IR Notes

The European Court of Justice has delivered a judgement on the interpretation of directive 2003/88 on working time (CJEU, 10 September 2015, case C-266/14, Federacion de Servicios Priva­dos del sindicato Comisiones Obreras). The case concerns two Spanish firms engaged in the installation and maintenance of security systems. The working time of the companies’ technicians used to be calculated as starting when they arrived at their regional office and ending when they returned there at the end of the day. However, the return journey between their homes and the regional office was not counted as working time. In the course of a reorganisation, the employer decided to close the regional offices. Now attached to the company’s head office, the technicians travel to the customers’ premises directly from their homes, to which they return at the end of the day following their final visit. The employer does not regard these journeys as working time, a view disputed by the employees (see press release, other languages). The Court recalled that the definition of “working time” is based on three cumulative criteria as follows: “any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties”. Accepting as beyond dispute that the employees were indeed carrying out their activity, the Court pointed out that they were also at their employer’s disposal because “during the necessary travelling time, which generally cannot be shortened”, they “are not able to use their time freely and pursue their own interests”. It remained to determine whether the employees were “working”. On this point, the Court found that “if a worker who no longer has a fixed place of work is carrying out his duties during his journey to or from a customer”, that worker must be regarded as working during that journey. Given that travelling “is an integral part of being a worker without a fixed or habitual place of work, the place of work of such workers cannot be reduced to the physical areas of their work on the premises of their employer’s customers”. It must be noted that the aim of the directive is to protect the health and safety of workers, which means that the travel time involved must be included when calculating the maximum working time. On the other hand, it does not oblige employers to remunerate travel time at the same rate as the working hours completed on the customers’ premises.

• Long-term unemployment: Having promoted the youth guarantee scheme, the Commission has now turned its attention to another group hit hard by the crisis: the long-term unemployed. The Commission has adopted a proposal for a recommendation to the Member States, putting forward measures to “better help” the long-term unemployed return to work (see press release). The Commission proposes that each Member State should take the following steps: 1. Encourage the long-term unemployed to register with an employment service; 2. Provide each person who has registered with an “individual in-depth assessment”, at the latest by the 18th month of unemployment; 3. Offer each individual a “job integration agreement” at the latest by the 18th month.


• Speech on the state of the Union: In his speech on the state of the Union, the President of the European Commission, Jean-Claude Juncker, insisted on the need to “promote and safeguard the free movement of citizens as a fundamental right of our Union, while avoiding cases of abuses and risks of social dumping”. This had to be respected as a “key principle”, he said, which was “to ensure the same pay for the same job at the same place”. He also intends to set up a “European pillar of social rights”, to be established initially within the euro area.

• Clarification on the application of the directive on the transfer of undertakings in the air transport sector: The European Court of Justice has ruled on the conditions of application of the “transfer of undertakings” directive – which safeguards the employment contracts of employees attached to the transferred company or entity – in the air transport sector (CJEU 9 September 2015, case C-160/14). The case concerns the winding-up of the Portuguese company AIA (resulting in the redundancy of 97 employees) and the assumption of its activities by TAP (see press release).


• Court of Justice heedful of calls for curb on “benefit tourism”: In the Dano ruling (CJEU 11 November 2014, case C-333/13, see IR Notes 20), the European Court of Justice affirmed that a Member State can refuse to grant a social benefit to Union citizens “who exercise their right to freedom of movement solely in order to obtain another Member State’s social assistance although they do not have sufficient resources to claim a right of residence”. The Court has added to its body of case law aimed at curbing “benefit tourism” with a new ruling (CJEU 15 September 2015, case C-67/14, Alimanovic) concerning a Swedish family of Bosnian origin. Having spent some time in Germany, where their three children were born, the family left for Sweden, returning to Germany more than ten years later in order to seek employment. The mother held a succession of temporary jobs for one year, after which she did not engage in any further occupational activity. She was in receipt of various social benefits for herself and her children until these were withdrawn on the grounds that her right of residence and that of her elder daughter derived solely from their search for employment (see press release, other languages). Granting precedence to directive 2004/38 on the right of residence over regulation No. 883/2005 on the coordination of social security systems, the Court made a distinction between two scenarios: 1. “If the worker is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first 12 months and has registered as a job-seeker with the relevant employment office, he retains the status of worker for no less than six months”. During this period, he retains his right of residence and may, consequently, rely on the principle of equal treatment with the nationals of the host country so far as access to social assistance is concerned. Beyond the six-month period, the right of residence lapses, and therefore the national authorities can refuse to pay the social benefits concerned (Article 7(3)). 2. The Court stressed that the right of residence can be maintained, again on the basis of directive 2004/38, which stipulates that Union citizens “who have entered the territory of the host Member State in order to seek employment may not be expelled for as long as they can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged” (Article 14(4)). This scenario, which applies to this particular family, does not preclude the receipt of the social benefits in question, but the directive affords a derogation by allowing the Member States (Article 24 (2)) “not to grant that citizen the social assistance sought”. In the eyes of the Court, the withdrawal of the benefits is therefore admissible and does not constitute a breach of equal treatment with the nationals of the host Member State who are in the same situation. As Jean-Claude Fillon, an expert from the FreSsco European network of specialists in the free movement of workers and social security coordination explains, “After the Brey (CJEU 19 September 2013, case C-140/12) and Dano rulings, the Court of Justice is seeking to bring closure to the issue: in this area, the directive takes precedence over the regulation and undermines the balance struck by the latter between a broad entitlement in the State of residence and the non-exportability of benefits to another Member State. The price for this position is a significant reduction in the protection previously granted to the economically inactive, pensioners and workers on very low incomes”.


• Modification of an employment contract may be equated with a dismissal: The Advocate General of the Court of Justice of the EU, in her opinion (which serves to inform the Court before it delivers a judgement), has stated in connection with the application of the directive on collective redundancies that, in certain cases, a “modification to their employment contract” offered to an employee could be considered tantamount to a “dismissal” when it refers to substantive elements of the contract and involves a major degradation in the employee’s working conditions (CJEU opinion, 3 September 2015, case C-422-14, Rivera).

“Nordic model” on the way out: The Nordic model of industrial relations, based on the central role afforded to collective bargaining without state interference, has been totally undermined by the present government. Having failed to get the social partners to adopt austerity measures, it has presented a bill which aims to reduce pay deals negotiated by collective bargaining. The Finnish trade unions claim that the draft law breaches the fundamental rights of trade unions, ILO conventions and the fundamental social rights of the European Union. The bill proposes to reduce salary enhancements for overtime, weekend and night-time working, and to cut sick pay and the number of official public holidays. The unions, supported by the European trade union movement (see IndustriAll and IUF press releases) have called demonstrations to oppose the new legislation. However, this action has so far not deterred the government, which has set itself the target of reducing labour costs by 5%.

• Report on the place of collective bargaining: The government has received a report which recommends granting greater importance to sectoral and company-level collective bargaining when making labour law (see summary, in French). Following a consultation phase with the social partners, a draft law will be submitted to the French parliament in early 2016

• Limits on the use of fixed-term contracts, and an improvement in parental leave: In June, the Polish parliament adopted two important laws modifying the labour code which were promulgated on 5 August. The first, which concerns fixed-term contracts, limits their use with the same employee to a maximum of three successive contracts whose total duration must not exceed 33 months. Since the amendment sets the length of employment contracts concluded for a trial period at three months, the total period of employment based on a fixed-term contract must not exceed 36 months. The amendment brings the notice periods for fixed-term and permanent contracts into line with each other, abolishes another form of employment contract (the contract concluded for the duration of completing a specific task) and removes the obligation on employees to serve out their notice. The new rules will take effect in February 2016. The second amendment makes the conditions for taking parental leave more flexible. Most of the modifications will become effective on 1 January 2016.

• Improvement in parental leave and maternity protection: Law No. 120/2005 of 1 September amended the labour code in order to strengthen maternity and parental leave provision. Parental leave, currently comprising 120 to 150 consecutive days, has been extended by 30 days in the case of multiple births. Parents must decide on how to divide this leave after the first six weeks, which must be taken by the mother Since 6 September, parents have no longer been obliged to split the leave into successive periods, but are allowed to take some of the leave concurrently (unless they both work for the same company and it has fewer than 10 employees). In 2016 paternity leave will go up from 10 to 15 days, 5 of which must be taken immediately after the child has been born. Employees having a child aged under three years have the right to work from home when this is possible; in particular they can be released from flexi-time work arrangements and must not be penalised in their career. Furthermore, another law, No. 146/2014 of 9 September, allows companies which have been found guilty of unfairly dismissing pregnant workers or workers who have recently given birth or are breastfeeding to be excluded from the award of public grants or subsidies.

Alcatel-Lucent / Nokia: In the context of Alcatel-Lucent’s acquisition by Nokia, the IndustriAll European trade union federation organised a meeting of the trade union coordination group for its affiliates at both companies on 11 September in Brussels. The 45 trade union representatives from ten European countries adopted a joint declaration calling for better employee involvement in the merger process. They condemned the lack of any real information to the European works councils and demanded that the spirit of directive 2009/38 be respected, calling for proper information and consultation of the two EWCs. The participants also drew up a list of questions for both management boards and deplored the fact that Nokia had opened negotiations on the future European works council without involving the representatives of the European works council of Alcatel-Lucent. Letters were sent to the senior management of both groups and to the French and Finnish prime ministers and economy ministers.

• Engie: An initial negotiating session between the management of the French energy group Engie (formerly GDF Suez) and the IndustriAll, EFBWW and EPSU European trade union federations was held on 8 and 9 September with a view to concluding a European agreement to accompany the group’s transformation.
  > Also of interest: The global framework agreement on fundamental social rights at ABN AMRO is now available.

• Civil aviation: The European Economic and Social Committee on 16 September adopted an opinion on an integrated EU aviation policy to promote a coherent, comprehensive strategy that eliminates unnecessary burdens undermining the aviation value network. In another opinion on social dumping in the European civil aviation sector adopted on the same day, the committee raised concerns over the increased use of false self-employed workers and temporary employment agencies to push down labour costs.


• Hourly labour costs: The hourly labour costs went up by 1.6% in the euro area and by 1.9% in the EU28 in the second quarter of 2015 compared with the same quarter of the previous year. While the increases were observed primarily in eastern European countries, decreases were recorded in Greece (–2.9%), Cyprus (–1.2%) and Italy (–0.4%) (see Eurostat press release).


• Growth in employment in the EU: The number of persons employed increased by 0.3% in the euro area (EA19) and by 0.2% in the EU28 in the second quarter of 2015 compared with the previous quarter. Portugal (+1.3%) and Greece (+1.2%) recorded the highest growth rates. However, employment contracted in Finland, the United Kingdom, Bulgaria and Lithuania (see Eurostat press release).