Contrat Nouvelle Embauche - Support - Improvement of Employment Market Through Flexibility

Improvement of Employment Market Through Flexibility

According to prime minister Dominique de Villepin, improving flexibility to fire would help small companies to be less reluctant to hire new employees. The idea is not new. For years, employers and economists have been asking for more flexibility to companies, and many consider the globalization makes the current highly protective labour law unaffordable. "The issue of flexibility must be addressed, and quickly" said both the leader of CGPME, France's association of SMEs, and Laurence Parisot, the leader of MEDEF, France's major employer's union. Both MEDEF and CGPME actually expected the government to push for even stronger reforms.

The "two years" period brings a major flexibility in the way small companies employers will be able to consider hiring without the fear of probation period deadline of usual long term contracts, after which firing becomes too heavy and costly. Particularly, the "no justification" clause for the two-year period is the key issue as employers won't fear to face the labour courts, where "employers often also argue that the tribunal is heavily prejudiced in favour of the employee".

The CNE is also in line with the International Monetary Fund (IMF) advice to "introduce flexibility in the French labour market". The IMF commented that CNE was a "first step" towards reform

After the First Employment Contract was aborted, a survey showed that 57% of bosses of very small companies feared that the CNE might be scrapped.