June 6, 2017 / 4:05 PM / 2 years ago

Macron's government strikes firm tone as it unveils labor reform

PARIS (Reuters) - French President Emmanuel Macron’s government showed its resolve to reform France’s labor laws before the end of summer on Tuesday, warning unions that it intended to act swiftly.

Macron said during the presidential campaign that he planned to fast-track the pro-business legislation through use of executive decrees in a country where the high cost of hiring and firing is seen as a deterrent to investors, and where unemployment is near double-digits.

Unions had urged the government to take more time to discuss reforms they fear would reduce cherished employment rights and make France more like Anglo-American style labor markets where workers enjoy less protection.

But speaking after meeting unions, Macron’s prime minister stuck to a plan to pass the reforms during the summer holiday lull, a period in which unions could struggle to mobilize protesters, and said he would not seek to please unions on all of their demands.

“We won’t agree on everything, but we must move forward,” Edouard Philippe, a former conservative mayor told a news conference. “It’s both indispensable and urgent.”

Macron’s La Republique En Marche (LREM) party is on course to win a landslide majority in this month’s legislative elections, opinion polls show.

That should help the 39-year old president sweep aside resistance from left-wing lawmakers and could also limit public support for any trade union strike action aimed at derailing the measures.

French Prime Minister Edouard Philippe (R) and Labour Minister Muriel Penicaud attend a news conference to unveil the government's labour reforms, in Paris, France, June 6, 2017. REUTERS/Charles Platiau

Strikes and a rebellion in parliament were two factors that hamstrung the previous government’s attempts to introduce similar reforms.

Macron was a minister in that government between 2014 and 2016 before he quit to launch his presidential bid.

His progress reforming France’s regulation-laden economy this time around will be closely watched by Germany, which wants its European Union partners to boost growth and jobs by implementing measures like the ones it introduced more than a decade ago.

In a document released on Tuesday, the government broadly stuck to measures contained in Macron’s campaign manifesto including the capping of compensation awards in unfair dismissal cases. [L8N1J339K]

Two of the biggest unions appeared willing to engage in talks with the governments.

“I don’t think the unions will want to make a snap judgment since we only just got this letter from the government,” Laurent Berger of the moderate CFDT union said on French TV.

Although the more militant CGT union unsurprisingly said it disagreed with the reforms and called on workers to protest over the coming days and weeks, the smaller FO union said the reform plan contained both positive and negative points.

French Prime Minister Edouard Philippe (R) and Labour Minister Muriel Penicaud attend a news conference to unveil the government's labour reforms, in Paris, France, June 6, 2017. REUTERS/Charles Platiau

“It could be that unions will let past some major parts of the labor code reform, which would be good initially,” Agnes Verdier-Molinie of the IFRAP free-market think-tank said.

“But they may be going for a deal on the pension reform, which the government could easily backtrack on because nobody understands what was in this reform,” she said on Boursorama TV.

Macron plans to tackle pension reform next year and has said he wanted to merge all 37 pension systems into one, including the generous ones enjoyed by workers at the state-owned EDF utility or SNCF railway company.

Editing by Andrew Callus and Richard Lough

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