IR Notes

The European Parliament ended its mandate with the adoption of a symbolic text: the directive “on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services”. The document provokes extreme emotions, from those who welcome it as an advance for social Europe and worker protection, to those who regard it as a victory of liberalism which will foster social dumping. The truth is somewhere between the two. The text provides the Member States with the means to combat abuses discovered in connection with the posting of workers. Thanks to the last amendments approved on 16 April by the Parliament, they will have more elements at their disposal “to determine whether an undertaking genuinely performs substantial activities” in its country of origin which could warrant the posting of workers to other Member States. The national authorities can therefore more easily combat the practice of “letter-box companies” whose sole purpose is to manage the posting of low-cost workers without any other substantial activity in the country of origin (Article 4 Section 2). The host States will therefore also be able to check the true nature of so-called “posted workers” more easily by detecting cases of workers “falsely declared as self-employed”. The text invites the authorities to be guided by the facts, such as the “subordination and the remuneration of the worker, notwithstanding how the relationship is characterised” in the contract (Article 4 Section 5). Finally, the text attempts to “guarantee respect for an appropriate level of protection of the rights of posted workers for the cross-border provision of services, while facilitating the exercise of the freedom to provide services for service providers and promoting fair competition between service providers” (Article 1). The aim is to support the functioning of the internal market and not to erect barriers at borders, which explains the wrath of the various “nationalist” parties. Nevertheless, the text remains fragile because it relies on the goodwill of the Member States ─ which may be open to doubt. On the other hand, it does nothing to change the fact that the social security contributions financing the national social protection systems differ widely across Europe, which has an impact on the cost of labour, favouring companies which post workers from countries with low social security costs. But that is the problem with Europe: it is a large internal market, and no country has wanted to give the European Union the mandate to harmonise the national social security systems.

• Adoption of the directive facilitating the free movement of workers: On 14 April the Council definitively adopted the directive “on measures facilitating the exercise of rights conferred on workers in the context of freedom of movement for workers”. This directive, which the Member States have two years to implement in their national law, aims to ensure the effectiveness of the right to equal treatment in comparison to nationals for workers and their families who move to another EU country in order to work. In particular, this concerns the enforcement of such rights with regard to access to employment, the conditions of employment and work (remuneration, dismissal, health and safety, etc.) and social and tax advantages. In their national legislation, the states must ensure that “judicial procedures for the enforcement of said obligations are available to all Union workers” and their families “who consider that they have suffered or are suffering from unjustified restrictions and obstacles to their right to free movement or who consider themselves wronged by a failure to apply the principle of equal treatment to them […]”. To assist them, the directive adds that “associations, organisations, including the social partners, or other legal entities … may engage, either on behalf of or in support of, Union workers and members of their family, with their approval, in any judicial and/or administrative procedure provided for the enforcement” of these rights.


• Adoption of the directive on supplementary pension rights: The European Parliament on 15 April definitively adopted the directive improving the protection of supplementary pension rights for mobile workers. The text, which has still to be formally adopted by the Council, in particular gives three guarantees to mobile workers: 1. Pension rights should be vested (guaranteed) after three years of employment at the latest. 2. The rights of workers who leave an employer-run pension scheme before retirement must be preserved and treated fairly compared to the rights of those workers who remain in the scheme (if the scheme includes indexation, this must apply equally to the pension rights of those who have left the scheme). 3. The employees have the right to know how potential mobility would affect their pension rights, and those who have left the scheme must be informed about the value of their rights.

• Institution for occupational retirement provision (IORP): On 27 March the European Commission adopted a legislative proposal on the activities and supervision of institutions for occupational retirement provision which does not envisage the introduction of new solvency standards for such institutions as was demanded by the social partners.

• European platform against undeclared work: On 9 April the European Commission proposed the creation of a European platform intended to improve cooperation at a European level in order more effectively to prevent and deter undeclared work. The platform would bring together all the various national bodies involved in the fight against undeclared work (labour inspectorates, social security agencies, tax authorities, etc.).
  


• European campaign to tackle psychosocial risks: The European Agency for Safety and Health at Work (EU-OSHA) on 7 April launched a two-year Europe-wide campaign entitled “Healthy Workplaces Manage Stress“. The Agency draws attention to the “startling” prevalence of work-related stress in Europe. According to a survey it commissioned, 51 % of workers find work-related stress to be common, while 40% think that stress is not handled well in their organisation.

• Rebellion by players in sectoral social dialogue: The European Commission’s refusal to adopt a proposal for a Council decision to make mandatory the agreement on health and safety signed on 26 April 2012 by the social partners of the European hairdressing sector was denounced on 7 February by the employers’ organisation for the private security sector – CoESS – (see statement) and, in March, by the social partners in the European sugar sector (see statement).

• Collective bargaining and work incapacity: while the collective bargaining system is currently being reformed, as described in an article published by Eurofound, a new reform of the incapacity for work rules is being prepared. The topic is currently being discussed with the social partners, as a further Eurofound article explains.

• Amendments to the Labour Code: The Council of Government on 4 April last adopted a draft law to amend the Labour Code. The aims of the new measures are: 1. To provide a framework intended to establish an age management policy in enterprises which is to be negotiated between the social partners. Companies having more than 150 employees will have to draw up an age management plan tailored to their business with a view to promoting the continued employment of older workers. 2. To increase the legal reference period for calculating working hours to four months for part-time workers to allow a higher number of hours worked during certain periods compensated by periods of lower activity, with a view to improving the work-life balance. 3. To put an end to the automatic termination of an employment contract at the point when an employee is allocated an old-age pension or reaches the age of 65 if he decides, in consultation with his employer, to continue the employment relationship part time.

• Notice periods in the event of dismissal to be reviewed: Following the judgement of the European Court of Justice (CJEU 13 March 2014, C-38/13, Małgorzata Nierodzik) which found that different notice rules for employees on fixed-term contracts and those employed on a permanent basis was incompatible with EU law (see IR Notes No. 6), the government is preparing to amend the Labour Code. The employers’ proposal is to vary the notice period for these two types of contract on the basis of seniority: a notice period of two weeks for workers employed for less than 12 months, rising to two months for contracts up to 36 months. The trade unions consider the two-week notice period to be insufficient and are calling for dismissals of workers on fixed-term contracts to be justified by the employer.

• Law on accessibility for people with disabilities: The government has adopted a bill (2008:567), with a proposed entry into force date of 1 January 2015, which considers inadequate accessibility for disabled people as discrimination in its own right. It will be possible for discrimination to be determined, in particular with regard to employment, if a disabled person is disadvantaged through a failure to take accessibility measures to put people with disabilities in a situation comparable to that of non-disabled people, while adjustment measures could reasonably be expected.

• Adecco: “It is with regret that we announce the creation of a European works council at Adecco,” reports the French CFDT trade union of the temporary employment group. Negotiated under British law, the agreement is “low end” and “falls well short of what is envisaged by the European directive,” states the CFDT, which regrets that certain trade unions represented on the special negotiating body voted for “this pseudo-agreement”. Out of the 26 voting, “17 countries voted in favour of this agreement. Nine countries, including France, voted against,” the CFDT explained.


• GDF Suez: In the framework of a consultation on the reorganisation of the Energy Europe business line (25,000 employees), the European works council has secured the same undertakings towards employees who might be affected by job losses as those made by the management at the time of an earlier consultation on the creation of shared service centres (see IR Notes No. 6). In addition, members of the EWC and of company management are to meet at the beginning of May to draw up a scorecard with indicators for following up the implementation of this reorganisation in the longer term.


• HSBC: The HSBC bank (27,000 employees) has since 5 October 2013 been negotiating a new EWC agreement after the installation agreement dated 6 September 1996 was terminated in October 2011 by the employee representatives because the rights to information and consultation it contained were judged to be insufficient. The employee representatives requested the negotiation of a new agreement in October 2012, the date from which the European works council ceased to function. An initial meeting of the special negotiating body took place in March 2013. Two more have followed, in November 2013, then in March of this year.


• Metro: The management of the German retail group Metro and the representatives of the European workforce on 3 April last, at the annual meeting of the European works council, signed a new agreement which strengthens the council’s information and consultation rights. The EWC installation agreement dates from 11 October 1996 and was renegotiated in 2006. The new renegotiating round began in April 2013 and was concluded on 15 January last. The new agreement strengthens the right to training and the role of the select committee and of the secretary. The employee members are granted the right to hold a second meeting, once every two years, dedicated to a particular topic, such as health and safety, training, equal treatment, etc.. The employee representatives also have recourse to two experts of their choice. UNI Europa is to be granted a permanent seat as a trade union expert.

• SAP: The agreement on worker involvement* concluded on 10 March 2014 in the course of converting the world leader in software packages, SAP, to a European Company (SE) (see IR Notes 7) includes a section on the SE works council, which will replace the current EWC, and another on employee representation on the supervisory board. The SE works council will have one representative for each country in which the group is established, and countries with a workforce smaller than 10 employees can ask to be represented by a council member from another member state. The text provides for one additional representative per 10 % of the workforce, which will lead to a composition that gives Germany the largest delegation (seven members), while all the remaining countries will be represented by a single member, thus forming a complement of 34 members. Unlike the European works council, which met only once per year, the SE works council will hold four meetings annually. The SE works council can set up working groups to deal with specific subjects for a limited period in order to ensure greater expertise within its ranks. It should be noted that the text assigns competence to the council only on transnational issues involving at least two member states, disregarding the other part of the definition contained in the directive concerning worker involvement, which grants competence also when a decision taken by central management (in Germany) affects the workforce of one other member state. As for the supervisory board, it is made up of 18 members, nine of whom are employee representatives (from 2019 onwards this will be reduced to 12 members, of whom six will be employee representatives, if this change is adopted by the general shareholders’ meeting). The agreement designates the first representatives, who will remain in place for one year until the board is then reconstituted by way of elections. The board will comprise seven German representatives, one representative from France (being the second-biggest company in terms of manpower) and another European representative appointed from among the other countries represented on the SE works council.

*Available on IR Share soon.

• IBM: The trade union steering group set up at the American computer group IBM by the UNI Global Union, IndustriAll Global Union and IndustriAll European Trade Union federations has agreed on the demands to be presented to the group’s management in order “to fight thousands of job cuts and deteriorating working conditions” (see UNI Global Union press release).

• GDF Suez: The management and the international trade union federation have completed the negotiation of an agreement on health and safety at work which incorporates the broad lines of the agreement concluded at a European level. In other respects, a special negotiating body will meet for the first time on 28 April to launch talks intended to culminate in a European agreement on the quality of life at work.

Annual report on gender equality: On 14 April the European Commission published its annual report on the equality of women and men which demonstrated that “concrete progress has been made in the area of addressing the gender pay gap”. However, “at the current rates of progress, it will take almost 30 years to reach the EU’s target of 75 % in employment, 70 years to make equal pay a reality and 20 years to achieve parity in national parliament,” the Commission announced. The pay gap still stagnates at 16.4 % Europe-wide. Worse than that, the gender gap in pensions stands at 39 %. Women represent on average 17.8 % of board members in the largest publicly listed companies, and 2.8 % of CEOs.

• Increased qualifications in the EU: A Eurostat news release published on 11 April, finds a continuous increase in the number of early school leavers – young adults aged 18 to 24 who have at most completed lower secondary school and who are not in further education or training – and in the number of young graduates. For those in the first category, their share has fallen from 17 % in 2002 to 12 % in 2013. As for the second group, Eurostat observes a steady rise in the proportion of people aged 30 to 34 who have completed tertiary education in the EU. This share has gone up from 24 % in 2002 to 37 % in 2013.


• Underemployment in the EU continues to grow: On the basis of the 2013 results of the labour force survey, Eurostat emphasises in a publication that, of the 216.4 million people aged between 15 and 74 in employment in the EU in 2013, 9.9 million were part-time workers who were underemployed, that is to say wishing to work more hours and available to do so. Since the crisis began, they have accounted for an ever increasing proportion of the labour force, rising from 18.5 % in 2008 to 22.7 % in 2013. Among the 137.2 million people classified as economically inactive (meaning persons who are neither employed nor unemployed), Eurostat counted 9.3 million people aged 15 to 74 who were available to work, but not seeking employment and 2.2 million seeking work, but temporarily not available. In total, these two groups represent a potential additional labour force of 11.5 million people, equivalent to 4.7 % of the active population (compared to 11 million in 2012).


• Large gap between unemployment rates in different European regions: In 2013, the regional unemployment rate revealed substantial disparities between the 272 regions of the EU, according to a study by Eurostat. The weakest rates were recorded in the regions of Upper Bavaria in Germany (2.6%), Freiburg in Germany and Salzburg in Austria (2.9% in each case), whereas the highest rates (between 33.7% and 36.4%) were identified in five regions of Spain.

The free movement of people is one of the fundamental rights of the European Union and undoubtedly one of the most important and most tangible for European citizens. For workers, this right to free movement has existed since the Treaty of Rome, which founded the European Community in 1957. The current Article 45 of the Treaty on the Functioning of the European Union states that such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. It shall entail the right 1. to accept offers of employment actually made; 2. to move freely within the territory of Member States for this purpose; 3. to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; 4. to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. See the European Industrial Relations Dictionary (in English) for further details.