Chirac withdraws controversial job contract regulation

Chirac withdraws controversial job contract regulation

	Published : Mon, 10 Apr 2006 12:55 By : Richard Owen Print this Story

PARIS: France is dropping the controversial First Employment Contract regulation that sparked large scale protests by students and labour unions and a near political crisis in the country, according to a decision taken by president Jacques Chirac. The president's office announced Monday the measure will be replaced by a new programme for encouraging hiring of young people "in difficulty".

In a statement, the president's office said his decision was based on a proposal from prime minister Dominique de Villepin after hearing the leaders and heads of the parliamentary groups of the parliamentary majority. The announcement came after a high-level meeting between Villepin, who is considered the architect of the controversial proposal, and leaders of the ruling UMP party.

The student leaders and the union activists are meeting Monday to decide on a future course of action in the wake of the president's announcement. They have all along been demanding total withdrawal of the First Employment Contract system proposal.

Chirac's office said in the statement, "The president of the republic has decided to replace article 8 of the equal opportunities law with measures to help disadvantaged young people find work."

The alternative suggestions are expected to be announced shortly and a new legislation will be moved in the parliament this week itself.

Villepin said in a televised statement that the necessary conditions of confidence and calm are not there, either among young people, or companies, to allow the application of the First Job Contract. It will be replaced by proposals aimed at helping disadvantaged young jobseekers and he would open a discussion "without preconditions" with social partners on how to provide youth unemployment.

The protests have damaged Villepin's popularity and many political analysts feel his candidature for the 2007 presidency elections is in jeopardy. Even though Chirac and Villepin play with words saying the first job contract was being "replaced", it is virtually dead, they say.

The students have been planning to renew their protests Tuesday. On Sunday, several hundreds of students had marched through the streets of Paris demanding that the classes should resume and the students should end the blockade.

Villepin had mooted the law, described in French acronym as CPE in January, in order to make the labour market more flexible and to reduce unemployment. The regulation provides for employers to fire workers younger than 26 years of job within two years of their getting the job without assigning any reasons. The students had said the provision reduced job security.

Meanwhile, interpreting what constitutes the replacement of the regulation, French labour minister Jean-Louis Borloo said in a newspaper interview that the government will offer subsidised job programmes and training and temporary subsidies or tax breaks for companies hiring unskilled youth workers on permanent contracts.

Chirac had signed the CPE into a law in early April.