Explanatory Memorandum to COM(2024)275 - - Main contents
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| dossier | COM(2024)275 - . |
|---|---|
| source | COM(2024)275 |
| date | 16-09-2024 |
CONTEXT OF THE PROPOSAL
1. The rules applicable to financial contributions from the European Globalisation Adjustment Fund for Displaced Workers (EGF) are laid down in Regulation (EU) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/20131.
2. On 3 June 2024, Belgium submitted an application EGF/2024/001 BE/Match-Smatch for a financial contribution from the EGF, following displacements in Match-Smatch supermarkets (Match SA. and Profi SA.) in Belgium.
3. Following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of Regulation (EU) 2021/691, that the conditions for awarding a financial contribution from the EGF are met.
SUMMARY OF THE APPLICATION
| EGF application | EGF/2024/001 BE/Match-Smatch | |
| Member State | Belgium | |
| Region(s) concerned (NUTS2 level 2) | Province of Hainaut (BE32),Contents | |
| Date of submission of the application | 3 June 2024 | |
| Date of acknowledgement of receipt of the application | 3 June 2024 | |
| Date of request for additional information | 17 June 2024 | |
| Deadline for provision of the additional information | 8 July 2024 | |
| Deadline for the completion of the assessment | 17 September 2024 | |
| Intervention criterion | Article 4(2), point (a), of Regulation (EU) 2021/691 | |
| Primary enterprise | Match-Smatch | |
| Number of enterprises concerned | 1 | |
| Sector(s) of economic activity (NACE Revision 2 division)3 | Division 47 (Retail trade, except of motor vehicles and motorcycles) | |
| Reference period (four months): | 11 December 2023 – 11 April 2024 | |
| Number of displacements during the reference period (a) | 444 | |
| Number of displacements before or after the reference period (b) | 69 | |
| Total number of displacements (a + b) | 513 | |
| Total number of eligible beneficiaries | 513 | |
| Total number of targeted beneficiaries | 365 | |
| Budget for personalised services (EUR) | 3 009 752 | |
| Budget for implementing EGF4 (EUR) | 121 500 | |
| Total budget (EUR) | 3 131 252 | |
| EGF contribution (85 %) (EUR) | 2 661 564 |
ASSESSMENT OF THE APPLICATION
Procedure
4. Belgium submitted application EGF/2024/001 BE/Match-Smatch within 12 weeks of the date on which the intervention criteria set out in Article 4 (2), point (a), of Regulation (EU) 2021/691 were met, on 3 June 2024. The Commission acknowledged receipt of the application the same date and requested additional information from Belgium on 17 June 2024. Such additional information was provided within 15 working days of the request. The deadline of 50 working days of the receipt of the complete application within which the Commission should finalise its assessment of the application's compliance with the conditions for providing a financial contribution expires on 17 September 2024.
Eligibility of the application
Enterprises and beneficiaries concerned
5. The application relates to 513 displaced workers whose activity has ceased in Match-Smatch4. This enterprise operates in the economic sector classified under the NACE Revision 2 division 47 (Retail trade, except of motor vehicles and motorcycles. The redundancies are mainly located in the NUTS 2 regions of Province of Hainaut (BE32), Province of Liège (BE33), and Province of Namur (BE35).
Intervention criteria
6. Belgium submitted the application under the intervention criteria of Article 4(2), point (a), of Regulation (EU) 2021/691, which requires the cessation of activity of at least 200 displaced workers over a reference period of four months in an enterprise in a Member State, including workers displaced in suppliers and downstream producers and/or self-employed persons whose activity has ceased.
7. The reference period of four months for the application runs from 11 December 2023 to 11 April 2024.
8. There were 444 displaced workers in Match-Smatch during the reference period.
Calculation of displacements and of cessation of activity
9. Pursuant to Article 6, first paragraph, point (a), in conjunction with Article 5, first paragraph, point (c), of Regulation (EU) 2021/691, the cessation of activities of the displaced workers during the reference period has been calculated from the date of the de facto termination of the contract of employment or its expiry.
Eligible beneficiaries
10. In addition to the workers already referred to, the eligible beneficiaries include 69 displaced workers whose activity ceased before or after the reference period of four months. All these workers ceased their activity within the six months before the start of the reference period and/or between the end of the reference period and the day before of the adoption of this proposal, pursuant to Article 6, first paragraph, point (b), of Regulation (EU) 2021/691, as required by Article 6, second paragraph, of Regulation (EU) 2021/691. A clear causal link can be established with the event that triggered the cessations of activity of the displaced workers during the reference period as required by Article 6, second paragraph, of Regulation (EU) 2021/691..
11. The total number of eligible beneficiaries is 513.
Description of the events that led to the displacements and cessation of activity
12. Match-Smatch faced a difficult economic situation for several years. In 2019, a first restructuring led to the closure of 15 stores and 140 redundancies. In 2020, the COVID-19 pandemic lead to a sharp increase of Match-Smatch's turnover, as well as in the retail food sector in general, because of the closure of the hospitality sector, rush to buy food, etc. This exceptional situation allowed Match-Smatch to obtain a positive net result of EUR 3,6 million. However, as the health situation was returning to normal, Match-Smatch again reported losses of EUR 11,9 million in 20215.
13. In January 2022, an action plan was launched to curb losses and put the enterprise back on the path to financial balance. However, food trade was strongly affected by the energy and inflationary crisis. As a result, the action plan failed and the gross operating value reached a historic loss of EUR 36,5 million in 2022 and 9 shops had to close.
14. Overall, the Belgian food retail sector recorded a significant decline in volumes sold in 2023. Increased cross-border shopping and e-commerce are part of the explanation. According to Comeos, the Belgian commerce and services association, border purchases in France increased by almost 70 % in Q1 2023, compared to Q1 20226 .
15. To prevent a further accumulation of losses, Match-Smatch accepted the Colruyt Group’s offer to acquire 57 of the 84 stores, also taking over the stores' staff (1 069 people). Eight additional stores went to Carrefour, Delhaize, Intermarché and Delfood.
16. The 339 employees of the 19 stores for which no buyer could be found, as well as the 174 employees of the Match-Smatch headquarters, were subject to a collective redundancy procedure.
Expected impact of the displacements as regards the local, regional or national economy and employment
17. The Match-Smatch redundancies concern all of Belgium. However, the territorial impact of the redundancies varies due to the differences between the Flemish and Walloon labour markets and because more than 70 % of the layoffs are concentrated in Wallonia.
18. In 2023, unemployment rate for Belgium as a whole remained at 5,5 %, the same level as in 2022. At the regional level, unemployment increased from 3,2 % to 3,4 % in Flanders and decreased from 8,4 % to 8,2 % in Wallonia. However, the difference of approximately 5 percentage points (pp) in the unemployment rate persists7.
19. In the last quarter of 2023, the employment rate in Flanders was 77,0 %8, and thus 1,5 pp above the EU average of 75,5 %9, whilst the employment rate in Wallonia (66,7 %) was 10,3 pp lower than in Flanders and about 9 pp lower than the EU average10.
20. Older workers are facing more barriers to employment. In the last quarter of 2023, there was a difference of 18,3 pp between the employment rate for the age group 20-54 (76,8 %) and the employment rate for the age group 55+ (58,5 %) at national level11. In the Walloon labour market, the registered job seekers aged fifty or older represent 25 % of the total job seekers in March 202412. About half of the Match-Smatch redundant workers (46 %) are aged fifty or older.
21. The Match-Smatch workforce is essentially made up of cashiers and warehouse workers. The economic crisis caused by the COVID-19 pandemic has accelerated the demand for more qualified workers in the Belgian labour market13, making it more difficult for the former Match-Smatch workers to reintegrate into employment.
22. Belgium applied for EGF co-financing solely to support former Match-Smatch workers living in Wallonia. The Flemish regional authorities consider that there is no need to top-up the support available to former Match-Smatch workers living in Flanders with EU co-financing from the EGF, given the situation on the regional labour market.
Application of the EU Quality Framework for anticipation of change and restructuring (QFR)
23. Belgium has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring14 have been taken into account.
24. Match-Smatch complied with Belgian law on collective redundancies, which establishes a mandatory procedure for informing and consulting workers' representatives. The procedure makes it possible to explore any possibility of avoiding or reducing the number of redundancies. It also seeks to mitigate the consequences of job loss through complementary social measures, such as support for redeployment or retraining of redundant workers. The negotiations secured a specific budget of EUR 533 500 to cover for retraining costs.
25. Belgium has reported that national labour law15 on the active management of restructuring requires enterprises undergoing restructuring to set up an employment unit (cellule pour l’emploi)16, whose purpose is to provide workers laid off in the context of collective redundancies with 30 hours of outplacement services in a period of three months (60 hours over six months for workers aged 45+).
26. Wallonia's regional legislation17 provides for specific support for redundant workers, in the form of a redeployment unit (cellule de reconversion)18 by the Regional Public Employment and Vocational Training Service (Le Forem), at the request of workers’ representative organisations. The redeployment unit does not constitute an obligation for the employer, nor for Le Forem. The implementation of the EGF co-financed measures will be managed through such a redeployment unit.
27. Belgium has reported that the redeployment unit was set up on 1 January 2024, shortly after the first redundancies.
Complementarity with actions funded by national or Union funds
28. Belgium has confirmed that the measures described below receiving a financial contribution from the EGF will not receive financial contributions from other Union financial instruments.
29. The coordinated package of personalised services complements actions funded by other national or EU funds (see outplacement services described in paragraph 25).
Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
30. Belgium has indicated that the co-ordinated package of personalised services has been drawn up in consultation with targeted beneficiaries, their representatives, the social partners, in compliance with Article 7 i of Regulation (EU) 2021/691.
31. Aiming to prepare a sound package of tailored measures to support the Match-Smatch workers’ efforts to return to work, Le Forem, trade unions (FGTB19 and CSC20), and other partners met on 17 January, 5 February and 19 March 2024, to better understand workers' retraining needs. The social counsellors who accompanied the workers after their dismissal were also consulted. These meetings resulted in a coordinated package of EGF measures that complies with Article 7 i of Regulation (EU) 2021/691.
Targeted beneficiaries and proposed measures
Targeted beneficiaries
32. The estimated number of displaced workers expected to participate in the measures is 365. Pursuant to Article 8(7), point (f), of Regulation (EU) 2021/691, the provided breakdown of these workers by gender, age group and educational level is as follows:
| Category | Number of | ||
| Gender: | Men: | 238 | (65,2 %) |
| Women: | 127 | (34,8 %) | |
| Non-binary | 0 | (0,0 %) | |
| Age group: | Below 30 years: | 28 | (7,7 %) |
| 30-54 years: | 222 | (60,8 %) | |
| Over 54 years: | 115 | (31,5 %) | |
| Educational level | Lower secondary education or less21 | 110 | (30,1 %) |
| Upper secondary22 or post-secondary education23 | 192 | (52,6 %) | |
| Tertiary education24 | 63 | (17,3 %) |
Proposed measures
33. Pursuant to Article 8(7), point (h) of Regulation (EU) 2021/691, the personalised coordinated package to be provided to displaced workers consists of the following measures:
- Information services, occupational guidance and outplacement assistance: This set of services expands the standard activities in support of Match-Smatch former workers carried out by Le Forem's employment unit on behalf of the dismissing enterprise. The standard offer will be extended beyond the mandatory period and additional specific services such as individual coaching, active job-search and job-matching will be proposed.
- Training, retraining and vocational training: Workers will have access to the standard training offer of Le Forem and its partners. In addition, after the profiling and agreement of individual projects with the vocational counsellor, EGF co-financed specific training will be offered to cater for the identified needs of the workers.
- Support towards business creation: The measure aims at workers who wish to launch their own business. It will include a diagnosis and guidance phase, awareness-raising actions on entrepreneurship, information sessions on the potential for business creation through territorial economic diagnoses and networking with relevant entrepreneurs and with certified coaches in business creation.
- Contribution to business creation: The workers who start a business or an activity as self-employed persons will receive a contribution up to EUR 15 000. The contribution will be paid in two installments, on the basis of evidence of the start and development of the business activity (supporting documents).
- Incentives and allowances: (1) Job-search and training allowances. Workers will receive EUR 2 per hour of effective participation in training or job-search activities. (2) Bonus for improving IT skills. Workers who follow both the module for access to digital autonomy and its complementary module will receive a lump sum of EUR 700 conditional on their active participation and completion of the training. The bonus aims to reduce digital illiteracy by encouraging workers to improve their IT skills. (3) Bonus for improving language skills. Workers who follow language training to improve their Dutch, English or German language skills as part of a specific job search, allowing them to reach a higher level of the Common European Framework of Reference for Languages will receive a lump sum of EUR 700. The same applies for the workers whose native tongue is not French and who improve their French skills to a higher level. The objective of this bonus is to encourage the development of cross-disciplinary language skills to facilitate workers’ reintegration into the job market. (4) Return-to-school allowance. A monthly allowance of EUR 350 will be granted to workers who embark on full-time secondary and tertiary studies, or qualifying training, regardless of their age. (5) Allowance towards business creation. To support workers while setting up their business, a monthly allowance of EUR 350 for a maximum of 12 months25 will be granted. (6) Hiring incentives. Enterprises recruiting former Match-Smatch workers aged 50+ will receive EUR 10 000 for full-time permanent contracts or fixed-term contracts up to 6 months followed by permanent contracts.
34. The training to gain digital autonomy mentioned above, that complements Forem's standard training to develop digital skills, together with a module on circular economy and efficient use of resources are in line with the requirements set out in Article 7(2) of Regulation (EU) 2021/691. The module on circular economy and efficient use of resources developped for former Swissport workers (EGF/2020/005 BE)26 is now part of Le Forem's standard training offer co-financed by ESF+. Therefore, it is not budgeted in this proposal. The circular economy module is complemented by a module on social economy also developed within the framework of an EGF case27.
35. The proposed actions, here described, constitute active labour market policy measures within the eligible actions set out in Article 7 of Regulation (EU) 2021/691. These actions do not substitute passive social protection measures.
36. Belgium has informed that the 30/60 hours of outplacement services that are the legal obligation of the employer began immediately after the displacements. The EGF co-financed redeployment unit took over after the end of the legal obligation without time gap.
37. Belgium has provided the required information on measures that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. In accordance with Article 9(1) of Regulation (EU) 2021/691, Belgium has confirmed that a financial contribution from the EGF will not replace such measures.
Estimated budget
38. The estimated total costs are EUR 3 131 252, comprising expenditure for personalised services of EUR 3 009 752 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 121 500.
39. The total financial contribution requested from the EGF is EUR 2 661 564 (85 % of total costs).
40. Pursuant to Article 8(7), point (m), of Regulation (EU) 2021/691, Belgium has specified that the national pre-financing and co-funding is provided by Région Wallone.
| Measures | Estimated number of participants | Estimated cost per participant (EUR)28 | Estimated total costs (EUR)29 |
| Personalised services (measures under Article 7(2), second subparagraph, point (a), of Regulation (EU) 2021/691) | |||
| Information services, occupational guidance and outplacement assistance (Reconversion: accompagnement/orientation/mobilisation) | 365 | 5 279 | 1 926 807 |
| Training, retraining and vocational training (Formation) | 150 | 208 | 31 200 |
| Support towards business creation (Dispositif d'accompagnement à l'entrepreneuriat) | 45 | 3 594 | 161 727 |
| Contribution to business creation (Bourse de lancement) | 12 | 10 000 | 120 000 |
| Sub-total (a): | – | 2 239 734 | |
| (74,42 %) | |||
| Allowances and incentives (measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691) | |||
| Incentives and allowances (Allocation de recherche d'emploi et de formation, prime numérique, prime langue, allocation de reprise d'études, allocation d'entrepreneuriat et subvention 50+) | 365 | 2 110 | 770 018 |
| Sub-total (b): | – | 770 018 | |
| (25,58 %) | |||
| Activities under Article 7 i of Regulation (EU) 2021/691 | |||
| 1. Preparatory activities | – | 78 400 | |
| 2. Management | – | 13 000 | |
| 3. Information and publicity | – | 5 000 | |
| 4. Control and reporting | – | 25 100 | |
| Sub-total (c): | – | 121 500 | |
| (3,88 %) | |||
| Total costs (a + b + c): | – | 3 131 252 | |
| EGF contribution (85 % of total costs) | – | 2 661 564 |
41. The costs of the measures identified in the table above as measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691 do not exceed 35 % of the total costs for the coordinated package of personalised services. Belgium confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.
42. In accordance with Article 7(2), fourth subparagraph, of Regulation (EU) 2021/691, Belgium confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 22 000 per beneficiary.
Period of eligibility of expenditure
43. Belgium started providing the personalised services to the targeted beneficiaries on 1 January 2024. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 1 January 2024 until 24 months after the date of the entry into force of the Financing Decision.
44. Belgium started incurring the administrative expenditure to implement the EGF on 22 September 2023. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 22 September 2023 until 31 months after the date of the entry into force of the Financing Decision.
Management and control systems
45. The application contains a description of the management and control system required under Article 23 of Regulation (EU) 2021/691, which specifies the responsibilities of the bodies involved. Belgium has notified the Commission that the financial contribution will be managed and controlled by the same bodies that manage and control the ESF+.
Commitments provided by the Member State concerned
- the principles of equality of treatment and non-discrimination will be respected in access to the proposed measures and their implementation,
- the requirements laid down in national and EU legislation concerning collective redundancies have been complied with,
- any double financing will be prevented,
- the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.
BUDGETARY IMPLICATION
Budgetary proposal
47. The EGF shall not exceed a maximum annual amount of EUR 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 202730 amended by Council Regulation (EU, Euratom) 2024/765 of 29 February 202431.
48. Having examined the application in respect of the conditions set out in Article 13(1) and (2) of Regulation (EU) 2021/691, and having taken into account the number of targeted beneficiaries, the proposed measures and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 2 661 564, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.
49. The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council pursuant to Article 15(1), first subparagraph, second sentence, of Regulation (EU) 2021/691 and, as laid down in point 9 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources32.
Related acts
50. At the same time as it presents this proposal for a decision to mobilise the EGF, the Commission will present to the European Parliament and to the Council a proposal to transfer to the relevant budgetary line the amount of EUR 2 661 564.
51. At the same time as it adopted this proposal for a decision to mobilise the EGF, the Commission adopted a decision on a financial contribution that constitutes a financing decision within the meaning of Article 110 of Regulation (EU, Euratom) 2018/104633. That financing decision will enter into force on the date on which the Commission is notified of the approval of the budgetary transfer by the European Parliament and the Council pursuant to Article 15(2), first subparagraph, of Regulation (EU) 2021/691.