Rescue plan for national trade union

In early July 2011, the Luxembourg Confederation of Christian Trade Unions (LCGB), one of the two representative trade unions at national level, revealed that it had debts of €1.05 million. As it is no longer able to pay its bills, cost reduction measures have become urgent and will include job and wage cuts as well as an early retirement plan for some of its staff. Two key executives have been suspended, provoking media debate about the internal cohesion of the organisation.

Heavy debts revealed

On 30 June, the Luxembourg Confederation of Christian Trade Unions (LCGB) organised a press conference, reported by Le Quotidien, aimed at ending speculation about alleged dismissals from its executive management.

At the same time, the confederation’s General Secretary Patrick Dury, and President Robert Weber, took the opportunity to reveal that LCGB was facing significant financial difficulties.

With debts totalling €1.05 million, comprised primarily of a loan of €500,000 and unpaid bills amounting to €400,000, the confederation had to take emergency measures. According to Robert Weber, part of the debt was incurred during the union’s campaign for workplace elections in 2008. However, press reports suggest that the majority of the debt is related to unexpected and underestimated expenses.

A number of sources have suggested the debts are the result of poor management of ASBL ProActif, claims one newspaper report. ProActif is a non-profit association founded by the confederation to fight unemployment. These allegations have been denied by Robert Weber.

As a result of the negative press coverage, the LCGB decided to release details of its financial accounts alongside an internally negotiated rescue plan.

Restructuring the union’s executive management

LCGB, although being a confederation of trade unions representative at the national level, is first and foremost a limited liability company (société anonyme) and is therefore bound by all the relevant regulations. Thus, as any other company facing financial difficulties would have to do, it must clear its liabilities and face its obligations towards its 54 employees.

As a result, a three-step rescue plan, called ‘Horizon 2015’, was internally negotiated as the confederation set the goal of balancing its books by 2015.

First, the parties reached a wage agreement providing, in particular, for an early retirement plan and a revised career progression policy. According to internal budget estimates, staff and wage reductions created by these measures should allow savings of around €1.2 million by the end of 2014. Robert Weber told Le Quotidien that the confederation has not planned any increase in the union’s membership fees.

However, the most noticeable decision is the suspension of two executive figures, Marc Spautz and Ali Kaes, who are also members of Luxembourg’s Chamber of Deputies. The confederation insisted this measure was not a termination of employment but a suspension of their employment contracts placing them on unpaid leave, on the grounds that their duties as elected Deputies prevents them from spending the required time serving as executives for the union. The LCGB revealed that both parties have agreed to reappoint Mr Spautz and Mr Kaes in the event that they lose their respective political mandates during the forthcoming parliamentary elections.

Commentary

A section of the national press remains unconvinced by the ‘conflict of roles’ justification given for the suspension of two of the union’s senior officials. Attention has been drawn to the fact that Robert Weber is also a Deputy and commentators have asked why he too had not stepped down, even temporarily, from his own union position.

In reality, press reports suggest that these developments are likely to make it more difficult for the national confederation to dismiss allegations that its current situation will not jeopardise its internal cohesion and its ability to remain representative at national level.

It is therefore worthwhile considering the extent to which a union facing such large financial problems can exert influence on the employment relations landscape, or on the Luxembourg social dialogue model.

Will the confederation have the same degree of union representation and credibility in the future? The answer may be provided by the results of the next social elections for staff delegations in 2013.

Guy Castegnaro & Ariane Claverie, CASTEGNARO, member of Ius Laboris, for HERA

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