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 necessary to give companies more flexibility and to help them adapt to an increasingly global marketplace. But opponents on the left counter that hard-won worker rights are being unfairly watered down, and they dispute the notion that the changes will help create jobs.

Philippe Martinez, the head of the General Confederation of Labor, a union known as the C.G.T., told France Inter radio on Thursday that the changes proposed by the government were “old recipes” that did not work. “All studies show that there is no relationship between collective rights and the fight against unemployment,” Mr. Martinez said.

Mr. Macron vowed after his election in May to move swiftly on changes to the labor code, and he decided to proceed by issuing a list of decrees, which Parliament authorized the government to do this month.

The decrees are expected to be issued at a cabinet meeting and signed by the president in September and to officially go into effect shortly afterward.

Parliament now has about five months to decide whether to ratify the changes. If lawmakers reject the new labor measures, they will remain in effect, but with an inferior status that means they can be overturned by Parliament at a later date.

Mr. Hollande passed changes to loosen the French labor code last year, despite weeks of street protests that sometimes turned violent and that pushed the government to dilute the overhaul.

Opponents of the new changes are planning to demonstrate, but there are signs that they might not be as united as they were last year.

The C.G.T., one of the bigger and more hard-line unions, has called for nationwide protests on Sept. 12, while the left-wing France Unbowed party is organizing a rally in Paris on Sept. 23.

But the head of the Force Ouvrière union, which stood by the C.G.T. last year to protest Mr. Hollande’s labor changes, told the business daily Les Échos on Wednesday that there had been a “real social dialogue” with the government and that his organization did not plan to demonstrate on Sept. 12. Other more moderate unions have also indicated that they are open to compromise with Mr. Macron.

“I think that we did our job as pragmatic unionists, which is to say that we discuss things point by point, and then in the end we will position ourselves on what is O.K. and what isn’t O.K.,” said Jean-Claude Mailly, the head of Force Ouvrière. “And I am sure that there will be some of both.”

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