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* Decree allows Sunday trading for DIY stores til mid 2015
* Workers will have to be paid at least twice more -decree
* Move seeks to appease retailers, workers pending new law
By Natalie Huet
PARIS, Dec 31 The French government has ruled to let home improvement stores open temporarily on Sundays while it reviews complex trading rules business leaders say hold back growth in Europe's second largest economy.
Sunday has been enshrined in law as a day of rest in France since 1906 but myriad clauses and exemptions have complicated the situation - with furniture and gardening stores for example cleared to open but not home improvement (DIY) stores.
Managers and workers from DIY stores have in recent months demanded the right to open too, staging protests and defying court-ordered closures in a dispute pitting them against hardline trade unions.
In a joint statement on Tuesday, France's trade and labour ministers said the government had passed a decree exempting DIY stores from the Sunday trading ban until July 1, 2015.
They said the move aimed to ensure that DIY stores willing to open on Sundays could do so legally pending an overhaul of the country's trading laws. They restated, however, that Sunday rest should remain the rule, and openings the exception.
The latest exemption would only impact those DIY store workers willing to work on Sundays, they said, stressing that these would have to be paid at least twice their usual wage, be granted compensatory rest and given guarantees in terms of job security and training opportunities.
Gerald Fillon, a Leroy-Merlin employee and spokesman for DIY workers supporting Sunday openings, welcomed the news.
"It's a great relief. This decree will allow us to open every weekend without being attacked from all sides," he told Reuters. "We're very happy the government heard us."
Business leaders in support of Sunday trading say it would boost jobs and wages in France at a time when unemployment has surged above 10 percent and economic growth is close to zero.
They are backed by some workers who say they need the extra pay. Some, such as Fillon, even took to the streets, demanding the right to work on Sunday and chanting "Yes Week-End" in a pun on U.S. President Barack Obama's "Yes We Can" campaign slogan.
But opponents say Sunday trading usually creates low-paid, part-time labour. Others say Sunday should remain a quiet day devoted to personal, spiritual and family time.
In September, a court ordered 15 Castorama and Leroy Merlin stores in the Paris region to close on Sundays, following a complaint by competitor Bricorama, which was itself ordered last year to shut down on that day.
The ruling angered business federations and Prime Minister Jean-Marc Ayrault sought to defuse the dispute by tasking the former head of France's postal service to find ways to fix "weaknesses" in the current rules.
Employees of cosmetics store Sephora are also campaigning to overturn another ruling, which forbade its Champs Elysees outlet to stay open until midnight.
Fillon, the DIY store worker, said a lot still had to be done to simplify Sunday trading rules while making them fair for workers. The decree is only a temporary fix, he said.
"This is a new step in our fight. We won't be taking the streets anymore, but maybe we'll hang out a bit more in the parliament's lobbies," he said. (Editing by Mark John and Louise Heavens)