EUROPEAN REVIEW

ISSUE 37 - Page 3

THE SHOCK ANNOUNCEMENT IN NOVEMBER that Volkswagen were to lay off about 4,000 workers in Belgium and move production to Germany has sparked an intense debate about both the new ‘globalisation fund’ agreed by EU ministers in 2005 and the practical effectiveness of employee consultation. Under the restructuring plan an estimated total of 10,000 jobs, including suppliers, will be lost in Belgium which has caused Prime Minister Guy Verhofstadt to accuse the firm of acting according to ‘national interests’. However another 20,000 redundancies are planned in Germany where Volkswagen has been under pressure to cut costs in competition with Japanese carmakers and sacked their chief executive, Bernd Pischetsrieder, shortly before the announcement.
Trade unions and Socialist MEPs quickly drew the conclusion that consultation with the workforce had not been adequate ‘We have received confirmation that the workers were not informed in good time about the restructuring plan being envisaged by the German company’ said Stephen Hughes, a British Labour MEP. Their opinion was not changed by the news that the new ‘globalisation adjustment fund’ could not be used to help the redundant employees as the jobs were not relocating outside the EU. However some MEPs were in favour of changing the proposal by passing a ‘VW amendment’. The European Trade Union Confederation (ETUC) advocated widening the terms of reference still further by using the green paper on ‘Modernising labour law’ (see page 6) put forward by the EU Commission to address the issues of working time, temporary agency work, European Works Councils (EWC), information and consultation, and restructuring.
The European Metalworkers’ Federation (EMF) objected strongly to the cuts but also stressed solidarity action. A new Trade Union Coordination Group was set up based on Volkswagen’s European Works Council (EWC) with representatives from eight different EU countries. Although prepared to organise Europe-wide action, the group also took part in national demonstrations in Belgium while German workers refused any increase in working time as a result of the redundancies. VW EWC Chairman, Bernd Osterloh called on management to produce ‘A medium-term industrial plan and develop a European concept which would promote VW cars in Europe and secure production sites.’ The EMF and the ETUC jointly wrote to the European Commission President José Manuel Barroso to plead for a more active industrial policy instead of the ‘The benign neglect approach currently prevailing’.

Lithuanian unions take on employers over long hours

THE SMALL BALTIC STATE OF LITHUANIA has experienced both runaway economic growth (7%-10% a year since 2002) and a large-scale outflow of workers to the more prosperous parts of the EU since it joined in 2004.

These two factors have combined to cause a labour shortage, a problem which employers constantly raise with the government. Now they want to go one step further and change the law on working hours. At present the labour code forbids working more than 48 hours in any seven day period including overtime. The Lithuanian Confederation of Industrialists (LPK) wants to extend this limit to 60 hours claiming that ‘With a week of 40 working hours, we’ll never reach EU living standards’. Trade unions however blame low wages for the Lithuania’s lowly position in the EU rich  list. The LPSK union confederation organised		protests at LPK offices throughout the country, culminating in a mass rally in the capital Vilnius, to oppose increased working hours, stressing that the minimum wage should be raised to 50% of the average salary so that the country can begin to bring its living standards in line with EU averages. There is some confusion as to whether such a change in the law would contravene EU directives. The recently elected social democratic government believes that this is allowable when a Member State is experiencing a labour shortage but unions say that the 2003 law which extended the Working Time directive does not permit the increase.
	Vilnius workers protest against longer hours

The recently elected social democratic government believes that this is allowable when a Member State is experiencing a labour shortage but unions say that the 2003 law which extended the Working Time directive does not permit the increase. The new government is thought to be more favourable to trade unions and social dialogue than its predecessor and is undecided on whether to agree to the employers’ unilateral request.