WRITTEN QUESTION P-1663/01

by Ulla Sandbæk (EDD) to the Commission

(1 June 2001)

Subject: Danish job rotation system

Can the Commission specify where, in its view, the problems lie in the revised Danish job rotation system which entered into force at the turn of the year?

Can the Commission confirm that it believes that arrangements which target specific groups, such as the disadvantaged unemployed, cannot be approved as they distort competition?

Can the Commission say when Denmark is expected to receive an answer on this matter?

Will the Commission provide me with a copy of its answer when available?

Answer given by Mr Monti on behalf of the Commission

(3 July 2001)

The scheme combines recruitment of a new employee in a company with training of an existing employee. The procedure is that an employee of a company is sent on training. At the same time, an unemployed person is hired to replace the person on training. When the training is over, the trainee comes back to another job and the newly hired person may stay on.

There are two different grants. Firstly, if the trainee receives a salary during the training, the employer receives a grant covering part of that salary cost. If the trainee does not receive a salary during the training, the grant goes to the trainee directly. Secondly, the employer receives a grant to cover part of the salary costs for the person employed. This grant is intended to compensate for the lower productivity of the disadvantaged workers hired under the scheme. Originally, though, the Danish authorities had the intention to allow non-disadvantaged workers to be hired in so-called bottle-neck sectors, which are sectors in which, in spite of general unemployment, it is difficult to find qualified workers.

According to the Community guidelines on aid to employment(1) the Commission will be favourably disposed towards aid to create new jobs in small and medium-sized organisations (SMEs) and in regions eligible for regional aid. Outside these two categories, it will also look favourably upon aid to encourage firms to take on certain groups of workers experiencing particular difficulties entering or re-entering the labour market (point 21 first indent). This is why the Commission, during informal contacts with the Danish authorities, pointed out that it could not approve aid to companies hiring non-disadvantaged workers in bottle-neck sectors. The situation was therefore the opposite of the one suggested in the question. The Danish authorities have agreed to amend the scheme so that it only involves disadvantaged workers. This means that the employment side of the job rotation scheme is covered by an already approved employment aid scheme.

On 11 April 2001, the Danish authorities notified the training side of the scheme. They claim that the training grant is administered as a so-called general measure and therefore does not constitute State aid. For a measure to be a general measure, it must not favour certain enterprises or the production of certain goods, there may be no sectoral or regional limits or preferences, the State may not have any discretionary powers, and there may not be any budgetary restrictions. The Commission is currently investigating whether all these criteria are fulfilled in the present case and has requested the necessary additional information from the Danish authorities. Once all the information has been submitted, and the notification can be considered to be complete, the Commission has two months to adopt a final decision. The decision can then be found, in Danish, at the following internet address: http://europa.eu.int/comm/secretariat_general/sgb/state_aids/.

(1) OJ C 334, 12.12.1995.