In a cost cutting drive, the government aims to lose 120,000 jobs in the public sector by 2022, out of a total workforce of 5.5 million currently.
Junior minister Olivier Dussopt says reforms are necessary to make the public sector “more attractive and more reactive” in a changing world where people have new expectations.
He hopes parliament will pass the law by the summer, ready for implementation in January.
However, all the main trade Unions have already rejected it and several are calling for a strike on 9 May.
The unions maintain the government wants to make rules on public sector employment more like those of the private sector.
The government says the proposed law would allow people to move more easily between jobs in both sectors.
Public opinion in France is likely to be divided over the idea of major reforms in the public sector.
One of the key complaints of the Yellow Vests is about the reduction in government services outside big towns and cities in France - but they also say they pay too much tax.