The French government under Emmanuel Macron recently passed a new labour reform with the aim of restoring health to the jobs market. On 22nd September, Macron boasted proudly that the changes were ‘unprecedented’ and the speed at which he put the legislation through should also be remarked upon.
The French jobs market has not been in the best of health in recent years. It has stagnated due to chronically high unemployment as well as slow growth. The country has strong worker protections and expensive benefits and both these factors have been singled out as part of the root of the problem.
Macron’s government has repeatedly argued for what they call “flexisecurity”. This essentially makes it easier for companies to make employees redundant, so they can readily take on new stand and this justification and argument closely mirrors that of Hollande and his government’s reasoning for its changes and measures passed before this new reform.
A CLOSER LOOK AT THE NEW REFORMS
The new reforms in France are complex but the main points include:
A cap on compensation for unfair dismissal, except for cases of discrimination and infringement of “fundamental rights”, and a reduction of the time limit in which an employee can claim it, although the rate of compensation has been raised 25 percent to sweeten the pill;
Multinationals will be able to declare redundancies on the basis of their performance in France alone, leading unions to fear that they will relocate from France to low-wage countries;
A reduction of the number of workplace committees from four to two, with health and safety now being debated at an expanded works council;
Small companies will now be able to negotiate with an employees’ representative who does not have union support and it will be easier to call workplace referendums;
There will now be only 11 categories of working conditions, some of which were previously covered by national labour law. They must be negotiated at industry level, allowing workplace-level agreements to undercut national ones;
The extension of the right to use contracts linked to the duration of a project, previously limited to construction, to other industries.
This final point is the one that is most relevant to the contractor working abroad, especially those in the IT sector. It means they can now work for six or twelve-month contracts with renewal at the end with no fear on their part that they will be considered in disguised employment, or employment on any level. This frees up more space for negotiation on rates.
The extended freedom for bosses to make employees redundant is also an interesting point for contractors and agencies. It may mean more highly-skilled professionals enter the world of self-employment.
These new reforms are designed to give companies more freedom and ability in releasing and taking on staff. This will more than likely result in more specialists moving into self-employment and regular employment is a much less attractive prospect. This is especially the case when you consider the high levels of taxes and social security in France.