• Macron reforms hand more power to firms to determine conditions
• Labour reforms seen in Germany as test of Macron's mettle
• CGT unions spearheading protest, others staying away

PARIS: President Emmanuel Macron faces the first challenge on the streets to his business-friendly reform agenda on Tuesday, when workers from the hard-left CGT union march through French cities to protest against a loosening of labour regulations.

Sounding a call to the working class, Philippe Martinez, the head of the Communist Party-linked CGT, branded the reforms a "social coup d'etat" and took offence at his pledge to give no ground to "slackers".

Labour unions have scuppered previous attempts to weaken France's labour code, but this time there was comfort for Macron as two other unions, including the largest, the CFDT, declined to join the protests.

After weeks of negotiations, the government last month set out measures including a cap on payouts for dismissals judged unfair, and greater freedom for companies to hire and fire.

The reform makes no direct reference to the 35-hour week, a totem of the labour code, though it hands firms more flexibility to set pay and working conditions. The government plans to adopt the new measures, being implemented by decree, on September 22.

During a trip to Athens on Friday, Macron told French business leaders: "I am fully determined and I won't cede any ground, not to slackers, nor cynics, nor hardliners."

He said the "slackers" comment was aimed at those who had failed to push through reforms in the past, but many interpreted it as an attack on the unemployed or on workers making the most of job protection.

French workers have long cherished the rights enshrined in the labour code. But companies complain it has deterred investment and job creation and stymied economic growth. Unemployment has been above 9 percent for nearly a decade.

Macron's reforms are being followed in Germany as a test of his resolve to reshape the euro zone's second-biggest economy, a must if he is to win Berlin's backing for broader reforms to the currency union.

The CGT is France's second-biggest union, though its influence has been waning. Martinez said Tuesday's nationwide protests were just the "first phase" and that more would follow. He called Macron's reference to "slackers" an insult to workers.

CGT workers from the rail, oil and power sectors have said they will heed his call for strikes on Tuesday.

"The president should listen to the people, understand them, rather than cause divisions," Martinez told France 2 television.

Macron himself was due in the French Caribbean territory of Saint Martin on Tuesday to survey the devastation wrought by Hurricane Irma.

UNIONS DIVIDED

Governments on the political left and right have been trying for decades to overhaul the 3,000-page labour code, but ended up watering down their plans in the face of street demonstrations.

Macron was economy minister in the Socialist government of president Francois Hollande, whose attempt at labour reform led to weeks of protests that at their peak brought 400,000 onto the streets, and stoked a rebellion within his own party.

Hollande was forced to dilute his proposals, but so far, there are no signs of Macron feeling compelled to back down.

An opinion poll published on Sept. 1 indicated that voters have mixed views on the reform. Nearly six in 10 said they opposed Macron's labour decrees overall. But when respondents looked at individual measures, most received majority support.

With economic growth accelerating, unemployment on a downward trend and the leading unions divided in their response to the reforms, it is not clear whether the protests will eventually gain significant momentum.

Finance Minister Bruno Le Maire told the newspaper Les Echos that voters had chosen Macron "to carry out the reforms that France has shrunk away from for 30 years".

The moderate CFDT union described Macron's labour decrees as a "deep disappointment", but said it would not join the CGT demonstrations.

The smaller Force Ouvriere (FO), usually an ally of the CGT, also decided to stay away, a move that has led to discord within its ranks.