Top French union calls strike after Emmanuel Macron unveils crunch labour reform

Emmanuel Macron faces a union showdown after he unveiled ambitious labour reforms and asked the "impatient" French not to judge him after only 100 days in office.

 France's  major hardline union, CGT, blasted the reform as a "declaration of war" that spelled "the end of the work contract". It called for massive street action on September 12 from "workers, pensioners and the young", along with the smaller CFE-CGC union.  Other protests could follow. 

The broadside came minutes after Mr Macron's government outlined a major overhaul of France's draconian labour code in what has been dubbed a "make or break" moment three months into the president's five-year mandate.

While the CGT opposition was expected, in a blow to Mr Macron, the moderate CFDT union was also surprisingly negative, calling the reform "disappointing" and aspects of it "dogmatic" - but stopped short of calling for strikes. However, Force Ouvrière, another leftist union, struck a more conciliatory tone.

With France's mainstream Left and Right in tatters, political opposition to the reform is being led by the radical France Unbowed of leftist firebrand Jean-Luc Mélenchon, which is planning a mass march in Paris on September 23.

With his popularity nosediving, the reform is seen as a crucial test of Mr Macron's ability to drive through the reform by executive order and not bow to inevitable street protests.

By acting fast, he hopes to avoid a repeat of the months-long, sometimes violent protests unleashed by labour reforms pushed through last year by his predecessor Francois Hollande. These led to mass rallies in major cities, and the blockade of fuel depots and even nuclear power stations.

The difference here, Mr Macron insists, is that while Mr Hollande sprung his reform on the French, this one was a central plank of his manifesto.

French President Emmanuel Macron Credit: v/AFP

France's labour code is a collection of laws setting out workers' rights spanning over 3,000 pages, some dating back over a century.

With the French jobless rate currently at 9.5 per cent of the active population Mr Macron on Thursday said: "France is the only major economy of the European Union that has not beaten mass unemployment". 

The centrist believes that hugely protective workers rights scare companies from taking on new workers, and a more flexible labour market will "free up" the economy. The overhaul had to be "ambitious and efficient enough" to spur job creation.

Unveiling the reform, Edouard Philippe, the prime minister, said he "assumed responsibility for differences of opinion" with unions but said these were "nuanced". 

French CGT union leader Martinez arrives to attend a meeting on the government's labour reform bill at the prime minister's Hotel Matignon office in ParisCredit: CHARLES PLATIAU/Reuters

"Nobody can claim that the labour code today helps create jobs," he said. The new reform, he added, was "ambitious, balanced and fair" and would help France "make up for lost years". It would provide foreign investors with greater "visibility".

Detailing 36 measures in five decrees, the labour minister, Muriel Pénicaud, said that the very "spirit" of the labour code would change and the priority would "for the first time" be given to "small and medium and sized businesses".

The reform aims to make it easier to adapt work time, pay and workplace mobility to market conditions based on agreements reached by simplified majority between employers and workers.

Workers compensation for dismissal judged in a labour court to be unfair will be set at three months of wages for two-years in the company with the amount rising progressively depending on how long a worker was with the firm, unions said.

However, normal severance pay will be increased from 20 per cent of wages for each year in a company to 25 per cent.

French Labour Minister Muriel Penicaud holds a press conference after a meeting about the new labour law with representatives of French trade unionsCredit: ALAIN JOCARD/AFP

Employers will have more freedom to negotiate terms and conditions with employees at the company level, rather than being bound by industry-wide collective agreements.

Companies with less than 50 employees will be able to negotiate with a staff representative without union involvement. Bosses of companies with less than 20 staff will be able to call referendums on changes to conditions.

Other measures include streamlining workers' committees, which are mandatory within large companies, and expanding the use of flexible "project contracts".

In a further concession to companies, multinationals whose French operations are struggling will find it easier to lay off staff, while redundant workers will receive higher payouts.

France's Medef employers' union welcomed the reform as one France has been waiting "for decades", describing it as a "bellwether moment" for Mr Macron. François Asselin, head of the CPME, the confederation of small and medium-sized businesses, called it a "success both in form and content".

Mr Philippe said the reform was just the beginning, and that France also had to bring down the cost of labour. His government also announced a drop in corporate tax to 25 per cent from the current 33 per cent by 2022.

It is unclear what effect the reform will have on Mr Macron's popularity, which melted over the summer to 40 per cent. An overhaul of the wealth tax and cuts to housing assistance have left a swathe of voters feeling Mr Macron's policies favour the rich, pollsters say.

In a lengthy interview in Le Point magazine, he urged the French to be patient, saying: "One doesn't do things in 100 days, or else we'd be the only country that has a two-year presidential campaign to govern for three months."

The plan, he said, was to "profoundly transform the economy, society and the political landscape," saying opposition to this came from "old parties, old politicians, and their allies".

He pledged to make France a "major power full stop" and help make Europe "leader of the free world". At 39, France's youngest leader since Napoleon also claimed he wanted to bring "political heroism" back into fashion.

The reform will be signed by executive order at a council of ministers meeting on September 22 and will be in force by the "end of September", said Mr Philippe.