Marks & Spencer closures fuel EU labour law debate

Commission steps up efforts to formulate stricter EU labour law placing greater responsibility on companies undergoing restructuring

The EU is currently discussing a new directive for information and consultation of workers when companies engage in industrial restructuring and is coming under increased pressure from public opinion in the wake of the announced Marks & Spencer closures.

The Commission is now also considering a directive about how companies should prepare for restructuring. However, the business community will most likely look very critically at any legislation pertaining to how companies manage industrial change.

It is not clear if the Commission is trying to pre-empt the discussion in the Council by announcing it will issue a list of company guidelines in May to be followed when announcing redundancies. This list will include actions, activities and initiatives that companies can use in order to anticipate redundancies.

 

European Commissioner responsible for employment, Anna Diamantopoulou, seemed pleased with the ruling: "It sends a political signal that companies have to respect their workers at least as much as they respect their shareholders,".

The UK and Ireland are strongly resisting the adoption of the consultation directive and are getting support from EU's employers' federation Unice.

Europe's trade union representation ETUC wants the "Works Council Directive" (the so called "Vilvorde Directive") to be reinforced.

 

Following on from a French court's ruling on the controversial Marks & Spencer closure in France, the Commission announced on 11 April that it will step up its efforts to formulate new EU labour law. According to the Commission, such legislation would place greater responsibility on the shoulders of companies with respect to workers consultation and retraining when companies undergo restructuring.

 

The EU is currently discussing a new directive for information and consultation of workers and the general feeling is that there is an urgent need to reach agreement. The Commission is expecting a wave of redundancies in Europe over the next couple of years and the Marks and Spencer case is bringing the debate on how to best to prepare for this back to the fore. French courts had earlier ruled that the UK retailer Marks and Spencer broke France's labour law, by not consulting its workers over the closure of stores.

 

The consultation Directive will next be discussed at the EU employment council on June 11. Although the consultation rules could be passed by qualified majority, Commissioner Diamantopoulou and many Member States would prefer to see a consensus solution.

Ms Diamantopoulou is also planning to announce an initiative in June on corporate social responsibility that includes companies' responsibilities to employees as well as to other areas such as the environment and human rights.

As for industrial change legislation, the Commissioner confirmed that this is a longer-term project not slated to be discussed with industry before summer.

 

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