On the eve of the introduction of a European internal market in electricity in February 1999, the social partners in the electricity industry held a workshop in Brussels in order to assess the implications of the internal market and restructuring on companies and employees. The workshop, which took place on 18 January 1999, was attended by around 100 employer and employee representatives from across the European Union and Central and Eastern Europe. Discussion at the workshop focused on the impact of restructuring on employment, the need for greater customer orientation, and equal opportunities for women and men.
Over the past decade, the European electricity industry has undergone a period of intense restructuring. The most important trend affecting EU electricity markets has been a change in market structure, designed to bring about increased competition in the sector. This was spurred partly by the European Commission's strategy on a European internal market in electricity. 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. The provisions of the Directive came into force in February 1999, with Member States required to open up about 25.37% of national market share to competition. EU policy has been one of the factors triggering changes in national policy, a wave of privatisation, restructuring, "unbundling" and more open competition. These combined factors have begun to transform the electricity supply sector, albeit at different speeds in different countries.
Eurostat figures show that as a result of restructuring, there has been, and will continue to be, a significant decline in employment in the electricity sector. Since 1990, employment in the sector has declined by over 25%. However, the magnitude of the decline in employment varies significantly from country to country, showing a strong correlation between the extent of restructuring and privatisation experienced in the sector. While the UK, for example, has seen a decline in employment of as much as 40%, employment in the sector in France and Spain remained stable or increased.
At the same time as a reduction in employment, there has been a significant qualitative change in employment relationships, away from full-time, open-ended jobs, to part-time, fixed-term and temporary employment. Much of the shift towards non-standard forms of employment has taken place in relation to the contracting-out of activities.
The social dialogue in the electricity industry
In the light of the severe reductions in employment in the sector in recent years, the social partners in electricity are increasingly looking towards finding common solutions to retain employment and to increase customer orientation, in order to create new markets and therefore jobs in the sector.
Employers in the industry are represented by the European Grouping of the Electricity Supply Industry (EURELECTRIC), a European-level employer organisation associated with the International Union of Producers and Distributors of Electrical Energy (UNIPEDE). The trade union side is represented by the European Federation of Public Service Unions (EPSU) and the European Mine, Chemical and Energy Workers' Federation (EMCEF). The social partners in the electricity industry started an informal sectoral social dialogue process in 1995 (EU9803190F). Issues discussed to date include vocational education and training, new technologies, the future organisation of work, equal opportunities and health and safety. On 12 September 1996, the social partners adopted a joint discussion document on health and safety and training, which was countersigned by Pádraig Flynn, the member of the European Commission responsible for employment and social affairs. More recently, the social partners commissioned a study on the impact of restructuring on women in the industry, which was presented at a workshop in January 1999 (see below). The social partners in the sector are currently in discussion over whether or not to submit an application to set up a sectoral dialogue committee - the Commission's new structure for the sectoral dialogue (EU9902150F).
Workshop on implications of internal market and restructuring
The sectoral social partners organised a workshop in Brussels on 18 January 1999, in order to exchange views and ideas on the implications of the internal electricity market and of restructuring on companies, employers and workers. The workshop was attended by around 100 representatives of companies, employers' organisations and trade unions across the European Union. A number of participants from the accession states of Central and Eastern Europe also took part.
The workshop took place in the context of an environment marked by accelerating change. As one of the participants put it, "the train has already left the station", while social partner organisations are trying to adjust to the impact of significant restructuring in the industry. EPSU and EMCEF presented a common position on Changes in the European electricity industry in which they underline the need to make the restructuring process as "socially acceptable" as possible, while at the same time looking at ways to develop new services and markets. They expressed their belief that the following principles need to be maintained in the restructuring process:
- restructuring must be based on agreements between unions and employers;
- there should be no compulsory redundancies;
- redundancy plans should be negotiated, in order to retrain and re-employ workers;
- restructuring should not be used to withdraw recognition from trade unions or to renege on collective agreements;
- newcomers in the market should recognise trade unions, accept collective bargaining, collective agreements and social standards to prevent distortion of competition;
- in case of mergers and acquisitions, negotiations with the unions should take place and rights should be transferred;
- where appropriate, discussions on European Works Councils should take place in a cooperative way.
A representative from EURELECTRIC similarly emphasised the importance of dialogue. However, he argued that this should primarily take place at company level and within industrial divisions at company level to ensure that solutions are closely suited to the specific needs of the locality. Furthermore, it was argued that the concept of job security must be adjusted, as this can no longer mean a job for life, but the development of the necessary skills to ensure "employability". A Finnish representative from EURELECTRIC further emphasised that in order to retain and create jobs in the industry and to remain competitive, further attention need to be paid to the greater customer orientation of the industry and the "branding" of goods. More customer orientation requires a reorientation of skills in the industry, away from a primarily technical content to a more marketing-oriented approach. Particular emphasis therefore needs to be placed on training, retraining and lifelong learning. While the trade unions fully support the concept of lifelong learning, a speaker from EPSU pointed to the experience of the UK, where the difficulties of developing a brand market for an essentially "invisible" product had been demonstrated. This is particularly true in an environment where different companies control the supply and distribution of electricity.
A refocusing of the skills base in electricity companies was seen to be a factor which could encourage the increased recruitment of women into the industry. Employment in the industry is currently clearly dominated by men, with women making up an average of only 15% of total employment. Despite the increasing customer focus, there has so far been little evidence of an increase in the number of women employed in electricity companies. Where women can be found, the tend to be employed in clerical and administrative tasks and very few companies employ women in executive positions, which serves to further inhibit the development of a proactive equal opportunities agenda. A number of EU-funded projects have sought to contribute towards the development of such a strategy by providing examples of good practice and encouraging "mentoring" schemes for women managers. Nevertheless, much clearly remains to be done in this area to make the industry more attractive to women.
In the final round-table discussion, representatives of EPSU emphasised the need to carry out a more detailed assessment of the impact of the internal electricity market on employment. A request to carry out such as study was made to DGXVII of the Commission when Directive 96/92/EC was adopted, but this has so far not happened. An official of DGXVII present at the conference argued that this was due to the fact that an assessment of whether the number of jobs lost in the electricity supply industry outweighed the number of jobs created in the electricity consuming industry as a result of a drop in prices was too complex. In conclusion, the social partners highlighted the significant degree of commonality in their concerns and approaches to the challenges facing the industry and expressed their determination to continue their dialogue. A representative of DGV encouraged them to take this forward by submitting an application to form a sectoral dialogue committee. This decision is currently under consideration.
Commentary
The experience of the UK, where the process of privatisation of the electricity industry has advanced furthest, has shown the threat presented by liberalisation to jobs in the previously public utilities. Trade union representatives at the conference argued that the main beneficiaries of this development so far have been the shareholders and so some extent the consumers (in particular the larger consumers who have sufficient buying power to influence prices). Other countries, which stand at the beginning of a process of increasing "marketisation", and other utilities, which also stand to be increasingly privatised over the coming years, are clearly worried by this example. They are seeking to learn from countries such as the UK in order not to make the same mistakes and to take on board any examples of good practice. The conference showed some clear commonality of concerns and approaches, and the fact that the social partners are considering a joint application to establish a sectoral dialogue committee may lead to way for other utilities to consider similar moves to allow them to be consulted at the European level. (Tina Weber, ECOTEC Research & Consulting)