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A round-up of France's controversial labour law reforms

Loic Venance, AFP | Copies of French labour code are displayed on August 29, 2017 in Nantes, western France.
4 min

Prime Minister Edouard Philippe and Minister of Labour Muriel Pénicaud unveiled reforms to France’s infamously inflexible labour laws on Thursday in a bid to lower unemployment and reinvigorate the job market.


The main thrust of the proposed reforms is that it will now be easier for companies to hire and fire workers. The changes increase the power of employers in a country that has traditionally had some of Europe’s strongest worker protection laws. The government is hoping that giving employers more freedom to manoeuvre will help revive France’s torpid economy.

France’s unemployment rate currently stands at 9.5 percent, about double that in Germany or Britain. Macron is hoping to significantly streamline the roughly 3,000-page “red book” containing the laws governing everything from worker safety to bonuses in a way that will codify basic employment protections while giving companies, unions and employees more freedom to negotiate terms.

Macron’s government is not the first to attempt such an undertaking. The government of former president François Hollande also tried to reform the labour code, sparking months of paralysing demonstrations in Paris and throughout France.

Macron hopes to avoid making the same mistakes. Thanks to his parliamentary majority and the divided opposition, he was able to convince legislators to make the changes by decree. To get support from businesses and unions, the government held scores of private meetings. The measures are expected to be adopted at a cabinet meeting on September 22 and will then need to be ratified by parliament.

Among the 36 new measures, which particularly benefit small and medium-sized enterprises (SMEs), is the option to negotiate some issues directly with employees on the company level.

“For the first time, labour law reforms give priority to SMEs and VSEs,” Pénicaud said while presenting the proposals. SMEs are those that have fewer than 250 employees and very small enterprises (VMEs) employ fewer than 50 people. More than half of France’s workforce is employed by SMEs.

Limits on payments for wrongful dismissal are a major element of the reforms. Fired workers will now have only one year in which they can file suit, and damage payments will now follow a formula based on length of employment and will be capped. The formula will differ based on the size of the company.

Severance payments, on the other hand, will increase to 25 percent of monthly salary for each year of employment from the 20 percent currently mandated.

For foreign multinationals, the permission to lay off multiple workers   which they are required to seek in France   will be based on the company’s economic performance locally and not on a global level.

Different professional industries will now also be able to modify the length of short-term contracts, the number of permitted contract renewals and the waiting period between contracts.

Employer lobbying groups welcomed the reforms, calling them pragmatic and an important step towards strengthening business confidence.

Unions, on the other hand, were less enthusiastic about the proposed changes, with the General Confederation of Labour (CGT) calling for demonstrations on September 12. Other unions were more muted in their criticism. France’s largest union, the moderate French Democratic Confederation of Labour (CFDT), had concerns about the reforms but said they would not be joining the protests, as did the third-largest union, Worker’s Force (FO).

On the political front, only the Democratic Movement party (MoDem) and a pro-Macron faction of the conservative Les Républicains applauded the measures. The reforms will lead to “strong and significant progress”, the MoDems said in a statement. The Socialists, for their part, said that the changes would undercut employee protections, calling workers the “forgotten ones” of the reforms.

The French Communist Party and the National Front also came out against the changes. France Unbowed, the political party of former left-wing presidential candidate Jean-Luc Mélenchon, went so far as to call on its members to join protests on September 12 and 23.

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