The French government has just announced the guidelines for a new labor
code, its first major reform to boost France’s economy, by giving more
flexibility to companies to adapt to the marketplace. The second major
reform sought by President Emmanuel Macron’s cabinet – an overhaul of
the French state – is set to follow.
The changes to the labor code have four goals. First, direct negotiations between employers and employees in small and medium-size firms (accounting for 55% of the workforce) would be facilitated by allowing such companies to negotiate with elected representatives not mandated by the trade unions. Second, social dialogue within larger firms would be simplified by merging separate workers’ committees (for hygiene, health, safety, and so on) into a central body. Third, collective bargaining over wages and employment would be decentralized from national to sectoral and/or firm level.Finally, laying off employees would become easier and more predictable, in particular with the introduction of upper and lower levels on payouts issued by labor courts.
The reform of the labor code will soon be accompanied by reforms of the unemployment insurance and job training systems. On the former, the government will take over from the unions, in order to provide unemployment benefits to all categories of workers, including the self-employed and those who voluntarily quit their current job to search for a new one. The cost of reforming unemployment insurance, however, is estimated at €3-5 billion ($3.6-6 billion), which may prove difficult to square with 2018 budget plans, which foresee a €20 billion cut in spending.
Read more: The Two Pillars Of French Economic Reform
The changes to the labor code have four goals. First, direct negotiations between employers and employees in small and medium-size firms (accounting for 55% of the workforce) would be facilitated by allowing such companies to negotiate with elected representatives not mandated by the trade unions. Second, social dialogue within larger firms would be simplified by merging separate workers’ committees (for hygiene, health, safety, and so on) into a central body. Third, collective bargaining over wages and employment would be decentralized from national to sectoral and/or firm level.Finally, laying off employees would become easier and more predictable, in particular with the introduction of upper and lower levels on payouts issued by labor courts.
The reform of the labor code will soon be accompanied by reforms of the unemployment insurance and job training systems. On the former, the government will take over from the unions, in order to provide unemployment benefits to all categories of workers, including the self-employed and those who voluntarily quit their current job to search for a new one. The cost of reforming unemployment insurance, however, is estimated at €3-5 billion ($3.6-6 billion), which may prove difficult to square with 2018 budget plans, which foresee a €20 billion cut in spending.
Altogether, the labor
market reform is intended to reconcile more flexibility for firms to
hire and shed workers – which is needed in an economy where growth is
driven by innovation and creative destruction – with more income
security and more training for the unemployed. The French labor market
currently suffers from a huge divide between qualified workers under
long-term contracts and low-skill workers who shuttle constantly between
unemployment and short-term jobs. The government’s reform is meant to
close this divide by increasing social mobility.
The second pillar of Macron’s economic program, reform of the state, has
two major components: a revamp of fiscal policy and an overhaul of the
public spending system. Here, too, the reform aims to address four main
long-standing problems.
Read more: The Two Pillars Of French Economic Reform
No comments:
Post a Comment