French government to impose labour reform by decree in face of rebellion

Bill seeks to make hiring, firing easier

PARIS (Reuters) — France's government decided on Tuesday to bypass parliament and impose a relaxation of the country's protective labour laws by decree, sidestepping a rebellion against one of socialist President Francois Hollande's flagship reforms

The decision, announced by Prime Minister Manuel Valls, follows weeks of street protests against the bill which seeks to make hiring and firing easier and the realization that lawmakers within the ruling party looked certain to shoot down the proposal.

"Because the country must move forward ... the cabinet has authorized me to engage the government's responsibility, which I will do later on," Valls told lawmakers to boos and heckling from the some quarters and applause among ministers.

Defeat would have delivered a hefty blow to the unpopular Hollande, who has said he will only run for re-election next year if he lowers a jobless rate stuck above 10 per cent. The government hopes the reform will encourage firms to recruit.

The government's decision not to compromise by watering down further the labour bill is also a strong signal to international investors and rating agencies, who have so far taken a welcoming but cautious approach towards Hollande's pro-business turn.

A rarely used clause in France's constitution — known as 49.3 — allows for reform by decree and underlines the strong powers wielded by the executive under France's presidential system, designed by World War Two leader Charles de Gaulle.

It is the second time in as many years Valls has used the clause, having last year rammed through parliament a law which loosened up Sunday trading rules and regulations in the transport and legal sectors.

Although Valls diluted parts of the labour bill in March following student protests, the proposal retains measures giving more flexibility to employers to agree in-house deals with employees on working time.

It also offers companies less restrictive conditions for layoffs made for economic reasons.

Rebel legislators in the Socialist Party accused the government of riding roughshod over parliament.

"It's a heavy-handed way of using the constitution to prevent the nation's representatives from having their say," Laurent Baumel, a rebel Socialist lawmaker told reporters, calling the decision "anti-democratic".

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