(Updates to add details)

LONDON -(Dow Jones)- ArcelorMittal (MT, MT.AE), the world's largest steelmaker, told trade unions Tuesday it doesn't plant to shutdown any of its European steel plants and will work with trade unions to ensure that compulsory layoffs are avoided.

The company and the European Metal Workers' Association signed an agreement Monday in which ArcelorMittal said it "intends to preserve all the tools and plants which are currently mothballed or temporarily suspended in order to restart them providing that market recovery allows doing so."

It also said it intended "not to resort to compulsory dismissals" but if dismissals were envisaged, it would enter into dialogue with the trade unions to reached a solution that ensured the future employment of its workforce.

ArcelorMittal employs 115,000 people in Europe, nearly a third of the European steel industry's 370,000 employees.

The company shutdown several of its European blast furnaces toward the end of last year following a slump in steel demand and has only restarted a handful of them in response to a slight technical pick-up in steel demand.

ArcelorMittal said last week that steel demand was improving globally but the recovery was fragile in certain parts of the world including Europe and the U.S.

The company offered buyouts in November last year to reduce its white collar workforce by 9,000 employees, or roughly 3% of its global workforce. About 6,000 of those accepting the buyout packages were expected to come from Europe while the remainder would come from outside Europe.

The company wouldn't comment on how many employees have accepted the buyout packages but so far, the company has reduced its workforce by almost 40,000 employees since the crisis began.

Bart Samyn, EMF Deputy General Secretary, said “This agreement finds concrete ways of dealing with the effect of the crisis and is a step in the right direction in the current period of uncertainty. Furthermore it provides for the ongoing skills development of workers and the long-term sustainable industrial development of ArcelorMittal in Europe."

He said the will make sure that the agreement is applied to all of ArcelorMittal's European sites.

Michel Wurth, member of the Group Management Board responsible for ArcelorMittal Flat Products Europe, said : "Making Europe’s steel industry competitive and secure now and for years to come is a challenge that deserves to be dealt with in partnership. The Social Dialogue Group created by this agreement is a good forum to work together on such fundamental challenges."

ArcelorMittal has agreed to enter into social dialogue with labor unions in anticipation of any structural changes within the company, EMF Policy Adviser Judith Kirton-Darling said. Discussions will be handled through the Social Dialogue group, which has 12 representatives from ArcelorMittal and 12 representatives from trade unions.

Company Web Site: http://www.emf-fem.org

http://www.arcelormittal.com

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

(END) Dow Jones Newswires

11-03-09 1451ET