Signs of flexibility in EU markets?

The French government has launched a programme of labour reforms that many are hailing as controversial.  The reforms are designed to make it easier for businesses to hire and fire employees and create jobs in order to spur on France’s economic growth.

After the very similar 2016 reforms were met with major protests on the streets of France, this move by Macron could either exemplify his government’s ability to push through difficult legislation and as such be seen to be making good on his campaign promises or it could cause a major blow to his popularity.

During his campaign, Macron stressed the need for businesses to be flexible in order to grow and that the French system as it stood did not and would not allow that to happen.  The reforms will allow for much more flexibility and will likely increase the interest in France as a place for big businesses to grow.  This is something that the EU member state will be thinking about as the UK prepares to leave the EU and big businesses consider a Head Office move to a country within the EU and the single market.

The reforms will introduce a limitation period of two months for employees to commence a legal challenge against their employers.  This is similar to the UK’s three month limitation period for challenges to be made in the Employment Tribunal.

Alongside this, the reforms will see a cap on severance packages that employers can be ordered to make where the employee has been dismissed for no justifiable reason.

This is not unlike the UK’s tribunal system which has a caps for unfair dismissal and wrongful dismissal of £80,541 (or one year’s salary) and £25,000 respectively.  Where the amount of money claimed is above the £25,000 limit for wrongful dismissal, a claim can be made in the High Court for the superior amount only where tribunal proceedings have been commenced but stayed subject to the High Court’s decision (in order to be within the 3 month limitation period should the matter return to the Employment Tribunal).

Macron has also stated the reforms will also aid in reducing unemployment in France of 10 per cent to around 7 per cent of the workforce by the end of 2022. 

Many have highlighted that, despite the reform’s similarities to those in 2016, there has been a dilution in the expected mass street protests over the summer from the French trade unions.  This is likely because Macron has listened to the trade unions and has attempted to implement fair economic and social change for both companies, their employees and the trade unions whilst ensuring that France’s economy progresses in the right direction. 

Protests are something that Macron will undoubtedly wish to avoid however with the current pro-business stance of the reforms, protests will be expected. It will however be interesting to see whether the public uproar will be as it was just over 12 months ago or whether the public will back Macron.

If you would like to discuss this further or have any employment questions, please contact David Gibson on 0191 232 0283 or at dg@srflegal.co.uk.