Social plan agreed at Thomas & Betts

Download article in original language : LU0010144NFR.DOC

Following the announcement of the closure of the Thomas & Betts' electronics plant in Luxembourg, which has been taken over by the Tyco Electronics Corporation, management and trade unions negotiated a social plan in September 2000, whereby employees will receive compensation amounting to an average of one year's pay.

Luxembourg has little experience of amendments to the legal situation of employers - such as plant closures and transfers - and where there have been any, they have rarely had a damaging effect on staff. However, in August 2000, Thomas & Betts Luxembourg, a manufacturer of interconnection components and systems and electrical, electronic and optical-fibre connectors, suddenly found itself in the news.

The company, a subsidiary of the US-based Thomas & Betts, had already made 170 employees redundant in 1997 after a production line was transferred to Hungary, and another 69 in 1998. On 2 July 2000, Thomas & Betts' professional electronics division was acquired by the US-owned Tyco Electronics Corporation.

In early August 2000, management announced through the press that it was going to close the Luxembourg factory down by the end of 2000: 94 staff would lose their jobs, together with another 20 or so employees on fixed-term contracts. The press release stated that "special efforts will be made to help the 94 employees at the plant to find new work, and negotiations to draw up a positive and correct social plan that will satisfy all the parties will commence as soon as possible in the next few weeks."

The Minister of Labour said that he would monitor the process politically to ensure that a legally compliant social plan was negotiated. Under Luxembourg law, in collective redundancies a social plan or redundancy programme must be negotiated with employee representatives and, where a collective agreement applies, trade unions, aimed at avoiding or reducing the number of job losses or mitigating their effects.

Talks on a social plan between the two representative trade unions at Thomas & Betts - the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) - began on 7 September 2000 and were completed on 20 September 2000. The two unions stated in a joint press release that "the provisions of the social plan are very favourable for those concerned." The main provisions are as follows:

• each employee will receive 125% of a month's pay for every year of service. Union representatives have calculated that average service is as high as 10.4 years, and that staff will thus receive the equivalent of a year's salary on average;

• each employee will also receive a bonus of LUF 217,000. At all events, the total negotiated payment, including the service-related payment and the bonus, will not be less than LUF 500,000;

• the company has instructed a job-placement agency to find employment for staff; and

• according to the unions, "all necessary administrative steps will be taken to enable staff to find employment".