Suez group signs three international framework agreements

Since August 2006, intensive negotiations have been taking place at the energy and environment company Suez between central management and employee representatives in relation to the company’s international human resources policy. Although the parties have not yet reached an agreement on all points, three international framework agreements were signed by 3 July 2007.

Negotiation process

Since 2006, Suez, an international group operating in the field of water, waste and energy services, has been in negotiations with employee representatives on various issues concerning the group’s corporate social responsibility. In February 2006, the Suez European Works Council (EWC) used the occasion of the announced merger with the French company Gaz de France to ask management to enter into negotiations on a range of issues, which were subsequently presented during an extraordinary meeting of the EWC in April 2006 (FR0603039I).

In August 2006, the EWC select committee, along with the French trade unions and the European Trade Union Confederation (ETUC), represented by the European Federation of Public Service Unions (EPSU), commenced negotiations with the Suez management in an effort to define the group’s social policy at corporate level. Although a number of other questions still need to be resolved, on 3 July 2007 three international framework agreements were concluded, covering the areas of profit sharing, advance planning of staff development, and equality and diversity.

Three framework agreements

Profit-sharing plan

The trade unions and the EWC demanded the development of a profit-sharing scheme that would allow workers to participate in the results of the Suez Group. Although these demands were not fully met, the negotiating parties reached a three-year agreement on a supplementary financial incentive plan, which is to be based on the group’s results. Accordingly, from 2007 to 2009, all Suez employees throughout the world, regardless of their nationality, position in the organisation, job responsibility or seniority, will share in the results of the group.

Based on the results for 2006, a sum of €80 million is to be set aside for 2007 for the payment of the incentives; the remuneration will be paid in the form of a free distribution of about two million bonus shares to the group’s 140,000 employees. However, for 2008 and 2009, the EWC is demanding that a different form of payment of the incentives be identified instead of the distribution of bonus shares. Moreover, the identification of alternative forms of payment should be subject to negotiation.

Forward planning of job and skill requirements

According to the management, Suez intends to be among the first European companies to apply the technique of forward planning in relation to its job and skill requirements. The framework agreement in this area stipulates that the company has to ensure the improved management of employment and skills, as well as the anticipation of future developments in occupations, work and growth. Management should promote internal mobility and prevent redundancies. Furthermore, the agreement provides for the establishment of European, national and local structures to support this strategy. In order to guarantee the effectiveness of these structures, training measures are to be introduced for the actors involved. The strategy of forward planning also includes the provision that, over the next five years, the group intends to hire 110,000 new employees – including 52,000 employees at its base in France.

Equality and diversity targets

An initial text on diversity and equal opportunities was also approved. Accordingly, Suez will provide an overview of the situation with regard to equality and diversity. At the same time, management and the employee representatives have agreed to devise a series of targets, indicators and objectives. Suez states that it is committed to gender equality and to correcting disparities in terms of employment, recruitment, compensation, access to promotion and training, working time and career interruptions. According to the management, diversity and equal opportunities are assets for social and business performance, helping the company to meet new challenges.

Outstanding issues

Both sides underline the innovative character of the aforementioned agreements. However, according to the EWC and the trade union representatives, negotiations on the remaining items need to continue in order to reach results over the next six months. Among the outstanding issues is the proposal by the employee side to improve trade union rights and to ensure training measures for employee representatives. Another open point for discussion concerns mechanisms to be adopted in order to guarantee the purchasing power of wages. The employee side had rejected the management’s proposal to commit to compensate for a proportion of inflation and is proposing instead a discussion on decent wages.

Volker Telljohann and Maite Tapia, Institute for Labour Foundation, Bologna

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