Posted on August
15, 2017 by Yves Smith
Yves here. While this post may
seem to be focused on a particularly narrow issue, it’s important object
lesson. The post below shows that a recent New York Times story wasn’t simply
inaccurate, but that it flagrantly and verifiably misrepresented French labor
rules in almost every manner imaginable. In other words, this article wasn’t
reporting. It was unabashed propaganda.
By a senior general counsel
with over 20 years’ experience across the IT, finance, insurance, banking,
telecom, biotech, media and entertainment sectors who is now Legal Director for
a major consultancy in France. Managed a series of multinational corporate
restructuring programs in Europe during the financial crisis. Very
knowledgeable about labor law regimes across the continent
The August 4th New York Times
article Macron Takes On
France’s Labor Code, 100 Years in the Making by Adam Nossiter is misleading
and erroneous in its description of the Labor Code – – “a mind-numbing 3,324
pages long and growing” – from his first sentence .
Nossiter’s article is curious,
infuriating and filled with hoary but totally false statements that support the
neoliberal argument that France needs to dismantle its worker protections to
make it more “competitive” and “flexible” – despite the fact that French
workers are more productive than just about any other workforce in the
Developed World ($108/hour worked versus G7 average $102).
Firstly, yes, the Code is
around 3000 pages long, including annotated case law references for the various
laws. Why are 3000 pages needed to regulate the labor market?
As readers of NC will know,
France is a unitary country with one legal system for all its regions and départements.
Meaning that one code needs to cover the entire country.
Since Nossiter is seemingly
astounded by all those French pages, let’s compare it to the much more flexible
US law page counts: The US Code Title 29 combined with the Code of Federal
Regulations (CFR) Title 29 is a mere 1874 printed pages. Note that the French
Code is printed on much smaller sized paper (A5, 148x210mm) to make it easier
to carry. So in fact, just the US Federal law (not counting state laws or case
law) is already much more voluminous than the French Code.
Nossiter’s further claims that
“France’s infamous, almost indecipherable labor code, the Code du Travail is
both revered and reviled.
Infamous? It’s hard to
understand how this could be applied to such a banal handbook of how to legally
manage employees. It’s a specialist’s legal text.
Indecipherable? Hardly. A
layperson could easily peruse the table of contents or the index to find out
for example, how a labor tribunal is composed and rules for the election of
judges. If I’m worried that I’ll be fired, I could look up the rules for the
proper procedure and prepare myself for the kabuki show of the entretien
préalable where the employer must inform you of the reasons for your dismissal
and give you a chance to respond.
Reviled? Perhaps in hardcore
French neoliberal French business circles, the Code is reviled. It would be
their dream to be able to hire and fire “at will” as in the US. No labor lawyer
I know – and I know some very liberal/neoliberal-minded ones – reviles the
code. One occasionally hears frustration with the way certain articles have
been drafted, or the latest Cassation Court decision interpreting a point of
law but never something as strong as revulsion.
Revered? Of course unions and
workers’ organizations rightly revere the Code as the result of decades of
struggle for labor rights. France is by no means a redistributive Democratic
Socialist country in the Scandinavian mold but it does have a history of
workers’ solidarity movements making hard fought achievements in social rights
– and the Labor Code is a key embodiment of those protections.
Nossiter again: The code is
regarded by many as the wellspring of the country’s malaise and
the chief obstacle to
generating jobs, leaving the country with an unemployment rate that hovers
persistently around 10 percent.
Wellspring of the country’s
malaise, chief obstacle to generating jobs? What is France’s malaise? Ask
French people what’s wrong with the country and they will not tell you it’s the
Labor Code. As of the last survey by IPSOS, French people are most concerned
about changes to the Labor Code. From Le Monde:
Nearly half of them (48%, +5
points in one year) believe that the protection of employees should be
strengthened, compared to 44% (down 7 points), who want more flexibility in the
labor market, and 8% to maintain the current situation.
Similarly, 55% (+ 13 points in
one year) believe that, in order to boost growth, the role of the State in
certain sectors of the economy must be strengthened, as against 45% (- 13
points) wishing to limit the role of the state and give as much freedom as
possible to enterprises.
Nossitter: “Mr. Macron is
trying to establish the revolutionary idea that over two centuries of laws and
court decisions minutely regulating work — the contents of the code — can now
be bypassed.”
There is no talk of bypassing
the Code. To be very clear, the changes to labor law that the Macron
administration is proposing will be incorporated into the existing Code (likely
making it even more mind-numbing for the New York Times). The proposed changes
are as follows:
Upper and lower limits on
labor tribunal awards. rather than allowing the labor tribunals to award
monetary compensation based on their opinion of the individual case, the new
law would set out a number of levels based on types of unjustified dismissals.
This is to allow employers to better estimate the cost of a dismissal and avoid
long court cases.
Economic layoffs in
multinational groups. the current law forces labor tribunals to consider the
worldwide economic performance of a multinational in judging whether a layoff
in France is justified. The law would allow the courts to limit their
consideration to only performance in France or perhaps the EU (still being
argued), allowing multinationals to close poor-performing French subsidiaries
at a lower cost.
Reduction of the statute of
limitations on bringing an unfair dismissal case against a former employer. The
current law allows employees up to a year to challenge an unfair dismissal. The
proposal is for a reduction but the limit has not yet been mooted by the
administration.
Part-time contracts for
project work. Currently, part-time contracts (CDD) are limited to 6 months in
duration with one renewal. The change would allow longer contracts to match
“project” work. This is promoted as modernization that will be adopted by the
IT sector but it is easy to see how this could also affect the building and
construction industry – though there is discussion about limiting this to
certain sectors of the economy. Things aren’t clear yet and this could be the
one aspect that does not get through to the final law. This is a long-wished
for change by the business lobby.
There are also some proposed articles
governing night hours (these have to be agreed in a collective agreement) and
the accounting of hours linked to pension amounts for certain jobs that are
considered especially physically arduous (train workers, construction, nursing,
etc.).
Legal recognition of
intra-enterprise agreements: while not yet clear how this will look in text,
the administration intends to allow certain intra-company agreements to take
precedence over collective agreements for entire professions or agreements
among a group of interrelated companies.
Nossiter on this aspect:
“individual agreements would be negotiated at the company or industry level
between bosses and workers.”
False.
This change would not simply
permit a company to “bypass” the Code but is considered an “inversion” of the
current philosophy of the labor law in that it allows lower steps in the
hierarchy to change regulation by simple company vote. Unions are for the most
part against this provision that would in effect abrogate their authority from the
bottom up.
It is also worth noting that
an employer does not currently have the right to organize an employee
referendum – this is either set out in law for the employees to organize
themselves through their works councils or via a union if it has enough
members.
Nossiter: “Last year Mr.
Macron’s predecessor, President François Hollande, backed down from an assault
on the code when the unions filled the streets in protest for weeks.”
False. After much protest,
some of it violent — and the formation of the “Nuit Debout” movement — the “El
Khomri” law was indeed passed by using a parliamentary maneuver under Article
49 of the French Constitution which allows the Prime Minister to pass a
non-budget law once per session if the government can survive a no-confidence
vote.
Nossiter: “For now, the labor
code is so complex, and violating it is so risky, that many French employers
keep it in a separate room and speak of it with awe. Only specialists, on their
staff or outside it, are allowed to consult the oracle, they say.”
This is absolute nonsense.
Anyone can consult the Code online. In my company’s Legal Department it sits on a table
next to the team of 3 labor lawyers. I think there’s a few copies, actually.
Anyone can stop by and read it. I might page through it for an aspect of my own
work with no one raising an eyebrow.
Nossiter: “The long epoch of
the Jacobin, the centralizing and controlling hand of Paris in the grit of
France’s economic life — present since the Napoleonic era — will be unraveled
if Mr. Macron gets his way.”
What to say here. I’ve set out
above the reforms – there is no change to the unitary government, the Code
promulgated from Napoleon’s time will still be in effect (the Code Civil – the
Labor Code dates from the 1900’s). The only thing unraveling is Nossiter’s
article on these pages.
Nossiter: “Indeed, at the
heart of the code’s language is the notion that the worker is inevitably an
exploitable object needing blanket protection from rapacious capitalist
predators. Over time, that idea has been woven into the fabric of the society
and economy. Even today, Stéphane Sirot, a labor historian, said, ‘It is the
state that makes the law.’”
The Code sets out provisions
that govern employer-employee relations and while there is a grain of truth in
the statement that the Code can be interpreted as having the point of view that
employees are exploitable, it’s because they are. An employer holds Damocle’s
sword if hiring and firing are not regulated by law. And yes, M. Sirot – the
state makes the law. I believe this is true just about everywhere – that said,
with legislative capture one could argue that the state doesn’t make the law
any longer in the US, but I digress.
Nossister: Labor courts […]
tilt heavily in favor of labor, and at their discretion can award big payouts
to workers who are dismissed. Those penalties have become among the chief
disincentives to new hires.
Nossiter is propagandizing by omission.
Labor courts only award payouts to workers who are dismissed without reason –
unjustified dismissals. This can be for discrimination, for example and often
is related to age or even an employee’s religion. This is why labor courts
exist.
There is more in Nossiter’s
alarmingly inaccurate article that is worth examining but this is perhaps the
best line and it comes not from him but the owner of a window business that he
interviewed:
Recently, she hired a
temporary worker to help with a surge in orders, intending to make the person
full time. But then she decided against it. “We felt that it was someone who
really knew the Code du Travail,” she said. “He had caused problems at the
SNCF,” the French state railroad, “‘You owe me this, you owe me that,’” Ms.
Guerniou said. “We’ve gone too far.”
A temporary worker at a window
business “really knew” the inscrutable, impenetrable, reviled, revered Code du
Travail? Not only that, he was fired for it.
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