IR Notes

The free movement of people, one of the founding principles of the European Union, is under attack from all sides. The United Kingdom, in its negotiations with the other governments aimed at averting a “Brexit”, intends to reduce access to social benefits paid to European citizens exercising their right to mobility. The result will be to hamper and complicate the movement of people seeking to move to that country in search of work. In other respects, the migrant crisis and the reaction of France following the 13 November attacks has led a number of countries to suspend one of the pillars of the Schengen Area by re-introducing border checks. On 17 February, the European Economic and Social Committee (EESC), which represents European civil society, adopted a resolution by 216 votes to 1, with 4 abstentions. The members of the EESC are “increasingly concerned about the pressure being put on the Schengen Agreement” and call on “Europe’s governments not to bow to populist pressure and fear but instead to defend the rights we have striven for”. This agreement is “aimed to promote the union of the peoples and solidarity between the peoples. Undermining it, therefore, in addition to having alarming economic consequences, would amount to a potentially fatal blow to solidarity and to the Union itself,” the Committee insists. As for the economic consequences of abandoning Schengen, France Stratégie, a French think-tank attached to the government, estimated that this would cause a reduction in GDP by 0.8 points, equivalent to more than 100 billion euros, for the countries in the Schengen area (“The Economic Cost of Rolling Back Schengen“, analytical note No. 39, February 2016). In its analysis, France Stratégie in particular measured the impact on cross-border workers, tourism and freight transport. For France, “the short-term direct costs related to these impacts” are assessed “to be between one and two billion euros per year. This evaluation does not take into account the necessary budget for implementing the controls”. “In the long run, the loss for France is estimated at around 0.5% of GDP, amounting to more than 10 billion euros, with regard only to the decrease in bilateral trade between countries belonging to the Schengen Area”. This cost would be catastrophic at a time when the OECD growth forecast has been revised downwards. Furthermore, as underlined by the Brussels correspondent of the French daily newspaper Libération in his blog (in French), “Schengen is primarily about the establishment of European police and judicial cooperation (…), which would disappear if it came to an end”. Restoring internal borders would undermine an acquis which should in fact be strengthened.

• Personal protective equipment (PPE): The Council on 12 February definitively adopted the new regulation on personal protective equipment, which supersedes directive 89/686/EEC of 21 December 1989. The new rules apply to all PPE intended to be placed on the market and/or to enter service for the first time on the EU market. They set out the health and safety requirements and establish the conformity assessment procedures which have to be followed by manufacturers, which will then be able to place the “CE marking” on their products (see European Council press release).

Update on the concessions obtained by the United Kingdom pertaining to employment and social affairs: The agreement on the guarantees granted to the United Kingdom arrived at on 19 February by the member states of the European Union does not permit the United Kingdom to opt out of European legislation relating to employment and labour law, although the EU can be instructed to review its laws from the perspective of subsidiarity and to check that current legislation does not represent an excessive burden in terms of red tape, particularly for SMEs (see p. 32 of the document). This approach could eventually legitimise a certain probing of existing legislation, concerning health and safety at the workplace for instance. In connection with free movement, the United Kingdom obtains an option right – which will also be open to the other member states – to index the level of family allowances paid for a resident’s children who have remained in their country of origin (see p. 33 of the document). In exceptional circumstances, the United Kingdom will be permitted to withhold payment of certain social benefits of a non-contributory nature (that is to say financed from taxation and not from social security contributions) to EU citizens intending to settle on its soil, for a period of four years (see p. 23 of the document). Over this period, provision is made for gradually increasing the access to benefits as the worker who has exercised his right to mobility becomes more and more integrated in the British labour market.

• Aid for employees made redundant by Volvo Trucks in Sweden: The European Commission on 16 February proposed an aid payment of 1.8 million euros from the European Globalisation Adjustment Fund to Sweden to help 500 of the 647 employees dismissed by Volvo Trucks and four of its suppliers as a result of the slump in the market for commercial goods vehicles in the road transport sector (see Commission press release).


• Mobilisation in support of the steel industry: The industry alliance AEGIS Europe, the employers’ organisation of European steel producers, Eurofer, and the sector’s trade union organisations led by the IndustriAll European trade union federation on 15 February mobilised several thousand people in Brussels in a protest against the importation of Chinese products in the EU at prices posing a threat to the European industry (see press releases of Eurofer, AEGIS and IndustriAll). The European Commission on 12 February launched new anti-dumping investigations with a view to establishing whether three steel products have been dumped on the EU market (see press release). Numerous professional and trade union organisations have adopted a European manifesto for free and fair trade“.

• European negotiation on active ageing: As provided for in the 2015-2017 work programme, the European social partners will on 18 March launch inter-professional negotiations with a view to concluding an autonomous framework agreement aimed at “fostering active ageing and an inter-generational approach”. A preparatory seminar was held on 9 February in Brussels. National presentations are available on the website of the European trade union federation EPSU.

Strike reform negotiation fails: On 18 February the social partners at federal level failed to reach agreement on revising the right to strike. “We could not accept the risks of sanctions against activists who were not involved in the illegal acts,” explains Marc Goblet, general secretary of the FGTB. “Furthermore, we did not want all trade union action to be banned, e.g. blockades of industrial areas, roads and roundabouts.” The CEO of the Federation of Belgian Enterprises (FEB), Pieter Timmermans, appears to favour further social consultation (see FEB position statement).

• Planned relaxation of rules governing employment contracts: The government has opened for public consultation a report that aims to make certain labour law rules more flexible. The report contains three main proposals: 1. To allow fixed-term employment without any specified reason (whereas at present fixed-term contracts are permitted only if there is a valid reason), and for a maximum of three times during a year. 2. To extend the trial period for new employees from four to six months, allowing employers to terminate the contract without stating any reason. 3. To shorten the obligation to re-employ a worker dismissed for economic reasons should new work arise in the company, from nine to four months. (See article in the trade union bulletin Trade Union News from Finland.)

Towards a new reform of labour law: Draft legislation “aimed at establishing new freedoms and new protections for businesses and employees” was sent for opinion to the Council of State on 17 February. The text precedes the rewriting of the Labour Code, a draft of which is expected to be presented in two years’ time, but already modifies certain sections on working hours, redundancies and collective bargaining. All the measures presented are in line with the reforms undertaken in other member states aimed at increasing the flexibility of working hours and decentralising collective bargaining by strengthening the role of company-level agreements. The text also aims to reduce the cost of redundancies and, for employers, to provide certainty around dismissals for economic reasons by specifying in the law the grounds judged to be admissible; this reduces the scope for judicial interpretation should the reasons for redundancy be challenged. The bill will be presented to the French cabinet on 9 March before being considered by parliament by May. It could be adopted before the summer. While the trade unions oppose many aspects of the bill, the employers’ organisations generally believe that it is going in the right direction.

• Reduction in employers’ contributions: The government on 18 February decided to keep the reduction in the social security contributions for employees paid at the minimum wage at 0.75 percentage points, thus setting the level of employers’ contributions at 23%. The minimum wage rate of 530 euros that has applied since 1st January must rise to 600 euros by 2019 according to a bill proposed by the new government, which brings together the socialist party and the radical left. At present, 500,000 employees receive the minimum wage.

• Owens-Illinois (O-I): The American glass packaging specialist Owens-Illinois (27,000 salariés) on 15 October 2015 signed a new European works council agreement to take into account the content of directive 2009/38. Unlike the preceding agreement, which was concluded under the law of France – the member state where the group has the most employees (around 2,000) – the new agreement is governed by Italian law.


• Praxair: The American supplier of industrial gases Praxair (27,000 employees), which had created a European works council in 2012 (see agreement), is about to enter negotiations to revise its agreement.
  
  > Also see: new European works Councils set up by McBridge.

Work-life balance: The French research institute IRES has published a review dedicated to current developments and the status of two instruments serving the work-life balance, that is to say leave granted to parents (e.g. parental leave and paternity leave) and childcare structures, in several OECD countries. This issue contains the “state of play of work-life balance mechanisms and examines the extent to which the crisis has exacerbated tensions and difficulties that already existed”. The articles from different countries seem to indicate that the work-life balance schemes have to some extent been “spared” by the crisis.

• The effects of digitisation: The European Trade Union Institute has published a working paper on “Digitalisation of the economy and its impact on labour markets” which has highlighted four main impacts: job creation, job change, job destruction and job shift. According to its author, Christophe Degryse, “There seems to be an emerging consensus concerning an increased polarisation of the society of tomorrow, with a shrinking middle class, a strong increase in low-income workers and households, and the explosion of a tiny minority of ‘superstars’ whose wealth levels are literally exploding”.