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 The CEO is among many bosses in France who won't hire a 50th worker,
in order to avoid the subsequent obligation to run and pay for an
in-house works council - something Goubault says is costly,
time-consuming, and "entirely useless".
Goubault's frustration is shared by bosses of small and mid-sized
businesses right across France, who say their growth is stifled by
endless bureaucratic demands regulating everything from worker
representatives to office space to healthcare.
It's a cry that President Francois Hollande - watching the country's
economy stagnate and its unemployment levels stick above 10 percent
- is finally heeding. While all of Europe is grappling with poor
growth and the threat of deflation, France is one of its weakest
members - and under pressure from its euro zone partners to take
action to halt the drag.
Though Hollande is now pushing through market reforms such as
limited deregulation of protected jobs and more Sunday opening times
in order to get more people into work and jumpstart the economy,
Goubault says it may be too late.
Bosses have been for so long cowed by high taxes, punitive workforce
rules and worries about the wider European economy that, even
unshackled, they may still balk at hiring.
"It's great that they are finally doing something about these
idiotic rules," said Goubault, 49, the fourth generation of printers
to run Goubault Imprimeur in western France.
"But in the current context, with all the other issues we have, I
don't think we should expect companies to start recruiting
aggressively overnight."
DEAL BY YEAR-END
Hollande has asked managers and unions to strike a deal by year-end
to work around rules mandating escalating bureaucratic obligations
that kick in at 10, 50 and 300 employees.
France's Ifrap think tank wrote in a recent study that removing
threshold effects could create 140,000 jobs, with more than 22,500
firms likely to grow if thresholds were removed.
In 2012, France counted 1,600 companies with 49 employees, which
fell abruptly to 600 firms with 50 employees, according to CGPME,
the main lobby for small- and medium-sized businesses.
"Companies just don't try to expand, which means they don't have
enough critical mass to export their products," said Genevieve Roy,
vice president of social affairs at the CGPME.
It's this lack of export capacity that has hurt the French economy
and set its firms at a disadvantage to competitors in Germany - a
raft of mid-sized, export-oriented firms that have steadily gained
market share from France in the past few years and helped keep
Germany's economy afloat.
Germany's firms are helped by more flexible worker representation
thresholds. A works council can be elected in any unit with staff of
five or more, but is not obligatory, while firms with more than 20
employees need only choose one 'safety advisor' - rather than the
committee of several that is required in French firms with 50
workers or more.
In 2013, Germany had 55,510 medium-sized firms with more than 250
workers versus 21,418 in France, according to European Commission
data. Medium-sized firms accounted for 2.6 percent of all firms in
Germany versus 0.9 percent in France.
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Among French law's most irksome features for managers - aside from
electing worker representatives at set levels - are rules requiring
them to set aside designated office space, create permanent health
and wellness committees, set up profit-sharing schemes and, in the
case of downsizing, strike collective severance deals - all of which
drains resources.
Hiring a 50th staffer also increases the amount of paperwork the
companies must file to the state. That extra head means companies
then have to apply a further 30 legal norms, including obligations
to maintain detailed records of their hiring activity to ensure
gender equality.
SATELLITES
The rules are so off-putting that many small business-owners simply
prefer to start new, satellite firms rather than hire a 50th worker
- creating yet more tiny corporate structures.
"I've been tempted at various points to hire a 50th worker," said
Goubault, 49. "But when you look at the costs - 3.5 percent of my
total salary costs - and all the obligations, you think, what's the
point? It bothers me and doesn't help my workers."
"I also explored putting workers into a holding company and all
sorts of acrobatics to get around the rules. But at the end of the
day all of it was more complicated than just keeping our current,
close-knit structure," he added.
The Organization for Economic Co-operation and Development said on
Friday that if France implements the reforms it has flagged, growth
could improve by 0.3 percentage points annually. Labor market moves
alone would account for a total 0.4 percentage points over five
years.
But implementing those reforms may prove tricky. Relations between
employer and union groups are at a low ebb - tested by years of low
growth and cost-cutting - and neither side is in the mood to make
concessions.
If they have not reached a deal on circumventing the most onerous
demands of workforce number thresholds by year-end, Hollande has
said he will implement the reform by decree. That's a risky move for
a government whose unpopularity is already at record levels and has
many of its Socialist Party members arguing that worker
representation is a core right.
One manager participating in talks on thresholds was skeptical about
the chances of a negotiated deal and said both sides were barely on
speaking terms.
"Things are very, very complicated," said the manager, who declined
to give his name because of the sensitivity of the discussions.
"In France, when you have given something, unions consider it given
for life. You can't go back on it, or with enormous difficulty."
(Editing by Mark John and Sophie Walker)
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