French Senate To Vote On Significant Labor Reform


PARIS (AP) â¿¿ France's parliament has passed a package of significant labor reforms Tuesday that the government hopes will help halt rising unemployment and jumpstart the country's stagnant economy.

The bill is one of President Francois Hollande's signature pieces of legislation designed to overhaul the country's notoriously hidebound labor market. It includes measures such as making it easier for workers to change jobs and for companies to fire employees.

Hollande, who is struggling in the polls, hopes the law will help bring down France's 10.6 percent unemployment rate and get the economy moving again. The country's gross domestic product hasn't risen significantly in a year, and France may have already fallen into another recession. GDP contracted 0.3 percent in the fourth quarter of 2012, and data released this week could show it fell again in the first quarter.

While France's economy has so far not suffered the same decline of its recession-hit neighbors, such as Spain and Italy, it also hasn't made the same efforts at reform.

The law "is a very good step in a very good direction but it has to just be the first," says Elie Cohen, an economist has advised Hollande.

"We need a second, a third a fourth and a fifth step."

The Senate easily passed a final version of the law Tuesday. The National Assembly had already approved it.

Here's a look at some of the measures in the law and what more needs to be done to shake up France's labor market:


One of the main measures of the bill allows companies to temporarily cut workers' salaries or hours during times of economic difficulty. This measure takes its inspiration from Germany, where furloughs have been credited with allowing companies to weather difficult times without resorting to massive layoffs. The government is hoping this will stem the tide of job losses that have been piling up in France; companies may find it easier to put workers on temporary leave rather than go through the notoriously onerous firing procedures.

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