Restructuring and employment E.Pichot European Commission TRACE Stocholm 23 May 2005

Communication of the Commission "Restructuring and employment"

The challenge Every year, 10% of European enterprises are set up and destroyed Every day, between and jobs are created and destroyed on average in each of the Member States Change is necessary but involves costly transformations for the enterprises and employees concerned, more vulnerable workers and regions being hit first Europe is facing an unsolved challenge, namely the challenge of anticipating and managing change

Need for Community action For the EU: bear the cost of the policies it implements (ex. trade agreements) Need to ensure social justice and the preservation of social cohesion An economic necessity, since targeted anticipation policies can reduce the costs of change and facilitate transition

Coherent Community policy Communication from the Commission "Restructuring and employment" Anticipating and accompanying restructuring in order to develop employment: the role of the EU issued on 31 March 2005 COM (2005)120

Partnership for change Strengthening the sectoral social dialogue Corporate social responsibility Creating a “Restructuring” Forum Second phase of consultation of the European social partners on company restructuring and European works councils

Funding to people and regions Focus of Structural funding on adaptability or workers and enterprises Proposed extra 'growth adjustment' fund of around €1bn (annually) to provide support to areas affected by restructuring. Proposed reserves for unforeseen restructuring consequences of up to 1% of the 'convergence' and 3% of the 'competitiveness' budgets (around €0.6bn annually)

Promoting worker mobility Improving the portability of supplementary pension rights Green paper on the evolution of labour law notably on effective and protected transition Implementing the social partners’ guidelines on restructuring Sectoral and regional monitoring

Focused and coordinated policies Reform of the Employment strategy, more focused on anticipating and accompanying restructuring Industrial policy with reinforced sectoral and regional follow-up Reinforced coordination of policies, including external, competition and trade policies, notably through an internal task force

Information, consultation,participation and restructuring

Overall context Process of restructuring and reorganisation Need for anticipating and managing change Importance of employee involvement Differences between National systems Experience of the European works councils

Information and consultation on specific issues Collective redundancies 98/59/EC: first Directive in 1975 Transfers of undertakings 2001/23/EC: first Directive in 1977 Health & Safety framework 89/391/EC in 1989

Transnational information, consultation and participation European Works Councils in 1994: Directive 94/45/EC extended to the UK by Directive 97/74/EC Involvement in the European Company in 2001 : Directive 2001/86/EC Involvement in the European Cooperative Society in 2003: Directive 2003/72/EC

Framework directive on Information and consultation A general framework for informing and consulting employees adopted in 2002: Directive 2002/14/EC

Information and consultation: a fundamental right "Workers or their representatives must, at the appropriate levels, be guaranteed information and consultation in good time in the cases and under the conditions provided for by Community law and national laws and practices" Charter of fundamental rights of the European Union, Art.27 – Constitution Art.II-87

Restructuring and EWCs EWC: a tool for better anticipation and management of change in company restructuring Problems in timing of information-consultation and articulation National-European Some involvement in hearings and competition procedures regarding M&As Problems for adaptation, renegotiation and transition periods when change of scope Examples of informal or formal negotiation

Review of EWC Directive 1999: deadline for re-exam as per Art.15 Dir. 2000: Commission report on implementation COM(2000) : European Parliament Resolution : quick revision needed A5-0282/ : Ecosoc Opinion: joint evaluation of positive impact CESE 1164/2003 April 2004: first stage consultation of social partners on the review September-October 2004: case study seminars of the social partners – "lessons learned" 2005: second stage consultation of social partners

Information, consultation and restructuring: current steps Framework Directive on information and consultation – Implementation 03/2005 European Works Council’s directive – Follow-up of the social partners' "lessons learned"- second stage consultation 03/2005 Corporate restructuring - Follow-up of the social partners' "orientations for reference"- second stage consultation of social partners and Communication of the Commission 03/2005 Corporate Social Responsibility initiatives – continuation- coming Communication of the Commission

Participation and restructuring: current steps European Company statute – Implementation 10/2004 European Cooperative Society – Preparation of implementation 08/2006 Forthcoming 10th (cross-border mergers) and 14th (cross- border transfers of seat) company law directives Corporate governance initiatives – Recommendation on the role of non-executive or supervisory directors – Advisory committee on corporate governance and company law – coming shareholders rights directive