European Commission launches new consultation on restructuring

The European Commission has launched a Europe-wide public debate on corporate restructuring and anticipating change that will run until 30 March 2012. This initiative is something of a surprise as the President of the Commission, José Manuel Barroso, stressed in October 2010 the need for a European framework on this matter. However, instead of launching a formal second consultation with social partners, the Commission has proceeded with a broader Green Paper instead.

Background

The European social partners have been working on the issue of restructuring for a number of years and even tried to agree a common text. After a first consultation, launched by the Commission in 2002, on how to anticipate and manage the social effects of corporate restructuring, the social partners negotiated ‘Orientations for reference in managing change and its social consequences’ in 2003.

However, the text has never been ratified by the European Trade Union Confederation (ETUC) and does not include any mechanism to insure its implementation.

In 2005, the Commission stressed in a communication (262Kb PDF), linked to a consultation with social partners, that this text was insufficient and called on the social partners ‘to become more involved in the ways and means of anticipating and managing restructuring’. It also asked them to continue their ongoing work by encouraging the adoption of best practice guidelines on restructuring and European works councils.

The aim of this consultation was ‘to ensure that these guidelines are put into practice and developed further, and in particular to encourage the adoption of these guidelines’. However, only limited progress was observed on the issue in the course of 26 seminars, one of which was organised by the social partners in each Member State, except Bulgaria, from 2003 to 2009. The findings were summarised in an assessment published in January 2010.

Lack of initiative from social partners

The lack of tangible initiative by the social partners and pressure from the European Parliament encouraged the Commission to propose an initiative. In July 2010, in an answer to former ETUC General Secretary John Monks, President Barroso said that the establishment of an EU framework could contribute to ‘ensure the active mobilisation of all actors to adapt to change’. He also announced a possible invitation to the European social partners to negotiate a European framework instrument in this field (EU1010031I).

In October 2010, the Commission’s Industrial Policy Communication (145Kb PDF) stressed that the 2003 joint text needed to be revisited to integrate knowledge that has subsequently been gathered on the best ways to anticipate and manage restructuring, and also to take into account the experience of the economic and financial crisis.

In November 2010 the Commission stated its intention to launch a consultation on a European framework for restructuring in the Single Market Act (188Kb PDF), and again in November 2011 in its Agenda for New Skills and Jobs (104Kb PDF).

Green Paper instead of proposal for a European framework

The point of these consultations was to ensure that the 2003 joint text is put into practice and developed further, and in particular to encourage the adoption of the guidelines. However, no real progress was observed on this issue apart from the 26 seminars organised by the social partners between 2003 and 2009.

However, instead of starting the second stage of consultation, the Commission decided in January 2011 to re-launch a political debate on change and restructuring in the light of the lessons learned from the financial crisis, ‘in order to promote employment, growth and competitiveness’. The aim is ‘to contribute to improving synergy between all relevant actors in addressing challenges related to restructuring and adaptation to change’, it says in its summary of the objectives of the consultation.

The Commission stressed that social dialogue and collective bargaining have played a crucial role in adapting production, work organisation and working conditions to fast-changing and demanding circumstances during the crisis.

The Green paper is accompanied by a Staff Working Document titled ‘Restructuring in Europe 2011’, which gives an in-depth overview of the different aspects of the Commission’s policy on restructuring. With this Green Paper, the Commission wants to ‘encourage permanent business adaptation to fast-changing economic circumstances while pursuing a high level of employment and social protection through the appropriate supporting measures’.

It strongly recommends measures that support the reallocation of resources between firms and occupations. The Commission regrets that practices in this field are ‘sometimes reactive rather than anticipative and proactive; they can happen too late in the decision-making process and may not involve external entities early enough for them to play a role in attenuating the social impact of restructuring’.

Further steps and social partner reactions

The Green Paper does not announce any concrete initiative from the Commission, but the Commission has the option to issue a White Paper after consulting the social partners.

According to the Green Paper, the Commission ‘will build upon the outcome of this consultation to consider new ways to better disseminate and effectively implement good practices, including at EU level, for dealing with both immediate concerns related to the economic crisis and long-term competitiveness objectives as identified in the industrial policy flagship initiative’.

At the time of writing, Business Europe had not yet published a position on the consultation. However, Judith Kirton-Darling, Confederal Secretary of ETUC, said in a statement that ‘with economic forecasts pointing downwards, now is not the time for the Commission to sit on its hands and intensify the pain for workers. Workers will not be taken in by this charade. We demand concrete anticipation measures today, not in another 10 years’.

Frédéric TURLAN, HERA

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