One of the curious features of the French economy is that there are, according to Medef, the business confederation, two and a half times as many companies with 49 employees as those with 50, reports The Financial Times.
The reason? Legislation that requires companies passing above the threshold of 50 staff to comply with some 35 extra regulations covering worker representation and administrative practices. Many businesses say they either curb their growth to remain below the threshold, or start a new company to avoid breaking the barrier.
“It is a wall that you have to jump,” says Michel Sapin, finance minister.
The socialist government has made regulatory thresholds a key focus of a new round of talks on labour market reforms starting on Thursday between France’s employers and trade unions. The talks are a centrepiece of President François Hollande’s promise of deeper structural reforms to rekindle growth in the stagnating economy – and satisfy France’s European partners frustrated by the slow pace of change.
Other issues are also on the table – notably loosening restrictions on Sunday and late-night opening in the retail trade. Medef is pressing for more flexibility in setting working hours and wage deals at branch level to unstitch the statutory 35-hour working week.
But the government, which has waved aside calls for an end to the 35-hour week, has placed heavy emphasis on the issue of thresholds, believing a seemingly narrow reform could unleash significant employment growth. It has threatened to legislate if the “social partners” do not reach an agreement by December.
Read more of this report from The Financial Times.