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.