IR Notes

The decision taken by the America automotive supplier Tenneco (26,000 employees) in September 2013 to shut down its factory at Gijon (230 employees) in Spain may appear trivial against the backdrop of industrial site closures across the whole of Europe, but it warrants consideration because it illustrates that the European level can have a “useful effect”: 1. The employee representatives at the site, supported by the European works council and the trade union coordinator of the IndustriAll European trade union federation (a representative of the FGTB/ABVV Belgian trade union) secured the appointment of an expert (the French consultants Secafi) by the local works council, although Spanish legislation does not provide for such appointments. This example shows that European works councils can be useful. 2. The European Commission, which was approached by the parties in December in order to find a means of restoring dialogue, threatened to intervene to verify the correct application of European regulations on information and consultation (see the Phrase of the Fortnight below). Although bluffing in part, the Commission provided the employee representatives with a case by pointing out that the management had breached European legislation by announcing from the very start of the information and consultation process that its decision was irrevocable, that is to say had already been taken. 3. In the absence of discussion about the alternative solutions proposed by the expert and of progress in the dialogue with management, the trade union representatives at the site brought an action before the High Court of Justice of the Asturias region for the failure to respect the information and consultation procedure. As a result, the Court declared the redundancies at the site invalid, demanded the immediate reinstatement of the 216 employees who lost their jobs and ordered the company to pay the salaries owed to the workers laid off since the end of December 2013.

• Quality framework for traineeships: On 10 March the Council adopted a Recommendation on “a quality framework for traineeships“. The Member States are invited to change their national law between now and the end of 2015 such that traineeship conditions must be agreed in writing between the trainee and the “traineeship provider” (the employer). The agreement should state the objectives of the traineeship, the working conditions, whether the trainees will be paid or otherwise compensated, and whether they will qualify for social security. The States should ensure that the traineeships have “a reasonable duration … that, in principle, does not exceed six months”. The Recommendation is judged insufficient by numerous member organisations of the European Youth Forum (see press release) and by the European Trade Union Confederation (see press release).


• Equality between men and women: On 7 March the European Commission adopted a Recommendation “on strengthening the principle of equal pay between men and women through transparency”. The Recommendation suggests four measures to enhance transparency, including the conduct of pay audits in companies with more than 250 employees, the result of which “should be made available to workers’ representatives and social partners” (OJEU, 8 March 2014, L 69, p. 11).


• Civil aviation: Commission Regulation No 245/2014 of 13 March 2014 “amending Regulation No 1178/2011 of 3 November 2011 laying down technical requirements and administrative procedures related to civil aviation aircrew” has been published in the Office Journal (OJEU, 14 March 2014, L 74, p. 33).


• Copyright: Publication in the Official Journal of the directive No 2004/26 of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (OJEU 20 March 2014, L 84, p. 72).


• Posting of workers: The informal agreement between the Parliament and the Council concerning the proposal for a directive for the enforcement of the directive concerning the posting of workers was approved on 18 March by the Committee on Employment and Social Affairs of the European Parliament by 30 votes to 11, with 3 abstentions. The text will be presented for definitive adoption at the April plenary session (14-17 April).

• Preservation of supplementary pension rights: Publication of the Council position, adopted on 17 February at first reading, with a view to the adoption of the directive “on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights” (OJEU, 15 March 2014, No C 77E, p. 1).


• Resolution of the European Parliament on the freedom of movement for workers: On 12 March the European Parliament adopted a resolution on the proposal for a directive on measures facilitating the exercise of rights conferred on workers in the context of freedom of movement for workers.


• Troika intervention: The European Parliament on 13 March adopted two resolutions on the role of the Troika (ECB, IMF, European Commission) in the four countries which received financial aid (Cyprus, Greece, Ireland, Portugal), one on the “Role and operations of the Troika with regard to the euro area programme countries” and the other on the “Employment and social aspects of the role and operations of the Troika“. The MEPs recommend that the social dimensions and employment should be better reflected in the aid programmes and that each of the affected countries should benefit from a “growth task force”. The MEPs call for the same attention to be given to social imbalances as to macroeconomic imbalances.

• Maternity leave and surrogate mothers: The European Court of Justice has ruled on two cases concerning female employees who claimed maternity leave for the birth of a child conceived through a surrogacy arrangement. Because she has not been pregnant or given birth in the meaning of Directive 92/85, the Court of Justice found that, in this case, the employee is not entitled to maternity leave. Certainly, the Court has previously judged that such leave is also intended to protect the special relationship between a woman and her child. However, on this occasion, it stresses that this objective concerns only the period subsequent to “pregnancy and childbirth”, which excludes women who have a baby through a surrogacy arrangement and have not themselves been pregnant. Consequently, the refusal by an employer to grant maternity leave constitutes neither direct discrimination – a commissioning father who has had a baby through a surrogacy arrangement is treated in the same way as a commissioning mother in a comparable situation – nor indirect discrimination – the refusal of leave in this case does not put female workers at a greater disadvantage than male workers. As a result, 1. The Member States are not required to provide maternity leave to a female worker who, as a commissioning mother, has had a baby through a surrogacy arrangement, even in circumstances where she may breastfeed the baby following the birth or where she does breastfeed the baby (CJEU 13 March, case C-167/12, CD). 2. An employer who refuses to provide such a female worker with maternity leave does not commit an act of discrimination on grounds of sex, or of discrimination based on disability, even if the female worker concerned is unable to bear her own child, obliging her to avail herself of a surrogacy arrangement (CJEU 13 March, case C-363/12, Z.). These are two cases in which the Court can be said to have erred on the side of caution.


• Fixed-term contracts: The European Court of Justice delivered two judgements on 13 March relating to the framework agreement on fixed-term work, concluded on 18 March 1999, which is annexed to directive 1999/70 of 28 June 1999. The Court found that national legislation cannot provide for different notice rules for fixed-term contracts of employment of more than six months (a fixed notice period of two weeks) and contracts of indefinite duration (notice ranging from two weeks to three months depending on the length of service of the worker concerned), where the two categories of workers are in comparable situations (CJEU 13 March 2014, C-38/13, Małgorzata Nierodzik). In another case, it accepted a rule which allows universities to renew successive fixed-term contracts concluded with associate lecturers without any limit on the maximum duration or number of renewals of such contracts, insofar as such contracts are justified by an objective reason (CJEU 13 March 2014, C-190/13, Márquez Samohano).

• Temporary work: The new scheme for permanent contracts for temporary agency workers (“CDI intérimaire”) took effect on 6 March, following the publication of the extension order in the Official Journal (6 March 2014). Concluded between temporary workers and temping agencies, the “CDI intérimaire” contract covers periods when the temporary worker is engaged on an assignment – when he or she receives remuneration at the rate equivalent to that normally paid by the user company – and periods of non-assignment, during which he or she benefits from a guaranteed minimum monthly salary that must not be lower than the French national minimum wage. During these periods, the temping agency can ask him or her to attend training courses. The aim of the social partners is to conclude 20,000 permanent contracts for temporary agency workers over three years. (See press release of Prism’emploi, the French association of employment agencies, and computer graphic, in French.)

• Labour market reform: The new government has published its draft “Jobs Act”, which is intended to result in a major overhaul of labour law. The “Jobs Act” is divided into two phases. 1. An emergency procedure with a decree law comprising measures that focus on the flexibility of fixed-term contracts and apprenticeships. 2. An extremely ambitious programme of reforms via a draft framework law which, once passed by parliament, will delegate to the government the task of adopting legislative decrees implementing a range of measures within six months. One of the first measures will be to allow fixed-term contracts to be concluded without redress. From now on, it will be possible to renew a fixed-term contract several times without stating a reason over a maximum period of three years. In connection with apprenticeships, it will now be possible to provide two-year contracts with remuneration fixed at two points below that normally envisaged by the classification tables contained in industry agreements for people up to the age of 29. The decree law also provides for time spent on training to be paid at 35 % of the hourly rate of pay.

• Unemployment insurance: The Council of Government on 19 March adopted the draft Grand Ducal regulation defining the criteria of “appropriate employment” in the context of the reform of the unemployment insurance scheme (“Adem”) (see press release, in French). Job seekers are required to accept appropriate employment. To qualify as such, the job must pay a wage that is at least equal to full unemployment benefit. The proposed job does not have to be identical to that previously held, but must be compatible with the individual’s qualifications or professional experience. The daily commute and family situation are not considered a justifiable reason for refusing a position. Having been registered as a job seeker for three months, a person must accept an allocated part-time job, even if he or she was previously employed full-time.

• Axa: Three members of the European group council of AXA, including the secretary Olivier Pelras, together with the CFDT trade union and human resources managers of AXA France received a delegation from the Trade Union Congress (TUC) (see press release). The TUC is preparing a report on how British legislation is applied to the information and consultation of employees (ICE), having visited major companies including Axa, Thales, Pernod Ricard and Husqvarna.


• GDF Suez: At its plenary session on 12 March, the European works council of GDF Suez secured undertakings from the management in connection with the planned creation of shared service centre management in Belgium and France. The EWC was not in favour judging that, for certain activities, the social consequences “seem disproportionate both as regards the resultant financial cost and in human terms”. The management for its part gave several undertakings. The affected employees will not be subject to redundancy or compulsory mobility. They will benefit from personalised assistance, and staff affected by duplication will receive priority redeployment within the GDF Suez group together with financial and vocational support. The collective agreements and staff regulations of each entity will remain unchanged under local legislation. The undertakings will be followed up by the EWC over the coming two years.


• Rockwell Collins: The management of the American aeronautical supplier Rockwell Collins (20,000 employees) and the secretary of the European works council have signed a new EWC agreement under Luxembourg law, which is undoubtedly one of the shortest such documents signed in recent years. The text refers to the minimum requirements of the 2009 directive and to the provisions of the Luxembourg Labour Code. Two annual meetings are envisaged, however, instead of the one provided for by legislation. The group has more than 1,800 employees in Europe and has its largest presence in France (40% of the European workforce), Great Britain (29%) and Germany (28%), as well as locations in Sweden and the Netherlands.


• Suez Environnement: On 20 February the social partners embarked upon the negotiation of a European agreement on health and safety at work. The next negotiating session is planned for 27 March, prior to what is scheduled to be the concluding meeting on 10 April.


• EWC database: The European Trade Union Institute has recently added the European works council agreement of Yara (2005) and its two renewals to its online database, as well as the EWC installation agreement of the Slovenian electrical household appliance group Gorenje (2013).

European works councils: In an issue of the weekly Courrier hebdomadaire (No. 2198, € 6.98) published by Centre de recherche d’information sociopolitique (CRISP), Peter Kerckhofs gives a detailed analysis of the “new Belgian regulations on European works councils”, supplemented by a statistical study focusing on the Belgian multinationals affected by the new European directive on the one hand, and the 91 EWCs to which the directive’s transposition into Belgian law applies on the other.

• Representativeness of the European social partners: Eurofound has published a representativeness study of the European social partners at cross-industry level. The national trade unions affiliated to the three European trade union organisations (ETUC, Eurocadres and CEC) cover 91% of European employees, while the three employers’ organisations (BusinessEurope, UEAPME, CEEP) account for 85% of businesses which employ 89% of workers. Only ETUC and BusinessEurope have members in all the countries of the EU. The CEC (European Confedération of Executives and Managerial Staff) is present in only 11 countries, while the CEEP (European Centre of Employers and Enterprises providing Public Services) has members in 17 states.


• Temporary work: On 21 March the European Commission published its report on the application of directive 2008/104 on temporary agency work. The report concludes that it is not necessary to amend the directive, but it finds that “the extent of the use of certain derogations to the principle of equal treatment may, in specific cases, have led to a situation where the application of the Directive has no real effects upon the improvement of the protection of temporary agency workers”. In other respects the Commission regrets that the Member States have too often maintained restrictions or prohibitions on the use of temporary agency workers.

The Tenneco dispute once again highlights the discussion about when the information and consultation of employee representatives should start. This principle, which has existed since the directives adopted in the 1970s to accompany restructuring measures (directives on collective redundancies, transfer of undertakings and insolvency) is at the heart of more recent directives, such as that on European works councils (directive 94/45), the directive on employee involvement in the European Company (2001/86) and directive 2002/14 on the European framework for informing and consulting employees. One conclusion is reached from reading these texts: if the information and consultation process is to have a “useful effect”, it must intervene before the employer has taken its final decision. Consultation about a decision that has already been taken or is irrevocable can only be considered as a breach of European social legislation. For more details, see the European industrial relations dictionary (in English).