In terms of employment and economic development, the law sets forth the following measures:

  The possibility for employers covered by the first section of article L. 131-2 of the labour code to hire employees under the “first-job contract” for the first-time hire of young people under the age of 26.
  The creation of “urban free zones” in particularly disadvantaged neighbourhoods with more than 8,500 residents starting on 1 August 2006.

In terms of equal opportunity and support for anti-discrimination measures, the law includes several specific points:

  The National Agency for Social Cohesion and Equal Opportunity, a public administrative structure, which will support actions targeting persons experiencing difficulties entering mainstream employment or society.
  Increased powers for the High Authority to Fight Discrimination and to Promote Equality (HALDE).

The “First-job” contract

The creation of the contract was announced by Dominique de Villepin at a press conference held on 16 January.

The contract will concern new employees under the age of 26 hired by companies with more than 20 employees. Just as for the “new hire” contract for very small businesses, the trial period for the “first-job” contract will be two years and will include a number of “guarantees”.

“I wanted to create a tool that would lead directly to open-ended employment: the ?first-job’ contract”, stated the Prime Minister. The contract specifically targets young people and will be considered an open-ended contract in terms of the right to State-funded unemployment benefits. An employee who is dismissed after four months’ employment with a company under the “first-job” contract will also receive benefits in the amount of 460 euros per month for a period of two years in addition to compensation for termination of the contract. According to Dominique de Villepin, the new contract is a “major step forward” and provides “fair compensation for the risk taken on by young people in a new economic environment”.

The 24-month “consolidation” period, during which employees hired under the “first-job” contract may be dismissed, may be shortened by including internships, fixed-term contracts, or other work completed by the young person for the company as part of alternating work-study training programmes.

Among the other guarantees included in the “first-job” contract are the right to individual training leave, for which employees under the contract are eligible starting their second month of employment with the company, and eligibility for the State-funded “Locapass” programme, which provides assistance with security deposit payments for rented housing and which will be offered systematically when this type of employment contract is signed.

According to the Prime Minister, the “first-job” contract should be considered an open-ended contract with regard to access to mortgages, in particular. “This contract is a direct pathway to stable employment; the purpose of the contract is to help young people who have experienced significant difficulty entering the job market, not to take the place of other types of contracts. This contract ensures the building of a secure career track with the hiring company”, he emphasized.