Brussels, 17/01/2012 (Agence Europe) - In order to prepare the next “employment package”, the European Commission launched, on Tuesday 17 January, a public consultation exercise on restructuring companies and on anticipating change. The context is well chosen given that average growth within the EU was hardly 0.3% during the last quarter of 2011, which resulted in a 0.1% fall in the employment rate (see EUROPE 10528). The Commission thus hopes to draw up a list of the practices that could contain the adverse effects that might occur during company restructuring, especially redundancies, and to highlight best practice.
There has been a growing number of company restructurings over recent years, as can be seen by the latest data provided by the European Restructuring Monitor. The economic and financial crisis has exacerbated the difference between the number of jobs lost and the number of jobs created. On average nearly two jobs were lost for every job created (1.8 to 1) between the years 2002 and 2010. Between 2008 and 2010, this ratio increased to 2.5 to 1, indicating a tendency whereby very low economic growth is compensated within companies by laying workers off or not replacing workers that have left their posts. The total number of restructurings was 11,000 within the EU for the above period.
The consultation was opened until 30 March 2012 in the aim of allowing the Commission to be able to finally propose alternatives and innovative solutions able to counter the above trend, which reveals that there is a close connection between restructuring and job losses. Several courses of action are being studied, especially in the working document (Restructuring in EUROPE 2011) drafted by the Commission services, allowing support for the Green Paper. If the Commission highlights the potentially innovative aspect of restructuring, this is because it takes inspiration from a highly mediatised example set by Germany. There is now a determination to associate the terms restructuring with adjustment. The flexibility of a company, and its method of operation, as well as relations between management and staff are clearly seen by the Commission not only as an asset in times of crisis but also an ingredient for greater competitiveness. For that reason, Employment, Social Affairs and Inclusion Commissioner Laszlo Andor proposes looking at “how measures, like, for example, short-term work, can be used to deal with the challenges we are likely to face in the coming period”. Short-term work or adjusting working time are better than unemployment, the Commission believes.
The whole point is to see whether a model, the results of which have been positive, can be transferred to other situations and what the effects would be in another member state, or indeed at European level. This point was highlighted by the commissioner, who explained the importance of the consultation by underlining that it was a tool that seeks to provide the means “to be able to react better in the future” by allowing “understanding of the reasons behind the success of certain measures in some countries or sectors during the crisis”. The questions have just been put, but the Commission has already put in place a relatively clearly defined framework for discussion. The employment package should promote improved cooperation among all stakeholders, including public and at European level. Restructuring should not just be a matter solely for the company, because, given the social consequences, what is at stake is public. EU involvement is highlighted, with a possible role being given to cohesion policy and use being made of the European Social Fund and the Globalisation Adjustment Fund. Elsewhere, no matter how restructuring is carried out, the Commission believes that it is more constructive to maintain strong, active social dialogue, involving public employment departments in this process.
The Commission states, however, that the limits of these options are clearly linked to market demand. Undeniably laying people off will continue to be a part of restructuring if economic conditions exert too strong a pressure. It is all about knowing how to lessen the social impact and anticipate low demand, while maintaining a balanced social dialogue framework. The Commission is seeking responses to all these questions. Anyone wishing to make a submission can access the consultation at:
http://ec.europa.eu/social/main.jsp?langId=fr&catId=699&consultId=9&furtherConsult=yes (JK/transl.jl/rt)