THE SOCIAL RESPONSIBILITY APPLIED TO RESTRUCTURINGS

 INTERVIEW  Franck YONBOUE

Press: Can one say that companies go towards restructurings socially responsible?

Franck YONBOUE :  “The idea is that an enterprise could restructure by different ways but a responsible way, which balances the interests of all the stakeholders in the enterprise, is at the same time possible and desirable”.

The restructurings appear since ten years in the European debates. The restructurings of the Sixties justified by the conditions of survival were replaced by the restructurings aiming for the intensification of the competitiveness of companies. This process is still on run, in spite of the periods of economic growth. Whatever their motivations, these restructurings generally result in reductions of manpower and high costs, whereas they are the subject of a legal framing particular. In France the legislation is binding for the employer and is more defending for employees. In spite of this protection of the employees, the evaluation of accompaniment of the restructurings is strongly criticized. Because of this situation, the concept of social responsibility applied to the restructurings will appear.

From now on the restructurings fall under a generalized and continuous movement of the economy (this implies the economic questions, social and of environment).

A-The high cost of the restructurings in spite of an exemplary legal protection

In spite of many waves of restructurings, the topicality of the lay-off remained permanent in France and the right of the lay-off was reinforced. Franck YONBOUE “However, paradoxically the restructurings are characterized by an increase of the costs, which causes interrogations on the relevance of the devices at the same time as a generalized feeling of social insecurity”.

A-a)   An exemplary legal protection

There is a regulation (payment) which frames (supervises) the redundancies (dismissals) at the level of the European community and at the national level. The objective being the job protection. Thanks to the European directives have has a harmonization of the laws of redundancy (dismissal), but he (it) remains partial. There are also directives concerning the restructurings. The big difficulty today, it is to move closer to the legislations of States members on this subject.

In 2001 a resolution of the European Parliament asks to the companies to associate

actively their staffs with the management of the changes in the company. Henceforth to set up a plan (shot) of restructuring, the Direction (Management) of the company will have to inform and consult the representatives of employee. “It is on this continental model that every European country built a legal order, according to the national legislations, the traditions and to the professional system of the relations (MALLET 2002).The French right constitutes all this mixture. It is a mixture which balances between, the social objective of maintenance of the employment of the employees, and that of the safeguarding of the competitiveness of the companies.

We distinguish the law of 3/01/1975 concerning the administrative authorization for the redundancies (dismissals). Since 1986, this law applies only for the protected employees. There is also a law of 1989 on the right (law) for the recon version (retraining) of any employee threatened with redundancy. We also have the measures of redeployment (reclassifying), compensation with the aim of limiting the redundancies (dismissals) and facilitating the redeployment (reclassifying) of the employees the redundancy (dismissal) of which was inevitable. In 27/01/1993 a law comes to strengthen the contents and the control of the massive redundancies (dismissals): plan of protection (saving) of employment. With this law, the employer guarantees the reintegration of the employees on the labour market.

A-b)   Measurements which have a high cost

All the economists affirm that, the French device of accompaniment and reorganization does not achieve the objectives in terms of job security. Often the first victims of the lay-offs are the employees that the law protects and for which the process of reclassification is difficult. His (her) employees are vulnerable because they are old, with a big age (seniority) in the company (society) accumulated by a weak qualification. In spite of the rates of high redeployments (reclassifying), his redeployed (reclassified) employees alternate in the precarious jobs, with weak salaries and strong feeling of uncertainty in front of the future. In front of it we wonder about the practices of companies (societies) and devices of accompaniments, restructurings.

A-b-a)     Critical of the practices of the companies

 More and more the companies (societies) by-pass the massive dismissals of the dismissals by individualizing the dismissals. He begins with an announcement of collective abolition of jobs, in the name of the persons who are going to be dismissed

The objective of the company is to neutralize the collective protections.

By individualizing the dismissals which are really massive dismissals, it allows the companies to escape the rule applicable to the massive redundancy because of the

gravity of the procedures. Thanks to these practices the employer sends back more easily the oldest and little qualified.

They also will practise the voluntary departures, the departures by mutual agreement, of the withdrawals of the labour market. The employees accept the propositions of departure on behalf of the employer because they are encouraged by big allowances of assignments offered by the company the company or the State.

A-b-b)     Inefficacity of the devices of accompaniments

The devices of accompaniment are unsuitable and ineffective (bruggeman 2003). At first the instruments of accompaniment of reconversions are granted that to the employees having a contract of employment. Instruments are uneven according to

companies (societies) and limited to the massive redundancy. The effectiveness of the protection of economic dismissals depends on size and means of the firm. We notice an important number of redundancies in the small companies and the companies in difficulties. The development of the groups of societies and companies in network lowers the number of the beneficiaries of the measures of accompaniments.

The absence of confrontation of points of view with the institutions of representation of the staff, made fail often the measures of accompaniments and of reclassification. They also point out an absence of monitoring of social plans and few firms do not know what their wage earners become after their departure of the firm (Franck YONBOUE).

The creation by the French government of a new instrument to follow the unemployed persons go can be to allow to have a figure on the beneficiaries of the measures of accompaniments. The purpose of this instrument is to indemnify the unemployed persons and to encourage the people in the training during their periods

of unemployment. So that this new instrument is effective the European Commission at the request of France, communicated massively on the social responsibility of companies

  1. B) The social responsibility applied to restructurings

 

It consists in the incentive (incitement) of companies to take into account the social impact of the reductions of Workforce by creating a tax on the redundancy. It is the same principle as that of the polluting payer.

There is another conception which is the negotiated responsibility exercised before and after the process of restructuring. This management innovative of the social responsibility of the company was more initiate (introduced) by the European institutions.

B-a)   The incentive measurements of the European Union

The restructuring within firms in Europe is a major European preference of authorities. In 2001 a commission composed of the representatives of firms of more than 1000 wage earners, and the European economic advice publishes a report on job and structural mutations. This committee has conclude, that it was necessary to protect the workers and to allow flexibility for companies. It is what they call suppleness and security.

This committee invites the countries of the European Union to compensate for the negative impact as regards the work and the working conditions. Consequently the prevention of restructuring is a priority objective of Europe and is inserted into the strategy of Lisbon « future of the economy of the knowledge, the more dynamic competitiveness of Europe ».

 B-b)  Arguments in favour of socially social restructurings of the firm

The arguments are: professional morality and good management. As regards the professional morality, the company worries about social consequences of the restructurings. When the company does not manage to avoid a massive dismissal, it is considered as a failure (defeat) of its policy.

Whereas when the restructuring provokes a true plan of preservation of the employment then we have a positive image of the company. So the massive staff cuts is not necessarily advantageous for the company because sometimes has

unfavourable effects in term of social organization and potentiality of the company. It is true that in the short term the massive reductions of workforce are positive, but long-term they are negative. Today the employer understood that short term strategy drives to inertia of restructurings, and expenses hidden by the accounting system.

Finally the social responsibility of the company is the voluntary integration of the social and ecological preoccupations of companies, in their commercial activities. We distinguish in this approach of the social responsibility of companies: the environment, the social, the economy, and the working conditions. The restructuring is an important decision because affects the production, the level of work and the profits that is why the interest is to reconcile the interests of its three decisions

When the restructuring leads to a massive reduction of the employment, then the firm has the responsibility to accompany the wage earner laid off towards the research of a new contract.

  1. C) The consideration of the environment in the social responsibility of the company

 

If the plurality of the speakers in a project masks the visibility of the people in charge, the entity project is much easier to apprehender. Thus the project establishes (constitutes) an object easier to encircle that the company. The stakeholders to the project are: the local and national associations representant the natural alive environment, the communities and the populations in zones touched by the project. The actions of non-governmental organizations are essential for the actual integration of the Environmental objectives and social in the realization of big projects. The role of the non-governmental organizations is important because the realization of very numerous projects are bound to the policies of developpement in the countries of the South. In the countries of the South, the non-governmental organizations denounce the weakness or the absence of the integration of the environmental and social consequences.

The presence of the non-governmental organizations is important for noting the distance between the speeches, the commitments and the actual practices. Companies are not environment-friendly in the countries of the South. Recently International amnesty asked British oil to modify certain measures which binds her to the State Turk in the project of pipeline because it is opposite human rights. With the creation of the national environmental policy act in 1969, any project which is susceptible to affect the environment been the object of a study and is subjected to the appreciation of the public. Thanks to the national environmental policy act, countries in process of development gradually set up a frame regulation making compulsory the environmental studies of impacts. However the social studies of impact remain weak. The truth talks of the failure of the actual integration of the social impacts and environmental is the corruption of the countries of the South.

With the signature in June, 2003 of the principles of the equator, any bank makes

The decision of financing gives to banks leaders, a powerful control lever on the conditions of realization of a project and on the integration by the promoters of societal objectives. As for all the big companies, the integration of the social responsibility of companies in the strategy of banks joins in the classic objectives of search(research) for legitimacy and for a good reputation quite there now the economic performances.

The big commercial banks who communicate on their social responsibility and are worried about their reputation cannot to lose interest in consequences of their decisions in financing.

 With the signature in June, 2003 of the principles of the equator, any bank makes

voluntarily a commitment to integrate the social aspect and environmental into the decisions of financing of the projects superior to 78 million euro. From now on the principle of the equator is a criterion in the decisions of financing of the projects. When a bank grants a credit of financing of a project, she verify that this criterion is respected at the beginning and at the end of the project. Nevertheless there are always banks and sometimes the World Bank who do not respect this principle because influenced by multinationals.

The integration of the negative impact environmental and social of a project in its conception, suppose a progressive implementation of a learning successive. It means the consideration of the cultures, the traditions, the customs, the political beliefs, the standards of the country which receives the project.

C-a) Some definitions relative to the social responsibility of the company

Unemployment: according to a recent report published in the United Kingdom, for

more than two thirds of the people redundancy has become a fact of life. For some workers, this is still a shock and hard to deal with. Other younger workers take it as an opportunity to start afresh.

The fear of being redundant will make some employees work long hours which means that the will have little time to participate in family life. People who work at management levels at particularly affected by this phenomenon.

Relocation: when a whole factory is closed down and moved to another part of the country or to another country, the employees who in some cases will have worked over thirty years for the firm have little hope of finding another job in the area, unless the local authorities manage to attract other firms to the area.

 

Training: everyone appears to agree that in the future people will be encouraged to train throughout their working lives. Companies will have to accept the fact that even during a flat economy period, it will be important to maintain and develop the skills of their employees.

The economy is increasingly a knowledgedriven one, so businesses will become more dependent on the people employed and their collective knowledge.

 

The environmental: it has taken quite while for most people to face up to the fact that measures must be taken to protect the environment. Global warning has come about mainly because of the emission of toxic gases from the industry and motor vehicles.

The giants agribusinesses argue that genetically modified foods could represent one of the biggest advances ever achieved in farming while environmentalist plus the general public in Europe believe that the could trigger a wide variety of serious environmental and health problems.

 Thank you for Franck YONBOUE to accept this interview (Britain press)

 

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