Wednesday, 16 March 2016

FRANCE: El Khomri Law

A new labor law, commonly referred to as ''the El Khomri law'' after the French Minister of Labor, Madame Myriam El Khomri, has generated significant attention in France over recent weeks. 

Tens of thousands of students and trade unionists rallied across the country last week against the government's labor reform plans, which put almost all aspects of France's strictly codified labor rules up for negotiation,  On Monday, Prime Minister, Mr Manuel Valls, unveiled a revised labor reform bill that makes concessions to trade unions following mass protests against the measures. 

In the revised version, the government will no longer impose a cap on severance for dismissed workers, a measure many companies argued would have helped reduce the uncertainty of going through the industrial court system. Instead, the new limits will be introduced as non-binding guidelines. But also give industrial courts more latitude than originally planned to assess the health of a company trying to lay off workers. Currently magistrates can block job cuts if they find that a company's other affiliates are profitable. The government wanted to limit the scope to as single location, but has now expanded that to include all of the company's activities in France. 

Despite Monday's concessions, the CGT and FO unions said that they wanted the government to scrap the bill completely, suggesting that Valls and President F. Hollande may face further protests in the coming weeks. 

The recent furore in France over the new labor law highlights a couple of unpleasant truths about the country. The new law, it is true, aims to introduce some measures that attack symbolic and real holy cow on the Left, a rather dramatic expansion of what constitutes a ''normal'' working week to 46 hours; a financial ceiling for unjust dismissal; and a redefinition of what unions are allowed to do in the case of disagreements and strikes. In short, French labor law will look a lot like its German counterpart. 

Let's not be flippant: these things matter, even in so called modern workplaces. But, then again, those workers also have unions to police the laws and protect them. Unfair dismissal is a real problem, which has no place in decent society-but it is not necessarily a problem that can be resolved by making compensation payments more unpredictable; French employers need to grow up and accept that workers have hard rights in workplaces. And too often a collective agreement is held up by one union not because that union fundamentally disagrees with it, but because all the others have signed it and thus ''sold out''. As usual the law was introduced without much debate with trade unions that represent those affected. 

In case things do not work out via the standard channels, the government has even made it clear that it might enforce the law without a vote- as if it were dealing with a state of emergency. The result, as usual in such cases in France: now that the law is tabled in parliament, the rest of the country engages in social mobilisation. Instead of taking the time to bring constituencies on board and then pass an amended version that has broad agreement, the government wrote the law and sent it to the ''Assembléé'' for approval. That makes for fast decision-making, sure, but also very slow or even implementation. 

Not surprisingly, the law, or much of it, has immediately been stamped as part of the ''neo-liberal'' project that the Left government is trying to force down the throat of the French. While the unions have been relatively moderate in their judgement, they see a few good things in the law but on the whole wish to see a lot of amendments and retractions-French employers are ritually foaming at the mouth, and every other possible group that could be affected has voiced its concern, including the ''Front National''. 

The law has also been the starting gun for grand maneuvres on the Left in preparation for the presidential elections. President Hollande is, to put it gently , not very popular. Elections are taking place in a little over a  year, and this law is a perfect opportunity for some big beasts in Hollande's Socialist Party (PS) to sharpen their profile with the party base. 

It is not a coincidence that Madame ''Martine Aubry'', the previous female Minister of Labor and a Social Affairs in the 1990s, who introduced the 35-hour week, is among the most vocal opponents of the law. She may have good substantive reasons for her problems with the law. Yet there is also little doubt that her ambitions to run for president, as she did in 2011 but lost to Hollande, have not been tempered and this is too good an occasion to ignore. 

Finally, and perhaps most importantly, it is all not going to matter much. The problem with France does not lie on the supply side of the labor market. Sure, France could perhaps do with a little more flexicurity-type flexibility here and there, as the law is introducing-although it is hardly the rigid nightmare that everyone believes it to be-and there are some relics among the labor laws that make life comfortable for some groups of workers while doing the opposite for others. 

But French growth and unemployment do not, did not, and never have depended on a more flexible labor market. The Problem with France is simple: It is in a monetary union with Germany, a much stronger, better-organized economy and therefore pays a high cost in no longer being able to control the main levers of economic adjustment, from interest rates via exchange rates to fiscal policy.

Because they no longer can rely on those instruments, politicians are looking for solutions where they can in the same way the proverbial drunk is looking for his keys under the light by the lamp post. He did not get home safely.

By Guylain Gustave Moke
Investigative Journalist
Political Analyst/Writer
World Affairs Expert

Photo-Credit: Agence France Presse-photo of : French Labor Minister Madame: Myriam El Khomri