Microeconomic conditions for restructuring of enterprises
The most important conditions for restructuring of enterprises are:
Long-term economic situation of the company - basic presupposition, indirect formation of a softer budget environment, inflow of capital.
Legislation and enterprise legal regulations - lack of knowledge of law on both sides, negative behaviour to unions vs. clear conception of negotiations with unions.
Social partnerships and collective bargaining – statutory duty, responsibility for the company, short term interests, dialogue?
Level of human resource management - essential requirement, level of quality communication on horizontal and vertical levels, framework of social dialogue.

Regional Background
Moravia-Silesia NUTS II region located in the North-East part of the Czech Republic
Bordered with Poland and Slovakia
1.2 mil. inhabitants (12%)
Ostrava – the centre of the region (350,000 inhabitants)
Former “STEEL HEART” in the process of bypassing since 1990
Now “R egion of contrasts and challenges”

Decline of traditional industries
Steel industry
1989 – 136,000 employees
2002 – 30,000 employees
Hard coal industry
1989 – 110,000 employees
2002 – 25,000 employees

Closures and Communities – 2003
95 % of the national steel industry and hard coal industry capacities located in the region
17.6 % unemployment rate in the region (10.9% - national average)
110,800 unemployed (20% of the CR total)
More than 66 % longer than 6 months
More than 25 % longer than 2 years

The role of Czech heavy industry enterprises and unions in restructuring
a) The worse the economic situation in the company, the more important the role of the state during the restructuring process
b) The economic situation of the company should be negotiated with unions, the union organisation representative should participate in company management meetings, analysing the management.
c) The company must contribute to the financing of retraining prior to dismissal. Companies should supply, in principle, the retraining which the labour offices refuse to provide, at present approximately 20 – 30 of all the costs for retraining.
d) The company should create conditions for the establishment and the work of company employment agencies.
e) The company should lead a dialogue with union organisations and the results should be agreed on in a collective agreement. Development of employment in the company is a part of the collective agreement.

Current problems and challenges
• Steel industry restructuring, integration and privatisation to the global players – in progress
• 5 to 10,000 redundancies in 2002-2005 – a problem
• Social dialogue and development programmes & projects to cope with the impacts – existing
• Implementation structures – working
• Fund-raising (national, regional and international sources - both public and private)– never ending story
• FDIs and local SMEs development to increase the job opportunities – much more is needed

Social & Development Programmes
• National Government – A complex social programme for people made redundant from the steel industry (employment agencies, retraining programmes, financial benefits, Labour Pool) and for the regional labour market development (industrial zones, investment incentives, SMEs support, transport infrastructure)
• Regional authorities – Regional Development Programme (measures in harmony with the national government)
Regional Employment Agencies (REA) in 2003 100% of redundant informed about the services
• Number of clients – more than 1397
• Number of services given to them – more than 4621
• Number of redundant in retraining courses – 404
• Number of redundant in motivation and job search techniques courses – 371
• Number of job vacancies offered through the information system of REA - 6808

EQUAL project–an opportunity to start
• August 2002 – DP project led by REA accepted for Action 2 of the EQUAL programme in the Czech Republic.
• Integration of employees made redundant in the process of steel industry restructuring on the labour market
• to increase capacity of employment agencies through co-operation with partners (regional/trans-national) to develop, test, disseminate and mainstream the innovative tools – EQUAL project outputs.

Conclusion
Restructuring of metallurgy in Czech enterprises was unsystematic and slow up until the end of the 1990's.This restructuring was initially socially neutral.
The establishment of Regional Employment Agencies, carrying out the Programme has made possible co-ordination of approaches to work within the framework of the accompanying social programme in metallurgy.
The system does work effectively, registering 100% of the dismissed employees from metallurgy enterprises and offering redundant employees a wide range of services.
The fundamental weakness of the overall system is the lack of newly created work positions in the region.
Growth-promoting programmes supporting the emergence of new work positions are insufficient up until the present.