The French Workplace: Government-Mandated Kumbaya
At businessweek.com, Gregory Viscusi and Mark Deen lay out some of the idiocy in the way the French are forced to run their businesses -- for example, why there are so many 49-employee companies...in a country with 2.9 million people out of work. The answer? French labor laws:
The country has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones. "I can't tell you how many times when I was Minister I'd meet an entrepreneur who would tell me about his companies," Thierry Breton, chief executive officer of consulting firm Atos and Minister of Finance from 2005 to 2007, said at a Paris conference on April 4. "I'd ask, 'Why companies?' He'd say, 'Oh, I have several so that I can keep [the workforce] under 50.' We have to review our labor code."
...Companies say the biggest obstacle to hiring is the 102-year-old Code du Travail, a 3,200-page rule book that dictates everything from job classifications to the ability to fire workers. Many of these rules kick in after a company's French payroll creeps beyond 49.
...The code sets hurdles for any company that seeks to shed jobs when it's turning a profit. It also grants judges the authority to reverse staff cuts years after they're initiated if companies don't follow the rules. The courts even deem some violations of the code a criminal offense that could send executives to jail.
A little something we should consider as government is allowed to meddle more and more in our lives and businesses.
I'm consistently amazed by people who think government is there to protect us. It's run by people -- flawed people, with self-interest in mind. If you don't believe that, either you're a 12-year-old girl with a lot of growing up to do or I don't want you voting.
via @WalterOlson
Just like market regulations to avoid confusopolies, there are also labour regulations. Some of those may have been developed eons ago and might have been relevant to those times, but that does not justify the total lack of regulation.
Probably they need correction over time for changed situations, but removing labour regulations just leads to business in itself becoming more irresponsible.
Redrajesh at May 17, 2012 9:44 AM
Hey, at least they can have 49 employees. An awful lot of U.S. regulations kick in at 11 employees.
Cousin Dave at May 17, 2012 1:33 PM
That reminds me of a King of the Hill episode where the Strickland Propane had one extra employee that wanted all this crap from the EEO laws. Eventually Hank quit, which put them under the limit. The boss fired the whiner on the spot.
Jim P. at May 17, 2012 7:31 PM
Very common. My father got done by a useless IT employee. After he got sacked, he made a claim under "unfair dismissal" law. Now, in Australia, that doesn't apply if you earn over something like $100k/year, i.e. you are subject to the terms of your contract only (usually 4 weeks severance pay)
Now, this guy had only been there 9 months, so he had only been paid $80k or so. Obviously, that should be considered pro-rata and the annual rate calculated to determine whether he is eligible right?
Not according to the tribunal. Less than $100k in the year, automatic compensation. I can't remember what he got, maybe 6 months salary.
Ltw at May 17, 2012 11:54 PM
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