After two months of strikes, sit-ins and violent street protests, the French government has caved in to social pressure and scrapped the First Employment Contract (CPE). The law was a controversial element of its equal opportunities Bill, designed to give underprivileged young people access to the jobs market.
This volte-face is not only a crushing blow to the credibility of prime minister Dominique de Villepin, who staked his reputation on the Bill, but has thrown the much-needed reform of the country’s labour laws into a state of disarray.
The sticking point in the proposed contract was the clause that would have allowed French employers to dismiss workers under the age of 26 without the need for explanation within a two-year probation period.
Ironically, the contract was an attempt to alleviate discontent, which exploded into urban riots at the end of 2005. With youth unemployment running at around 22%, the idea was that more flexibility for employers would lead to the creation of more jobs.
But in a country where high levels of employee protection are taken for granted, De Villepin’s attempts to force through this radical reform have been met with unassailable opposition.
At the French equivalent of the Chartered Institute of Personnel and Development – the Association Nationale des Directeurs et Cadres de la Fonction Personnel – deputy general Marie Eon said the government’s failure to consult with employers and unions led to a misconceived contract that was doomed to failure. “The government had to deal with unemployment, but failed to negotiate with employers and other social partners,” Eon told Personnel Today.
She said that most employers were against the CPE, as they believed it would have led to a two-tier recruitment market where young people would have been stigmatised and treated unfairly.
However, Eon agreed that the reform of French employment law is necessary if the country is to compete with the free market economies of northern Europe and the US.
Currently, 90% of workers in France are employed on a contract called the CDI. This offers permanent employment with an average probation period of 1.5 months (compared with one month in the UK) and any dismissals are subject to long, drawn-out processes.
Redundancies of more than one employee have to be referred to local government officials, and employers live in fear of legal action should they fire a worker.
Anne Saint-Martin, an economist at the Organisation for Economic Co-operation and Development, said 25% of dismissals in France end up at tribunal, with three-quarters of these being won by the employees.
“The CDI is really rigid and causes employers a lot of judicial uncertainty,” said Saint-Martin.
Attempts by the government to establish more flexible employment agreements started in August 2005, when it introduced a contract aimed at helping small companies to grow without having to commit to taking on staff long term.
A forerunner to the ill-fated CPE contract, the CNE contract, gives companies with fewer than 20 employees special rights to lay off staff within their first two years without showing a ñreal and serious reasonî.
This is widely thought to have brought real benefits and about 400,000 workers are now employed under CNE terms.
But the CPE contract would have extended this right to all firms and singled out young workers as dispensable – a step too far in a country with a rich tradition of student rebellion and union uprisings.
Instead, the government backtracked and announced some unconvincing measures to replace it. These include boosting existing public sector job programmes, and offering incentives to private employers to take on young people from disadvantaged areas.
But these makeshift proposals ignore the issue of protectionism that is holding back French employers, according to Philip Bushill-Matthews, MEP for the West Midlands and Conservative spokesman on employment.
“The problem won’t go away until politicians give a real lead,” he said. “But now people know this government will bow to pressure, nothing will happen until a new government comes in.”
In the meantime, increasing numbers of young French adults will continue to migrate in search of work opportunities.
Amelie Leonard, a 30-year-old communications professional, left Paris for London six years ago. She said: “France never had a period of privatisation similar to Thatcherism, and is still very much a socialist country. Getting a proper job is a real problem in France.”
Dominic de Villepin
French prime minister
“I wanted to act fast on joblessness, because the dramatic situation and the despair of many young people made it vital. Initially, I wanted to put forward a strong solution. Not everyone understood that, and I regret it.”
MEP and Conservative spokesman on employment
“The French politicians showed their naivety by putting forward a controversial Bill they had discussed with nobody.”