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Macron Takes On France’s Labor Code, 100 Years in the Making

But changing it is no easy task. Every such fundamental economic reform in France for at least the last quarter-century has foundered in the streets of Paris, overwhelmed by sometimes violent union demonstrations. Already, Mr. Macron’s ambition to roll back worker protections has helped dent his approval ratings.

Mr. Macron is trying to establish the revolutionary idea that over two centuries of laws and court decisions minutely regulating work — the contents of the code can now be bypassed. It is a shock to the system.

Unions, now in contentious negotiation with Mr. Macron’s government over the details, have not misunderstood what is at stake.


President Emmanuel Macron has made lightening the labor code the centerpiece of his promise to revitalize the economy. Credit Pool photo by Philippe Wojazer

“They’ve decided to break the Code du Travail,” Philippe Martinez, head of the hard-left CGT union, told reporters in July, after meeting with the French government. “There will be fewer rights for workers.”

Mr. Martinez promised antigovernment demonstrations for Sept. 12, after the return from summer holidays. “The workers have got to react,” he said.

It is not an idle threat. Last year Mr. Macron’s predecessor, President François Hollande, backed down from an assault on the code when the unions filled the streets in protest for weeks.

But Mr. Macron might be the one to break the mold.

Already the Parliament, controlled by representatives of his own political movement, has voted to let the president pass the reforms by ordinance, a shortcut past parliamentary debate and amendment. Once the details are worked out — and assuming France’s administrative high court signs off — the reforms become law.

It would be a major departure for France. For now, the labor code is so complex, and violating it is so risky, that many French employers keep it in a separate room and speak of it with awe. Only specialists, on their staff or outside it, are allowed to consult the oracle, they say.

Mr. Macron has set in motion a reform that, if it passes, would effectively keep the thick red book locked in its room, gathering dust.

The Macron changes would help employers set the rules on hiring and firing, ignore the crippling restraints in the code that discourage taking on new workers, and limit unions’ ability to get in the way. Instead, individual agreements would be negotiated at the company or industry level between bosses and workers.

Mr. Macron’s labor minister, Muriel Pénicaud, made the government’s intentions clear as she introduced the bill allowing Mr. Macron to act.

“The company itself is the space where the creation of social standards” — the protections, rights and obligations of workers — “most efficiently fulfills the specific needs of workers and companies, in the construction of the best compromise, closest to the ground,” she said.


France’s infamous, almost indecipherable labor code, the Code du Travail, is both revered and reviled. Credit Fred Tanneau/Agence France-Presse — Getty Images

The goal, she declared, is “to renew the French social model.”

That notion, unremarkable in the Anglo-Saxon world, represents a seismic shift in France. Every aspect of worker-employer relations will now be on the table.

The long epoch of the Jacobin, the centralizing and controlling hand of Paris in the grit of France’s economic life — present since the Napoleonic era — will be unraveled if Mr. Macron gets his way.

That hyper-regulation of much of French life, including labor, was formed in the early 19th century as part of the country’s escape from the chaos of the French Revolution.

“The emerging law,” a prominent Socialist wrote triumphantly in 1903, seven years before the birth of the labor code, “is a Socialist law.”

Indeed, at the heart of the code’s language is the notion that the worker is inevitably an exploitable object needing blanket protection from rapacious capitalist predators.

Over time, that idea has been woven into the fabric of the society and economy. Even today, Stéphane Sirot, a labor historian, said, “It is the state that makes the law.”

But if Mr. Macron prevails, the historic French opposition, even hatred, between worker and employer that is enshrined in the code will no longer be the guiding philosophy in labor relations.

“Company agreements will be the law — it is an incredible revolution,” said one of the country’s top labor lawyers, Jacques Barthélémy, a co-author of an influential report on the labor code in 2015 that helped inspire Mr. Macron’s proposals.

“This will make the French labor market more flexible, and allow companies to adapt,” said Gilbert Cette, an economist at the University of Aix-en-Provence who was Mr. Barthélémy’s co-author.


Factory workers building Smart cars in Hambach, France. Employers blame the Code du Travail for making it expensive to hire new workers and difficult — and even more costly — to fire them. Credit Dmitry Kostyukov for The New York Times

That is not the case today. For now, a company with 48 workers hesitates to go to 50, even if orders are expanding. Two more workers bring with them a host of new obligations under current law.

Those include structured negotiations with unions and workers and onerous new taxes. These barriers have become known as France’s infamous “social ceilings.”

“There is a discouragement, for sure, on the hiring of new people,” said Catherine Guerniou, who owns a small window-making company in the Paris suburbs.

“The ceilings are a barrier,” she said. “Sure, we’d like to grow,” expanding from the eight she now employs. “But I’m scared. There are so many constraints.”

With the philosophical shift proposed by Mr. Macron, those constraints could disappear. “The actors themselves would work out the agreements,” Mr. Cette said. “They become the authors.”

The unions are wary. Not least, under Mr. Macron’s proposals, labor courts — institutions going back to Napoleon and 1806 — could lose much of their power.

They tilt heavily in favor of labor, and at their discretion can award big payouts to workers who are dismissed. Those penalties have become among the chief disincentives to new hires.

On a recent afternoon at the austere glass-fronted labor court headquarters in the north of Paris, a lawyer for one union plainly acknowledged that the workers he represented had quit after being burned out from grueling workdays.

He nonetheless asked the panel of judges to recast the resignations as a firing — and hand them tens of thousands of euros in indemnities.


The labor minister, Muriel Pénicaud, made the government’s intentions clear as she introduced a bill that would allow the president to act toward reform. Credit Geoffroy Van Der Hasselt/Agence France-Presse — Getty Images

The request would be unthinkable in the United States, labor experts said, but in France the judges hardly blinked and appeared sympathetic.

Pierre Kuchly, a maker of industrial valves outside Paris, has been condemned by a labor board for wrongful firing. “You think you’ve done it right, but then you have to pay,” he said.

With a growing international business, he would like to add to his staff of 30. “Obviously, I hesitate to hire. If you want to separate from someone, it’s complicated,” he said.

“You’ve got to be able to let people go without creating problems,” he said. The code is not a help. “It’s so complex, I don’t even look at it,” Mr. Kuchly said.

The language of the code itself is extraordinarily mystifying, even in the judgment of experts. One passage in the section on firing states:

“If, in the case of the definitive and total closing of the company, the judge cannot, without being unaware of the autonomy of this reason for the firing, deduce the fault or the blameworthy frivolity from the sole absence of economic difficulties, or, in the contrary case, deduce the absence of fault from the existence of such difficulties, it is not forbidden to him to take into account the economic situation of the company in order to evaluate the conduct of the employer.”

Legal experts have interpreted the tangle to mean that an employer is not necessarily off the hook — indeed is perhaps guilty of “blameworthy frivolity” in a firing — even if his company is having financial problems.

And also that a shuttered company’s profits don’t necessarily point to an employer’s guilt.

The hazards embedded in that complexity scare employers into paralysis, experts and employers themselves say.

“We are in permanent fear of facing a Code du Travail that is more and more complex, of always having one more obligation,” said Ms. Guerniou, the window maker.

Recently, she hired a temporary worker to help with a surge in orders, intending to make the person full time. But then she decided against it.

“We felt that it was someone who really knew the Code du Travail,” she said. “He had caused problems at the SNCF,” the French state railroad, “‘You owe me this, you owe me that,’” Ms. Guerniou said. “We’ve gone too far.”

Source: NYT > World

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