In July 2007, the management of Fulflex [1], a company producing elastic materials for various products including baby, healthcare and textile products, informed the works council at its site in Kehlen in western Luxembourg that it was going to make 20 people redundant following the relocation of production to Singapore. Several days later, the management reversed its decision and informed the works council that only 10 jobs were under threat and that a significant proportion of production would in fact remain in Luxembourg.[1] http://www.fulflex.com/
Despite efforts to prevent redundancies, in early 2008 the manufacturing company Fulflex announced that it had no option but to lay off 18 of its remaining 26 workers at its Luxembourg site, after having lost its main client. Following marathon negotiations, the representative trade unions and management recently signed a social plan, providing for financial compensation, an acceptable notice period and dispensation from working this period for the redundant workers.
Efforts to safeguard employment
In July 2007, the management of Fulflex, a company producing elastic materials for various products including baby, healthcare and textile products, informed the works council at its site in Kehlen in western Luxembourg that it was going to make 20 people redundant following the relocation of production to Singapore. Several days later, the management reversed its decision and informed the works council that only 10 jobs were under threat and that a significant proportion of production would in fact remain in Luxembourg.
At the end of October 2007, the trade unions negotiated an employment retention plan that allowed five workers to be redeployed to another company, while five others opted for voluntary redundancy with compensation negotiated by the social partners. The management of Fulflex thus appeared to be reassuring workers about the future of the Luxembourg site.
Collective redundancy announced
However, in early December 2007, the management informed the works council that Fulflex had just lost its main client and that, as a result, the Luxembourg site would lose 80% of its production. The company announced that it had no other option but to make 18 of the 26 remaining workers redundant.
Negotiations on social plan
On 8 January 2008, negotiations concerning the introduction of a social plan were initiated. The discord between management and the two representative trade unions – the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) – essentially related to the fact that the management considered that the payment of the full redundancy package in a single instalment constituted a form of reward for the staff being made redundant. For their part, OGB-L and LCGB believed that neither the amount of additional compensation for each year of employment nor the single compensation payment were acceptable. In protest, the workforce staged a picket in front of the company’s site.
The trade unions and management have met several times, in particular to discuss criteria for selecting the people to be made redundant; in addition, they decided on criteria relating to the skills, family situation, age and seniority of workers in the company, as well as each individual’s personal situation. The law requires that the selection criteria are clearly defined in the social plan. These criteria are determined according to the needs of the restructured company and, as far as possible, on the basis of social considerations.
An OGB-L representative outlined that, despite certain points of disagreement, the discussions had been conducted in a positive spirit. However, beyond the financial aspect, certain questions remain unanswered. OGB-L believes that the company has a social responsibility and expressed surprise at the numerous turnarounds in the management’s discourse in terms of explaining its human resources policy.
Trade unions agree on social plan
The trade unions eventually managed to reach agreement with the management on an acceptable social plan. Accordingly, in addition to financial compensation, a notice period of 90 days has been negotiated for the employees who have been at the company for less than five years. Moreover, dispensation from the requirement to work the notice period has been granted to all employees, so that they can devote their time to finding a new job. Workers who find new employment during their notice period, consisting of either a six-month or permanent contract, and who inform management of this, will be paid for the remainder of the notice period and receive the compensation outstanding within 15 days.
Odette Wlodarski, Prevent
Eurofound recommends citing this publication in the following way.
Eurofound (2008), Social plan agreed at Fulflex following redundancies, article.
