France to Introduce New Labor Code by Early 2016, Valls Says

Updated on

French Prime Minister Manuel Valls said his government plans to introduce changes to the code governing labor practices by early next year as part of an effort to revive growth.

Valls backed a report recommending that more labor rules should be set by negotiations between unions and employers at the company level, rather than nationally. Talks on setting up a new system will begin this month, he said.

“This is an essential reform and it shows our determination,” Valls said at a press conference in Paris. “Our culture and our negotiating practices are changing.”

With an economy that has been largely stagnant since he came to office three years ago, French President Francois Hollande is looking to push through reforms to help revive growth in the run up to elections in 2017.

Hollande since his 2012 election has made some changes to France’s labor codes, making it easier for companies and workers to negotiate an end to employment contracts, allowing companies facing problems to renegotiate working times, and cutting payroll taxes by about 40 billion euros ($44 billion) over the course of his five-year term.

The idea of the next stage of reforms is to scale back the role of France’s 3,000-plus-page labor code to simply laying out principles, and leaving the details to company-by-company negotiations, said Jean-Denis Combrexelle, the author of the study commissioned by Valls.

‘Grand Principles’

“We can’t imagine that a top-down system can decide for 16 million employees,” Combrexelle said. “It’s not possible. The primary role of the labor code must be to fix the grand principles.”

Medef, France’s main business lobby, hailed Combrexelle’s report as “a good departure point,” adding it was looking forward to a “rapid and effective putting into action of its proposals.”

The CGT, France’s largest union, said in a statement that the labor code is the “minimum core” of workers’ rights “and must remain applicable to all.”

The CFDT union, the second largest, said it “salutes the idea of giving more space to collective negotiations,” but said that legal working times, the minimum wage, and contract rights “must remain inscribed by law.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE