Businesses divided over French labour law reform

Protests against the French labour law reforms, 24 March. [PASCALVAN/Flickr]

French business leaders are growing more concerned about the country’s economic outlook. A proposed set of labour reforms has split bosses into two camps. EURACTIV’s partner La Tribune reports.

The French economic recovery was faster than expected in 2015. GDP grew not by 1.1%, as predicted, but by 1.2%; a whole percentage point higher than in 2014. This trend is expected to accelerate in 2016, albeit gently, with predicted growth of 1.5%.

But even so, this recovery is not robust enough to put a smile back on the faces of the country’s business leaders.

Pessimism outweighing optimism

Questioned by Opinion Way as part of the Great Consultation, 43% of French bosses said they were “concerned” in March this year compared to 40% the previous month. This pessimistic attitude is particularly common in the retail sector.

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The government will propose legislation to simplify over-complex labour laws and promote more collective bargaining accords at a sectoral level, French Prime Minister Manuel Valls said on Wednesday (9 September).

In the latest questionnaire, only 7% of bosses said they felt “bold”, compared to 11% in February. It is also worth noting that the most optimistic business leaders work in the services sector and the most pessimistic in industry.

The one positive point in this barrage of bad news was that 8% of bosses now plan to hire new staff, up from 6% in February. Paradoxically, in light of the prevailing feeling of pessimism, it is the industrial sectors that plan to hire the most workers.

Businesses divided over French labour law reform

Against such a negative backdrop, it would be natural to assume that Labour Minister Myriam El Khomri’s reforms would increase the confidence of business leaders.

OECD: France must reform labour market and cut spending

Labour market rigidity and excessive public spending are among the issues holding back France’s economic recovery, according to an OECD report. EURACTIV France reports

But while 75% believe the current labour law is stifling French employment and the economy, bosses are divided over the government’s plans. 47% have come out in support of the bill and 46% in opposition.

The opportunity to negotiate working hours and organise production within each business is only seen positively by 32% of bosses. Just 21% agreed with the extension of fixed daily rates to SMEs, and only 26% with the increased flexibility of economic lay-offs in times of slow business or loss-making.

85% even said they did not believe that big infrastructure projects will help to boost the French economy.

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