European Framework Agreement on employment guarantees at Alstom and Schneider Electric

The first-ever European collective bargaining agreement involving two companies – Alstom and Schneider Electric – was concluded with the European Metalworkers’ Federation in July 2010. The agreement sets out social commitments about how employees of energy transmission and distribution company Areva T&D will be treated following its acquisition by the two companies. It also includes a commitment to avoid plant closures and compulsory redundancies for three years.

About the agreement

The aim of the agreement, concluded by the two French companies Alstom and Schneider Electric with the European Metalworkers’ Federation (EMF) on 7 July 2010, is to set out specific employment commitments for the employees of Areva T&D, a subsidiary of the power group Areva. Areva T&D is to be split between the acquiring companies:

  • the transmission activities of Areva T&D will form a new unit at Alstom which will be known as Grid;
  • the distribution activities of Areva T&D will be integrated into Schneider Electric’s energy business.

The signatories see this as a ground-breaking agreement, being the first of its kind in Europe and because it tries to deal directly with the problem of employment management, often a difficult issue following an acquisition of this kind.

No plant closures for three years

The agreement states that all employees included in the headcount of Areva T&D at the date of acquisition by the Alstom-Schneider Electric consortium will be entitled to an equivalent job in the same area. This means either in the same location, or no more than one hour’s travelling time – about 10km – from the previous location. The aim is ‘to avoid any significant increase of employees’ commuting time, as collectively estimated, compared with the current situation’. Any new job will reflect the employee’s level of qualification, remuneration and seniority in the same way that their previous post did.

The two groups have also guaranteed that no European Areva T&D site of any type – and including those in Switzerland, Turkey and Norway as well as all EU Member States – will be closed before 24 March 2013 unless all employees have been relocated in accordance with the agreement.

No collective redundancies for three years

The agreement also states that there will be no compulsory collective redundancies at the two organisations in Europe before 24 March 2013 ‘unless economic conditions significantly deteriorate’, as defined in the minutes of the Areva group’s European Works Council meeting of 17 December 2009.

These commitments apply to Alstom’s new transmission sector and to Schneider Electric’s entire energy distribution activity.

The agreement also makes it clear that at no point will these formal commitments to Areva T&D employees be interpreted in a way that would be detrimental to those who were employed by Alstom or Schneider Electric at the time of the acquisition. This clause addresses fears expressed by employees of the two groups that they might be more exposed to redundancy in any future restructuring as a result of the protection offered to former Areva T&D employees by the new agreement.

Integration and training

The agreement commits both companies to the rapid integration of Areva T&D employees. In particular, the two groups guarantee that their training policies will further employees’ development.

The scope of both of the group’s European Works Councils (EWCs) will be discussed by the end of the year and both groups commit to assessing the Areva agreements already in existence at group level within one year of the integration of the Areva T&D employees. This assessment will be debated with the trade union representatives of each of the two groups to make it possible for them to include relevant topics in social negotiations at European, national and sectoral level.

Areva’s European agreement on equal opportunities will be placed on the agenda of the Alstom and Schneider EWCs as soon as these bodies are enlarged to encompass the Areva T&D activities. Both EWCs will follow up the implementation of this agreement and the signatory parties will monitor implementation by means of an annual meeting.

Commentary

This agreement represents a real innovation because this is the first time that a European agreement has been signed by two groups in the context of an acquisition. It also gives specific employment guarantees in this context, centred on a commitment not to close any plant or make compulsory redundancies before March 2013. The agreement is the result of the cooperation built up between Patrick Kron, Alstom Chair and Chief Executive Officer (CEO), and Jean-Pascal Tricoire, Schneider Electric President and CEO, whose shared views on employment management, training and promotion of social dialogue were expressed during the Areva group’s December 2009 EWC meeting.

Frédéric Turlan, HERA

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