WRITTEN QUESTION P-1207/01

by Gérard Caudron (PSE) to the Commission

(4 April 2001)

Subject: Closure of healthy undertakings

The brutal and cynical announcements of closures at Danone and Marks and Spencer demonstrate to those who might still have had any doubts that the era of the mixed economy and the European social model is dead.

Restructuring in undertakings as a result of genuine economic problems would be understandable, but it is not possible to accept restructuring in healthy and prosperous undertakings which have only one single objective: increasing the profits of those who own capital.

If agricultural crises can prompt our officials to take action, voluntary acts of vandalism which, in the name of money, destroy entire families should cause our European leaders to act at least as decisively, particularly given that the absence of any reaction will cause this trend to accelerate in the future.

For this reason, I ask you most earnestly what you intend to do.

Answer given by Mrs Diamantopoulou on behalf of the Commission

(5 June 2001)

The Commission attaches the greatest importance to the social consequences of corporate restructuring.

As far as existing European legislation on the protection of employees in cases of corporate restructuring is concerned, national legislation implementing a number of Directives in the field of labour law and industrial relations apply and have to be respected, in particular Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies;(1) and Council Directive 77/187/EC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or part of businesses(2), modified by Council Directive 98/50/EC of 29 June 1998(3).

As these Directives have been transposed into national law, it is up to the national administrative or judicial authorities to decide if any infringements have taken place in the cases concerning the companies Danone and Marks and Spencer.

The Commission has repeatedly stressed the need to ensure that corporate restructuring is done in a socially acceptable way and as, a consequence, has underlined the urgency of strengthening employees' information and consultation rights, particularly in the context of the spate of restructuring and the numerous mergers and take-overs faced with on an almost daily basis.

This was the central preoccupation of the Commission in the preparation of its proposal for a Council Directive establishing a general framework for informing and consulting employees in the Community(4) which is on the table of the Council of Ministers. The aim of the proposed Directive is to improve the information and consultation rights of workers employed in individual companies as well as to fill in the gaps in provisions for employee information and consultation at national and Community levels. The proposal has to be seen as one concrete answer at Community level to the concerns of European citizens resulting from the insecurity emerging from successive waves of mass operations of corporate restructuring, mergers, acquisitions, etc, normally accompanied by job-losses.

This Directive once adopted by the Council and implemented in the Member States will afford to employees in companies of at least 50 workers (even if they are subsidiaries of a multinational group) a number of basic rights: the right to information about recent and upcoming developments in company activity, about the company's economic and financial situation, the right to be informed and consulted on employment issues and on decisions likely to lead to substantial changes in work organisation as well as the right to know how the company proposes to handle those changes.

In its Social Policy Agenda(5), the Commission proposed the creation of an observatory on change to be developed in the Dublin Foundation. The proposal was endorsed by the Stockholm European Council of March 2001 stating that such an observatory should be set up as soon as possible.

Moreover, the Commission intends to present a Green Paper in June 2001 on corporate social responsibility underlining that restructuring in a socially responsible manner means to balance the interests and concerns of all the stakeholders who are affected by the changes and decisions.

In conclusion, Europe must face industrial restructuring which can contribute to increased competitiveness and economic growth and its social consequences by combining innovation with social cohesion and improving its capacity to manage change. The Commission takes a comprehensive approach as outlined above through improving the capacity to anticipate and manage change through the Dublin Observatory; by creating legal mechanisms to ensure adequate protection of workers in situations of industrial restructuring; and by developing corporate social responsibility.

(1) OJ L 225, 12.8.1998.

(2) OJ L 61, 5.3.1977.

(3) OJ L 201, 17.7.1998.

(4) OJ C 2, 5.1.1999.

(5) COM(2000) 379 final.