REPORT on restructuring and employment
9.2.2006 - (2005/2188(INI))
Committee on Employment and Social Affairs
Rapporteur: Jean Louis Cottigny
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on restructuring and employment
The European Parliament,
– having regard to the Commission Communication of 31 March 2005 entitled 'Restructuring and employment: Anticipating and accompanying restructuring in order to develop employment: the role of the European Union' (COM(2005)0120) and the opinion of the European Economic and Social Committee of 14 December 2005 (CESE 1495/2005),
– having regard to the 1989 Charter of Fundamental Social Rights for Workers and the action programme relating to it,
– having regard to Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees[1],
– having regard to Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies[2],
– having regard to Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses[3],
– having regard to European Parliament and Council Directive 2002/14/EC of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community[4],
– having regard to its resolutions of 28 October 1999[5], 17 February 2000[6] and 15 February 2001[7] on business restructuring in Europe,
– having regard to Council Recommendation 92/443/EEC of 27 July 1992 concerning the promotion of participation by employed persons in profits and enterprise results (including equity participation)[8],
– having regard to the conclusions of the Lisbon European Council of 23 and 24 March 2000 and to the resolutions of the European Parliament, in particular its resolution of 15 March 2005 on this subject[9] and its resolution of 9 March 2005 on the mid-term review of the Lisbon strategy [10],
– having regard to the Commission communication 'Working together for growth and jobs: A new start for the Lisbon Strategy' (COM(2005)0024),
– having regard to the conclusions of the Brussels European Council of 22 and 23 March 2005 and the European Parliament resolution of 13 April 2005[11],
– having regard to the Commission communication entitled 'Fostering structural change: an industrial policy for an enlarged Europe' (COM(2004)274) and the European Parliament resolution of 9 June 2005[12],
– having regard to the own-initiative opinion of the European Economic and Social Committee of 29 September 2005 entitled “Social dialogue and employee participation, essential for anticipating and managing industrial change” (CESE 1073/2005),
– having regard to the Commission communication on the Social Agenda (COM(2005)0033) and the European Parliament resolution of 26 May 2005 on the Social Agenda for the period 2006-2010[13],
– having regard to the Commission communication to the Council and the European Parliament entitled 'Common Actions for Growth and Employment: The Community Lisbon Programme' (COM(2005)0330),
– having regard to the initiative taken by the Commission to designate 2006 as the European Year of Workers' Mobility and to the implementation of the Lisbon Strategy[14],
– having regard to the Commission communication entitled 'Building our common Future:
Policy challenges and Budgetary means of the Enlarged Union 2007-2013' (COM(2004)0101), the Commission communication entitled 'Financial Perspectives 2007-2013' (COM(2004)0487) and the European Parliament resolution of 8 June 2005 on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013[15],
– having regard to the common position of the Brussels European Council of 15 and 16 December 2005 on the Financial Perspective 2007-2013,
– having regard to the proposal for a Council regulation laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund (COM(2004)0492),
– having regard to the proposal for a European Parliament and Council regulation on the European Social Fund (COM(2004)0493),
– having regard to Articles 87(3), 127, 136 and 158 of the EU Treaty,
– having regard to Rule 45 of its Rules of Procedure,
– having regard to the report of the Committee on Employment and Social Affairs (A6‑0031/2005),
A. whereas a social and economic approach to risks is the key element characterising the European social model and whereas it is applied in a variety of forms as part of the different national policies designed to build a welfare state based on the idea of solidarity and social security,
B. whereas these risks, if they are not anticipated, can equally affect and destroy employees, for whom work is one of the essential elements of their liberty and dignity, and employers and their productive assets, which evolve in the context of the competition inherent to an open economy,
C. whereas economic changes are inevitable, whether in the form of foreseeable evolution or unforeseen revolution, through adopted policies or as a result of crises; whereas these transformations affect all European states, whatever their level of economic development and social protection, though the challenges they face may differ and be met with specific responses according to the nature of their productive assets and long-term strategic investment and research choices, and, in a broader sense, depending on their recent economic and political history,
D. whereas restructuring is a specific form of economic change and may be a sudden and reluctant process of adaptation by a business to changes in consumer needs and to constraints resulting from the globalised economic climate, with a view to enabling it to remain competitive or regain its competitiveness, and whereas businesses and workers constantly need to adjust to create growth and employment,
E. whereas there are various levels of restructuring (inter-sector restructuring, restructuring within a single sector, restructuring within an individual firm and restructuring at worker level); whereas, within individual businesses, various types of restructuring may be observed (changes in production processes, outsourcing, relocation, site closure, job cuts, mergers/buyouts etc.); whereas restructuring at worker level takes place when increased demands are placed on workers’ skills; whereas these differing levels and types of restructuring call for different responses,
F. whereas one of the consequences of globalisation is increased concentration, regrouping and the creation of large international groups, sometimes in sectors of vital strategic interest; whereas therefore assistance to businesses should no longer be conceived solely on a national and local authority scale but at international level; whereas, furthermore, small and medium-sized enterprises are also dependent on globalisation and should receive the same attention as large groups in that regard,
G. whereas the difficulties which cause businesses to undertake restructuring are most often due to an opening up to international trade, but are also linked to the capacity of businesses to prepare themselves and their workers for modernisation and restructuring processes; sharing and supporting the Commission’s position that it is appropriate for the EU to bear the cost and face up, together with the Member States, to the legislative implications of policies it implements; calling on the Commission to consider the social consequences before opening up industrial sectors to the international market,
H. whereas the consequences of restructuring sometimes run counter to the Lisbon objectives seeking to promote full employment, quality of jobs, social and territorial cohesion and sustainable development, and whereas workers must be guaranteed opportunities for upgrading of skills and lifelong learning,
I. whereas the recognition that economic and social renewal is at the heart of the Lisbon strategy is vital; and whereas restructuring is also fundamental to the process of wealth creation and the raising of living standards;
J. whereas the social partners and public authorities have an essential role to play in accompanying restructuring, both at an overall level by creating new jobs and at an individual level by providing the workers concerned with opportunities to adapt to a new activity, in particular by means of training, but also in anticipating it and seeking for alternative solutions wherever possible,
K. whereas mobility in Europe is too low, which means that business potential is insufficiently exploited; whereas workers who are willing to move are often deterred from taking up their activities abroad as a result of administrative and linguistic obstacles; whereas insufficient use is made of national measures for lifelong learning;
L. whereas the weakness of European growth and business competitiveness are in part due to the weakness of investment in production and research; whereas the European Union should promote and support the investment capacity of businesses as well as R+D,
M. whereas, in view of their responsibility for adequately anticipating restructuring, businesses should guarantee the best possible training conditions for their workers in respect of:
- initial practical training periods and apprenticeship;
- the ongoing training of their employees;
- the recognition of work experience;
- whereas workers only gain real benefit from training if they have the opportunity to apply their new knowledge immediately; and whereas, in order to meet these objectives, businesses should draw up plans and schedules of responsibility for training and the development of qualifications negotiated between the social partners on the one hand and the institutions awarding professional qualifications on the other,
N. whereas the principal source of information at European level is the European Foundation for the Improvement of Living and Working Conditions, which manages the ERM (European Restructuring Monitor) and whereas use of this source should be optimised, particularly as regards the visibility and accessibility of information in all EU languages,
O. whereas one of the reasons why European businesses are in difficulty is the absence of adequate international rules on intellectual property protection and effective measures to combat counterfeiting,
1. Welcomes the Commission’s decision to opt for a global, transversal approach to an issue which is as important for businesses as it is to workers and their social and working environment;
2. Agrees with the Commission that restructuring is not necessarily synonymous with social decline and a loss of economic substance provided that such measures are correctly anticipated, that firms can manage them quickly and effectively in dialogue with trade unions, that anticipatory measures at business level together with public action help ensure that the change is carried out in sound conditions and that businesses anticipate restructuring by means of ongoing training for their workers; considers that these conditions are not often present;
3. Considers that business restructuring should only take place if warranted by the circumstances, namely in order to save jobs or improve the competitiveness and the economic development of firms, and should not be used to boost profitability through dismissals or for purely financial or speculative reasons, such as capital gains for pension or shareholder funds; considers that, faced with immoral or predatory tactics, the Commission should take advantage of the possibility of mediation at European level through a group of independent ombudsmen;
4. Notes that continual processes of adjustment to changing framework conditions are unavoidable if businesses are to develop; accordingly, considers it important – as the European social partners also noted in their joint document “Orientations for reference in managing change and its social consequences”– to explain in good time to workers and/or their representatives the need for changes, and to take the interests of the workers into account;
5. Considers that, in line with the European Economic and Social Committee’s above-mentioned opinion of 29 September 2005, while the success of restructuring is certainly measured in terms of businesses’ competitiveness and innovative capacity, it is equally measured in terms of job preservation and good social management of any negative consequences;
6. Considers that, since the European Union promotes the opening-up of the market, it also has a duty to put in place the necessary financial resources to anticipate better and accompany restructuring and mitigate its social consequences, as well as to promote innovation and the search for new entrepreneurial potential and the maintenance of working conditions;
7. Considers that the Union needs to rise to challenges of a global dimension, such as restructuring, by improving the competitiveness of Europe’s economy and businesses through better coordination and more consistent application of four existing Community instruments:
- competition policy, particularly the issue of state aid,
- internal market policy, particularly the establishment of Societas Europea and the Community patent,
- enterprise policy, particularly support for SMEs,
- solidarity policy, particularly by reorienting the ERDF and ESF to regions affected by actual or planned restructuring;
8. Agrees with the Commission that the ESF and, to a lesser extent, the ERDF in respect of SMEs undergoing restructuring, which are too often overlooked, have a crucial role to play in anticipating and managing restructuring; proposes that the financial programmes under discussion for 2007-2013 should be geared more closely to anticipating and managing restructuring, especially in areas where a high proportion of industry is accounted for by a limited number of sectors, and that the Funds will be allocated a budget adequate to this task;
9. Considers – in view of the unpredictability of some restructuring events and the difficulty of foreseeing their impact on the local area, and given the extent to which the Union’s policies are responsible for this – that a growth adjustment and contingency reserve should be set up, and welcomes in this connection the common position of the European Council; expresses the wish, moreover, that businesses will also be able to endow this reserve;
10. (a) Urges that the size of an undertaking in which restructuring has taken place or its geographical location within the Union should not be used as the sole selection criteria for potential EU aid and that appropriate account should also be taken of the interests of small and medium-sized enterprises (SMEs);
(b) Urges that another criterion should be whether a firm includes provision for adjustment processes as part of its business planning, and in particular whether it is committed to initial and further training;
11. Considers that the EU is a very essential partner in assisting the conversion process in regions where restructuring has occurred (industrial, tertiary, intersectoral, intrasectoral, etc.);
12. Calls on the European Union to support geographical mobility and mobility of employment in order to make better use of the available workforce of every category and, in particular, of young people, women and persons above 45 years of age, and calls upon the European Union to help remove administrative and linguistic barriers to mobility;
13. Suggests that environmental issues should be taken into account in the context of European assistance during restructuring, in particular by promoting the conversion of industrial or agricultural processes to activities which are less polluting and hence less dangerous for the surrounding population and for the workers;
14. Notes, furthermore, that the first victims of restructuring are dismissed employees and that priority aid should be given to them in all cases, and to the economic activities dependent on the business undergoing restructuring, particularly sub-contracting SMEs; stresses the need to take better account of the ‘hidden effects’ of restructuring, such as those affecting workers’ health; notes that individuals directly threatened by redundancy suffer medical and psychological problems, and that, during the first five years following their dismissal, the mortality rate among such employees is twice as high as among those who are not dismissed; considers, therefore, that financial assistance should not be limited to the structural aspect of restructuring and that the human dimension of these challenges should be taken into account by prioritising personally-tailored assistance for workers;
15. Condemns also, among the hidden effects of restructuring, the early retiring of employees, who then, on account of their age, are the least employable, giving rise to significant financial costs to society, the loss of their professional skills and a senseless risk of labour shortage;
16. Calls for better monitoring and better traceability of the use of Community funds, so as to ensure that they are properly used, to prevent their being diverted to related, speculative or administrative purposes and to prevent their being used to fund relocations; calls in particular for firms subsidised from EU funds which relocate part or all of their activities within the EU to be barred from receiving any further Community aid for a given period of time and for them to be required possibly to reimburse aid so as to prevent subsidy tourism;
17. Reaffirms the essential character of the Community acquis in the social field and the importance in particular of existing legal instruments, which must be fully applied and better monitored by the Member States, who are responsible for their proper transposition and application. This concerns in particular the following:
- Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council,
- Council Directive 98/59/EC of 20 July 1998 on collective redundancies,
- Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses,
- Council Directive 2002/14/EC of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community;
18. Regrets that the second phase consultation on the European Works Council is only a minor subchapter encompassed in a broader Commission Communication, and calls on the Commission, should the intention be to revise the current European Works Council, to launch a proper second phase consultation offering social partners the opportunity to negotiate in accordance with article 138 of the EC Treaty and with the principle of transparency.
19. Shares the Commission’s opinion that the European social partners should occupy a central place in accompanying and managing restructuring with a view to promoting worker mobility in Europe and the putting in place of structures for lifelong learning where appropriate;
20. Calls on the Commission to continue to work towards a Community framework for the protection of workers’ rights in the event of restructuring; notes in this connection the work already undertaken by the social partners and calls on them to find ways of applying the good practices they have identified;
21. Calls on the Commission to put in place, in accordance with the spirit of the Lisbon Agenda, an ‘open method of coordination’ (OMC) with a view to providing the Member States with broad guidelines on restructuring;
22. Calls for reforms to state aids seeking to target them as much as possible towards the areas which contribute most to growth and employment, thus preventing their being used to fund unjustified relocations or restructuring; demands also that for weakened sectors requiring specific or transitional rules, state aid should be authorised more easily where it does not distort competition in the common market;
23. Proposes creating a legal regulatory framework under which Community aid would be made subordinate to compliance with conditions which concern the protection of the interests of the communities and regions and the creation of more and better jobs;
24. Calls on the Member States to set up specific measures adapted to the tradition of each Member State, which may take the form of permanent conversion units, where necessary, to assist employees affected by restructuring and guarantee equal treatment whatever the employee’s nationality, sex and age; calls on the Member States to treat as an urgent priority the adoption of measures for the mutual recognition of professional training certificates and the certification of informal qualifications and the recognition of experience; considers it essential finally that action plans be adopted to support workers who are made redundant; considers also that aid for training and re-training should be given as quickly as possible;
25. Considers that equity participation by employees may be an appropriate way to secure greater involvement in decision-taking concerning restructuring; calls, therefore, on the social partners – and on the Commission and Member States – to move forward in this debate and to re-enter this subject on the agenda of the broad debate on the future of social Europe launched by the British presidency in 2005;
26. Calls on the European Union, in deepening the internal market and concluding international trade agreements, to take into account the difficulties facing enterprises so that the consequences of its policies are predictable;
27. Considers, with a view to anticipating and accompanying as effectively as possible the difficulties firms may face, that use should be made of all relevant sectorial analysis tools so as to permit the monitoring and ongoing evaluation of each sector of economic activity in Europe; welcomes, therefore, the willingness expressed in the above-mentioned communication of 31 March 2005 to give an enhanced role to the EMCC and stresses the need for EU citizens to have greater access to the EMCC’s work;
28. Calls on the Commission to propose a European one-stop shop for all citizens, local authorities, social partners and businesses affected, enabling them to find information on the problems related to restructuring, on the opportunities which exist for anticipating and properly managing restructuring, and on their rights (including access to various types of subsidy) and obligations;
29. Stresses the need for analyses of the monitoring of past restructuring events, with a view to ascertaining their real impact on the businesses concerned, so as to permit a more effective approach to future restructuring;
30. Calls on the European Union’s commercial partners to implement laws on intellectual property protection and on the Member States to do their utmost to combat counterfeiting effectively;
31. Instructs its President to forward this resolution to the Council and Commission.
- [1] OJ L 254, 30.9.1994, p. 64.
- [2] OJ L 225, 12.8.1998, p. 16.
- [3] OJ L 82, 22.3.2001, p. 16.
- [4] OJ L 80, 23.3.2002, p. 29.
- [5] OJ C 154, 5.6.2000, p. 139.
- [6] OJ C 339, 29.11.2000, p. 280
- [7] OJ C 276, 1.10.2001, p. 160.
- [8] OJ 245, 26.8.1992, p. 53.
- [9] OJ C 377, 29.12.2000, p. 164.
- [10] OJ C 320 E, 15.12.2005, p. 73.
- [11] P6_TA(2005)0127.
- [12] P6_TA(2005)0230.
- [13] P6_TA(2005)0210.
- [14] MEMO/05/229.
- [15] P6_TA(2005)0224.
EXPLANATORY STATEMENT
In recent years, restructuring has become a common phenomenon in the business world, and often has immediate effects on employment, working conditions and local economies.
However, this phenomenon may occur at various levels and in different ways: there is not one single type of restructuring. For this reason, the European Union must be able to make the appropriate response in each case to a given situation as quickly as possible.
The first level of restructuring is inter-sectorial: these major changes involving whole sectors, such as the expansion of the tertiary sector, have been widely observed in the countries of Western Europe, and are now affecting the new Member States in Central and Eastern Europe.
The second level relates to restructuring and changes within a given sector.
The third level is that of the individual business, within which various types of restructuring may take place, such as changes in production processes, outsourcing, relocation, site closures, staff reductions, mergers/buyouts, etc.
In general, there are two types of factor which trigger restructuring: general factors, resulting from changes in international trade in the current climate of globalisation, and individual factors focussing on a firm’s own strategies.
These two factors are intrinsically linked and interdependent: a firm’s strategy is often a response to the need to adapt to changes in the market and in the sector.
In its communication of 31 March 2005 entitled: “Restructuring and employment: Anticipating and accompanying restructuring in order to develop employment: the role of the European Union”, the Commission addresses the problems linked to the negative consequences of restructuring, relocation and mergers. These consequences often run counter to the Lisbon objectives, specifically those relating to the promotion of full employment, quality of jobs, social cohesion and sustainable development.
The European Union has long been developing policies and instruments to deal with restructuring. In the past, the EU played an essential role in restructuring the iron and steel and shipbuilding industries, but the recent textiles crisis has shown that the existing arrangements were no longer sufficient to cope with changes of this magnitude. The European Union must therefore step up its actions and develop the means to mobilise in a crisis, but must also consider setting up new instruments permitting it more effectively to predict and thus address these restructuring events.
However, the actions of the EU should not be targeted solely at sectors in difficulty, as they have over the past few years when high-level sector-specific groups were set up to define the strategic prospects of many industries. In any case, from a horizontal perspective, there are already many European policies helping to anticipate and accompany the process of restructuring: the directives on informing and consulting workers (though these also need to be properly implemented), the European social dialogue, the employment policy, financial support instruments, industrial and commercial policy, rural development policy, etc.
The European Union needs to be able to respond successfully to the challenges of globalisation and the speed of the changes affecting the economy and society in general. To that end it needs to develop a proactive strategic approach to restructuring. Accordingly, it needs to find its place within the network of shared responsibilities between employers, public authorities, social partners and workers in order to address the debate on anticipating, accompanying and adapting to restructuring. Anticipating, managing and accompanying the processes of restructuring calls for the active participation of all those concerned and must be based on transparent synergies between political, legislative, contractual and financial instruments. Action must be taken at all the relevant levels, including that of the EU.
The importance of the Commission communication and of this report is that they bring the restructuring issue back on to the EU’s agenda, together with its links with employment and other policies in this area, social dialogue and the whole social role of business, whether at EU or national level.
It is appropriate that the European Union should bear the costs and face up to the legislative implications of the policies it implements, and it is regrettable that there has been a lack of political will on the part of the Member States to head in this direction. The Commission communication is unfortunately still very vague, with a few exceptions, on the measures to be taken, and the resolution proposed here seeks to remedy this omission and be more specific.
- Financial appropriations must be made available following the debate on the financial perspectives, both from the Structural Funds and by the establishment of a growth adjustment fund: this is the price the European Union has to pay for assuming its role in the opening up of markets, to enable it to respond to shocks at regional or sectorial level, and to impacts on employment and the environment. However, it must be possible to provide some support for the utilisation of this money.
- The role of the social partners must be enhanced to make them better able to anticipate restructuring, as well as to avoid it when possible: this involves reforming the directive on European Works Committees, complying with the existing provisions, and consolidating various provisions on informing and consulting workers. These measures will permit the rights of employees to be enhanced and made more effective.
- Employees, who are the first to be affected by restructuring, should be the focus of attention; they should be the first to benefit from aid, they should be provided with assistance and their progress monitored. Appropriate training should be permanently on offer to help them deal with changes and enable them to obtain high-quality jobs.
- The relevant analytical tools should be put in place at sectorial level, to improve understanding of the restructuring phenomenon, to anticipate restructuring events more effectively and adapt responses accordingly.
The eventual harmonisation of the Member States’ tax and social systems will also make it possible to effectively combat the various types of social dumping within the Community which also results in relocation and restructuring.
These are some of the means which should enable the Union to take effective action to ensure that restructuring is not synonymous with social decline and a loss of economic substance.
We should exercise constant vigilance to ensure that the European social model is preserved and should have the courage in all our decisions to seek to improve it.
PROCEDURE
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Title |
Restructuring and employment | ||||||||||||
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Procedure number |
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Basis in Rules of Procedure |
Rule 45 | ||||||||||||
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Committee responsible |
EMPL 27.10.2005 | ||||||||||||
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Committee(s) asked for opinion(s) |
IMCO |
ITRE |
ECON 27.10.2005 |
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Not delivering opinion(s) |
IMCO |
ITRE 17.1.2006 |
ECON 16.11.2005 |
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Enhanced cooperation |
No |
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Motion(s) for resolution(s) included in report |
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Rapporteur(s) |
Jean Louis Cottigny |
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Previous rapporteur(s) |
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Discussed in committee |
5.10.2005 |
23.11.2005 |
25.1.2006 |
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Date adopted |
26.1.2006 | ||||||||||||
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Result of final vote |
for: against: abstentions: |
34 5 5 | |||||||||||
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Members present for the final vote |
Jan Andersson, Roselyne Bachelot-Narquin, Jean-Luc Bennahmias, Emine Bozkurt, Iles Braghetto, Philip Bushill-Matthews, Milan Cabrnoch, Derek Roland Clark, Luigi Cocilovo, Jean Louis Cottigny, Harlem Désir, Harald Ettl, Richard Falbr, Carlo Fatuzzo, Joel Hasse Ferreira, Roger Helmer, Stephen Hughes, Karin Jöns, Jan Jerzy Kułakowski, Sepp Kusstatscher, Bernard Lehideux, Elizabeth Lynne, Thomas Mann, Ana Mato Adrover, Maria Matsouka, Ria Oomen-Ruijten, Csaba Őry, Marie Panayotopoulos-Cassiotou, Pier Antonio Panzeri, Jacek Protasiewicz, José Albino Silva Peneda, Kathy Sinnott, Jean Spautz, Gabriele Zimmer | ||||||||||||
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Substitutes present for the final vote |
Edit Bauer, Dieter-Lebrecht Koch, Lasse Lehtinen, Jamila Madeira, Marianne Mikko, Dimitrios Papadimoulis, Luca Romagnoli, Leopold Józef Rutowicz, Elisabeth Schroedter, Barbara Weiler, Tadeusz Zwiefka | ||||||||||||
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Substitutes under Rule 178(2) present for the final vote |
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Date tabled – A6 |
9.2.2006 |
A6-0031/2006 | |||||||||||