Macron faces key test as France outlines labor reforms

Prime Minister Edouard Philippe, outlining the overhaul alongside Labor Minister Muriel Penicaud, said France had to increase flexibility in its labor market to counter decades of mass unemployment.

'Labor law is not the first cause of unemployment,' Philippe said, but 'no one today can say that our labor law stimulates job creation.'

The reforms -- which will be debated over the coming days before being finalized -- will take the form of five executive orders, thanks to a law passed last month by the Parliament, where Macron's centrist party holds a healthy majority.



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The executive orders will be presented to the cabinet of ministers for adoption on September 22 and come into force in late September.

In an interview with Le Point magazine, published Thursday, Macron -- who has seen his poll numbers tumble in recent weeks -- said the French people had backed his agenda for change when they elected him president in May.

'We turned the page of three decades of inefficiency to embark on the path of reconstruction that will enable reconciliation,' he is quoted as saying.

'The reform of the labor market is a reform of profound transformation and, as I have committed myself, it must be ambitious and effective enough to continue to reduce mass unemployment and allow us not to return to this subject during the five-year term.'

Union talks

The government's plans were hammered out following weeks of meetings with union representatives.

Philippe said they had four aims: fostering dialogue among social partners; building legal security to foster job creation and greater transparency for employers; bringing tailored solutions for small and very small businesses; and strengthening the economic attractiveness of the country.

Among the measures in the package are limits on the damages granted to workers in cases of wrongful dismissal. Currently, it is left up to individual tribunals to decide and the damages awarded can vary widely.

There will also be greater scope for individual labor agreements to be negotiated at a company and industry level, rather than on a sector-wide basis, Philippe said. This means, for example, that a small company with fewer than 20 employees could negotiate directly with an elected employee who is not mandated by a trade union.

Workers will also gain new rights under the reforms, including a 25% increase in unemployment compensation.

Cooperation between the government and unions in drawing up the plans may ease some public concerns, although the CFDT, France's biggest private-sector union, said it was 'disappointed' overall and announced it would hold a demonstration in October.

The Force Ouvrière said there were only a couple of 'points of disagreement.'

However, the CGT union, France's second largest, has accused the Macron government of being 'ultra pro-market' and did not join the negotiations. It has called for strike action on September 12 to protest the proposed changes.

Controversies

Macron has already weathered a number of controversies since he took office in May.

Earlier this month he backtracked over plans to give his wife, Brigitte, official status as First Lady of France -- a role that would have included access to public funds and a staff -- amid widespread public opposition. The proposal came at the same time as the President was pushing for a law that would ban French parliamentarians from employing members of their own families.

France's last election campaign was plagued by fake jobs scandals involving far-right candidate Marine Le Pen and conservative contender Francois Fillon. In June, Macron's own defense minister, Sylvie Goulard, resigned after becoming embroiled in a fake jobs scandal of her own.

In July, Gen. Pierre de Villiers resigned as head of the French armed forces over a dispute surrounding the country's defense budget.

Another controversy concerned Macron's reported high spending on makeup.

The Force Ouvrière said there were only a couple of 'points of disagreement.' The Force Ouvrière said there were only a couple of 'points of disagreement.' Among the measures in the package are limits on the damages granted to workers in cases of wrongful dismissal. Currently, it is left up to individual tribunals to decide and the damages awarded can vary widely. The executive orders will be presented to the cabinet of ministers for adoption on September 22 and come into force in late September. Earlier this month he backtracked over plans to give his wife, Brigitte, official status as First Lady of France -- a role that would have included access to public funds and a staff -- amid widespread public opposition. The proposal came at the same time as the President was pushing for a law that would ban French parliamentarians from employing members of their own families. Prime Minister Edouard Philippe, outlining the overhaul alongside Labor Minister Muriel Penicaud, said France had to increase flexibility in its labor market to counter decades of mass unemployment. 'Labor law is not the first cause of unemployment,' Philippe said, but 'no one today can say that our labor law stimulates job creation.' Cooperation between the government and unions in drawing up the plans may ease some public concerns, although the CFDT, France's biggest private-sector union, said it was 'disappointed' overall and announced it would hold a demonstration in October.

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