IR Notes

A “choice between succeeding together or becoming insignificant separately” is how European business views the situation, as indicated by Markus J. Beyrer, BusinessEurope director general, who pointed out that none of the European member states are projected to be among the world’s largest economies by 2050. For the employers’ organisation president, Emma Marcegaglia, the voters have backed a pro-European majority which has the fervent “obligation to work together constructively” for a “more competitive Europe to create more growth and more jobs”. In a joint statement, six national employers’ organisations (BDA, BDI, CEOE, Confindustria, Lewiatan and Medef) also see in these results “a clear majority for those parties which are in favour of European integration”. For the next five years the eurozone needs “more cooperation and democratic control”, and the European institutions should “focus on a limited number of key priorities providing real added value” such as “global competitiveness, growth, prosperity and employment”. Tackling the problem of employment is the one rare point of convergence with the trade union movement. For Bernadette Ségol, General Secretary of the European Trade Union Confederation (ETUC), “the real challenge is to get Europe’s 26 million unemployed back to work”. However, this must be achieved by “major investment at EU and national level to drive sustainable growth and job creation” and not by pursuing austerity policies (see press release of the ETUC). All the European trade union federations which have released statements view the ballot as a protest vote against austerity and unemployment. Like Oliver Roethig, regional secretary of UNI Europa, they denounce the “progress of Euro-sceptic and nationalist forces”, even if certain polls have shown, as in France, that trade union supporters sometimes voted above the national average for such parties. A clear vote for a pro-European majority on the one hand, a protest vote against austerity policies on the other; a call to continue the reforms to increase Europe’s competitiveness versus a demand to end austerity measures and start investing again… The social partners are struggling to find a common starting-point for a shared vision of the formulas for leading Europe out of the crisis.

• Directive on the management of the posting of workers: Directive 2014/67 of 15 May 2014 on the enforcement of directive 96/71/EC concerning the posting of workers in the framework of the provision of services has been published in the Official Journal of the European Union. The text, which provides a management framework for the posting of workers by increasing the means available to the Member States to limit abuses, was definitively adopted on 16 April by the European Parliament (see IR Notes 8), following the compromise secured in February between the Parliament and the Council, which represents the heads of state and government (see IR Notes 5). The new directive will become law on 18 June next and the Member States will have until 18 June 2016 to transpose it into their national law. The directive “aims to guarantee respect for an appropriate level of protection of the rights of posted workers (…) while facilitating the exercise of the freedom to provide services for service providers and promoting fair competition between service providers (…)”. It “shall not affect in any way the exercise of fundamental rights (…), including the right or freedom to strike or to take other action covered by the specific industrial relations systems in Member States (…)”. Neither “does it affect the right to negotiate, conclude and enforce collective agreements and to take collective action. The directive facilitates “the identification of a genuine posting” and “prevention of abuse and circumvention” (Article 4) for Member States. It allows them to impose “administrative requirements” and “control measures”, provided that these are “justified and proportionate” (Article 9). The text also gives Member States the option of imposing joint and several liability between a contractor and a “direct subcontractor” if the latter has failed to pay its employees or make its social contributions (Article 12). However, this liability is mandatory in the construction sector.


• Directive on “intra-corporate” transfers: Directive 2014/66 of 15 May 2014 on the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer has been published in the Official Journal of the European Union. The directive aims to manage and facilitate the mobility of managers, specialists and trainee employees “of branches and subsidiaries of multinationals” originating from non-member countries when they are temporarily relocated for short assignments to other units within their group situated within the EU. “Facilitation of intra-corporate transfers enables multinational groups to tap their human resources best,” the directive explains. It regulates 1. The “conditions of entry to, and residence for more than 90 days in, the territory of the Member States (…) of third-country nationals”; 2. Their rights and “those of their family members”; 3. The mobility of the latter within the EU. The directive specifies the criteria for admission (Article 5), such as the existence of a work contract or an assignment letter containing a certain number of details, including the duration of the transfer, the location of the host entity and even the remuneration. On this last point, a vigorous debate took place between the Council and the European Parliament on the application of equal treatment with the workers of the host country in terms of pay. In the end, Article 18 introduces equal treatment with regard to working conditions, between intra-corporate transferees and European employees who are posted in the framework of the provision of services (directive 96/71). Intra-corporate transferees thus benefit from the application of the provisions of labour law in the host country which are mandatory for posted workers (work periods, minimum wage, paid holidays etc.). Concerning remuneration, Article 5.4 b) provides that it must not be “less favourable than the remuneration granted to nationals of the Member State where the work is carried out occupying comparable positions in accordance with applicable laws or collective agreements or practices in the Member State where the host entity is established”. It therefore seems that the risk of social dumping is eliminated by the combined reading of these two texts. The directive must be transposed into national law by the Member States between now and 29 November 2016.


• Enhanced cooperation between public employment services: Decision No. 573/2014 of 15 May 2014 on enhanced cooperation between the public employment services has been published in the Official Journal of the European Union (see IR Share 10).

• Strategic framework on health and safety: On 6 June, the European Commission is due to present a new EU strategic framework on health and safety at work for the period 2014-2020. According to the Commission, this framework is intended “to improve implementation of existing health and safety rules”, to allow small businesses to enhance their capacity “to put in place effective and efficient risk prevention strategies”; to tackle “new and emerging risks” and “to take account of the ageing of the EU’s working population”. It remains to be seen which tools will be envisaged (restrictive directives or not), and if taking the difficulties of small businesses into account will result in their obligations being diminished.


• Recommendations to the Member States: On 2 June, the European Commission presented its country-specific recommendations for 2014. They concern the budgetary reforms of the employment market and other structural reforms which every Member State is due to implement in the next twelve to eighteen months in order to stimulate growth. Link to the recommendations.


• Situation of the glass industry: In the framework of the “Glass Campaign” conducted by the IndustriAll European trade union federation, a meeting was held on 16 May in Brussels between an IndustriAll delegation and Diego Canga-Fano, head of cabinet of Antonio Tajani, vice-president of the European Commission responsible for Industry and Entrepreneurship, as well as representatives of the Directorate-General for Enterprise and Industry with responsibility for industrial competitiveness, energy-intensive sectors and anti-dumping measures. The delegation depicted the job losses incurred in the glass sector since 2008, mainly for flat glass and solar panels, but also for hollow glass. Possible avenues to support the sector were explored jointly, such as state aid for innovation and R&D, adaptation of anti-dumping measures, regional funds, and the inception of European sectoral social dialogue.

• Paid leave cannot cancel out the payment of commission: The European Court of Justice (CJEU, 22 May 2014, case C-539/12, Lock v British Gas Trading Limited) noted that, during his four weeks’ paid annual leave imposed by directive 2003/88, an employee has the right to maintenance of his customary remuneration. If part of his prior remuneration comprises commission generated from sales, said commission must be incorporated in the amount of remuneration maintained during leave periods. However, the Court went further, adding that, when the employee returns from leave, when he had of course been unable to generate any commission, his remuneration must not be reduced to the level of his basic salary. “That adverse financial impact may deter the worker from actually taking that leave,” the Court stressed, suggesting to employers that they should take into account the average amount of commission received by the employee over a twelve-month period in order to add this average to the basic salary paid to the employee after returning from leave.


• Move towards stopping “benefit tourism”: Whereas several countries have shown their unwillingness to pay social benefits to European citizens who have come to reside on their territory, the Advocate General of the Court of Justice has published his conclusions in a case where a benefit paid to the unemployed was refused to a young Romanian woman who had settled in Germany (CJEU, Conclusions, 20 May 2014, case C-333/13, Elisabeta Dano). The Advocate General found that a State must be able “to withhold social security benefits to citizens who exercise their freedom of movement with the sole objective of obtaining the benefit of social assistance from another Member State, even when they do not have sufficient resources to claim a right of residence of more than three months”.


• An actuarial calculation cannot give rise to discrimination linked to gender: The European Court of Justice is due to pronounce in the near future on a question of different treatments of men and women as a result of an actuarial calculation. In her conclusions (CJEU, 15 May 2014, case C-318/13), the Advocate General of the Court, Juliane Kokott, found that a flat-rate allowance paid to a man to compensate for life-long health problems following an industrial accident must not be lower than that paid to a woman in the situation solely by dint of an actuarial calculation which takes into account that a woman’s life expectancy is longer than a man’s.

• Hospital sector: The European social partners in the hospital sector  – the Hospeem employers’ organisation and the EPSU European trade union federation – on 6 March adopted their Joint Work Programme 2014-2016, which deals in particular with health and safety at work, as well as recruitment and retention of hospital staff.

• Equal pay between men and women: A royal decree of 25 April 2014 specifies the arrangements for writing the report on the pay structure for male and female workers which must be compiled every two years in companies with 50 or more employees. This document must be submitted to the employee representatives who can request an action plan to bring about a neutral salary structure if they discover unequal treatment.

• Vote-buying in the European elections: The chief executive of the Bobov Dol mine, Hristo Kovachki, has appeared inviting employees to vote for the BSP socialist party in return for meat vouchers worth two-thirds of their salary. He promised that if the socialists won the elections, he would open the meat outlet (which he owns), which would then be well stocked. The day after the vote, however, the employees who queued for many hours eventually saw only a few kilos of meatballs and sausages arrive.

• Labour market reform: Law No. 78 of 16 May 2014 (in Italian), which amends the decree law of 20 March 2014 (in Italian) reforming the employment market, was published in the official journal on 19 May. The principal measures envisaged concern more flexible use of fixed-term contracts (which are to have a maximum duration of 36 months, with up to five renewals allowed during this period) and apprenticeship contracts.

• Collective agreement signed for bank workers: The collective agreement (in French) applicable to the banking sector for 2014 to 2016 was signed on 15 May by the OGBL, Aleba and SESF trade unions on the one hand, and the Association des banques et banquiers (ABBL) on the other. It has still to be published in the official journal (Mémorial A) to attain validity.

• Representation of women in the boardroom: On 23 May, the government adopted a bill to modify company law (Proyecto de Ley por el que se modifica la Ley de Sociedades de Capital) which increases transparency about directors’ remuneration and aims to ensure a balanced representation of men and women on company boards. Listed companies will be required to adopt objectives to this effect, however without the law imposing a quota for women.

• Areva: At an extraordinary meeting of the European works council on 24 March, the European group council (EGC) of Areva gave its opinion on the agreement to surrender the Duisburg facility to a buyer (the Livia group). The council emphasised that the management had granted its request “to set up a follow-up committee to ensure the commitments made towards the Duisburg workforce”. In other respects, in the framework of a joint-venture being formed with Gamesa, the council has secured “the presence of an observer representing the employees of the joint venture until the end of 2015 and the delivery of a presentation on the strategic, financial and social aspects at every biannual meeting of the EGC”. Thereafter, “beyond 2015, the EGC reserves the right to invite a staff representative from the joint venture to its meetings should a particular situation require it”.


• Fiat Industrial: The Fiat Industrial group was condemned by the Turin Court of Appeal on 6 May, as a result of its anti-union behaviour towards the federation of metallurgical employees and workers of the CGIL confederation (Fiom-CGIL). The judgement (in Italian) criticised the group for having excluded Fiom-CGIL from the special negotiating body (SNB) set up at the end of 2011 to negotiate the installation of a European works council. The court found that Fiat had interfered with the process for nominating members of the SNB, whereas only trade union organisations are authorised to appoint such members. “The judgment – the first that relates to European-level issues – is a credit to the tenacity and consistency of Fiom-CGIL and IndustriAll Europe, which has refused to negotiate without Fiom-CGIL,” stressed the IndustriAll European trade union federation.


• Geopost: At the EWC meeting of GeoPost (a branch of La Poste) held in Zurich on 12 and 13 May, the management presented a document concerning well-being at work on which, according to FO, the three French trade unions, FO COM, CFDT and CGT, abstained from voting because “it did nothing for the employees”. Under the provisions of the document, each branch “must conduct a survey to measure satisfaction” at least every two years, “involving all staff in the form of an anonymous, objective questionnaire”. The branches must then initiate action plans “to eliminate the shortcomings found”. In addition, “the French trade unions voted against a second text intended to amend the agreement regulating the EWC’s operation”. The document sought to increase the number of members on the executive committee from 5 to 6 representatives and allocated a budget to the European works council. The three trade unions objected to the fact that the signatories to the initial agreement were not involved in negotiating the amendments.


• UniCredit: The European works council of the Italian UniCredit banking group at a plenary session on 21 May presented the joint declaration on corporate social responsibility signed on 31 January 2014 by the European social partners – UNI Finance and the European Banking Federation (see press release, in English, or Italian). For the European works council, this declaration considers social dialogue as a crucial tool to mitigate the effects of the crisis and to find common solutions with a view to managing the impacts on the group’s employees. In other respects, the EWC hopes to reach agreement on a joint declaration on responsible sales as well as a global framework agreement, in cooperation with the international trade union federation UNI Finance. Furthermore, in a joint declaration (in English, or Italian) dated 20 May, the Italian trade union federations (Dircredito, Fabi, Fiba, Fisac, UniSin and Uilca), together with Austria’s GPA-DJP and Germany’s Verdi federations, denounced the strategic plan for the group for the 2014-2018 period, which relies too heavily on reducing costs and cutting jobs.

• Amazon: The German service sector union, Ver.di, called employees at Amazon out on strike for two days, from 30 to 31 May 2014. The dispute, which concerns the company’s two logistics centres in Germany, has been ongoing since April 2013. The trade union is demanding that the remuneration of the 9,000 employees should be set according to the conditions of the collective agreement covering the retail sector and mail order sales, whereas the American owner is applying the collective agreement of the logistics sector, whose terms are less favourable.

• PSA Peugeot Citroën: The French car manufacturer Peugeot-Citroën on 15 May signed a three-year agreement authorising the donation of rest days to an employee whose child is seriously ill, just a few days after the relevant law No. 2014-459 of 9 May 2014 was adopted (see IR Notes 10). The scheme could be extended in three years time for the event of serious illness of a spouse.

• Smurfitt Kappa: The international trade union federations IndustriAll and UNI Global Union on 18 and 19 May in Madrid set up a global trade union network within the Smurfitt Kappa paper group. It is to be steered by a coordinating committee comprising six members, including two representatives of the European trade unions, two representatives for Latin America and one representative each for the two international trade union federations. The secretary of the European works council attended the meeting in order to give his support.

Restructuring-related legislation: The European Foundation for the Improvement of Living and Working Conditions (Eurofound) has updated its database of national legislation on anticipating and managing change. This tool, to which IR Share has contributed, collates more than 370 measures in force in the 28 Member States (plus Norway). It provides a unique means of researching or comparing the arrangements applicable in the various nations.

• Country-based overview of industrial relations: The European Foundation for the Improvement of Living and Working Conditions (Eurofound) has updated its fact-files (“Country profiles“) of the different national systems of industrial relations in Europe (in English), as well as of countries outside the EU, such as the USA and Japan.


• Work in the world: The International Labour Organisation has published its “World of Work Report 2014 » (in English) (also see summary) which recalls that “economic growth is not sustainable when it is based on poor and unsafe working conditions, suppressed wages and rising working poverty and inequalities”. For the ILO, “Employment and decent work should therefore be a central goal in the post-2015 development agenda”.


• Growing risk of poverty in Europe: Eurostat has updated its annual survey of the poverty risk in Europe (“People at risk of poverty or social exclusion“, only in English) which highlights an increase in this risk between 2011 and 2012. Thus, 124.2 million people (24.8% of the population of the EU) were at risk of poverty or social exclusion in 2012 (compared to 24.3% in 2011). The criteria used to measure this risk include exposure to material deprivation, which affects 9.9% of the population (up 1 point), with an extremely high rate in Bulgaria (40%) and a rate of 25% in Hungary, Latvia and Romania. In other respects, 40.2% of Europeans would not be able to face unexpected expenses (up 2.1 points compared to 2011).


• Employment rate continues to fall in 2013: Having steadily increased from 2002 to 2008, rising from 66.7 % to 70.3 %, at the onset of the economic and financial crisis, the employment rate in the EU has continued to contract, establishing itself at 68.3 % in 2013, a long way from the 75 % envisaged by the Europe 2020 strategy, according to Eurostat (Stat 14/80 of 19 May 2014). Only Germany and Malta have recorded near continuous growth in their employment rate throughout the entire period, from 74 % in 2008 to 77.1 % in 2013 in the case of Germany, which is the only country (along with Malta) to exceed its national target of 77 % for 2020. For people in the 55 to 64 age group, the pattern is quite different: their employment rate has risen continuously, from 38.1 % in 2002 to 50.1 % in 2013. It is noteworthy that the gap between the highest and lowest employment rates has been extended from 19.4 percentage points in 2010 to 26.6 points in 2013

A phrase regularly employed when the posting of workers is being debated, “social dumping” does not really have a set definition. Numerous business practices may be described as “social dumping”, from fraud to perfectly legal behaviour. Somewhere in the middle is “social optimisation”, the act of taking advantage of the diversity of social security systems and labour law regimes. At present, the “posting of workers” and “social dumping” appear to be synonymous, hence the adoption of a directive to improve the way posting is managed (see Legislation). However, increased checks by national authorities on companies posting workers can do nothing when faced with a reality of the EU: as with taxation, social protection is not harmonised. A posted employee coming from a country where the social security contributions are low will offer a competitive advantage over employees from a country in which these contributions are high, even if he receives the same level of pay as employees from the host country. This is “social dumping”, and it is perfectly legal. While no country is prepared to harmonise its tax rates or its social security system, this form of “social dumping” has a bright future. See the European Industrial Relations Dictionary (in English) for further details.