IR Notes

The relaunch of European social dialogue will be in the hands of its players: this was the key message of the high-level conference held on 5 March in Brussels attended by representatives of the European Commission and the European and national social partners. There was no earth-shattering announcement from the Commission, which was clearly there to listen to the social partners. However, it did not come empty-handed. As Valeria Ronzitti, General Secretary of CEEP – European Centre of Employers and Enterprises providing Public services – explained in conclusion, having feared this would be a PR exercise, the conference had produced concrete commitments from the Commission which actually constituted a “work programme”: 1. Strengthening the involvement of social partners in the EU semester (elaboration of national reform plans and recommendations to the member states) in the drafting and follow-up phases; 2. Involving the social partners in EU policy making, beyond the mandatory consultations envisaged by the Treaty relating to industrial relations, in areas which have an impact on employment (new energy policy, single digital market, etc.); 3. In connection with the better regulation policy, which aims to make EU legislation simpler and more effective, the Commission will systematically conduct impact assessments of the agreements signed in the framework of sectoral social dialogue; it should also play a more important role in evaluating the application of the agreements at both interprofessional and sectoral levels, although this was not clearly stated. The Commission will not do more, since the relaunch of social dialogue is rather a matter for the players themselves. As Jean-Claude Juncker pointed out at the end of the conference, “You can’t have a tripartite system without a bipartite basis. The Commission can act as a go-between at national level and also at European level,” he continued. “Agree on a joint programme so that the Commission has people to discuss with”.

• Guidelines on health and safety in professional sport: The European social partners in the sport and active leisure sector – Ease and UNI Europa – on 21 February adopted Guidelines on health and safety. These should be taken over by the social partners at national level in the form of collective agreements and should be applied to both paid staff and volunteers. The declaration lays down recommendations common to all three sub-sectors (not-for-profit sport, professional sport and active leisure) and others specific to the individual sub-sectors.

• Abusive use of fixed-term contracts: The Court of Justice of the EU has delivered a judgement condemning Luxembourg for maintaining in force, with respect to occasional workers in the entertainment arts, derogations from measures designed to prevent the abusive use of successive fixed-term contracts (CJEU 26 February 2015, case C‑238/14, European Commission v. Grand Duchy of Luxembourg). For this category of workers, contracts may be renewed more than twice, even for a total period exceeding twenty-four months, without being deemed to be permanent contracts. “Such a provision therefore carries a real risk that it will result in misuse of that type of contract and, accordingly, is not compatible with the objective of the framework agreement” on fixed-term work of 18 March 1999, which is set out in the annex to directive 1999/70 of 28 June 1999, “and the requirement that it have practical effect” (also see CJEU press release).


• Non-payment of a special severance allowance is permitted: The Court of Justice of the EU was asked to consider the case of a Danish employee who continued in active employment after becoming eligible for retirement with a full pension (CJEU 26 February 2015, case C‑515/13, Ingeniørforeningen i Danmark v. Tekniq). When made redundant, the employee objected to the fact that his employer failed to pay him a special severance allowance linked to seniority (amounting to between one and three months’ salary). This severance allowance is designed to help older workers to find new employment. Under the legal provision, said allowance does not have to be paid to employees who are eligible for a state retirement pension. Is this measure at odds with the principle of non-discrimination on grounds of age? No, according to the Court, because it is “objectively and reasonably justified by a legitimate aim relating to employment and labour market policy” and, on the other hand, it constitutes “an appropriate and necessary means of achieving that aim”.


• Cross-border workers are not required to pay taxes linked to funding the social security system of the country in which they work: Having ruled in 2000 that two French social security contributions – the CSG and CRDS – could not be deducted from employment income and substitute income of workers who, although resident in France, were subject to the social security legislation of another member state (CJEC 15 February 2000, case C-169/78 and case C-34/98), the Court of Justice has applied the same reasoning to levies on income from assets (for example rental income) received in the country in which the worker exercises his activity (CJEU 26 February 2015, case C-623/13, Ministre de l’Économie et des Finances v. Gérard de Ruyter). A large number of cross-border workers can therefore now be expected to claim repayment of contributions deducted from their income from assets (also see CJEU press release).

• Adaptation of the collective labour agreement on parental leave: The National Labour Council has amended collective labour agreement (CCT) No. 64 of 29 April 1997 establishing the right to parental leave in order to ensure its compliance with the revised European framework agreement on parental leave set out in the annex to directive 2010/18 of 8 March 2010. Parental leave is thus increased from three to four months, and employees now have the right to request changes to their work pattern or working hours after taking parental leave.

• The social partners’ expectations of the new government: Following the parliamentary elections on 1 March which gave victory to the liberal Reform Party led by the ruling Prime Minister Taavi Roivas, the social partners have published a press release with a list of their priorities for the new legislature: as well as education and life-long learning, they include administrative reform and more efficient, more durable and better quality public services. They had previously reacted negatively to proposals from certain parties wishing to speed up the rise in the minimum wage by giving more power to the government to set its level.

• Negotiations on reform of the collective bargaining system fail: The negotiations between the social partners aimed at reforming the system of collective bargaining have failed after more than a year of talks, due in particular to the employers’ desire to focus on the issue of increasing fines for illegal strikes. The negotiations were conducted as part of the national pact for employment and growth concluded in September 2013 (see article in English in the newsletter of the Finnish trade unions).

• Wage agreement in the metalworking and electrical industries: The employeers’ organisation Südwestmetall and the IG Metall trade union on 24 February reached agreement on a 3.4% increase in salaries, together with a one-off payment of 150 euros, for workers in the Baden-Württemberg region (see press release, in German). This result will, however, serve as a precedent for all regional agreements, which will allow the sector’s 3.7 million employees to be covered. The agreement, concluded for twelve months, improves the remuneration of workers opting for early retirement (who will be paid 90% of their net wage) and maintains at 4% the number of company employees who can join the scheme. The deal provides for enhanced funding of continuing professional development, although without granting the “right to CPD” demanded by IG Metall. The employers’ organisation Gesamtmetall regards the agreement as providing a significant pay rise in real terms, although it pushes companies to the limit of what is economically sustainable (see press release, in German).

• Ban on shops opening on Sundays and at night: The parliament has passed a new law (No. 201/2015, to take effect on 15 March) banning Sunday and night-time opening in the commerce sector. It is thus prohibited to open a shop on Sundays and on all other days of the week between 10 pm and 6 am. The measure is intended to boost small businesses at the expense of large retail outlets. Sunday and night-time opening has always been permitted since 1990. The law contains exceptions, however, for shops with a surface area of less than 200 m² kept by a single family. This appears to breach the constitutional principle of equal treatment. The legislation has been heavily criticised.

• Reduction in social security contributions for businesses: Royal decree 1/2015 of 27 February 2015 introduces a reduction in social security contributions, whereby the first 500 euros of monthly remuneration are to be exempted almost entirely from social security payments (which account for 23.6% of salaries). Employers will consequently save 118 euros per month, which proportionately reduces the cost of labour for workers on low wages. This exemption is conditional on the employment of one full-time permanent staff member (in the case of a part-time worker, the exemption is decreased in proportion to the working hours, down to a minimum of half-time employment). The exemption is granted for 24 months (or 36 months in companies having fewer than 10 employees), but the company must maintain its employment level for the three years following signature of the employment contract. In other respects, in the case of self-employed workers without employees who must stop working in order to take care of a child or close relative, the decree provides for their complete exemption from social security contributions under the self-employed scheme if they take on a staff member as their replacement.

• Wage agreement in the banking sector: Following four months of negotiations, a new agreement was signed on 2 March between the trade union representing employees in the finance sector (Finansförbundet) and the employers’ organisation of Swedish banking institutions BAO. In addition to general wage increase measures, the package includes a significant hike in the minimum wage and the decision to continue reducing the wage gap between women and men (see Finansförbundet press release , in Swedish).

Gefco: The management of the transport and logistics group Gefco (11,500 employees, including around 5,500 in the EU) and the special negotiating body (SNB) on 18 February signed an agreement on setting up a European works council (in French). The agreement, whose signing was unanimously approved by the members of the SNB, complies with directive 2009/38 and offers material and financial resources commensurate with the group’s size. One of the interesting clauses concerns transnational issues. It limits the EWC’s responsibility to plans concerning the entire group or at least two establishments and affecting at least 150 of the group’s employees spread across at least two countries, and at least 80 employees in one of the countries involved. If a country affected by a proposal is not represented on the EWC, the management undertakes to call the local management (if applicable accompanied by an employee representative) before the EWC in order to answer EWC members’ questions.

• Axa: The European works council of the Axa insurance group is organising a training day on the issue of digital transformation on 8 April in the context of a secretariat meeting, expanded to include the secretaries of the French works councils and elected representatives of countries not represented in the secretariat.

• Société Générale: The UNI Europa Finance European trade union federation on 26 and 27 February set up a trade union alliance within the group. Its aim is to pave the way for negotiation of a global agreement “to improve working conditions” and “to develop transnational industrial relations in the company” (see UNI Finance press release).

• EU minimum wage levels: As of 1 January 2015, 22 of the 28 member states had national minimum wages which ranged from 184 euros in Bulgaria to 1,923 euros in Luxembourg. Bulgaria and Romania (218 euros) offer a minimum wage that is lower than the highest minimum wage levels in China (220 euros in Zhejiang province in 2014). (see Eurostat press release)


• Unemployment receding in the EU: According to Eurostat, the EU28 unemployment rate was 9.8% in January 2015, down on December 2014 (9.9%) and on January 2014 (10.6%). In the euro area, the rate was 11.2% in January 2015, compared to 11.3% in December 2014 and 11.8% in January 2014. Year-on-year, the unemployment rate in January fell in 24 member states (see Eurostat press release)


• Employment and poverty targets for 2020 become more distant: According to Eurostat, the targets set in the Europe 2020 strategy for employment and poverty reduction will not be met. In 2013, the results with regard to the employment rate (68.4%) and poverty (121 million people at risk of poverty or social exclusion) are even lower than those recorded in 2008 (see Eurostat press release).

There are more and more of them, struggling to join the employment market, and their prospects of retiring on a full pension appear highly uncertain: the acronym NEETS, which has recently entered European terminology, was first coined in Great Britain at the end of the 80s and designates young people “not in education, employment or training”. In 2011, there were 7.3 million NEETS in the EU and their number is probably higher still today. See the Eurofound European Industrial Relations Dictionary (in English) for further information.