IR Notes

The European Commission on 6 June published a communication on a new “Strategic Framework on Health and Safety at Work 2014-2020“. The document, which belatedly succeeds the preceding 2007-2012 strategic framework, does not contain any announcements of legislative proposals. It will be for the next Commission to draw conclusions, in 2016, from the ongoing evaluation of all European legislation on the subject. The Commission is to examine “possible simplifications and/or reductions in administrative burden” and to encourage Member States to review their own transposing legislation. It also intends “to assess the situation of micro-enterprises in low-risk sectors and consider how to simplify the implementation of risk assessment, including documentation”. Between now and 2016, the Commission will prioritise non-legislative tools “to make a difference on the ground”. The strategic framework identifies the three principal challenges which must be met, according to the Commission: 1. To improve implementation of the existing health and safety rules, particularly in micro-enterprises and small businesses, 2. To improve the prevention of work-related diseases by tackling new and emerging risks, but without neglecting existing hazards; 3. To take account of the ageing of the EU’s workforce. The European Trade Union Confederation (ETUC) expressed its disappointment, judging the strategy to be “weak and insubstantial” (see ETUC press release, in English).

• Amendment of the insolvency regulation: The European Council has arrived at a compromise on the amendment of regulation 1346/2000 on insolvency proceedings. The European Commission had adopted a revision proposal in December 2012. The compromise will be sent to the Parliament for a first reading. It incorporates a new principle aimed at giving powers to the Member State in which secondary proceedings have been opened to deal with the specific questions of terminating or amending employment contracts. This rule supplements that contained in the current regulation which provides for the effects of the proceedings on an employment contract and on the employment relationship to be regulated exclusively by the law of the Member State that applies to the employment contract.

• Undeclared work: The opinion of the European Economic and Social Committee on “A strategy against the shadow economy and undeclared work” adopted on 21 January 2014 has been published in the Official Journal.

• Paid leave must be remunerated, even in case of death: The European Court of Justice has delivered a judgement on the granting of paid leave to the widow of a deceased employee who, prior to his death, had accumulated an entitlement to 140 days’ paid leave which were not taken because of his illness (CJEU 12 June 2014, case C-118/13, Gülay Bollacke). The question arising was whether the paid annual leave envisaged by directive 2003/88 is lost when a worker dies, that is to say not only the right to take time off work (which can no longer be exercised), but also the entitlement to payment in lieu of the leave. The judgement notes that the “entitlement to paid annual leave constitutes only one of two aspects of an essential principle of EU social law and that that principle also includes the entitlement to a payment”. The Court finds that the “receipt of financial compensation if the employment relationship has ended by reason of the worker’s death is essential to ensure the effectiveness of the entitlement to paid annual leave”. In the opinion of the Court, the directive “is not to be interpreted as meaning that the death of a worker that ends the employment relationship relieves the deceased worker’s employer of payment of the allowance in lieu to which that worker would ordinarily have been entitled by way of paid annual leave outstanding”. The allowance for paid leave must therefore be disbursed to the employee’s widow, at least for the portion representing the four weeks’ leave envisaged by the directive; doubts may arise in the case of leave granted beyond four weeks by the law or by collective agreements.

• Meeting about European works councils in the retail sector: The UNI Europa Commerce European trade union federation on 4 and 5 June brought together trade union representatives of a number of groups, including Auchan, Carrefour, H&M, Metro and Tesco. The objective was to assess the functioning of the different EWCs, to exchange views on the practical difficulties of exercising a mandate as an EWC member and to arrive at proposals to improve the way the EWCs work (see the press release of UNI Europa Commerce).

• Collective agreements: the OGB trade union confederation and the ministry of labour have created a website providing information (in German) about all current collective agreements. The site offers an overview of selected collective agreements as well as news about ongoing negotiations (http://www.kollektivvertrag.at).

• Collective wage agreement for the building industry enters force: The pay deal concluded by the social partners in the construction industry in May took effect on 5 June for 24 months (see IG Bau press release, in German). Under the agreement, the sector’s 732,000 employees will receive a 3.1 % rise in the western federal states as of 1 June, followed by 2.6 % on 1 June 2015. To make good the wage gap between the western and eastern states, the latter will benefit from an additional 0.7 % bonus.

• Number of trade union members falls slightly in 2013: According to a report published on 28 May by the Department for Business, Innovation & Skills on trade union membership, around 6.5 million employees belonged to a trade union organisation in 2013; this was broadly unchanged from 2012, although a slight dip of 6,000 members was recorded. In 2013, the trade union membership rate was 25.6 %. In the private sector, the trade unions saw their numbers increase for the third consecutive year, by 61,000 in 2013 to more than 2.6 million members. The proportion of employees who were trade union members remained stable in 2013, at 14.4 %. In the public sector, union membership levels declined from 56.3 % in 2012 to 55.4 % in 2013.

• Airbus Group: The information and consultation process at European works council level of Airbus Group on the aerospace group’s restructuring has been completed. The aims of the restructuring are to establish Airbus Defence & Space with effect from 1 July 2014 by merging the Astrium and Cassidian subsidiaries, to reorganise the Airbus Group’s central corporate functions and to effect site closures or transfers of activities. The reorganisation is likely to result in 5,800 posts being cut. The negotiations conducted by the European works council have led the management to give several undertakings, the most important being not to introduce any compulsory redundancies before 1 January 2017. However, should activity fall significantly below the level anticipated by the restructuring plan, the management has not ruled out authorising layoffs after employing the mechanisms for short-time working, if redeploying surplus staff within the group fails to maintain the jobs. A follow-up at least every three months is planned with the employee representatives at national level and at each EWC meeting of the Airbus Defence & Space division and of Airbus Group. The situation will be reappraised in November 2016. In Germany these undertakings have been incorporated in an agreement concluded with the group works council. The latter believes that this success has been made possible by the cooperation of all the staff representative bodies at the locations in Germany, as well as by the unanimous stance of the European works council.

• Schneider Electric: An agreement concerning the information, consultation and involvement of employees at Schneider Electric in Europe (in French) was signed on 10 June by the management and all members of the special negotiating body to mark the group’s conversion to a European Company (SE). The text improves the preceding agreement on the European works council in a number of respects. In particular, it states that the EWC of the SE is competent to discuss plans likely to impact on at least 150 jobs in at least one country, as in the preceding agreement, “or 10 % of the total workforce” of that country, adds the new document, to allow for countries with a small number of workers. A budget of 30,000 euros is also granted for the work of the EWC. In addition, it contains a clause rare in this type of agreement on valuing the “experience acquired through exercising a mandate as a member of the European works council”, to permit such experience to be recognised “in the member’s career record”. In other respects, the signatories introduced a mechanism for employee participation not at SE level, but within Schneider Electric Industries SAS. Five members of the select committee of the European works council and its secretary will serve on the company’s supervisory board in an advisory capacity.

• Ford: The management of Ford in Germany and the staff representatives have reached an agreement, after more than 18 months of negotiations, that allocates production of the next Ford Fiesta to the Cologne plant, rather than outsourcing it to Romania or another low-wage country (see IG Metal press release, in German). The pact includes sacrifices on the part of the workforce (number of shifts to be reduced from three to two; greater flexibility in terms of weekly and daily working hours, with the possibility of cutting or extending shifts by 30 minutes according to demand; abolition of the bonus for 25 years’ service) in return for a guarantee that the jobs of the 24,000 German employees will be secure until 2021. The management believes that it will save 295 million euros over five years. The president of the central works council, Martin Hennig, commented that the loss of Fiesta production would have meant the death of the Cologne site and would have jeopardised around 10,000 jobs at Ford and its suppiers.

• Qatar Airways: The International Transport Workers’ Federation (ITF) and the International Trade Union Confederation (ITUC) on 5 June submitted an action against Qatar to the International Labour Organisation (ILO) for allowing its national airline Qatar Airways to restrict women’s rights and practise workplace discrimination (see ITF press release).

• Rising job creation in Europe: The number of persons employed has increased by 0.1 % in the euro area and by 0.2 % in the EU28 in the first quarter of 2014 compared with the previous quarter, according to estimates published by Eurostat. In the fourth quarter of 2013, employment had also risen by 0.1 % in the euro area and by 0.2 % in the EU28. Compared with the same quarter of the previous year, employment advanced by 0.2 % in the euro area and by 0.7 % in the EU28 in the first quarter of 2014 (after -0.4 % and 0.0 % respectively in the fourth quarter of 2013).


• Stronger purchasing power of European workers: The annual report of the Foundation for the Improvement of Living and Working Conditions (Eurofound) on pay highlights an increase in the purchasing power of European employees for the first time since 2011. According to Eurofound, the nominal rates of collectively agreed pay increases, although low, are higher than inflation in a number of European countries, resulting in greater buying power.

In its judgement of 12 June last, the Court of Justice of the European Union noted that paid leave constitutes an “essential principle of EU social law”. This principle concerns the entitlement to at least four weeks’ paid annual leave granted to all European workers by article 7 of directive 2003/88 of 4 November 2003. The text also stipulates that this minimum period of paid leave may not be replaced by an allowance in lieu unless the employment relationship ends, when the employee is compensated for the paid leave accrued at the time of his departure by an allowance. The latter rule is appraised strictly by the Court of Justice because use of the allowance in lieu must remain an exception. In fact, the legal basis for this directive is the preservation of health and safety at the workplace, which has prompted the Court to establish important jurisprudence on the subject so that workers do actually take these four weeks’ leave. See the European Industrial Relations Dictionary (in English) for further details.