French President Nicolas Sarkozy has repeatedly called for an overhaul of the law, which was introduced ten years ago by the then Socialist government as one of their top priorities. He has, however, been cautious about scrapping the law altogether, due to its huge popularity among French workers.
Many of them do actually work longer than 35 hours a week but accumulate their overtime to take extra holidays later, a practice heavily criticised by industry federations as French workers are already Europe's top holidaymakers with 37 days of paid leave a year. In comparison, its German neighbours are entitled to 27 days of paid holidays.
The bill, already approved earlier this month by the National Assembly (France's lower house), was supported by the Senate's centre-right majority but unsurprisingly opposed by the opposition Socialists. It also includes other key measures to reform rules on strikes and unemployment benefits. The bill is expected to come into force by the end of August.
"Companies will at last be able to operate a management policy based on a secure legal framework. It's a remarkable advance for the economy," said Daniele Giazzi, the ruling UMP Party's national secretary for enterprise, in a statement praising the bill.
The move comes amid EU attempts to make labour markets in the EU 27 more flexible in a bid to cope with the pressures of globalisation (see our Flexicurity LinksDossier). The French labour market has up till now been considered to be among the bloc's most rigid models and one of the least successful in promoting job creation.
Labour market reforms proposed in the past have triggered mass strikes. Trade unions are also strongly opposing the new initiative, which they say could allow companies to oblige their employees to work up to 235 days a year, instead of the current maximum of 218.
During a day of protests last month, tens of thousands demonstrated against the plans, but trade unions had hoped for far more, triggering the resignation of some workers.
The move comes just weeks after EU labour ministers agreed to compromise over the long-disputed Working Time Directive, which limits workers to a weekly maximum of 48 hours a week, which attracted the strong support of the French government (EurActiv 10/06/08).