France Unveils Contentious Labor Overhaul in Big Test for Macron

“Of course, we know that labor laws are not the primary cause of unemployment in France,” Mr. Philippe said. “But we also know that if we want to move forward on the question of employment, we have to deal with all aspects, all causes of unemployment together.”

Mr. Philippe said that for employers, especially small companies, and for foreign investors, the labor code “is often perceived as an obstacle to hiring, as an obstacle to investment,” and he called the overhaul “ambitious, balanced, and fair.”

But union leaders, speaking to reporters after the meeting with the government, had mixed reactions, expressing satisfaction with some points and dismay at others, like the permission for bosses to negotiate directly with staff members in companies with fewer than 20 workers.

The overhaul to the vast and complicated labor code is only part of a broader effort, and the government is working on more contentious changes, including budget cuts and modifications to the pension and unemployment systems.

The government held talks over the summer with the unions to discuss the changes, which would make it easier for employers to hire and fire workers and to engage in collective bargaining at the company level, as opposed to industrywide agreements.

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President Emmanuel Macron in Paris on Tuesday. The overhaul to the vast and complicated labor code is only part of a broader effort that includes budget cuts and modifications to the pension and unemployment systems.

Credit
Yoan Valat/European Pressphoto Agency

“The reform of the labor market is a reform of profound transformation,” Mr. Macron told the weekly Le Point in a wide-ranging interview published online on Wednesday, adding that it had to be “ambitious and efficient enough to continue to lower mass unemployment.”

The government argues that the changes are…

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