France is in the midst of reforming its often tough labour laws, in the teeth of opposition from unions which usually back the country’s socialist government.

The reform, commonly called the ‘El Khomri law‘ after the French labour minister Myriam El Khomri, will be debated and voted upon (and probably amended) in the National Assembly in early July.

This follows another vote and modification by the Senate on 28 June. Meanwhile, protests and social media opposition have continued since the law was first proposed in February. Opponents say it undermines basic rights of employees, giving boards more power to take decisions about their employees’ work obligations.

The main points of this proposed law are:

• New criteria for redundancy: any decline in turnover or losses compared with the previous year for a period of one to four trimesters, depending on company size, is sufficient to justify lay-offs.
• Giving boards more power to agree working time and overtime pay within contracts, which could breach national working hours limits in certain circumstances.
• A company referendum: when a majority of trade unions refuse to sign an enterprise’s working agreement, minority organisations representing 30% of employees can call for a referendum to disavow such a veto.
• Provisions insisting that company agreements be renegotiated every five years.
• Scrapping an obligation for workers to receive mandatory health checks.

Although the final text is not yet known, many organisations think it will reflect this version, with liberalising amendments passed by the centre-right-controlled Senate being discarded.

Indeed, with many socialist members of the assembly being far from happy with the text, commentators predict that the law may be passed by a so-called 49-3 motion, an article from the Fifth Republic’s constitution that allows the executive, here led by prime minister Manuel Valls, to adopt a law, regardless of a parliamentary vote.

It has already used this procedure to overcome opposition during an earlier vote at the assembly (on 10 May).

Karl Ghazi, secretary general of the Confédération Générale du Travail (commerce section) trade union, explained to Board Agenda: “The Senate strengthened the text, like abolishing the 35-hour week, to show their opposition, as a rightist majority, to the National Assembly, but it will certainly come back to the original one, with the 49-3 motion in order to be sure it will pass.”

Paris-based labour lawyer David Van der Vlist agrees: “The government is confronted with a very particular situation because it doesn’t have a majority in the National Assembly, while the right wing agrees with the project but is opposed in order not to offer a political victory to their opponents one year before the presidential elections.

“Conversely, leftist parties and a big part of the socialist group are opposed to it, and the general opposition is a majority.

“The text is going to be analysed in the National Assembly from the 5^th to the 8^th of July, but it’s very probable that the government will use the 49-3 again before any debate that could delay the text’s adoption”.

The clause was written into the constitution to promote stable government, profoundly lacking in the shifting parliamentary majorities of the Fourth Republic, which collapsed in 1958.

Dr Michel de Fabiani, president of the remuneration committees section of the French Institute of Directors (IFA—Institut Français des Administrateurs), welcomed the anticipated reform.

He told Board Agenda: “If we assume that the final text will be the same as the one initially proposed by the government, we can consider it really brings progress as opposed to the current situation.”

De Fabiani says the law would allow “more practical working agreements to be put in place, fitting with companies’ needs”.

As for the board role in securing such agreements, he predicted management may drive strategy here and inform boards after a deal, but how the system would work in practice, he said, was not yet clear.

According to Karl Ghazi, the law is “only a recast of the old requests by the Medef [Mouvement des entreprises de France—the country’s business association] from the end of the 90s, where they wanted to make the labour law supplementary to the national convention of companies and allow companies to overcome the social public order”.

More leeway

Medef refused to comment before the law was voted upon. But it is clear that the law will give companies more leeway to negotiate worker hours than the current national 35-hour-a-week cap, giving boards more power, but also forcing them to handle more industrial disputes.

“It would mean that each company has its own rules, which would affect competitiveness,” Ghazi explains, noting that if Peugeot forged a 40-hour-week agreement, Renault would follow suit “to remain competitive and limit its production costs”.

Moreover, Ghazi says the referendum was also a powerful tool for boards wanting to undermine unions: “It’s saying that unions and staff representatives are not representative of the companies, even though employees voted for them.

“Then it’s easy to address directly the employees, telling them that in case they don’t agree with their board of administrators they would lose money and have to fire people, which is blackmail, easy to do when people are scared for their job.”