The False Promise of Macron’s Labor Reforms

Republished with permission from The Nation

The French president’s proposed labor code would have grave consequences for workers.

PARIS, FRANCE – SEPTEMBER 21, 2017 : Demonstration against the France’s labor laws supported by president Emmanuel Macron government. – Editorial credit: Guillaume Destombes / Shutterstock.com

By Cole Stangler

Give him credit for consistency at least. Amid all the equivocations shaping his career, French President Emmanuel Macron has remained singularly committed to the cause of remaking labor law to favor employers. Since his Socialist predecessor, François Hollande, appointed him economy minister in 2014, the former investment banker has repeatedly argued that France must reform its labor code along pro-business lines in order to boost job growth. And on August 31, his recently elected government unveiled a long-awaited proposal to do so.

As Macron’s prime minister, Edouard Philippe, put it, the reforms are a “necessary” tool to reduce unemployment, which currently stands at 9.5 percent. If this is the goal, success may be partial at best. Similar efforts in the world’s most highly developed countries have cast doubt on the supposed link between labor deregulation and job growth.

But even if they do bring down unemployment, the reforms are likely to be overshadowed by the grave consequences at the workplace and damage to the country’s social fabric. At their core, the proposed changes weaken unions’ collective-bargaining rights and make it easier for companies to lay off workers. This would only exacerbate growing working-class disaffection from politics—a situation that culminated in a record-high 10 million votes for the far-right National Front in May. By weakening the labor law, Macron is playing with fire.

Compared with the pro-business employment model that prevails in the United States, the government’s reforms may seem modest. But they strike at the foundation of the French system, which seeks to provide workers with a more level playing field for their negotiations with employers.

Among the major elements of the reform package is a proposal to limit worker compensation for unjustified layoffs. Unlike in the United States, where the so-called at-will employment doctrine reigns, French employers must generally show “cause” for job terminations. If they fail to do so, employees can seek damages in special courts that oversee employment-contract disputes. Under current law, these judges can force companies to dole out pay over extended periods of time. This prospect discourages unfair layoffs and provides employees a sense of job security.

Proposed reforms would radically overhaul this system. For the first time, the law would set upper limits on the amount of damages awarded. Under the government’s proposal, for example, someone unjustly fired after two years on the job would be compensated no more than three months’ pay. As such, trade unionists and labor-law experts fear the measure puts a price tag on layoffs. Whereas bosses may have previously hesitated over certain job cuts for fear of unfavorable court rulings, now they can rest assured that the firings will not cost more than several months of extra pay.

Other measures similarly pave the way for job cuts. As it stands, employers in France can justify economic layoffs by pointing to their financial difficulties, but multinational companies must show that such struggles extend across their global operations. The government’s reforms would limit that threshold to France alone. In other words, a major manufacturer doing business in a dozen different countries will be given legal footing to cry poverty in France just as it builds new plants in, say, Poland or Turkey.

The proposal also strikes a heavy blow against unions and workplace democracy at large. Since the advent of the postwar welfare state, French law has required large employers to maintain a series of different representative structures for employees, including worker-run health and safety committees. Macron’s reforms would merge these structures into a single unit. In practical terms, that means fewer people devoted to raising employee grievances—not to mention needless risk to occupational health and safety. (Existing on-the-ground checks partly explain why France has a workplace fatality rate 40 percent lower than the United States’.)

The reforms also curtail collective bargaining at small and medium-sized businesses, which together employ more than 6 million workers. Under Macron’s proposal, companies with fewer than 50 employees would be authorized to negotiate employment terms with employee representatives that are not sanctioned by unions. The reforms would also allow businesses with fewer than 11 employees to directly propose votes on modifying employment terms to their staff—a key departure from current law, which requires prior consultation with employee representatives. Within the tight confines of a small business, there will nearly always be pressure to succumb to the demands of managers.

Finally, the government seeks to deepen last year’s labor reforms by further undermining large-scale collective-bargaining agreements. While just about 11 percent of French workers belong to unions, the power of organized labor in France derives from its hefty institutional role. In addition to regularly consulting with the government, unions set national employment standards through sector-wide labor agreements. Last year’s labor law famously allowed company-level agreements that force employees to work longer hours than their counterparts in the same industry. But this year’s package also enables individual companies to negotiate over bonus pay. By the same token, the reforms would authorize bargaining over the use of short-term labor contracts. Employers will likely relish chance to convince unions to agree to the creation of new short-term jobs. But given companies’ incentives to control labor costs, such a practice risks becoming normalized over time, encouraging the growth of temporary gigs over standard employment contracts.

Following last year’s legislation, the changes would mark yet another step toward what is undoubtedly the promised land for bosses: The ability to fully set work rules and pay rates on their own, with neither pesky red tape nor irritable unionists blocking the way.

About the Author:

Cole Stangler is a Paris-based journalist writing about labor and politics. A former staff writer at International Business Times and In These Times, Cole has also published work in VICEDissent, and The Village Voice.

Read the article in its original form on The Nation

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