Abstract
The process leading to a net zero carbon economy by mid-century will have massive effects on jobs, labour relations and income distribution. The idea of just transition – that achieving the ambitious objectives to bring climate change under control will only be possible if the transition to a net-zero carbon economy is balanced and just – has evolved in the last four decades from a union initiative to a complex policy framework adopted by international organizations, and also referred to in the COP21 Paris Agreement (UNFCCC, 2015). Building on literature analysis, this article deconstructs the concept of ‘just transition’ by discussing its various interpretations and dimensions and highlighting the role of trade unions in applying it. Based on sectoral case studies, concrete examples from two key sectors of the European economy – energy and automobile – are given, where massive employment transitions are under way and social dialogue plays a key role. Conclusions about the changing role of trade unions and the importance of co-operative industrial relations are drawn.
Introduction: framing the climate emergency context
Scientific evidence is piling up: time is running short for having a realistic chance to bring climate change under control (Green et al., 2019). With growing public awareness for climate change, ‘climate emergency’ has as a term become widespread in policy debates and been declared by the European Parliament (2019). While national commitments are falling short of the Paris targets, the Intergovernmental Panel on Climate Change (IPCC, 2018) made a strong case for sticking to the more ambitious 1.5°C target. For Europe – as stated in the Communication of the European Commission on the European Green Deal (EC, 2019a) – the objective is to achieve climate neutrality by 2050. This requires steeper emissions’ cuts with harsher employment and distributional effects.
The transition to a (net) zero carbon economy by 2050 means a fundamental revision of our linear, extractive and fossil fuel–based growth model with major effects on jobs, livelihoods, working conditions, skills and employment prospects. Whether it will be a just transition depends heavily on the actions of the labour movement. The article argues that the large-scale restructuring that goes with the decarbonization of the economy requires an adaptation of interest-reconciliation mechanisms, involving also new strategic approaches by the main actors, including trade unions.
After highlighting the specificity of the green transformation, the article focuses on a critical assessment of the just transition concept and analyses concrete job transitions and related just transition policies in the European energy and automobile sectors. Through these sector studies the main drivers of the transformation, the likely employment and regional effects and emerging actors’ strategies are analysed. Section ‘Introduction: Framing the climate emergency context’ provides an overview of the concept of just transition as it has evolved over the past four decades. Section ‘Methodology’ critically discusses the varieties of just transition, while section ‘Just transition – the concept and its dimensions’ looks at the role of trade unions in just transition at different levels, arguing that, despite the diversity of their views and attitudes, unions can play an eminent role in making just transition a success. Section ‘Variety of just transitions’ examines case studies from the two key sectors, energy and automobile; Section ‘Conclusion’ concludes.
Methodology
The theoretical analysis is based on a review of the relevant literature in an attempt to connect two main streams of academic debate, one dealing with the concept of just transition from a political economy perspective and one with trade unions as actors from an environmental labour studies perspective. As a result, the article identifies a potential conflict in union strategies, as agents of change on the one hand and actors dealing with the effects of change, on the other.
Different strategic approaches to just transition are shown through empirical evidence from two sectors of the European economy, together making up more than a third of European carbon emissions: energy generation and the automobile industry. Both sectors have well-paid unionized jobs but differ greatly in their economic weight and future perspectives. The section draws on literature and a documentary review (European Commission, European Union (EU) Joint Research Centre and international consultancy firms) in its introductory part and is based on country and sector studies conducted by national experts within a project conducted by the European Trade Union Institute (ETUI) (Galgóczi, 2019). For the national studies, the selection of countries was based on their respective weight within the sector – Poland and Germany making up two thirds of EU coal-based electricity generation, while Germany and France are home to major car manufacturers. National case studies draw on National Energy and Climate Plans and government documents. Sectoral studies in the automobile industry and at the energy multinational, Enel, were conducted by national and industry-level experts, including plant level surveys and first-hand accounts by practitioners.
Just transition – the concept and its dimensions
Just transition was an early union demand and its origins date back to the 1960s in a dispute over uranium mining in Canada (Greener Jobs Alliance, 2018). Then, US trade union leader, Tony Mazzocchi (1993) pleaded for a ‘Superfund for workers’ to provide financial support for workers displaced by the closure of toxic production facilities and the Canadian trade union leader Brian Kohler (1996) used the term ‘just transition’ to ‘reconcile efforts to provide workers with decent jobs and the need to protect the environment’.
In the union movement, the forerunner of the International Trade Union Confederation (ITUC) included ‘just transition’ in its statement to the Kyoto Conference in 1997. It was subsequently a major success for unions that ‘just transition’ was included in the Preamble to the Paris agreement (UNFCCC, 2015) and that the ‘Silesia Declaration on Solidarity and Just Transition’ was adopted at COP24 (ETUC, 2018).
In the United Nations (UN), the International Labour Organisation (ILO) has paved the way to making just transition an established element of the sustainable development agenda. Since 2008, the ILO has developed a wide-ranging programme dealing with green jobs and just transition. The ILO Guidelines (2015) became the anchor of just transition policies.
The narrow interpretation of just transition restricts itself to the pragmatic claim of managing the epochal green transformation in a given socio-economic framework in a way that is balanced and just. From a functional point of view, it has two main dimensions: ‘outcomes’ (how the new employment and social landscape in a decarbonised economy should look); and ‘process’ (how we get there from present socio-economic realities). The ‘outcome’ perspective sets the claim of decent work for all in an inclusive zero-carbon society, with not just green but quality jobs. The ‘process’ perspective has the vision of a managed transition with meaningful social dialogue at all levels and has two main pillars (Galgóczi, 2018): one dealing with the distributional effects of climate policies (for example, how a higher carbon price affects different income groups) and one with the management of employment transitions, including active regional restructuring programmes with industrial policy and regional development initiatives.
The initial claim of a narrow focus was for the green transition not to create further inequality or aggravate the social situation during the process and in its outcome. A broader approach elaborates more on the future zero-carbon world, including the claim that society should be inclusive with low inequality and quality jobs. While realizing under what concrete circumstances a just transition is supposed to take place, it is also recognized that present inequalities in societies need to be addressed; this might even be a precondition for a just green transformation. To avoid the concept of just transition becoming an elitist idea (Rosemberg, 2017) for the rich and democratic societies of the global North, climate and environmental justice need to be addressed both in the relationship between the global North and the global South and within those societies. The broad interpretation of just transition thus expands from a narrative originally referring to a developed economy to a global one. From unions’ perspective, the narrow focus of just transition refers above all only to their members, while the broad vision opens up to wider societal issues and follows a ‘just transition for all’.
Variety of just transitions
Reflecting again on the influential 2015 ILO Guidelines, which put social dialogue at the centre of delivering just transition, we cannot avoid the question, what happens if social dialogue does not exist or does not function? Stevis (2018) points out that: ‘Just Transitions are most needed in countries and places without a social welfare system’. Entrenched inequalities rooted in the past may block any prospect of a successful just transition strategy. Inequality has a lot of crosscutting dimensions between the global North and the South, within societies, among employees and between economic sectors. All these aspects and dimensions of the original concept contribute to the emergence of a variety of approaches and strategies to implement just transition on the ground, in a given socio-economic environment. Whether the societal and actor-based context of a just transition is conflictual or co-operative, the variety of just transition strategies reflects the underlying variety of societies and real-life situations. There is no silver bullet for a just transition strategy. While decarbonization is a common objective, concrete transitions take place in work environments that are determined by the capital-labour relationship.
Debates have been intensifying about the meaning and interpretations of the ‘just transition’ concept. Newell and Mulvaney (2013) examine the political economy of just transition and describe its complexity: achieving zero-carbon while paying attention to issues of equity and justice; taking into account the pursuit of ‘climate justice’ for current and future generations; and also managing potential contradictions that might flow from pursuing energy and climate justice simultaneously. Heffron and McCauley (2018) point to parallel universes within the separate energy, environment and climate change scholar communities in the understanding and definition of ‘transition’ or what ‘justice’ means. Stevis and Felli (2015) raise the very relevant question: ‘just transition for whom?’ They point to the fact that among global labour unions there are different visions, ranging from those that focus on just transition in the concrete sectors of their members to those that propose fundamental changes in the global political economy and make the case for a just transition for all. They identify a range of views as affirmative that call for more equity within the parameters of existing political economy and as transformative that call for more profound changes of the political economy.
Stevis and Felli (2015) also use the term shared solution approach for strategies that see a socially acceptable greening of the economy as a mutually beneficial process where the existing balance of power is maintained. This approach is also labelled green Keynesianism, as it focuses more on the opportunity side and job creation effect of green transition. All major international organizations and union confederations follow this interpretation, which does not envision transformative changes in the political economy. The authors also distinguish a differentiated responsibility approach, more prominent among unions in sectors negatively affected by environmental regulations and climate policy, such as chemicals, mining and parts of manufacturing. Accordingly, in these sectors the state and capital have more responsibility towards workers put at risk during the green transition.
A more radical interpretation of just transition is referred to as the social ecological approach, which seeks a reorganization of the relations between state, capital and labour. According to this transformative approach, the socialization of production and the ‘democratic control and public ownership of remaining fossil fuel supplies’ is necessary to enact a transition to a low-carbon economy. This view is shared by the Congress of South-African Trade Unions (COSATU), the Labour Network for Sustainability and the Trade Unions for Energy Democracy (TUED) initiative.
From a broader perspective, these three approaches are not necessarily in contradiction with each other but reflect different socio-economic conditions under which the green transformation takes place. There is no inherent conflict between climate/environment policy objectives and labour – at core, a co-operative approach seems to be evident, as decarbonization is a common interest of humanity. But the transition to a green economy takes place in a socio-economic environment defined by the capital/labour relationship. From the perspective of labour, any previous transformation of the production system or work organization within the labour-capital nexus happened on the basis of capital’s profit interest. Labour had an inherently conflictual relationship with these reorganization plans because they exerted pressure on labour to serve the interest of capital. However, the imperative of green restructuring puts pressure on both capital and labour, with the main objective of lower carbon emissions and not higher profits. Corresponding workplace level changes often have the same pattern as of any other business reorganization (downsizing and flexibilization, etc). This is a particular challenge for unions.
Unions and just transition
According to the critical environmentalist approach, the historical basis for the social reconciliation between capital and labour emerged on the basis of the high degree of wealth established through ever increasing material flows and the depletion of natural resources (Schepelmann, 2009). Economic growth was considered as the way of reconciling opposite interests (workers/capital) by redistributing (part of) the additional wealth, as evident for example from the emergence of the social partnership model in continental Europe (Maier, 1990). Labour and capital were thus perceived as two sides of the modern industrial capitalist production model that is no longer sustainable.
In this context, an emerging body of literature that identifies itself as ‘Environmental Labour Studies’ (Räthzel and Uzzell, 2013) distinguishes between ‘Labour environmentalism’ and ‘Social Movement Unionism’, where the latter goes beyond the workplace perspective and the focus on membership and embraces wider issues. Stevis and Felli (2015) framed this by differentiating between labour unions in terms of political strategy, as ‘business’ or ‘social’ unionism (Dreiling, 1998; Moody, 2001). Accordingly, ‘business unionism’ limits itself to getting a fair share out of a growing economy while leaving broader questions of political economy and equity in the hands of firms and states. ‘Social unionism’, on the other hand, recognizes that unions ought to have a say about the organization of the political economy both because it shapes their material benefits and because they see themselves as engaged citizens (Munck, 2002).
Viewed in historical perspective, unions have argued that a consistent defence of their members’ interests demands a long-term struggle for a social and political context at national and international levels, one which is favourable to the wellbeing of people and society as a whole (Spooner, 2000) and embraces broader ‘civil issues’.
For capital, labour is one production factor; natural resources, including the atmosphere, are another. In this respect, unions have been fighting capital and the labour rights acquired – that is, a decent ‘price’ for labour – were hard won. Internalizing the external costs of using environmental resources for business operations requires a paradigm change in the production model, a process expanding the scope of the traditional capital-labour conflict/dialogue. The implication is that unions, as long-standing opponents of capital, are precisely in a position to address issues linked to sustainable development.
Unions have also shown readiness to expand their scope and recognize the limits of material and resource exploitation. Environmental issues have become a major topic for them and – as demonstrated above – by creating the narrative of just transition they argue for a rebalancing of market- and capital-based approaches through consideration of social and environmental aspects. Yet another prejudice often applied to unions in the past was that they were predominantly interested in preserving the status quo. However, not least because of the structural pressures induced by globalization and technological change in recent decades, unions have become important agents in the management of change. In this traditional role, they were used to managing change driven by the profit motive of capital. In these cases, they also often questioned the legitimacy of the change itself, and at least one way of fending off its effects on employees has been trying to keep the change itself at bay.
In the case of decarbonization, the situation is different: it is a shared objective in the interest of humanity. At the same time, meeting this objective poses a huge challenge to the world of work as workplace level employment transitions appear within the traditional capital-labour nexus with similar patterns of reorganization (e.g. employment reduction, job transitions, higher flexibility and work pressure) to those which unions normally fight against when defending workers’ interests. A further complication is that in most cases changing dynamics in the world of work are under the simultaneous influence of all major megatrends: decarbonization, technological change and globalization.
There is an apparent contradiction between the main competence of unions in managing the consequences of change and at the same time pushing this change forward. By raising the climate policy ambition, and with it also the pressure on work organization, they are consequently supposed to make their interest representation task more difficult. This contradiction in roles may appear in tensions between union action at a higher level and plant level action. Unions at national or supra-national level have been promoting the concept of just transition in the context of climate change. But unions on the ground – at local, regional, sectoral or company levels – are confronted with its implementation in real-life work relationship practices. National union centres and their umbrella organizations are, by and large, organizations set up to represent workers to government and inter-governmental organizations on matters relating to broad economic, industrial and social policy and environmental issues, whereas the dealings of ‘industrial union structures’ with employers relate to wages and working conditions, collective bargaining, and union co-ordination. The former category of union organization thus takes up broader societal issues, such as environmental and climate policy, while the latter are more narrowly focused on how the membership is affected by the immediate consequences of the transformation.
The idea of a just transition emerged as a union demand, in the context of plant closures to end the toxic effects of chemical substances on workers and the population at large. The concept of a just green transition developed on this basis has become much more complex and multi-faceted. It has a common overall objective, but with conflicts of interest in its implementation on the ground. This is where the role of unions and social dialogue is key.
The climate and environmental dimension of sustainability requires compromises that go beyond the topics social partners have normally focused on in the past. Social dialogue traditionally aimed at compromises that directly affect those represented in the negotiations, while in the case of climate policy the consequences are less immediate and the interests of parties not directly represented at the negotiation table also need to be taken into account (EC, 2019b). Social partners can contribute to most of the Sustainable Development Goals (SDG)s, as identified by the ILO and the ITUC (2017). This process has, however, different levels, with different actor constellations and concrete practices at each level.
The ILO just transition Guidelines (ILO, 2015) call for governments to promote and engage in social dialogue at all stages and at all levels, from the national to the enterprise, in line with international labour standards. Social partners are also expected to raise awareness and provide guidance among their members for the just transition framework and play an active role in the formulation, implementation and monitoring of national energy and climate plans under the Paris Agreement. At workplace level, the traditional main function of social dialogue has been to settle the conflicting objectives of parties in the context of the capital/labour relationship. Fighting climate change is different in the sense that this is a common objective, although finding balanced and just policies to achieve this needs a co-ordination process for which social dialogue is most appropriate. Neither employers nor unions on the ground have, however, an imminent interest in setting ambitious climate policy objectives, at least not in the short-term. The objectives, the ambition and the drive for change come from the higher policy sphere, from intergovernmental or governmental level, while social dialogue at lower levels is a key instrument for finding the most balanced means of implementation. The ability of unions to manage and balance this epochal change can contribute to their empowerment in the future.
Sectoral and plant level cases: coal phase out and the transformation of the automobile industry
Decarbonization in the automobile and power sectors, driven by climate and environmental regulation at European and national levels, presents huge challenges to the world of work. While both sectors have higher than average wage levels and union organization, there is a major difference between them in the nature and magnitude of the challenge: coal has no future, but the automobile does, albeit in a different form. In the coal-based power sector, on the one hand, the majority of existing jobs will disappear in a decade and the regional effects will be harsh (Alves Dias et al., 2018). However, even though coal itself does not have a future, workers in the sector and their families, as well as those dependant on the sector in the surrounding region, must have one. Employment in the coal sector makes up just 0.15 percent of European employment but, with its high concentration, the sector is of vital importance for individual regions. On the other hand, with its more than 6 percent share of total European employment, the broader automobile sector is a key employer. For the car industry, the exit from the combustion engine will require different competences, skills and work organization, having also a substantial impact on the previously established comparative advantages of nations and manufacturers (Bauer et al., 2018).
National level policies in phasing out coal
Just transition policies for the coal sector are mainly focused on stretching the phase-out as long as possible, with defensive strategies by social partners and such employment policy tools as income protection and early retirement in the centre. The cases of Germany and Poland – the two countries that generate nearly one-half of hard coal-based, and nearly two-thirds of lignite-based, electricity in the EU – clearly demonstrate this. At the same time, they also highlight important country-specific differences.
The concentration of the coal sector is extremely high in Poland and it is largely controlled by the state. Despite significant imports of coal, the price of domestically produced coal is substantially higher than the world market price due to long-term guaranteed price contracts with power plants. The coal mining sector also has a negative fiscal balance, as its contributions to public finances do not even cover the state support it receives.
The lack of a genuine climate policy in Poland is seen as legitimate in the domestic political environment. The result is that strategic documents related to the sector do not include employment reduction as this would be instantly opposed by the unions and could endanger the stability of any government. The main goal of Polish energy strategy until 2040 (Szpor, 2019) is energy security, ensuring the competitiveness of the economy and energy efficiency alongside a reduction in the energy sector’s impact on the environment. Accordingly, hard coal will still remain the single most important source of electricity production in 2040.
Given the lack of pressure for more radical change, active transition management is not seen as necessary. There is no policy framework for managing employment transitions and the ‘contingency measures’ addressed to miners are rather limited. They embrace traditional monetary instruments like mineworkers’ pensions, early retirement and redundancy payments (Szpor, 2019). There are virtually no schemes for re-employment in alternative workplaces and only a very limited number of projects addressed to miners’ families and local communities.
In Poland, there is no genuine conflict between unions (cf. Thomas and Doerfinger in this volume), employers and the state in the context of the energy transition – all three concentrate their efforts on preserving the status quo of a coal-based economy. This situation corresponds to the case described by Hospers (2004) for the Ruhr region of the 1970s where all actors had one shared interest in preserving the coal-based status quo. With almost 100 percent organization and a mobilization power that goes back to the iconic role they played during the strike-marathon in the 1980s, miners’ unions do everything they can to preserve the privileged role of coal in Poland. Employers focus more on stretching out the transition, as the CEO of Poland’s largest coal mine recently explained: ‘Breaking the green trend is practically impossible anymore and we need to adjust. However, we need to do it on our own terms’. (Martewicz, 2020). It is the Polish state that seeks to reconcile the interests of the national coal-based energy system against EU climate and energy policy.
In Germany, the number one coal burner in Europe, a cautious, gradual and consensual way of phasing out coal has been chosen. Building on 60 years of experience in transforming the Ruhr coal and steel region into a modern energy and knowledge-based economic region (Galgóczi, 2014), Germany’s coal phase-out applies three main elements of a just transition approach: slow and gradual transition with a high level of social dialogue; active labour transition management; and engagement in industrial and regional development (Gärtner, 2019). The economic diversification of the once mining dependent Ruhr region was actively managed by the federal and regional governments and restructuring processes were embedded in a co-operative industrial relations culture, with a stronger version of co-determination practices – Montan-Mitbestimmung – applied in the mining and steel industry enterprises, including full parity on the supervisory board and a representative in the board of directors. However, strong social dialogue and the active role of the regional government in managing the restructuring process did not automatically lead to success. Hospers (2004) and Grabher (1993) identified a lock-in position of the region into coal and steel over more than a decade up to the mid 1980s. ‘Institutional lock-in’ played a key role as a self-sustaining coalition of local businessmen, politicians and unions had one shared interest: the preservation of existing structures.
Measures taken to facilitate the labour market transitions of workers dismissed were exemplary. In larger cases this was done via targeted agencies that specialized in employment promotion and training (Beschäftigung und Qualifizierungsgesellschaft). The Ruhr Coal Vocational Training Society was the model case for such institutions and was widely used in the transformation of the East German economy after German reunification.
To manage manpower restructuring bargaining parties first signed an agreement in 1993 to guarantee a socially responsible downsizing of employment. An agreement on the complete closure of German hard coal mining by 31 December 2018 was negotiated between the German Coal Association and the trade union for mining, chemical and energy industries (IG BCE) and came into force on 1 April 2012. The agreement provides a framework for the balance of interests, building on a social compensation plan and various work agreements. A key lesson that emerges from Ruhr transition (Galgóczi, 2014) is that a successful transition takes time, a strong vision of the future and adequate resources. Worker co-determination has been an important factor in the coal sector, facilitating solutions that embrace social protection and retraining efforts.
In 2018, the federal government established the Commission on Growth, Structural Change and Employment (referred to below as the ‘Commission’) to provide recommendations on a gradual reduction in the capacities of coal-fired power plants. The Commission consisted of policy makers at different levels of governance and all major stakeholders, including employers, unions, NGOs and experts. While the Commission represented a perfect example of social dialogue in terms of procedural justice, reconciliation of interests did not follow the traditional capital-labour dichotomy. Interest conflicts emerged between environmental NGOs, climate policy experts and central government representatives (opting for fast transition), on the one hand, and unions, employers and regional politicians (opting for a prolonged transition), on the other. The recommendations aim at a gradual and steady reduction in the greenhouse gas emissions of the power sector. The last coal-fired power plant should be phased out by 2038 (with the option of an earlier exit by 2035), marking the longest farewell to coal by an EU15 member state. At the same time, the Commission has followed the concept of a just transition in various dimensions (Litz, 2019). First, social dialogue has been exemplary; second, with a phase-out stretched over almost two decades, both the regions and energy and industry companies have been given a reasonable amount of time to transform; and, third, the proposal foresees the provision of comprehensive financial support, to a total value of €40 billion until 2038, to the stakeholder groups affected. The declared aim is to replace the gradual loss of gross added value and employment with new jobs and gross added value by industrial producers to the same level.
The Commission’s recommendations stipulated that coal regions should be developed into modern energy regions with massive investment in transport and digital infrastructure, as well as in local research and innovation. These recommendations were widely criticized because of their low climate policy ambition that falls short of Germany’s net-zero carbon commitment by 2050 and puts Germany into the last rank in coal phase out of any Western European country. The IG BCE union pursued a balancing act, with an as-late-as-possible coal phase-out strategy, arguing for ‘proper framework conditions’ with an active industrial policy and job security (IG BCE, 2019). There have been repeated clashes between members of IG BCE and environmental activists of Ende Gelände who came to the Rhineland to occupy the Hambach Forest and the open-cast mine (Bergfeld, 2019). The IG BCE’s general secretary, Michael Vassiliades, insisted on the need to put jobs first and environmental issues second.
In France, the coal sector is limited to four coal-fired powerplants with less than a thousand direct employees altogether. After the declaration of the government in 2018 to close them down by 2022, demonstrations were held by the Confédération Générale du Travail (CGT) union and all four plants began strike action that has continued in repeated waves ever since. CGT and Force Ouvrière (FO) unions argue that the government should withdraw the closure project, given the low share the plants have in France’s CO2 emissions and their role in maintaining energy security. Both organizations have also denounced the high social costs of the closure, which could lead to up to 5,000 job losses. The third main union, Confédération Française Démocratique du Travail (CFDT) has a more balanced approach on the transition, supporting the decarbonization of the energy sector but denouncing the lack of visibility concerning the future of the plants.
The role of unions in the coal sector in various countries can be regarded as defensive, from defending the coal-based economy status quo (Poland and at plant level in France) to pleading for a lengthy transition process in Germany. In line with the classification of Stevis and Felli (2015), these unions apply a differentiated responsibility approach in expecting more responsibility from the state towards workers put at risk during the green transition, but they fall short in terms of transformative ambition.
Company level practices
The case of ENEL and its coal power plants
ENEL is the second-largest electricity company in Europe. Its main shareholder is the Italian State and it employs approximately 75,000 people worldwide and 36,000 in Italy. It has a good track record with industrial relation practices (Rugiero, 2019), including its European Works Council Agreement (2001), the Protocol of National Industrial Relations for the ENEL Group (2012) and its Global Framework Agreement (2013). Facing up to the challenges of energy transition and the EU’s stricter emissions limits from 2021, ENEL announced its Future-e Programme and, in May 2017, the closure of two large coal power plants by 2018 and a plan to close all its coal and lignite generation plants by 2030. ENEL’s CEO announced the company’s ambition to become the world’s first ‘truly green energy giant’ and achieve carbon neutrality by 2050. Altogether ENEL announced the reconversion of 23 power stations with significant employment implications (in 12 cases the reconversion has already started). Unions have initially taken a very critical view of the Future-e plan, claiming the lack of timely information and their scarce involvement in these processes. In a joint document in February 2017, they put forward proposals for a more gradual approach in the process of decommissioning and adjustment of plants, including new investment plants for some.
ENEL then entered into social dialogue on a just transition framework agreement with its Italian union partners. It is a good example of a just transition agreement including provisions for: a recruitment plan using apprenticeship to ensure the knowledge transfer of competences of older towards younger workers; and encouraging mobility and training for the optimization of internal resources. The framework also includes dedicated training measures to ensure that qualifications and employability are retained, as well as creating new skills for the development of new business (see Tomassetti in this volume).
Plant level agreements in the automobile sector
The stakes in the automobile industry are much higher and the transformation is also more complex as, besides decarbonization, the digitalization of both production and the product and a reconfiguration of the global supply chains of the industry are proceeding simultaneously. Added to this are several unknown elements concerning the depth and nature of the upcoming mobility revolution. To illustrate the role of industry stakeholders at policy-making level, the post-2021 scenario of EU CO2 emission limits for the average car fleet produced by each manufacturer is a good illustrative example. Employer associations have been playing a controversial role over a long period in lobbying for lighter regulation on car emission standards, while some manufacturers also took the step of implementing fraudulent practices (Rieger, 2018). CEOs of the main car manufacturers were regular guests at ‘automobile summits’ held at the German Chancellor`s office, with the silent support of unions. Unions at policy level called for a balanced emissions reductions policy, one taking employment and social aspects into account, and for a just transition fund for the industry (IndustriAll, 2018), while presenting also a study in the European Parliament pointing to the higher job losses associated with more ambitious targets. Finally, the European Council (2018) reached a compromise position of a 35 percent CO2 reduction by 2030 compared to 2021 levels. Germany first voted for a 30 percent reduction following lengthy debates where both employers and unions backed the softer target, but finally agreed with the 35 percent target.
While climate policy ambition was not the strength of automobile industry actors, they are now focused on managing the radical transformation in a balanced way. Co-operative industrial relations and co-determination practices in the main European manufacturers (above all in Germany and France) are great assets to facilitate employment transitions in an advanced-looking and innovative manner. In the German case, the IG Metall union sees its main tasks as to: shape location, employment, innovation and investment strategies; conclude agreements to safeguard production locations and find a development perspective for every plant (Strötzel and Brunkhorst, 2019). At plant level, works councils are focused on securing the core interests of employees with further agreements on collective bargaining, company pension schemes and profit-sharing. In return, they support the restructuring process.
As a prominent example, the General Works Council of Daimler has reached an agreement on ‘Project Future’ under which job security for all Daimler employees is extended from 2020 to 2030, including those in logistics and branch offices. Within the work of the company’s innovation committees, the works council is to be advised of future product strategies by plant management and has the right to make proposals. Investment commitments of €35bn have been made in German locations over the next 7 years dedicated to the areas of e-mobility, mobility services, connectivity and autonomous driving.
Volkswagen is anticipating extensive job cuts resulting from the introduction of new technologies and products. As part of its ‘Future Pact’, 25,000 jobs will be eliminated, although 9000 will be created. Back in 2016, the works council had already been able to negotiate a job security plan up to 2025, so the reduction in employment will therefore be achieved in a socially acceptable manner, including through part-time work for older employees, set to significantly expand (Strötzel and Brunkhorst, 2019). At the same time, commitments have been made to locate new e-mobility products at German sites. In this way, each department has been given a development perspective over the next few years. Management’s plans to outsource certain products and logistics, or to relocate all new e-components abroad under specific termination plans, could thus be fended off. There have also been strategic agreements in the supplier sector that relate specifically to the transformation process.
At the German component manufacturer Schaeffler, an agreement on the future (Zukunftsvereinbarung) has been reached that goes beyond normal employment agreements. Suppliers’ products are relatively independent of the brand identity of the end product, so they can position themselves more flexibly within the new drive and mobility concepts than can end manufacturers. In this way, business models beyond the private ownership of cars are also of great interest here.
In the French automobile sector, company trade unions are also in the position of negotiating on the issues arising from the company’s strategic orientation in the medium-term. Unions may seek to negotiate: the types of job categories threatened by economic or technological change, the implementation of employee mobility, sustainable training and the inclusion of young people in the company, employment of older workers and so on. This negotiation framework, together with works council consultations on strategic orientation, offers the tools with which to achieve a shared vision of a company’s strategy. Such information/consultation practices provide the opportunity to discuss the opportunities for diversification and the detailed skills, training and employment adaptations they will require.
Conclusion
There is no genuine trade-off between the environmental, labour and social dimensions of sustainability during the green transition; in real-life situations these may however appear. A just transition does not happen in a vacuum, but in the real-life circumstances of current societies and working relations, the quality of which have a decisive effect on what just transition strategies are adopted and how they might work. The ILO Guidelines set the basic principles with two fundamental pillars: having a clear future strategy of decarbonization with a comprehensive policy framework, on the one hand, and a meaningful and functioning social dialogue throughout the entire process at all levels, on the other. But the existence of social dialogue is not enough to make just transition a success, social partners including unions need to adapt new strategies.
Although just transition has been a long-term union demand, there are certain conditions that are necessary for putting it into practice, such as a level of inequality within manageable margins and a certain level of democratic participation of the members of society in social and civil dialogue structures. Even within societies where these conditions are met (as in the EU), conflicts of interest concerning how to manage the decarbonization process clearly exist. These appear, however, in a different context from that which was characteristic of the traditional capital-labour interest conflict, posing both challenges and opportunities for social dialogue.
While decarbonization itself is a common objective, concrete transitions take place in work environments that are, further on, determined by the capital-labour relationship. This is where the role of unions and social dialogue is key. There is however an apparent contradiction between the main competence of unions in managing the consequences of change and, at the same time, pushing this change forward. This duality of roles often appears in tensions between higher level union actions and plant level actions. Unions at national or supra-national level are promoting the concept of just transition based on a broad societal understanding and pushing for ambitious climate policy targets. But it is unions on the ground, at local, regional, sectoral or company levels, that are confronted with its implementation in the practices of real-life work relationships and focus their strategies on the workplace.
Examples from the automobile industry and the energy sector show that a just transition approach is possible, although sectoral and geographic differences are substantial. These examples show that, instead of distinguishing between two types of unionism (‘business’ vs ‘social unionism’ or ‘labour environmentalism’ vs ‘social movement unionism’) in most cases these roles tend to appear at different levels in the same organization or are linked to the different exposure of members to the process of change. Those unions (mostly in services and construction) whose members are less directly affected by the implementation of ambitious climate policy measures or higher-level union organizations that focus on policy debates and broad societal issues are ready to put forward high climate and environmental standards. Unions in manufacturing sectors, in particular at lower organizational levels, still have difficulties embracing high climate policy ambition strategies. Once the targets are set, however, they are efficient, successful and innovative in managing the restructuring process in an active and forward looking way, as demonstrated most prominently in the case of IG Metall. While mostly acting in terms of business unionism at plant level, it has also opened up to a broader societal role, for example, organizing a demonstration in June 2019 to demand a fair and ecological transition in joint action with environmental groups (Bergfeld, 2019). On the other hand, unions in the coal-based energy sector, in line with a differentiated responsibility approach, justifiably expect more responsibility from the state towards workers during the green transition, but fall short in their transformative ambition.
With the high stakes of the climate emergency, unions need to find a way to match high climate policy ambition with an efficient transition management strategy in the interests of their members and of the whole society. Setting up a broad policy framework for a just transition at national and supra-national level can facilitate this, with employment policies that promote change, supportive industrial policies and active regional development policies. This is where the role of social dialogue is key at the national level and where the cooperation of environmental and labour advocacy groups is also important. Finally, the timeframe of the transition is crucial, allowing well-founded just transition plans to be built up that include investment and skills development strategies.
Footnotes
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship and/or publication of this article: This paper draws upon research funded by the ETUI. The ETUI is financially supported by the European Union.