Key changes in French labor rules after planned overhaul

The French government announced Thursday a plan to overhaul labor laws in the country, a thick set of complex rules that gives French workers greater job security but has long been seen as a hindrance to hiring and economic activity by many business leaders.

Here are the key changes contained in the package:

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WRONGFUL DISMISSALS

The amount of damages awarded by labor courts in the event of dismissals recognized as wrongful will now be capped. These amounts will depend on the employees’ seniority in the companies.

The amount won’t be able to exceed 20 months of gross salary, and only for employees with 29 years or more of seniority.

For employees with five years of service, for instance, the amount of damages will be up to six months of salary. For 10 years of seniority, the capped amount will be 10 months of salary. And, for 15 years of seniority, it will be 13 months.

These are maximum amounts. The judge can award lesser damages depending on specific circumstances.

But damages won’t be capped in certain cases, including if the dismissed employees have been victims of discrimination or sexual harassment.

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BYPASSING UNIONS

From now on, small companies, which represent the vast majority of businesses in France, will be able to bypass the trade unions to negotiate deals in many fields.

In businesses with fewer than…

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