Committee saves jobs in ArcelorMittal

With more than 6,000 employees in Luxembourg, ArcelorMittal, one of the world leaders in steel production, is also the largest private employer in the country. In February 2011, ArcelorMittal’s local management announced that more than 250 full-time jobs in the company’s Rodange and Schifflange plants were threatened following a fall in demand for steel and continued financial losses at the company. The government and trade unions mobilised quickly to find a solution.

Steel industry tripartite coordination committee

In 1977, the Luxembourg steel industry experienced a deep crisis which led the government to establish a steel tripartite conference. The important role played by social dialogue and consensus in overcoming this particular crisis was commonly acknowledged, and so sectoral tripartite discussions became a permanent platform for social dialogue in the steel industry.

Recent events have demonstrated that the tripartite coordination committee is as relevant today as it was forty years ago.

Between 2009 and 2010, two sites of the major steel producer ArcelorMittal, in Rodange and Schifflange, made losses totalling €78 million, representing an average loss of €3 million per month, mainly as a result of the drop in demand in the construction sector. Confronted with the prospect of mass unemployment, the Steel Tripartite Coordination Committee demonstrated its capacity for action.

In April 2011, representatives of the government, trade unions and ArcelorMittal management had already managed to reach a framework agreement that ultimately led to a final rescue plan being approved on 16 June 2011.

Maintaining employment as the main objective

The agreement includes cost-cutting measures which, it is anticipated, will sustain production at both sites. Naturally, these cost-cutting strategies also aim to reduce the number of job losses and the company has envisaged a final workforce of 888 employees, representing a cut of 262 full-time jobs.

On this issue, Minister of Labour Nicolas Schmit made the point that downsizing was not a feature of the traditional Luxembourg social model and highlighted the value of instruments that have played an important role over the past thirty years, such as redeployment and reclassification.

Hence, out of the 262 full-time jobs that fall within the scope of the cost-cutting measures, 132 will be deployed across the country to other plants within the company while the remaining 130 employees will be referred to reclassification units where they will perform tasks traditionally undertaken by subcontractors.

The non-profit association a.s.b.l. Sidérurgie welcomed this rescue plan with relief. It brings together the two trade unions the Luxembourg Confederation of Independent Trade Unions (OGB-L) and the Luxembourg Christian Trade Union Confederation (LCGB).

However, this success has been tempered by the fact that 26 full-time jobs in the computer services department are expected to be transferred to an external company and were not covered by the rescue plan.

A long-term steel strategy is needed

The pending issue concerning the fate of the computer services department led the sector’s workforce representatives to express further concerns. Indeed both OGB-L and LCGB, through a.s.b.l. Sidérurgie, urged their negotiating partners to commit to comply with the principles that govern the Luxembourg social model and to the agreements reached in the sector in the past.

President of a.s.b.l. Sidérurgie, John Castegnaro, warned in an interview published in Le Quotidien (in French) that dismissing staff should never become the norm and added that the next tripartite agreement should be designed to guarantee the sustainability of the Luxembourg steel industry.

In that context, the association has invited ArcelorMittal’s Managing Director, Michel Wurth, to negotiate an emergency agreement with a view to resolving the difficulties within the computer services department, as set out in a press release dated 16 June 2011 (in French, 78kb PDF).

Commentary

Although it is clear that the tripartite coordination committee has failed to prevent all redundancies, the social partners have made it clear that prevention and anticipation still remain the most appropriate remedies.

Guy Castegnaro and Ariane Claverie, Castegnaro Cabinet d'avocats, HERA