The labor reforms were largely directed at making companies take on more workers on permanent contracts, rather than temporary ones, to bring down the unemployment rate from ten percent. The proposals would give employers more scope to lay-off workers and cut costs and allow some employees to work far longer than the current 35-hour week.
Other reforms include a cap on severance pay for workers dismissed by a company. The current uncertain cost of laying-off workers mean that companies are risk-averse to doing so, leaving them less flexible and — in some cases — less productive. The government has now relented on that point, making the proposed cap non-binding.
Unpopular Hollande
Employment protection is higher in France than in other major western countries, according to calculations by the Organization for Economic Cooperation and Development (OECD) and HSBC.
A group of lawmakers from Hollande's own socialist party released a statement saying:
"This bill is not useful for France or for the common good. It is not in line with the reforms that one expects from a government of the left."
Despite a slight rise in popularity following the Charlie Bebdo and November 13 terror attacks, Hollande remains deeply unpopular over his handling of the economy. France has struggled to grow its economy — partly because of the Code du Travail — and partly because his efforts to counter unemployment have largely failed.
New @tns_global @Le_Figaro poll suggests François Hollande so unpopular he may come 4th in 2017 presidential vote pic.twitter.com/UNYN3dYpIx
— Evan O'Connell (@evanoconnell) April 18, 2016
Hollande has said he would not stand for a second term in the 2017 elections unless unemployment falls below 10 percent. Unless he can reform the labor laws, he is unlikely to hit that target.
