Is a Restructuring Law Good for Employers?

Friday, February 14, 2014 | Published by

Following the lead of the European Parliament, the European Commission recently announced that it too has taken on the prospect of improving corporate restructurings in order to minimize the impact on employees. The “EU Quality Framework for Anticipation of Change and Restructuring” seeks advice and counsel from all stakeholders on the actions necessary to anticipate restructuring and the management of the restructuring processes.

The European Commission has asked employers, employees, social partners, national and regional authorities and trade unions to support the Quality Framework. Additionally, the Commission has asked the parties to cooperate with one another and reach a consensus on the following guidelines:

  • Strategic long-term monitoring of market developments
  • Continuous mapping of jobs and skills needs
  • Measures for individual employees such as training, career counselling and assistance to facilitate professional transitions
  • Involvement of external actors at an early stage, such as public authorities, university, training centres and supply chain
  • Making full use of EU Structural Funds like the European Social Fund and the European Globalisation adjustment Fund in the concerned regions, in order to promote job creation and inclusive transitions.

Similar to the European Parliament’s initiative in the summer of 2013, the European Commission’s announcement has been met with mixed reviews. On the one hand, all parties seem to agree that improving the restructurings process is necessary, but the debate is primarily focused on whether legislative mandates are required to aid in the process, or if in fact such efforts will impede the practice.

In these uncertain economic times, restructurings offer employers the opportunity to redefine their core focus both financially and strategically, since the goal of any restructuring is to ensure the long-term stability of the company. As such, many employers’ organizations remain skeptical of the EU’s efforts. The concern is that these guidelines will result in turning the restructuring process from a means of strengthening or shoring-up a company, to the total annihilation of the company, which is the exact opposite of why companies seek a restructuring in the first place.

In the end, it remains to be seen whether the EU’s efforts will be good or bad for business and how these initiatives could impact employers and their employees throughout the European Union.


For more information about restructurings download L&E Global’s Special Report on International Restructurings. This report covers the types of restructuring methods available to employers, provides statistical analysis on restructuring activities throughout Europe, North America, and the South Pacific, details efforts to improve or minimize restructuring and highlights restructuring trends in the L&E Global member countries:

http://leglobal.org/content/report-on-international-restructurings/

For more information on the EU Quality Framework for Anticipation of Change and Restructuring, please visit:

http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=2012&furtherNews=yes

For more information on the European Parliament’s efforts please see L&E Global’s July 2013 Blog at:

http://blogs.leglobal.org/2013/07/19/is-a-european-union-law-on-corporate-restructuring-inevitable/