France plans labour reform bill, as unemployment remains above 10 per cent

After talks between trade unions and employer groups ended without agreemnet, the French authorities decided they would use legislation to reform rules on worker representation, the country's labour minister Francois Rebsamen said.

Socialist President Francois Hollande had asked worker and company representatives to negotiate a deal to simplify requirements, such as running works councils and health and safety committees, that companies say make them reluctant to hire people.

"The government will carry out a reform and this will require legislation to do so," Labour Minister Francois Rebsamen said in an interview with the weekly newspaper Le Journal du Dimanche published on Sunday.

"Let me reiterate, excessive formalities are bad for dialogue and so for employment," he said. "There must be a better way to organise compulsory meetings between employers and staff representatives and make them more efficient."

In order to prepare the reform, Rebsamen said he would meet union and employer representatives this week before February 19 talks announced by Prime Minister Manuel Valls this week after the failure of the recent negotiations.

Firms say bureaucracy connected with worker representation is an obstacle on hiring and investment in the euro zone's second-largest economy. The regulations kick in when companies hire 10, 50 and 300 employees.

Consequently, some smaller businesses limit the size of their workforce - keeping it at 49 employees, for example, to avoid the requirement that they pay for in-house works councils and health and safety committees once they hire their 50th worker.

Although President Hollande's poll ratings surged this month as the public hailed his response to attacks by Islamist gunmen, his unpopularity had been at record lows, with the main reason being unemployment in France remaining above 10%.