In a bid to reverse the upward trend in unemployment, the French government has announced a raft of measures, including more flexible labor rules and reduced costs, aimed at encouraging small firms to create more jobs.
Softened labor laws and a bonus for hiring their first employee are meant to encourage small and medium-sized enterprises by "lifting obstacles, uncertainties, simplifying life," French Prime Minister Manuel Valls said after a cabinet meeting on Tuesday.
The premier unveiled a host of reform measures to encourage small businesses to take on more staff in an attempt to reduce the country's rampant unemployment.
While growth in the eurozone's second largest economy has started picking up, unemployment is stuck above 10 percent. Reducing joblessness is one of President Francois Hollande's main pledges, but more than halfway through his term, he is yet to see success on that front.
Hollande has said he will not to seek a second term in office in 2017 if the jobless rate has not dropped by then.
France's stiff labor laws often dissuade employers from taking on staff as they fear they won't be able to fire them.
'Lifting the constraints'
Small firms "can hesitate to hire because they feel there is too much uncertainty, too much complexity," PM Valls said. "Today's measures are meant to lift the constraints ... and make life easier for small and very small firms and encourage them to hire," he added.
The "Small Business Act" will grant a bonus of 4,000 euros ($4,500) to businesses who currently have no employees (there are 1.2 million in France) and who hire their first worker for a year-long contract. That measure will be valid for contracts signed between June 9, 2015, and June 8, 2016.
Furthermore, the government is seeking to cap the damages that can be awarded to a staff member found to have been dismissed unfairly. It hopes this will reduce legal uncertainty and cut the duration of lengthy labor tribunals.
This measure, however, did not apply to large companies or "serious labour law abuses" like discrimination or harassment, said Valls.
Small firms will also be allowed to renew short-term contracts twice instead of just once. But the maximum time someone can be employed as a temporary staff member remains 18 months.
The government also suspended a number of the additional obligations that small businesses face when they add employees.
The measures target France's 2.1 million "very small" and 140,000 "small and medium sized" firms. They will cost the government about 200 million euros, Economy Minister Emmanuel Macron said.
sri/hg (AFP, Reuters)