Is a ‘bloated’ labour code to blame for French economic woes?

Heaping scorn on France’s labour laws has long been a favourite pastime of politicians, journalists and business leaders. In a story titled, “The labour code and its absurd (or hilarious) articles,” conservative daily Le Figaro mocked clauses that ban alcohol consumption at work (except for wine and beer), eating sandwiches at one’s computer (instead of taking a proper lunch break) and sending work emails during the holidays.

More damagingly, the code is routinely decried as the chief culprit for France’s stubbornly high unemployment rate, cosseting those who have a job to the detriment of those who don’t. Its critics also say key provisions that limit working hours and make it hard to fire employees are a liability for France's image abroad, keeping foreign investors at bay.

François Bayrou, a prominent centrist politician, is fond of ridiculing the labour code on television chat shows. Twice he has brandished a 3,000-page doorstopper of a book he presented as France's Code du Travail, comparing it with a slim brochure he said was its Swiss equivalent. Never mind that Switzerland doesn’t have a single labour law, and that Bayrou was therefore not comparing like for like – the stunt prompted hilarity and raucous applause from the audience.

Writing in Le Monde, Alain Supiot, a professor at the elite Collège de France, described Bayrou’s antics as “politics hitting rock bottom by measuring the quality of a text based on its weight” – and even “cheating” in the process.

‘State of economic emergency’

For all its alleged flaws, the Code du Travail is regarded by many in France as untouchable. Successive governments have chiselled away at its 10,000 articles – notably easing restrictions on layoffs and working hours – but without ever daring a comprehensive overhaul.

Now President François Hollande fancies his chances. On Monday, his Socialist government received an eagerly awaited report outlining the “core principles” of a new, leaner code. Given the explosive nature of the subject, the choice of author – former justice minister Robert Badinter, a figure revered by the left and respected across the board – was widely interpreted as an attempt to preempt any backlash.

As it turned out, there was nothing particularly explosive in the so-called "Badinter report", which mostly restated existing principles such as gender equality, the right to maternity leave and a ban on employing anyone under 16. The much-maligned 35-hour workweek, which is reviled by business leaders but cherished by many French workers, was also preserved, albeit with an important caveat.

It is now up to the government to rule on the sensitive issue of wage premiums for overtime. That will be addressed in a bill due on March 9. While a redraft of the full code is likely to take years, the government has vowed to act fast on the chapter that relates to working hours. Increasingly prone to urgent rhetoric, Hollande has described this as crucial to tackling France’s “state of economic emergency”.

Simplification, not deregulation

France, where unemployment remains stubbornly high at a near-record 10 percent, has promised to speed up structural reforms demanded by the European Commission in Brussels. With presidential elections due in May 2017, Hollande only has a small window of opportunity to push through legislation that can have a visible impact on growth and jobs, increasing his chances of re-election.

But changing labour laws will not necessarily affect the unemployment rate, says Gilles Auzero, a professor of labour law at Bordeaux University. “There is no scientific study proving that the current code hinders employment,” he told FRANCE 24. “Those who say so are merely stating their personal convictions.”

Auzero said efforts to simplify the code are, in principle, a good idea – provided they do not serve as a pretext to dilute the text. “There is room for a comprehensive rewriting of the code to make it more readable and accessible,” he said, noting that small businesses do not always have the legal knowhow to comply with every clause. “But simplification should not mean deregulation.”

‘Shattering glass ceilings’

Critics to the left of the government say deregulation is precisely what the maverick economy minister, Emmanuel Macron, has in mind. The former investment banker has singled out “complexity” as one of “three ailments” afflicting France's economy. He has spoken of “lifting all blockages” and “shattering glass ceilings”, with a particular focus on the 35-hour workweek.

Macron's repeated digs at the 35-hour week have infuriated many in the ruling Socialist Party and sowed chaos in the government. In the process, they have also turned him into a darling of business groups and a fixture of the French press.

During the Davos forum last week, Macron said forthcoming reforms announced by Hollande would put a “de facto” end to the 35-hour week by allowing companies to adjust working hours as they please. He told FRANCE 24 that the government would seek to “increase negotiation at the corporate level” so that companies can choose for themselves “through majority votes”.

On Monday, Macron expressed a measure of satisfaction with the Badinter report. In line with existing legislation, the report preserves the 35-hour week as the “norm” while allowing companies to negotiate longer hours so long as they pay higher wages for overtime. But contrary to current rules, it does not specify a threshold for the premium, suggesting firms may be able to reduce it to a bare minimum.

Auzero noted that the labour code already leaves ample room for exemptions, particularly in the field of working hours. He cast doubt on Macron's optimism regarding collective agreements. “They are seldom feasible,” he said, pointing to the dismal track record of employers and trade unions in reaching agreements. “And when they are [feasible], they can easily end up being more complex than the law.”

The code’s fundamental mission

Anne Eydoux, an economist at the Paris-based Centre for Employment Studies, argues that far from hindering employment, France's labour laws actually provide a protective framework for both employees and their employers that is conducive to job creation. “This framework governs labour relations, enabling each player to know what is legal and what is not,” she told FRANCE 24, adding that the code's precision “reduces uncertainty and disputes, thereby facilitating hiring”.

Eydoux said the emergence of mass unemployment in the 1980s had strengthened the employers' hand, allowing them to negotiate numerous exemptions to the labour code – which, incidentally, increased its bulk and complexity. The result has been a steady rise in part-time, precarious work, particularly among women, “but with no impact on unemployment figures, which have remained stubbornly high”.

Reforms to the labour code, Eydoux argued, should restore protections to workers – not reduce them. Pointing to the emergence of the “sharing economy” and companies like Uber, she said labour laws must “integrate new forms of precarious employment that combine independent work and subordination”.

Like Auzero, she warned against attempts to replace the existing legal framework with collective negotiations. At stake, Eydoux argued, is the labour code's fundamental mission to offset the inherent imbalance between employers and their employees. “The law protects workers by granting them certain rights that limit the power of employers,” she said. “Collective bargaining, on the other hand, is based on power relationships in which workers are always in a position of weakness.”