French govt launches measures to fight unemployment

Prime Minister Manuel Valls announced a series of measures on Tuesday to encourage small businesses to take on more staff.

French Prime Minister Manuel Valls unveiled measures that would encourage small businesses to take on more staff. REUTERS/Philippe Wojazer

Following a cabinet meeting, Valls said that softened labour laws and a bonus for hiring their first employee are meant to encourage small and medium-sized enterprises by "lifting obstacles, uncertainties and simplifying life."

The latest measures come against the backdrop of worrying unempoyment figures. There has been a steady rise in unemployment under President Hollande who has pledged not to seek a second term in office in 2017 if he fails to reverse the upward trend in unemployment which stands at 10 percent.

The ‘Small Business Act’ will grant a bonus of 4,000 euros to businesses who currently have no employees and who hire their first worker for a year-long contract.

France’s stiff labour laws often dissuade employers from taking on staff as they fear they won't be able to fire them.

To ease these concerns the government is seeking to put a limit to the damages that can be awarded to a staff member found to have been fired unfairly.

Valls said this measure did not apply to large companies or "serious labour law abuses" like discrimination or harassment.

Short-term contracts – which have very strict rules for employers to encourage them to take staff on permanently – can now be renewed twice instead of only once.

However the maximum time someone can be employed as a temporary staff member remains 18 months.