The French government has announced the outcome of its recent talks on labour reforms. The agreed changes include:
* A new facility for employers and workers to reach agreement at a company level. Negotiations with a non-elected employee (not approved by a trade union) will be possible in companies with less than 20 employees. Moreover, in companies with 20 to 50 employees, negotiations may involve an elected staff member – not necessarily someone nominated by a trade union.
* Freedom for CDD fixed-term contract rules to be set at a company level.
* An end to judicial review of redundancy decisions if company worldwide operations are profitable – only French profitability will be relevant.
* A new cap on compensation for unfair dismissal – three months’ salary for employees with more than two years employment and up to 20 months for those with 30 years of employment. However, the severance compensation for normal dismissal will increase.
* A new structure for employee participation in companies with 50+ employees.
The changes will be implemented by executive order via five decrees – thus avoiding lengthy parliamentary debate – and are likely to be introduced by the end of September 2017. The CGT is the only major trade union to announce strike action and public protests against the reforms – with demonstrations around the country on September 12th.
Will the reforms make France significantly more attractive a location for international employers? Probably not. Although heralded as fundamental, the reforms do nothing to overcome the problem of industry-wide applicability of collective agreements for larger employers or introduce anything close to a hire and fire at will regime. They do not address the 35-hour week or the burden of numerous social security payment obligations.