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Hiring and firing to be made easier under French labor reforms

  • Bosses in France are to find it easier to hire and fire staff under new reforms aimed at overhauling the country's labor market.
  • The French government laid out 36 new measures on Thursday.
  • Plans include greater autonomy at a workplace level, rather than an industry level.
French President Emmanuel Macron at a press conference at the Chancellery on May 15, 2017 in Berlin, Germany.
Axel Schmidt | Getty Image
French President Emmanuel Macron at a press conference at the Chancellery on May 15, 2017 in Berlin, Germany.

Bosses in France will find it easier to hire and fire staff under new reforms aimed at overhauling the country's notoriously stringent labor market.

The French government laid out 36 new measures on Thursday as part of President Emmanuel Macron's plans to encourage employment and business freedoms.

These include greater autonomy at a workplace level, rather than an industry level.

The changes will be especially significant for small and medium-sized businesses, which employ over half of the French workforce.

Under the new rules, companies with fewer than 50 employees will be able to set up workers' committees which can bypass unions. This means that if a business can agree terms with the majority of its employees, for instance on working hours and pay, that deal can trump wider industry guidelines.

The rules will also place a cap on damages payable to staff for unfair dismissal. This is one of the more controversial measures, but the government insists that having transparency will make employers less reluctant to recruit.

Employees will now have one year to challenge a dismissal in courts, rather than the previous two years. Meanwhile, damages payments will now be capped at three months' pay for two years of work and 20 months' pay for 30 years.

The plans have attracted criticism, with demonstrations scheduled for next month, but the country's two biggest unions have said they will not take part.

Their unveiling marks a moment of truth for Macron, who has vowed to slash France's stubbornly high unemployment rate from 9.5 percent to 7 percent by 2022.

The government plans to pass the laws by decree next month, having already won parliamentary backing.

Analysts say that the plans will make it easier for Macron to push ahead with the rest of his major reform agenda, which spans domestic policy as well as increased EU integration.

"The proposals will allow Macron to prove his reformist credentials and give him strong momentum to pursue further policy changes at home and abroad," Teneo Intelligence said in a press note.

However, they insisted that his success will now hinge on his speed of delivery.

"The ability of the French bureaucracy to keep up with Macron's plans is a challenge in this regard, given the president's decision to cut the number of staff at the cabinet level and his willingness to push ahead with multiple reforms simultaneously."

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