French employers say draft labor accord unacceptable

Mon Jan 7, 2013 6:19am EST
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By Nicholas Vinocur

PARIS (Reuters) - French employers will reject moves to overhaul rigid labor rules unless unions drop demands to tax short-term contracts more heavily than long-term ones, their leader said on Monday, suggesting talks this week could fail.

Socialist President Francois Hollande called on employers and unions to strike a deal by the end of 2012 that would grant companies more flexibility in hiring and firing while giving more job security to workers on short-term contracts.

Talks between the Medef employers' union and main labor groups spilled into January after talks broke up in December without a deal, with each side accusing the other of making unacceptable demands.

The government says it will impose its own deal if the two sides fail to reach an agreement.

As talks resume this week, Medef chief Laurence Parisot said employers would be unable to sign a deal imposing higher costs for hiring on seasonal or short-term contracts.

French per unit labor costs are currently among the highest in the European Union, above Germany but below Denmark, and are often cited by economists as a brake on growth and a factor in maintaining chronically high unemployment.

"At this point in our discussions, including talks we had all day yesterday, on Sunday... the Medef will not sign the deal," Parisot said on Radio Classique. "The issue of taxation for short contracts is a vital question."

Parisot accused Hollande's Socialist government of indirectly interfering in the talks to the employers' disadvantage.   Continued...

MEDEF leader Laurence Parisot attends the French employers' body MEDEF union summer forum on the campus of the HEC School of Management in Jouy-en-Josas, near Paris, August 29, 2012. REUTERS/Charles Platiau