Europe Eyes Labor Reforms

Manila Bulletin, March 31, 2006 | Go to article overview

Europe Eyes Labor Reforms


Byline: ANGELA CHARLTON Associated Press

PARIS a" In much of Europe, the idea that a company can dismiss workers just because profits are sagging is unacceptable, an affront to longcherished values.

Yet economists say that even if the American model a" under which layoffs are common a" would never fly here, reforms to Europeas labor laws are crucial to the continentas economic health. Franceas battle between unions and the government over a new kind of job contract is just the loudest and latest sign that the European system is ailing.

The question of how to cure it is prompting soulsearching and underscoring divisions across the continent. At stake is Europeas vision of itself: Is it the worldas epicenter of progressive ideas or an economic heavyweight? Can it be both?

"Nobody has a magic recipe," said Marco Manacorda of the London School of Economics. "We need to ask hard questions."

The European Union has had little luck stepping into the fray.

One of the most divisive EU debates of late was over a services law that would have allowed companies to operate under the labor regulations of their home country while doing business in another EU country. It was struck down last month.

In the United States and Britain, young people often jump from job to job and most posts are ultimately temporary. To dismiss an employee, companies can often just say, "Youare fired."

In France, workers who land a coveted permanent contract can plan to stay at their jobs until retirement. To fire most employees, companies not only have to give at least three months notice, pay fines to the state and up to three years of severance pay _ they also have to convince a judge that the firing is justified, something they donat always manage to do.

The French government says these rules are crippling and at fault for persistent unemployment, and devised a law in January that eases them. The most prickly part of the law, the so-called first job contract, allows employers to fire workers under 26 without reason during the first two years on a job.

Unions and students were stunned, and are staging mass protests and strikes in a bid to bury the law. To them, job security is one of democracyas achievements, and infringing on it is seen as a step backward.

France shouldnat compare itself with booming economies like China, "where there is not much unemployment but the working conditions are not acceptable," said the head of the countryas main student organization, Bruno Juillard.

Meanwhile, many French workers and employers are seeking profits elsewhere. …

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