France’s government is on the verge of drastically changing its centuries-old Labor Code to make it easier to hire and fire workers — and companies in America are waiting for the ripple effects to wash ashore.
At its heart, among the many bylaws in the 3,400-page Labor Code are laws that protect jobs so that a corporation can’t fire a worker without due cause. Companies in France — as well as companies in America — want to change the Labor Code to make it more flexible. French companies, they say, can’t be competitive without these changes.
French workers and students taking to the streets to protest the changes, and the people of France are with them. A survey last week by French polling company IFOP showed that six of 10 French people support the strikes.
What are the changes?
Under the proposed changes, large companies would be able to negotiate deals with their staffs directly, rather than go through unions, to work longer than the 35-hour week currently allowed, at lower wages. Companies can do this only at times when they face economic difficulties or are seeking to boost market share. The changes also would make it easier for companies to use economic reasons to justify layoffs. In addition, unions would have less influence on negotiating salaries, paid holidays, bonuses and pensions.
The unions are staunchly opposed to the changes, saying they could lead to a reduction of workers’ rights, benefits and job protection.
The changes are a “danger to our rights, and our lives,” read a social media headline published by Mobilization Paris 1, a group representing students at the University of Paris-Sorbonne, one of France’s biggest universities. The students were supposed to be one of the sectors of society that would be in support of the changes, but instead, the students oppose them, saying they would jeopardize equality.
Why does America care?
If the changes to the law made French companies more competitive relative to their American counterparts, then American companies should be opposed to them, right? On the contrary. The American Chamber of Commerce is strongly backing them. The chamber says that the Labor Code not only hurts French companies, but it also hurts U.S. companies that want to hire and fire workers in France.
France needs to “adapt labor law to the economic reality,” said the American Chamber of Commerce in France. “The rigidity of the French labor market is a recurring irritant which also penalizes France and its attractiveness” as an investment, read an article written by the policy committee and signed by the six members of the chamber’s board, including officials from Dow Chemical, Google, IBM, Cisco, 3M and BNP Paribas.
The question for Americans then is do we support our companies’ stance in the matter of business policy and increased flexibility? Or should we stand by the French people who would seek to preserve workers’ rights, protect jobs and a voice for unions?
After the government of President Francois Hollande succeeded in pushing softened-down changes through the National Assembly, the French Senate is scheduled to take up the issue this week.