Explanatory Memorandum to COM(2022)201 - Globalisation Fund application from France - EGF/2022/001 FR/Air France - Main contents
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| dossier | COM(2022)201 - Globalisation Fund application from France - EGF/2022/001 FR/Air France. |
|---|---|
| source | COM(2022)201  |
| date | 10-05-2022 |
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 21 January 2022, France submitted an application EGF/2022/001 FR/Air France for a financial contribution from the EGF, following displacements in Air France 2 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/2022/001 FR/Air France |
| Member State | France |
| Regions most concerned (NUTS 3 level 2) | Île de France (FR10) 4 |
| Date of submission of the application | 21 January 2022 |
| Date of acknowledgement of receipt of the application | 21 January 2022 |
| Date of request for additional information | 4 February 2022 |
| Deadline for provision of the additional information | 25 February 2022 |
| Deadline for the completion of the assessment | 12 May 2022 |
| Intervention criterion | Article 4(2)(a) of the EGF Regulation |
Primary enterprise | Air France |
Number of enterprises concerned | 3 |
| Sector(s) of economic activity (NACE Revision 2 division) 5 | Division 33 (Repair and installation of machinery and equipment) Division 51 (Air transport) |
| Reference period (four months): | 1 July 2021 – 1 November 2021 |
| Number of displacements during the reference period (a) | 282 |
| Number of displacements before or after the reference period (b) | 1 298 |
| Total number of displacements (a + b) | 1 580 |
| Total number of eligible beneficiaries | 1 580 |
| Total number of targeted beneficiaries | 1 580 |
| Budget for personalised services (EUR) | 20 873 656 |
| Budget for implementing EGF 6 (EUR) | 00 000 000 |
| Total budget (EUR) | 20 873 656 |
| EGF contribution (85 %) (EUR) | 17 742 607 |
ASSESSMENT OF THE APPLICATION
Procedure
4. France submitted application EGF/2022/001 FR/Air France within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 21 January 2022. The Commission acknowledged receipt of the application the same date and requested additional information from France on 4 February 2022. 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 12 May 2022.
Eligibility of the application
Contents
- Enterprises and beneficiaries concerned
- Intervention criteria
- 7. The reference period of four months for the application runs from 1 July 2021 to 1 November 2021. There were 282 displaced workers in Air France during the reference period.
- 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 282 displaced workers whose activity has ceased in Air France. The enterprise operates in the economic sector classified under the NACE Revision 2 division 51 (Air transport). The redundancies in Air France are located in 12 French NUTS level 2 regions in mainland France 7 and four French NUTS level 2 regions overseas 8 .
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 July 2021 to 1 November 2021. There were 282 displaced workers in Air France during the reference period.
Calculation of displacements and of cessation of activity
8. The cessation of activities of the 282 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 1 298 displaced workers whose activity ceased before or after the reference period of four months. All these workers ceased their activity within the six months before the start of the reference period on 1 July 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 cessations of activity of the displaced workers during the reference period..
10. The total number of eligible beneficiaries is 1 580.
11. The events giving rise to these displacements are a result of the unexpected global economic crisis caused by the pandemic. The COVID-19 crisis severely and abruptly affected Air France, like any other airline, forcing it to reduce its flight offer due to the closure of borders and the drop in air travel.
12. In addition to the sharp decline in income and traffic with almost non-existent movements at the beginning of the pandemic, COVID-19 is causing a long-term crisis in air transport. In France GDP fell by 8% in 2020 9 and despite an increase by 7% in 2021, it is not yet at pre-pandemic levels. The drop in household available income is having an impact on travel spending. Furthermore, teleworking and new health and environmental requirements are questioning the relationship with air transport, which may result in a change in customer behaviour in the long term. Air transport recovery is therefore expected to be slow and uncertain. Air France expects to reach 95% of its pre-pandemic flight offer only in 2023.
13. At the beginning of the crisis, Air France was losing EUR 450 million of cash flow every month. The enterprise would have been in insolvency and would no longer have been able to pay salaries if it had not obtained EUR 7 billion in State-guaranteed loans. However, the loans alone would not have been sufficient to overcome the situation without additional measures, such as downsizing operations, redefining the domestic network, and simplifying and streamlining support functions (such as marketing, communications, human resources, etc.). These measures led to reductions in staff.
Expected impact of the displacements as regards the local, regional or national economy and employment
14. The region Île de France has been the most affected by the redundancies in Air France, as 57% of the displacements occurred in this territory.
15. The French authorities explain that the deterioration of the labour market in Île de France, as in the rest of France, was a consequence of the sanitary crisis, and particularly the first confinement (March 17 - May 10 2020) during which almost all economic activity stopped.
16. At the start of the personalised measures in the first quarter of 2021, immediately after the first wave of dismissals the unemployment rate was 7,7% 10 in Île de France. There were more than one million (1 056 950) registered job seekers 11 , that is an increase by 8% year-on-year. The number of job seekers increased by 9,2% for men and by 6,7% for women 12 . Almost half (49,8%) of the total were long-term (more than 12 months) job seekers, 4 percentual points (pp) more than in 2020 Q1.
17. The employment situation in France 13 has improved since the dismissals occurred and the support started. The number of job seekers declined by 5,8% in 2021 Q4 year-on-year 14 , while in Île de France here are still almost a million registered job seekers (994 110 in 2021 Q4) 15 , notwithstanding a decline by 6,1% year-on-year 16 . Long term job seekers still represent 49,3% of the total number of job seekers (i.e. 1,2 pp more than in 2020 Q4 17 ), despite the decline by 3,9% over the year.
18. The French labour administration specified that Air France’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. 18 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 (QFR)
19. France has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring have been 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 to pay the full costs of accompanying active labour market measures to staff dismissed as a consequence of organisational restructuring. An intervention by public authorities is only foreseen once the measures provided by the dismissing enterprise end.
20. France has informed that Air France has set up an extensive package of active labour market measures aimed at assisting the workers dismissed. In cooperation with an external outplacement consultancy (Alixio Mobilité and Sodesi), Air France set up a guidance info point (Espaces d’information, d’accompagnement et de conseil), as the first contact point for workers concerned. At this info point, workers not only receive first guidance on perspectives, but are also helped in their endeavours to participate in training measures, or to find new employment.
21. Regarding the activities undertaken to assist the displaced workers, France has indicated that the implementation of accompanying active labour market measures part of Air France’s legal obligation started immediately after the dismissals.
22. 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
23. France has indicated that the co-ordinated package of personalised services has been drawn up in consultation with staff and union representatives. In a series of meetings between Air France and SNPNC 19 , l’UNAC 20 , l'UNSA-PNC 21 , CFDT 22 , FO 23 , and CFE/CGC 24 , the negotiating parties designed the package of measures to help the employees concerned. These rounds of internal negotiations started on 8 July 2020 and ended on 28 May 2021 25 .
Targeted beneficiaries and proposed measures
24. All 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: | 695 | (44,0 %) |
| Women: | 885 | (56,0 %) | |
| Non-binary | 0 | (0,0 %) | |
| Age group: | Below 30 years: | 21 | (1,3 %) |
| 30-54 years: | 1 073 | (67,9 %) | |
| Over 54 years: | 486 | (30,8 %) | |
| Educational level | Lower secondary education or less 26 | 65 | (4,1 %) |
| Upper secondary 27 or post-secondary education 28 | 1 051 | (66,5 %) | |
| Tertiary education 29 | 464 | (29,4 %) |
25. There are 96 workers with disabilities.
26. 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") 30 , 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.
27. The personalised services to be provided to displaced workers consist of the following measures:
–Advisory services and vocational guidance: The dismissed workers will receive career guidance and be assisted in their job search, or receive start-up guidance in case they aim at starting their own business. The participants will receive vocational 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 and helped to choose job offers, prepare interviews, etc. Specialized advisors will help the workers aiming for self-employment, business take over or business creation with drawing business plan, search for funding and other accompanying services towards entrepreneurship.
–Training: The workers will be offered a variety of upskilling or reskilling trainings tailored to their needs, as identified by the counsellors providing the advisory services. The workers aiming for self-employment will be offered training towards business creation provided by Sodesi (PASS CREA), the Chamber of Commerce and Industry, or the Chamber of Trades and Crafts.
–Contribution to business creation. Workers who start their own businesses (business take-over or start-up) will receive up to EUR 15 000 to cover setting-up costs, investment in assets and current expenditure. The contribution will be paid in three instalments based on reaching pre-defined milestones. A first instalment of EUR 3 000 will be paid upon presentation of proof of setting up or taking over a business, such as the receipt of registration 31 . A second and third instalment of EUR 6 000 each, upon presentation of the first and second statement of activity to the RSI 32 , indicating a turnover of at least EUR 200 and EUR 500 respectively for self-employed persons and sole proprietors; or upon presentation of a certificate issued by a chartered accountant, indicating a turnover of at least EUR 500 and EUR 1 000 respectively for enterprises 33 .
– Hiring benefits. The SMEs that hire a former Air France worker on a permanent contract or on a fixed-term contract of at least 6 months, will receive up to two months of wages and employer’s contributions, and part of the costs of the training to adapt to the new job, were such training necessary.
–Quick reemployment allowance. Workers who quickly return to employment with a permanent or temporary contract of at least 6 months will receive an allowance equal to the job search allowance 34 they would have received had they not found the job. The amount cannot exceed the equivalent of 4 months of job search allowance.
–Salary top-ups. This measure aims at offering an incentive to accept new employment (permanent or fixed term of at least six months), even if the salary of the new employment found is lower than in the previous job. The allowance will be equal to the difference between salaries up to EUR 600 per month for a maximum of 30 months 35 , or up to EUR 375 36 per month for a maximum of 48 months 37 . In any case, the total per worker may not exceed EUR 18 000.
28. The proposed actions, here described, constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation. These actions do not substitute passive social protection measures.
29. France informed that Air France regularly offers trainings for its staff in which attention is paid to digital skills and skills required in a resource-efficient economy, as part of it Skills Development Plan. The training provided on Air France's digital training platforms remain available to the displaced workers for the duration of their participation in the EGF measures.
30. 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.
31. The estimated total costs are EUR 20 873 656, comprising expenditure for personalised services only. France decided to cover expenditure for preparatory, management, information and publicity, control and reporting activities with their own resources.
32. The total financial contribution requested from the EGF is EUR 17 742 607 (85 % of total costs).
33. The national pre-financing and co-funding is provided by Air France.
| Measures | Estimated number of participants | Estimated cost per participant (EUR) 38 | Estimated total costs (EUR) 39 |
| Personalised services (measures under Article 7(2)(a) of the EGF Regulation) | |||
| Advisory services and vocational guidance (accompagnement congé de reclassement Alixio et Sodesi) | 1 162 | 2 098 | 2 437 820 |
| Training (formation) | 805 | 2 815 | 2 266 400 |
| Contribution to business creation (prime à la création d'entreprise) | 591 | 15 000 | 8 865 000 |
| Sub-total (a): Percentage of the package of personalised services | – | 13 569 220 | |
| (65,00 %) | |||
| Allowances and incentives (measures under Article 7(2)(b) of the EGF Regulation) | |||
| Hiring benefits (aide TPE - PME) | 46 | 5 296 | 243 608 |
| Quick reemployment allowance (indemnité de reclassement rapide/immédiat) | 512 | 11 467 | 5 871 235 |
| Salary top-ups (indemnité différentielle de rémunération) | 83 | 14 332 | 1 189 593 |
| Sub-total (b): Percentage of the package of personalised services: | – | 7 304 436 | |
| (35,00 %) | |||
| Activities under Article 7(5) of the EGF Regulation | |||
| 1. Preparatory activities | – | 0 | |
| 2. Management | – | 0 | |
| 3. Information and publicity | – | 0 | |
| 4. Control and reporting | – | 0 | |
| Sub-total (c): Percentage of the total costs : | – | 0 | |
| (0,00 %) | |||
| Total costs (a + b + c): | – | 20 873 656 | |
| EGF contribution (85 % of total costs) | – | 17 742 607 |
34. 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.
35. France confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 22 000 per beneficiary.
36. France started providing the personalised services to the targeted beneficiaries on 1 February 2021. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 1 February 2021 until 24 months after the date of the entry into force of the Financing Decision.
37. France started incurring the administrative expenditure to implement the EGF on 6 January 2021, but it decided to cover it with its own resources.
Management and control systems
38. 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. Air France will be responsible for the implementation of measures. In this regard, the French authorities will conclude a partnership agreement with Air France.
Commitments provided by the Member State concerned
39. 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,
–Air France, 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
40. 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 40 .
41. 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 17 742 607, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.
42. 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 41 .
Related acts
43. 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 15 645 511 42 .
44. 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 43 . 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.