European Globalisation Adjustment Fund for Displaced Workers (2021-2027)

SUMMARY OF:

Regulation (EU) 2021/691 on the European Globalisation Adjustment Fund for Displaced Workers (EGF)

WHAT IS THE AIM OF THE REGULATION?

The aim of the regulation is to renew the European Globalisation Adjustment Fund (EGF) for the period covered by the multiannual financial framework (MFF) 2021-2027. Subsequently, the fund has been renamed the European Globalisation Adjustment Fund for Displaced Workers (EGF).
It offers support for employees and self-employed persons who have lost their jobs because of major restructuring events.

KEY POINTS

Mission and objectives

The EGF is a solidarity fund financing active labour market measures (such as training, job searches and business start-ups) when there are unexpected and significant job losses arising from major restructuring events.
It is an emergency fund outside of the MFF ceilings.

Intervention criteria

EGF support is triggered if more than 200 (reduced from the previous 500 during the 2014-2020 period) jobs are lost — salaried or self-employed — over a 4-month period (for dismissals in the same enterprise, or dismissals in the same region), or over a 6-month period in an enterprise or for a group of businesses (particularly small and medium-sized enterprises) in the same sector and geographical area. For dismissals in an enterprise, this threshold may include suppliers and downstream producers.
In small labour markets, applications that do not meet this threshold may be accepted if the redundancies have a serious impact on employment and the local, regional or national economy. Exceptionally, this could also apply to larger labour markets, but the financial help for all such cases in a given year must not exceed 15% of the annual EGF ceiling.
The EGF does not apply to workers dismissed as a result of budgetary cuts by an EU Member State (public sector dismissals).

Eligible measures

A financial contribution from the EGF may be made for active labour market policies forming part of a coordinated package of personalised services, designed to reintegrate the displaced worker into employment or self-employment. This could include the following:

training and retraining, including in information and communication technology and other digital skills;
certification of acquired knowledge and skills;
job-search assistance;
targeted group activities;
occupational guidance and advisory services;
mentoring;
outplacement assistance;
promoting entrepreneurship;
aid for self-employment, business creation, employee takeovers and cooperation activities;
time-limited measures (no more than 35% of the total package), such as allowances for mobility, childcare, training, subsistence and carers, along with employers’ recruitment incentives — on the condition that the beneficiaries actively participate in job-searches or training.

The dissemination of skills required in the digital industrial age and in a resource-efficient economy shall be considered as a horizontal element in the design of the coordinated packages.

The EGF will not support measures that are the responsibility of enterprises under national law or collective agreements. Member States may apply for aid for preparatory, management, information and publicity, and control and reporting activities. Approved EGF applications are valid for 24 months.

Investment in self-employment, business start-ups or employee takeovers may not exceed €22,000 per beneficiary. The financial contribution from the EGF is limited to what is necessary to provide temporary, one-off support for targeted beneficiaries.

Applications

Member States must make an EGF application within 12 weeks of the reference period in which the job losses occur, to be analysed by the European Commission, which proposes the mobilisation of the EGF to the budgetary authority (European Parliament and Council). This is necessary as the EGF is outside and above the MFF ceilings.
The decision on whether to mobilise EGF funding is taken by the budgetary authority within 6 weeks of receipt of the Commission’s proposal.

Co-financing rate

The co-financing rate of the EGF is aligned with the highest co-financing rate of the European Social Fund Plus (ESF+) in the Member State concerned, but will not be lower than 60%.

Repeal

The regulation repeals Regulation (EU) No 1309/2013 with effect from 1 January 2021.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 January 2021, with the exception of Article 15 (budgetary procedure and implementation), which has applied since 3 May 2021.

BACKGROUND

The European Monitoring Centre on Change assists the Commission and the Member States with qualitative and quantitative analyses to help assess trends of globalisation, technological and environmental changes, restructuring and the use of the EGF.
The European Pillar of Social Rights, created as a response to social challenges in Europe, acts as a guiding framework for the EGF allowing the EU to put the principles into practice in the case of major restructuring events.
The EU Quality Framework for anticipation of change and restructuring is the EU policy instrument that sets the framework for best practice for anticipating and dealing with corporate restructuring.
See also:
- Funding (European Commission)
- European Globalisation Adjustment Fund for Displaced Workers (EGF) (European Commission).

MAIN DOCUMENT

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 1309/2013 (OJ L 153, 3.5.2021, pp. 48-70)