Time for cool and calm reflection

Date: 15/05/1997

THE shock waves which reverberated across Europe when Renault announced its decision to close a profitable plant in Belgium prompted an immediate clamour for action.

Something must be done - and fast - to prevent anything like that from happening again, cried the car manufacturer's critics.

Within weeks, the Dutch EU presidency responded to the public outcry over Renault's decision by summoning the social partners to a 'crisis' meeting to discuss the issue.

All sides agreed then to begin work on a new code of conduct to govern the handling of such cases in future, to prevent companies from announcing decisions likely to have a profound effect on their employees without consulting the workforce properly first.

Now that the dust has had time to settle, it appears that getting agreement on such a code will be far from easy.

Already, the European employers' federation UNICE is arguing that existing EU legislation in this area is adequate and all that is required is proper enforcement of the rules, while the European Trade Union Confederation insists that what happened in Vilvoorde has emphatically underlined the need for tougher Europe-wide legislation.

Far from resolving this argument, last week's ruling by the French court of appeal that Renault had indeed failed to comply with EU legislation on consulting and informing employees and must call a meeting of its European works council before it can close the plant appears to have muddied the waters still further.

For it has been seized on by those in each camp as evidence that right is on their side.

In fact, the debate is much more complex than that. Whether or not Renault failed to comply with the 1993 Works Council Directive in this case does not, on its own, settle the issue of whether that directive, together with EU laws on collective redundancies, gives workers adequate protection.

The Dutch presidency's decision to move swiftly to launch formal discussions on the lessons to be learnt from the Vilvoorde affair is understandable, given the blow dealt to many European workers' faith in the Union by the Renault decision.

But it would be wrong for either the social partners or policy-makers in the EU institutions to draw over-hasty conclusions.

With the issue of European competitiveness taking centre stage in the debate over how to tackle rising unemployment, striking the right balance between protecting employees' rights and avoiding the imposition of unnecessary burdens on business has become more important than ever.

Cool and calm reflection on the events leading up to the decision to close the Vilvoorde plant, and a thorough examination of the existing legislation on worker consultation, are vital before any decisions are taken on the way ahead.

If those deliberations produce firm evidence that a change in the rules is needed because of loopholes in the legislation, then the EU should be prepared to act.

But if they point rather to a failure to ensure compliance with existing regulations, then all those concerned should think long and hard before adding to the rules already in place.