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PARIS, March 27 (Reuters) - A top French court knocked down a law on Thursday that would have imposed hefty fines on healthy companies which closed factories, deeming it unconstitutional in a setback for its champion, President Francois Hollande.
The Socialist Hollande pushed the law through parliament in October to regain support from blue-collar workers disappointed over what many perceived to be market-friendly reforms implemented during his first months in power.
It would have required firms with more than 1,000 employees to prove they had exhausted all options for selling a factory before closing it down. Stiff fines were foreseen for firms which failed to prove they had done enough to find a buyer.
Such requirements would "impose burdens on companies' business decisions... that amount to an unconstitutional infringement on property rights and freedom of enterprise," the Constitutional Court wrote in a statement.
Business leaders had criticised the "Florange" law, named after a steelworks in northern France where Hollande, during his 2012 campaign for the presidency, told workers would pass legislation to protect their jobs in case of a shutdown.
It would have allowed commercial courts to fine firms up to 20 times the minimum wage (1,430 euros or $1,900) per worker laid off if the sale of a factory was found to be unjustified.
Such penalties were "out of proportion with the seriousness of the targeted behaviour," the court wrote.
With joblessness still above 10 percent despite billions of euros spent on subsidised jobs for youths, Hollande's approval ratings have fallen further since October to reach their lowest level for any French president since World War Two.
Frustration over joblessness contributed to the Socialist Party's poor showing in the first round of local elections on Sunday and helped the far-right National Front party make strong gains, notably in blue-collar areas.
Marine Le Pen's National Front seized the town hall of Henin-Beaumont, a former Socialist bastion in northern France, and the party is positioned to win several more in the second round on Sunday.
Reporting By Emile Picy; Writing by Nicholas Vinocur; editing by John Irish and Andrew Callus