ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from France (EGF/2022/001 FR/Air France)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to 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[9], and in particular Article 15(1) thereof,

Having regard to 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[10], and in particular point 9 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) The objective of the European Globalisation Adjustment Fund for Displaced Workers (EGF) are to demonstrate solidarity and promote decent and sustainable employment in the Union by providing support for workers made redundant and self-employed persons whose activity has ceased in the case of major restructuring events and assisting them in returning to decent and sustainable employment as soon as possible.

(2) The EGF is not to exceed a maximum annual amount of EUR 186 000 000 (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093[11].

(3) On 21 January 2022, France submitted an application to mobilise the EGF, in respect of worker’s displacements in Air France in France. It was supplemented by additional information provided in accordance with Article 8(5) of Regulation (EU) 2021/691. That application complies with the conditions for a financial contribution from the EGF as laid down in Article 13 of Regulation (EU) 2021/691.

(4) The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 17 742 607 in respect of the application submitted by France.

(5) In order to minimise the time taken to mobilise the EGF, this decision should apply from the date of its adoption,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the Union for the financial year 2022, the European Globalisation Adjustment Fund for Displaced Workers shall be mobilised to provide the amount of EUR 17 742 607 in commitment and payment appropriations.

Article 2

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply from [the date of its adoption].

Done at …,

For the European Parliament For the Council

The President The President
 

EXPLANATORY STATEMENT

I. Background

The European Globalisation Adjustment Fund has been created in order to provide additional assistance to workers suffering from the consequences of major structural changes in world trade patterns.

According to the provisions of Article 8(1) of Council Regulation (EU, Euratom) No 2020/2093 laying down the multiannual financial framework for the years 2021-2027[12] and of Article 15 of Regulation (EU) No 2021/691[13], the Fund may not exceed a maximum annual amount of EUR 186 million (2018 prices).

As concerns the procedure, according to point 9 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council and the 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[14], in order to activate the Fund the Commission, in case of a positive assessment of an application, presents to the budgetary authority a proposal for mobilisation of the Fund and, at the same time, a corresponding request for transfer.

II. France’s application and the Commission’s proposal

On 21 January 2022, France submitted an application EGF/2022/001 FR/Air France for a financial contribution from the EGF, following 282 displacements in the economic sector classified under the NACE Revision 2 division 33 (Repair and installation of machinery and equipment) and 51 (Air transport) in 12 French NUTS level 2 regions in mainland France and four French NUTS level 2 regions overseas.

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.

On 10 May 2022, the Commission adopted a proposal for a decision on the mobilisation of the EGF to support the reintegration in the labour market of 1 580 targeted beneficiaries, and communicated it to the Parliament and the Council on the same day.

The Commission deemed the application admissible 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.

This application is examined under the 2022 budget, the MFF (Council Regulation (EU, Euratom) No 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027[15] and the IIA of 16 December 2020.

The cessation of activities of all displaced workers during the reference period running from 1 July 2021 to 1 November 2021 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.

The application refers to the mobilisation of a total amount of EUR 17 742 607 from the EGF for France representing 85 % of the total costs of the proposed actions.

The objectives of the EGF are to demonstrate solidarity and promote decent and sustainable employment in the Union by offering assistance in the case of major restructuring events, in particular those caused by challenges related to globalisation, such as changes in world trade patterns, trade disputes, significant changes in the trade relations of the Union or the composition of the internal market and financial or economic crises, as well as the transition to a low-carbon economy, or as a consequence of digitisation or automation[16].

The COVID-19 crisis severely and abruptly affected Air France, forcing it to reduce its flight offer due to the closure of borders and the drop in air travel.

In France, GDP fell by 8 % in 2020 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.

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.

The region Île-de-France (57 % of the displacements) has been most affected. 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 %  in Île-de-France. There were more than one million (1 056 950) registered job seekers, that is an increase by 8 % year-on-year.

The six types of actions to be provided to redundant workers, for which EGF co-funding is requested consist of:

a. 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.

b. 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.

c. 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. A second and third instalment of EUR 6 000 each, upon presentation of the first and second statement of activity to the RSI[17], 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[18].

d.  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.

e. 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 they would have received had they not found the job. The amount cannot exceed the equivalent of 4 months of job search allowance.

f. 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, or up to EUR 375 per month for a maximum of 48 months. In any case, the total per worker may not exceed EUR 18 000.

According to the Commission, the described measures constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation and do not substitute passive social protection measures.

France provided the required information on actions that are mandatory for the enterprises concerned by virtue of national law or pursuant to collective agreements. They confirmed that a financial contribution from the EGF will not replace such actions.

Procedure

In order to mobilise the Fund, the Commission has submitted to the Budgetary Authority a request to transfer a global amount of EUR 15 645 511 from the EGF reserve (30 04 02) to the EGF budget line (16 02 02).

At the request of France, the financial contribution paid from the EGF to finance active labour market measures following displacements in Selecta was lower than the amount mobilized in the Decision of the European Parliament and of the Council dated 24 March 2022 (EUR 4 074 296).

France informed the Commission that 107 redundancies planned for January 2022 could be avoided thanks to the post-COVID economic recovery. Therefore, France revised downwards the amount of the EGF necessary to assist Selecta redundant workers. This amount now stands at EUR 1 977 200.

Since EUR 2 097 096 of commitment appropriations have remained available on the operational line after the payment to France, the Commission does not need to transfer the full amount of commitments for Air France from the reserve line.

According to an internal agreement, the Employment and Social Affairs and Regional Development Committees should be associated to the process, in order to provide constructive support and contribute to the assessment of the applications from the Fund.

LETTER OF THE COMMITTEE ON EMPLOYMENT AND SOCIAL AFFAIRS (14.6.2022)

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on mobilisation of the European Globalisation Adjustment Fund – EGF/2022/001 FR/Air France – France (2022/0143(BUD))

Dear Mr Chair,

Under the procedure referred to above, the Committee on Employment and Social Affairs has been asked to submit an opinion to your committee and decided to send the opinion in the form of a letter.

The Committee on Employment and Social Affairs considered the matter at its meeting of 14 June 2022. At that meeting, it decided to call on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

Yours sincerely,

Dragoş Pîslaru

SUGGESTIONS

The deliberations of the EMPL committee are based on the following considerations:

A. whereas on 21 January 2022 France submitted application EGF/2022/001 FR/Air France for a financial contribution from the European Globalisation Adjustment Fund for Displaced Workers (EGF), following 282 displacements in the economic sector classified under the NACE Revision 2 division 33 (Repair and installation of machinery and equipment) and 51 (Air transport) mainly 12 French NUTS level 2 regions in mainland France and four French NUTS level 2 regions overseas, within a reference period for the application from 1 July 2021 to 1 November 2021;

B. whereas the application relates to 282 displaced workers whose activity in the company Air France and two of its subsidiaries has ceased during the reference period, while 1298 workers were displaced before or after the reference period as a consequence of the same events that triggered the cessations of activity of the displaced workers during the reference period and all 1580 workers will thus be considered eligible beneficiaries;

C. whereas the Commission deemed the application admissible 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;

D. whereas on 10 May 2022, the Commission adopted a proposal for a decision on the mobilisation of the EGF to support the reintegration in the labour market of 1580 targeted beneficiaries, and communicated it to the Parliament and the Council on the same day;

E. whereas Air France was severely impacted by the COVID-19 crisis, which caused a sharp decline in income and traffic;

F. whereas in France, GDP fell by 8% in 2020 and despite an increase by 7% in 2021, it is not yet at pre-pandemic levels; whereas the drop in household available income is having an impact on travel spending; whereas climate  change and the necessity to reduce greenhouse gas emissions but also teleworking and new health and environmental requirements are questioning the relationship with air transport, which may result in a change in customer and organisational behaviour in the long term; whereas Air transport recovery is therefore expected to be slow and uncertain; whereas Air France expects to reach 95 % of its pre-pandemic flight offer only in 2023;

G. whereas, at the beginning of the crisis, Air France was losing EUR 450 million of cash flow every month; whereas 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; whereas, 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.); whereas these measures led to reductions in staff;

H. whereas France has indicated that the co-ordinated package of personalised services has been drawn up in consultation with staff and union representatives; whereas, 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; whereas these rounds of internal negotiations started on 8 July 2020 and ended on 28 May 2021[25];

I. whereas 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) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027[26];

Therefore, the Committee on Employment and Social Affairs calls on the Committee on Budgets, as the committee responsible, to integrate the following suggestions in its motion for a resolution:

1. Considers that financial contributions from the EGF should be primarily directed at active labour market policy measures and personalised services that aim to reintegrate beneficiaries rapidly into decent and sustainable employment within or outside their initial sector of activity, while preparing them for a greener and more digital European economy;

2. Agrees with the Commission that the conditions set out in Article 4(2), point (a), of the EGF Regulation are met and that France is entitled to a financial contribution of EUR 17 742 607 million under that Regulation, which represents 85 % of the total cost of EUR 20 873 656, comprising only expenditure for personalised services;

3. Notes that all the procedural requirements were met; welcomes the social partners’ involvement in the package of measures for which the EGF co-financing is requested; underlines the need for transparency at every step of the procedure and calls for social partners’ involvement in the package of service’s implementation and evaluation;

4. Stresses that the French authorities have confirmed that the eligible actions will not receive assistance from other Union funds or financial instruments;

5. Notes that the application relates in total to 1580 displaced workers whose activity has ceased; welcomes the fact that France expects that all of the eligible beneficiaries will participate in the measures (targeted beneficiaries); stresses that 56% of the targeted beneficiaries are women, 30,8% are aged over 54 years and that there are 96 workers with disabilities; further stresses the specific needs of these groups should be taken into account when providing personalised services;

6. Recalls that the redundancies impacted various regions across France, in particular in the region Île-de-France, where 57 % of the displacements took place; notes that the French labour administration specified that Air France’s restructuring affected the employment balance in the territories concerned;

7. Notes that France started providing personalised services to the targeted beneficiaries on 1 February 2021 and that the period of eligibility for a financial contribution from the EGF will therefore be from 1 February 2021 until 24 months after the date of the entry into force of the financing decision; recalls that personalised services to be provided to the workers consist of the following measures: advisory services and vocational guidance, training, contribution to business creation, hiring benefits, quick reemployment allowance and salary top-ups; welcomes the fact that the co-ordinated package of personalised services was drawn up by France in consultation with staff and union representatives;

8. Recalls the possibility for special time-limited measures within the coordinated package including, inter alia, to pay childcare allowances, as provided  in Article 7.2 b of the EGF regulation to facilitate job seekers’ participation in the activities proposed;

9. Reminds that the objective of the EGF is to demonstrate solidarity with and support beneficiaries and to rapidly reintegrate them into decent and sustainable employment within or outside their initial sector of activity; stresses the importance of preparing workers for a green and digital European economy and therefore fasten the twin transitions; reiterates in this context the important role the Union should play in providing the necessary qualifications for the just transformation in line with the European Green Deal;

10. Reiterates that assistance from the EGF must not replace actions that are the responsibility of companies, by virtue of national law or collective agreements.

LETTER OF THE COMMITTEE ON REGIONAL DEVELOPMENT (3.6.2022)

Mr Johan VAN OVERTVELDT

Chair

Committee on Budgets

WIE 05U012

Subject: Opinion on Mobilisation of the European Globalisation Adjustment Fund – EGF/2022/001 FR/Air France (2022/0143(BUD))

Dear Mr Van Overtveldt,

The European Commission has transmitted to the European Parliament its proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund following an application from France (COM(2022)0201) following displacements in Air France and two of its subsidiaries, Hop and Hop training.

I understand that it is intended that a report on this proposal will be soon adopted in the Committee on Budgets.

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 and four French NUTS level 2 regions overseas.

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.

The total number of eligible beneficiaries is 1 580.

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. Air France expects to reach 95% of its pre-pandemic flight offer only in 2023.

The personalised services to be provided to displaced workers consist of the following measures: Advisory services and vocational guidance; Training; Contribution to business creation; Hiring benefits; Quick reemployment allowance; Salary top-ups.

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 The national pre-financing and co-funding is provided by Air France. The total financial contribution requested from the EGF is EUR 17 742 607 (85 % of total costs).

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.  

The committee coordinators have assessed this proposal, and asked me to write to you reporting that the majority of this committee has no objection to this mobilisation of the EGF to allocate the above-mentioned amount as proposed by the Commission.

Yours sincerely,

Younous Omarjee

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

Key to symbols:

+ : in favour

– : against

0 : abstention