IRENE
Policy Paper
N° 15 / 2015
Vulnerability and Restructuring
Results VIRES project 2014-2015
Policy paper IRENE
Wim Sprenger
with contributions from partners in 10 member states
VIRES
A project funded by the European Union
www.responsible-restructuring.eu
Contents
Executive summary ......................................................................................................... 3
1.
Vulnerability and Restructuring ....................................................................................... 7
Introduction and conceptual framework .............................................................................. 7
Vulnerability before and during the crisis ............................................................................ 7
Youngsters hit hard by the crisis ..................................................................................... 9
Migrants .................................................................................................................... 10
Restructuring: consequences and main players ................................................................... 13
Management and anticipation of restructuring ............................................................... 13
Main players .............................................................................................................. 15
Restructuring regimes and change ................................................................................ 18
Vulnerability and restructuring – main observations in this chapter ...................... 20
2.
Restructuring and vulnerability ......................................................................... 22
Restructuring during the crisis ..................................................................................... 22
Change in employment situation youngsters during the first 4 years of the crisis ................ 23
Youth unemployment in VIRES countries compared ........................................................ 25
Migrants in the VIRES countries ................................................................................... 28
Transition from education into labour market and restructuring companies ....................... 29
Youngsters and migrants in the VIRES countries, first conclusions ................................... 30
3.
Case studies and national workshops .............................................................................. 32
11 Cases from 7 partners ............................................................................................. 32
Some lessons from the case studies ............................................................................... 35
National workshops .................................................................................................... 36
4.
Concluding remarks ..................................................................................................... 36
References ........................................................................................................................ 40
Appendix .......................................................................................................................... 43
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Executive summary
The VIRES project (2014-2015)
VIRES analysed the situation for vulnerable groups – youngsters and migrants – on the
labour market and in restructuring processes. Partners came from 10 member states:
Bulgaria, Belgium, Czech republic, France, Germany, France, Italy, Slovenia, Spain,
Sweden and United Kingdom. These member states vary substantially as to ‘restructuring
regimes’, labour market characteristics, and degree of vulnerability for migrants and
youngsters. Each national partner did a literature study on the actual situation and the
developments since the start of the crisis. In 7 countries a special case study was added
and in 6 countries national workshops were organized to discuss the results with
stakeholders and interested researchers.
The main questions for this synthesis report are: What is the relation between
vulnerability and restructuring? Is vulnerability of specific groups of employees directly
correlated to decisions made in restructuring of corporations, and to which degree? And if
so, which policy measures could help improve the position of these vulnerable groups?
Restructuring partly responsible for vulnerability
Vulnerability of groups of workers covers:
- economic vulnerability: uncertainty about income and wage level, at risk of not
being able to pay for living costs, and being dependent on social security benefits.
- employment vulnerability: uncertainty about employment stability, at risk of
loosing employment, and being dependent upon unemployment benefits.
- knowledge vulnerability: uncertainty about what skills are needed and required, at
risk of loosing employability, and/or being forced to take jobs with low skills
demands.
Available data suggest that youth unemployment moves with the crisis at a level of 2,0 to
more than 3 times higher than general unemployment, but in most countries within the
borders of the situation before the crisis. Restructuring contributed to increasing
unemployment and declining access to jobs for young people. The position of young
people vis a vis restructuring organizations and on the labour market seems more and
more vulnerable through the crisis years. In contrast to migrants they have, however, a
perspective of less vulnerable conditions once they move into older age groups.
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Some categories of migrants lack formal rights to enter the job market and do not always
have equal employment status as other employees. This makes them particularly
vulnerable to restructuring decisions: the first to be fired or not hired, dependent on low
skilled work and workplaces, lacking protection in case of restructuring. Even trade
unions and public policies are often far away.
Behind the unemployment data less visible forms of restructuring have developed.
Anticipation of future restructurings leads to a shift into more vulnerability for certain
groups, blocking access and facilitating all sorts of adjustments. Young people and
migrants often lack protection and facilities in restructuring processes. But their
vulnerabilities tend to grow and to be exploited by new ways of anticipating restructuring:
 By the creation peripheral groups, at arms length or further away from the core
workforce.
 By creating barriers and new contractual forms (temporary contracts, outsourced
jobs, forced self-employment, near-slavery employment relations) to reduce
labour costs, benefits and dismissal budgets.
 Partly also by existing restructuring procedures for core workers and their
supporters (the ‘crowding out‘ effect of training and mobility programs, policy
measures concentrating on management of restructuring).
Case studies
The 11 case studies in manufacturing and the public sector illustrated the double edged
relationship between restructuring and vulnerability. On the one hand. that restructuring
processes make vulnerable groups more vulnerable, as they are the first to leave or lose
their contract if job losses are at stake (‘last in first out’, expiration of temporary
contracts, lower tariffs or less hours paid for self-employed). On the other hand, that
vulnerable groups are part of (apprenticeship) agreements, introducing vulnerable groups
into restructuring firms, but on more vulnerable conditions (temporary contracts, lower
incomes) than core workers moving into pre-retirement or staying in the company.
We find that there are no specific measures targeting vulnerability, but several measures
targeting young or migrant groups. We also find that the specific “vulnerable” groups
studied in this project often face lower conditions and perspectives (income, employment,
training schemes) than other employees, even if they are supported by active labour
market policies. This is a risk factor for success of these measures in coping with
vulnerability (examples in Belgium and France). Trade unions are involved in
negotiations, accepting more vulnerable conditions to achieve improvements for
youngsters and migrants.
National workshops
The 6 national workshops discussed a variety of topics: the need to give vulnerable
groups a voice in restructuring, the relation between education, restructuring and
vulnerability, the need to include vulnerable groups in management and anticipation of
restructuring and its negotiations, crowding out effects, positive and negative effects of
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the LIFO principle, the relation between vulnerability and economic downturn during the
crisis, government regulation fostering vulnerability, discrimination, lack of knowledge
on the position of vulnerable groups nationally and regionally, position and tools for
trade unions facing restructuring.
Economic crises always create vulnerability. But the precise forms and degrees of
vulnerability seem to be related to the kind of restructuring regime in a country.
Dependent of the dominant restructuring measures applied in a country the burden
of economic change is distributed among the labour force. There are different forms
of vulnerability and the vulnerability is distributed to different groups. Thus,
restructuring regimes may have a distributive effect. For example, in regimes where
short time working schemes are used, permanent workers will not be laid off. In
principle they are not competing with the new entrants for those jobs that exist.
However, employers may not necessarily hire many new workers, which would help
vulnerable groups enter the labour force. Thus, short time working schemes may
contribute to raise the entry barriers to the labour market. In a market regime
vulnerability is more evenly distributed among all labour market groups. As
adjustments are made through reducing wages, all workers are vulnerable. In these
countries temporary contracts are less necessary to adjust. Most often employment
protection is rather low for many people.
In regimes characterized by qualitative adjustment (e.g. Sweden), and extensive
transition support for dismissed workers, there is the risk of a creaming off effect.
The vulnerable workers are those with limited work experience. New entrants are
vulneralised, because they have to compete with dismissed workers. For skilled and
experienced core employees a move from income and quantitative adjustments to
more qualitative adjustments can be observed, partly driven by employers,
employees, trade unions and supporting institutions. Income and quantitative
adjustments still are used as restructuring tools, but less visible than during mass
dismissals.
Policy recommendations
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The need to give youngsters a voice in the national (un)employment
programmes
The importance of education programmes, bridging the gap between
(vocational) education and employment
The importance of negotiated agreements between the main restructuring
players (employers, trade unions and employees) to re-connect vulnerable
groups and restructuring firms
The crowding out out effects of ‘good provisions for dismissed core workers’,
pushing the non-core workers further from employment
The need to discuss and eventually change LIFO (Last In First Out) as
leading principle for managing restructuring
Recognize the relation between vulnerability of certain groups and economic
downturn in a country
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In some countries government policy has increased the vulnerability of
migrants to restructuring by keeping many at the base of the occupational
hierarchy
The importance of (hidden) discrimination in keeping groups of migrants
vulnerable
The need to investigate more into management and anticipation of
restructuring at company level and the outcomes for migrants and youngsters
Look for much more detailed evidence about youngsters and migrants both on
the national and regional level
Trade unions could opt more for ‘inclusive bargaining’, integrating vulnerable
groups in the negotiation processes during restructuring
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1. Vulnerability and Restructuring
Introduction and conceptual framework
The starting point of the VIRES project (Vulnerable groups In REStructuring) is that
young people and migrants are among the vulnerable groups in the labour market during
the six years of the actual economic crisis. It is important to note that vulnerability should
not be generalized to a specific age category, ethnicity or gender.
The literal definition of vulnerable is someone who is defenceless, at risk, exposed or
in a weak position. Here we suggest a situational definition of vulnerability: vulnerable
is the individual who’s situation can be much worse when affected by a change which is
independent of his or her own actions. We use migrant and young, to learn about
vulnerability, because we can assume that among these groups there are examples
that we can learn from.
VIRES analysed the situation in 10 member states: Bulgaria, Belgium, Czech republic,
France, Germany, France, Italy, Slovenia, Spain, Sweden and United Kingdom. These
member states vary substantially as to ‘restructuring regimes’, labour market
characteristics, and degree of vulnerability for migrants and youngsters. In each member
state a literature study on the actual situation and the developments since the start of the
crisis has been performed. For Spain and the Czech Republic this desk research was the
only activity, due to the project limits. In 7 countries a special case study was added and
in 6 a national workshop organized to discuss the results with stakeholders and interested
researchers.
This synthesis report brings together the results of these national studies. The main
questions for this synthesis report are: What is the relation between vulnerability and
restructuring? Is vulnerability of specific groups of employees directly correlated to
decisions made in restructuring of corporations, and to which degree? And if so, which
policy and negotiating measures could help improve the position of these vulnerable
groups?
Vulnerability before and during the crisis
Vulnerability of particular groups in the labour market has already been a topic before the
economic crisis started in 2008. Migrants have since long been seen as among the most
vulnerable groups. For youngsters the situation is different. From the start of the
economic crisis their position has been regarded as more and more vulnerable.
Saunders (2003) analysed the Anglo-Saxon oriented Canadian labour market in the precrisis years. What makes an employee vulnerable? Saunders argues workers are
vulnerable, in that their participation in the labour market leaves their wellbeing at risk.
In the new labour market ‘knowledge workers’, and their skills are in demand.
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Nevertheless, a large part of the labour force finds it difficult to access work that provides
a decent income and working conditions that meet societal norms:
• Workers, such as the own-account self-employed, who are outside the scope of
coverage of employment standards legislation
• Employees who are covered by employment standards laws, but who have
difficulties to access these rights, because they are unaware of them or reluctant to
complain for fear of losing their jobs
• Those who lack access to non-statutory benefits such as extended medical
insurance,
dental plans, disability coverage, and private pension plans
• Workers who are unable to qualify for (..) Employment Insurance or to fully
benefit from public pension plans
• Adult workers whose earnings are very low over long periods of time, because of
low wages and/or lack of stable employment.
For Saunders vulnerability is thus related to skill levels, employment protection, wage
levels and access to social security and pension provisions. But ‘not all non-standard
workers are highly vulnerable to economic risks. High-income professionals within the
own-account self-employed category would be an example. Moreover, many workers in
standard employment relationships (…) are vulnerable.’
We may identify three different types of vulnerability:
1. Economic vulnerability: uncertainty about income and wage level, at risk of
not being able to pay for living costs, and being dependent on social security
benefits.
2. Employment vulnerability: uncertainty about employment stability, at risk
of loosing employment, and being dependent upon unemployment benefits.
3. Knowledge vulnerability: uncertainty about what skills are needed and
required, at risk of loosing employability, and/or being forced to take jobs
with low skills demands.
Saunders Canadian colleague Chaykowski (2005) investigates ‘economic vulnerability’,
three years before the economic crisis hits countries all over the globe. For Chaykowski
the main candidates to be vulnerable are people of lower skill, who may suffer from
discrimination in the labour market, or who face other constraints (e.g., family
responsibilities; inability to finance training that would enhance skills). Chaycovski
observes that these vulnerable workers experience typically nonstandard employment
arrangements. For his analysis in Canada 2005 he concentrates on two of the main forms
of nonstandard employment – part-time and self-employment. Within Anglo-Saxon
Industrial Relations these groups tend to be vulnerable, since they lack protection and
rights like extended health care, dental care, insurance, insurance, and pension plans. The
author also zooms in on the extent to which other vulnerable workers, such as low-income
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non-standard employees, have access to collective representation, and how collective
representation may be related to access to employment rights and benefits.
Youngsters hit hard by the crisis
Four years later the situation and the core of vulnerability seems radically changed.
Analysing the developments during the start of the crisis in more than 20 EU members
states, Verick (2009) presents a central question: Who is hit hardest during a financial
crisis? In her view vulnerability is now directly connected to what happens during crisis,
and thus to the process of intensifying restructuring of sectors, companies and – later –
public services. Verick’s answer is given in the under title of her article: The Vulnerability
of Young Men and Women to Unemployment in an Economic Downturn. Analyzing
former financial economic crises1 and the first years of the 2008 global crisis she finds
proof of heightened vulnerability of youth to unemployment. The rapidly growing
vulnerability ‘can be explained by a combination of the degree of economic contraction,
sectorial composition of employment prior to the crisis and institutional structures.’
However, the last dimension (labour market and policy institutions) does not play the
leading role, as Verick observes. In general these institutions seem to react to economic
downfall instead of being autonomous factors enhancing new vulnerability. Rather the
outcome is being driven by the collapse of aggregate demand and restructuring
processes, which is concentrated in contracting sectors. This process subsequently
interacts with the institutional arrangements and the policy environment, which in turn
influences how labour adjusts.’’
Verick points at the heterogeneous impact of the crisis on the labour market in terms of
age and gender dimensions. Huge differences can develop in and between countries and
specific labour market groups. The 2008 crisis produced an important gender dimension
to the vulnerability of youngsters. Young men have been generally more affected,
reflecting that these individuals are employed in such sectors as construction and
manufacturing, which are heavily impacted. Young women nonetheless do experience
increasing unemployment rates often in a similar fashion to young men. In some
countries, they are in fact the group that suffers the most.
In 2013 the IRENE network analysed restructuring in SME’s and in public services.
Köper and Dorshu reported their case study in banking, testing the hypothesis that older
workers are a vulnerable group in restructurings. Their results showed that younger
workers might be more vulnerable. Not because of health problems but as a result of
institutionalized higher job insecurity: ‘An explanation for the low level of job insecurity
of older employees as opposed to younger employees could be that – due to seniority
principles - workers with long term contracts and therefore particular older workers
hardly have to face layoffs in the German public sector. (…) Especially younger
1
Finland (1991), Japan (1992), Mexico (1994), Norway (1987 ), Spain (1977 ), Sweden (1991) and Turkey
(1994)
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employees are more often temporarily employed and thus can be more easily dismissed
than older workers. The principle “last in first out” is the reason for the dismissal of
younger workers in the course of restructurings.’
The authors raise the question if vulnerability is purely a function of workers’ contractual
relationship with their employer, that is their status. Or is the key determinate of
vulnerability certain characteristics, such as (old or young) age, which leave the worker
more vulnerable on the labour market? Or is it a combination of both, where certain
characteristics leave a worker more likely to be in a more vulnerable status employment?
It is one of the key questions to be analysed in the VIRES project: vulnerability because
of positions in the labour market, or (also) because of restructuring policies of companies.
Migrants
Vulnerability of migrants groups seems less related to the crisis. Workers belonging to
migrant groups are more permanently part of their group than youngsters. The latter
group will move to a non-youngsters age groups in due time. This is not the case for
migrants. A first generation migrant (‘foreign born’) will be part of this category during
life time, despite aging. The same for the second generation, although they have been
‘native born’, and some of them can be half native born (one parent migrant, one parent
native born). A third variance is the foreign country they come from: coming from a
member state in the European Union will grant migrants a series of institutional rights and
possibilities on the labour market; this is different for those arriving from a non EU
country.
Figure 1, Unemployment rate of persons in EU-27 with native-born parents and
first- and second-generation background
Source Eurostat
Figure 1 illustrates the big differences between migrants and native born (= non-migrants)
in EU-27 at the start of the financial crisis in 2008. Unemployment among first generation
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migrants is nearly double compared to native born. In the group of second-generation
migrants there is substantial difference between those with a complete foreign
background (both parents first-generation) and those with a mixed background (one
parent native, one parent foreign). Unemployment in the mixed group is near the average
of nationals, in the foreign group of the 2nd generation it is more than 2% higher on
average. This raises the question if vulnerability of migrants is related to restructuring, or
is it a more immanent phenomenon in the labour market?
Vulnarability of migrants related to restructuring?
Figure 2, covering 9 of our 10 VIRES countries (only Bulgaria lacking) shows
unemployment rates of migrants keep staying higher than those of natives during the
whole period. However there are striking variances. Unemployment in the two groups rose
in parallel in 8 of the 10 VIRES countries between 2007 and 2010. Only in Germany there
was a decline, both for unemployment of natives and migrants. In Czech Republic
unemployment among natives inclined, among migrants there was a small decline between
years 1 and 4. In UK the rise of ‘native unemployment’ was relatively higher than
amongst migrants; Italy and Sweden show the reverse: relatively higher rise of
unemployment among migrants compared to natives. For Slovenia lacking migrant data
for 2007 and 2008 make a 4 year comparison impossible.
Figure 2, Unemployment among migrants (compared to ‘natives’) during the crisis, 20072010
Source: Eurostat, Unemployment by sex, age and nationality
These data suggest the vulnerability of migrants (as far as employment and unemployment
are concerned) is partially structural and a systematic factor of labour markets in EU
countries. There are however signs that crisis and restructuring do play a role. Either in
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‘keeping the gap at level’ between native employees and their migrant colleagues (also the
case in Germany). Or in changing this relation: declining the gap (like in Czech Republic
and UKL) or inclining it (Italy, Sweden).
Immigration and emigration as possible factors
It is one of our goals to explore the background of the differences in the position of
migrants between countries in the European Union. Is there a connection with migration
levels? EU member states vary in immigration levels, but also in emigration. Some
countries have faced substantial emigration of younger higher skilled migrants. Partly this
has raised the immigration of this higher skilled category in other member states,
particularly in Germany. In Spain emigration rose during the crisis years. In particular
lower skilled second generation immigrants from Latin-American origin moved back; high
unemployment in the construction sector How did these movements, and the net rate of
migration as the sum of immigration and emigration influence the labour markets.
Discrimination a factor? Individual, institutional, structural levels
Which is the role and influence of discrimination, when looking at the position of
migrants in relation to restructuring and access? We follow De los Reyes and Wingborg
(2002), cited in the Swedish VIRES study: These authors analyze labour market
discrimination at three levels: the individual, the institutional and the structural level. In
their view discrimination is never just a question of individual expressions or isolated
victims. Instead the authors suggest the roots of discrimination have to be found in
institutional and/or structural perspectives. Institutional discrimination refers to the
established systems of regulations and norms in society and working life. Certain rules,
routines, policies, actions and practices make possible that some groups of individuals are
favoured, while others are disadvantaged. Structural discrimination is a combination of
these two levels, grounded on both individual actions as well as institutional practices.
Bisin et al (2011) see the first access to a job as a main factor to cope with individual and
institutional discrimination: ‘Because of prejudices and discrimination, the main problem
for immigrants is very likely to find a first job (whether they are new immigrants or
second-generation immigrants) since once employed they can show their ability and thus,
in principle, prejudices and discrimination should be lower.’
Exploring these structural elements of discrimination is not simple. The question is:
Which could be the institutional and structural mechanisms that contribute to worsen the
situation of vulnerable workers in times of restructuring? The VIRES project reveals some
of these. Institutional discrimination as an extra factor to be denied access to companies is
reported in Belgium (temporary agencies, and bad access to legal employee status for
migrants), in Italy, Spain and Slovenia.
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Restructuring: consequences and main players
Restructuring is a dominant economic and social development in many EU countries
since the beginning of this millennium. The process has even intensified during the last
six years of crisis. Restructuring reflects important changes and decisions on adjustment
of costs and employment levels, as well as quality of jobs and those fulfilling them.
Restructuring can take place:
 in companies and public organizations, internal reorganisations, external decision
making like outsourcing, offshoring and co-operation, privatisation, bankruptcy,
closing product or service lines or opening new ones
 in value chains involving a series of companies and eventually individuals
 in sectors: loss of employment like recently in many countries in construction and
services during the crisis years; development and growth of economic activities
and employment due to new technologies, availability of skilled employees, cooperation between various players in a sector
 in regions confronted with disappearing economic activity or new regionally
based industries or service providers.
Restructuring may often result in job loss and job changes for the employees involved.
Restructuring can also – even in parallel in the same process – be aimed at job creation
(starting a new site, expanding activities in the actual site, extension of subcontracting in
the same country, in another member state or in other continents). The job creation
variant of restructuring was however from 2007 less common than the job loss cases.
Only a minority of the cases monitored in EMCC’s European Restructuring Monitor
ERM, covering announcement of restructuring decisions in the EU, were about creation
or extension of employment.
In the last quarter of 2013 96.245 job losses (72% of all announced job changes) were
recorded in EU27, against 37.925 (28%) announced job gain. The job gains observed
were relatively high in Czech Republic, relatively high losses concentrated in bigger
member states UK, Germany, France and Spain, not unexpected as their nominal
employment rates are much higher than those in other member states. (EMCC, January
2014).
Management and anticipation of restructuring
For quite a period restructuring has been analysed from two perspectives in EU-28:
 ‘Management’, the way and the instruments used to cope with actual restructuring.
Here the concrete steps and decisions, legal and social obligations, instruments to
cope with the result of these decisions, eventually the process of social dialogue to
cope with the process are main elements of managing restructuring processes.
Substantial differences in procedures, legal frameworks, impact of social dialogue,
tools available for cushioning effects of restructuring exist between EU member
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states, also between the 10 participating in VIRES. This report will highlight some
of these in Chapter 3.
‘Anticipation’, policies and tools to anticipate for social responsible restructuring:
how to be prepared and cushion eventual future restructurings, avoid unnecessary
job losses and help people to accommodate with (coming) change. Anticipation
should pave the way to manage future restructurings in a social responsible way.
By being prepared and anticipating possible changes to be expected or forecasted,
employees and employers can and should anticipate change. Taking steps and
developing tools to cope with the changes in an active and employment directed
way, avoiding unemployment, loss of skills, health problems, income problems,
degradation of social identity.

It is often difficult to clearly separate and define these two perspectives, as also projects
done by the IRENE/HIRES network have showed. Still it seems useful to take both
perspectives into consideration, analysing restructuring or developing policies within and
outside companies and institutions. This is certainly the case in the VIRES project.
Anticipation of restructuring can involve decisions and tools ‘facilitating’ future
restructurings in the sense that ‘non-standard’ and vulnerable employment relations are
created and extended, in order to avoid difficult adjustments with the core workforces of
open ended contracted employees. Examples are:
 Raising the rate of temporary contracts, which can be ended without problems and
costs for employers at the end of the contract period
 Raising the number of temporary agents hired from temp agencies – their contract
can be ended as soon as the organizations does no longer need these workers
 Outsourcing non vital or specialized activities to other companies, countries,
independent or self-employed – here an economic or service contract comes in
place of labour contracts and thus avoids obligations by labour law, social
dialogue outcomes,
 In general terms: creating a bigger ‘flexible pool’ around the organization, raising
the rate of external flexibility
Vulnerable groups tend to be over-represented in the flexible pool and under-represented
in the core workforce. Also as a result of tools and principles used during management of
restructuring, like the Last In First Out – LIFO – principle, still in force in many member
states, once dismissals are inevitable. But there seems to be movement. The national
VIRES report for Belgium makes clear that new legislation should cushion the LIFO
principle .2
In the Netherlands, not represented in VIRES, a so-called ‘reflection principle’ replaced
LIFO in 2006, in order to divide the consequences of restructuring over all age groups. The
company workforce is divided in 5 age categories. Within each of these 20% of the dismissals
will be executed on the base of LIFO (Sprenger 2014, Bergström 2014).
2
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Who are the principle players in restructuring processes, both during management of
restructuring and in processes of anticipation? The next part and framework for our
analysis is based on the concepts developed in the MOLIERE project, finished end of
2014 (Bergström, 2014). It identifies the main players and actors in restructuring
processes – both managing and anticipating.
Main players
The individual employee
The individual who conducts work is the main subject of restructuring. The employee
may be directly employed (through an open ended or fixed term contract) by an employer.
Being subject to restructuring is a liminal state, with both objective and subjective
dimensions. An employee notified as redundant is the typical case of being subject to
restructuring. An employee in the flexible pool may not be dismissed but confronted with
the end of a temporary labour contract or a contract for economic performances, without
directly being identified as an objective victim or participant of the process and decisions
made.
Workers not losing their job of contract can still be affected by restructuring and its
outcomes. The workload of these survivors is often increased (Eurofound 2012), their job
requirements changing. Not all employees involved regard themselves subject to
restructuring, even if the employer. Thus, to address the impact of restructuring on the
individual level, one needs to consider the individual’s subjective definition of the
situation.
The impact of restructuring on the individual level and the responsibilities assumed by the
employer often varies. Not seldom those in the flexible pool are the first victims or
addresses subjects. Without knowing they can ‘help’ protect core workers’ jobs,
employment, dependent on the centrality of the employment relationship and the
possibilities to involve other employees than those covered by basic legal protection and
tools available.
Despite the fact that employees are primarily affected individually in restructuring, groups
or categories of employees can be involved or touched, if they share common positions or
common personal characteristics (like young employees, older employees, migrants,
women, low skilled, people with open ended or with temporary contracts, independents
contracted by restructuring firms).
In the VIRES project we looked at groups of young and migrant individuals facing
restructuring. Which are the main features of their relation to restructuring employers?
,
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Which are their strengths and weaknesses towards the restructuring company or
organization when restructuring crosses their path? Which are their main problems and
challenges?:
 Protection against dismissal or not having their temporary contracts extended?
 Not being hired or being in the last cohorts of candidates for new jobs?
 Lacking skills, experiences,
 Self-esteem needed after restructuring?
 Being over represented among low wage earners and in low wage sectors?
2. The employer
The employer is the actor who initiates restructuring, i.e. decides on changes that affect
the employment status and or working conditions for the individual worker. The
employer, management, is the actor with formal responsibility for the employment
relationship, but is not always responsible for the decision to initiate restructuring.
Decisions can be made various decision makers. In the public sector, for example,
political leaders and governments, initiate decisions to change, but they are not always
held accountable for the formal responsibilities in the relationship to the worker affected
by the decision (Bergström, et.al, 2013). Similarly, in larger companies, the decision
leading to restructuring can be rather distant from the actual workplace where workers are
affected. This distance is a major issue when it comes to anticipating and managing
change and is even more complicated when the initiators (decision makers) are located in
one country, like in large multinational companies, and the formal employer
responsibility is located in another. In such organizations, decisions about restructuring
are not only distributed through multiple hierarchical levels, but also through multiple
institutional, regulative and cultural frameworks.
Although the employer is primarily an individual key player in restructuring processes,
the outcome and consequences of these processes can go beyond the single corporation
and the employees directly involved. Sectors can be in restructuring (like construction,
finance, public services as health care), value chains can face restructuring, regions can;
restructuring processes can even have a global character, involving countries and moving
economic activities to other labour markets .
For VIRES key questions about employers’ role and position towards youngsters and
migrants during restructuring have been:
 Do employers anticipate future restructuring resulting in strengthening or in
weakening the relative labour market position of these groups?
 Do employers manage actual restructuring treating these group equally with other
labour market groups and the core worker categories?
 Do employers feel responsible for restructuring consequences for vulnerable
groups
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Workers’ representatives and trade unions
Workers’ representatives have an important role to play in restructuring processes in
representing workers’ interests and ensuring that they are treated with dignity and respect
(Moore, Thomson & Luton, 2008). The role of trade unions and workers representatives
can be more complicated the larger the workplace and the enterprise are. The longer the
distance between the initiator, the decision maker, and the worker who is affected by the
decision, the more the employee is located somewhere in the flexible pool around.
Management of restructuring can be negotiated in social plans. Unions may also take
action to resist restructuring by initiating strikes and other forms of conflicts or suggest
other alternatives than to make workers redundant. Even when trade unions are passive,
they may play a role.
Trade unions do not only influence and monitor decisions on the local level, they also
influence decisions on a more general level, through negotiation of collective agreements
to regulate conditions for restructuring on a more general level for sectors or occupational
groups and or by influencing legal and policy frameworks on national and European
levels.
VIRES looked at the question what unions and works councils can ‘do’ and organize to
help young and migrant workers enter (post-) restructuring companies or prevent them
from being the first to lose their employment due to restructuring.
The supporting actors
The employers’ responsibility for workers in times of restructuring is often outsourced to
external actors. The most wide spread and common form of supporting actor is the Public
Employment Services (PES). The role of the PES is to provide income support workers
who are subject to restructuring and to reduce unemployment through various forms of
active labour market programmes. There are, however, several examples of cases where
employers decide to take on further responsibility for workers, where they organize some
form of in-house transition unit, where workers are supported, both economically and
substantially with the processes of finding new jobs before the employment contract is
terminated (Bergström & Diedrich, 2008b). In other cases, employers outsource this
“function” to private employment agencies or outplacement firms (Knuth, 2008). In
Sweden specific job security councils, established through collective agreements between
social partners, provide transition services to redundant workers covered by the agreement
(Bergström & Diedrich, 2008a).
VIRES questioned how these supporters (can) take into account young and migrant
dismissed or unemployed during restructuring processes. Do special projects and targeted
programmes play a role in influencing decision-making or the consequences of
restructuring for these categories?
The state and public services
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As identified in the ARENAS project (Bergström, et.al, 2010) the state has two primary
roles in relation to managing change and restructuring:
(1)
A regulatory role, to set the rules governing the actors in restructuring activities,
for example the responsibility of employers to inform and consult with workers’
representatives, and the requirements and obligations of employers should they decide to
initiate collective redundancies, as well as the resources, rights and obligations of workers
and their representatives in such situations;
(2)
A facilitative role, to help actors play the roles they have been given in their
respective labour markets and stimulate preferred patterns of behaviour among
employers, workers and workers’ representatives.
VIRES in particular analysed the roles of the state during the crisis years: Which policy
and policy tools have states implemented to improve the position of the target groups in
case of restructuring and after restructuring? Which results are programs like Youth
Guarantee expected to produce?
Restructuring regimes and change
These five main actors may have an important impact on the outcomes of restructuring. In
the MOLIERE project three main roads for adjustment by restructuring are highlighted,
starting from a model the French labour economist Bernard Gazier developed in 2008.
The model combines changes in terms of economic and labour market developments with
the changes in the ‘system’ that facilitates change, the collection of measures, policies and
regulations that exist in a country. Gazier constructs three different restructuring regimes,
defined as the combination of adjustment mechanisms and measures controlled or
adopted by a particular group of actors: adjusting wage and labour costs, quantitative
adjustment (numbers of employees and working hours), qualitative adjustment (measures
enhancing or maintaining the quality of the workforce and assuring more effective use of
labour).
Figure 3: Restructuring and workforce adjustment regimes, according to Glazier
Changes
primarily
realized by:
Restructuring
regimes:
Market
(economic contracts)
Restructuring
regime: Wage
and labour cost
adjustment
Restructuring
regime:
Quantitative
adjustment
Restructuring
regime:
Qualitative
adjustment
Market led
regimes
Dominant
measure: wage
cuts
Negotiated
(social partners)
Dominant
measure
Working time
Dominant
measure:
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reduction
transition to new
job
State
(and public services)
Dominant
measure: Early
retirement
Source: MOLIERE synthesis report 2014 (Bergström, 2014)
Restructuring regimes can face at least three categories of changes. The first are changes
within one of the three the existing regime change processes. The second kind of change
refers to movements in the horizontal axis of the model, a learning process that signifies a
movement from one adjustment mechanism to another. The third type of change refers to
the vertical axis, the way changes of restructuring regimes are made or changes in the
power game between different actors within the restructuring regime.
Bergström {2014), analysing recent changes in restructuring regimes, points at some
possible trends towards:
 More market driven wage and income adjustments in some countries (in particular
UK, Bulgaria, Portugal and Slovenia – all represented in the VIRES project too)
 From quantitative towards qualitative adjustments in some other countries (less
early or no retirement schemes, more temporary working time reduction schemes,
more job-to-job and mobility facilities)
 A movement towards negotiated adjustments in a series of countries (bigger role
for social partners)
 From a dominant role of the state in a series of countries to more negotiated policy
solutions, combined with new state initiatives.
An intriguing question is if the Gazier model of dominant restructuring regimes¸ as it
has been re-formulated in the MOLIERE project, helps us better understand the
position of vulnerable groups on the labour market and in restructuring processes in
various countries. In general the model can help us understand why different groups
can be made vulnerable, depending the dominant adjustment mechanism in a country:
 In countries where restructuring is dominantly managed by wage adjustment,
wage decreases in principle can affect all workers equally. Workers with lower
income will have the greatest difficulties and are most vulnerable. In the longer
term wage reduction could even help newcomers to enter the labour force.
 In dominant quantitative adjustment regimes adjustment is mainly managed by
regulating who is inside and who is outside. Instruments used are early
retirement schemes, short time or temporary unemployment benefits for core
workers; migration and re-migration can also play a role in adjusting
quantitatively. In general, in quantitative adjustment regimes vulnerability is
primarily related to those who are outside the protected group.
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
In regimes where qualitative adjustment is the dominant mechanism, the
vulnerable groups are primarily those who lack work experience or skills
demanded by employers. New entrants with limited work experience are more
vulnerable in times of restructuring.
Is it possible that (groups of) youngsters and migrants are vulnerable in each of the
three dominant models? Outcomes of the VIRES project at least suggest that wage and
income adjustments directed to vulnerable groups are a substantial part of anticipation
of restructuring in all countries, regardless the dominant adjustment regime.
Possibilities to build a flexible pool on the labour market (growing numbers of
temporary contracts and outsourced work) can be found in most countries. Many of
these vulnerabilities are ‘invisible’ within the firms and organizations and provide
opportunities to concentrate anticipation and management of restructuring on
quantitative and qualitative adjustments for the core workers.
Flexible pools of more vulnerable workers can make room for qualitative adjustment,
paving the way for a smaller and highly competent core workforce, worthwhile to
invest in by training and workplace development (higher productivity, effective use of
skilled employees). For less skilled work and for highly specialized – temporary – jobs
the flexible pool can deliver what is needed on short and longer terms.
Vulnerability and restructuring – main observations in this chapter
Both youngsters and migrants are vulnerable in the labour market. Vulnerable groups are
characterized by:
1. Lower health and well-being scores
2. Higher unemployment
3. Structural barriers to enter employment (in particular groups of migrants with
foreign background or parents)
4. Greater difficulties and barriers to attend job protection and open ended contracts
5. Lower protection by legal provisions in the labour market and during restructuring
6. Relatively lower income/wages and inferior working conditions
7. Possible discrimination in the labour market (in particular women and migrants)
8. Barriers to training and retraining during working life
9. Hit harder by economic downfall and crisis (in particular youngsters)
In fact we can observe three main elements of vulnerability:
-
Economic vulnerability: uncertainty about income and wage level, at risk of not
being able to pay for living costs, and being dependent on social security benefits.
Employment vulnerability: uncertainty about employment stability, at risk of
loosing employment, and being dependent upon unemployment benefits.
Knowledge vulnerability: uncertainty about what skills are needed and required, at
risk of loosing employability, and/or being forced to take jobs with low skills
demands.
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Are these vulnerabilities only a product of labour markets and their regulations? VIRES
has tried to identify in which way and to which extent restructuring processes contribute to
vulnerability of young and migrant workers. Which is the role and influence of each of the
five main players: employers, individual workers, trade unions and works councils,
supporting actors like the public employment services, the state (regulating and
facilitating) and public services.
Can the Gazier model of changing restructuring regimes help us better understand how
and why some groups are more vulnerable than others as a consequence of anticipation
and management of restructuring?
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2.
Restructuring and vulnerability
In this chapter we look at the relation between restructuring processes and vulnerability of
young and migrant workers. Is vulnerability of these labour market groups directly related
to restructuring and vice versa? Or are groups of youngsters and migrants per definition
vulnerable on the labour market, independent from restructuring processes and
regulations in?
Chapter 1 suggests the latter is more the case for migrants, in particular those from
foreign parents. A direct relation with actual restructuring could be at stake for youngsters
during the crisis. We will have a more comparative look at some statistics covering the
crisis years 2008 to 2014 in the VIRES countries to test this idea.
Restructuring during the crisis
From 2002 Eurofound runs the EMCC, the European Monitoring Centre on Change.
Announced restructurings of a certain scale have been monitored for EY member states,
collective dismissals as well as planned job creation.
Figure 4, Announced restructurings 2002-2013
Announced restructurings 2002-2013 in 11 member states
1000
800
600
400
200
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: Eurofound: Fox, 2014
Figure 4 shows the number of announced restructurings in 9 of the 10 VIRES countries,
except for Italy. More major restructurings have been announced in the bigger member
states, both job losses (the majority) and job creations. 2009 had more than 900
announcements in these 11 countries. In particular in the UK and Sweden (the latter
country having a much smaller labour market) relatively many restructurings were at
stake in 2009. For Germany, France and Spain the year 2013 had the most
announcements.3 For Belgium and the Czech Republic this was the case in 2009, at the
start of the crisis.
The high numbers of restructurings in bigger countries do not completely reflect the risks
and chances to lose a job or get a new one, due to restructuring. First only major
announcements are part of the database. What happens in and with smaller companies or
3
It might be that Germany had relatively more job creation announcement
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non-announced restructurings is not part of the EMCC data. And secondly labour
markets in the VIRES countries vary a lot in size.
In the final report of the MOLIERE project restructurings in 2007 and 2013 have been
compared for 9 of the 10 VIRES countries. For the year 2007 an indicator could be
constructed of the rate of those threatened with unemployment in the six years after. Next
Table 2 shows this rate was by far the highest in Slovenia, the Czech Republic and
Sweden – not the biggest countries in VIRES.
Table 2, Workers threatened by job loss between 2007 and 2013
Number of threatened by
job loss (2007-2013)
Belgium
73443
Rate of threatened of
employed in 20074
1,69%
Bulgaria
14595
0,45%
Czech Republic
123182
2,54%
France
444270
1,75%
Germany
349932
0,94%
Slovenia
43293
4,52%
Spain
122335
0,60%
Sweden
110043
2,47%
UK
563792
1,98%
Total
2035179
1,43%
Source: Eurofound EMCC, in Bergström 2014
Change in employment situation youngsters during the first 4 years of the crisis
As Table 2 illustrates participation in employment changed dramatically in the years
2008-2012. In 2008 37,3 % of all young people between 15 and 24 declined was in
employment in EU-28. Four years later the rate had dropped to 32,8 %. In some of the
VIRES countries the loss of jobs was much higher than the European average; Spain
(losing nearly half of its youth jobs), Slovenia, Italy, United Kingdom. In all countries the
number of ‘inactive’ youngsters (= not in employment, nor in unemployment).
Partly this reflects more young people stayed away from the labour market, partly
restructuring and dismissals. Only in Germany youth employment did keep its level at
46,6%, but more youngsters went ‘inactive’ there too .
4
This indicator is calculated as the sum of all workers threatened by redundancy between 2007 and
2013, divided by the number of workers employed in 2007. Thus, the indicator shows how many of
those employed in 2007 were threatened to be redundant during the period 2007-2013.
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Table 3, Change in the share of young people employed, unemployed or inactive, persons
aged 15–24, 2008 and 2012 (% of the population aged 15–24)
Employe
Unemploy
Inacti
d
ed
ve
EU-28 2008
37,3
6,9
55,8
2012
32,8
9,7
57,5
Belgium 2008
27,4
6,0
66,6
2012
25,3
6,2
68,5
Bulgaria 2008
26,3
3,8
69,9
2012
21,9
8,6
69,6
Czech Republic 2008
28,1
3,1
68,9
2012
25,2
6,1
68,7
Germany 2008
46,6
5,5
47,8
2012
46,6
4,1
49,3
Spain 2008
36,0
11,7
52,3
2012
18,2
20,6
61,2
France 2008
31,3
7,1
61,6
2012
28,8
9,0
62,2
Italy 2008
24,4
6,6
69,1
2012
18,6
10,1
71,3
Slovenia 2008
38,4
4,5
57,1
2012
27,3
7,1
65,6
Sweden 2008
42,2
10,7
47,2
2012
40,2
12,4
47,4
United Kingdom 2008
52,4
9,2
38,3
2012
46,9
12,4
40,7
Source: Eurostat Regional Yearbook 2014
Table 3 makes clear that young people face huge problems of access to existing
employment.
But not only the rate of employment went down for youngsters. Also the conditions of the
remaining employment have changed. Figure 5 illustrates that in EU-27 4 young people
(15-24) who are active in the labour market (performing a job) had a temporary job
compared with 1 in the whole labour market group. Eurofound, comparing youngsters
with their colleagues of 30 years and older, observes that ‘the proportion of 15–24 yearolds employed in temporary jobs in the EU is almost five times higher than for those aged
30 and over’. Here the direct link to restructuring is striking. Employees with a temporary
contract are among the first victims of restructuring with job losses, as their contract can
simply end by not being extended.
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Figure 5, Proportion of employees in the 15–24 and 25–64 age groups in temporary jobs
(2012), % of employees in each age group
Source: Eurofound, 2014 (based on Eurostat, Labour Force Survey (LFS)
Youth unemployment in VIRES countries compared
But the EU-27 averages hide huge differences between countries and restructuring
regimes in oput 10 VIRES countries, as Figures 6a and 6b reveal. Germany (below 7,7%
in October 2014 ), Slovenia (16,4%) and UK (under 19%) at the relative ‘lower end’,
Italy (43,3%) and Spain (53,8) with the highest scores. In 2014 youth unemployment
went slightly down in 8 of the 10 countries, Belgium and Italy still facing a small incline.
Bulgaria, Italy and Spain were the VIRES countries where youth unemployment more
than doubled 5 or 6 six years later compared to 2008. Germany was the only country with
a net decline of youth unemployment. From 2009 youth unemployment was at a rather
stable level in France, Sweden, UK and the Czech Republic (the latter with substantial
decline in 2014).
Five VIRES countries reached their peak in 2013, the Czech Republic, Sweden and UK
had it before 2013. In Belgium and Italy a continuous incline took place since 2010.
Figure 6a, Comparison youth employment in 6 VIRES member states during crisis years
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Youth unemployment %
60
50
40
30
20
10
0
Youth unemployment in % 2008-2014
Belgium, Bulgaria, Czech Republik, Germany, France, Italy
Belgium
Bulgaria
Czech Rep.
Germany
France
Italy
2008
18
2009
21.9
11.9
9.9
15.1
16.6
10.4
19
21.3
11.1
23.6
25.4
2010
2011
22.4
21.8
18.7
25
18.3
9.8
23.3
27.8
18.1
8.5
22.6
29.1
2012
19.8
2013
28.1
19.5
8
24.4
35.3
23.7
28.4
18.9
7.8
24.8
40
24
21.5
14.2
7.7
24.3
43.3
Oct 2014
Source: Eurostat
Figure 6b, Comparison youth employment in other 4 VIRES member states during crisis
years
Youth unemployment
Youth unemployment in % 2008-2014 Slovenia, Spain,
Sweden, UK
60
50
40
30
20
10
0
Slovenia
Spain
Sweden
UK
2008
10.4
24.5
20.2
15
2009
13.6
37.7
25
19.1
2010
14.7
41.5
24.8
19.8
2011
15.7
46.2
22.8
21.3
2012
20.6
52.9
23.7
21.2
2013
21.6
55.5
23.6
20.7
Oct 2014
16.4
53.8
23.2
19
Source: Eurostat
Relation/rate youth unemployment and general unemployment
How did youth unemployment relate to the general unemployment levels in the VIRES
countries?
Figures 7a and 7b illustrate some differences too.
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Figure 7a, Unemployment and youth unemployment 2008-2012 in Belgium, Bulgaria,
Czech Republic, Germany, France and Italy
60
50
40
30
20
10
0
Belgium
6
Bulgaria
3.8
Czech Rep.
3.1
Germany
5.5
France
7.1
Italy
6.6
YUE 2008
18
11.9
9.9
10.4
19
21.3
UE 2012
6.2
8.6
6.1
4.1
9
10.1
YEU 2012
19.8
28.1
19.5
8
24.4
35.3
UE 2008
Source: Eurostat
Figure 7b, Unemployment and youth unemployment 2008-2012 in Slovenia, Spain,
Sweden and UK
60
50
40
30
20
10
0
UE 2008
Slovenia
4.5
Spain
11.7
Sweden
10.7
UK
9.2
YUE 2008
10.4
24.5
20.2
15
UE 2012
7.1
20.6
12.4
12.4
YUE 2012
20.6
52.9
23.7
21.2
Source: Eurostat
The figures show youth unemployment in 2008 was at a rate of 3,0 or more than general
unemployment in four VIRES member states Belgium, Bulgaria, the Czech Republic and
Italy; between 2,5 and 3,0 in France, from 2,0 – 2,5 in Slovenia and Spain; between 1,5
and 2,0 in Germany, Sweden and UK.
In 2012 these rates, although the levels had risen significantly, were more or less the same
in 9 of the 10 member states,: Belgium, Bulgaria, Czech Republic, Germany, France,
Italy, Slovenia,. Spain, Sweden and UK. Only in Germany the unemployment rates went
down, both for youngsters and the labour force as a whole.
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Regional variations
Not only do we find differences in the level of youth unemployment. Maybe even more
relevant are the differences within countries, between regions. Figure 8 summarizes
regional variation of youth unemployment in the VIRES countries in 2012. In Spain the
lowest rate was around 40, the highest more than 70%. In Italy the variation was even
bigger: between just over 10% in the North until nearly 60% in southern regions.
Relatively high regional variations also in France and Belgium. In Slovenia, Sweden and
Germany ‘low’ and ‘high’ youth unemployment regions are much closer to the national
average.
Figure 8, Regional disparities in the youth unemployment, persons aged 15-24 by
NUTS 2 regions 20125
80
max
mid
min
Capital region
National average
Other NUTS regions
1
2
70
60
50
40
30
20
10
Germany
Slovenia
Belgium
Czech Republic
United Kingdom
France
Sweden
Bulgaria
Italy
Spain
0
Source: Eurostat Regional Yearbook 2014
Migrants in the VIRES countries
The position of migrants in and between VIRES countries is more complicated. As
various authors show in the detailed study on migrants, employment and labour market
integration (= policies), edited by Platonovo and Urso (2010), EU member states vary
thoroughly in:
 The composition and backgrounds of immigrants
that year – this can not be derived from these data.
The shaded bar shows the range of the highest to lowest region for each country. The dark bar shows the
national average. The orange circle shows the capital city region. The dark purple circles show the other
regions.
5
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
The rights and status of groups of migrants, also in relation to restructuring
processes
 The sectors and industries in which migrant employees are concentrated
The national VIRES papers give lots of details about the position of special groups of
migrants in each country.
In some countries the crisis has stimulated new streams of migration. High skilled
‘national’ employees leave the country, migrating to EU member states with better
perspectives and offering their country a future brain drain. Almost 25.000 people
emigrated from Slovenia between 2008 and 2012, where as 14.000 immigrants moved in,
mainly from outside the EU.
(like relatively high skilled but badly paid Bosnian migrants).
Huge downsizings have hit special sectors during the crisis, like construction in Spain.
One of the results has been a re-migration stream of South-American construction
workers losing their jobs and perspectives – many of them left in recent years: the number
of South-American foreigners went down from more than 1.4 million in 2008 to just over
700,000!
A recent Italian report summarizes the position of migrants, and shows restructuring
policies can stretch out into the black economy, ‘slavery’ at farms, a majority of
temporary contacts, health and safety problems, as well as discrimination and racism at
the workplace (Caritas Report, 2014). The report sums up:
- 41.2% of migrant workers is in a lower job category than appropriate considering
their qualification and the real job;
- Migrants have low opportunities to find high-skilled jobs;
- A high incidence of black economy;
- Increase in slavery, especially in agriculture;
- A high incidence of temporary contracts
- A high incidence of accidents at work;
- A high presence of discrimination and racism at workplace
- Low wage
Transition from education into labour market and restructuring companies
Both for young people and migrants the transition from education is an important access
factor. Young people leaving school without any experience of what happens in
companies and organizations are more vulnerable for not be hired or the first to be fired.
Migrants having a qualification not recognized or heavily under-valued in the receiving
country will be pushed into low skilled employment at arm length of protected quality
jobs in companies.
A recent report argues the ‘Nordic’ model (young people in Nordic countries leave their
parental house much earlier than their age peers in South and east Europe) and
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‘Apprenticeship’ models (like the still dominant dual vocational system in Germany) are
characterised by a more rapid transition to adulthood and a quicker transition from school
to work. At the other end of the spectrum, in the ‘Eastern European’ and ‘Mediterranean’
models, difficult and problematic school-to-work transitions are associated with very slow
and late transitions to independence and autonomy. The report claims that in general,
countries with a higher integration of school and work, through apprenticeship
programmes or through more young people effectively combining school and early labour
market experiences, display a smoother and quicker transition from school to work
(Eurofound 2014).
Indeed a number of the case studies in the VIRES project concentrate on agreements and
measures creating new possibilities for apprenticeships within restructuring companies
(Sweden, Italy), in order to create entrances in companies – even if they are restructuring
and/or downsizing. Here trade unions accept that the apprenticeship places have no open
ended contracts or an employment guarantee. Training for a job and experience in the
execution should help young people to be in a better position on the labour market after
their contract.
Student work is another way of bridging transitions. But in combination with
restructuring it can also create new vulnerabilities. The Slovenian concept of Student
Work in fact made other and better job qualities vulnerable, as employers prefer cheap
and skilled students over school leavers looking for a job.
Youngsters and migrants in the VIRES countries, first conclusions
Available data suggest that youth unemployment moves with the crisis at a level of 2,0 to
more than 3 times higher than general unemployment, but in most countries within the
borders of the situation before the crisis. Restructuring contributed to increasing
unemployment and declining access to jobs for young people. The position of young
people vis a vis restructuring organizations and on the labour market seems more and
more vulnerable through the crisis years.
The same is true for categories of migrants. Partly they lack formal rights to enter the job
market or have an equal status as other employees. This makes them extra vulnerable for
victimization in restructuring decisions: the first to be fired or not hired, dependent on low
skilled work and workplaces, lacking protection to be autonomous players in case of
restructuring. Even trade unions and public policies are often far away.
Behind the unemployment data less visible forms of restructuring have developed.
Anticipation of future restructurings leads to a shift into more vulnerability for certain
groups, blocking access and facilitating all sorts of adjustments.
The VIRES project does not proof that vulnerability of young people and migrants is
mainly a product of restructuring. These groups are also vulnerable on the labour market,
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30
in particular in years of crisis. They often lack protection and facilities to be a major
player in restructuring processes. But their vulnerabilities tend to grow and to be
exploited by new ways of anticipating restructuring:
 By the creation special groups, at arm length or further away from the core work,
to deal with the main ‘problematic aspects’ of restructuring
 By creating barriers and new contract forms (temporary contracts, outsourced
jobs, forced self-employment, near-slavery employment relations) to reduce
labour costs, benefits, dismissal budgets
 Partly also by existing restructuring procedures for core workers and their
supporters (the ‘crowding out‘ effect of training and mobility programs, policy
measures concentrating on management of restructuring).
This shift touches each of the three boxes of the Gazier model, favilitating:
- new forms of wages and labour costs management (incomes, wages,
unemployment benefits, pension rights) for the growing group without open ended
contracts
- new fields of quantitative adjustments in countries by contracting out, temporary
employment relations, and make more external flexibility possible
- the creation of low quality jobs for a part of the workforce as a result of more
vulnerable contract relations and less access to policy facilities and facilities.
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31
3.
Case studies and national workshops
11 Cases from 7 partners
In 7 of the 10 VIRES countries one or more case studies were added to the desk research.
In Germany, Czech Republic and Spain no case studies have been performed. In this
chapter we summarise the contents and conclusions of these studies.
Table 4 gives an overview of the contents and coverage of the case studies. Of the 11 case
studies performed, 5 analyzed aspects of restructuring in manufacturing (cars, steel, ICT),
3 in public services, 1 in commercial services (a micro firm), 1 in a state organized
transition program, 1 multi-sectorial . 8 had youngsters as a main group, 2 or 3 migrants,
8 covered (partly) also other groups of employees or unemployed.
Table 4, Case studies in 7 VIRES countries
Belgium
Bulgari
a
Name/topic
M
Reconversion cells
ICT-Telecom
X
X
Electric services
France
Re-employment
support
Italy
Generational relay
Slovenia Migrants job quality
Journalists
outsourced
Sweden
Last in first out
Saab bankruptcy
Volvo-step
UK
Care company
Total
10
M = Manufacturing
PS = (Former) Public services
CS = Commercial services
Med = Media, Press
STS = State Transition Services
PS
CS
STS
Med
X
X
X
MS
Y
s
X
X
Mi
G
X
X
X
X
X
X
X
X
X
X
X
5
X
X
X
X
X
X
X
X
X
X
3
1
2
1
8
MS+ Multi-sectorial
Ys = Youngsters main group covered
Mi = Migrants main group covered
OG = Other groups (also) covered
X?
X
3
X
8
Belgian case: At steel company Arcelor, low skilled young employees and older core
workers could be outplaced for a period of a year to prepare for dismissals and new jobs.
could prepare for restructuring and dismissals. Using a state funded Walloon outplacement
device (conversion cells) they could be coached by former trade unionists coaching.
Employees participating were interviewed on their experiences during the scheme.
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Young employees uttered bitterness (“We trained the one who took our job.”), acceptance
and showed their ability to switch to another job “again”. Pre-pensioners showed relief,
serenity and prepared for their future personal projects.
Bulgarian case 1: ICT skilled youngsters at Bulgarian Post EOOD Company, Bulgarian
Telecom and a HP multinational company) are in the better positions, in particular those
with soft skills and good ideas. They are well salaried, accompanied in their carrier
development, trained. Most vulnerable are workers beyond 55 years, with low qualification,
lack of computer and foreign language literacy.
However the young ICT employees miss basic rights at work (organizing in trade unions
forbidden) and have to work extra (health risks). Many cannot participate in management and
decision making about business development of their company.
Bulgarian case 2: 3 of the 16 workers in a private micro firm providing electrical services are
young workers. They are forced to do extra work with a lower salary. They lack training
courses and do not find a trade union defending their rights. In times of restructuring they
have a higher risk to lose their job, as management wants to keep the experienced older
workers.
French case: The Employment Security Contract (CSP) based on a national interprofessional agreement, was introduced into French law in 2011. It can provide pay subsidies
to the amount of 80% of the last gross salary, and intensive individual coaching, support and
training by the national Public Employment Services. The negotiators of the national
agreement knew the measure would systematically exclude young workers and presumably
migrants. Experimentally there is a possibility to extend the CSP to employees on fixed-term
contracts, including agency workers. It was only applied in some areas on a temporary basis.
Analysing this initiative two main problems came up. First, the benefits provided are not
seldom insufficient to make a living. Potential beneficiaries often have stronger short-term
incentives to take up other precarious jobs, in particular through employment agencies.
Second, a continuous follow-up to beneficiaries is not guaranteed. The CSP allows
employees to switch between training or coaching, and work. Many job seekers only use it in
times when no gainful employment is available, which makes continuous participation in
training or coaching difficult.
Possible improvements of CSP: make participation in the programme more interesting and
effectively support people in precarious employment.
Italian case: Some years ago Energy company ENEL started a new important restructuring
with significant job reductions. Reduction in demand, decline of industrial and household
electricity consumption, stronger sectorial competition had led to a productive
‘overcapacity’. Even though trade unions recognized and accepted the necessity of the
restructuring, they claimed for solutions with the lowest impact for in particular youngsters.
After a long-lasting discussion, In May 2013 the company and unions agreed on a
‘generational relay’ device: early retirement on a voluntary basis for 3,500 employees,
simultaneously hiring of 1,500 workers between 18-30 as apprentices in technical and
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commercial jobs. Apprentices may move to open-ended arrangements but the company has
no obligations to keep these workers after three years. Pay levels are lower, health and
wellbeing might be more vulnerable: the new workers are expected to have more extended
multi-tasking, working time flexibility, higher work intensity.
For the trade unions involved the agreement is very important and innovative as part of
management of restructuring, even though ‘it is not enforceable to all companies, but only to
the big ones’.
Slovenian case 1: The ‘migrant case’ shows the dominant profile of a migrant worker in
Slovenia is an older worker in a ‘3D job’ (Dirty, Dangerous and Demanding), with more
health problems, socially and economic exclusion, forced into elementary survival patterns.
Many are well educated and overqualified for the job they get and do. Because of irregular
work schedules, poor working conditions and low wages they represent a high-risk poorly
informed, marginalized, exploited and discriminated workforce.
Slovenian case 2: New labour and copyright legislation facilitated a transition of open ended
and external contracts into self-employment for journalists, in particular during the crisis.
Between 2008 and 2013, the number of self-employed journalists increased from 450 to 563,
the number of full-time journalists decreased by 200 people. In 2014 practically no external
contractors in the field of media do not have a status of self-employed. For employers it
means lower administrative burdens. Self-employed journalists pay taxes and social security
contributions, tasking over administrative burdens.
Swedish case 1: In 2008 the Volvo is praised for its work to increase the share of women in
the Tuve plant production line. The 2500 workers come from about 40 different nationalities,
among them 400 women. In 2010 every third newly recruited worker should be female and
the share of women should increase by 70 per cent. But in 2009 in response to the global
financial crisis the principle of last in first out is applied. As a consequence young women
and men working in the factories are made redundant. The efforts to support diversity and
gender equality in the workplace are erased.
Swedish case 2: In December 2011 SAAB goes bankrupt, a severe form of restructuring with
job losses for all 3000 employees. Coaches from two bi-partite Job Security Councils
immediately start contacting 95% of them. In individual meetings the redundant workers are
informed about the services, invited to express their expectations and support needs and agree
on the support process with the coach. The case demonstrates some problems and challenges
of restructuring in the Swedish context. While measures to facilitate transition to new jobs are
implemented quickly for recently dismissed workers, those already unemployed can get more
vulnerable because of severe competition with these 3000 ex Saab employees.
Swedish case 3: VOLVO-step, negotiated/agreed by trade unions, creates a 12 months’ paid
apprenticeship contracts for youngsters during three (crisis) years, to bridge the gap between
unemployed educated youngsters and restructuring firms. For young school leavers it offers
access to future employment in manufacturing, industry can hire ‘experienced’ youngsters in
the coming years. From autumn 2012 1200 young people (400 each year) get 12 weeks theory
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and 34-weeks internship. They have five weeks of paid holidays and get a fixed monthly
salary of 17000 Swedish crowns (about €1900).
All participants in the program are offered a fixed-term employment of 12 months for the
duration of the program. Their wage is 75% of the starting salary of about SEK
17,000/month. The local trade unions agreed that the program was to be seen as an
apprenticeship program, including training and learning on the job, which means that the
youngsters would not compete with ordinary jobs. As their fixed-term employment does not
exceed 12 months, they do not have priority to re-employment. The company regards the
initiative as an investment, securing its long-term sourcing of expertise and manage the
forthcoming retirements (= anticipation). This view is supported by the local trade union
representatives. Volvo-step has resulted in a new Government´s programme setting up a
‘Professional introductory Agreement’ with a subvention for salaries and supervision (€330
to €440) per individual.
United Kingdom case: A former local council run care company, privatized 25 years ago, is
in the process of closing in order to redevelop the property and build a new, larger and more
upmarket care home on the site. With the exception of some senior managers almost 70
employees are minority ethnic or migrant, the majority being either Filipino, west African,
Caribbean or black British. Most of them have open ended contracts, an a-typical situation in
health care, a heritage from the former public status of the home.
A range of support measures is implemented by employer and union. No permanent or
contract staff are dismissed. Staff, also those on temporary contarcts or form an agency, are
offered the opportunity to transfer to other care homes owned by the company if suitable
vacancies existed.
Despite the support the period is stressful and uncertain for many workers. The union focuses
on developing and training representatives from specific nationalities such as Filipino and
African. They feel these representatives will have a deeper empathy and understanding of the
needs of their members compared to white representatives and thus create more trust. All
workers are redeployed on their existing or higher salaries, very unusual in this sector.
Some lessons from the case studies
Some of the case studies highlight the relation between vulnerable and less vulnerable
employees. Either showing that restructuring processes make vulnerable groups more
vulnerable, as they are the first to leave or lose their contract if job losses are at stake (‘last in
first out’, expiration of temporary contracts, lower tariffs or less hours paid for selfemployed).
Or they are part of (apprenticeship) agreements, introducing vulnerable groups into
restructuring firms, but on more vulnerable conditions (temporary contracts, lower incomes)
than core workers moving into pre-retirement or staying in the company.
Vulnerable groups facilitated by state measures or schemes often face lower conditions and
perspectives (income, employment, training schemes) than other employees. This is also a
risk factor for success of these measures in coping vulnerability (examples in Belgium and
France).
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Trade unions are involved in difficult negotiations, accepting more vulnerable conditions if
they want to achieve improvements for youngsters and migrants.
National workshops
The workshops expressed the severity and vulnerability of (certain groups of) youngsters and
migrants in the country. A part of these are institutionalised in the labour market. The other
part is connected with and a result of restructuring policies, both managing and anticipating
change. The workshops discussed the need to give vulnerable groups a voice in restructuring,
the relation between education and restructuring/vulnerability, the need to include vulnerable
groups in in management and anticipation of restructuring and its negotiations, ‘crowding
out’ effects, positive and negative effects of the LIFO principle, the relation between
vulnerability and economic downturn during the crisis, government regulation fostering
vulnerability, discrimination, lack of knowledge on the position of vulnerable groups
nationally and regionally, position and tools for trade unions facing restructuring.
4.
Concluding remarks
Vulnerability of groups of workers covers:
- economic vulnerability: uncertainty about income and wage level, at risk of not being
able to pay for living costs, and being dependent on social security benefits.
- employment vulnerability: uncertainty about employment stability, at risk of loosing
employment, and being dependent upon unemployment benefits.
- knowledge vulnerability: uncertainty about what skills are needed and required, at
risk of loosing employability, and/or being forced to take jobs with low skills
demands.
Although the VIRES countries share some main indicators for vulnerability of young and
migrant people, there is a huge variety in the degree and the intensity of vulnerability
problems (unemployment, access to jobs, educational transition systems, position of trade
unions, state measures and services). To combat vulnerability for special groups, new
solutions and tools will have to be developed within the frameworks of national, sectorial and
certainly also regional levels – as vulnerability varies widely among regions in the same
country.
The main players will include restructuring companies, anticipators of restructuring,
educators, and policymakers. And of course young and migrant people themselves, despite
their vulnerable position during and after the crisis.
Youth unemployment seems to move with the crisis at a level of 2,0 to more than 3 times
higher than general unemployment, but in most countries within the borders of the situation
before the crisis. Restructuring worked out in rising unemployment and declining access for
young people. In most countries in line with the general effects of restructuring. However the
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position of young people vis a vis restructuring organizations and on the labour market seems
more and more vulnerable through the crisis years.
The same is true for categories of migrants. Partly they lack formal rights to enter the job
market or have an equal status as other employees. This makes them extra vulnerable for
victimization in restructuring decisions: the first to be fired or not hired, dependent on low
skilled work and workplaces, lacking protection to be autonomous players in case of
restructuring. Even trade unions and public policies are often far away.
Emigration or re-migration are both signs of vulnerability and adjustment mechanisms during
the crisis.
Behind the unemployment data less visible forms of restructuring have developed.
Anticipation of future restructurings leads to a shift into more vulnerability for certain
groups, blocking access and facilitating all sorts of adjustments.
The VIRES project does not proof that vulnerability of young people and migrants is mainly
a product of restructuring. These groups are also vulnerable on the labour market, in
particular in years of crisis. They often lack protection and facilities to be a major player in
restructuring processes. But their vulnerabilities tend to grow and to be exploited by new
ways of anticipating restructuring:
 By the creation special groups, at arm length or further away from the core work, to
deal with the main ‘problematic aspects’ of restructuring
 By creating barriers and new contract forms (temporary contracts, outsourced jobs,
forced self-employment, near-slavery employment relations) to reduce labour costs,
benefits, dismissal budgets
 Partly also by existing restructuring procedures for core workers and their supporters
(the ‘crowding out‘ effect of training and mobility programs, policy measures
concentrating on management of restructuring).
In the VIRES countries – eventually with the exception or Germany - the growing
vulnerability of young and migrant (future) employees is certainly related to restructuring
policies and practices. In this way there is indeed a correlated relation.
However the huge variations in degree and aspects of vulnerability in and between the
countries shows that also labour market institutional factors, economic developments,
regional developments and policymaking of the main players in the labour market play a huge
role.
It will be a task for these players in each country to develop new strategies, integrating
structural vulnerability drivers and the management and anticipation of restructuring at
various levels. The actual situation is not very promising that this can be done soon and at
substantial scales, as some reactions ion the national papers illustrate.
The Gazier model for restructuring, presented in Chapter 1 helps understand the relation
between vulnerability of youngsters and migrants and restructuring decision, in particular new
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ways of anticipation. The precise forms and degrees of vulnerability seem to be related to the
kind of restructuring regime in a country. Dependent of the dominant restructuring measures
different groups can be vulnerable and the distribution of vulnerability varying.
In regimes where short time working schemes are used permanent workers will not be laid
off. In principle they are not competing with the new entrants for those jobs that exist.
However, employers may not necessarily hire many new workers, and help keep vulnerable
groups substantially.
In a market regime vulnerability is more spread among all labour market groups. As
adjustments are made through reducing wages, all workers are vulnerable. In these countries
temporary contracts are less necessary to adjust. Most often employment protection is rather
low for many people.
In regimes characterized by qualitative adjustment (e.g. Sweden), and extensive support for
dismissed workers, there is the risk of creaming off effect. New entrants are vulneralized,
because they have to compete with dismissed workers.
For skilled and experienced core employees a move from income and quantitative
adjustments to more qualitative adjustments can be observed, partly driven by employers,
employees, trade unions and supporting institutions. Income and quantitative adjustments are
still there, but less visible than during mass dismissals.
Some of the case studies highlight the relation between vulnerable and less vulnerable
employees. Either showing that restructuring processes make vulnerable groups more
vulnerable, as they are the first to leave or lose their contract if job losses are at stake (‘last in
first out’, expiration of temporary contracts, lower tariffs or less hours paid for selfemployed).
Or they are part of (apprenticeship) agreements, introducing vulnerable groups into
restructuring firms, but on more vulnerable conditions (temporary contracts, lower incomes)
than core workers moving into pre-retirement or staying in the company.
Vulnerable groups facilitated by state measures or schemes often face lower conditions and
perspectives (income, employment, training schemes) than other employees. This is also a
risk factor for success of these measures in coping vulnerability (examples in Belgium and
France).
Trade unions are faced with difficult negotiations - more or less accepting more vulnerable
conditions, if they want to achieve improvements for youngsters and migrants.
A selection of policy recommendations from the national workshops:
 The need to give youngsters a voice in the national (un)employment programmes
 The importance of education programmes, bridging the gap between (vocational)
education and jobs in (restructuring) firms
 The importance of negotiated agreements between the main restructuring players,
employers, trade unions and employees, to re-connect vulnerable groups and
restructuring firms
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







The crowding out or creaming out effects of ‘good provisions for dismissed core
workers’, pushing the non-core workers further from employment perspectives
The need to discuss and eventually change LIFO (Last In First Out) as leading
principle for managing restructuring
Recognize the relation between vulnerability of certain groups and economic
downturn in a country
In some countries government policy has increased the vulnerability of migrants to
restructuring by keeping many at the base of the occupational hierarchy
The importance of (hidden) discrimination in keeping groups of migrants vulnerable
The need to investigate more into management and anticipation of restructuring at
company level and the outcomes for migrants and youngsters
Look for much more detailed evidence about youngsters and migrants both on the
national and regional level
Trade unions could opt more for ‘inclusive bargaining’, integrating vulnerable groups
in the negotiation processes during restructuring
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Appendix
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