Liberalisation of electricity market to cost 1,700 jobs?

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In January 2001, the increased pace of the opening up of Europe's electricity production and distribution markets to competition led Belgium's Electrabel electricity company to revise its plan for adaptation to the new market situation. Management announced that the reorganisation of the sector would lead to 1,700 job losses, but compulsory redundancies seem to have been ruled out.

Since the early 1990s, the electricity market in the European Union Member States has been undergoing a process of liberalisation, largely spurred by the European Commission with the aim of ensuring greater competitiveness and pushing prices downwards. In 1996, the Council of Ministers and European Parliament adopted Directive 96/92/EC concerning common rules for the internal market in electricity, providing for a phased opening-up of electricity markets to competition (EU9902151F). The liberalisation process has so far led to the loss of close to 300,000 jobs across the EU - causing concern among trade unions, as evinced by a European demonstration in Brussels in May 1999 (EU9903163N).

Under the EU schedule, 38% of national electricity markets had to be opened to competition by 2006, but on average 60% of markets have been opened so far. Consequently the EU Energy and Transport Commissioner, Loyola de Palacio, announced in January 2001 that she wanted to "to accelerate the timetable and have a full opening to all consumers of the electricity and gas markets by 2005. The opening to competition for all non-domestic customers should be by 2003 for electricity and by 2004 for gas."

In Belgium, the Flemish regional parliament passed an order in 2000 on the deregulation of the market in Flanders. This led the other regions to take similar measures. Furthermore, Electrabel, the electricity company responsible for the Belgian generation and distribution network, which forms part of the Tractebel group, the energy division of the Suez Lyonnaise des Eaux group (and thus controlled today from Paris), also decided to accelerate its adaptation to the markets. It thus revised its plan in this area, which had stipulated a set of measures to be applied gradually up to 2006. Thus, Electrabel announced various emergency adaptation measures to the various works councils involved.

The Transform 2003 plan

On 30 January 2001, Electrabel management presented to the group's 35 works council s its plan to "strengthen its competitiveness and provide an attractive work setting," in order to prepare the electricity sector for the total liberalisation of the market.

According to a company [press release](http://presse.electrabel.be/webcontent/pressrelease/fr/resource/Electrabel entame un nouveau dialogue social_31012001.htm), the group has three priorities in dealing with the accelerated liberalisation:

1. remodelling its activities around four basic activities - production, trading, management of networks and sales;

2. research and development in fields addressing the new challenges of the market; and

3. strengthening the competitiveness of the organisation through an effective and targeted mobilisation of all workers concerned.

With regard to the requirement for new skills to be acquired or attracted, the press release clearly announced that "certain job functions that were useful in a regulated market would lose their relevance in a liberalised market. On the other hand, other jobs requiring new skills would have to be created (trading, e-commerce etc)."

Consequently, 1,700 jobs which "are no longer of direct benefit to the performance of its four basic activities" will disappear from the Electrabel organisation chart in 2003. The workforce stood at 15,235 on 1 January 2001. Some 350 new employees will be recruited for the new jobs (in compliance with collective agreements previously signed), while there will be voluntary departures and "natural wastage", plus retraining measures to help employees affected find another job within the company (with training campaigns planned). There will remain 800 employees who "it will not be possible to retrain or redeploy within the company". Management announced that for this group a "concerted socially acceptable solution" would be found outside Electrabel.

Union reactions

The rate of trade union membership among the Electrabel workers is high, at 95%. Workers' representatives at Electrabel come from four different union organisations:

• the National Federation of White-Collar Workers (Centrale Nationale des Employés, CNE), affiliated to the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV);

• the Electricity and Gas Federation ( (Fédération de l'Électricité et du Gaz, FEG) affiliated to CSC/ACV;

• GAZELCO, the union for blue-collar workers, white-collar workers, technicians and managers in the gas and electricity sector affiliated to the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV). It should be noted that in the case of Electrabel, this union represents workers in the private sector, though it forms part of FGTB/ABVV's General Confederation of Public Services (Centrale Générale des Services Publics/Algemene Centrale der Openbare Diensten, CGSP/ACOD) - according to the union, "this choice is dictated by our ideological conviction: energy is an essential requirement and the public authorities must meet it"; and

• the Federation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicaux Libéraux de Belgique/Algemene Centrale der Liberale Vakbonden van België, CGSLB/ACLVB).

In response to the management statements on its restructuring plan, and in order to present a common union front, the national joint offices of CGSLB/ACLVB, CNE, FEG and GAZELCO wanted to signal their disagreement with the plan by clearly rejecting redundancies in any form. The union organisations thus presented a set of demands which proposed the following alternative solutions:

• a reduction in working hours;

• a reduction of overtime;

• limiting the work done by third parties (subcontracting); and

• improving early retirement schemes.

The national secretary of CNE, Jean-Marie Piersotte, denounced Electrabel management for wanting to make people redundant while "the financial position is particularly healthy, the company uses subcontracting intensively, it admits the existence of 300,000 hours of overtime. (...) It should on the contrary be creating jobs.". He cited the example of nuclear power stations where a lack of personnel could jeopardise safety.

FGTB/ABVV also issued a press release on 6 February 2001 in which it "required a round-table on the subject of the transition to a liberalised electricity market, before distributing the Electrabel profits for the year 2000". This consultation should guarantee the security of electricity supply for the country through a better programmed and regulated liberalisation process.

Subsequently, on 1 March, Electrabel management appeared to give an undertaking in the electricity sector joint committee that the workforce reduction plan would be implemented without compulsory redundancies. Thus, management proposed alternatives such as full-time career breaks, helping employees set up their own businesses, early retirement formulae and other options. The union organisations favour solutions more oriented towards the collective redistribution of working hours. Negotiations are under way.

Commentary

Beyond the question of jobs, the question of energy management in Belgium is also raised by the liberalisation issue. In this respect, the General Council of the Commission for Electricity and Gas Regulation (Conseil Général de la Commission de la régulation de l'Électricité et du Gaz/Algemene Raad van de Commissie voor de regulering van de electriciteit en het gas, CREG) was set up on 21 February 2001 (on the basis of the Act of 29 April 1999 on the organisation of the electricity market). The social partners have been involved in the debate on the liberalisation of the market and are members of the CREG. Representation on this new body is divided up as follows:

• seven representatives of trade union organisations and the organisations representing small-scale energy consumers;

• seven representatives of employers' organisations and the organisations representing large-scale energy consumers;

• nine representatives of the public authorities; and

• four representatives of other organisations (environmental organisations, consumers' organisations etc).

The CREG will be responsible for "defining the main strategic outlines of the energy market in Belgium and for closely monitoring the work relating to the actual implementation of the opening of the market, in close cooperation with the government" (according to the Federation of Belgian Enterprises, Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO). It should "enable employer-employee consultations on the basis of scientific studies, in particular with regard to the conditions to be satisfied to consider authorising the construction of different possible means of electricity generation in the future" (according to FGTB/ABVV). (Catherine Delbar, Institut des Sciences du Travail, UCL)