Macron’s Copernican revolution: French labour law reform

French president Emmanuel Macron, true to his election commitment, has published decrees seeking to implement major liberalising reforms of French labour law.

He has called it a “Copernican revolution” (he of the 16th century earth around the sun idea).

It remains to be seen whether French labour law will revolve around Mr¬†Macron’s vision of reform or he will (as so many French presidents before) end up revolving around the trade unions’ vision. If he succeeds, maybe they will call him the Sun President.

The key reforms:

  • Employee/employer negotiation and collective agreements will be able to take place at the individual company/business level and not, as now required, at the sector level. This will allow for much faster company/employee level responses to changing business conditions and circumstances.
  • Negotiating collective agreements for employees of smaller (less than 50 employees) business may not require union involvement.
  • Global business strength will no longer be available as a reason to block local French restructuring or reductions in force. Currently a global business wanting to restructure French operations can be blocked from doing so on the grounds that its non-French operations are healthy.
  • Wrongful dismissal damages will be moved on to a fixed scale based on salary and length of service and will be capped. This is a move away from sector based awards which have often resulted in exaggerated compensation pay-outs and great uncertainty.
  • Firms employing more than 50 staff will see a large reduction in red tape. The requirement of having various separate worker representative bodies will be replaced with a single representative body. France, curiously, has the highest relative number of companies in the developed world employing less than 50 people. This obscure record may now end.
  • Short term contract lengths and renewals will no longer be governed by national law but will be set by negotiation at business sector level.

The enactment of the decrees is expected at the end of September, subject to Mr Macron’s actual position in the French political universe.