Social partners reply to European Commission on restructuring and EWCs

In July 2005, the European Trade Union Confederation and the private sector employers’ body UNICE responded formally to a European Commission Communication on restructuring and the role of European Works Councils. This article highlights the key points of the two organisations’ submissions.

During July 2005, two of the main EU-level social partner organisations, the European Trade Union Confederation (ETUC) and the Union of Industrial and Employers’ Confederations of Europe (UNICE), submitted formal responses to the European Commission’s April 2005 Communication (COM(2005) 120 final), Restructuring and employment (EU0504202F).

The Communication set out a range of measures aimed at improving the EU’s capacity for anticipating and managing restructuring. At the same time, it initiated the second phase of consultations with the EU-level social partner organisations under Article 138(3) of the Treaty establishing the European Community (TEC) on two issues - the social aspects of restructuring, and enhancing the effectiveness of European Works Councils (EWCs). In doing so, the Commission called on the social partners to begin negotiations on promoting and monitoring best practice guidelines on handling restructuring and on the operation of EWCs.

Speaking at the inaugural meeting of the new EU Restructuring Forum in June 2005 (EU0507202N), social affairs commissioner Vladimír Špidla urged the social partners to 'go further' than their existing joint texts on these issues - Orientations for reference in managing change and its social consequences (EU0307203F) and Lessons learned on European Works Councils (EU0505204F) - and in particular to reach agreement on how these guidelines can be 'implemented in concrete terms'. He said that the tripartite social summit to be held before the spring 2006 European Council would provide an opportunity to 'take stock and measure progress' by the social partners on these issues.

ETUC position

In its comments, the ETUC executive committee criticises the Commission for launching a joint consultation on two separate issues: 'EWCs do not deal exclusively with restructuring, and restructuring is not only an issue for EWCs', nor is it always cross-border in nature. Moreover, the ETUC argues that the Commission failed to meet the procedural requirements for second-phase consultations with the social partners. Article 138(3) of the TEC specifies that if, after the first phase of consultation, the Commission 'considers Community action advisable', second-phase consultations should take place 'on the content of the envisaged proposal'. The ETUC argues that the Commission has not produced any such proposal: 'It is clear from the Commission’s document, and also in view of the political situation within the Commission, that no legislative proposal will be presented on either topic.' Moreover, 'there is no indication of what the European Commission will do if, by the 2006 spring Council, nothing has happened with regard to interprofessional or sectoral social dialogue.'

The response states that neither of the two existing joint statements by the social partners 'foresees any follow-up measures' or 'further commitments', which the ETUC says is 'a clear indication of the difficulty of reaching agreement with the employers'.

The ETUC says that 'no option should be excluded' in respect of the Commission’s request for talks between the social partners. At the same time, its response confirms that 'with regard to EWCs, the ETUC is maintaining its long-standing demand for the revision of the Directive', and reiterates its main priorities for legislative amendment. However, its adds that: 'The possibility should not be ruled out of getting back together with the employers in a social dialogue to jointly analyse more cases that illustrate the good or bad implementation of the Directive.'

On restructuring, the ETUC says that 'several options can be considered in order to make progress on this question: the Commission should submit urgently its proposal on the harmonisation of information and consultation rights; progress made at the sectoral social dialogue level must be evaluated; [and] the current situation at national level must be assessed, especially in the light of the 2002-3 debate within the framework of European social dialogue'. The ETUC points out that, in any case, restructuring will be back on the agenda of the interprofessional social dialogue as a result of a joint project on restructuring in the new Member States, due to end in June 2006.

UNICE position

The position paper prepared by UNICE’s social affairs committee welcomes the Commission’s 'positive attitude' towards restructuring. It stresses that: 'Companies have to be able to react quickly to changing economic situations. In order to be able to adapt to change in a positive way, it is of vital importance that no further burdens are imposed on companies ... Trying to prevent or limit restructuring by tightening the regulatory straitjacket around the business would be counterproductive.'

UNICE argues that 'If restructuring is managed in a proactive way, adjustment costs can be minimised'. The EU can play a 'positive role'. However, dealing with the consequences of restructuring is 'by definition a matter for local players. They have to be tackled by the firms and the employees directly concerned.'

UNICE says it shares the Commission’s overall aim of 'fostering a positive attitude to change and enhancing Europe’s capacity to manage it proactively'. However, it does not support the proposal to create a new capacity for Community intervention in crisis situations, and has 'the greatest doubts about the added value' of the new restructuring forum.

As regards the second-phase consultation of the social partners, UNICE states that 'while appreciating the open character of this consultation', it remains convinced that launching it was 'neither desirable nor necessary'.

Its position paper stresses that UNICE and its member federations are 'committed to promoting [the two existing joint texts on restructuring and EWCs] across the European Union and are currently collecting information on actions taken by employers and workers representatives on restructuring'. UNICE is also 'willing to discuss with ETUC how to further encourage the promotion of the restructuring and EWC texts', but adds that 'these best practice tools must not be seized upon by the Commission in order to prepare further legislation on these subjects, or to interfere with the decisions of local players who are best placed to devise solutions to deal with the social consequences of change.'

Like the ETUC, UNICE points out that discussions between the European social partners on restructuring will continue within the social dialogue in the context of a joint study of restructuring in the new Member States.

Commentary

Predictably, both the ETUC and UNICE have responded cautiously to the Commission’s attempt to prompt negotiations between the social partners about promoting good practice on handling restructuring and the operation of EWCs. The two organisations have indicated their openness to further talks, but have very different objectives. While the ETUC wants the Commission to adopt a more interventionist strategy for involving workers in managing the problems of restructuring and relocation, and in particular to move to strengthen the EWCs Directive (94/45/EC)(EU0407207F), UNICE is opposed to any further legal regulation of the process of restructuring and to the revision of the EWCs Directive, preferring a voluntary approach on the basis of the existing joint social partner texts. The likely next steps in the process, and the outcome of any talks between the social partners, remain uncertain. The Commission has signalled its reluctance to propose revision of the EWCs Directive, but if the social partners do not come up with the sort of response it has called for, the ball will be back in the Commission’s court. (Mark Hall, IRRU)