EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 2.7.2008 
SEC(2008) 2154 
  
COMMISSION STAFF WORKING PAPER 
Restructuring and employment the co ntribution of the European Union 
{COM(2008) 419 final} 
EN 2   EN COMMISSION STAFF WORKING PAPER 
Restructuring and employment the co ntribution of the European Union 
INTRODUCTION 
This paper forms part of the package pr esented with the Co mmission Communication A 
renewed social agenda: Opportunities, access and solidarity in 21st century Europe1. The 
Communication emphasises the need to prepar e the European Union to cope with the 
challenges of globalisation better and to pr omote social management of change and 
restructuring. Such management must offer ne w opportunities to workers and regions affected 
by restructuring, must allow the workers acce ss to training or re-training, and must 
demonstrate real solidarity with them. The European Union’s action with regard to the management of restructuring operations can only supplement that of the other actors, and in 
particular the Member States, the regions and, naturally, the companies and employees 
themselves. 
The term ‘restructuring’ here means a modifi cation of a company’s workforce that affects 
both the latter’s qualitati ve (skills and qualifica tions required) and its quantitative features 
(number of jobs) following adaptations to the company’s structure, organisation or 
production. Such adaptations, which are the resu lt of many factors, su ch as changes in 
demand, the introduction of new processes or the arrival of new competitors, are necessary for 
the company to remain competitive. They also  bring new opportunities, as evidenced by the 
creation of over 12 million new jobs across the EU from 2000 to 2007. The social management of restructuring is designed to re duce the negative effect s of such adaptations. 
In 1998 the Commission published a report by th e High-Level Group on economic and social 
implications of industrial change chaired by Pehr Gyllenhammar. The concerns and 
suggestions presented in the report have s ubsequently guided the Commission’s action to 
promote the social management of restructuring. 
This paper takes stock of the main advances in this area in the wake of the two 
Communications on the management of rest ructuring presented by the Commission in 
January 2002
2 and March 20053. 
Taking as a basis a review of the last ten year s, and the lessons which can be drawn from it, 
the main players in the management of restruct uring processes are invited to press ahead with 
and to step up cooperation. In pa rticular, the contribu tion of the social partners following the 
adoption of the 2005 Communication is eagerly aw aited. For its part, the Commission intends 
to continue its work and step up its efforts to encourage anticipation of coming changes and 
the development of partnerships between the players. 
                                                 
1 COM(2008) XXX final 
2 http://ec.europa.eu/employment_social/social_dialogue/docs/changement_I_fr.pdf . 
3 COM(2005) 120 final. 
EN 3   EN I. REVIEW 
I.1. The Gyllenhammar Group Report 
In 1997 the European Council4 invited a high-level expert group to analyse the implications 
and economic and social effects of industrial cha nge, and to consider wa ys of anticipating and 
managing them. The Group’s report, Managing change  (November 1998), presented a set of 
recommendations addressed to political decision-makers, company managers and social 
partners. 
EXTRACTS FROM THE MAIN RECOMMENDATIONS OF THE 
GYLLENHAMMAR GROUP 
• Companies should be encouraged to take volunt ary action to emulate the level of the best. 
Legislation should be used to  prevent improper behaviour. 
• A motivated workforce is the key to success. Companies have the responsibility to 
maintain the employability of their workers,  whilst workers have the responsibility to 
utilise all available training opportunities. 
• Develop social dialogue to tap its  full potential at all levels. 
• Companies should shoulder the main respons ibility for the anticipation of change. 
• Commission should assist this  process by creating an Observatory on industrial change. 
• Larger companies are encouraged to prepare a ‘Managing change report’. 
• In the event of a cris is, the main responsibility for ac tion lies with the company; the 
government should abstain from interfering in industrial change alt hough local authorities 
may intervene in a coordinating and mediatin g capacity to support the negotiation of a 
successful outcome. 
• Any company proceeding with dismissals wit hout having taken the necessary steps to 
safeguard the employability of those dismisse d should be barred from access to public aid. 
I.2. The 2002 and 2005 Communications  
The 2002 Communication  
The Commission based its 2002 Communication Anticipating and managing change: A 
dynamic approach to the social asp ects of corporate restructuring  on points highlighted in the 
report Managing change  and in connection with the Li sbon Strategy. The Communication 
sought to stimulate dialogue between the social  partners with a view to identifying and 
developing best practice in an ticipating and managing restructur ing. It took as a starting point 
the observation that corporate re structuring operations are an im portant element of the process 
of change. Forward-thinking human resources  planning and better qualifications are 
fundamental in this context, while the introduction of mechanis ms to support the latter calls 
for active partnership between the social partners.  
                                                 
4 Luxembourg Extraordinary European Council meeting on employment, 21 and 22 November 1997. 
EN 4   EN In accordance with Article 138 of the EC Tr eaty, the Communication called on the social 
partners to express their opini ons on the advisability of layi ng down certain principles at 
Community level for action to support good pr actice in companies undergoing restructuring, 
and on the way such principles should be developed and laid down. The Communication 
asked the European social partners to say wh ether they regarded agreements between the 
social partners at inter-b ranch or sector level as the right way to proceed.  
The inter-branch social partners responded to this request by presenting a document entitled 
‘Orientations for reference in managing change  and its social conse quences’ in October 2003. 
Their contribution contained an in-depth analys is of the phenomenon and identified key factors 
in the sound management of a restructuring oper ation. The social partners agreed that the 
existence of good social dialogue in a climate of trust and a positive attitude to change were important factors in preventing and limiting its negative consequences.  
The ‘orientations for reference’ developed by the European social partners underlined the need 
to: 
• explain the reasons for the change to the empl oyees or their representatives in good time;  
• make provision for effectively informing an d consulting the employees throughout the 
process of change;  
• maintain and develop the skills and qualificati ons of the employees in order to enhance 
their employability;  
• take into account the regiona l dimension (economic and so cial repercussions of the 
restructuring on the regions affected); 
• consider the specific situati on of subcontractor SMEs.  
The social partners were unable, however, to agree on mechanisms for implementing and 
following up these guidelines, and this conseque ntly limited the practical impact of their 
work. 
The 2005 Communication  
The Commission’s Communication of 31 March 2005 entitled Restructuring and 
employment: Anticipating and accompanying rest ructuring in order to develop employment 
— The role of the European Union  fitted in fully with  the re-launch of the Lisbon Strategy. Its 
aim was to identify and promote the mobilisation of resources that would allow both the economic actors and the workers to adapt qu ickly to the changes under way. The Commission 
emphasised that a combination of different in struments and policies could allow opportunities 
offered by current processes of change to be exploited optimally and problematic aspects to 
be tackled, in particular by facilitating transitions on the employment market.  
Many European policies contribute to the obj ectives of adaptation to change, and of 
anticipation of and support for restructuring operations: one ma y cite policies on competition 
and innovation, those aimed at improving the environment in which European companies 
operate and at facilitating the reallocation of  resources, employment, education and training 
policies, directives on inform ing and consulting workers, th e European social dialogue, 
cohesion policy, financial support instruments, rural development policy, etc. The Union is 
EN 5   EN also developing sectoral polic ies geared to anticipating change and strengthening the 
competitive position of Europe’s economy. 
At the same time, in accordance with Articl e 138 of the Treaty the Commission called upon 
the European social partners to continue with  their work to identify good practice with regard 
to the anticipation of and suppor t for restructuring operations a nd, above all, to find the means 
of ensuring their application.  The Commission encouraged the so cial partners to be more 
proactive in the management of restructur ing and to step up cooperation in order to: 
– promote the application and follow-up of their gu idelines on restructuring activities, and a 
discussion on the way forward;  
– encourage the adoption of best  practice set out in the exis ting guidelines on restructuring, 
where applicable;  
– promote best practice in the way that Europ ean works councils operate, with a view to 
making them more effective, in particular as  regards their role as  a driving force for 
change;  
– develop a common approach to the other point s in the Communication of concern to them, 
and in particular training, mobility, th e sectoral dimension and anticipation.  
The Commission had intended to go ahead with its analysis of the advances made at the 2006 
Tripartite Social Summit. However, as the soci al partners decided to continue their work on 
the guidelines by holding several series of na tional seminars, the Commission has opted to 
wait until they have made sufficient progre ss before proceeding with this analysis. 
The other measures proposed in the Communi cation have actually been implemented. 
Attention is drawn in particular to those listed below.  
The European Employment Strategy 
The guidelines endorsed the importance given to the priorities relating to anticipation and 
management of change and the contributi on of active employment  policies under the 
European Employment Strategy (EES). More recently, in their national reform programmes 
the Member States were asked to give subs tance to the principles for implementing a 
flexicurity strategy, which has a key role to play in securing caree r paths by combining a 
flexible workforce, capable of adapting to ne w markets and new technol ogies, with a suitable 
compensation system and active employment policies.  
The EES fits into the wider c ontext of the Lisbon Strategy, wh ich concentrates on stronger, 
sustainable growth and on more and better jobs . The Lisbon Strategy’s re-launch has led to a 
comprehensive review of the EES, aimed at fully  exploiting the synergies between measures 
taken at national level and Community actio n by making it more ef fective. The Lisbon 
Strategy constitutes a key element for the management of restructuring operations, as it aims to encourage the competitiveness of Europe’s ec onomies and thus to strengthen their ability to 
respond to current and future adaptations. 
Cohesion policy 
Cohesion policy is designed to reinforce ec onomic and social cohesion across the Union 
through the reduction of disparit ies. To achieve this object ive, the European Regional 
EN 6   EN Development Fund (ERDF) and the European So cial Fund (ESF) support proactive strategies, 
in particular to raise standards of training, di versify the industrial base and adapt to economic 
and structural change. In order both to anticipate and to respond to changes and restructuring, 
the European Union has noteworthy instrument s in the form of medium-term programmes 
funded under the cohesion policy. These integrated  programmes have increasingly come to 
replace previous initiatives of a sectoral natu re, which have proved to have limited coverage 
and impact. An integrated a pproach under the cohe sion policy provides th e political decision-
makers with the chance to take  account of the whole set of conditions require d to respond to 
the effects of economic changes.  
The Structural Fund programming process is  flexible, so although the programmes are 
implemented for a seven-year period, they can be  adjusted to fit in with new circumstances. 
This flexibility was demonstrated by the actions  undertaken as part of the closure of the 
MG/Rover car plants in the United Kingdom  (ERDF and ESF part-funding). During the 
previous programming period, the Equal Comm unity Initiative and i nnovative actions under 
the ESF5 and the ERDF6 also contributed, both through the development of innovative 
solutions and discussions and the exchange of good practice, to gr eater knowledge of the 
mechanisms permitting improved social handling of restructuring operations7.  
European rural development policy also makes a significant contribution to job creation and 
to the development of qualifications among th e population in rural ar eas. Thanks to the 
European Agricultural Fund for Rural Development,  the Member States and regions can part-
fund actions to achieve that objective. The Member  States have made use of this option in the 
new programming period for 2007-13. 
European Globalisation adjustment Fund 
The Commission has set up the European Globa lisation Adjustment Fund (EGF) to provide 
support for workers affected by restructuring pr ocesses linked to change s in the organisation 
of world trade. The EGF has been in operati on since 1 January 2007  and its first annual 
implementation report is also presented in connection with th e renewed Social Agenda. The 
EGF constitutes one of the Union’s most important  and most visible initi atives in this field. 
The external dimension 
The Union has continued to promote basic social standards in its external policies, on the one 
hand through various free trade, partnership, as sociation and cooperation agreements, and on 
the other, in its development aid programmes and projects. The EU ha s actively supported the 
inclusion of decent work as a global objectiv e of the United Nations. In a Communication 
published on 24 May 2006 the Commission devel oped an integrated strategy aimed at 
mobilising the EU’s internal and external polic ies for the promotion of decent work. It has 
                                                 
5 Communication from the Commission on the Implementation of Innovative Measures under Article 6 
of the European Social Fund Regulation for the programming period 2000-2006 (COM(2000) 894 final). 
6 Communication from the Commission on guidelines for innovative actions under the European regional 
development Fund for the programming period 2000-2006 (COM(2001) 60-005). 
7 See the reports on the evaluation of ESF support for the anticipation and management of economic 
change (July 2007), innovative meas ures in accordance with Article  6 of the ESF and the 2000-06 
Equal Community Initiative at http://ec.europa.eu/employment_social/evaluation/esf_fr.html , 
http://ec.europa.eu/employment_social/esf/fields/2000_2006/article_6_2000_2006_programme_fr.htm  
and http://ec.europa.eu/employment_social/equal/about/key-doc_fr.cfm   
EN 7   EN supported consideration of the i ssues connected with decent work  by the G8, and the research 
work launched recently by the IL O and the secretariat of the WTO on the interaction between 
commerce, employment and social policy.  
Monitoring of activity sectors  
With a view to helping workers and companies to anticipate changes more effectively, the 
Commission has launched in-depth  research and analyses,  both on the restructuring 
phenomenon itself and on the monitoring of activity  sectors, including a series of sectoral 
studies on the identificati on of emerging skills at sectoral level and on changes in employment 
between now and 2020. This prospective analysis  is being carried out in conjunction with 
independent researchers, social partners and other European institutions, such as the European Parliament, EUROFOUND’s European Monitoring Centre on Change (EMCC)
8 and the 
European Centre for the Development of Vocationa l Training (Cedefop). It will comprise part 
of the response to the Council’s resolution of 15 November 2007 on the new skills for new 
jobs9, and to the request from the March 2008 Eu ropean Council concerning employment and 
qualification forecasts for 2020.  
Owing to the scale of the changes they are unde rgoing, over the last two years certain sectors 
have been the subject of reinforced monito ring, closely linking the Commission, professional 
organisations, the social partners and the regions concerned. This is the case of the automobile 
sector and, more recently, defence. Starti ng from a shared diagnosis, these monitoring 
programmes identify the roles and responsibilitie s at each level and of each group of actors. 
This generates a programme of practical measures that focus on strengthening the competitiveness of these sectors and regions, identifying future requirements in terms of innovation, skills and qualificati ons and the resources to meet  them, and putting in place 
systems for anticipating and managing the so cial impact of the changes anticipated. 
A number of sectoral social di alogue committees have taken an interest in this issue. 
Noteworthy examples include work carried ou t in the civil aviation, hotels and catering, 
furniture, textiles, shipyards, electricity, suga r, chemicals and railway sectors or industries
10. 
Restructuring Task Force 
Since 2005 the Restructuring Task Force  has carried out major work on the internal 
coordination of the various policies targeting rest ructuring operations or those of relevance to 
addressing their economic and social impact. This is shown by the increasing extent to which the need to anticipate restru cturing and develop partnershi ps at all leve ls has been 
incorporated into different Co mmunity policies and actions (int egrated guidelines, Structural 
Funds frameworks, industrial policy, commercial policy, various sectoral policies, environment policy, etc.). 
                                                
 
8 In 2001 one of the proposals of the Gyllenhammar Expert Group was implemented. This involved the 
establishment of a European Monitoring Centre  on Change (EMCC) within EUROFOUND, the 
European Foundation for the Improvement of Living and Working Conditions in Dublin. The EMCC 
manages in particular the European Restructuring Monitor (ERM), which collects information on restructuring operations  on a certain scale. 
9 OJ C 290, 4.12.2007, p. 1. 
10 http://ec.europa.eu/employment_social/social_dialogue/sectoral_en.htm .  
EN 8   EN Restructuring forums 
Since March 2005 the Commission has held six ‘restructuring forums’  on various important 
facets of restructuring. These were the ina ugural forum on anticipat ion (June 2005) and the 
forums on the sectoral dime nsion (July 2006), the regional dimension (December 2006), 
instruments for analysis and anticipation (June  2007), the automobile sector (October 2007) 
and SMEs (November 2007). Attended by hundreds of  participants each  time, the forums 
have permitted a wide exchange of views on the mutual interdependence of the different 
facets of dealing with corporate restructuring and the proactive and positive management of 
processes of change.  
The 2005 Communication also refe rs to the revision of the Directive on European works 
councils. After the social partners were consul ted, a draft recasting of the Directive is being 
presented as part of the renewed Social Ag enda. In conjunction with other, non-regulatory 
measures, this new proposal seeks to ensure  that workers’ rights to information and 
transnational consultation are properly observe d in practice, to increase the number of 
European works councils established, to strength en legal security and to ensure that the 
Directives on worker information and consultation work in with each other more effectively. 
Alongside other European legisl ation, such as that concer ning worker information and 
consultation, mass redundancies and the transfer of  companies, the Directive is a key tool for 
promoting the social management of restru cturing operations. Also  presented with the 
renewed Social Agenda, the Commission Staf f Working Paper on transnational company 
agreements concluded by companies at European or international level is another example of 
work at European level aimed at encouraging such social management of restructuring.  
Other European institutions have also ma de a contribution. On several occasions, the 
European Parliament has underlined the need  to support the social management of 
restructuring operations and has invited the Commission in partic ular to step up its work. The 
European Economic and Social Committee’s C onsultative Commission on Industrial Change 
(CCMI) has produced a large number of own-init iative opinions and information reports 
directly connected with the management of  restructuring operati ons. In October 2007, the 
Committee of the Regions adopted an outlook opi nion on success factors to anticipate and 
accompany restructuring in cities and regions11, which stresses that it is at local and regional 
level that action is most effective when it comes to the implementation of policies designed to addressing restructuring operations. 
II. PRESSING ON WITH ACTIONS 
Over the last decade, the number of factors contributing to change has multiplied 
(e.g. acceleration of globalisati on, climate change, changes in the way companies are run as a 
result of the financiarisation of the economy, technological development, changing tastes of 
consumers and demographic trends). The Commi ssion, the European social partners and the 
other players, who have taken a large number of initiatives for optimising the management of change, should therefore press on with them and step up their efforts in the future.  
                                                
 
11 CoR 340/2006. 
EN 9   EN II.1 The key role of social partners and companies 
The importance of a joint approach by the social partners with regard to the anticipation and 
management of change should be underlined. In  view of the social partners’ intention to 
promote and evaluate the guidelines for refe rence in managing change and its social 
consequences in their 2006-08 working programme , the Tripartite Social Summit for Growth 
and Employment to be held in March 2009 could be the right time to present a first assessment of their work in this field. On th e basis of that contri bution, thought could be 
given to the advisability of presenting new in itiatives to promote principles shared at 
European level. 
Considering the key role played by business in  the management of change, a possibility for 
the future is to encourage companies to incl ude management of change and restructuring, 
including the relations they develop within thei r immediate environment (such as with regions 
or subcontractors), in reports many compan ies produce on a voluntar y basis in connection 
with corporate social respons ibility. Inclusion of restruct uring in such reports would 
encourage the exchange of good practice and c ould allow the public au thorities to gain a 
better grasp of the issues raised by industrial and technological change. 
II.2. A wider partnership  
A number of actions already unde r way that demonstrate the be nefit of a wider partnership 
will be continued in the future in order to develop this approach and encourage social 
management of restructuring operations. The ma in aim of these actions is to step up the 
exchange of good practice in the management of  restructuring by emphasising in particular 
the major role of anticipation, which is complementary to that of partnership: 
– Continuation of ‘r estructuring forums’ : topics to be addresse d include climate change, 
the contribution of the European Social F und, transnational company agreements, the 
financiarisation of the economy, th e results of sectoral studies as a tool for anticipation, the 
defence industry and the link be tween health and restructuring. 
– Continuation and widening the scope of the monitoring of certain sectors and certain 
regions  which are likely to experience signifi cant changes in economic and employment 
terms. Such monitoring will take the form of partnerships like those developed in the 
automobile sector. These partnerships ar e necessary owing to the complexity of 
restructuring processes. Cooperation between  all players, partic ularly upstream of a 
restructuring project, is an essential c ondition for sound mana gement of change. 
Authorities at all levels (European, nationa l and regional) and a ll economic and social 
actors need to play their part in line with th eir own roles and responsib ilities. All players, 
and in particular the social partners, shoul d develop long-term vi ews and education and 
training systems and practice should be  adapted to those perspectives. 
– Launch during the next few months of an interactive site called ‘ANTICIPEDIA’ , which 
will be a collection, exchange, dissemination and networking tool for the actors involved in 
change. 
– Dissemination of results of prospective sectoral analyses , in particular through the 
organisation of national seminars and suppor t for sectoral social dialogue committees 
wishing to contribute to su ch forward planning work.  
EN 10   EN – Publication of a guide collating good practice on training and the adapta tion of skills in 
SMEs  before the end of 2008.   
– Possible establishment of sectoral employment and qualifications councils . In the 
economic sectors facing profound changes in th e structure of employ ment, consideration 
will be given to setting up such councils as a practical tool for following up the sectoral 
analyses. Canada’s experience with sector al employment and qualifications councils, 
involving public, economic, social and traini ng actors with the aim of analysing and 
exchanging information on the long-term trends  in jobs and skills  in a given sector, 
including the impact of IT, could provide a worthwhile area for action for the Union’s 
sectoral social dialogue and pr ovide a measure of response to  concerns about identifying 
job shortages. A communicati on addressing the possibility of  setting up such councils is 
planned for 2009. 
II.3 Cooperation with national and regional authorities 
Cooperation with national authorities is another key area for the management of restructuring 
operations. Clearly, it is the job of nati onal governments to simplify the regulatory 
framework, take action to prom ote and support investments in  production and research and 
innovation activities, ensure the development of a qualified workforce and use the Structural 
Funds to anticipate and manage restructuring. In the c ontext of efforts to press ahead with the 
cohesion policy and create new, sustainable jobs , the importance of paying special attention to 
issues relating to the anticipation, preparation and management of restructuring through the 
ESF’s Adaptability priority and the Regions for Economic Change initiative has been underlined on numerous occasions. 
Further, stronger coherent action in the fields  of continuous training and employability to 
facilitate professional transiti ons is another key area for action by the public authorities, in 
which the application of the principles of flexibility const itutes a major strand. 
The EMCC recently launched an appeal for voluntary cooperation between the Member 
States for the improved collectio n of data on restructuring oper ations, based on notifications 
of mass redundancies. Given the importance of  having available the most complete and 
reliable data possible, this appeal should be passed on by the Commission.  
Good practice has demonstrated th at it is for the regional and lo cal authorities to carry out 
permanent monitoring of cha nges in economic activities of significance to their region, in 
close cooperation with the economic players invol ved. Their participation in putting in place 
and strengthening mechanisms for the adaptation  of companies and staff and in boosting the 
competitiveness of the region’s economic and social fabric is a major challenge. 
II.4 Greater visibility for Community action 
In addition to the role of the Restructuring Task Force within the Commission, which is to 
improve coordination of the vari ous Community policies with an  impact on the processes of 
change and restructuring, bette r evaluation of the social impact of Community policies in 
accordance with the new ‘horizontal’ clause in th e Lisbon Treaty could be an additional factor 
in anticipating the effects of Community interven tions. In addition, the vi sibility of action at 
European level also needs to be increased. To achieve this, the services of the Commission 
will be publishing regular 
reports on restructuring operations in Europe. The first of these, 
to be adopted before the end of 2008, will outlin e the main Community policies incorporating 
a specific dimension on adaptation to change.