IR Notes

Following a vote in favour by the European Parliament on 14 April, the Council on 27 May adopted a directive on “the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”. The directive aims to protect businesses against economic and industrial espionage by providing a harmonised definition of the concept of trade secrecy. Its objective is to allow companies that have been the victim of trade secret misappropriation to seek redress more easily before the courts (see Council press release). The legislation would appear to protect whistleblowers, employees and employee representatives. However, as accustomed, everything will depend on how the directive is transposed in the 28 member states. Thus, for whistleblowers, the text provides that the protection against the disclosure of trade secrets is dismissed “insofar as directly relevant misconduct, wrongdoing or illegal activity is revealed”. Opponents of the text emphasise that such a clause would not protect the employees and the journalist behind the Luxleaks disclosures, which revealed perfectly legal activities (the tax rulings handed down by Luxembourg to multinational companies), even if these were contrary to European interests. After a long campaign by trade unions and NGOs (“Stop trade secrets“), some amendments were made. Thus, according to article 1, section 2 d), the directive does not affect “the autonomy of social partners and their right to enter into collective agreements, in accordance with Union law and national laws and practices”. In other words, it freely allows the social partners to control the use of confidential information within companies. Furthermore, the directive cannot “be understood to offer any ground for restricting the mobility of employees”. It is a question neither of “limiting employees’ use of experience and skills honestly acquired in the normal course of their employment”, nor of “imposing any additional restrictions on employees in their employment contracts other than restrictions imposed in accordance with Union or national law” (art. 1 sections 3 b and c). The directive then states that the “acquisition of a trade secret shall be considered lawful” when the trade secret is obtained in the “exercise of the right of workers or workers’ representatives to information and consultation” (art. 3 section 1 c). However, this does not solve the problem for employee representatives who obtain confidential information which they then disclose in part to other employee representatives or their trade union. In other respects, the protection against the disclosure of trade secrets is dismissed if it constitutes “disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions”. Finally, article 14 on damages states that “member states may limit the liability for damages of employees towards their employers for the unlawful acquisition, use or disclosure of a trade secret of the employer where they act without intent”. As with any directive, the devil is in the details, and nowhere more so than in those contained in the 28 national laws that are required to transpose this directive within the next two years.

Commission delivers its recommen-dations to the member states: The European Commission on 18 May proposed its 2016 country-specific recommendations (CSRs), setting out its economic policy guidance for individual member states for the next 12 to 18 months (See press release of the European Commission). According to the Commission, “This guidance focuses on priority reforms to strengthen the recovery of Member States’ economies by boosting investment, implementing structural reforms and pursuing fiscal responsibility”. It considers that “The Member States have advanced reforms over the last year, but the pace of such progress needs to be accelerated to contribute, as it should, to jobs, growth and investment”. The Commission had been expecting “more progress in generating a business and employment friendly and regulatory environment, increasing female labour market participation (…)”. The following documents can be consulted on the website devoted to the European Semester: the country-specific recommendations (“Commission Recommendation”), the report on each country drawn up by the Commission staff (“Country report 2016”) and the national reform programme addressed to the Commission by each member state. All of the documents are accessible in English and in the language of the home country at least. The European Trade Union Confederation highlighted a number of positive points in the recommendations, but at the same time was “very concerned that the Commission is again interfering in the autonomy of the social partners and collective bargaining. It’s wrong to claim that the increase in minimum wage in Portugal would harm employment and competitiveness as it is wrong to claim that the minimum wage in France hampers employment.” (See press release) The employers’ organisation BusinessEurope called on the member states to implement the recommendations. When asked for their opinion in 2016, 88% of BusinessEurope’s members felt that the 2015 recommendations were going in the right direction, but only 20% judged that they had been correctly implemented by the member states.

• Rise in trafficking for the purpose of labour exploitation: The European Commission on 19 May published a Report on the progress made in the fight against trafficking in human beings. According to the report, 15,846 women, men, girls and boys were registered as victims of trafficking in human beings in the EU in the period 2013-2014. However, the actual figures are significantly higher than those recorded by the national authorities. While sexual exploitation accounted for 67% of recorded cases, labour exploitation concerned 21% of the registered victims, notably in the agriculture and construction sectors, in hotel and catering services, manufacturing and domestic work. While this is “by no means a new phenomenon”, “as a result of the economic crisis, demand for cheap labour has increased, with people trafficked into and within the EU to carry out unpaid or very low-paid work, living and working in conditions that do not respect their human dignity”. The Commission called on the member states to improve their implementation of the EU directive preventing and combating trafficking in human beings passed in 2011.
  > Also see the related report (summary and in full, in English) produced by the European Foundation for the Improvement of Living and Working Conditions (Eurofound).


• Worker representation on company boards: The Employment and Social Affairs Committee of the European Parliament is due, on 26 June, to issue its verdict on an own-initiative report concerning “workers representation on board level in Europe”, presented by the committee’s chair, Thomas Händel (S&D). The proposal under review in particular demands that the European Commission 1/ Ensure that different corporate forms created at European level are not used to exclude or circumvent existing forms of worker representation in the companies that are planning to adopt one of these European corporate forms; 2/ Draw up a directive that establishes a model for employee representation in these organisations in “all directives regarding European corporate law”; 3/ Revise directive 2004/25 of 21 April 2004 on takeover bids to ensure that the workers “of a bidding company are also consulted, rather than just those of the company subject to the takeover bid”.


• Confirmation of state aid to facilitate closure of mines in Spain: The European Commission on 27 May authorised the payment of aid of €2.13 billion to alleviate the social and economic impact of closing 26 uncompetitive Spanish coal mines by 2018 (see Commission press release).


• European platform on undeclared work in place: The European Commission on 27 May officially launched the “European Platform on undeclared work”, which will comprise two representatives of the 28 member states together with four representatives of the European social partners. It will also include fourteen observers appointed by the European social partners at sectoral level (see composition and Commission press release (in English), as well as the press release of the European Trade Union Confederation).

• Employment of disabled employees: Starting from 1 July, an employer who employs a person having a certain disability rating will be exempted from the associated social security payments (33% of salary), up to a ceiling of 380 euros. (Above that amount the employer remains liable for social security payments.)

Implementation of reform to prud’hommes courts: A degree implementing law No. 2015-990 of 6 August 2015, whose aim is to improve the operation of the prud’hommes courts – the first level of jurisdiction for labour cases in France – provides for the envisaged measures to become law on 26 May. The parties will from now on be able to defend themselves before the court without having to invoke a legitimate ground. However, in the event of an appeal, they must be represented by a lawyer or trade union representative responsible for defending employees. To speed up the time taken to process cases, which is scandalously long, the judges (conseillers prud’homaux) can sit in twos (comprising one employee judge and one employer judge) rather than on panels of four, and they will be tasked with delivering a ruling within three months.

• New data on the union density rate in France: The French labour ministry has published a study based on data collected in 2013 on trade union membership in France. While the percentage of employees stating that they belong to a trade union remains stable, at 11.2%, this conceals substantial differences between the public and private sectors (19.8% and 8.7% respectively); also between private sector companies with 200 or more employees (14.4%) and those with fewer than 50 employees (5%); and similarly between private sector employees on a permanent contract (9.9%) and those on fixed-term or agency contracts (2.1% and 1.2% respectively). The weakness of these rates does not, however, indicate a marginalisation of the unions since their representativeness is based on their vote in the workplace elections, which attract substantial turnouts (43% in 2012 in the private sector and 53% in the public services in 2014), and not on the number of members.

• Incentives to go part time prior to retirement: A ministerial decree dated 7 April 2016 on “facilitated part-time work” that has just been published in the official journal (Gazetta Ufficiale of 18 May) and will take effect at the beginning of June, aims to promote the principle of active ageing by the use of part-time work in the run-up to retirement. The decree introduces a scheme that encourages employers to reduce the working hours of employees on permanent contracts who are close to retirement. Under the decree, by way of compensation for the reduction in his salary, the employee will receive back from his employer the equivalent of the employer’s contributions corresponding to the income he has lost. Furthermore, the employee will continue to acquire pension rights because the state will pay the equivalent of the employer’s and employee contributions to the social security agencies on the portion of working hours lost.

• Towards a reform of the legislation on public contracts: The government on 19 May presented a bill on the criteria that public authorities should impose in connection with public contracts. The objective is to encourage SMEs to bid for tenders and to protect the Swedish model by insisting on compliance with minimum standards in terms of salaries and working conditions. The government has actually discovered that public contracts were too often awarded on the basis of savings relating to salaries in particular, which encouraged wage dumping. If adopted, the bill would become law on 1 January 2017.

Coca-Cola Iberian Partners: The management of the Coca-Cola Iberian bottling group and the members of the special negotiating body established to create a European works council, assisted by a representative of the EFFAT European trade union federation, on 25 May signed an agreement (available in Spanish), in Barcelona. The new EWC will represent 4,610 Spanish and 430 Portuguese employees. The document provides for an annual plenary meeting and three meetings of the select committee. For Enrico Somaglia, EFFAT’s company policy officer, the agreement goes beyond the standards of the 2009 EWC Directive and comes at a time when other European bottling companies (and including Coca-Cola Iberian Partners) have merged to form “Coca-Cola European Partners” to form “Coca-Cola European Partners”. “Nevertheless it can be considered a good example for the upcoming negotiations of the CCEP EWC,” he said (see EFFAT press release in English).

• Siemens: The German group Siemens has been held to account by the Danish trade union federation 3F for breaching environmental obligations. The case calls into question the reliability of the “smiley” working environment award, issued by a certification body, which exempts companies holding the certificate from labour inspectorate visits. Indeed, according to 3F, over the past 10 years there have been 64 proven cases of chronic asthma and eczema caused by exposure to dangerous chemicals during the production of wind turbines. 3F has taken legal action against the employer, both for failing to take the necessary precautions, but also for illegally spraying isocyanate, a dangerous chemical. The hearing at Aalborg local court is scheduled to begin at the end of May.

Paper on the social situation in Slovakia: The research service of the European Parliament has published a report on the social and employment situation in Slovakia and the outlook for the Slovak Presidency of the European Union (in English). The report, written by the Central European Labour Studies Institute (CELSI), gives an insight into the country that in July will assume the presidency of the EU for the first time for a six-month term. The document records the strong rise in the employment rate, from 54% in 2009 to 62.7% in 2015, although the contraction in the unemployment rate has not been on the same scale, falling from 14.5% in 2010 to 10.3% in January 2016. The minimum wage has gone up continuously, from 269 euros in 2008 to 405 euros in 2016. In 2015, it represented 0.43% of the average wage (883 euros). With regard to industrial relations, the report outlines three levels of social dialogue: at national level, where there is tripartite dialogue, in the sectors – the level that dominates collective bargaining – and in companies. The collective bargaining coverage rate and union density rate have been declining, reaching 24.9% and 13.3% in 2012, respectively. It should be noted that the Constitutional Court recently ruled that the practice of extending collective agreements to all the employers in a sector was unconstitutional.