Management of restructuring
Exiting measures and tools
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Mass economic redundancies
Danish definition of economic redundancy:
“Redundancy implemented by an employer for
one or more reasons, which cannot be
ascribed to the employee”
Danish Ministry of Employment
Planned number of Danish job cuts
Sector 2003 2004 2005 2006 2007 2008 2009
Manufacturing 6,336 3,124 3,945 3,740 787 4,352 6,876
Transport/communications 2,910 0 1,289 100 0 565 500
Other services 0 0 0 0 300 205 0
Real estate/business activities 120 0 0 130 0 701 270
Hotels/restaurants 0 0 0 100 0 102 0
Retail 550 0 0 250 0 225 645
Agriculture/fishing 0 0 0 0 0 115 0
Financial services 100 0 0 0 100 300 660
Total 10,016 3,124 5,234 4,320 1,187 6,565 8,951
Source: European Monitoring Centre on Change, European Restructuring Monitor
Major job cuts in Denmark
September 2008 –
Economic redundancy procedures (I)
• A relatively simple process in Denmark
Act on early warning, etc. in connection with large-scale redundancies
The information-consultation procedure
• The reasons for the proposed redundancies
• The number of employees to be dismissed, the affected categories of
employees, as well as the period where it is anticipated that the redundancies
will take place
• The number of employees normally employed at the company as well as the
categories to which they belong
• The criteria to be used for selecting the employees to be dismissed, to the
extent that the legislation permits the employer to do so
• Whether there among the employees to be dismissed are employees with
access to redundancy payments set by individual or collective agreement, and
if so how those allowances are determined.
Economic redundancy procedures (II)
Obligations of the employer
• Basically limited to informing the
Regional Employment Council
• Can take place after 30 days…
• …or after 8 weeks if the number
of redundancies equal more than
50 % of the workforce and the
total number of people employed
at the site is at least 100…
• …unless otherwise agreed in a
collective or individual agreement
The worker support measures
• Outstanding amounts that the firm
owes them according to their
contracts and the collective
• Otherwise only in special cases (e.g.
people employed on
Re-employment measures – 2 types
• Initiatives directly related to the
economic redundancy procedure
• Other re-employment initiatives
Initiatives directly related to the economic
Major job reductions: Financial support for re-employment initiatives
• Funds from the warning pool (varslingspuljen)
– Information meetings for the dismissed employers.
– Buying individual consultations with consultants at the jobcentres to the
– Courses in job searching for up to two weeks within the notice period.
– Skill development, including further education of the employees for up
to eight weeks within the notice period.
– Drawing up job-plans for the dismissed workers.
– Establishment and operation of an office at the workplace where
warned or dismissed workers can seek help and assistance.
• Establishment of a national preparedness system for dismissed workers
Other re-employment initiatives
The Active Labour Market Policy
“The active employment policy aims at contributing to
ensuring a well-functioning labour market. This takes
place in the form of a number of measures in relation
to both unemployed and employed persons who are
looking for a job or wishing to undergo training or
education. And it takes place in the form of measures
targeted at both private and public enterprises.”
Danish Ministry of Employment
Measures under the Active Labour Market Policy
• Job plan – employment goal of the unemployed person
(77% are satisfied with the proces)
• Guidance and skill development – a maximum of six
weeks training courses
• Internships – 4-26 weeks depending on situation -
successful evaluation in 2008
• Employment with wage subsidy – for up to one year
with various subsidies depending on skills
• Adult traineeships – subsidy for long term unemployed
• Flexibility jobs – evaluated in 2005 and shows important
problems as unemployment level is high for cleared ”flex
Regional impact of restructuring
The four employment regions Source: Hendeliowitz
(2008): Danish Employment
Policy – National Target
and Local Delivery
Regional Employment Authorities - responsibilities
• Supporting and ensuring good performance by
the job centres managed by the municipalities.
• Evaluating and discussing the results of the
regional and local employment efforts.
• Surveying and analysing the development on the
regional labour market.
• Disseminating knowledge concerning the
regional labour market various kinds of
• Functioning as the secretariat of the Regional
• Administrative responsibilities in relation to
residence and work permits, economic
redundancies, surveying the division of labour in
Examples of regional initiatives
Adult trainees – promoting a second chance for formal education
Employment Region of the Capital and Zealand has established a campaign
promoting the previously described scheme of adult trainees (voksenlærlinge).
It is acknowledged by the employment region that companies are increasingly
demanding that new employees have completed a formal education. However,
the number of adult trainee grants has recently dropped from 4,800 in 2006 to
1,500 in 2008. The campaign seeks to reverse this trend by using the following
•35,000 firms with more than three employees receive information about the scheme.
•Half of the 35,000 firms are being contacted and offered a free visit by a consultant from the local job
•Unemployed people are encouraged to undertake an education as an adult trainee.
•TV commercials are advertising for the campaign on regional channels.
•Firms are ensured funding for an adult trainee if the person fulfils the requirements and the training is
related to a field with good or very good possibilities for getting a job.
Examples of regional initiatives
Municipality analyses – characterising the local labour market
The Employment Region of Central Jutland has during 2008 conducted analyses
of each of the municipalities in the region (Kommunebeskrivelser). Central
questions are being considered in these publications including:
•How will employment develop over the next 10 years?
•Will there be a sufficient supply of qualified labour?
•In which way will the development affect the different municipalities?
The purpose of these reports is to assist the local job centres with the
preparations of their employment plans for the coming year. Furthermore, the
reports also make it possible for the municipalities to benchmark themselves with
the region as a whole in order to identify strongholds as well as areas, which
need greater attention from the job centres.
… Thanks for your attention …
Source: Flemming Ipsen, University of Aalborg