What's all the fuss about the French labor law (CPE)?

French PM: Dominique de Villepin

What is the CPE (Contrat Première Embauche: First Job Contract)?

The French Prime Minister Dominique de Villepin announced this new labor law on January 16, 2006. It makes it possible for employers, for a two year period, to separate from employees under 26 years of age without having to provide justification.

The French PM, along with most of the right political parties and employers, believe this measure will help lower the unemployment rate amongst the young. Unemployment for people under 25 is about 20% (40%-50% in the poor suburbs). Globally, the French unemployment rate is about 9.5%. Left political parties and the trade unions believe this is an unfair measure that will contribute to increased "precarity" in the French society.

To understand why such a simple measure creates so much unrest, a little history is required. Since the French Revolution in 1789, French society has evolved under the principal that "Bosses/Corporations" must be opposed/balanced with the needs of Humans/Workers (for a good example, read "Germinal" published in 1885 by Emile Zola, 1840-1902 or see the more recent movie "Germinal" with Gerard Depardieu). This sparked the concept of worker's rights and "social progress". Until 20 years ago, most French people were taught that "social progress", like its name implies, cannot go backwards or be reverted. As idealistic or even utopist as this may seem to many - especially on this side of the pond - entire generations of French people grew up with this concept established as dogma.

CPE 2006 Protest March 19th 2006

What are some of the arguments you will hear?

Arguments For CPE:

  • This is a proven measure that has already been demonstrated successfully (i.e. in England, Spain, US, etc.).
  • It's better to have a job you can lose at any moment than no job at all.
  • Employers don't hire for the pleasure to fire. If you perform well, you will stay on-board for many years.
  • Currently, because of the cumbersome labor laws,  many younger people end up doing multiple long-term internships, anyway.

French labor laws need some deep changes. The CPE is merely the required starting point. In France, most workers look for contracts called CDI (Contrat de travail à Durée Indéterminée, in English: Contract with No Determined Ending). Under this type of contract, employees cannot be fired until and unless the company is in serious financial trouble (i.e. on the verge of bankruptcy) or, through extremely grave professional fault.  So, you end up with a very sclerosed labor market.

Employers seriously hesitate before creating a CDI position.  How can an employer know if that worker will work out in the current company style/culture? Or, if to stay competitive, whether or not they will need to downsize in the following years?  Symmetrically, employees never leave their "CDI job" until they can get another "CDI job". Since CDIs can be hard to come by, this employee might stay in thier current "unhappy" position for years, sometimes an entire career. This is not very productive. It's very difficult for most French people to imagine a "dynamic labor" market like we have in the United States. They have never experienced it. Many employees do not realize that without these "dogmatic CDI contracts", they might be the first to want to change companies for a better fit, and maybe even a pay raise. Since companies can hire and fire more easily, they will hire more, contributing in turn to reinvigorate the labor market. This "mobility" contributes to a higher rate of trial and error, thus improving productivity.

CPE 2006 Protest March 19th 2006

Arguments Against CPE:

  • Younger people are the future of France. Why should they be treated differently than "adults"?
  • Employers will hire youngsters with a CPE and then fire them on their 2nd anniversary to hire another youngster with a CPE for the following 2 years.
  • Since you can be fired at any time under a CPE, you will have difficulties finding lodging and getting credit for purchases or loans.

For those against it, CPE is a stepping stone towards further "social progress erosion" that will lead to less balance between workers and corporations. CPE 2006 Protest March 19th 2006 They fear ending up in a society where the rights of the workers or the needs of its citizens become a secondary issue, or even irrelevant. Many French believe the government's role is to focus primarily on the quality of life of its citizens. Many believe Corporations "live/evolve" in a world for Humans, and should adapt the Human's needs, not the other way around. The only way to make sure that imbalance does not happen is to actively balance the "corporate needs" with the "needs of the citizens". Many actually dread a society like the United States, where the social purpose of government is questioned, and access to it becomes the right for the very wealthy and large corporations. Some might say it is a society where the citizens are forgotten: "Do we exist to serve corporations or do corporations exist to serve the citizens?".


My perspective is that France has to accept the established and proven rules of capitalism. It really has no choice at this point.  This does not mean they have to let go of being "socially minded". The more money you make, the more social programs you can develop. This is a huge change for a system that has been based mainly on "Human Principals" for the better part of the last 200 years. Privately, most French people - even some on the left side of the political scale - know something has to change, but accepting the rules of "globalization", which indeed offer no guaranteed protection for workers, without "kicking and screaming" first would not be French! So, in the midst of human cries, tears, burning sausages and rubber, I say "Vive la France!"

Check out some great photos at "CPE protests 2006 image gallery".

Paris CPE Protest 2006 Paris CPE Protest March 2006

Comments

what will change

I have yet to have anyone really explain the difference between a CPE and a CDD - other than (I think) CDDs can only last up to one year in length. I can understand both arguments here: I know many young - and very well qualified - people who have been stuck on the merry go round of stages and CDDs since leaving university, without a CDI being forthcoming. On the other hand, with costs to employers so much higher than their counterparts in the UK, and the difficulty / cost involved in firing people, I can understand why any company - particularly in the current climate - would think twice about hiring unproven staff on permanent contracts.

From my own experience, the CDD proved the entry into a company that I needed, and from then, I was able to prove that I was worthy of the holy grail of a CDI, but not everyone is so lucky

France is becoming capitalist??

Does this mean that France is going to become more capitalist than socialist? I live in australia and we have a similar rule here but its only 3 to 6 months usually where the employer can fire you for no reason. But 2 years?! Quite a few people get fired and replaced due to this rule and especially since the younger you the cheaper you are to pay so this is a terrible rule. I love France because the people aren't scared of the government like many many other countries so it is really disheartening to myself. I hope rules like these do not become the country itself.