On 31 March 2011, the European Commission terminated its contract for the provision of security services in its Luxembourg premises with Luxembourg firm G4S Security Services S.A. and transferred the contract to a Belgian competitor, CobelGuard Security. What could have been an ordinary procurement matter has resulted in a difficult situation for 173 full-time workers of G4S at the EU Commission, who may have to decide whether to choose to work for CobelGuard instead.
Is the voluntary transfer of contracts the answer?
After much suspense and even a temporary suspension of its tender, the EU Commission announced on 11 March 2011 that its contract with G4S would not be renewed. Since then, the new contractor CobelGuard has been under severe pressure as it doesn’t have enough employees to take on the contract, according to a report in L'Essentiel (in French) on 8 March 2011.
For this reason, CobelGuard invited G4S to negotiate the transfer of 173 full-time employment contracts for staff currently dedicated to the EU Commission.
G4S effectively has three options, as reported on 10 March 2011 in Le Quotidien (in French):
- terminating all 173 employment contracts;
- dividing the 173 workers between other sites under continuing contracts with G4S;
- agreeing to transfer all 173 employment contracts to CobelGuard.
The third option could result in the voluntary enforcement of rules contained in the labour code related to the transfer of undertakings.
What happens under a transfer
A transfer of an undertaking automatically triggers the transfer of existing employment contracts to the transferee as outlined in article L.127-3 of the labour code (in French, 1Mb PDF).
The terms and conditions resulting from any collective bargaining agreement (CBA), which apply to the transferor before contracts are passed over, must be continued by the transferee until they expire, or until a new CBA enters into force.
G4S management firmly rejected the last solution, arguing that it would not give up 173 members of its qualified workforce, considering the huge investment it had made in the past with vocational training for its employees.
Response to rejection
In response to the refusal of G4S, CobelGuard Security has taken several initiatives:
- it launched a huge staffing campaign explicitly aimed at the employees of G4S posted to the EU Commission;
- it gave trade unions written confirmation that each employee would be guaranteed the same remuneration and seniority acquired at G4S;
- it promised to take on the collective defence of employees who might be sued by G4S for breaking their employment contracts without respecting the notice period, outlined in a company newsflash ( in French, 148Kb PDF) sent out to employees on 21 March 2011.
Anger and consensus among the trade unions
The trade unions are obviously convinced by the legitimacy of the third choice – the transfer of employment contracts.
The Neutral Union of Luxembourg Workers (NGL/SNEP) openly encouraged its members to resign from G4S and join CobelGuard Security, and denounced in a press release (in French) on 17 March 2011 what it called a ‘hostage taking’ of employees by G4S.
As for the Luxembourg Confederation of Christian Trade Unions (LCGB), reported to be the controlling trade union in the sector, it severely blames the EU Commission for having played a key role in the current deadlock. In a report in Le Quotidien (in French) it said the Commission had put unjustified pressure on the two security companies, thus destabilising employment.
In the long-run, the LCGB is arguing for a legal framework that would enable social partners to cushion the threat to jobs imposed by the termination of a contract for service provision by security firms.
A ‘social blood bath’
The most striking response is the quite neutral attitude adopted by the government through the voice of its Minister of Labour Nicolas Schmit, who just referred to a principle of ‘liberty’ in the choice of employer by employee and pointed at the need to preserve a ‘peaceful social climate’, as reported in a CobelGuard company newsflash (in French, 147Kb PDF) on 21 March 2011.
CobelGuard Security, in contrast, predicted a ‘social blood bath’, as reported in Paperjam (in French) on 29 March 2011. This harsh language reflects the pressure experienced by the new contractor, which needs to be able to post 190 security officers to the EU Commission on 1 April 2011.
Needless to say G4S has definitely not heard the last of CobelGuard Security, since a complaint was lodged with the EU Commission on 29 March. The Commission will have to confirm or deny that the Belgian firm has been restricted in its freedom of provision of services.
Guy Castegnaro & Ariane Claverie
Castegnaro Cabinet d'avocats, member of Ius Laboris