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Macron, meeting union leaders, puts his labour reform plans to the test

PARIS (Reuters) - French President Emmanuel Macron’s commitment to reform will face a first crucial test on Tuesday when he meets unions and employers to talk over labour reforms he has pledged to push through quickly despite deep opposition on the Left.

French President Emmanuel Macron attends a meeting at the Elysee Palace in Paris, France May 21, 2017. REUTERS/Philippe Wojazer

Against a background of high unemployment of 9.6 percent, the pro-business, Europe-minded centrist, elected just over two weeks ago, has made a loosening of labour market regulations his biggest economic priority in his first year in office.

In essence, he wants to make hiring and firing easier by giving more powers to companies to strike in-house deals on working time for instance and capping severance packages awarded by industrial tribunals.

During the roller-coaster campaign, Macron said he would seek parliament’s approval over the summer for powers to push through legislation by means of executive decree.

That would show his ability to act quickly on reform - something likely to impress his EU partners and particularly paymaster Germany - while at the same time catching the unions on the hop since their supporters normally show little readiness for street protests over summer months.

Approval for using executive decree will also depend on whether Macron gets the required majority of support in parliament in legislative elections next month.

On Tuesday, Macron is expected to meet leaders of the Communist-backed CGT, the CFDT and a third union, as well as talking with Pierre Gattaz, head of the Medef employers’ body.

But he may have his work cut out to sell his reform plans to the trade unions, particularly the hardline CGT which led weeks of sometimes violent protests last year to reforms by former Socialist President Francois Hollande.

Hollande’s plans to cap severance pay were eventually dropped after the unions blocked oil refineries for several weeks and cut power production at nuclear plants.

“If the government wants to force its reforms through or doesn’t take into account our proposals, there will be anger and also mobilisation,” the CGT’s head, Philippe Martinez, warned on Europe 1 radio on Monday.

Macron will be hoping to get on board the reformist CFDT, which supported last year’s plans and has now overtaken the more militant CGT as the strongest in the private sector.

But CFDT chief Laurent Berger also signalled misgivings last week about Macron’s decision to use executive decrees to get his reforms through.

“He is wrong to think legislating via decrees over the summer will help him avoid social conflicts,” Berger told Les Echos newspaper.

Macron, who has said he will personally oversee the labour reform’s implementation as one of his six manifesto priorities, will nonetheless rely on Prime Minister Edouard Philippe and Labour Minister Muriel Penicaud for day-to-day negotiations.

The appointment of Penicaud, a former human resources director at yoghurt giant Danone who was also a member of Socialist grandee Martine Aubry’s staff when she introduced the 35-hour working week, was well received by reformist unions.

“She’s a woman I like,” Berger told French television last week. “Her nomination makes sense.”

Reporting by Michel Rose; Editing by Richard Balmforth