The new French President, Emmanuel Macron, highlighted during his campaign that, as President, he would quickly push forward labor law reforms in order to allow France to streamline international business, attract foreign investors and encourage economic growth.
His proposed reforms are:
1. To make it easier to dismiss employees in France: Macron’s proposals will make it easier to lay off employees, will cap damages for unfair dismissal, and will introduce a “right to be wrong” for employers dealing with the French Administration.
2. To reduce the cost of labor: social security contribution levels to be reduced, and removed on overtime.
3. To encourage employment, but control abuse: the reforms will incentivise employers to offer new jobs in disadvantaged areas, but will discourage abusive use of short-term contracts and set time limits on international secondments of employees to France.
4. To streamline social dialogue between employers and employee representative organisations: Macron reinforces collective negotiation at company level rather than industry-wide, as at present, and allows the merger of employee representative organisations to reduce their numbers.
In his campaign, President Macron said that he would use decrees to liberalize the labor market quickly avoiding long parliamentary debates. To do so, he must however first obtain the authorisation of the French Parliament to use decrees and to ratify the bills afterwards.
Whether President Macron will be able to implement his reforms will depend on the results of the French legislative elections in mid-June 2017 and the outcome of his talks with employee representative bodies. Indeed, the measures Macron is proposing may lead to difficult discussions with unions, who have previously contested any changes which would affect the existing rights of employees.