The government of Emmanuel Macron has introduced its first labor reforms in France. They include:
- Capping the damages judges can award to workers who have been wrongfully terminated at one month’s pay for every year of employment.
- Raising the compensation for workers who are laid off for legitimate economic reasons by 25 percent.
- Enabling employers to bypass union-dominated workers’ councils and call company-wide referendums on sensitive topics like overtime.
- Allowing multinationals to lay off workers at loss-making French subsidiaries even if the foreign-based parent company is profitable.
After a summer of consultations, two of France’s three largest trade unions — the Democratic Confederation of Labor and Workers’ Force — have given their consent to the reforms. The hardline General Confederation of Labor remains opposed and has called a nationwide strike for September 12.
No matter the resistance unions put up, the liberalizations are almost certain to be rubber-stamped by parliament, which is controlled by Macron’s party.
The president defended his reforms in an interview with Le Point magazine:
We are the only major economy in the European Union that has not defeated mass unemployment for more than three decades.
The Financial Times reports that the reforms are central to Macron’s plan for making France more attractive to foreign investors and bringing down unemployment from 9 percent.
The reform is also designed to show France’s renewed determination to fix its economy — a condition for Brussels and Berlin to agree to support more stimulus and more protective labor rules at an EU level.
Macron is trying to win support for reform of the Posted Workers Directive, which allows companies to pay Eastern European laborers the prevailing wage in their home country as opposed to a Western European salary.
Since winning 66 percent support in the presidential election in May, Macron’s popularity has been cut in half.
He does not seem perturbed. “I’m going to have to live for months with the people’s impatience,” he told Le Point.
The French will be ready to believe again when the results are there.