Eszter-Petronella SOÓS PhD

44. Labor Code: now everyone’s unhappy

President Hollande’s effort to overhaul the Labor Code does not go according to plan. Opinion polls and facts show that the French are rather against the modifications proposed by the government, trade unions alike. And now, ladies and gentlemen, employers also join them in contestation.

The main employers’ organization, Medef is particularly upset because, in the new version, the government intends to surtax fix-term employment contracts. Evidently, employers consider this surtax to be what it is: a tax hike (it is a tax hike, because fix-term contracts are already more expensive than indefinite ones). The government’s minister in charge, Myriam El Khomri has also raised her voice after Medef’s protest, saying that the reaction of employers was caricatural.

Pierre Gattaz, the President of Medef also said in an interview on Monday that the new version of the Labor Code does not simplify things, as the government originally intended – it rather complicates things.

Myriam El Khomri (photo from here)

The government is in an unhappy place as well. Social discontent is strong, young people are particularly against the Labor Code overhaul (PM Manuel Valls tried to address the issue by announcing new measures, worth of an annual 500M, to help young people find work).

The situation is this: things do not look good for those who hoped for a simplified and more flexible French labor market. The chances of adoption of such a law are getting slimmer by the day. There will be changes, for sure, but will they favor employment and will they really make a change? Not sure.

The process of changes, withdrawals, adaptations, corrections and negotiations navigated the government to a politically dangerous sea: the long process, instead of enabling social partners to come up with a reasonable compromise, just managed to make everybody unhappy.

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