Tense industrial relations at steelworks group

Industrial relations at Luxembourg steelmaker ArcelorMittal have been deteriorating since the management’s decision in December 2012 to no longer observe two collective agreements that affect 3,000 of its workers. The company says it has a legal obligation to establish a ‘single status’ among employees and it must therefore end separate collective agreements for blue-collar and white-collar workers. Trade unions, however, see the move as an attack on social dialogue.

Background

Struggling steelmaking giant ArcelorMittal, which operates in 60 countries and employs around 260,000 people worldwide, had a difficult 2012 in Luxembourg where it employs 3,000 workers. Despite uncertainties surrounding the future of ArcelorMittal’s sites in Luxembourg, and after several months of negotiations, early in the year there had been some progress with social partners in the steelmaking sector and the government. On 28 March 2012, a newspaper article (in French) said that a tripartite memorandum of understanding had been signed setting out a plan to tackle growing economic problems.

The main commitments of the Lux-2016 plan for the future of steelmaking included investments of €150 million in Luxembourg over five years, social measures to support employees affected by a decision to close its steelworks at Schifflange, including an early retirement option, and the reduction of production at the plant at Rodange.

However, it does not contain any commitment to maintain a certain number jobs at the Rodange and Schifflange locations. This was a matter of contention because, according a press release (in French) from the OGBL trade union, a study ‘clearly demonstrates the existence of alternatives that could allow them to operate profitably’.

Industrial relations at the company’s Luxembourg sites have deteriorated further since its decision in December 2012 to no longer observe two current collective agreements.

Reductions in productivity

In April 2012, OGBL denounced the company’s ‘financial vampirism’ when the managers of the ArcelorMittal site at Dudelange announced they were running down the capacity of one production line and completely closing another, albeit temporarily. The decision meant a reduction in the number of shifts and the temporary redeployment of the surplus staff.

The OGBL and LCGB-SESM trade unions accused the management in a newspaper article (in French) of ‘deliberately provoking a substantial reduction in the Dudelange order book by channelling the work to other sites’. On the OGBL website, the two unions then launched an ‘appeal to the Luxembourg Government to stop the systematic and organised devastation of the country’s steelmaking heritage’. In October, more bad news was announced by the group, with its proposal to shut down part of the production at Schifflange from January 2013 for an ‘indefinite period’.

Collective agreements terminated

On 14 December 2012, after six months of negotiations intended to reach agreement on a single collective agreement, the ArcelorMittal management decided to stop observing the two collective agreements currently in force.

The group explained that the decision was in response to the need ‘to adapt existing collective agreements to legislation on the single status of white-collar and blue-collar workers’ which all private sector companies must implement by the end of 2013. In a news article (in French), the management said it had put forward:

...a framework agreement on the timetable of these negotiations... to allow a new agreement that serves the best interests of our employees and the future of ArcelorMittal in Luxembourg to be arrived at within one year.

Luxembourg’s Prime Minister Jean-Claude Juncker, reacting to similar cases in which employers had terminated collective agreements, said in an interview (in French) in December 2012 that although such initiatives met all the legal criteria, they would be perceived as being ‘deliberately provocative’. He added:

This way of doing things ignores the fact that, in this country, the major trade unions have acted responsibly in talks with the employers on practically every occasion when the situation demanded it. Antagonising them in this way, even if legally correct, is not the right way to go.

Unions on the back foot

If the management’s language was intended to be reassuring, the trade unions were not convinced. According to the minority LCGB union, the management was willing to talk about cancelling rest days and even ending automatic career advancement. Jean-Claude Bernardini, Executive Member of the OGBL, said in December 2012 in a news article (in French):

We are waiting to see which issues the management wants to talk about and, if it really does want to attack gains, we will offer…resistance.

The LCGB, meanwhile, rallied more than 200 employees for a picket protest at the company.

Elsewhere, a delegation from the OGBL was received by government representatives to take stock of the situation. An inaugural negotiation meeting was held on 8 January 2013. The parties decided to meet every fortnight to work out a new collective agreement between now and the end of 2013 as the law required. The unions emerged partially reassured by the commitment made by the management to maintain the wage guarantees provided for in the Lux-2016 agreement.

Commentary

As a result of the economic crisis and the ArcelorMittal group’s strategy, the future of Luxembourg’s steelmaking industry appears increasingly fragile. It has left the social partners to oversee a decline in the sector which seems to them to be unavoidable. The climate is characterised by the unions’ loss of confidence in their management, which complicates social dialogue at both tripartite and company level.

Frédéric TURLAN, IR Share

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