European Parliament resolution on restructuring and employment (2005/2188(INI))
Date: 2006-03-15
Institutions: Committee on Employment and Social Affairs, European Parliament
Subjects: competitiveness, continuing vocational training, economic and social cohesion, economic development, geographical mobility, industrial restructuring, job cuts, labour law, offshoring

30.11.2006

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Wednesday, 15 March 2006

P6_TA(2006)0088

Restructuring and employment

European Parliament resolution on restructuring and employment (2005/2188(INI))

The European Parliament,

— having regard to the Commission Communication of 31 March 2005, entitled ‘Restructuring and
employment: Anticipating and accompanying restructuring in order to develop employment: the role of
the European Union’
the European Economic and Social
Committee of 14 December 2005 (CESE 1495/2005),

(COM(2005)0120) and the opinion of

— having regard to the 1989 Charter of Fundamental Social Rights for Workers and the action programme

relating to it,

— having regard to 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 under-
takings for the purposes of informing and consulting employees (1),

— having regard to Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the

Member States relating to collective redundancies (2),

— having regard to 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 undertak-
ings, businesses or parts of undertakings or businesses (3),

— having regard to Directive 2002/14/EC of 11 March 2002 of the European Parliament and of the
Council establishing a general framework for informing and consulting employees in the European Com-
munity (4),

— having regard to its resolutions of 28 October 1999 (5), 17 February 2000 (6) and 15 February 2001 (7)

on business restructuring in Europe,

— having regard to Council Recommendation 92/443/EEC of 27 July 1992 concerning the promotion of
participation by employed persons in profits and enterprise results (including equity participation) (8),

— having regard to the Presidency conclusions of the Lisbon European Council of 23 and 24 March 2000
and to the resolutions of the European Parliament, in particular its resolution of 15 March 2000 (9) on
that subject and its resolution of 9 March 2005 on the mid-term review of the Lisbon strategy (10),

— having regard to the Commission communication ‘Working together for growth and jobs: A new start

for the Lisbon Strategy’ (COM(2005)0024),

— having regard to the Presidency conclusions of the Brussels European Council of 22 and 23 March 2005

and the European Parliament resolution of 13 April 2005 (11) on that subject,

— having regard to the Commission communication entitled ‘Fostering structural change: an industrial
policy for an enlarged Europe’ (COM(2004)0274) and the European Parliament resolution of 9 June
2005 (12),

(1) OJ L 254, 30.9.1994, p. 64.
(2) OJ L 225, 12.8.1998, p. 16.
(3) OJ L 82, 22.3.2001, p. 16.
(4) OJ L 80, 23.3.2002, p. 29.
(5) OJ C 154, 5.6.2000, p. 139.
(6) OJ C 339, 29.11.2000, p. 280.
(7) OJ C 276, 1.10.2001, p. 260.
(8) OJ L 245, 26.8.1992, p. 53.
(9) OJ C 377, 29.12.2000, p. 164.
(10) OJ C 320 E, 15.12.2005, p. 164.
(11) OJ C 33 E, 9.2.2006, p. 487.
(12) Texts Adopted, P6_TA(2005)0230.

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— having regard to the own-initiative opinion of

the European Economic and Social Committee of
29 September 2005 entitled ‘Social dialogue and employee participation, essential for anticipating and
managing industrial change’ (CESE 1073/2005),

— having regard to the Commission communication on the Social Agenda (COM(2005)0033) and the
European Parliament resolution of 26 May 2005 on the Social Agenda for the period 2006-2010 (1),

— having regard to the Commission communication to the Council and the European Parliament entitled
(COM(2005)

‘Common Actions for Growth and Employment: The Community Lisbon Programme’
0330),

— having regard to the initiative taken by the Commission to designate 2006 as the European Year of

Workers' Mobility and to the implementation of the Lisbon Strategy (2),

— having regard to the Commission communication entitled ‘Building our common Future: Policy chal-
lenges and Budgetary means of the Enlarged Union 2007-2013’ (COM(2004)0101), the Commission
communication entitled ‘Financial Perspectives 2007-2013’ (COM(2004)0487) and the European Parlia-
ment resolution of 8 June 2005 on Policy Challenges and Budgetary Means of the enlarged Union
2007-2013 (3),

— having regard to the Presidency conclusions of the Brussels European Council of 15 and 16 December

2005 on the Financial Perspective 2007-2013,

— having regard to the proposal for a Council regulation laying down general provisions on the European
Regional Development Fund, the European Social Fund and the Cohesion Fund (COM(2004)0492),

— having regard to the proposal for a European Parliament and Council regulation on the European Social

Fund (COM(2004)0493),

— having regard to Articles 87(3), 127, 136 and 158 of the EC Treaty,

— having regard to Rule 45 of its Rules of Procedure,

— having regard to the report of the Committee on Employment and Social Affairs (A6-0031/2006),

A. whereas a social and economic approach to risks is the key element characterising the European social
models and whereas it is applied in a variety of forms as part of the different national policies designed
to build a welfare state based on the idea of solidarity and social security,

B. whereas these risks, if they are not anticipated, can affect and impact on employees, for whom work is
one of the essential elements of their liberty and dignity, and employers and their productive assets,
which evolve in the context of the competition inherent to an open economy,

C. whereas a distinction should be made between, on the one hand, the restructuring of businesses linked
to changes in specific industrial sectors and, on the other, the relocation of businesses, most often for
the purpose of reducing production costs, and whereas these two issues require different responses,

D. whereas economic change is inevitable, whether in the form of foreseeable or unforeseen evolution,
through adopted policies or as a result of crises; whereas these transformations affect all European
States, whatever their level of economic development and social protection, though the challenges they
face may differ and be met with specific responses according to the nature of their productive assets and
long-term strategic investment and research choices, and, in a broader sense, their recent economic and
political history,

(1) Texts Adopted, P6_TA(2005)0210.
(2) MEMO/05/229.
(3) Texts Adopted, P6_TA(2005)0224.

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E. whereas restructuring is a specific form of economic change and may be a sudden and reluctant process
of adaptation by a business to changes in consumer needs and the constraints of the globalised
economic climate, with a view to enabling it to remain competitive or regain its competitiveness, and
whereas businesses and workers must constantly adapt to create growth and employment,

Wednesday, 15 March 2006

F. whereas there are various levels of restructuring (inter-sector, within a single sector, within an individual
company and at worker level); whereas, at company level, various types of restructuring may be
observed (changes in production processes, outsourcing, relocation, site closure, job cuts, mergers and
acquisitions etc.); whereas restructuring at worker level takes place when increased demands are placed
on workers' skills; whereas these differing levels and types of restructuring call for different responses,

G. whereas one of the consequences of globalisation is increased concentration, regrouping and the creation
of large international groups, sometimes in sectors of vital strategic interest; whereas, therefore, assis-
tance to businesses should no longer be conceived solely on a national and local authority scale but at
international level; whereas, furthermore, small and medium-sized enterprises are also dependent on
globalisation and should receive the same attention as large groups in that regard,

H. whereas the difficulties which cause businesses to undertake restructuring are most often due to an
opening up to international trade, but are also linked to the capacity of businesses to prepare themselves
and their workers for modernisation and restructuring processes; sharing and supporting the Commis-
sion's position that it is appropriate for the EU, together with the Member States, to bear the cost, and
face up to the legislative implications, of policies it implements;

I. whereas the consequences of restructuring sometimes run counter to the Lisbon objectives seeking to
promote full employment, quality of jobs, social and territorial cohesion and sustainable development,
and whereas workers must be guaranteed opportunities for upgrading of skills and lifelong learning,

J. whereas the recognition that economic and social renewal is at the heart of the Lisbon strategy is vital;
and whereas restructuring is also fundamental to the process of wealth creation and the raising of living
standards;

K. whereas the social partners and public authorities have an essential role to play in accompanying restruc-
turing, both at an overall level by creating new jobs and at an individual level by providing the workers
concerned with opportunities to adapt to a new activity, in particular by means of training, but also in
anticipating it and seeking alternative solutions wherever possible,

L. whereas mobility in Europe is too low, which means that business potential is insufficiently exploited;
whereas workers who are willing to move are often deterred from taking up their activities abroad as a
result of administrative and linguistic obstacles; whereas insufficient use is made of national measures for
lifelong learning;

M. whereas the weakness of European growth and business competitiveness are in part due to the weakness
of investment in production and research; whereas the EU should promote and support the investment
capacity of businesses as well as Research and Development,

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N. whereas, in view of their responsibility for adequately anticipating restructuring, businesses should guar-

antee the best possible training conditions for their workers in respect of:

— initial practical training periods and apprenticeship;

— the ongoing training of their employees;

— the recognition of work experience; bearing in mind that workers only gain real benefit from

training if they have the opportunity to apply their new knowledge immediately;

and whereas,
in order to meet these objectives, businesses should draw up plans and schedules of
responsibility for training and the development of qualifications, negotiated between the social partners
on the one hand, and the institutions awarding professional qualifications on the other,

O. whereas the principal source of information at European level

is the European Foundation for the
Improvement of Living and Working Conditions, which manages the ERM (European Restructuring
Monitor) and whereas its use should be optimised, particularly as regards the visibility and accessibility
of information in all EU languages,

P. whereas one of the reasons why European businesses are in difficulty is the absence, at international
level, of adequate rules on intellectual property protection or effective measures to combat counter-
feiting,

1. Welcomes the Commission's decision to opt for a global, transversal approach to an issue which is as
important for businesses as it is to workers and their social and working environment;

2. Agrees with the Commission that restructuring is not necessarily synonymous with social decline and a
loss of economic substance provided that it is properly anticipated, that firms can manage it quickly and
effectively in dialogue with trade unions, and respecting national customs and practice, that anticipatory
measures at business level together with public action help ensure that the change is carried out in sound
conditions and that businesses prepare for restructuring by providing ongoing training for their workers;
considers that these conditions are not often met;

3. Considers that business restructuring should only take place if warranted by the circumstances, namely
in order to save jobs or improve the competitiveness and the economic development of firms;

4. Notes that continual processes of adaptation to changing circumstances are unavoidable if businesses
are to develop; accordingly, considers it important — as the European social partners also noted in their
joint document of 16 October 2003, entitled ‘Orientations for reference in managing change and its social
consequences’— to explain in good time to workers and/or their representatives the need for changes, and
to take the interests of the workers into account;

5. Considers that, in line with the European Economic and Social Committee's above-mentioned opinion
of 29 September 2005, while the success of restructuring is certainly measured in terms of businesses'
competitiveness and innovative capacity, it is equally measured in terms of job preservation and the good
social management of any negative consequences;

6. Considers that, since the European Union promotes the opening-up of the market, it should propose
measures and financial resources better to anticipate and accompany restructuring and its social conse-
quences, as well as to promote innovation and the search for new entrepreneurial potential, and the mainte-
nance of working conditions;

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7. Considers that the Union needs to rise to challenges of a global dimension, such as restructuring, by
improving the competitiveness of Europe's economy and businesses through better coordination and more
consistent application of four existing Community instruments:

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— competition policy, particularly the issue of State aid,

— internal market policy, particularly the ‘Societas Europea’ and the Community patent,

— enterprise policy, particularly support for SMEs,

— solidarity policy, particularly by reorienting the European Regional Development Fund (ERDF) and the

European Social Fund (ESF) to regions affected by actual or planned restructuring;

8. Agrees with the Commission that the ESF and, to a lesser extent, the ERDF in respect of SMEs under-
going restructuring, which are too often overlooked, have a crucial role to play in anticipating and managing
restructuring; proposes that the financial programmes under discussion for 2007-2013 should be geared
more closely to anticipating and managing restructuring, especially in areas where a high proportion of
industry is accounted for by a limited number of sectors, and that the Funds will be allocated a budget
adequate to this task;

9. Considers — in view of the unpredictability of some restructuring events and the difficulty of foreseeing
their impact on the local area, and given the extent to which the Union's policies are responsible for this —
that a European globalisation adjustment fund and a contingency reserve should be set up, and welcomes in
this connection the abovementioned Presidency conclusions on the Financial Perspective 2007-2013;

10. Urges that

a)

the size of an undertaking in which restructuring has taken place or its geographical location within the
Union should not be used as the sole selection criteria for potential EU aid and that appropriate account
should also be taken of the interests of SMEs;

b) another criterion should be whether a firm includes provision for adjustment processes as part of its

business planning, and in particular whether it is committed to initial and further training;

11. Considers that the EU is an essential partner, whose role is to assist the conversion process in regions
where restructuring (industrial, tertiary, intersectoral, intrasectoral, etc.) has taken place:

12. Calls on the EU to support geographical mobility and mobility of employment in order to make
better use of the available workforce of every category and, in particular, of young people, women and
persons above 45 years of age; also calls on the EU to help remove administrative and linguistic barriers to
mobility;

13. Calls on the Commission to submit a proposal concerning the 14th Company Law Directive on the
cross-border transfer of the registered office of limited companies, under which the transfer of registered
offices must not be used to restrict workers' rights; considers that the protection of workers' acquired rights
regarding their participation in company decisions (employee participation) must be both a fundamental
principle and a declared objective of the directive;

14.
Suggests that environmental issues should be taken into account in the context of European assistance
during restructuring, in particular by promoting the conversion of industrial or agricultural processes to
activities which are less polluting and hence less dangerous for the surrounding population and for the
workers;

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15. Notes, furthermore, that the people most affected by restructuring are those employees made redun-
dant and that they should always receive priority aid as should the economic activities dependent on the
business undergoing restructuring, particularly sub-contracting SMEs; stresses the need to take better
account of the ‘hidden effects’ of restructuring, such as those to workers' health; notes that individuals
directly threatened by redundancy suffer medical and psychological problems, and that, during the first five
years following their dismissal, the mortality rate among such employees is twice as high as among those
who are not dismissed; considers, therefore, that financial assistance should not be limited to the structural
aspect of restructuring and that the human dimension of these challenges should be taken into account by
prioritising personally-tailored assistance for workers;

16. Welcomes the Commission's attitude to restructuring in its communication of 31 March 2005 entitled
‘Restructuring and Employment: Anticipating and accompanying restructuring in order to develop employ-
ment: the role of the European Union’ (COM(2005)0120); highlights, in this connection, the joint work of
the European social partners on the topic of restructuring, which provides important restructuring guide-
lines, which should become part of business practice;

17. Condemns also, among the hidden effects of restructuring, the early retirement of employees, who
then, on account of their age, are the least employable, giving rise to significant financial costs to society,
the loss of their professional skills and a senseless risk of labour shortage;

18. Calls for better monitoring and better traceability of the use of Community funds, so as to ensure that
they are properly used, to prevent their being diverted to related, speculative or administrative purposes and
to prevent their being used to fund relocations; calls in particular for firms subsidised from EU funds which
relocate part or all of their activities to be barred from receiving any further Community aid for a period of
seven years and for them to be required possibly to reimburse aid so as to prevent subsidy tourism;

19. Reaffirms the essential character of the Community acquis in the social field and the particular impor-
tance of existing legal instruments, which must be fully applied and better monitored by the Member States,
who are responsible for their proper transposition and application. This concerns in particular the
following:

— Directive 94/45/EC on the establishment of a European Works Council,

— Directive 98/59/EC on collective redundancies,

— Directive 2001/23/EC on the approximation of the laws of the Member States relating to the safe-
guarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertak-
ings or businesses,

— Directive 2002/14/EC establishing a general framework for informing and consulting employees;

20. Regrets that the second-phase consultation on the European Works Council only forms in a small
part of the extensive Commission Communication of 31 March 2005, and calls on the Commission, if it
intends to revise Directive 94/45/EC, to launch a proper second phase consultation offering social partners
the opportunity to negotiate in accordance with article 138 of the EC Treaty and the principle of transpar-
ency.

21. Reiterates its request for the Commission to submit a proposal to amend Directive 94/45/EC to
strengthen the rights of employees working for Europe-wide groups;

22.
Shares the Commission's opinion that the European social partners should occupy a central place in
accompanying and managing restructuring with a view to promoting worker mobility in Europe and the
putting in place of structures for lifelong learning wherever appropriate;

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23. Calls on the Commission to continue to work towards a Community framework for the protection of
workers' rights in the event of restructuring; notes in this connection the work already undertaken by the
social partners and calls on them to find ways of applying the good practices they have identified; calls on
the Commission to submit a proposal for a directive in the absence of an adequate response from social
partners;

24. Calls on the Commission to put in place, in accordance with the spirit of the Lisbon Agenda, an open
method of coordination (OMC) in this area, with a view to providing the Member States with broad guide-
lines on restructuring;

25. Calls for a reform of State aid in order to target it as much as possible towards the areas which contri-
bute most to growth and employment, thus preventing its use to fund unjustified relocations or restruc-
turing; also, calls for State aid to be authorised more easily in weakened sectors requiring specific or transi-
tional rules where it does not distort competition in the internal market;

26. Calls on the Member States to set up specific measures adapted to the tradition of each Member State,
which may take the form of permanent conversion units, where necessary, to assist employees affected by
restructuring and guarantee equal treatment whatever the employee's nationality, sex or age; considers that
these conversion units may be based, in particular, on the regional employment pacts; calls on the Member
States to adopt, as a matter of urgency, measures for the mutual recognition of professional training
diplomas, the certification of atypical qualifications and the recognition of experience; considers it essential
that action plans be adopted to support workers who are made redundant; considers also that aid for
training and re-training should be given as quickly as possible;

27. Considers that equity participation by employees may be an appropriate way to secure their greater
involvement in decisions leading up to restructuring; calls, therefore, on the social partners — and on the
Commission and Member States — to move forward in this debate and to put this subject back on the
agenda of the broad debate on the future of social Europe launched by the British presidency in 2005;

28. Calls on the European Union, in deepening the internal market and concluding international trade
agreements, to take into account the difficulties facing enterprises so that the consequences of its policies are
predictable;

29. Considers, with a view to anticipating and accompanying as effectively as possible the difficulties firms
may face, that use should be made of all relevant sectoral analysis tools so as to permit the monitoring and
ongoing evaluation of each sector of economic activity in Europe; welcomes, therefore, the willingness
expressed in the above-mentioned communication of 31 March 2005 to give an enhanced role to the Euro-
pean Monitoring Centre on Change (EMCC) and stresses the need for EU citizens to have greater access to
the EMCC's work;

30. Calls on the Commission to propose a European one-stop Internet shop for all citizens, local authori-
ties, social partners and businesses affected, enabling them to find information on the problems related to
restructuring, on the opportunities which exist for anticipating and properly managing restructuring, and on
their rights (including access to various types of assistance) and obligations;

31. Underlines the need for analyses of the monitoring of past restructuring events, with a view to ascer-
taining their real impact on the businesses concerned, so as to permit a more effective approach to future
restructuring;

32. Calls on the EU's commercial partners to implement laws on intellectual property protection, and on
the Member States to do their utmost to combat counterfeiting effectively;

33.

Instructs its President to forward this resolution to the Council and Commission.