French labor unions and business leaders struck a deal on Friday to overhaul swaths of France’s notoriously rigid labor market, moving to tame some of the most confounding rules in the 3,200-page labor code as the country tries to increase its competitiveness and curb unemployment.
Representatives from three of the five powerful unions at the negotiating table, the Christian CFTC union, CFDT union, and the CFE-CGC union, all expressed confidence their organizations would approve the reform deal (the two holdouts, the notoriously radical CGT and FO unions, refuse to sign on), which includes real, substantive changes, including, “…giving employers more flexibility to reduce working hours in times of economic distress without incurring union strikes.” In addition:
High levels of compensation that courts can award to laid-off workers would be trimmed. The five-year period that former employees now have to contest layoffs would be reduced, a shift that Medef, France’s employers’ union, said would ‘reduce the fear of hiring’ by businesses.
Why so much change, and why now? French President François Hollande admitted France’s notoriously labyrinthine labor edifice – wholly designed and owned by unions — have made it virtually impossible to do business in France. (Ergo, a 10.7 percent national unemployment rate; 25 percent for young people). And he’s right: In a passage that could be filed under “Too Ironic For Words,” the Times details how union-backed regulations stifle job creation and economic growth:
Under current labor rules, many entrepreneurs in France hesitate to hire large numbers of workers. Some employers even resort to operating several companies with no more than 49 employees each instead of running larger ones that employ hundreds. That is because after the 50th employee is hired, a stack of new regulations come into play, including long firing procedures even for underperforming employees and requirements for numerous union representatives.
(Apparently, The Grey Lady believes the laws of economics are different in the United States, where Times editors and writers have never met a regulation they didn’t love.)
When right-to-work passed last year in Michigan, a long-held union redoubt, many observers noted that it now seemed as if serious labor reform could happen anywhere.
It seems they were right.