1. Corporate Restructuring And Workers' involvement
E.Pichot European Commission
Hannover November 2005

2. 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

3. Communication of the Commission "Restructuring and employment"

4. The challenge
Every year, 10% of European enterprises are set up and destroyed
Every day, between 5 000 and 15 000 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

5. 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

6. 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

7. 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

8. Funding to people and regions
Focus of Structural funding on adaptability or workers and enterprises
Under discussion in the Council:
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)

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

10. 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

11. Workers’ involvement:
Community framework

12. 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

13. 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

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

15. 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

16. 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

17. Participation and restructuring:
current steps
European Company statute – Implementation 10/2004
European Cooperative Society – Preparation of implementation 08/2006
Adopted 10th (cross-border mergers) and forthcoming 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

18. European Works Councils

19. Progress under Directive
750 EWCs in operation
-about 450 under Article 13
-about 300 under Article 6
Agreements cover 13 million employees (about 60% of employees) and 40% of companies in the scope
EWCs involve more than representatives
Incorporated into existing industrial relations systems without difficulty

20. Transnational I & C A learning process
Issues: not only economic/employment, also strategic, health & safety, training, mobility,..
Importance of continuity
Importance of the link to National and local representations
Examples of informal or formal negotiation, notably on fundamental rights, H&S, restructuring

21. 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

22. Review of EWC Directive
1999: deadline for re-exam as per Art.15 Dir.
2000: Commission report on implementation COM(2000)188
2001: European Parliament Resolution : quick revision needed A5-0282/2001
2003: 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