News analysis

An autumn of discontent awaits Macron

Major union, with backing of left-wing opposition parties, calls for strikes against his plans to reform France's rigid labour laws

One of France's biggest trade unions has called for strikes next week in response to President Emmanuel Macron's plans to change the country's rigid labour laws.

The proposed strikes, which already enjoy the backing of the country's left-wing opposition parties, will be the most serious challenge to Mr Macron since his election in May, and could well seal the fate of his entire presidency. For nothing is as politically toxic in France as attempts to curtail the privileges of unionised workers.

Hovering at around 10 per cent of the labour force, France's unemployment rate is more than double that of Germany or Britain; as Mr Macron admitted this week, his country is "the only major economy of the European Union that has not beaten mass unemployment". He seeks to tackle this; he ran an election campaign on a promise to slash jobless rates to not more than 7 per cent by the end of his presidential term in 2022.

Key to upholding the pledge is an overhaul of France's labour code, one of Europe's most complex, which covers everything from employers' obligations to pay a union-negotiated minimum salary in each industrial sector, to expensive compensation packages for laid-off workers. The code acts as a huge disincentive to hiring workers and hits young workers particularly hard; statistically, they are twice as likely to remain without a job, since employers fear the financial costs of hiring.

The reforms announced by Mr Macron's government on Thursday represent only a modest step in labour liberalisation. If implemented, they will allow small and medium-sized enterprises - in which up to half of France's labour force is employed - to negotiate their own salary packages, independently of what their respective industrial sector may have agreed with nationwide trade unions; that should result in greater employment, albeit at potentially lower salaries.

Compensation for those retrenched will be capped at a minimum of three months' pay for those who have worked for more than two years with the same employer, to not more than 20 months' pay for veteran workers; the minimum payout now is half a year's salary. And although workers who are laid off will retain the right to appeal to the courts, the scope of their appeals will be narrowed.

Labour Minister Muriel Penicaud is deliberately trying to play down the revolutionary character of the measures, claiming that they are aimed at promoting a new "dialogue".

People protesting against new labour laws at a union forum near Paris on Wednesday. France's jobless rate hovers at around 10 per cent. PHOTO: REUTERS

This low-key approach appears to have achieved its immediate objective, which is to defuse any united backlash from unionised labour. Two major trade unions, the Workers' Force and the French Democratic Confederation of Labour, have announced that, although they dislike the reforms, they won't actively oppose them.

But the General Confederation of Labour (or CGT as it is known by its French acronym) is now calling for strikes and, although it's not the largest union, it is particularly strong in key industries such as railways and ports, as well as energy distribution networks.

On paper, Mr Macron has a wide popular mandate for what he proposes to do. His party holds an absolute majority of 308 seats in the 577-seat National Assembly and latest opinion polls indicate that up to 60 per cent of the public is persuaded of the necessity to reform the labour laws.

But the centre-left Socialist party, which governed France until May, is desperate to regain its popularity by opposing reforms it dismisses as "doing nothing to address important needs such as social dialogue", as Mr Boris Vallaud, one its leaders, characterised them. And the Socialists are being outflanked in their opposition by a movement created by Mr Jean-Luc Melenchon, a radical far-left politician who is planning his own "mass protest march" through Paris in order to deliver a response, as he puts it, "to the height of aggression" from the government.

As things stand, Mr Macron should be able to prevail, and he is predicted to win a legal challenge to the reforms, on which France's constitutional court is scheduled to rule by the end of this month.

Still, the obstacles he faces remain considerable. For next month he will also have to present a new Budget, which will cut expenditure in order to reduce France's borrowing. And his personal approval ratings are nosediving: they have fallen from 57 per cent before the traditional French August holidays to 40 per cent today.

A hot autumn lies ahead.

A version of this article appeared in the print edition of The Straits Times on September 02, 2017, with the headline 'An autumn of discontent awaits Macron'. Print Edition | Subscribe