GREEN PAPER Restructuring and anticipation of change: what lessons from recent experience?
Date: 2012-01-17
Institutions: European Commission
Subjects: anti-crisis plan, competitiveness, economic growth, economic intelligence, industrial restructuring, innovation, job creation, job cuts

EUROPEAN COMMISSION 

Brussels, 17.1.2012 
COM(2012) 7 final 

GREEN PAPER 

Restructuring and anticipation of change: what lessons from recent experience? 

{SEC(2012) 59 final} 

 
 
 
 
  
 
GREEN PAPER 

Restructuring and anticipation of change: what lessons from recent experience? 

1. 

INTRODUCTION: PROACTIVE RESTRUCTURING FOR FUTURE COMPETITIVENESS AND 
GROWTH 

The  central  subject  of  the  present  Green  Paper  is  company  restructuring  and  its  social 
consequences  which  are  a  cause  of  legitimate  concern  for  many  European  citizens. 
Restructuring is a crucial factor for employment and for the competitiveness of the European 
economy. 

This Green Paper aims to identify successful practices and policies in the field of restructuring 
and  adaptation  to  change  in  order  to  promote  employment,  growth  and  competitiveness  as 
part of the Europe 2020 strategy1 and in particular the industrial policy flagship initiative of 
October 20102, the "Agenda for new skills and jobs" adopted in November 20103. The Green 
Paper  is  also  intended  to  contribute  to  improving  synergy  between  all  relevant  actors  in 
addressing challenges related to restructuring and adaptation to change and takes into account 
the  important  work  carried  out  in  recent  years  by  the  European  Commission,  the  social 
partners, regions, Member States and many other stakeholders.4 

The  Commission  wishes  to  renew  the  terms  of  this  policy  debate  in  the  light  of  the  lessons 
learned from the economic crisis, the deep changes in the economic and competitive contexts 
worldwide and the structural reform agenda currently implemented in the EU.5 

In that light, the Commission will build upon the outcome of this consultation to consider new 
ways to better disseminate and effectively implement good practices, including at EU level, 
for  dealing  with  both  immediate  concerns  related  to  the  economic  crisis  and  long-term 
competitiveness  objectives  as  identified  in  the  industrial  policy  flagship  initiative.  The 
Commission will feed the results of this Green Paper consultation into the revived flexicurity 
agenda, also with a view to steering a renewed debate at EU level on a possible approach to 
and framework for restructuring.  

In the industrial policy flagship initiative, the Commission stated, in particular, that ‘updated 
orientations on restructuring can be very useful in reinforcing the capacity of businesses and 

1 
2 

3 
4 

5 

COM(2010) 2020. 
Commission Communication of 27 October 2010 ‘An integrated industrial policy for the globalisation 
era — Putting competitiveness and sustainability at centre stage’ (COM(2010) 614 final). 
Commission Communication ‘An Agenda for new skills and jobs’, COM(2010) 682 final 
Including the Commission’s consultation document on restructuring of January 2002, the results of the 
subsequent work carried out by the European social partners and a number of other reports and studies 
conducted  in  recent  years,  not  least  in  the  Restructuring  Forums  organised  by  the  Commission  since 
2005. A useful summary of the lessons learned by all the stakeholders in restructuring is given in the 
‘Checklist  for  restructuring  processes’  presented  by  the  Commission  in  its  Communication  of  3  June 
2009 ‘A shared commitment for employment’. 
COM(2011) 815  —  Annual  Growth  Survey  2012,  http://ec.europa.eu/europe2020/reaching-the-
goals/monitoring-progress/annual-growth-surveys/index_en.htm 

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workforce  to  adapt  to  a  fast-changing  economic  environment’.  Such  updating  could  also 
‘encourage a shift from purely reactive actions to more anticipative strategies’.6 

The  Green  Paper  is  accompanied  and  supported  by  the  Staff  Working  Document 
‘Restructuring in Europe 2011’. The Staff Working Document describes the impact of the 
economic  and  financial  crisis  on  labour  markets  and  the  responses  of  the  different 
stakeholders;  illustrates  EU  action  in  the  field  of  anticipating  skills  needs  and  developing 
competences; highlights the role of EU funds in support of restructuring processes, the impact 
of restructuring in EU regions and the role of ‘smart specialisation’ strategies7; analyses the 
role of social dialogue, legal instruments and Member States’ support measures in this field; 
outlines the challenges and the EU responses to them; and highlights some tentative lessons 
learned in recent years on anticipation and management of change and restructuring. 

The lessons from the crisis 

The  European  economy  is  emerging  with  difficulty  from  the  deepest  recession  in 
decades. The recession caused a large drop in economic activity in the EU, with millions of 
jobs  lost  and  a  high  human  cost,  and  put  public  finances  under  severe  pressure,  leaving 
Member States with more binding fiscal constraints. 

The  outlook  for  the  EU  labour  market,  which  proved  rather  resilient  during  the  2008-2009 
recession and started to create jobs again by the end of 2010, has deteriorated markedly and 
continues to exhibit significant cross-country differences. In many advanced economies, job 
creation has so far been insufficient to hire back the workers laid off during the crisis, and the 
consequences  of  the  recession  are  increasingly  raising  concern  about  the  possibility  of 
persistent effects on unemployment rates. 

Besides  diverging  GDP  developments,  other  relevant  factors  explaining  the  differences  in 
unemployment rates across Member States include differences in the extent of adjustment of 
working hours, different needs to relocate labour across sectors, e.g. away from construction, 
different  education  and  training  systems,  notably  apprenticeship  arrangements,  different 
economic and institutional starting conditions and dissimilar policy responses to the recession. 

In spite of extremely adverse market and financial situations, companies and their workforces 
throughout Europe have, by and large, engaged creatively in restructuring processes that 
have  been  constructive,  effective  and  instrumental  in  limiting  job  losses,  through 
innovative  arrangements,  often  with  the  support  of  public  authorities  and  European 
Commission.  

The  European  Commission's  communication  "A  European  Economic  Recovery  Plan" 
(COM (2008) 800 final) adopted in November 2008 provided a framework for a co-ordinated 
action  at  EU  level,  across  the  various  policies  and  mobilising  the  available  instruments  to 

6 
7 

Commission Communication ‘An Agenda for new skills and jobs’, COM(2010) 682 final, point 1.2. 
Smart  specialisation  is  a  condition  for  well-perfoming  national  and  regional  research  and  innovation 
systems under the Innovation Union's self assessment tool and a key element of the reformed cohesion 
policy  and  is  proposed  as  ex-ante  conditionality  for  the  use  of  the  European  Regional  Development 
Fund  in  the  next  programming  period  of  the  Structural  Funds  2014-2020.  A  Smart  Specialisation 
Platform  was  launched  in  June  2011  and  will  assist  regions  and  Member  States  in  developing  such 
strategies. 

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support the European economy. In this context, cohesion policy is of particular importance as 
the main instrument at EU level for investing in competitiveness, growth and jobs.8 

It is urgent to analyse the adequacy of this response in the light of the uncertainty about the 
path of the current recovery and the new risks looming on the horizon. 

The competitiveness challenges 

From  a  more  medium-term  perspective,  technological  progress  and  innovation  shorten  the 
product  life  cycle  and  constantly  force  firms  and  the  labour  force  to  adjust.  In  addition, 
changes  in  the  international  division  of  labour  and  the  arrival  of  strong  companies  from 
emerging  countries,  in  particular  those  specialised  in  the  upper  segments  of  the  market, 
further  intensify  the  competitive  pressures  on  European  companies.  The  competitiveness  of 
the European economy, the preservation of its activities and jobs and the development of new 
products and related job openings will depend more and more on the capacity of European 
companies to enhance their competitive base through innovation and rapid but smooth 
adaptation  to  change.  In  this  sense  technological  change  and  innovation  may  force 
adjustment strategies for companies and labour, but there are also indications that innovation, 
combined  with  research  and  education  can  build  an  effective  way  to  pull  Europe  out  of  the 
crisis.  The  Commission  launched  the  Innovation  Union  Flagship  initiative  in  2010,  and 
reported on the progress of the state of the Innovation in 2011. 9 

Firms divert resources from industries and sectors  producing  traditional goods and services, 
usually with a low elasticity of demand to world income, towards sectors and industries with a 
higher technology and knowledge content, usually with a high elasticity of demand to world 
income.  The  competitiveness  of  the  EU  depends  on  its  capacity  to  foster  framework 
conditions  for  innovative  fast-growing  firms,  important  for  sustainable  growth  and  job 
creation.10 It will also depend on the capacity to retain and further develop a productive base 
in Europe, which in turn will bolster the service economy. 

Enterprises  need  to  be  able  to  adapt  to  the  internationalisation  of  world  production  and 
respond  to  the  competitive  challenge.  Any  obstacles  to  such  adjustment  could  hamper 
competitiveness  and  employment  in  the  long  run.  Framework  conditions,  as  stressed  by  the 
industrial policy flagship initiative, are crucial to enable successful economic adjustment. An 
early involvement of all relevant stakeholders is necessary for the adjustment measures to be 
successful. Adequate access to finance is especially relevant, as investments can be delayed or 
stopped altogether by lack of credit and limited access to finance. Good practices in this area 
need to be identified and disseminated. 

The  challenge  of  adaptability  of  businesses  and  employability  of  workers  —  companies  at 
centre stage of the restructuring process 

Human  resources  development  and  skills  enhancement  are  of  paramount  importance  in  this 
context.  That  is  why  the  EU  needs  to  use  recent  experience  to  enhance  its  global 
competitiveness,  so  that  it  comes  out  stronger  and  turns  itself  into  a  smart,  sustainable  and 

8 

9 

10 

Cohesion  Policy:  Responding  to  the  economic  crisis.  A  review  of  the  implementation  of  cohesion 
policy measures adopted in support of the European Economic Recovery Plan, (SEC(2010) 1291 final). 
EU 2020 Flagship Initiative Innovation Union, Commission Communication SEC(2010) 1161 and State 
of the IU Report 2011 (2011) 849  
"Innovation Union Competitiveness report 2011", ec.europa.eu/iuc2011.  

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inclusive  economy  delivering  high  levels  of  employment,  productivity,  competitiveness  and 
social cohesion. 

The positive export performance of some Member States shows that success in global markets 
relies  not  only  on  price  competitiveness  but  also  on  other  factors  such  as  sector  product 
specialisation, innovation and skills levels. In these areas, the weaknesses pre-dating the crisis 
are becoming glaringly obvious. 

The  EU  has  over  the  last  few  decades  built  a  strong  system  of  employment  and  social 
protection that, combined with a relatively high level of education, has been the basis for its 
economic and social prosperity so far. However, new actors entering the global economy and 
fast-changing  business  environments  are  challenging  a  system  that  was  very  effective  in 
delivering  growth  and  jobs.  It  is  becoming  increasingly  evident  that  without  change,  this 
system is inadequate to ensure that resources, and especially human resources, are rapidly and 
smoothly reallocated from declining to emerging activities. It is also less and less capable of 
giving workers a real chance of professional development when their jobs are at risk, because 
it does not nurture their ability to adapt to change. 

The recent economic and financial crisis and the attendant pressure for structural change make 
it more important than ever to address such weaknesses. In line with the flexicurity approach 
and the Europe 2020 strategy,11 the Commission is eager to encourage permanent business 
adaptation  to  fast-changing  economic  circumstances  while  pursuing  a  high  level  of 
employment  and  social  protection  through  the  appropriate  supporting  measures. 
Measures  supporting  the  reallocation  of  resources  between  firms  and  occupations  are 
strongly  in  demand.  These  include  changes  in  employment  protection  legislation  and 
business  practices  related  to  corporate  restructuring  that  do  not  hamper  reallocation  of 
resources  towards  higher  value-added  and  faster-growing  activities,  but  also  appropriate 
training  and  activation  policies  that,  together  with  suitably  designed  unemployment  benefit 
systems, accompany displaced workers towards different jobs and professions. 

Restructuring  operations  are  part  of  the  everyday  life  of  companies,  workers,  public 
authorities  and  other  stakeholders.  In  recent  years,  the  EU  has  put  a  substantial  amount  of 
energy  and  effort  into  pursuing  policy  objectives  that  facilitate  adaptation  to  change  and 
restructuring. However, in spite of the commendable work of the European social partners in 
this field following previous Commission consultations, the adaptation capacity of companies, 
workers and regions needs to be further enhanced.  

The role of national, regional and local authorities in economic and social conversion 

The  crisis  hit  entire  industrial  sectors  and  thereby  whole  regions,  irrespective  of  national 
borders.  This  has  added  to  the  persistent  geographic  inequalities,  both  between  and  within 
regions, that undermine the single market. 

11 

The  concept  of  flexicurity  is  at  the  core  of  an  integrated  strategy  that  has  been  developed  by  the 
Commission and the Member States on the basis of wide agreement that Europe needs to find new and 
better ways of making its labour markets more flexible, while at the same time providing new and better 
forms  of  security.  It  is  a  comprehensive  response  to  the  challenges  faced  by  the  European  labour 
markets and societies in the context of globalisation and technological and demographic change. It is an 
integral part of the Europe 2020 strategy and its flagship initiative ‘New skills and new jobs’. 

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Proactive and dynamic restructuring is likely to be encouraged when public authorities play a 
supporting role in restructuring operations and processes for anticipating them by facilitating 
coordination between outside stakeholders and companies. 

The role of regions, besides the one of the countries, in promoting smart specialisation is of 
paramount importance and ways of reinforcing that role should be further analysed. 

Public service, another important employer 

While the focus of this Green Paper is on the industrial sector, the impact of the crisis on the 
public  sector  must  also  be  addressed,  acknowledging  the  important  role  of  both  the  public 
sector as an employer and as a service provider.  

Employment in public services (including public administration, education, health and social 
work)  has  been  increasing  considerably  compared  to  other  sectors  over  the  last  three  years, 
with around 2 million more jobs. In autumn 2010, however, growth slowed down, and in the 
first semester of 2011 turned negative. The impact of spending cutbacks in the public sector 
probably explains this change12. The cutbacks in the public sector will mostly affect women 
both  as  employees  and  as  main  users  of  services  such  as  for  instance  childcare  and  elderly 
care. 

The production of many public services sector may be more valuable for the competitiveness 
of the economy than what their cost and productivity suggest (e.g. because they give rise to 
high consumer surpluses or to total factor productivity improvements in other sectors). This 
would be the case of service sectors such as health, education, personal care to children and 
the elderly or of transport services.  

Public  authorities  are  directly  or  indirectly  responsible  through  public  enterprises  or  the 
granting of concessions for a sizeable share of employment in the service sectors. Further to 
their general responsibility for the economy, they should ensure the conditions for the smooth 
transmission of knowledge and the best use of the existing workforce of the sectors of which 
they  are  in  charge.  At  the  same  time,  the  need  to  continue  to  consolidate  public  finances 
obviously  impacts  on  public  sector  activities  and  employment.  Efficiency  improving 
restructuring  is  increasingly  important  also  in  the  public  sector.  This  underlines  the 
importance  of  restructuring  strategies  in  the  public  sector  which  appropriately  take  into 
account  the  specific  role  of  public  services,  including  in  contributing  to  productivity  in  the 
private sector. 

One  can  also  question  how  can  anticipative  and  strategic  long-term  approaches  to  the 
management of change and restructuring be applied to the public sector, in the framework of 
the current consolidation measures. It would also be important to take into account the need to 
restructure key public services such as healthcare and to ensure their long-term sustainability 
in the face of growing demand. 

12 

EU  Employment  and  social  situation  report  quarterly  review  September  2011"  - 
ESTAT 

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2. 

THE LESSONS FROM THE CRISIS 

The impact of the financial crisis on the real economy started to be fully felt in 2009, when 
GDP  declined  at  an  unprecedented  annual  rate  on  both  sides  of  the  Atlantic.  Employment 
proved very resilient in Europe immediately after the recession, particularly due to the strong 
adjustment  of  hours  worked.  Since  the  second half  of  2009,  however,  job  shedding  became 
widespread  and  unemployment  shot  up  in  most  EU  countries,  albeit  with  large  differences. 
The recovery gained momentum in the first half of 2010 but stabilised in the remaining part of 
the  year,  also  reflecting  the  fading  of  temporary  factors  such  as  the  exceptional  stimulus 
measures.  Despite  output  recovery,  employment  growth  did  not  follow  until  late  2010,  and 
unemployment remained at the high levels reached in 2009.13 

The overall trend in employment reflected different patterns at sectoral level. While initially 
the  rise  in  unemployment  affected  mainly  industries  that  are  most  exposed  to  the  business 
cycle and could rely only to a limited extent on the adjustment of working hours, in particular 
construction, there is evidence that part of this increase is becoming entrenched. In spite of the 
widespread use of short-time working schemes, employment declined also in manufacturing 
and remained on a downward trend during the recovery. These patterns could be due to the 
adjustment triggered by the worldwide recession following excess capacity in certain sectors 
and to the fact that GDP losses during the recession risk becoming permanent. 

The need to reallocate workers from low- to high-productivity sectors may indeed engender 
longer unemployment spells and a high structural unemployment rate, which in turn will have 
negative effects on human capital, thus further contributing to persistent unemployment.14 

The speed at which unemployment will go back to pre-crisis levels will depend not only on 
the  growth  outlook  and  on  the  different  economic  and  institutional  starting  conditions,  but 
also on the need for sectoral reallocation and on the capacity of firms to adjust labour costs 
directly  or  through  varying  the  hours  worked.  It  will  also  depend  on  the  presence  of 
supportive  policy  frameworks,  including  unemployment  benefit  systems  and  activation 
policies  providing  incentives  for  the  unemployed  to  go  back  to  work;  wage  setting 
frameworks  supporting  wage  adjustment;  tax  systems  encouraging  job  creation;  targeted 
active labour market and training policies facilitating labour market transitions and the return 
to work for the long-term unemployed. 

Experience during the economic crisis demonstrates that, in spite of extremely adverse market 
and  financial  situations,  companies  and  their  workforces  throughout  Europe  have,  by  and 
large,  engaged  in  restructuring  processes  that  have  been  constructive,  effective  and 
instrumental in limiting job losses through innovative arrangements. 

As highlighted in the European Restructuring Monitor (ERM) Report 2009 ‘Restructuring in 
recession’,15  in  response  to  the  crisis,  many  companies  throughout  Europe  have  taken 
initiatives to maintain jobs — most prominently, various means of reducing working hours 
(see box). These include production stops, obligations to take annual leave, shorter working 

13 

14 

15 

Source:  Labour  market  developments  in  Europe  2011,  European  Commission,  European  Economy 
2/2011. 
The belated response of employment to the recovery was also the counterpart of labour hoarding during 
the recession and went hand-in-hand with a considerable rebound in labour productivity. 
http://www.eurofound.europa.eu/publications/htmlfiles/ef0973.htm.  See  also  the  ERM  2011  Annual 
report: http://www.eurofound.europa.eu/publications/htmlfiles/ef1165.htm. 

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weeks  or  days,  enhanced  use  of  working  time  accounts,  leave  rotation  and  sabbaticals.  In 
some  firms,  wage  levels  have  been  adjusted  downwards,  with  temporary  cuts  of  10–20 % 
being  not  uncommon.  Most  companies  have  resorted  to  different  combinations  of  these 
measures, and intense bargaining has led to a wide range of trade-offs — for example, lower 
wages  in  return  for  company  equity.  Severance  packages,  often  in  combination  with  early 
retirement, are also widespread. 

More  than  ever,  social  dialogue  and  collective  bargaining  have  played  a  crucial  role  in 
adapting  production,  work  organisation  and  working  conditions  to  fast-changing  and 
demanding circumstances during the crisis. 

For their part, public authorities have stepped up public instruments aimed at promoting the 
reintegration into the labour market of those who became unemployed during the crisis. In an 
early phase of the crisis, Member States enhanced the responsiveness of public employment 
services  and  their  service  offer.  However,  the  prolonged  duration  of  the  downturn  has  led 
some  governments  to  cut  back  expenditure  and  to  reduce  resources  across  public 
administration, including public employment services (PES).16 Some Member States have set 
up or reinforced pre-existing specific outplacement bodies. These bodies usually have many 
stakeholders,  including  the  state,  regional  authorities,  the  social  partners  and  other  local 
actors. Their efficiency — a result of specialising in outplacement work — together with the 
high  levels  of  trust  inherent  in  multi-stakeholder  governance  make  them  a  valuable  tool  for 
coping with the effects of the downturn. 

Shorter  working  weeks  have  probably  been  the  most  innovative  response  to  the  crisis, 
often  with  extensive  public  support  for  these  schemes.  Generally,  workers  have  been 
compensated  for  lost  hours  both  in  countries  with  public  schemes  and  in  countries  where 
working  time  reduction  was  regulated  by  collective  agreement,  with  public  authorities 
intervening in the first case to top up collectively agreed compensation. The degree to which 
training  is  provided  during  newly  available  free  time  also  varies  considerably,  as  does  the 
extent  to  which  social  security  contributions  are  maintained  during  the  period  of  reduced 
working hours. 

During the 2008-2009 recession, the reduction in hours worked has been the main cost-saving 
strategy for companies. However, reducing working hours as a crisis response is not always 
possible.  Within  firms  a  temporary  reduction  of  working  time  is  possible  when  positive 
balances are available in working time accounts. Moreover, these short-time working schemes 
are likely to lose their effectiveness when weak labour demand persists. A belated withdrawal 
of  these  schemes  may  carry  substantial  costs  in  terms  of  locking  in  labour  to  declining 
activities, thereby preventing the necessary reallocation of resources, damaging future growth 
prospects  and  distorting  competition.  Finally,  the  availability  of  government-sponsored 
schemes depends on their fiscal situation, which has worsened in several countries. 

When  analysing  these  mechanisms,  it  is  important  to  take  into  account  the  fact  that  their 
efficiency  and  impact,  both  from  an  economic  and  social  viewpoint,  have  differed 
considerably  in  diverse  national  and  sectoral  contexts.  Any  conclusions  on  their  adequacy 

16 

In an EC survey on ‘PES adjustment  to the crisis 2011’, 13 out of 21 respondents declared that their 
financial resources would be reduced in the 12 months ahead. In 9 of those 13 cases these reductions 
amounted to 10 %.  

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and/or transfereability to other contexts should therefore include an analysis of the factors of 
success. 

Working time reduction and short-time working schemes — some evidence 

The  analysis  of  changes  in  employment  and  working  hours  in  reaction  to  the  fall  in  output 
shows that the adjustment of the Member States’ labour markets differed substantially during 
the  worst  of  the  crisis.  Whereas  in  some  countries  job  shedding  was  immediate,  in  others 
employers,  in  some  cases  supported  by  the  public  authorities  through  short-time  working 
schemes, first reduced the working hours of their workers instead of making them redundant. 

The chart below shows that the reduction of working time was most widely used in the EU in 
the first quarter of 2009, when manufacturing production was in its cyclical trough. Following 
the recovery of output average working hours also increased, indicating both the withdrawal 
of short-time working and in some cases workforce adjustments. 

Table:  Quarterly  growth  in  employment  and  average  hours  worked  in  manufacturing 
sector in the EU (seasonally adjusted) 

%
3

2

1

0

-1

-2

-3

-4

-5

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

Persons employed

Average hours

Total labour input in hours

Source: Eurostat 

Looking  at  the  developments  in  the  Member  States,  the  reduction  in  working  hours  was 
widely  used  in  several  countries  in  the  first  quarter  of  2009.  In  particular,  working  time 
reductions  were  substantial  in  Germany,  Belgium  and  Austria,  which  managed  to  maintain 
employment at a similar level to the previous year. 

Table: Change in the level of employment and in the average number of working hours 
in manufacturing in Q12009 compared to Q12008 (seasonally adjusted) 

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%

5

0

-5

-10

-15

-20

-25

-30

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d
g
n
K
d
e
t
i
n
U

Persons employed

Average hours

i

a
n
e
v
o
S

l

Source: Eurostat (data for Italy are not available) 

There seems to be some indication that short-time working schemes served to reduce the rate 
of job loss and associated rise in unemployment in these economies. Moreover, such schemes 
are  beneficial  for  businesses,  which  are  thus  enabled  to  retain  highly  skilled  or  specially 
trained workers through the course of an economic downturn. 
A Commission analysis17 indicated that these schemes were effective in reducing the impact 
of the economic crisis on job loss and emphasised that timely withdrawal of such measures 
was necessary following the economic crisis. The study highlights the risk that prolonged use 
of short-time work supports demand in declining sectors, possibly delaying their restructuring, 
especially when the costs of labour reallocation are low and the incentives to restructure high. 
By  delaying  reallocation,  short-time  work  schemes  hold  back  productivity  growth  and  the 
consequent wage gains. To be most effective, these schemes should be linked to an efficient 
unemployment  benefits  system  that  promotes  labour  reallocation.  This  analysis  is  supported 
by a recent OECD study18 that suggests that short-term working schemes had an economically 
important impact on preserving jobs during the economic downturn, with the largest impacts 
in  Germany  and  Japan  for  workers  with  permanent  contracts.  Such  schemes  were  largely 
successful in maintaining employment in these economies.  

In line with the recommendations set out in the European Economic Recovery Plan, Member 
States introduced comprehensive anti-crisis packages to contain the impact of the financial 
crisis on aggregate demand and prevent excessive labour shedding in response to a temporary 
contraction of output. In addition to short-time working schemes, the coverage and generosity 
of unemployment benefits was increased in several Member States. Short-term measures also 
included  direct  support  to  enterprises,  such  as  loans  or  guarantees  to  facilitate  access  to 
finance; lowering of social security contributions; job creation schemes in the public sector; 

17 

18 

Alfonso Arpaia et al., ‘Short time working arrangements as response to cyclical fluctuations’, European Commission, European 
Economy Occasional Paper No 64, July 2010. 
Alexander Hijzen and Danielle Venn, ‘The role of short-time work schemes during the 2008-09 recession’ OECD Working Paper 
115, Jan 2011. 

EN 

10 

   EN 

 
 
 
 
 
 
 
 
                                                 
strengthened active labour market policies and training provisions often targeted at redundant 
workers. 

Starting from 2010, the incipient recovery coupled with more binding fiscal constraints led to 
a revision of policy priorities. Reforms will have to be appropriate to a context where growth 
is gradually resuming but labour is not yet giving its full contribution to the growth potential 
due to high and persistent unemployment. The focus has to be on tax and benefit systems that 
ensure that work pays off; activation policies that reward the unemployed going back to work; 
employment  protection  systems  that  balance  security  with  flexibility;  wage  developments 
consistent with the rebalancing and adjustment needs of the economy. Many of the emergency 
labour market measures taken at the onset of the financial crisis were gradually phased out. 
Active  labour  market  and  training  policies  were  strengthened,  while  some  countries  started 
reforming  employment  protection  legislation  to  foster  job  creation  and  fight  labour  market 
segmentation. 

Are the policy measures and practices outlined above in relation to restructuring, with 
special reference to short-time working schemes during the crisis appropriate? In what 
specific  contexts?  Are  they  able  to  cope  with  persistently  weak  demand?Finally,  what 
can Member States, the Commission or the social partners do to exchange, disseminate 
and encourage wider application of the best practices in this domain? 

3. 

THE COMPETITIVENESS CHALLENGE: THE IMPORTANCE OF FOSTERING ECONOMIC 
AND INDUSTRIAL ADJUSTMENT 

Different ways for companies to adjust 

Adjustment is part of the competitive process for enterprises. It is a means for companies to 
improve  their  productivity.  The  need  for  constant  adjustment  results  from  technological 
change,  innovation,  keener  competition  and  the  emergence  of  new  competitors,  shifts  in 
consumer  preferences,  changes  in  legislation,  availability  and  price  of  resources  and  other 
inputs,  market  access,  etc.19
  The  pressure  to  change  that  may  arise  during  normal  times 
becomes stronger during the extended periods of weak economic activity. Companies that do 
not manage to adjust to changing conditions will not keep up with competitors in the long run. 

Adjustment  can  therefore  be  seen  in  the  context  of  a  process  of  re-allocation  of  resources, 
whereby  existing  productive  structures  are  challenged  and  possibly  replaced  by  new,  more 
efficient  and  competitive  structures  and  firms.  With  an  industry  base  ever  more  skilled  and 
increasingly capital- and technology-intensive, EU industry will become even more integrated 
into  international  value  chains  as  global  sourcing  becomes  more  complex  and  in  order  to 
serve global growth markets. 

Such adjustment can take the form of changes in the company’s activities, e.g. a broader or 
narrower  scope,  changing 
internal 
entrepreneurship, new use of assets, clearing of the balance sheets, improvements in skills and 
training, and/or organisational changes in the management of the company. In concrete terms, 

the  value  chain,  spin-offs  and 

its  position  on 

19 

EN 

See  for  instance  the  DG  ENTR  study  ‘Measuring  and  benchmarking  the  structural  adjustment 
at  http://ec.europa.eu/enterprise/policies/industrial-
performance  of  EU 
competitiveness/industrial-policy/future-of-
manufacturing/files/key_findings_measuring_and_benchmarking_en.pdf. 

industry’, 

available 

11 

   EN 

 
                                                 
new  business  models  are  emerging  that  link  manufacturing  more  closely  to  services.  The 
development  of  innovative  solutions  such  as  more  resource-efficient  production  methods  or 
new technologies such as advanced materials and nanotechnology may have implications for 
outsourcing  decisions,  etc.  These  are  some  of  the  activities  that  would  be  part  of  daily 
business dynamics for a sound enterprise to stay competitive. 

Framework conditions needed for efficient adjustment 

Companies and sectors themselves normally know best about their needs for restructuring. To 
achieve  an  efficient  adjustment,  firms  need  to  operate  in  an  environment  where  the 
appropriate framework conditions enable such adjustment. Any obstacles to such adjustment 
will hamper competitiveness and employment in the long run. 

The  Single  market  must  help  set  framework  conditions  and  create  opportunities  across 
Europe.  The  functioning  of  the  labour  market  and  mobility  is  one  important  aspect.  .Other 
important  areas,  for  enterprises  and  for  society  at  large,  include  the  functioning  of  capital 
markets (access to finance), the degree of competition on product markets, the efficiency of 
R&D  and  innovation  systems,  the  entrepreneurial  environment,  mechanisms  for  knowledge 
transfer  and  take-up  of  technology,  an  effective  education  system  and  training  and  broader 
societal  challenges.  These  are  not  only  regulatory  aspects.  The  Single  Market  Act  and  the 
Innovation  Union  Flagship  initiative  is  geared  to  systematically  removing  these  obstacles, 
enabling enterprises to get good ideas faster to the market, adjust and grow. Highly innovative 
SMEs and innovation clusters are becoming a key channel of the innovation and production 
process.  This  translates  into  an  increasing  need  for  cluster  policy  and  smart  specialisation, 
provision  of  skills  as  well  as  focused  knowledge  of  future  markets  and  relevant  key 
technologies. 

Restructuring 

Restructuring may concern a single firm, be related to its ongoing business development, or 
linked  to  a  failure  of  previous  investments.  It  may  also  involve  a  whole  sector  or  some 
segments  of  this  sector.  In  addition,  there  are  clear  differences  between  sectors,  with  some 
being  more  affected  than  others  by  the  pressure  mentioned  above.  For  instance,  industries 
such  as  equipment,  chemicals,  motor  vehicles or  electrical  machinery could be described as 
heavily affected by global competition and technological development. This has implications 
for their need for efficient restructuring. 

A  recent  example  of  how  companies  and  sectors  are  dealing  with  restructuring  in  a 
demanding  economic  and  social  environment  is  given  by  the  automotive  industry  in  the 
Interim  Report  of  the  High  Level  Group  CARS  21  adopted  on  2  December  2011  (see  the 
accompanying Staff Working Document ‘Restructuring in Europe 2011’20). 

Some restructuring operations (e.g. closing parts of supply chains, temporary redundancy of 
some employees) will have negative consequences for the surrounding economy. This means 
that there is a role for policy makers, but an efficient policy answer should not delay or block 
necessary efficiency-enhancing restructuring. Rather, it should focus on policy measures that 
facilitate reallocation of resources to different enterprises/sectors. 

20 

EN 

point 

See 
http://ec.europa.eu/enterprise/sectors/automotive/competitiveness-cars21/cars21/index_en.htm. 

Staff  Working  Document. 

4.3.2 

For 

the 

the 

report, 

of 

12 

see 

   EN 

 
                                                 
In  particular,  access  to  finance  is  of  vital  importance  to  economic  activities,  as  necessary 
adjustments that involve investment can be delayed or stopped by limited access to external 
funds.  Such  access  to  finance  is  influenced  not  only  by  capital  markets  or  public  financial 
support,  but  also  by  other  regulatory  factors  such  as  corporate  taxation  or  bankruptcy  rules. 
Lengthy  and  burdensome  bankruptcy  procedures  may  effectively  prevent  honest  failed 
entrepreneurs  from  re-entering  business  and  thereby  saving  existing  and  creating  new  jobs, 
despite substantial evidence that such 'second chance' businesses grow more quickly and are 
more resilient than traditional 'start-ups'21.  

The Commission Communication "Think Small First, A Small Business Act for Europe" of 
200822 and the follow up Communication "Review of the Small Business Act for Europe" of 
201123 requests Member States to take two specific actions to tackle this issue. In particular, 
the 2008 Communication asked Member States to " Aim to complete all legal procedures to 
wind  up  the  business  in  the  case  of  non-fraudulent  bankruptcy  within  a  year"  and  the  2011 
Communication  asked  Member  States  to  "promote  second  chances  for  entrepreneurs  by 
limiting the discharge time and debt settlement for an honest entrepreneur after bankruptcy to 
a maximum of three years by 2013" 

State  aid  rules24  play  a  role  in  some  cases  of  restructuring.  This  type  of  aid  is  allowed  for 
companies  that  are  deemed  viable  but  in  difficulty  and  would  go  bankrupt  without  public 
support  as  no  private  entities  are  willing  to  provide  them  with  capital.  Therefore,  this  aid 
relates only to extreme situations in which the companies may not have reacted in time to a 
changing environment. 

The Commission would like to hear views from stakeholders on the following questions: 

- What types of framework conditions are most appropriate in order to enable successful 
industrial adjustment? 

-  What  existing  measures  on  access  to  finance  to  accompany  structural  adjustment 
constitute good practice? 

- What further measures need to be taken to improve bankruptcy proceedings? 

4. 

THE  CHALLENGE  OF  ADAPTABILITY  OF  BUSINESSES  AND  EMPLOYABILITY  OF 
WORKERS — COMPANIES AT CENTRE STAGE OF THE RESTRUCTURING PROCESS 

The EU has managed to safeguard the productive base of its economy through the worst years 
of the economic downturn. However, with the current uncertain macro-economic conditions, 
the ability of European industry to remain competitive and preserve its jobs will depend more 

21 

22 
23 
24 

study 

'Business 

Dynamics' 

The 
(http://ec.europa.eu/enterprise/policies/sme/business-
environment/files/business_dynamics_final_report_en.pdf)  gathers  this  evidence,  along  with  extensive 
information  on  bankruptcy  laws  of  the  Member  States  and  analysis  of  the  effects  of differing 
bankruptcy proceedings on entrepreneurs and businesses. Further information including a sampling of 
'best practices' supporting honest failed entrepreneurs can be found at the 'second chance' portal here: 
http://ec.europa.eu/enterprise/policies/sme/business-environment/failure-new-beginning/index_en.htm  
COM(2008) 394 final of 25.06.2008. 
COM(2011) 78 final of 23.02.2011. 
Guidelines  on  State  aid 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2004:244:0002:0017:EN:PDF. 

in  difficulty:  http://eur-

rescuing  and 

restructuring 

firms 

for 

EN 

13 

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and more on its capacity to innovate as well as to quickly and smoothly adapt to change. 
Such change is due to technological progress, shifting trade patterns, the evolving regulatory 
framework, changing business models and consumers’ behaviour. The EU, through its actions 
in  different  policy  areas,  needs  to  support  its  business  sector  in  this  regard.  The  scale  of 
economic  restructuring  and  social  change  triggered  by  the  deep  adaptation  required  by 
environmental,  economic,  technological,  market  and  societal  challenges,  and  accelerated  by 
the  great  recession,  is  immense.  From  an  employment  viewpoint,  it  will  involve  both  job 
creation and job destruction and above all job transformation (in terms of new tasks, new 
skill profiles and new working arrangements). While a qualified labour force is one of the key 
competitiveness factors of European industry, it cannot be taken for granted and sustaining 
this factor requires a proactive approach. 

Smooth  adaptation  to  change  clearly  requires  skills  needs  and  adequate  human  capital 
investment. In order to sustain smart, sustainable and inclusive growth it is essential to ensure 
that  firms  have  a  suitably  skilled  workforce  in  order  to  avoid  skills  shortages  and 
mismatches. Anticipation of future skill requirements (for example, the need for green skills 
and skills in areas such as health and social care) and the consequent adaptation of education 
and  training  systems,  curricula  and  qualifications  in  collaboration  with  the  social  partners, 
development  of  apprenticeship  of  quality  retraining  in  the  context  of  lifelong  learning  of 
workers already active in the sector is also crucial for maintaining high employment. In case 
of skills shortages, firms should be prepared to look abroad for talent. To this end, investment 
in ICT skills and in digital literacy is imperative. Jobs are being generated in the production 
of new energy-efficient semiconductors, in cloud computing service providers, cyber security 
and  in  virtualization  applications  provider.  As  a  result,  people  with  skills  needed  in  these 
sectors will be in high demand, and specific initiatives on eSkills should be encouraged. 

The  economic  and  financial  crisis  and  the  concomitant  acceleration  of  change,  with  the 
ensuing needs for restructuring in certain sectors and for sectoral reallocation of labour, have 
made  it  more  important  than  ever  for  Europe to address existing  weaknesses with regard to 
adaptability of businesses and employability of workers. 

The  Commission  wants  to  encourage  permanent  business  adaptation  to  fast-changing 
economic circumstances while pursuing a high level of employment and social protection 
through the appropriate supporting measures. Measures supporting the reallocation of 
resources across firms and sectors are strongly needed as well as measures capitalizing 
on the highly-skilled but increasingly unemployed youth. Better anticipating and managing 
restructuring would help employees and companies to adapt to transitions imposed by excess 
capacities and by modernisation and structural adjustment. 

Management  and  employees’  representatives  are  the  key  players  to  discuss  forward-
looking  restructuring  strategies  at  company  level.  Policy  measures  accompany  such 
restructuring  to  avoid  social  hardship  and  promote  new  skills  and  jobs,  by  facilitating 
economic  conversion  and  professional  transition.  In  order  to  facilitate  the  reallocation  of 
factors  when  required,  policies  should  indeed  aim  to  prevent  rigidities  in  the  labour  market 
and its skills structure becoming a hindrance to adjustment and economic growth. 

At the same time, the social and health effects of employment insecurity, adaptation, loss of 
employment,  and  long-term  unemployment  need  to  be  addressed  by  effective  approaches 
which  enable  employees  to  adapt  to  change  at  workplaces,  quickly  reintegrate  into  labour 
markets  and  mitigate  the  health  effects  of  transitions.  Emerging  practices  at  company  and 
sector level can be noted in this field, also through times of crises. 

EN 

14 

   EN 

 
The  amplification  of  the  factors  driving  change  is  having  a  profound  effect  on  the  way  in 
which the social partners and public authorities address this issue. In several Member States, 
there  has  in  recent  years  been  a  clear  trend  away  from  a  purely  corrective  strategy 
towards preventive action, i.e. a shift towards a more proactive strategy which helps to 
minimise social impacts linked to restructuring process. Preventive strategies integrate the 
risks inherent in restructuring, so that the outcome can be both positive professional mobility 
of the workers affected and an increase in companies’ competitiveness. 

Observation  of  restructuring  processes  in  Europe  suggests,  however,  that  practices  in 
this field are sometimes reactive rather than anticipative and proactive; they can happen 
too  late  in  the  decision-making  process  and  may  not  involve  external  entities  early 
enough for them to play a role in attenuating the social impact of restructuring. 

Passive  attitudes  and  resistance  to  change  have  a  huge  economic  cost  and  threaten 
investment  and  employment  growth.  It  is  therefore  important  to  create  the  conditions  of 
trust  that  will  allow  all  segments  of  society  (companies,  workers  and  their  representatives, 
public authorities, etc.) to face the future in a dynamic way. 

Is  the  anticipative  approach  feasible  with  regard  to  management  of  change  and 
restructuring?. 

How can the existing orientations and guidelines on restructuring be improved in light 
of the lessons learned from the crisis and the new economic and social challenges? How 
can the lessons from the crisis be disseminated and implemented? 

5. 

CREATING SYNERGY IN THE PROCESS OF INDUSTRIAL CHANGE 

The  Commission  would  like  to  hear  the  views  of  all  stakeholders  on  good  practices  and 
possible  synergy  in  the  fields  of:  (a)  anticipating  restructuring  processes;  (b)  preparing  and 
managing restructuring processes; (c) evaluation and reporting; (d) the role of social dialogue; 
and (e) reviewing passive protection, as outlined below. 

(a)  Anticipating restructuring processes 

Long-term strategic planning 

Anticipation  of  change  is  more  successful  if  it  is  integrated  effectively  into  companies’  and 
regions’  long-term  strategies  to  secure  and  strengthen  their  long-term  sustainability  and 
competitiveness, and if an innovation-oriented culture is fostered. Furthermore by anticipating 
change  in  their  long-term  strategic  planning,  companies  and  public  authorities  could  grasp 
emerging  opportunities  and  generate  growth  and  employment.  A  positive  example  in  this 
respect  is  the  development  of  low-carbon  and  resource-efficient  technologies,  which  has 
proved to be a source of sustainable growth and jobs in different regions across the EU. 

Long-term  corporate  strategic  planning  includes  human  resources,  employment  and  skills 
objectives for  continuing  development of the skills  and competences  of the  workforce. This 
can  increase  the  productivity  and  therefore  the  competitiveness  and  profitability  of  the 
company,  and  its  capacity  to  adapt  and  to  be  innovative.  It  can  also  help  to  increase  the 
employability of employees and to encourage their mobility inside and outside the company. 

EN 

15 

   EN 

 
Local  and  regional  authorities  can  also  play  an  important  role  in  improving  the  longer-term 
competitiveness of their regions, in particular through the development of smart-specialisation 
strategies. 

What could be done to encourage strategic long-term and innovative approaches to the 
management  of  change,  including  employment  and  skills  issues,  be  encouraged?  How 
can synergy be improved between companies, local authorities and other local actors? 

How  should  specific  responsibilities  and  roles  be  distributed  among  companies,  social 
partners and public authorities be distributed in this field? 

Early anticipation of employment and skills needs 

Some companies develop mechanisms, in cooperation with employees’ representatives and/or 
with  vocational  educations  and  training  providers,  for  forward-looking  planning  of 
employment  and  skills.  Public  employment  services  and  sectoral  organisations  also  play  an 
important role in retraining workers who have to change occupation or sector, thus facilitating 
reallocation of labour between firms and sectors. 

Identifying the right type of training and the skills needed, and where they may be found in 
the future, including in preparation for demographic change, requires the full cooperation of 
all  partners  involved.  Cooperation  between  companies  and  vocational  schools  proves  to  be 
very successful in that matter when being well structured and framed. An important role can 
also  be  played  here  by  local  initiatives  such  as  skills  partnerships  with  regional  and  local 
authorities  in  close  cooperation  with  outside  bodies,  including  universities  and  other 
education  and  training  providers,  technology  institutes,  innovation  centres  and  development 
agencies as well as healthcare and social security providers. Companies can also contribute to 
employment and skills observatories, and take part in other relevant initiatives in the region 
and/or sector concerned. 

How  can  effective  practices  for  anticipating  employment  and  skills  needs  within 
companies  be  further  encouraged?  How  can  training  be  developed  as  a  permanent 
feature of human resources management? 

How  can  synergy  between  action  taken  by  companies  and  public  sector  initiatives  be 
promoted to facilitate appropriate employment and skills policies? 

(b)  Preparing and managing restructuring processes 

Early preparation 

Time  is  critical  in  efforts  to  manage  restructuring  well.  As  far  as  possible,  restructuring 
operations should be preceded by appropriate preparation involving all relevant stakeholders 
in  order  to  prevent  or  cushion  their  economic,  social  and  regional  impact.  At  sector  level, 
good  examples  are  industry-wide  actions  undertaken  in  the  defence,  auto  parts  and  telecom 
industries. 

This  preparation  should  ideally  occur  as  early  as  possible  and  start  as  soon  as  the  need  to 
restructure is recognised, taking account of the methods and procedures negotiated at the level 
of the sector, region or company concerned, if any. An early start will make it easier to adopt 
measures to minimise the economic, social and regional impact of the operation. 

EN 

16 

   EN 

 
How  can  companies  and  their  workforces  be  encouraged  to  engage  in  early  and 
adequate preparation of restructuring processes favouring acceptance of change? What 
best practices exist in this field? 

Building mutual trust and shared diagnosis 

It is important to build mutual trust and arrive at a shared diagnosis through continuous and 
high-quality  communication  between  all  the  relevant  stakeholders.  Companies’  long-term 
strategic  goals  and  requirements  or  short-term  constraints  should  be  explained  to  the  extent 
possible,  along  with  measures  envisaged  and  other  possible  options  in  the  light  of  all  the 
interests concerned. 

Corporate  social  responsibility  and  a  transparent  approach  can  encourage  all  stakeholders, 
especially employees’ representatives, to cooperate in the search for solutions that satisfy the 
interests of both parties without creating undue delays and uncertainties. 

To what extent can mutual trust and shared diagnosis play a role in good management 
of restructuring? How can this be promoted within companies and in broader contexts? 

Minimising the social impact 

While  seeking  to  preserve  their  competitiveness  and  long-term  prosperity,  companies  faced 
with  the  need  to  restructure  usually  envisage  redundancies  only  after  having  considered  all 
possible alternative options. Companies also often try to identify and implement appropriate 
supporting  measures.  Employees’  representatives  should  be  open  to  negotiating  flexible 
solutions alternative to redundancies. 

As  shown  by  the  economic  crisis,  flexibility  is  inherent  in  the  existing  system.  Many 
companies  throughout  Europe  have  taken  temporary  initiatives  to  maintain  jobs,  including 
through  reducing  working  hours,  production  stops,  obligations  to  take  annual  leave,  shorter 
working  weeks  or  days,  enhanced  use  of  working  time  accounts,  leave  rotation  and 
sabbaticals. 

When  redundancies  cannot  be  avoided,  or  as  part  of  the  package  of  alternative  options, 
companies, local authorities and all relevant stakeholders including health and social security 
providers  can  be  encouraged  to  work  together  to  make  arrangements  for  the  employees 
concerned  to  improve  their  employability  and  re-enter  the  labour  market  as  quickly  as 
possible. 

It has been shown that, through its human and psychological consequences, poorly managed 
restructuring  can  have  a  significant  negative  longterm  impact  on  the  human  resources  of 
companies,  thereby  weakening  this  key  resource  for  competitiveness. Companies  and  social 
partners  from  some  sectors  undergoing  particularly  strong  change  have  therefore  agreed  on 
guidelines  to  manage  mental  health  issues  at  workplaces,  and  are  increasingly  engaged  in 
managing these challenges. 

What can companies and employees do to minimise the employment and social impact 
of  restructuring  operations?  What  role  can  public  policies  play  in  facilitating  these 
changes? 

Minimising external economic, social, environmental and regional impacts 

EN 

17 

   EN 

 
The  need  to  address  the  territorial  impact  of  restructuring  was  mentioned  during  social 
partners’ work. In many cases, when a restructuring operation has major effects in a region, 
companies seek to align their preparatory activities with those of all the other actors with the 
aim of maximising the re-employment opportunities of employees, encouraging the economic 
and  social  conversion  of  the  region  affected  and  developing  new  economic  activities  that 
create jobs. 

For that purpose, companies often discuss the measures being prepared with the regional or 
local  authorities  and  other  relevant  stakeholders,  including  health  and  social  security 
providers. They also sometimes participate in and/or contribute to any task force or network 
set up at regional or sectoral level to minimise the impact of the operation. 

In  some  cases,  the  measures  outlined  above  include  the  employees  of  other  companies, 
including SMEs, in the region affected by the restructuring of larger companies. Information 
and assistance to SMEs is likely to help them to adapt their own businesses and manage the 
restructuring process. 

What  can  companies,  local  authorities  and  all  the  other  stakeholders  usefully  do  to 
minimise the regional impacts of restructuring? 

How  can  companies  affected  as  a  result  of  the  restructuring  of  another  company  be 
supported  in  their  own  adjustment  process?  In  particular,  how  can  SMEs  be  better 
informed and assisted in the restructuring process? 

(c)  Evaluation and reporting 

Tools  for  regular  evaluation  and  reporting  of  restructuring  operations  in  cooperation  with 
employees’  representatives  and  the  outside  organisations  involved  in  those  processes  might 
prove useful in some circumstances, in particular to facilitate a learning process. 

What  role  can  evaluation  and  reporting  of  past  restructuring  operations  play  in 
increasing knowledge and improving stakeholders’ practices? 

(d)  The role of social partners 

Since  management  and  workers’  representatives  are  among  the  key  players  to  discuss 
restructuring  strategies,  it  would  be  useful  to  give  a  prominent  role  to  social  dialogue  in 
disseminating and encouraging best practices. 

What  role  social  dialogue  could  play  in  better  disseminating  and  encouraging  best 
practices for the anticipation and management of restructuring? 

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(e)  Reviewing passive protection 

A  shift  from  passive  employment  protection  to  active  protection  is  at  the  heart  of  the 
flexicurity  concept.  One  possible  way  of  implementing  this  concept  is  to  move  away  from 
protecting specific jobs and towards protecting employees through their working life. Another 
possibility is to strengthen the so-called internal flexibility that aims at protecting jobs through 
measures  ensuring  a  flexible  adaptation  to  the  changing  circumstances.  In  some  instances, 
however,  such  a  change  has  not  always  been  accompanied  by  an  overhaul  of  the  existing 
employment protection system, especially in terms of burdens and costs. 

Like any other function within companies, anticipation of change and proactive restructuring 
certainly  have  a  cost  but  also  a  benefit  for  all  those  involved:  companies  improve  their 
capacity  to  adapt,  employees  become  more  employable  and  regions  boost  their  economic 
dynamics. 

While  fully  taking  into  account  the  huge  differences  between  Member  States  in  this 
regard,  the  Commission  would  like  to  hear  the  views  of  stakeholders  (in  particular 
national authorities and social partners’ organisations) on whether some aspects of the 
employment  protection  systems  need  to  be  reviewed  in  the  light  of  this  intended 
transition towards anticipation and proactive protection of employment. 

6. 

THE ROLE OF REGIONAL AND LOCAL AUTHORITIES 

Proactive  and  dynamic  restructuring  is  often  encouraged  when  public  authorities  play  a 
supporting role in restructuring operations and processes for anticipating them by facilitating 
coordination  between  outside  stakeholders  and  companies.  They  also  often  create,  promote 
and support mechanisms to encourage small and medium-sized companies to get involved in 
measures  of  that  type.  Finally,  public  authorities  also  support  anticipatory  processes  and 
restructuring operations to alleviate their economic, regional and social impact. Some of the 
best practices identified in Europe are set out below. 

Some identified best practices in Europe: 

• 

• 

Public authorities, including PES, play a major role in regions affected by structural 
change: they set up permanent bodies, networks or observatories to monitor change 
processes;  promote  territorial  employment  pacts  for  employment  creation  and 
adaptation;  promote  or  create  mechanisms  facilitating  employment  transition; 
arrange  training  for  small  and  medium-sized  companies  and  their  employees  and 
support  dialogue  and  cooperation  between  them  and  large  companies;  favour 
regional employment and economic and social conversion. 

In  some  cases,  public  authorities  activate,  in  cooperation  with  companies,  rapid 
response  services  and  support  schemes  to  help  employees  facing  professional 
transitions  or  redundancy.  Without  prejudice  to  companies’  obligations  resulting 
from  national  laws  and/or  practices,  public  authorities  sometimes  co-finance 
employability measures, including the acquisition of transferable skills. 

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‘Smart  specialisation  strategies’  can  also  be  an  important  tool  for  regions  to  use  in  their 
restructuring process.25 

At  EU  level  the  Coheion  Policy,  and  especially  the  European  Social  Fund,  as  well  as  the 
European  Globalisation  Adjustment  Fund  also  exist  to  support  both  anticipative  action  and 
measures  aimed  at  helping  employees  whose  job  is  threatened  by  particular  restructuring 
events,  including  emerging  labour  market  needs  resulting  from  the  transition  towards  low-
carbon and resource-efficient economy. 

How can a supporting role be encouraged for public authorities, particularly at regional 
level, in anticipation processes, as well as in particular restructuring events, taking into 
account differing national traditions regarding the involvement of public authorities in 
company-level processes? 

CONSULTATION 

The Commission invites all interested parties to respond to the questions set out in this Green 
Paper, and provide any additional comments, by 30 March 2012. 

The green paper and the template for reply are available on the Europa website: 
http://ec.europa.eu/social/main.jsp?catId=333&langId=en 

Responses can be sent by email to: 

EMPL-GREEN-PAPER-RESTRUCTURING@ec.europa.eu 

or by post to: 

European Commission 
Directorate-General for Employment, Social Affairs and Inclusion 
Green Paper on Restructuring 
Unit C2 
Rue Joseph II, 27 
Office 06/044 
B-1000 Brussels 

25 

See Commission Staff Working Document ‘Restructuring in Europe 2011’, point 4.1.3. 

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