Nice to know

1. Changes in production environment-Lay-off and reduced working hour models in 12 European countriesUPM EF-meeting 13.4.2010 Esa Kaitila(esa.kaitila@paperiliitto.fi)

2. Nice to know • In the world there are 4298 pulp, paper or board mills • Production in 2009: • 415 million tonnes paper and board (EU: 121) • 252 million tonnes pulp (EU: 71) • Most mills in 2009 • China (687), India (468), USA (400) • The biggest mill in 2009 is in China • Dongguan Nine Dragons Paper Industries • 16 paper machines • 5,8 million tonnes per year

3. Number of pulp and paper mills in Europe

4. Mills in Europe in different grades

5. Capasity changes in paper in Europe 12.9.2014 5

6. Capasity changes in Pulp in Europe

7. CEPI Countries - Comparison of % changes of Production by Grade in 2009 Comparison with same quarter of previous year

8. CEPI Countries - Comparison of % changes of Production by Grade in 2009 Comparison with previous quarter

9. Paper & Board - % Change in Production by Grade and by Country 12 months 2009 / 12 months 2008

10. Lay-off and reduced working time practises in 12 European countries • Finland • Sweden • Norway • Denmark • France • Italy • Germany • Austria • Great Britain • Poland • Spain • Portugal

11. Customers in Finnish Paper Workers Unions unemployment register

12. Cost structure in pulp and paper industry in Finland

13. Effectivity of different measures • Permanent rise of prices +1-5% (in 2010-2013) • Major effectivity + 1,6 billion, 18 000 work hours • Reduction of salaries -1 – 3% (in 2010-2013) • Minor effectivity + 24 – 83 million, 550 – 1700 work hours • Exports +1-5% (in 2010-2013) • Minor effectivity – 160 million, 1800 work hours • Tax reductions for production for two years (- 4,2 - 12,7%) • Minor effectivity - 24 million, 3300 work hours

14. Results - Finland The employer has the right to unilaterally lay-off their personnel at 14 days’ notice The duration of the lay-off is not limited 7 days’ period of partial benefit, during which no compensation for loss of earnings is paid After this, daily unemployment benefit for 500 days maximum, totaling to approximately 60 % of normal pay Lay-offs where working hours have been reduced so that they exceed 75 % of a full time employee’s working hours in the industry do not entitle the employee to receive unemployment benefit

15. Sweden in reality it is not possible to lay off employees with state part-financing (system changed in 1985) the employees who have been laid off are entitled to the same salary and same benefits they would receive if they were working lay-offs without pay may occur in certain, exceptional circumstances (in situations where the work is seasonal or the work is not continuous) the lay-off may be realized as one continuous period during which the employees are relieved from work, or as weekly reductions in working hours

16. Norway For example lack of orders or low amount of work are justified reasons for lay-offs The company must discuss the lay-offs with the chief shop steward the notice period is 14 days The employer pays full salary for the first five working days of the lay-off After five working days, there are three working days without any compensation After this, the state pays benefit for 52 weeks The benefit for 52 weeks is 62,4 % of the previous year’s income before taxes

17. Denmark It can be agreed that the weekly working hour deviates from 37 hours normal weekly time Companies can not lay off full-time employees and replace them by recruiting part-time employees In situations of a permanent lack of demand, the company can dismiss employees respecting their individual notice periods In case of short term drops in demand 13 weeks of so called “work sharing” can be established The employees participating in work sharing are divided into 2 teams, one team working and one on leave When on leave the employees receive unemployment benefit (50 – 80 %) if they are insured

18. France Before temporary lay-offs, the employer must seek for other means for the lay-off The employee has the right to decide themselves whether they are on vacation or temporarily laid off The employer must meet with the worker council, after which they must ask the local labor authorities for permission for the lay-off No waiting period The duration of the lay-off is 1000 hours maximum The company pays a benefit that corresponds to 75 % of the salary before social expenses

19. Italy • Lay-offs are possible • State benefit for max. 12 months • Approximately 60 % of normal salary • Labour Union targets: • increasing the maximum duration of the benefit to 18 months • raising the benefit up to 80 % with increments

20. Austria - reduced working hours The law for reduced working hours was revised 2009 Companies have the right to receive acceptance for reduced working hours from government, chamber of economics and trade unions The company must pay its employees salary for performed working hours Usually employees receive 90 % of their salary, for 60-80 % of working hours The difference is received from the unemployment insurance The minimum duration for reduced working hours is three months and the maximum is 18 months

21. Germany – reduced working hours Reductions in working hours must be the result of permanent and continuous financial disturbances It is possible to reduce weekly hours to 0-38 hours The company only pays for performed working hours Loss of earnings is compensated by the unemployment insurance paid by the state The benefit for persons living alone is 60 % of the loss of earnings and 67 % for persons with children The use of reduced working hours is limited to 24 months social security contributions are taken over completely by the Employment Agency after 6 months.

22. Great Britain Laying off employees is possible either temporarily or for a fixed period of time Employees that have been temporarily laid off are almost always paid a salary for the duration of the lay-off; however, the salary is clearly lower in most instances than their normal level of income Employees that have been permanently laid off receive a redundancy payment Instead of discharging, some companies provide their employees with the possibility of “voluntary sabbaticals” Work markets lack instruments that would protect employees during financial crises

23. Poland Only few companies monitor their working hours Where collective agreements have been made, they have been made for a long period of time and they cannot react to short-term changes The instruments of collective agreements or labor force policies are not enough to handle the decrease in demand, which is linked to changes in working hours In order to survive crises, no labor political measures, such as reductions on working hours, have been determined

24. Spain The employer may suspend their employees primarily based on a mutual agreement Usually suspensions are targeted at employees whose contracts are valid for the time being, but they may also be targeted at fixed-term employees During the suspension, other obligations stated in the collective agreement are valid

25. Portugal The employer has the right to terminate/postpone the employments of some employees in case the company operations has seriously damaged Lay-off is an alternative to reduced working hours System was changed in 1989 when authority permission was no longer required for lay-offs The employer will negotiate lay-offs with the appropriate employee representative and present detailed suggestions for procedures, as well as reasons for lay-offs During a temporary lay-off, the employees are entitled to a fixed lay-off salary Employees may apply for work elsewhere