World Economy

France Plans Labor Reform Bill

France Plans Labor Reform Bill
France Plans Labor Reform Bill

The French government will use legislation to reform rules on worker representation after talks between trade unions and employer groups ended without agreement this week, the country’s labor minister said.

Socialist President Francois Hollande had asked worker and company representatives to negotiate a deal to simplify requirements, such as running works councils and health and safety committees, that companies say make them reluctant to hire people, Reuters reported.

“The government will carry out a reform and this will require legislation to do so,” Labor Minister Francois Rebsamen said in an interview with the weekly newspaper Le Journal du Dimanche published on Sunday.

“Let me reiterate, excessive formalities are bad for dialogue and so for employment,” he said. “There must be a better way to organize compulsory meetings between employers and staff representatives and make them more efficient.”

To prepare the reform, Rebsamen said he would meet union and employer representatives this week before Feb. 19 talks announced by Prime Minister Manuel Valls this week after the failure of the recent negotiations.

Companies say red tape connected with worker representation is a brake on hiring and investment in the eurozone’s second-largest economy. The regulations kick in when companies hire 10, 50 and 300 employees.

Consequently, some smaller businesses limit the size of their workforce – keeping it at 49 employees, for example, to avoid the requirement that they pay for in-house works councils and health and safety committees once they hire their 50th worker.

Unemployment in France remains above 10 percent and has been a key cause of the record-low unpopularity of President Hollande, although his poll ratings have rebounded sharply this month as the public hailed his response to attacks by gunmen that killed 17 people in Paris.