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Saturday 26 July 2008

A French revolution in labour law as Sarkozy aims to get the country working

This week saw parliamentary approval for a change in France's labour laws and a potential beginning of the end to the country's 35-hour working week.

The French president, Nicolas Sarkozy, and his ruling centre-right Union pour un Mouvement Populaire (Union for a Popular Movement UMP) party say the decision will loosen up the country's labour laws and provide a boost to the economy.

Opponents see it as a "step back in time" and a threat to social justice.

At the heart of the reform is the challenge to the France's 35-hour working week.

Many would agree that the original legislation - introduced just over 10 years ago - has had something of a stranglehold on the French labour market ever since.

The original goal of the then Socialist government was to decrease unemployment. But instead the results have been minimal, if not nearly impossible to gauge and, say many economists, cost the country millions of euros.

And while there has been an increase in people taking on second jobs in their free time, critics have claimed that small and medium sized businesses in particular have suffered from the inflexibility of the existing law, and it has made them less competitive.

Employment minister, Xavier Bertrand, one of Sarkozy's closest allies and a possible future prime minister, told national radio that the new law would make the labour market more flexible.

And there's certainly a case to be made for breaking the seeming rigidity of a system where work stops at a given hour regardless of whether a task has been finished - simply because that's the law.

But the new legislation won't actually get rid of the 35-hour-working week altogether, even if that might well be Sarkozy's eventual goal. It'll just allow companies to determine with their employees' consent how long the working week should last (maximum 48 hours) thereby bringing France more into line with its EU partners.

The latest move was probably inevitable as it's all part of Sarkozy's plan to get France back to work.

When asked at a press conference earlier this year whether he wanted to see the end of the 35-hour-working week, Sarkozy took most reporters' breath away by summing up his response in just one word - "yes".

Since then he has backtracked somewhat. In a sense he has had to, simply because his oft-repeated mantra of "work more to earn more" as a means of fulfilling his electoral pledge to increase the purchasing power of the average man and woman on the street, wouldn't function without it.

He still needs the 35-hour working week to be able to allow employers to pay overtime to employees who choose to take it. And he still needs employees to be able to choose between those extra days off they can accumulate or paid overtime. The two go hand in hand.

Sarkozy said as much in a televised inteview a couple of months ago when he admitted that he had not "communicated correctly" the thinking behind his so-called fiscal package. That has since been rectified with a million-euro advertising campaign.

Parliamentary approval is not quite the end of the road for the legislation as far as opponents are concerned.

They say the new law is "dangerous" and claim it increases the likelihood that employees will be forced to work longer hours without being properly paid for them, gives employers an unfair upper hand in allowing them to "dictate the rules" and will lead to an overall reduction in the number of days off.

A group of parliamentarians representing the political Left here in France, along with the Greens intends to challenge the legislation before the country's constitutional court.

For the moment though, Sarkozy finally seems to be delivering on some of the electoral promises he made last year. This latest reform follows hot on the heels of a general overhaul of the French constitution, approved at the beginning of this week.

If he can now be seen to be delivering on the one major area in which he has so far failed - increasing purchasing power - then the economy could well see the kick start it has been waiting for and been promised for over a year now.

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