French PM announces new labour code for early 2016


The reform will reduce role of lengthy labour code by setting principles and replacing national bargaining with firm-by-firm negotiations.

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

Valls backed a report recommending that more labour 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 François 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 labour 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 labour 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.

“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.”

Read more of this report from Bloomberg.

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