French employers say draft labour accord unacceptable

Parisot said that heavier levies on short-term contracts, which are mainly used in tourism and restaurants, would make employers less - not more - likely to hire, while undermining broader efforts to ease wage pressures.

"It would be absolutely disastrous...to fail because of this purely symbolic issue," she said.

Parisot, accusing Hollande's Socialist government of indirectly interfering in the talks to employers' disadvantage, added that they would not extend negotiations beyond this week.

Flexibility Employers want an agreement that will allow companies to adjust their wage burden more nimbly in a downturn, as well as simplifying the rules about firing workers to make the process more predictable and keep costs in check.

Two major unions reject measures to add flexibility. All five unions at the talks want greater job security for workers on flimsy contracts, calling for employers who use them to be penalised by paying higher taxes or more welfare contributions.

Unions reject greater flexibility in work contracts and demand more security for short-term workers. They want employers using short-term contracts to pay more tax or higher contributions to the a fund that pays out unemployment benefits.

"At the moment we have to be pessimistic," Stephane Lardy, negotiator for the hardline Force Ouvriere (FO) union, told Reuters. "It's obvious that the last draft the employers offered us is very, very far from an agreement."

Labour Minister Michel Sapin said the government would present a draft law regardless of the talks' outcome. However, he expressed faith in a deal being reached by Jan. 11, when talks are due to conclude.

"They're negotiating, it's their responsibility, and I'm letting them negotiate," he told Canal+ television.

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