The Lingering Travails of the Loi du Travail

  • While junior doctors strike in the UK, a French general strike is planned on Thursday over proposed labour market reforms.
  • IMF, OECD, Moody’s and HSBC all find that France’s current labour laws are partly responsible for economic underperformance. Yet 70% of the French population still oppose the reforms.
  • Labour laws are also leading to increasing number of temporary contracts. Since 2000, the proportion of new short-term contracts has increased by 11 percentage points.
  • Without reforms, the competitiveness gap between Germany and France will grow. Germany is the 4th most competitive country while France is 22nd.
  • The Government has already watered down the reforms. Proposals to cap compensation payments for unfair dismissal have been dropped.
  • Further reforms are unlikely after the 2017 Presidential election. Reforms are deeply unpopular and other priorities have risen up the political agenda.

Author Daniel Mahoney wrote an op-ed for City A.M. on the issues raised by this bulletin.

(Image: marcovdz)

Daniel Mahoney, Tim Knox, Nicolas Bouzou - Wednesday, 27th April, 2016