Explanatory Memorandum to COM(2022)35 - Globalisation Fund application from France - EGF/2021/007 FR/ Selecta - Main contents
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| dossier | COM(2022)35 - Globalisation Fund application from France - EGF/2021/007 FR/ Selecta. |
|---|---|
| source | COM(2022)35  |
| date | 07-02-2022 |
CONTEXT OF THE PROPOSAL
1. The rules applicable to financial contributions from the European Globalisation Adjustment Fund for Displaced Workers (EGF) are laid down in Regulation (EU) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/2013 1 (hereinafter called EGF Regulation).
2. On 12 October 2021, France submitted an application EGF/2021/007 FR/Selecta for a financial contribution from the EGF, following displacements in Selecta in France.
3. Following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of the EGF Regulation, that the conditions for awarding a financial contribution from the EGF are met.
SUMMARY OF THE APPLICATION
| EGF application | EGF/2021/007 FR/Selecta |
| Member State | France |
| Region(s) concerned (NUTS 2 level 2) | All French NUTS level 2 regions in mainland France are affected, except Limousin (FRI2) |
| Date of submission of the application | 12 October 2021 |
| Date of acknowledgement of receipt of the application | 26 October 2021 |
| Date of request for additional information | 26 October 2021 |
| Deadline for provision of the additional information | 18 November 2021 |
| Deadline for the completion of the assessment | 7 February 2022 |
| Intervention criterion | Article 4(2)(a) of the EGF Regulation |
Primary enterprise | Selecta |
Number of enterprises concerned | 1 |
| Sector(s) of economic activity (NACE Revision 2 division) 3 | Division 46 (Wholesale trade, except of motor vehicles and motorcycles) |
| Reference period (four months): | 1 June 2021 – 1 October 2021 |
| Number of displacements during the reference period (a) | 294 |
| Number of displacements before or after the reference period (b) | 179 |
| Total number of displacements (a + b) | 473 |
| Total number of eligible beneficiaries | 473 |
| Total number of targeted beneficiaries | 473 |
| Budget for personalised services (EUR) | 4 766 930 |
| Budget for implementing EGF 4 (EUR) | 26 360 |
| Total budget (EUR) | 4 793 290 |
| EGF contribution (85 %) (EUR) | 4 074 296 |
ASSESSMENT OF THE APPLICATION
Procedure
4. France submitted application EGF/2021/007 FR/Selecta within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 12 October 2021. The Commission acknowledged receipt of the application and requested additional information from France on 26 October 2021. Such additional information was provided within 15 working days of the request. The deadline of 50 working days of the receipt of the complete application within which the Commission should finalise its assessment of the application's compliance with the conditions for providing a financial contribution expires on 7 February 2022.
Eligibility of the application
Contents
- Enterprises and beneficiaries concerned
- Intervention criteria
- Calculation of displacements and of cessation of activity
- Eligible beneficiaries
- Description of the events that led to the displacements and cessation of activity
- Expected impact of the displacements as regards the local, regional or national economy and employment
- Complementarity with actions funded by national or Union funds
- Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
- Targeted beneficiaries
- Proposed measures
- Estimated budget
- Period of eligibility of expenditure
5. The application relates to 473 displaced workers whose activity has ceased in Selecta. This enterprise operates in the economic sector classified under the NACE Revision 2 division 46 (Wholesale trade, except of motor vehicles and motorcycles). The redundancies are spread throughout mainland France 5 .
6. France submitted the application under the intervention criteria of Article 4(2)(a) of the EGF Regulation, which requires the cessation of activity of at least 200 displaced workers over a reference period of four months in an enterprise in a Member State, including workers displaced in suppliers and downstream producers and / or self-employed persons whose activity has ceased.
7. The reference period of four months for the application runs from 1 June 2021 to 1 October 2021 during which 294 workers were displaced by Selecta.
8. The cessation of activities of the displaced workers during the reference period has been calculated from the date of the employer's individual notice to lay off or to terminate the contract of employment of the worker.
9. In addition to the workers already referred to, the eligible beneficiaries include 179 displaced workers whose activity ceased before or after the reference period of four months. All these workers ceased their activity within six months before the start of the reference period on 1 June 2021 and/or between the end of the reference period and the day before the adoption of this proposal. A clear causal link can be established with the event that triggered the cessation of activity of the displaced workers during the reference period.
10. Therefore the total number of eligible beneficiaries is 473.
11. Sales by vending machines have been hit hard by the economic and financial consequences of the COVID-19 pandemic. According to EVA (European Vending & Coffee Association 6 ), the drop in sales and turnover was much larger in 2020 than during the economic and financial crisis 7 . In April 2020, 58% of the vending machine operators in Europe declared turnover losses between 61% and 99%, year-on-year. In September, 48% of the operators declared a reduction in turnover between 21% and 40% year-on-year 8 .
12. In France there are about 600 000 vending machines, 70% in businesses and 30% in public places. According to NAVSA 9 , the French Organization for Automatic Sales and Services, although vending machines were allowed to continue operating during the pandemic, the sector found itself in a situation of inactivity/limited functioning. The inactivity was triggered either by the closure of the sites where the machines were located (business and public places such as airports, railway stations, etc.) or by lack of access to the vending machines in the open sites. Access to the vending machines was restricted to avoid people gathering at the machines’ vicinity and not because of health threatens related with the functioning of the machines.
13. Once the lockdown was softened, machine/site access was eased. However, sanitary measures still lead to interruption or restriction of sales by vending machine (e.g. ban on selling non-essential items; recommendation not to drink or eat in the public transport network; etc. 10 ). Furthermore, massive teleworking caused a sharp drop in consumption at the workplaces. A majority (90%) of European vending machine operators reported being affected by people working from home, as more than 80% of vending activity occurs in workplaces 11 . In France, the vending machine businesses in the Île-de-France region lost 70% of turnover (September 2020 year-on-year) because of telework 12 .
14. According to NAVSA the turnover of the sector in France dropped between 50 and 90% in 2020 compared to 2019, putting at risk about 25 000 jobs 13 . For 2021, the forecast is that the activity of the sector will reach 25% of the pre-pandemic level 14 .
15. The fall in the number of visitors to places where Selecta’s vending machines are located, following the lockdown, resulted in a drastic fall in turnover per machine. According to Selecta, despite the recovery of activity in summer 2020, the replenishment of the machines was down by 47%, compared to February 2020, the last pre-pandemic month.
16. Selecta operates in a mature market. Thus, the competition is fierce and leads to low sales prices for products sold from vending machines and high fees paid for the rented space where the machines are installed. This narrows the operators' profit margins.
17. Despite re-negotiating contracts in an attempt to curb loss-making, exacerbated by fixed cost and falling sales, Selecta recorded operating losses of EUR 60 million in 2020. In the first half of 2021, turnover improved by 0,4% compared to 2020. However the turnover is about half (-48,3%) of what it was in 2019 15 .
18. Faced with these economic difficulties, the enterprise drew up a plan consisting of the reorganization of activities and the displacement of 473 workers.
Expected impact of the displacements as regards the local, regional or national economy and employment
19. The region Île-de-France (32%) and and the city of Lille (13%) have been most affected by displacements in Selecta.
20. The French authorities explain that the deterioration of the labor market in Île de France, as in the rest of France, was a consequence of the health crisis, and particularly the first confinement (March 17-May 10) during which economic activity almost stopped. The number of unemployed in Île-de-France increased by 8,6% (2020 Q4 year-on-year), with more than one million 16 registered job seekers 17 and an unemployment rate of 8,3%. In October 2021, the unemployment rate was 7,6% and the number of job seekers was slightly down compared with 2020 Q4, but still above one million 18 job seekers 19 .
21. In 2021 Q3 year-on-year, the number of job seekers fell by 1,8% for men and by 2,3% for women in Île-de-France. Per age group, the number of job seekers under 25 years old fell by 5,7% and by 3,2% for the age group 25 to 49, while number of job seekers aged 50+ increased by 2,1% 20 .
22. Lille ranks 195th out of 321 French employment zones 21 . The registered unemployment rate in 2021 Q1 in Hauts de France, where Lille is located, was 9,4% 22 . In October 2021, 52% of the registered unemployed were men and 48% women. By age group, the unemployed up to 30 years represented 32%; the 54+ represented 12% and the group 30 to 54 years old 56%.
23. The French labour administration specified that Selecta’s restructuring affected the employment balance in the territories concerned. Consequently, it notified the enterprise of its obligations regarding the revitalisation of employment in such territories. The enterprise has to provide actions such as direct employment aid, funding of prospective studies, financial contribution to mutual funds for revitalization in the region, etc. 23 designed to promote new economic activities and the creation of jobs to make up for those lost.
Application of the EU Quality Framework for anticipation of change and restructuring
24. France has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring were taken into account. According to the French Labour Code, a company in bonis (i.e. not in liquidation) and employing 1 000 employees or more, is responsible for the full costs of accompanying active labour market measures for staff dismissed as a consequence of organisational restructuring for four months. On a voluntary basis the enterprise may extend the compulsory four months period. An intervention by public authorities is foreseen only after the end of the measures provided by the dismissing enterprise.
25. The French authorities indicated that staff and union representatives are closely involved in the organisational plans to adapt to change. They also highlighted that Selecta put in place a very active training policy that goes far beyond its legal obligations. In 2021, the training budget per worker was 30% higher than in 2019 with the aim of improving staff’s employability and mobility.
26. Regarding the activities already undertaken for the assistance of the displaced workers, France has indicated that the implementation of accompanying active labour market measures part of Selecta’s legal obligation started immediately after the dismissals.
27. France has confirmed that the measures described below receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.
Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
28. France has indicated that the co-ordinated package of personalised services was drawn up in consultation with staff and union representatives. In a series of meetings between Selecta and CGT, FO, CFDT and CFE-CGC 24 , the negotiating parties designed the package of measures to help the employees concerned. These rounds of internal negotiations started on 14 October 2020 and ended on 12 February 2021.
Targeted beneficiaries and proposed measures
29. All 473 displaced workers are expected to participate in the measures. The breakdown of these workers by gender, age group and educational level is as follows:
| Category | Number of expected beneficiaries | ||
| Gender: | Men: | 367 | (77,6 %) |
| Women: | 106 | (22,4 %) | |
| Non-binary | 0 | (0,0 %) | |
| Age group: | Below 30 years: | 36 | (7,6 %) |
| 30-54 years: | 348 | (73,6 %) | |
| Over 54 years: | 89 | (18,8 %) | |
| Educational level | Lower secondary education or less 25 | 141 | (29,8 %) |
| Upper secondary 26 or post-secondary education 27 | 189 | (40,0 %) | |
| Tertiary education 28 | 143 | (30,2 %) |
30. The measures for which the French authorities seek EGF co-financing relate to the extension of the duration of the redeployment leave ("congé de reclassement") 29 , beyond the enterprise’s legal obligation. This measure is intended for dismissed workers and for workers who at the time of their voluntary departure, did not yet have any precise plans for redeployment and wished to benefit from retraining measures, advice, guidance or assistance to set up or take over a business, etc.
31. The personalised services to be provided to displaced workers consist of the following measures:
–Advisory services and vocational guidance: The workers will be accompanied and oriented towards their projects for redeployment as workers or self-employed persons. The participants will receive job-to-job counselling and guidance, job search support, coaching, information on available training, and promotion of entrepreneurship. Within this measure, workers will be provided with outplacement opportunities resulting from active job-search carried out by specialists.
–Psychological support unit: Face-to-face and online psychological support will be provided by specialists in psychosocial risk prevention in reorganisation contexts.
–Training: The workers will be offered a variety of trainings tailored to their needs, as identified by the counsellors providing the advisory services. Some examples of possible vocational trainings are: landscaper in eco-gardening, CPA 30 Butcher, CPA Cook, cook assistance, technician in industrial maintenance, thermal and sanitary installer, smart (connected) building technician, road freight transport driver licensing, SDC 31 construction machinery and SDC crane, CPA concierge-building care-taker, etc. Training in business creation is also foreseen for the workers willing to become self-employed.
–Contribution to business creation: Workers returning into employment as self-employed persons will receive up to EUR 6 000 to cover setting-up costs, investment in assets, etc. The contribution will be paid in two instalments of EUR 3 000. The first payment upon presentation of the proof of registration of the business 32 or the declaration of registration of the self-employed person. The second payment after proving to have been in business for at least 12 months.
–Job search allowance. This monthly allowance amounts to 65% of the worker's last gross salary. This amount is calculated based on the workers' full-time participation in active labour market measures; if participation is lower, the EGF will co-finance only the allowance proportionate to the actual participation.
–Allowance for quick reemployment. Workers who return quickly to employment will receive an allowance equivalent to 20-30% of the job search allowance 33 they would have received if they had not found the job.
–Outplacement incentive. This monthly allowance (up to 6 months) aims to compensate for the possible loss of income when a displaced worker accepts a new job (permanent or fixed term of at least six months) with a lower salary. The allowance will be 80% of the difference with the previous salary, up to EUR 200 per month, for the first three months, and 50% of the difference, up to EUR 100 per month, for the next three months.
–Contribution to moving and installation costs. The workers who after accepting a job at 60 km or more from home or involving more than 90 minutes of commuting time, move closer to their new working place (in terms of distance or commuting time) may receive a contribution to moving costs up to EUR 2 000. A contribution to installation costs (EUR 500 per adult and EUR 200 per child of the household) is also foreseen.
32. The proposed coordinated package of personalised services, here described, constitutes active labour market measures within the eligible measures set out in Article 7 of the EGF Regulation. The proposed services do not substitute passive social protection measures.
33. France informed that Selecta regularly offers trainings for its staff in which attention is paid to digital skills and skills required in a resource-efficient economy. The training part of the EGF package includes training in office software and other softwares, and TOSA 34 certification, which caters for the dissemination of the skills required in the digital industrial age and in a resource-efficient economy, as required by Article 7.1 of the EGF Regulation. Should a particular training need be identified for a specific beneficiary, the relevant training could be offered.
34. France has provided the required information on measures that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. They have confirmed that a financial contribution from the EGF will not replace such measures.
35. The estimated total costs are EUR 4 793 290, comprising expenditure for personalised services of EUR 4 766 930 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 26 360.
36. The total financial contribution requested from the EGF is EUR 4 074 296 (85 % of total costs).
37. The national pre-financing and co-funding is provided by Selecta.
| Measures | Estimated number of participants | Estimated cost per participant (EUR) 35 | Estimated total costs (EUR) 36 |
| Personalised services (measures under Article 7(2)(a) of the EGF Regulation) | |||
| Advisory services and vocational guidance (accompagnement congé de reclassement - salariés porteurs d'un projet personnel et salariés licenciés) | 443 | 2 174 | 963 200 |
| Psychological support unit (cellule de soutien psychologique) | 473 | 17 | 7 800 |
| Training (formations) | 393 | 3 622 | 1 423 320 |
| Contribution to business creation (accompagnement création d'entreprise) | 120 | 6 000 | 720 000 |
| Sub-total (a): Percentage of the package of personalised services | – | 3 114 320 | |
| (65,33 %) | |||
| Allowances and incentives (measures under Article 7(2)(b) of the EGF Regulation) | |||
| Job-search allowance (allocation de congé de reclassement) | 200 | 8 027 | 1 605 300 |
| Allowance for quick reemployment (indemnité recrutement rapide) | 10 | 2 275 | 22 750 |
| Outplacement incentive (allocation différentielle) | 10 | 900 | 9 000 |
| Contribution to moving and installation costs (aides à la mobilité: déménagement, frais d'installation) | 2 | 7 780 | 15 560 |
| Sub-total (b): Percentage of the package of personalised services: | – | 1 652 610 | |
| (34,67 %) | |||
| Activities under Article 7(5) of the EGF Regulation | |||
| 1. Preparatory activities | – | 9 560 | |
| 2. Management | – | 16 800 | |
| 3. Information and publicity | – | 0 37 | |
| 4. Control and reporting | – | 0 | |
| Sub-total (c): Percentage of the total costs : | – | 26 360 | |
| (0,55 %) | |||
| Total costs (a + b + c): | – | 4 793 290 | |
| EGF contribution (85 % of total costs) | – | 4 074 296 |
38. The costs of the measures identified in the table above as measures under Article 7(2)(b) of the EGF Regulation do not exceed 35 % of the total costs for the coordinated package of personalised services. France confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.
39. France confirmed that the costs of investments for self-employment, business creation and employee take-overs will not exceed EUR 22 000 per beneficiary.
40. France started providing the personalised services to the targeted beneficiaries on 1 April 2021. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 1 April 2021 until 24 months after the date of the entry into force of the Financing Decision.
41. France started incurring the administrative expenditure to implement the EGF on 1 October 2020. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 1 October 2020 until 31 months after the date of the entry into force of the Financing Decision.
Management and control systems
42. The application contains a description of the management and control system, which specifies the responsibilities of the bodies involved. France has notified the Commission that the financial contribution will be managed by the Délégation générale à l’emploi et à la formation professionnelle (DGEFP) of the Ministry of Labour, Employment, Vocational Training and Social Dialogue, in particular by the unit Fonds national de l'emploi (DGEFP - MFNE). The payments will be made within the DGEFP by the unit Affaires financières (DGEFP - MAFI). The Commission interministérielle de coordination des contrôles (CICC) is the French audit authority for the EGF. Selecta will be responsible for the implementation of measures. In this regard, the French authorities will conclude a partnership agreement with Selecta.
Commitments provided by the Member State concerned
43. France has provided all necessary assurances regarding the following:
–the principles of equality of treatment and non-discrimination will be respected in access to the proposed measures and their implementation,
–the requirements laid down in national and EU legislation concerning collective redundancies have been complied with,
–Selecta, which has continued its activities after the lay-offs, has complied with its legal obligations and provided for its workers accordingly,
–any double financing will be prevented,
–the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.
BUDGETARY IMPLICATION
Budgetary proposal
44. The EGF shall not exceed a maximum annual amount of EUR 186 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) No 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 38 .
45. Having examined the application in respect of the conditions set out in Article 13 i and (2) of the EGF Regulation, and having taken into account the number of targeted beneficiaries, the proposed measures and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 4 074 296, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.
46. The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council, as laid down in point 9 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources 39 .
Related acts
47. At the same time as it presents this proposal for a decision to mobilise the EGF, the Commission will present to the European Parliament and to the Council a proposal for a transfer to the relevant budgetary line the amount of EUR 4 074 296.
48. At the same time as it adopted this proposal for a decision to mobilise the EGF, the Commission adopted a decision on a financial contribution that constitutes a financing decision within the meaning of Article 110 of the Financial Regulation 40 . That financing decision will enter into force on the date on which the Commission is notified of the approval of the budgetary transfer by the European Parliament and the Council.