International: PSA Peugeot Citroën sets up world works council

An updated global social responsibility agreement has been signed between PSA Peugeot Citroën, the France-based automotive multinational, and international trade union organisations in May 2010.

On this page:
Organisation profile
2006 social responsibility agreement
Discrimination and diversity
Forward planning for change
Health and safety
Environment
Monitoring and world works council
"An essential tool for promoting sustainable industrial relations".

Organisation profile

PSA Peugeot Citroën, which has its headquarters in Paris, is Europe's second-largest manufacturer of cars and light commercial vehicles. It has operations in 160 countries worldwide, with major manufacturing and component plants in France, Argentina, Brazil, China, the Czech Republic, Italy, Portugal, Slovakia and Spain.

The group is expanding its production base near the high-potential markets of China, Latin America and Russia. For example, in April 2010 it started work on a new car assembly plant in Kaluga, Russia (owned 70% by PSA Peugeot Citroën and 30% by Mitsubishi of Japan), while in China it has a joint venture with the Dongfeng company and is planning another with the China Chang'an Automobile Group.

PSA Peugeot Citroën has a workforce of 186,000 (including 52,000 at the Faurecia auto components company, in which PSA is the major shareholder). Of these employees, 54% work in France, 32% in other European countries and 13% elsewhere in the world.

2006 social responsibility agreement

In March 2006, the company signed a "global framework agreement on corporate responsibility" with the International Metalworkers' Federation (IMF), and the European Metalworkers' Federation (EMF), which represent around 90 trade unions recognised throughout the group. By concluding an international framework agreement of this sort, PSA Peugeot Citroën joined a group of more than 80 multinational companies, including almost all the major Europe- and US-based automotive groups (such as BMW, Daimler, Ford Europe, General Motors Europe, Renault and Volkswagen).

The 2006 agreement dealt with both human rights and specific HR management and development issues, throughout PSA Peugeot Citroën's global operations. It committed the company to observing human rights and International Labour Organisation (ILO) core labour standards worldwide. These include freedom of association, the right to collective bargaining, the right to equal pay, and bans on forced/child labour and discrimination. With regard to HR management, the agreement provided that PSA Peugeot Citroën would:

• base recruitment on diversity and equal opportunities, avoiding any discrimination;
• develop its employees' skills through continuing training, giving all workers the possibility to benefit from training, particularly programmes aimed at adapting to new technologies, equipment systems and processes;
• promote career development, observing equality principles and using objective and transparent appraisal methods;
• give employees regular information on the group's progress and aspects likely to affect employment and working conditions, both directly and indirectly through local representative structures and trade unions;
• take a "socially minded" approach to developments in its activity, ensuring timely information and consultation for employee representatives and providing accompanying measures for the workers affected;
• pay decent wages and observe equal pay principles, while introducing company-performance-related payments;
• provide welfare and social protection cover;
• observe, as a minimum, national rules on working time, and negotiate over flexible working time and work organisation; and
• provide a healthy and safe work environment.
   

   

  The 2006 agreement dealt with both human rights and specific HR management and development issues, throughout PSA Peugeot Citroën's global operations.

   

Each PSA Peugeot Citroën subsidiary was to negotiate with unions on the implementation of the global agreement's HR management and development principles, in particular those on training, career development and health and safety. The agreement's signatories agreed jointly to decide actions to implement all areas of the accord, taking into account the specific situation of the group's various divisions, leading to the drafting of an action plan in each of the main countries where PSA Peugeot Citroën operates.

The group made a commitment to make the agreement known to its suppliers, subcontractors, partners and distribution networks and demand that they respect the ILO standards referred to (as well as asking its suppliers to obtain a similar commitment from their own subcontractors). Human rights observance was made a key factor in the award of contracts by PSA Peugeot Citroën.

The agreement included a commitment to review and adapt its provisions after three years. This process led to the conclusion of a renewed agreement on 20 May 2010. The PSA Peugeot Citroën accord was already one of the most comprehensive of such international framework agreements, and the revisions have made it even more detailed. The main changes are given below.

Discrimination and diversity

The accord's section on the elimination of discrimination has been expanded and now also covers the promotion of diversity. It states that PSA Peugeot Citroën will not allow any discrimination in recruitment and career development based on:

• origin;
• sex;
• habits;
• sexual orientation;
• age;
• family status;
• pregnancy or maternity;
• genetic characteristics;
• the membership or non-membership (real or supposed) of an ethnic group, nation or race;
• political opinions;
• trade union or mutual activities;
• religious convictions;
• physical appearance;
• family name;
• health status; or
• disability.

The company will apply and promote best practice, beyond the legal rules, and fight racism, sexism, xenophobia and homophobia, and more generally intolerance in respect of differences, and guarantee the respect of private life.

The agreement states that, for PSA Peugeot Citroën, diversity means "working together and enabling all talents to be developed". The group "chooses to employ people of diverse profiles, reflecting society and its environment" and believes that "the coexistence of employees with different profiles is a source of complementarity and social balance". This promotes the "confrontation of ideas" and "economic performance". Managing diversity means managing skills, independently of any other criterion.

The 2006 agreement included a statement that the company recognises the principle of equal pay, especially between men and women, for work of equal value and performance. The revised text adds that this principle is applicable whatever the contractual arrangements are under which workers are employed.

Forward planning for change

The revised agreement includes a new section on "forward planning for changes to professions and jobs". This reflects the concept of "forward-looking management of employment and skills" (gestion prévisionnelle des emplois et des competences, GPEC), an HR approach promoted by legislation in France. GPEC seeks to forecast a company's future jobs and skills needs and adapt employees to them - through measures such as skills assessments, training and redeployment - so as to prepare for change, maintain employment levels and give employees more secure career paths.

The PSA Peugeot Citroën accord promotes: forward planning to address changes to occupations and jobs, and developments in technologies and products; better forecasting of the skills that group companies will need; and making employees aware of industrial, organisational and technological developments and changes.

This "anticipation" approach requires a thorough knowledge of the company's strategy and the major issues and elements that influence this strategy. With this in mind, PSA Peugeot Citroën has set up a "strategic joint committee" involving management and union representatives. This body looks in depth at issues linked to the company's situation and at short- and medium-term policies, and at the resulting changes in occupations and jobs. The committee was initially restricted to France but, given the strategic aspect and international dimensions of the issues dealt with, it has included non-French union representatives since 2008.

The revised agreement provides that management in other countries will develop forward-planning measures to address changes in jobs and occupations in the automotive industry by identifying the occupations that are either growing in importance or at risk from technological, organisational and economic changes.

PSA Peugeot Citroën will "strive to accompany its employees in all changes to activities and employment". It aims to implement necessary changes as part of a continuous process, avoiding "sudden breaks and hasty redeployment".

Beyond the organisation itself, another addition to the agreement states that the company will participate in "structured discussions" within the wider automotive industry and promote social dialogue in the sector, particularly on the issue of forward planning for economic, technical, industrial and social changes.

Health and safety

The agreement's provisions on "safety, working conditions and health" have been strengthened, notably in terms of commitments to apply occupational safety management systems, and to address particular workplace problems such as stress.

The revised accord states that for PSA Peugeot Citroën, the "only acceptable target is an accident-free workplace". The group undertakes to ensure that efficient occupational health and safety policies based on prevention are set out in the various establishments in the form of a management system for occupational safety. This involves everyone according to his or her level of responsibility, including management and union representatives.

The company undertakes to gradually improve the ergonomics of workstations. It will seek, for each employee, a position in accordance with his or her aptitudes, without discrimination. It will also work to reduce physical, postural, cognitive and mental loads, and to promote wellbeing in the workplace.

PSA Peugeot Citroën will pursue an active health policy as a priority. This will be directed towards the prevention of illnesses that may appear or develop through work activity, including "psycho-social" risks, situations of harassment and stress, musculoskeletal problems and risks arising from chemicals and driving.

The group will also support health professionals in providing information and prevention initiatives for employees on subjects such as tobacco dependency, alcoholism, drug dependency, AIDS or STDs.

Environment

Unlike many other such international framework agreements, the 2006 accord at PSA Peugeot Citroën did not include any provisions on environmental issues. The revised agreement remedies this gap, and the company is now committed to:

• respecting relevant international, European and national statutory obligations, and having a permanent concern for improving safety, protecting health and the environment, preserving natural resources and minimising the impacts on the environment of the group's activities;
• using natural and energy resources (water, raw materials, gas, electricity, fuel, etc) responsibly;
• contributing to combating climate change, by identifying direct and indirect sources of greenhouse gas emissions, measuring them and implementing measures to reduce them gradually;
• making efforts to develop products that are "increasingly respectful of the environment" in terms of carbon dioxide and pollutant emissions and the use of natural resources;
• introducing manufacturing methods whose impact on the environment is as low as possible, by controlling air, ground and water pollution, and other impacts on the environment and third parties (noise, odours, etc);
• promoting environmental protection initiatives with its customers, suppliers and other stakeholders; and
• ensuring that each subsidiary makes trade union organisations and employee representatives aware of its actions, good practice and results in the environmental field.

The group's production sites already have an environmental management system, based on international standards, which involves and mobilises all managers and provides for employee training.

Most non-production sites apply environmental measures and management adapted to their particular challenges. At all sites, the organisation seeks to develop its employees' awareness and skills in respect of environmental challenges. Further, the company offers solutions "enabling its employees to adopt cleaner types of conduct", for example through streamlining work travel and commuting, and promoting "more ecological behaviour".

Monitoring and world works council

The 2006 agreement provided that, at national level, its implementation would be monitored each year in the main countries where PSA Peugeot Citroën operates by "local social observatories", made up of HR managers and union representatives, on the basis of a common monitoring document drawn up by the signatories to the global agreement.

At overall group level, a report on the agreement's implementation in the various countries was to be presented each year to the EWC. Further, given the global development of the group, the signatories agreed that it would be appropriate, in due course, to create a world works council. Initially, the EWC was expanded to include, as observers, union representatives from non-European countries where the workforce was large enough (ie more than 500) to warrant representation under the EWC's rules. After three years, the signatories would decide on transforming the EWC definitively into a world works council.

The amended agreement retains this two-tier monitoring system. With regard to the local social observatories, the accord now specifies that they will be set up in countries where the company has more than 500 employees, and that their operation will allow each trade union organisation (or, in their absence, employee representative bodies) to give its opinion as part of the annual monitoring process.

At group level, the revised agreement definitively converts the EWC into a world works council. The current EWC is enlarged to include union representatives from non-European countries with more than 500 PSA Peugeot Citroën employees, such as Argentina and Brazil. These representatives will attend plenary meetings of the council, both to participate in monitoring the implementation of the global agreement and to receive the information about the group's general situation and strategies that is normally on the EWC's agenda. The non-European representatives may participate in discussions, with the exception of those that are particular to the EWC's remit (such as appointment of the EWC's secretary and assisting experts, and specific consultations based on the EWCs Directive or the 2003 agreement establishing the PSA Peugeot Citroën EWC).

Each plenary meeting of the world works council will be preceded by a preparatory meeting of the employee representatives, attended by representatives of the IMF and the EMF.

The world works council will receive specific information on the overall implementation of the agreement's new provisions on environmental protection. It is due to hold its first meeting in late June 2010.

With the confirmation of its earlier experimental arrangements, PSA Peugeot Citroën has become one of a small but growing group of multinational companies with a world works council, which includes other major automotive groups such as Renault (France), Daimler (Germany) and Volkswagen (Germany). These councils have been set up in various ways, including:

• as an additional worldwide layer of information and consultation, alongside a Europe-specific EWC;
• through the creation in a multinational without an existing EWC of a wider global body incorporating the functions of an EWC; or
• through the expansion of an existing EWC.

PSA Peugeot Citroën has taken the third route, alongside companies such as Renault, Danone (France, food), Lego (Denmark, toys and theme parks) and Skandia (Sweden, insurance).

"An essential tool for promoting sustainable industrial relations"

Denis Martin, PSA Peugeot Citroën's director of HR, said that the amended agreement marks "a new and important phase in the deployment of the group's policy of social responsibility". It is "consistent with the group's vision, in particular as regards responsible development vis-à-vis the women and men of the group".

The general secretary of the IMF, Jyrki Raina, welcomed the improvements to the 2006 agreement and in particular the creation of the world works council, in view of the company's international expansion. He added: "This new agreement is an essential tool for promoting sustainable industrial relations and decent working conditions in PSA Peugeot Citroën, its suppliers and subcontractors." Bart Samyn, the EMF's deputy general secretary, said that he was very satisfied with the revised accord: "It poses new and major challenges, particularly the area of the environment. I look forward to seeing how they will be met."

This article was written by Mark Carley, European editor.

European employment policy, practice and law, June 2010