WRITTEN QUESTION P-1707/03

by Stavros Xarchakos (PPE-DE) to the Commission

(16 May 2003)

Subject: Relocation of companies outside the EU

Recently the multinational Schiesser decided to relocate its Greek subsidiary, Schiesser-Palco, from Greece to Bulgaria, putting 500 Greek workers mainly women out of work.

According to statements by officials at the Greek General Confederation of Labour (GSEE), when a company relocates from the USA to a country with lower labour costs (so that the company can take advantage of these lower costs), the USA imposes an additional tax (in the guise of a social clause) on products imported from the third country in order to support those dismissed and also to discourage company relocations outside the USA.

The most recent report from the Economist Intelligence Unit, dated 30 March 2003, on foreign direct productive investment, says that Greece is one of the lowest ranked in Europe, at eighteenth of 22 EU Member States included in the report, below all the current EU members and also four of the new members from eastern Europe (the Czech Republic, Poland, Hungary and Slovakia).

Does the EU intend to follow the USA's example in doing something to support those dismissed by companies which relocate, and primarily to check the flood of companies abandoning EU countries? What other urgent initiatives does the Commission intend to take on this major issue which is reducing the EU's jobs and sapping its wealth?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(16 June 2003)

The Commission has no intention of proposing to introduce in the Union a retaliatory measure such as the one mentioned by the Honourable Member. The Commission is not aware of any such measure being taken by the United States.

The Commission, however, would like to remind that the Union has developed throughout the years a comprehensive policy for dealing adequately with the social consequences of corporate restructuring. As a result of that on-going policy, every restructuring operation must be preceded by effective information and consultation of employees' representatives with the aim of avoiding or attenuating its social impact, in accordance with Community Directives on Collective Redundancies(1), Transfers of Undertakings(2), European Works Councils(3) and Information and Consultation(4).

In particular, Directive 98/59/EC concerning collective redundancies provides for information and consultation with the workers' representatives in cases where the employer is contemplating such redundancies. These consultations should be carried out in good time with a view to reaching agreement and cover, at least, ways and means of avoiding collective redundancies or reducing the number of workers affected as well as of mitigating the consequences by recourse to accompanying social measures. These measures aim, inter alia, at aid for redeploying or retraining workers made redundant.

More generally, the Commission advocates the idea that, when deciding on their relocation, enterprises should always take into account the effects that those decisions could have on their employees as well as on the social and regional context. This has recently been underlined in the Commission Communication concerning Corporate Social Responsibility (CSR) A business contribution to Sustainable Development(5).

Furthermore, the Commission invited the European social partners to engage in a dialogue on anticipating and managing change with a view to apply a dynamic approach to the social aspects of corporate restructuring. The social partners agreed to incorporate this issue in their pluriannual work program 2003-2004. The Commission very much hopes that their joint work in this field results in a Community framework which may help companies and their workers to address adequately the social dimension of corporate restructuring.

(1) Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies. (This Directive consolidates Directives 75/129/EEC and 92/56/EEC).

(2) Council Directive 2001/23/EC of 12 March 2001 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 parts of undertakings or businesses.

(3) Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees.

(4) Directive 2002/14/EC of the Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community.

(5) COM(2002) 347 final.