France: employment protection plan agreed for 1,300 Michelin employees

On 24 March, the French tyre giant Michelin and the CFDT, CFE-CGC and SUD trade unions signed an employment protection plan (PSE) for the sites in Cholet (955 employees) and Vannes (299) concerning a total of 1,254 employees. Only the CGT union did not sign the agreement. Though these three unions have accepted the agreement, they continue to contest the economic grounds for the closure of the two factories. “We have signed but we do not validate the redundancy plan. We believe that economic competitiveness is not threatened,” said Laurent Bador, CFDT central union delegate at Michelin. For its part, the management refers to an “unavoidable decision due to the structural transformation of the tyre market” and the “deterioration of competitiveness” due to Asian competition. “I would like to commend the sense of responsibility shown by the organisations that have chosen to sign the agreement in the interests of the employees. We hope that this very important step will reassure employees that the group is honouring its commitment to provide each of them with a tailor-made solution,” said Alain Robbe, director of social relations in France for the Michelin Group, in a statement.

Internal mobility allowance equal to €40,000 gross

The agreement, which is the culmination of three months of negotiations between management and the unions, provides for internal mobility measures including a gross allowance of €40,000, a gross supplement of €5,000 for a spouse who has lost their job, payment of removal costs and assistance in finding housing and employment for the spouse. A list of positions available for internal redeployment has been available since the announcement of the factory closures on 5 November last year. For the time being, only 12% of the employees at the two sites have applied, i.e. around 150 people. However, they will have the opportunity to change their minds within three months of the transfer and before the family moves. It will also be possible to extend this period by a further two years at their request. In addition, a transition to retirement scheme is available, with a deadline of 24 March 2025 for signing up, for employees who are eligible for a full pension by 31 December 2030 at the latest. It includes a change in working hours, remuneration equal to 75% of their last annual salary during the period not worked and the possibility of a 75% reimbursement for ‘buying back’ up to two quarters of pension contributions. These measures should affect around 15% of employees, i.e. between 150 and 180 people.

Compensation based on age and seniority above legal requirements

Employees who do not choose internal redeployment will be made redundant from 20 June. In addition to the standard redundancy payment, they will receive a non-statutory lump-sum payment of €40,000 gross, increased by €1,250 for each year of service and according to age (from two months’ salary for those under 30 to six months’ salary for those over 50). Support measures are also planned. These include a redeployment leave of 12 months, plus a renewable three-month extension for employees over the age of 50 and people with disabilities, training, compensation allowances and assistance with settling in a new town or region. However, employees made redundant for economic reasons will have priority for hiring for 24 months after the termination of their employment contract if they express this wish in writing. Finally, whether they have opted for internal or external mobility or early retirement, all employees who have already experienced transfers involving relocation as part of previous restructuring programmes will receive additional compensation equal to €10,000 for one transfer, €15,000 for two transfers and €25,000 for more than two transfers.