Written by Hilary Barnes
A “first impressions” dispatch by John Homes, UK ambassador to France 2001-06, in which he said how struck he was at the conservatism of French society, illustrated by, among other things, always going to great lengths to prevent companies from laying off personnel while taking much less interest in the creation of new jobs, has attracted a certain interest in France in the past few days.
Nothing has changed since. A new test of the present socialist government’s resolve may take place over the plan announced on October 8 by Alcatel Lucent (NYSE:ALU), the Paris-based Franco-American telecom equipment group, to eliminate 10,000 of its 72,000 jobs world-wide, including 900 out of about 10,500 in France.
According to a revision of the rules under this government, a company which wants to apply a collective lay-off plan must first obtain the agreement of a majority of the labour force for what is known as a “social plan”, or a programme to save jobs, before it can do so.
If it cannot do this, the decision passes to the goverment, which must approve the plan before any lay offs can take place.
In theory, the new legislation is, seen through the eyes of the employers, an advance, as it should speed up the process of finally agreeing to plans to lay of personnel.
Until the new law came into effect, trade union militants were often able to block the plans of a company to reduce the labour force for years by repeated recourse to the special courts that deal with these issues, which by reputation have a strong bias in favour of the trade union case.
The hitch is that in his presidential election campaign in 2012, President Francois Hollande made a point of declaring that he would go to great lengths to stop companies using collective lay-off plans. The more militant trade unions are now hoping to force him to live up to his campaign promises.
On October 8, Francois Hollande said the government would do what it could to see that the number of lay-offs in France was reduced “as much as possible” and the minister for industrial “redressement“, Arnaud Montebourg said that the plan “goes too far”, but he also admitted that Alcatel Lucent is burning cash very rapidly, that its future is at stake, and it needs restructuring.
Pierre Gattaz, president of MEDEF, the largest of France’s employer organisations, was quoted by Reuters as cautioning the goverment against a state intervention the only effect of which would be to delay “catastrophe”.
Alactel Lucent’s share price fell by just over 7 % to €2,576 on October 9.
