Proposed French work reforms represent small cultural revolution

Law would allow businesses in difficulty decrease salaries and would simplify layoffs

French prime minister Jean-Marc Ayrault  delivers a speech next to labour minister Michel Sapin in Pantin, a Paris suburb, on Monday.   Photograph: Fred Dufour/Reuters

French prime minister Jean-Marc Ayrault delivers a speech next to labour minister Michel Sapin in Pantin, a Paris suburb, on Monday. Photograph: Fred Dufour/Reuters


The legislation, sponsored by a left-wing government, will allow businesses in difficulty to decrease salaries and working hours and is intended to shorten and simplify the process of laying-off workers.

It will be debated from April 2nd for one week. Socialist labour minister Michel Sapin vaunted the “unprecedented” and “innovative” nature of the reform and predicted it will pass by late April and take effect before the year ends.

“This is one of the most profound reforms France will have carried out in the last 30 years,” Mr Sapin told the Europe an-American press club. “It marks true progress in French social policy . . . These subjects have been raised for decades, but never resolved.”

Alluding to French tradition, Mr Sapin rejoiced that the reform is being carried out “in normal conditions of democratic debate, without confrontation . . . without revolution, without demonstrations, without strikes. At the heart of it is a new method of true social dialogue between social partners.”

Unemployment has risen in France every month since July 2008. The Organisation for Economic Co-operation and Development predicted last week that French joblessness “will continue to rise until it stabilises at 11.25 per cent at the end of 2013”.

Inspired by Germany
The labour minister said France should take inspiration from Germany. “A preference for firing” in France was “perhaps one of the causes of the until now inexorable rise of unemployment”, Mr Sapin said.

“A [French] company that encounters difficulties immediately asks, ‘how many people should we fire?’ In Germany, the reflex is: ‘How many jobs can we save by adjusting salaries and working hours?’” he added. “Germany has fewer unemployed today than it did in July 2008; France has 1.2 million more.”

Previous attempts to reform the French labour market were imposed by the government. “The result was always blockage, immobility,” Mr Sapin said.

President François Hollande challenged trade unions and business management to negotiate the details of reform among themselves. They concluded an agreement on January 11th, without government intervention. The resulting text has been cast as a major piece of legislation by the socialist government. But it is viewed by some as a betrayal of socialist ideals.

Extreme left position
“Our extreme left says the left-wing majority, not the social partners, should have done this,” Mr Sapin explained. “That would mean a reform imposed from on high, independently of the social partners.

“Business management would have sworn to reverse it at the first opportunity. But economic actors – businesses as well as employees – need a stable, in-depth reform that will last.”

The country’s two biggest trade unions, the communist Confédération Générale du Travail and the socialist-leaning Force Ouvrière, which represent the majority of state-sector employees, oppose the draft law.

Three smaller unions representing private sector workers approve it, and a majority of right-wing deputies are expected to vote for it.

The reform was inspired by the Scandinavian example of “flexi-security”, which gives employers more flexibility to hire and fire, while providing more security to workers who lose their jobs.

Asked how the government can increase security for the unemployed while it searches for €5 billion in budget cuts, Mr Sapin said the added security, including “personal training accounts” which offer 20 hours of training for every year worked, would come at no extra cost to the government.