French labour summit opens with union boycott

Summit aims to launch reforms around apprenticeships, labour code
By Nicholas Vinocur
||Last Updated: 07/07/2014

PARIS (Reuters) — A major French trade union is to boycott a labour summit designed to combat record unemployment and others threatened to follow suit on Monday as ruling Socialist officials accused employers of giving nothing in return for billions of euros in tax credits.

Prime Minister Manuel Valls said the two-day summit should launch reforms including greater use of apprenticeships and simplify a 3,200-page labour code to ease rules on worker representation which firms say are too costly and complex.

Hours before the opening on Monday afternoon, the large CGT union said it would not attend the key sessions on Tuesday and the FO union was threatening to do likewise over what they call unfair behavior by employers due to reap an unprecedented 40 billion euros ($57 billion CAD) in tax credits over the next three years.

"Today our main problem is Medef's attitude," Socialist Party chief Jean-Christophe Cambadelis told France Info radio, echoing government sources who criticized the employers' group.

"Their culture is 'take the money and run.'"

Gerard Rodriguez, a senior official at the CGT, told Reuters his union would neither attend a speech to be delivered by Valls, nor the meetings on Tuesday where a series of working sessions are the backbone of the consensus-building endeavor.

French corporate margins are among the lowest in the euro zone. However economists say labour costs have in recent years been rising less quickly than in neighboring Germany, which has just backed the introduction of a minimum wage.

Last week it was Medef that threatened to boycott the meeting unless the government delayed the implementation of an early retirement scheme for workers in strenuous jobs.

It got the concession — a one-year delay until 2016 — but at the price of irking the unions and the government.

"We will decide this morning on what we do... We can still decide to not attend tomorrow," FO chief Jean-Claude Mailly told iTele news channel.

Participants and company executives said talks would focus mostly on difficulties implementing past reforms like President Francois Hollande's "responsibility pact", under which firms agreed to hiring targets in return for lower labour costs.

"The conference is less about moving ahead than ensuring what we already agreed can be implemented," Philippe Louis, president of the reform-minded CFTC union, told Reuters.

Asked if he expected any breakthrough deals, he added: "No, we can feel that feet are firmly on the brake pedals."

Reform fatigue

While the lead-up to the summit was marked by a series of strikes, unions and employers accused each other of not putting into practice a labour cost reform voted into law in April.

Credits have begun to flow to companies, but negotiations on how to apply counterparties on hiring in hundreds of job sectors have barely got off the ground. Only ten branches have started the talks.

While Medef says credits are coming too slowly, Laurent Berger of the moderate CFDT union argued the flow should be cut off altogether in 2016 and 2017 unless employers live up to vows on investment and hiring.

Tranches of tax credits to companies are to be voted each year as part of the budget. Berger added he had no clear backing from the government on his proposed ultimatum.

Deutsche Bank economist Gilles Moec hailed the government's willingness to cut employer costs as significant, saying the reforms could help firms more than income tax cuts being undertaken by Italian Prime Minister Matteo Renzi.

However, he questioned whether France's reforms would result in more hiring.

"If the government thought for one second there was a reality behind the counterparties, it was mistaken," Moec said of the hiring promises made by employerrepresentatives when they signed the responsibility pact earlier this year.

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