‘Restructuring’ gap as wide as ever

Date: 30/10/1997

By Simon Coss

THE Renault car company's shock decision to close its profitable factory in Brussels Vilvoorde earlier this year highlighted just how far apart Europe's employers and employees are on the question of how to handle the problem of major job losses.

While both sides agree that some 'restructuring' - the euphemistic term for factory closures and lay-offs - of the Union's major industries is inevitable, trade unions and employers seem unable to agree on how it should be carried out.

In March, following Renault's announcement, the Dutch government, which held the Union presidency, asked the EU's social partners - the European Trade Union Confederation (ETUC), employers' federation UNICE and public sector employers' group CEEP - to try to agree on a common approach for dealing with similar situations in the future.

At the beginning of July, to the surprise of no one, the three sides announced that they had so far been unable to come up with a deal, and the buck was passed to Luxembourg, currently at the EU helm.

The biggest single sticking point centres on the question of when the workforce should be informed that its employers intend to take drastic action, such as closing a plant.

The ETUC says that employees must be told that a company is in difficulty as soon as possible, so that they can play an active role in drawing up any possible rescue plan. “We want to be fully involved in industrial restructuring decisions, but we are not,” adds a spokesman for the organisation.

But UNICE argues that it is simply not possible to inform staff at such an early stage. Experts point out that under stock exchange rules, once a company tells one group of people that it is in difficulty, it has to tell everyone.

If management simply announces a firm is having problems without at the same time putting forward any feasible solutions, says UNICE, then the company's share-price is likely to plummet and a bad situation will become infinitely worse.

“What we say is that the workers should be consulted well before a decision is implemented rather than before it is taken,” explains secretary-general Zygmunt Tyszkiewicz.

His organisation argues that the ETUC is asking for the workforce to be allowed to take management decisions when, in most EU member states, they are not members of the board. “What the ETUC is asking for is manifestly impossible,” he asserts.

For the trade unions, the Renault case has demonstrated that existing Union rules on worker consultation and mass redundancies must be beefed up in order to prevent other employers using similar tactics.

But UNICE argues almost exactly the opposite. It says court rulings against Renault in France and Belgium, as well as at the European Court of First Instance, have shown that EU directives have all the teeth they need.

“Renault proved that the directives were not at all at fault. It was a question of how they were used,” says one expert.

With the two sides so far apart over the issue, the Luxembourg presidency and the European Commission are likely to come in for heavy criticism whatever solution they finally suggest.