IR Notes

The Council and the European Parliament on 27 February finally reached agreement on the text of the directive which aims to regulate the posting of workers in order to limit abuses (Parliament press release). The wording of the document remains largely unchanged from that adopted by the 28 Member States on 9 December 2013. The text (see Council press release, in English) has still to be formally adopted by the two institutions before being published in the Official Journal. The states will have two years to transpose the directive into their national law. They will have greater latitude to carry out checks and will be able to adopt additional measures beyond those proposed in the directive, simply by informing the European Commission. The text also contains elements to combat bogus self-employment. The European Trade Union Confederation has voiced its disappointment in a press release. Although the document may allow certain forms of abuse relating posted workers to be tackled, it does not cover all of the problems and does not address social dumping linked to differences in the cost of social protection. In other respects, whatever the measures taken by the states, they will need to be justified and proportionate if they are to avoid being considered as in breach of EU law by the European Court of Justice.

• Road transport: Publication of Regulation No. 165/2014 of 4 February 2014 on the tachographs used in road transport which also allow compliance with social legislation to be verified. The majority of the measures will take effect from 2 March 2016, with the exception of three articles which will come into force on 2 March 2015 (OJEU, 28 February 2014, No. L 60, p. 1).


• Chemical products: Publication of Directive 2014/27/EU of 26 February 2014 amending five directives in order to align them to Regulation No. 1272/2008 on the classification, labelling and packaging of substances and mixtures. The Member States have until 1 June 2015 to implement this directive. As pointed out by the European Trade Union Institute, “The most visible sign of this new law for workers and the public will be that the old symbols and risk phrases on chemicals labels will gradually be replaced by new pictograms and hazard statements” (OJEU 5 March 2014, No. L 65, p. 1).


• Non-financial information: On 25 February the Council endorsed the agreement reached between the Parliament and the Council on a draft directive concerning the publication of non-financial information on diversity matters by certain large companies. The European Commission had presented this Proposal on 16 April 2013. The text has still to be formally adopted by the two institutions before being published in the Official Journal. Some 6,000 companies with more than 500 employees will be required each year to publish a statement containing information on environmental, social and employee-related issues, respect for human rights and anti-corruption measures. Although no sanctions are envisaged, companies which do not respect these obligations will have to explain why. In their statement on corporate governance (as prescribed by article 20 of directive 2013/34/EU), companies will be required to describe the diversity policy which they apply to their executive, management and supervisory bodies with regard to criteria such as age, gender, and educational and professional background.

• Parental leave and redundancy: The European Court of Justice has delivered a judgement in which it adds to its body of case law protecting employees choosing to take parental leave. In this case, a female employee was dismissed at the beginning of a period of part-time parental leave that followed her maternity leave. She did not accept that her protective award for dismissal should be calculated on the basis of her part-time salary. The Court of Justice found that the protective award had to be calculated on the basis of the remuneration applicable when the employee was working full-time prior to parental leave. A reduction in the protective award would dissuade employees from taking parental leave and would therefore be contrary to the framework agreement on parental leave of 14 December 1995. The Court stated that clause 2, paragraph 4 of this agreement, which is intended to protect employees against dismissal in association with taking parental leave, “must be interpreted as articulating a particularly important European Union social right and it may not, therefore, be interpreted restrictively” (CJEU, 27 February 2014, Case C-588/12, Lyreco Belgium NV v. Sophie Rogiers).


• Maternity leave: The European Court of Justice has delivered a judgement in a case concerning a young woman who had taken a competitive examination for the Italian prison service. She was successful in the competition in April and was due to begin a 12-month training course in December, before being appointed to a post. Just before the training course began, she gave birth and was placed on compulsory maternity leave for three months, that is to say until March. Under the legislation, a candidate is prevented from taking the training course if absent for more than 30 days. She was therefore informed by letter that, once the first 30 days of her maternity leave had elapsed, she would be excluded from the course concerned and that payment of her salary would be suspended. On the other hand, she would be admitted as of right to the next course, although the date on which the next course would be held was not indicated. In the eyes of the Court, the exclusion from the training course and the fact that she was prevented from participating in the examination at its end constitute “unfavourable treatment for the purposes of Article 15 of Directive 2006/54”. Consequently, this action, “which provides for automatic exclusion from a training course and renders it impossible to sit the examination organised at the end of that course, without account being taken, in particular, either of the stage of the course at which the absence for maternity leave takes place or of the training already received, and which merely grants the woman who has taken such leave the right to participate in a training course organised at a later, but uncertain, date, does not appear to comply with the principle of proportionality”. The Court also stated that the provisions of articles 14 (1) (c) and 15 of directive 2006/54 “are sufficiently clear, precise and unconditional to have direct effect” (CJEU 6 March 2014, Case C-595/12, Napoli).


• Transfer of an undertaking in the case of a non-autonomous economic entity: The European Court of Justice has found that European legislation on the transfer of undertakings (directive 2001/23 of 12 March 2001) must be interpreted as not precluding national legislation which applies the rule of maintaining employment contracts upon the transfer of part of an undertaking, even if the latter does not constitute a functionally autonomous economic entity existing before the transfer. The directive “is intended to achieve only partial harmonisation of the area in question. It is not intended to establish a uniform level of protection throughout the European Union on the basis of common criteria, but to ensure that the employee is protected in his relations with the transferee to the same extent as he was in his relations with the transferor under the legal rules of the Member State concerned”. The case concerned the transfer of a division of Telecom Italia to one of its subsidiaries (CJEU 6 March 2014, Case C-458/12, Lorenzo Amatori).

• European Globalisation Adjustment Fund: On 5 March, the European Commission proposed to provide Italy with €3 million from the European Globalisation Adjustment Fund (EGF) to help 1,146 former workers of VDC Technologies SpA and its subsidiary Cervino Technologies Srl to find new jobs (see press release). It has also proposed to provide Spain with €1.9 million from the EGF to help 285 former workers of the car manufacturer Grupo Santana in Andalucía find new jobs (see press release).


• Remuneration in the banking sector: On 4 March the European Commission adopted a Regulation on the regulatory technical standards defining the criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile (the “risk-takers”). Supplementing the directive on own funds requirements (CRD IV), which took effect on 17 July 2013, these new provisions entered force on 1 January 2014. The variable component must not exceed 100 % of the fixed component of the total remuneration for risk-takers. The latter are defined by 15 qualitative (being a member of senior management, having the authority to commit significantly to the bank’s risk exposure, etc.) and quantitative criteria (total remuneration exceeding € 500,000 per year or inclusion in the 0.3% of staff with the highest remuneration in the institution etc.).


• Regulation of traineeships: During its plenary session on 27 February, the European Economic and Social Committee (EESC) adopted an opinion on the “proposal for a Council Recommendation on a quality framework for traineeships” and called for a framework which emphasised both regulations to guarantee the quality of the traineeships (apprenticeship content) and rules to ensure adequate working conditions (working hours, financial compensation, social security). It came too late to be heeded by the Council, however, since Coreper (the Permanent Representatives’ Committee responsible for preparing the work of the Council) had already adopted a compromise to the proposal put forward by the European Commission on 4 December 2013 which the European Trade Union Confederation (ETUC) regards as extremely inadequate (see press release).

• Social dumping in road transport: On 28 February the Council of Ministers approved a draft royal decree which provides for penalties in the framework of the action plan to combat social dumping in the road transport sector. The amount of the fine if there is no consignment note in the truck or for drivers taking their weekly rest in the vehicle is increased from € 50 to € 1800, payable immediately for foreign drivers, failing which the truck will be detained.

• Reform of training and social democracy: On 27 February 2014 the Parliament definitively adopted the law on vocational training, employment and social democracy. In particular it implements the national interprofessional agreement (ANI) of 14 December on vocational training (see article published by Eurofound). However, the text also contains provisions on: 1. Reforming apprenticeships. 2. Reforming the representativeness of employers’ professional bodies with the creation of a public finance mechanism for these and the trade union organisations. 3. Measures intended to increase the transparency of the works councils’ accounts (L. N° 2014-288 of 5 March 2014, Official Journal Dated 6 March). Link to the press pack of the Ministry of Labour (in French).


• Responsibility pact: To reduce payroll costs, the government has decided to decrease the burden of social security contributions on businesses, on condition that the employers undertake to create jobs. The government asked the social partners to reach agreement on the measures in return for the reduction in contributions. The three employers’ organisations and three trade union organisations (CFDT, CFE-CGC, CFTC) adopted a “statement of conclusion” on 5 March on the pact’s implementation. The text requires the social partners, at branch level, to open discussions, as soon as the arrangement for reducing the social security contributions is known, with a view to arriving at a “signed list of conclusions” or “negotiations with a view to arriving at an agreement” which specify “quantitative and qualitative objectives in terms of jobs”. In a press release the government speaks of an “historic social compromise”.


• Restructuring: The “Florange law” (loi visant à reconquérir l’économie réelle) has been definitively adopted by the Parliament and, from 1 April, it will impose a new obligation on businesses with at least 1,000 employees which wish to close an establishment to find a buyer. A company which fails to comply with this obligation could have to pay a penalty of up to 20 times the monthly value of the French minimum wage per job lost.

• Minimum wage: The Minister of Labour, Andrea Nahles (SPD), on 24 February opened the dialogue with the social partners on the establishment of a national minimum wage. The minister expects the draft law to be adopted in April, which will allow the minimum wage to take effect on 1 January 2015. The hourly rate has already been set at € 8.50.


• Workplace elections: Around 25 million people employed in the private sector in around 650,000 companies are invited to vote for representatives to their local works council (Betriebsrat) in elections taking place between 1 March and 31 May.

• Transfer of Undertakings: The Transfer of Undertakings (Protection of Employment) Regulations 2006 have been amended; the revised regulations came into force on 31 January last (see analysis of the law firm Harbottle & Lewis).

• Reduction in social security contributions: The Royal Decree 3/2014 establishes that the employer’s social security contribution will be only € 100 per month during 2 years for new permanent employment contracts. The contribution may be as low as €50 per month if the contract is part-time. In companies with fewer than 10 employees, during the third year there is a 50 percent reduction in employer’s social security contributions:


• CCOO confederation: The trade union federations for industry and of the chemicals sector within the CCOO confederation on 20 February merged to form a new organisation, CCOO Industria.

• Rio Tinto: At an extraordinary meeting on 5 March, the European Works Council of Rio Tinto called for “greater transparency and more dialogue”, stating that “listening more attentively to its demands and its opinions on the dysfunctional aspects of the company would allow Rio Tinto to advance more reliably than by implementing futile and costly restructuring programmes”. The EWC, like many other staff bodies, is calling for the CEO of the group to attend its next meeting in order to demonstrate the group’s social responsibility. In addition, the EWC intends to “follow the campaign led by IndustriAll” to establish a trade union network within the group.”

• Schneider Electric: The first meeting of the special negotiating body (SNB) set up to negotiate an agreement on the involvement of employees as part of the conversion of Schneider Electric to a European company (SE) was held on 27 February. The SNB comprises 30 members who have appointed a smaller technical group of 11 members to negotiate with management. The negotiating meetings are scheduled for 20 March and 10 April next. In addition, the office of the European works council has adopted a statement in connection with the consultation on the sale of the Appliance division of Invensys, which the group acquired in January. The text criticises a rapid resale which does not take social commitments in terms of preserving jobs into account.

• Orange: The second follow-up meeting of the international framework agreement signed in 2006 with the Worldwide Trade Union Alliance of the Orange group, under the auspices of the UNI Global Union trade union confederation, will take place on 27 and 28 March next at Abidjan (Ivory Coast), with the French and African affiliated unions, as well as members of the group’s senior management.

• Deteriorating health affecting the population of Greece: An article written by British researchers and published by the scientific journal The Lancet on 22 February provides “fresh evidence of the enormous impact of austerity measures on the Greek public health system,” underlines the European Trade Union Institute (Etui). The number of cases of severe depression more than doubled in the period from 2008 to 2011. Suicide attempts rose by 36 % between 2009 and 2011, with a 45% increase in deaths caused by suicide in the 2007-2011 period. The article should be required reading for the MEPs who are soon to adopt the own-initiative report prepared by Alejandro Cercas on the impact of the Troika’s decisions in the four countries, including Greece, which received financial aid.

Although in recent months the term “posting of workers” has regularly been associated with that of “social dumping”, it actually stems from a directive adopted on 16 December 1996 (Directive 96/71) aimed at regulating the mobility of employees sent by an employer for a limited period to another Member State to carry out their work in the framework of the provision of services. It therefore summed up two fundamental rights of the European Union: the free movement of people (and thus of workers) and the free movement of services. Even then, the law-makers were at pains to avoid social dumping, by stipulating that workers posted to another Member State were governed by a certain number of mandatory provisions in terms of social legislation, such as the rules applicable to nationals regarding health and safety at work, a minimum wage, paid leave etc.. However, 18 years on, the European Union has just tightened up certain aspects of this directive (see lead story) which, although well-meant, was too often flouted. For more information: See the Industrial Relations Dictionary of the European Foundation for the Improvement of Living and Working Conditions (Eurofound).