Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2011/010 AT/Austria Tabak from Austria)
Date: 2013-03-07
Institutions: European Commission
Subjects: Austria, European Globalisation Adjustment Fund, collective dismissal, commitment of expenditure, economic recession, employment aid, general budget (EU), payment appropriation, reintegration into working life, tobacco industry

EUROPEAN 
COMMISSION 

Brussels, 7.3.2013  
COM(2013) 119 final 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund in accordance with 
point 28 of the Interinstitutional Agreement of 17 May 2006 between the European 
Parliament, the Council and the Commission on budgetary discipline and sound 
financial management (application EGF/2011/010 AT/Austria Tabak from Austria) 

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EXPLANATORY MEMORANDUM 

Point  28  of  the  Interinstitutional  Agreement  of  17  May  2006  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 
management1  allows  for  the  mobilisation  of  the  European  Globalisation  Adjustment  Fund 
(EGF)  through  a  flexibility  mechanism,  within  the  annual  ceiling  of  EUR 500 million over 
and above the relevant headings of the financial framework. 

The rules applicable to the contributions from the EGF are laid down in Regulation (EC) No 
1927/2006  of  the  European  Parliament  and  of  the  Council  of  20  December  2006  on 
establishing the European Globalisation Adjustment Fund2. 

On 20 December 2011, Austria submitted application EGF/2011/010 AT/Austria Tabak for a 
financial contribution from the EGF, following redundancies in Austria Tabak GmbH and in 
14 suppliers and downstream producers in Austria. 

After  a  thorough  examination  of  this  application,  the  Commission  has  concluded  in 
accordance  with  Article  10  of  Regulation  (EC)  No  1927/2006  that  the  conditions  for  a 
financial contribution under this Regulation are met. 

SUMMARY OF THE APPLICATION AND ANALYSIS 

Key data: 
EGF Reference no. 
Member State 
Article 2 
Primary enterprise 
Suppliers and downstream producers 
Reference period 
Starting date for the personalised services 
Application date 
Redundancies during the reference period 
Redundancies before and after the reference period 
Total eligible redundancies 
Redundant workers expected to participate in the 
measures 
Expenditure for personalised services (EUR) 
Expenditure for implementing EGF3 (EUR) 
Expenditure for implementing EGF (%) 
Total budget (EUR) 
EGF contribution (65 %) (EUR) 

EGF/2011/010 
Austria 
(c) – exceptional circumstances 
Austria Tabak GmbH 
14 
20.8.2011 – 19.12.2011 
15.11.2011 
20.12.2011 
320 
0 
320 

270 

5 864 615 
200 000 
3,3 
6 064 615 
3 941 999 

1. 

2. 

1 
2 
3 

The  application  was  presented  to  the  Commission  on  20 December 2011  and 
supplemented by additional information up to 9 October 2012. 

The application meets the conditions for deploying the EGF as set out in Article 2(c) 
of  Regulation  (EC)  No  1927/2006,  and  was  submitted  within  the  deadline  of  10 
weeks referred to in Article 5 of that Regulation. 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406, 30.12.2006, p. 1. 
In accordance with the third paragraph of Article 3 of Regulation (EC) No 1927/2006. 

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Link  between  the  redundancies  and  major  structural  changes  in  world  trade  patterns 
due to globalisation or the global financial and economic crisis 

3. 

4. 

The  redundancies  were  caused  by  the  closure  of  Austria  Tabak's  last  remaining 
production site in Hainburg (Niederösterreich/Lower Austria). Following a decision 
by  their  owners,  Japan  Tobacco  International  (JTI)4,  this  cigarette  factory  has  been 
wound down in stages from the 2nd half of 2011 up to mid- 2012. 

In order to establish the link between the redundancies and major structural changes 
in  world  trade  patterns  due  to  globalisation,  Austria  argues  that  the  cigarette  and 
tobacco  product  manufacturing  industry  in  the  EU  (included  in  NACE  Revision  2 
Division 125),  has  been  seriously  affected  by  changes  in  world  trade  patterns,  in 
particular  a  significant  reduction  of  the  EU  market  share  and  delocalisation  of 
production to third countries. 

These  changes  in  trade  patterns  reflect  the  decline  in  cigarette  consumption  in  the 
industrialised European countries as well as the USA and Japan over the past decade 
(mainly because of tobacco control measures and increasing taxation). Austria backs 
up their arguments by citing data from the World Health Organisation (WHO)6 and 
the  Tobacco  Atlas  published  by  the  World  Lung  Foundation/American  Cancer 
Society7. These show that there is and will be a sharp increase in demand in tobacco 
products  in  the  emerging  Asian  countries  and  in  Russia8.  China,  Russia  and 
Indonesia together account for one third of the world’s smokers. 

Fig. Declining smoking trends in adult male smoking (industrialised countries): 1960-2010 
Source: http://www.tobaccoatlas.org 

4 

5 

6 
7 
8 

Geneva  based  JTI  belongs  to  Japan  Tobacco  Inc.,  Japan  and  is  one  of  the  world's  largest  tobacco 
corporations  (in  2007:  10,8 %  of  the  world  market),  after  State-owned  China  National  Tobacco 
Corporation  (in  2007:  32 %),  Philip  Morris  International  (in  2007:  18,7 %),  and  British  American 
Tobacco (in 2007: 17,1 %). JTI currently operates in 120 countries employing 25 000 people. 
Division 12 of NACE Revision 2 includes both smoking and smokeless tobacco products. The former 
include manufactured cigarettes as well as cigars, pipes and hand-rolled cigarettes. Smokeless tobacco 
includes products such as snuff or chewing tobacco. 
http://www.who.int/tobacco/en/atlas5.pdf 
http://www.tobaccoatlas.org: updated 2012 (fourth) edition. 
China with 320-350 million smokers represents a huge market, according to WHO, Philip Morris and 
other sources. More than 38 % of the world's cigarettes in 2009 were consumed in China, the Russian 
Federation being the next highest-ranking country. The per capita rate of smokers is said to be highest 
in Russia (about 39 % of Russia's 143 million population), in comparison to 28 % of China's 1,3 billion 
population and 27 % of the 314 million population of the USA. 

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5. 

In response to these developments, Japan Tobacco International (JTI), similar to the 
other  major  tobacco  corporations,  has  reduced  its  production  sites  and  shifted 
production  to  the  emerging  markets.  The  firm  has  vigorously  promoted  the 
globalisation  of  its  tobacco  business  and  steadily  broadened  its  business  base, 
currently  owning  28  production  sites  world-wide9.  JTI  reduced  the  number  of 
marketed  cigarette  brands  to  the  most  promising  ones  and  adapted  the  production 
processes  to  the  new  global  set-up  allowing  them  to  assign  production  volumes 
flexibly to the factories with free capacities. 

Explanation of the unforeseen nature of those redundancies 

6. 

The  Austrian  authorities  explained  that  the  announcement  in  May  2011  by  JTI  to 
close the Hainburg site and to dismiss all workers came as a surprise as the factory 
was modernised just a few years earlier, after JTI had taken over Austria Tabak from 
the British Gallaher group in 2007. JTI had then planned to make it a medium-sized 
enterprise producing not only Austrian cigarette brands but increasingly also the so-
called  GFB  (global  flagship  brands)  marketed  by  the  multinational10.  At  that  time 
and in the years up to 2010, this was thought to be a long-term strategy. 

The table below shows the closures of Austria Tabak's four factories since 2005 and 
the  827  redundancies  caused,  illustrating  the  reorganisation  undertaken  by  their 
respective owners, Gallaher group, UK (up to 2007) and JTI11.  

Austria Tabak  
sites (4 + HQ) 

date of site 
closure 

number of 
redundancies 

comment 

Schwaz (Tirol) 

end 2005 

Fürstenfeld (Steiermark) 

end 2005 

110 

48 

not part of application 

2006: Gallaher group (UK) modernises Austria Tabak's remaining sites in Linz 
(Oberösterreich) and Hainburg (Niederösterreich) for higher cigarette volumes. 

2007: Japan Tobacco International (JTI) acquires Austria Tabak restructuring it. 

Linz (Oberösterreich) 

end 2009 

269 

not part of application 

2010: the volumes produced so far in Linz are shifted to Hainburg which now 
manufactures 40% of the cigarettes consumed by the Austrian market. 
2010/2011: Philip Morris gains market shares in Austria superseding Austrian brands. 

Hainburg 
(Niederösterreich) 

end 2011 

320 

subject of the EGF 
application 

Vienna headquarters 

2011/2012 

80 

not part of application 

Austrian cigarette brands & global flagship brands are now manufactured within  
JTI's global production chain (28 production sites world-wide). 

9 
10 

11 

http://www.jt.com/about/division/tobacco_global/index.html 
Austrian  cigarette  brands  are  for  example  Meine  Sorte  or  Memphis.  Global  flagship  brands  are  for 
example Camel and Benson & Hedges. 
The  years  up  to  1995,  Austria  Tabak  was  State-owned  with  a  monopoly  in  Austria  for  producing, 
finishing  and  disseminating  cigarettes  and  other  tobacco  products,  such  as  filters.  In  2001,  they  were 
acquired by the British Gallaher Group, and JTI took over Gallaher, including Austria Tabak, in 2007. 

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Demonstration  of  the  number  of  redundancies  and  compliance  with  the  criteria  of 
Article 2(c) 

7. 

8. 

9. 

10. 

Austria  submitted  the  application  under  the  intervention  criterion  of  Article  2(c)  of 
Regulation  (EC)  No  1927/2006.  This  provision  allows  applicants  to  derogate  from 
the requirements of Articles 2(a) and 2(b) in small labour markets or in exceptional 
circumstances  when  redundancies  have  a  serious  impact  on  employment  and  the 
local economy. In this case the applicant must specify which of the main eligibility 
requirements  its  application  fails  to  meet,  and  thus  from  which  it  is  seeking  a 
derogation. The Austrian authorities specified that the application seeks to derogate 
from  Article  2(a),  where  the  normal  threshold  is  at  least  500  redundancies  over  a 
four-month period. 

The application cites a total of 320 redundancies in Austria Tabak GmbH, an agency 
supplying  temporary  workers  (Posavac)  and  13  further  suppliers  and  downstream 
producers  during 
to 
19 December 2011.  Out  of  these,  210  redundancies  were  calculated  in  accordance 
with the first indent and 110 were calculated in accordance with the second indent of 
the second paragraph of Article 2 of Regulation (EC) No 1927/2006. 

the  four-month  reference  period  from  20 August 2011 

An additional 22 former Austria Tabak workers left the labour market as they opted 
for  early  retirement  (not  part  of  this  EGF  application).  A  further  80  workers  were 
expected to lose their jobs in Austria Tabak's Vienna headquarters, but since some of 
these dismissals would happen outside the reference period, these 80 workers were 
not included in this EGF application either. 

Austria  justifies  the  request  for  EGF  support  and  the  use  of  the  exceptional 
circumstances criterion by the particular situation of the cross-border area where the 
redundancies  occurred  and  the  serious  impact  of  the  redundancies  on  the  local  and 
regional economies and labour markets. The municipality of Hainburg is one of the 
easternmost towns of Austria bordering Slovakia and located in the structurally weak 
district  of  Bruck  an  der  Leitha12.  Many  workers  from  Slovakia  (and  also  from 
Hungary)  take  up  work  on  the  Austrian  side  of  the  cross-border  area  as  the  salary 
levels  are  higher  than  at  home.  For  the  former  Austria  Tabak  workers,  the 
competition with other job seekers is therefore tough. Details on the expected impact 
of the redundancies are given further below. 

12 

This district is part of the NUTS III region 'Wiener Umland – Südteil'; in the South it borders with 
Austria's only 'phasing out' region, the NUTS II province of Burgenland (see map). 

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11. 

In  the  opinion  of  the  Commission  services,  the  particular  situation  of  the  area 
affected  by  the  job  losses  (Austrian  district  bordering  Slovakia)  and  the  serious 
impact on the local and regional economies and labour markets as described by the 
Austrian  authorities  combine  to  meet  the  exceptional  circumstances  criterion  of 
Article  2(c)  of  Regulation  (EC)  No  1927/2006.  Since  Austria  Tabak  was  the  area's 
second-largest  employer,  with  many  small  businesses  linked  to  the  enterprise,  the 
impact of the enterprise's closure was particularly severe at local level (Bruck an der 
Leitha district). 

Identification of the dismissing enterprises and workers targeted for assistance 

12. 

The application relates to 320 redundancies in the following 15 enterprises, with 270 
workers (84,4 %) targeted for assistance: 

Enterprises and number of dismissals 

Austria Tabak GmbH 
Posavac  
ÖWD 
Simacek 
Nitschinger 
Rehberger 
Alimanovic 
Mabeko 
Total no. of enterprises: 15 

210 Eybel 
83
4
7
2
1
1
1

Windisch Bau GmbH 
Kubena 
Bauschutz 
Nagelreiter 
Stuhl 
Otto 

Total no. of dismissals: 320 

1 
2 
1 
1 
4 
1 
1 

13. 

The break-down of the 270 targeted workers is as follows: 

Category 
Men 
Women 
EU citizens 
Non EU citizens 
15-24 years old 
25-54 years old 
55-64 years old 
> 64 years old 

Number
225
45
253
17
47
199
24
0

Percent 
83,3 
16,7 
93,7 
6,3 
17,4 
73,7 
8,9 
0,0 

14. 

There  are  no  workers  with  longstanding  health  problems  or  disabilities  among  the 
targeted workers. 

15. 

In terms of occupational categories, the break-down is as follows: 

Category 
Clerical support workers  
Service and sales workers 
Craft and related trades workers 
Plant and machine operators, and 
assemblers 
Elementary occupations 

ISCO-08 Number  Percent
2,6
2,6
7,8
19,6

7 
7 
21 
53 

4 
5 
7 
8 

9 

182 

67,4

16. 

In  accordance  with  Article  7  of  Regulation  (EC)  No  1927/2006,  Austria  has 
confirmed  that  a  policy  of  equality  between  women  and  men  as  well  as  non-
discrimination has been applied, and will continue to apply, during the various stages 
of the implementation of and in access to the EGF. 

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Description of the territory concerned and its authorities and stakeholders 

17. 

18. 

At  NUTS II  level,  the  redundancies  concern  the  Land  of  Niederösterreich  (Lower 
Austria,  AT12),  one  of  Austria's  nine  federal  provinces,  and  at  NUTS  III  level  the 
region Wiener Umland/Südteil (AT127), and more specifically the district of Bruck 
an der Leitha and the municipality of Hainburg. 

the  Chamber  of  Labour  of  Niederösterreich 

The  main  stakeholders  are 
the  provincial  government  of  Niederösterreich 
(niederösterreichische Landesregierung), the regional and local public employment 
services  (Landesgeschäftsstelle  Niederösterreich;  Bezirksstelle  Bruck/Leitha  des 
Arbeitsmarktservice  AMS),  the  municipality  of  Hainburg  and,  and  for  the  social 
(Arbeiterkammer 
partners, 
Niederösterreich;  worker 
of  Austria 
(Wirtschaftskammer  Österreich;  employer  side),  as  well  as  trade  union  of  private 
sector  employees,  printing,  journalism,  and  paper  (GPA-djp,  Gewerkschaft  der 
Privatangestellten,  Druck,  Journalismus,  Papier)  and  Produktionsgewerkschaft 
PRO-GE,  both  under  the  umbrella  of  Austria's  Federation  of  Trade  Unions 
(Österreichische Gewerkschaftsbund /ÖGB)13. 

the  Economic  Chamber 

side), 

Expected impact of the redundancies as regards local, regional or national employment 

19. 

20. 

21. 

Austria  argues  that  the  closure  of  Austria  Tabak's  Hainburg  site  has  had  a  severe 
impact on both the local and regional labour markets. Since Austria Tabak was the 
area's second-largest employer, with many small businesses linked to the enterprise, 
the closure has put the Bruck an der Leitha district in a particularly difficult situation. 
In  September  2011,  the  number  of  job  vacancies  had  almost  halved (- 47 %), 
compared  to  the  same  month  in  the  previous  year,  whereas  for  Niederösterreich 
(NUTS II level) and at national level, this decline was much lower (- 4 % and - 7 %, 
respectively). 

According to the Austrian authorities, the labour market is strained also at NUTS III 
level  ('Wiener  Umland  –  Südteil').  Statistical  data  show  that  already  from  2006  to 
2010,  this  region  has  had  the  highest  unemployment  figures  among  the  seven 
NUTS III regions of Niederösterreich14. Moving away to other areas is therefore not 
an  easy  option  for  the  dismissed  workers,  and  the  fact  that  many  of  them  had 
relatively low-paid jobs, makes a new start even more difficult. 

At  NUTS II  level,  the  Land  of  Niederösterreich  was  also  affected  by  other  mass 
redundancies  for  which  EGF  applications  were  submitted  to  the  Commission:  704 
redundancies in the metal sector in 200915 and 1 274 redundancies related to the road 
transport sector in 201016. 

Co-ordinated  package  of  personalised  services  to  be  funded  and  a  breakdown  of  its 
estimated  costs,  including  its  complementarity  with  actions  funded  by  the  Structural 
Funds 

22. 

13 
14 
15 
16 

The  following  types  of  measures  are  proposed,  all  of  which  combine  to  form  a 
coordinated package of personalised services aimed at re-integrating the 270 targeted 
workers  into  employment.  They  will  be  provided  to  the  210  former  Austria  Tabak 
workers through an enterprise-type labour foundation (Unternehmensstiftung Austria 

http://www.oegb.at/servlet/ContentServer?pagename=S06/Page/Index&n=S06_4 
Statistik Austria: Statistisches Jahrbuch 2012 
EGF/2010/007 AT/Steiermark-Niederösterreich, OJ L 263, 7.10.2011. 
EGF/2011/001 AT/Niederösterreich-Oberösterreich, OJ L 317, 30.11.2011. 

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Tabak) as defined in Federal Directive AMF/23-201117, established on 1.12.2011 as 
part  of  the  social  plan  concluded  a  few  months  earlier.  The  measures  for  the 
60 former  workers  of  the  suppliers  and  downstream  producers  will  be  organised 
outside the labour foundation. 

23. 

The  body  responsible  for  implementing  the  measures  within  the  labour  foundation 
and  for  the  coordination  with  the  regional  public  employment  service  (AMS, 
Arbeitsmarktservice) is waff Arbeitsintegrations GmbH, Vienna, while the measures 
for the former workers of the suppliers and downstream producers are carried out by 
FAB,  Vienna  (www.fab.at).  Both  organisations  are  specialised  in  supporting  the 
employment re-integration and sustainable qualification of workers. 

The  two  implementing  bodies,  in  cooperation  with  the  local  employment  services, 
assess the meaningfulness of each measure for the labour market, and they monitor 
the  development  of  each  individual  worker  to  ensure  that  the  plans  agreed  in  the 
initial  phases  of  the  programme  are  pursued.  Waff  and  FAB  also  control  the 
compliance  of  the  measures  with  the  foundation  rules  (Stiftungsordnung)  and  other 
relevant  sets  of  laws.  In  line  with  §18  of  Arbeitslosenversicherungsgesetz  (ALVG) 
and  depending  on  each  person's  previous  work-time  pattern,  the  workers  must 
involve  themselves  full-time,  learning  times  included.  This  is  documented  through 
regular  reports  and  certificates  to  confirm  the  participation  of  the  workers  in  the 
measures. 

–  Information regarding the labour foundation and admission: General information 
for the 210 former workers of Austria Tabak GmbH with the possibility for them 
to apply for admission to the labour foundation. 

–  Occupational orientation: This is the first activity taking place after the worker has 
joined  the  labour  foundation  or  the  support  scheme  organised  by  FAB.  It  is 
budgeted for all 270 workers and normally lasts six weeks, with the possibility for 
extension by a few more weeks in particular cases. It consists of an analysis of the 
vocational and personal potential of each worker and the definition of a realistic 
occupational  pathway  plan  forming  the  basis  for  the  participant's  subsequent 
activities.  During  this  measure,  workers  can  also  follow  short  internships  in  an 
enterprise  (tasters  of  maximum  five days).  Those  having  the  potential  to  create 
their own businesses  are  directed towards the Enterprise Foundation Programme 
of the AMS which is financed outside the EGF. 

–  Individual  training:  This  is  planned  for  225 workers  and  can  cover  any  training 
that  has  been  approved  by  the  public  employment  service  in  its  catalogue  of 
measures  and  which  is  necessary  or  helpful  to  improve  the  chances  for  a  re-
integration  of  the  individual.  Other  courses  can  be  approved  by  the  AMS  on  an 
individual basis if they are in line with the worker's agreed pathway. 

Niederösterreich aims to upskill or retrain as many workers as possible before they 
start  looking  for  new  jobs  in  order  to  prepare  for  the  region's  future  employment 
challenges  (e.g.  response  to  demographic  ageing,  greener  and  knowledge-based 
economy etc.). Depending on their educational and skills levels, the workers have a 
variety  of  possibilities  at  their  disposal.  For  instance,  lower  skilled  people  can 
complete  apprenticeships  reduced  in  time  (about  50 %  of  the  period  normally 

17 

Austrian  labour  foundations  are  an  active  labour  market  policy  instrument  in  Austria  to  improve  the 
labour market position of job seekers. They are based on Arbeitslosenversicherungsgesetz (§ 18) and on 
implementing  directives  issued  by  the  labour  market  service  (AMS).  Latest  AMS  directive: 
http://www.ams.at/_docs/001_ast_RILI.pdf 

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required)  and  follow,  in  parallel,  classroom  courses.  Those  with  higher  technical 
and/or educational backgrounds can enrol in higher technical and vocational schools 
(berufsbildende  höhere  Schulen)  under  Austria's  adult  vocational  education  and 
training  scheme  (zweiter  Bildungsweg  für  Erwachsene).  Retraining  will  be  targeted 
to areas as varied as green jobs, health and care, information technologies, science, 
tourism and other services. 

A part of the studies and vocational training will not need to be co-financed by the 
EGF  because  it  is  financed  within  the  Austrian  education  system  (receiving  mixed 
financing  from  national,  regional  and  local  sources)18.  In  cases  where  an  agreed 
training programme takes longer than the EGF implementation period, the extended 
financing will be provided by Austria. 

–  Consultation  and  support  during  training:  During  the  period  a  worker  is  on 
training  and  qualification  measures,  the  workers  are  followed-up  by  the  career 
development consultants of waff Arbeitsintegrations GmbH and FAB who provide 
support in case of need. This consultant-worker cooperation secures the successful 
completion of the agreed pathway plans. This measure has been budgeted for 225 
workers. 

–  Corporate internships during training: An important aspect of the support package 
is  the  combination  of  theoretical  and  practical  learning.  Three  different  types  of 
internships are envisaged, with different durations and clearly defined rights and 
obligations which need to be agreed by the AMS. This measure has been budgeted 
for 85 workers. 

–  Active  job  search  assistance:  This  provides  the  workers  with  personalised 
assistance to help them find new jobs including techniques on how to prepare for 
job  interviews/selection  tests,  etc.  Depending  on  each  worker's  profile  and 
situation,  the  active  job  search  can  either  start  directly  after  the  occupational 
orientation  or  on  completion  of  the  individual  training  path.  The  public 
employment  services  are  informed  when  the  worker  enters  the  job  search  stage. 
The job seekers can test a future new job during one week. The normal duration of 
this  module  is  limited  to  14  weeks,  renewable  for  an  additional  8  weeks  for 
participants aged over 50 or for an additional 14 weeks for people with a reduced 
working capacity. This measure has been budgeted for 40 workers. 

–  Inplacement: In exceptional and well defined cases, a theoretical qualification - in 
combination  with  practical  on-the-job  training  -  can  be  undertaken  directly  with 
an employer. The rights and obligations for enterprise and worker are laid down in 
a written agreement which has to be approved by the public employment service 
(AMS). This measure provides that the worker is offered contract-based work in 
the enterprise  either directly  after completion of the qualification measures or at 
an agreed date. It has been budgeted for 60 workers. 

–  Intensive support for workers aged over 50: A comprehensive set of measures is 
available  to  cater  for  the  specific  needs  and  circumstances  of  older  workers  to 
facilitate their re-integration into work and recognising their right to employment 
up to pension age. This measure has been budgeted for six workers. 

18 

www.abc.berufsbildendeschulen.at / http://www.kursfoerderung.at/index.php?id=3 
http://erwachsenenbildung.at/themen/lebenslanges_lernen 

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–  Training  allowance  (ausbildungsbedingte  Zuschussleistung/Stipendien)19:  This 
allowance is paid for all 210 former workers of Austria Tabak GmbH only for the 
duration  of  their  participation  in  the  training  measures  within  the  labour 
foundation. The rate is EUR 200 per person and month. It permits the worker to 
cover  travel  expenses  and  the  cost  of  learning  materials.  This  allowance, 
the  subsistence  allowance,  may  not  exceed  a  worker's 
combined  with 
unemployment  benefit  assessment  basis.  Unemployment  benefits  are  interrupted 
during the period these training allowances are granted. 

–  Subsistence  allowance  while  on  training  and  on  active  job  search  measures 
(Schulungsarbeitslosengeld)20:  This  allowance  has  been  budgeted  for  all  210 
former  workers  of  Austria  Tabak  GmbH  only  for  the  duration  of  their 
participation  in  the  training  and  active  re-integration  measures  within  the  labour 
foundation. It permits a serious full-time involvement of each dismissed worker in 
the  measures.  The  approximate  rate  is  EUR  1 000  per  person  /  month,  and  13 
months have been calculated in the budget (average figures, as the actual amounts 
depend on each worker's salary prior to the dismissal and the period during which 
each worker remains in the active measures). This allowance, combined with the 
training allowance, may not exceed a worker's unemployment benefit assessment 
basis. Unemployment benefits are interrupted during the period these subsistence 
allowances are granted. 

–  Subsistence  allowance  while  on  training  and  on  active  job  search  measures,  and 
qualification  bonus  (Beihilfe  zur  Deckung  des  Lebensunterhaltes  (DLU)  und 
Qualifizierungsbonus)21:  This  allowance/bonus  has  been  budgeted  for  60  former 
workers  of  the  suppliers/downstream  producers  only  for  the  duration  of  their 
participation  in  the  training  and  active  re-integration  measures  within  the  EGF 
project  (supported  by  FAB).  It  permits  a  serious  full-time  involvement  of  each 
dismissed worker in the measures.  

Workers who participate in longer training measures (longer than three months with 
a minimum of 25 hours per week) will receive an additional qualification bonus (less 
than EUR 10 per day). 

The approximate rate for the subsistence allowance is EUR 1 000 per person / month, 
and slightly less than 13 months have been calculated in the budget (average figures, 
as the actual amounts depend on each worker's salary prior to the dismissal and the 
period  during  which  each  worker  remains  in  the  active  measures).  This  allowance 
may not exceed a worker's unemployment benefit assessment basis. Unemployment 
benefits are interrupted during the period these subsistence allowances are granted. 

–  Aftercare on a new post: This activity, available upon individual request, can last 
up  to  26  weeks  once  a  worker  has  taken  up  new  work  and  after  having  left  the 
labour  foundation.  This  measure  is  a  contribution  towards  sustainability  of  the 
new employee-employer relationship and helps to prevent job losses. It has been 
budgeted for 37 workers. 

The expenditure for implementing the EGF, which is included in the application in 
accordance  with  Article  3  of  Regulation  (EC)  No  1927/2006,  covers  preparatory, 
information  and  publicity  as  well  as  control  activities  and  the  management  of  the 

Based on § 18 of Arbeitslosenversicherungsgesetz (ALVG). 
Based on § 18 of Arbeitslosenversicherungsgesetz (ALVG). 
Beihilfe zur Deckung des Lebensunterhaltes (DLU), based on § 35 of Arbeitslosenversicherungsgesetz 
(ALVG) and on Federal Directive AMF/3-2012 http://www.ams.at/_docs/001_bemo_RILI.pdf  

24. 

19 
20 
21 

EN 

10 

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25. 

Actions 

labour foundation. The labour foundation management costs are calculated on a flat 
rate basis (EUR 75 000 for the EGF implementation period). All partners involved in 
the measures are committed to communicating the EGF support. 

The  personalised  services  presented  by  the  Austrian  authorities  are  active  labour 
market measures within the eligible actions defined by Article 3 of Regulation (EC) 
No 1927/2006. The Austrian authorities estimate the total costs at EUR 6 064 615, of 
which  the  expenditure  for  personalised  services  at  EUR 5 864 615  and  the 
expenditure for implementing the EGF at EUR 200 000 (3,3 % of the total amount). 
The total contribution requested from the EGF is EUR 3 941 999 (65 % of the total 
costs). 

Estimated 
number of 
workers 
targeted 

Estimated 
cost per 
worker 
targeted 
(EUR) 

Total costs (EGF and 
national cofinancing) 
(EUR) 

Personalised services (first paragraph of Article 3 of Regulation (EC) No 1927/2006) 

Information regarding the labour 
foundation and admission 

Occupational orientation 
(Berufsorientierung) 

Individual training 
(Individuelle Qualifizierung) 

Consultation and support during training 
(Bildungsbegleitung) 

Corporate internships during training 
(Praktika während der Qualifizierung) 

Active job search assistance 
(Aktive Arbeitssuche) 

Inplacement (practical training with a 
new employer, combined with classroom 
training) 

Intensive support for workers  
aged over 50 

Training allowance (ausbildungsbedingte 
Zuschussleistung/Stipendien) 

Subsistence allowance while on training 
and active job search 
(Schulungsarbeitslosengeld)  

210

100

21 000

270

1 090

294 300

225

4 560

1 026 000

225

85

40

60

6

767

200

300

650

200

172 575

17 000

12 000

39 000

1 200

210

3 600

756 000

210

13 000

2 730 000

EN 

11 

   EN 

Subsistence allowance while on training 
and active job search 
and qualification bonus (Beihilfe zur 
Deckung des Lebensunterhaltes (DLU) 
und Qualifizierungsbonus)  

Aftercare on a new job 
(Nachbetreuung) 

60

13 000

780 000

37

420

15 540

Sub total personalised services 

5 864 615

Expenditure  for  implementing  EGF  (third  paragraph  of  Article  3  of  Regulation  (EC)  No 
1927/2006) 

Preparatory activities 

Management of the labour foundation 

Information and publicity 

Control activities 

Sub total expenditure for implementing 
EGF 

Total estimated costs 

EGF contribution (65 % of total costs) 

25 000

75 000

35 000

65 000

200 000

6 064 615

3 941 999

26. 

According to Austria, the measures described above are complementary with actions 
funded  by  the  Structural  Funds.  The  current  Austrian  ESF  Operational  Programme 
under  Objective  2  focuses  mainly  on  the  long-term  unemployed  (and  to  a  lesser 
extent  on  older  workers  and  women  wishing  to  return  to  work  after  longer  career 
breaks),  whereas  the  EGF  aims  to  help  workers  immediately  after  their  lay-offs. 
Since Austria has put in place certification of costs procedures to exclude any risk of 
double financing, there is no overlapping between the two funds. 

Date(s)  on  which  the  personalised  services  to  the  affected  workers  were  started  or  are 
planned to start 

27. 

Austria started the personalised services to the affected workers included in the co-
ordinated package proposed for co-financing to the EGF on 15 November 2011. This 
date therefore represents the beginning of the period of eligibility for any assistance 
that might be awarded from the EGF. 

Procedures for consulting the social partners 

28. 

staff 

representatives  of  Austria  Tabak  GmbH, 
On  11  August  2011, 
Wirtschaftskammer  Österreich  (employer  side),  Arbeiterkammer  Niederösterreich 
(worker side) and the trade unions Produktionsgewerkschaft PRO-GE and GPA-djp 
agreed on a social plan for the dismissed workers which included plans to establish a 
labour foundation to provide the workers with targeted support for finding new jobs. 

EN 

12 

   EN 

 
 
 
 
 
 
 
The  agreement  of  the  social  partners  was  a  prerequisite  for  the  recognition  of  the 
Austria Tabak labour foundation by the Austrian employment services (AMS). 

29. 

Austrian  social  partnership  cooperation  is  a  voluntary  arrangement  of  mostly 
informal  nature  and  is  not  regulated  by  law22.  Only  when  enterprises  decide  to 
participate  in  specific  labour  market  policy  measures  are  they  subject  to  the 
applicable public employment service (AMS) rules. 

30. 

The Austrian authorities confirmed that the requirements laid down in national and 
EU legislation concerning collective redundancies have been complied with. 

Information  on  actions  that  are  mandatory  by  virtue  of  national  law  or  pursuant  to 
collective agreements 

31. 

As regards the criteria contained in Article 6 of Regulation (EC) No 1927/2006, the 
Austrian authorities in their application: 

•  confirmed that the financial contribution from the EGF does not replace measures 
which are the responsibility of companies by virtue of national law or collective 
agreements; 

•  demonstrated that the actions provide support for individual workers and are not 

to be used for restructuring companies or sectors; 

•  confirmed  that  the  eligible  actions  referred  to  above  do  not  receive  assistance 

from other EU financial instruments. 

Management and control systems  

32. 

33. 

34. 

Austria  has  notified  the  Commission  that  Japan  Tobacco  International  (JTI)  and 
Niederösterreich's public employment services (AMS) will provide the 35 % national 
co-financing and are pre-financing the actions. The former will take on 28 % of the 
national co-financing and the latter 72 % (approximate figures). 

Austria confirmed that the financial contribution will be managed by the same body 
that manages the ESF: unit VI/INT/9 within the Federal Ministry for Labour, Social 
Affairs  and  Consumer  Protection  (BMASK  Bundesministerium  für  Arbeit,  Soziales 
und  Konsumentenschutz),  which  will  act  as  managing  authority  and  as  payment 
service. The financial control authority for the EGF is different from that of the ESF: 
unit VI/S/5a within BMASK will take on this function for the EGF.  

The  coordinated  package  of  personalised  measures 
implemented  by 
Unternehmensstiftung  Austria  Tabak  managed  by  waff  Arbeitsintegrations  GmbH, 
Vienna in cooperation with FAB, Vienna and is monitored by the public employment 
service  (AMS).  Furthermore,  the  BMASK  is  supported  by  a  technical  assistance 
provider  who  will  also  act  as  first  level  control.  All  major  arrangements  and 
obligations are laid down in written agreements. 

is 

Financing 

35. 

On the basis of the application from Austria, the proposed contribution from the EGF 
to  the  coordinated  package  of  personalised  services  (including  expenditure  to 
implement  EGF)  is  EUR 3 941 999,  representing  65 %  of  the  total  cost.  The 
Commission's proposed allocation under the Fund is based on the information made 
available by Austria. 

22 

ÖGB website http://www.sozialpartner.at/sozialpartner/Sozialpartnerschaft_mission_en.pdf 

EN 

13 

   EN 

                                                 
36. 

37. 

38. 

Considering the maximum possible amount of a financial contribution from the EGF 
under  Article  10(1)  of  Regulation  (EC)  No  1927/2006,  as  well  as  the  scope  for 
reallocating  appropriations,  the  Commission  proposes  to  mobilise  the  EGF  for  the 
total  amount  referred  to  above,  to  be  allocated  under  heading  1a  of  the  financial 
framework. 

The  proposed  amount  of  financial  contribution  will  leave  more  than  25 %  of  the 
maximum annual amount earmarked for the EGF available for allocations during the 
last  four  months  of  the  year,  as  required  by  Article  12(6)  of  Regulation  (EC)  No 
1927/2006. 

By  presenting  this  proposal  to  mobilise  the  EGF,  the  Commission  initiates  the 
simplified  trialogue  procedure,  as  required  by  Point  28  of  the  Interinstitutional 
Agreement of 17 May 2006, with a view to securing the agreement of the two arms 
of the budgetary authority on the need to use the EGF and the amount required. The 
Commission invites the first of the two arms of the budgetary authority that reaches 
agreement on the draft mobilisation proposal, at appropriate political level, to inform 
the other arm and the Commission of its intentions. In case of disagreement by either 
of  the  two  arms  of  the  budgetary  authority,  a  formal  trialogue  meeting  will  be 
convened. 

39. 

The Commission presents separately a transfer request in order to enter in the 2013 
budget  specific  commitment  appropriations,  as  required  in  Point  28  of  the 
Interinstitutional Agreement of 17 May 2006. 

Source of payment appropriations  

40. 

Appropriations  from  the  EGF  budget  line  will  be  used  to  cover  the  amount  of 
EUR 3 941 999 needed for the present application. 

EN 

14 

   EN 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund in accordance with 
point 28 of the Interinstitutional Agreement of 17 May 2006 between the European 
Parliament, the Council and the Commission on budgetary discipline and sound 
financial management (application EGF/2011/010 AT/Austria Tabak from Austria) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having  regard  to  the  Interinstitutional  Agreement  of  17  May  2006  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 
management23, and in particular point 28 thereof, 

Having  regard  to  Regulation  (EC)  No  1927/2006  of  the  European  Parliament  and  of  the 
Council  of  20  December  2006  establishing  the  European  Globalisation  Adjustment  Fund24, 
and in particular Article 12(3) thereof, 
Having regard to the proposal from the European Commission25, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  European  Globalisation  Adjustment  Fund  (EGF)  was  established  to  provide 
additional support for workers made redundant as a result of major structural changes 
in world trade patterns due to globalisation and to assist them with their reintegration 
into the labour market. 

The scope of the EGF was broadened for applications submitted from 1 May 2009 to 
30 December 2011 to include support for workers made redundant as a direct result of 
the global financial and economic crisis. 

The Interinstitutional Agreement of 17 May 2006 allows the mobilisation of the EGF 
within the annual ceiling of EUR 500 million. 

Austria submitted an application to mobilise the EGF, in respect of redundancies in the 
enterprise  Austria  Tabak  GmbH  and  in  14  suppliers  and  downstream  producers,  on 
20 December 2011  and  supplemented 
to 
9 October 2012. This application complies with the requirements for determining the 
financial  contributions  as  laid  down  in  Article  10  of  Regulation (EC) No 1927/2006. 
The Commission, therefore, proposes to mobilise an amount of EUR 3 941 999. 

it  by  additional 

information  up 

(5) 

The EGF should, therefore, be mobilised in order to provide a financial contribution 
for the application submitted by Austria. 

23 
24 
25 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406, 30.12.2006, p. 1. 
OJ C […], […], p. […]. 

EN 

15 

   EN 

                                                 
HAVE ADOPTED THIS DECISION: 

Article 1 

For  the  general  budget  of  the  European  Union  for  the  financial  year  2013,  the  European 
Globalisation  Adjustment  Fund  (EGF)  shall  be  mobilised  to  provide  the  sum  of 
EUR 3 941 999 in commitment and payment appropriations. 

This Decision shall be published in the Official Journal of the European Union. 

Done at Brussels,  

Article 2 

For the European Parliament 
The President 

For the Council 
The President 

EN 

16 

   EN