International security agreed following acquisition of Areva T&D

In July 2010, two French multinationals, Alstom and Schneider Electric, signed a ground-breaking European-level agreement on job security following the joint acquisition of part of another French company, Areva. The accord includes employment guarantees for the former Areva employees and a commitment to avoid compulsory redundancies before 2013.

On this page:
Acquisition of Areva T&D
Employment guarantees
Integration and training
Social dialogue
Collective agreements
Other issues
An innovative agreement.

Acquisition of Areva T&D

In June 2010, Alstom and Schneider Electric, power and electrical engineering multinationals based in France, jointly acquired the energy transmission and distribution (T&D) business of Areva, a state-controlled French nuclear power group. Areva T&D has operations throughout the world and a total workforce of around 30,000 people. Its transmission activities will become a new transmission division of Alstom, while the distribution activities will be integrated into Schneider Electric's energy business.

Trade unions at Areva T&D had opposed the sale, which was ordered by the French Government in order to raise funds for Areva's core activities. The Areva European Works Council (EWC), while opposing the planned sell-off, met senior managers from Alstom and Schneider Electric in December 2009, and obtained a number of commitments on employment levels and conditions in the T&D activities after the takeover.

Trade unions and the EWCs at Alstom and Schneider Electric also had concerns about the effects on the two companies' employees of the acquisition and subsequent restructuring. In order to achieve an overall set of harmonised, Europe-wide guarantees for the workforces of all three firms, the EWCs and unions mandated the European Metalworkers' Federation (EMF) to negotiate an agreement with Alstom and Schneider Electric. The EMF represents metalworking and engineering workers' unions recognised in the three groups.

An agreement was signed on 5 July 2010. It sets out the commitments made by Alstom and Schneider Electric in December 2009, provides additional detail and specifies the commitments' scope, duration and follow-up procedure.

Employment guarantees

The agreement provides that all employees of Areva T&D at the time of the acquisition will continue in employment in an equivalent position in the same "employment area". This means employment at either the same location as previously or at a site less than one hour's - or approximately 10 km - distance from the previous location. If necessary, this distance will be adjusted in coordination with local employee representatives at the sites concerned. The aim is to avoid any significant increase in employees' commuting time, assessed collectively, compared with the current situation.

The new positions occupied by the former Areva T&D staff will be at the same level as their previous jobs and attract the same remuneration, and the employees will retain their service-related rights.

Except for plans communicated to the employees of Areva T&D prior to the acquisition, and the relocations of staff referred to above, no Areva T&D sites in Europe will be closed before 24 March 2013. No collective redundancy plan - except for voluntary departures - will be implemented in Europe before the same date, unless economic conditions deteriorate significantly. These commitments apply to Alstom's new transmission division and to Schneider Electric's entire energy business. 

Any adaptations of organisation or capacity that might be required to meet market needs will be submitted to consultation with the EMF and the employee representative bodies of the company concerned, before implementation. In the case of Schneider Electric, this process will occur in line with a Europe-wide agreement on "anticipation of change" signed with the EMF in July 2007. This agreement includes provisions on information and consultation with the company's EWC and national employee representative bodies, both "upstream" dialogue on the company's plans and priorities, and ad hoc information and consultation on organisational change plans likely to have an impact on employment.

The commitments to former Areva T&D employees will not be detrimental to other Alstom or Schneider Electric employees.

Integration and training

Alstom and Schneider Electric will implement specific measures for former Areva T&D employees, in order to facilitate their rapid integration.

The training policy implemented by the two groups for the newly integrated activities will support and promote the strategic development of these activities and the development of the employees concerned. A training plan for the T&D employees and associated strategic objectives, setting out the priorities, resources and implementation procedures, will be presented to the two companies' EWCs within six months of the European agreement's signature. The implementation of the plan in each country will be conducted in accordance with local legislation and agreements.

Social dialogue

Alstom and Schneider Electric will maintain social dialogue with trade union and employee representatives in each European country, in accordance with existing collective agreements and national legislation. The two companies will facilitate the rapid integration of the former Areva T&D activities in their existing social dialogue bodies.

The parties to the agreement will rapidly address, during meetings of the two EWCs, the way in which the former Areva T&D transmission activities will be integrated into the Alstom EWC and the distribution activities into the Schneider Electric EWC. The aim is to finalise integration by the end of 2010.

Collective agreements

Alstom and Schneider Electric will assess the group-level collective agreements that apply to Areva T&D, within one year of the integration of its employees into the two companies. This assessment will be discussed with trade union representatives in each company, in order to include the issues dealt with in the Areva T&D agreements in bargaining at Alstom and Schneider Electric, according to the applicable rules at European, national and sector level.  

At European level, in November 2006, Areva signed an agreement on equal opportunities with the EMF. The accord contains provisions on promoting and encouraging equality in the workplace between men and women, and the integration and retention of people with disabilities. This agreement will be placed on the agenda of the Alstom and Schneider Electric EWCs as soon as they have been enlarged to include the former Areva T&D activities.

Other issues

The agreement covers the European countries represented on the Alstom and Schneider Electric EWCs, plus any other EU member states not represented, along with Norway, Switzerland and Turkey.

The signatory parties will meet once a year to ensure that the agreement is followed up at European level. The detailed implementation will be specifically followed up by the Alstom and Schneider Electric groups, both at meetings of their EWCs and at national level in the relevant social dialogue bodies.

The agreement does not replace any more favourable provisions that may be found in national legislation and/or collective agreements concluded by Alstom and Schneider Electric, at local, national or regional level.

An innovative agreement

In a joint press release, the EMF, Alstom and Schneider Electric said that the agreement reflects the two companies' strong commitments on the integration of Areva T&D's employees, and on providing them with "a professional future and better prospects to develop their long-term potential". According to the parties: "The innovative nature of the agreement is illustrated both by its European dimension and its content, which covers employment management in the context of an acquisition."

Multinational companies, notably in the manufacturing and utilities sectors, are increasingly signing European-level agreements with their EWCs and/or European trade union federations, such as the EMF. Aspects of company restructuring are among the most common themes of these agreements, either laying down principles and rules for dealing with restructuring in general or, as with the Areva T&D accord, dealing with the employment aspects of a particular restructuring exercise. Other recent examples of companies signing Europe-wide restructuring agreements include ArcelorMittal (Luxembourg, steel), GDF Suez (France, energy and utilities), General Motors (US, automotive), RWE Energy (Germany, utilities) and, as mentioned above, Schneider Electric. 

The agreement on the employment implications of the acquisition of Areva T&D is unusual because it deals with a complex type of corporate restructuring, in the form of a joint acquisition by two multinationals of part of another group. The agreement is thus the first known deal of this sort to be signed by two companies, and to be negotiated on behalf of three separate workforces by a European-level trade union federation. 

The agreement is also notable for the specific and concrete nature of the commitments made by the companies. In particular, all former Areva T&D employees are guaranteed continued employment in an equivalent job in the same geographical area, and on the same pay. There will (assuming that economic conditions do not deteriorate significantly) be no compulsory redundancies for at least 33 months, affecting either the former Areva T&D staff or the existing Alstom and Schneider Electric employees working in the same divisions.

This article was written by Mark Carley, European editor.