Agreement avoid redundancies at SES Astra

Download article in original language : LU0302105FFR.DOC

In January 2003, SES Astra, the Luxembourg-based satellite operator, announced plans for 32 job losses. However, a redundancy programme negotiated with the LCGB trade union subsequently succeeded in avoided any compulsory redundancies, through the use of internal and external transfers and early retirement.

SES Astra, which has its head office in Betzdorf (Luxembourg), is the world’s largest operator of satellites. On 4 January 2003, it announced that it planned to cut 32 jobs, or one 10th of its Luxembourg workforce, and that negotiations over a redundancy programme would commence with the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB). This new workforce reduction (a major one in the Luxembourg context) occurred after six other jobs were cut a few weeks earlier.

The decision to reduce the workforce was justified on the grounds of a 'repositioning of the group in the light of development son the market'. The company, which made a smaller profit than usual in 2002, is suffering from erratic conditions in the telecommunications sector, where its main clients operate, and which is marked by a sharp fall in advertising revenue. For the management, the job losses were a preventive measure looking forward to an upturn announced for 2005.

Negotiations on redundancy programme

Under the terms of the law of 23 July 1993 concerning collective redundancies, any company that plans to dismiss at least seven employees during a period of 30 days, or 15 employees during a period of 90 days, must enter into negotiations with workers’ representatives with a view to drawing up a redundancy programme (plan social). These negotiations must focus at least on the possibility of avoiding collective redundancies or reducing their number, and on the possibility of mitigating the consequences, particularly by providing social support measures mainly involving assistance in helping employees to find a new job or to be redeployed.

Negotiations commenced on 9 January 2003 between SES Astra management and LCGB, which stated that it would 'endeavour to draw up models guaranteeing to the employees affected the means of existence'. The union made it clear that, before addressing the possibility of redundancies, there was an urgent need to explore all possible ways of saving jobs in the enterprise, particularly as these are highly skilled jobs.

The other main union confederation, the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L), also wrote to the Minister of Labour and Employment asking him to call a meeting at the National Conciliation Office, as the planned redundancies had 'no objective motivation'.

On 9 January 2003, Prime Minister Jean-Claude Juncker announced that 'it was unimaginable that there would be 32 redundancies at SES Astra.' He said that 'even if one works in satellites, one has to put one’s feet back on the ground and get back to Luxembourg, and remember the useful instruments that Luxembourg has at its disposal in this field.' He also announced that he would instruct the Minister of Labour to 'make a close examination of the redundancy programme that senior management had to send him at the end of the first negotiating meeting, in order to assess the extent to which the number of redundancies could be reduced to a minimum through internal or external transfers, or by offering early retirement'.

After the first round of discussions, which lasted for three hours, SES Astra senior management issued a press release in which it stated that 'at the end of the meeting, the two parties had expressed a desire to try and reach a balanced solution by the deadlines provided for in the law, that is to say within 15 days.' A few days later, the company's director of human resources stated that the firm would behave 'in a public-spirited way in these difficult times.' He justified the redundancies on the grounds that it was necessary to adapt certain departments of SES Astra to changes in the satellites market, and to clients’ needs: in view of developments in the economic climate, the only savings still open were in staff costs.

Redundancies avoided

The talks over the SES Astra redundancy programme took place behind the scenes, but are known to have involved the Prime Minister and the Minister of Labour - 25% of the company's capital is owned by the Luxembourg state.

On 24 January 2003, the firm's employee committee and company joint works committee, in partnership with LCGB, agreed a redundancy programme with company management that should in fact avoid any redundancies. Instead of the 32 redundancies initially announced, only 21 people will be covered by the programme if they wish to take advantage of it. These 21 people will be able to choose between opportunities to: take internal transfers; move to SES enterprises in Luxembourg or abroad; take voluntary early retirement; or opt for external transfers to other enterprises. Finally, it was agreed that an enlarged joint works committee meeting would be convened in future whenever a threat of restructuring might lead to redundancies.

LCGB states that this is the first redundancy programme in Luxembourg which, through internal and external transfers and retirements, has avoided direct redundancies.

Commentary

At a time when the Luxemburg labour market has experienced a number of job losses in the important banking sector, it has become particularly important that a company, part of whose capital is owned by the state, should show that drawing up a redundancy programme is mainly aimed at preventing redundancies. The SES Astra programme will most certainly have a positive effect on the general industrial relations climate in Luxembourg, by suggesting that highly skilled staff (a shortage of whom is often deplored) should be retained at any cost in order to make use of them when the economy takes off again. (Marc Feyereisen)