French unions fret as Macron readies promised labour-law upheaval

[PARIS] French unions are about to get a preview of President Emmanuel Macron's upheaval of labour protection, and their expectations are low.

The Labor Ministry will this week unveil the outcome of months of talks with union and company representatives, part of a plan by the new president to reinvigorate an economy that's been underperforming the euro area. Worker groups have expressed concern about the impact of the change, with some warning of protests in response.

The publication comes as Mr Macron travels to meet with Eastern European leaders in Austria and Bulgaria, which could inflame any union antagonism to the plan. He's pressed on with the controversial reform even after a high-profile incident during the campaign, when he was jeered by workers at a Whirlpool factory in northern France.

The facility is being shut down to shift production to Poland, a well-known scenario in several of the nation's job-deprived regions.

The ministry will share details of the plan with employers' lobby Medef at a meeting on Tuesday, with France's two largest unions - CFDT and CGT - getting their peek on Wednesday.

Legislation will be published at the end of the month, just as most employees return from summer vacation, to enable enforcement in September.

"This is clearly going to be a reform to serve large company's interests," said Fabrice Angei, a member of CGT, the country's second-largest union. Gilles Lecuelle, national secretary at white-collar workers' union CFE-CGC, said his union is "very worried" about the changes.

Mr Macron has pledged France will be an exception no more in matters of workers' rights. A thick red book known as "Code du travail" still governs labor relations in the euro area's second-largest economy even as most of its peers have cut back regulation.

For decades, protests have prevented the changes central bankers and executives say is needed to boost competitiveness and output.

ECONOMIC RECOVERY

The planned changes come as the euro area's economic recovery continues to solidify, with even France, after years of erratic growth, recording consistent expansion in recent quarters. Unemployment was 9.5 per cent in the three months through June, the lowest since 2012, but still double the rate in the UK and Germany.

In Spain, unemployment has dropped to 17 per cent from 26 per cent in 2013 after sections of labor legislation similar to French rules were dismantled.

Still, most new jobs are temporary, rather than permanent contracts that are often better paid and offer more stability, meaning inequality is a pressing issue.

France 2 television reported last week that Mr Macron's law will scrap rules limiting temporary work. Companies will be able to adapt rules on pay and working conditions for regular work contracts, as well as reduce conditions for termination, such as helping fired employees find another job. The Labor Ministry didn't respond to a request for comment.

"It's not so much the rules that'll change as the possibility that'll be given to companies to ignore or change them, which is a profound transformation," said CGT's Angei. "The impact will eventually be huge as companies will threaten to fire workers or take jobs abroad if they don't accept new rules." While CGT has already called for demonstrations next month, and CFDT, the country's largest union, hasn't ruled out joining, the government says it won't waver.

Among potential steps that have particularly irked unions, Mr Macron would make it cheaper and easy for companies to fire illegally by limiting the amount of compensation workers would be able to claim in court. Firms would also be able to skip rules to pay night shifts or overtime better.

"We're not interested in following Spain and Germany's footsteps," said CFE-CGC's Lecuelle. "Some may be dying to return to the Middle Ages, when workers roamed the country in search of a little job here, another one there, that's not our idea for a brighter future."

BLOOMBERG