IR Notes

The Court of Justice of the European Union has issued a ruling of relevance for the protection of precarious employees (CJEU, 14 September 2016, case C‑596/14, Diego Porras). A temporary employee had worked in a ministry from 2005 to 2013 on the basis of successive temporary contracts as a replacement for a staff member who was seconded to a permanent trade union post. Following the adoption of royal decree-law 20/2012, as a result of which the trade union official’s exemption from normal duties was revoked, the ministry terminated its employment contract with the temporary worker, who contested the termination and sought reclassification of her employment as permanent, as well as payment of severance compensation. The Court began by noting that, although Spanish legislation provides for compensation of this kind (20 days’ salary for each year of service), this is reduced for employees on fixed-term contracts (12 days’ salary for each year), and does not exist at all for temporary staff. The Court found that clause 4 of the framework agreement on fixed-term work (directive 1999/70 of 28 June 1999) “must be interpreted as precluding national legislation […] which refuses to provide for any compensation for termination of a contract of employment” to a temporary worker “while allowing such compensation to be granted, inter alia, to comparable permanent workers”. The mere fact that the worker has carried out her work on the basis of a temporary contract “cannot constitute an objective ground justifying the refusal to grant such compensation to that worker”. “Every month, around 1.5 million fixed-term contracts come to an end in Spain – which corresponds to 50,000 contractual expiries per day. It is understandable that any legal uncertainty surrounding contract termination can only cause concern among employers, be they in the private or public sector,” comments Francisco Javier Gómez Abelleira, professor at Carlos III University of Madrid. This ruling has opened a can of worms in a country where 25% of employees are employed on fixed-term contracts (compared to an EU average of 15%). The biggest trade union confederations (CCOO, UGT) are demanding urgent legal reform to raise severance pay for fixed-term employees to the level of compensation applicable to those on a permanent contract, meaning an increase from 12 to 20 days’ salary per year of service, and from 0 to 20 days in the case of temporary contracts. On the other hand, the main employers’ organisation (CEOE) is trying to minimise the impact of the ruling. It regards any such reform as pointless and believes that the Court’s reasoning is incorrect. The government has not yet issued a clear opinion on the issue. What should employers do from now on? “To a great extent, the answer to that question depends on the position of the national courts,” says Francisco Javier Gómez Abelleira. “The trade unions are already asserting that the courts should directly implement the European decision, which could lead employers to take pre-emptive action by paying the highest level of severance pay in order to avoid any disputes”. Another question concerns the extent to which the ruling is retroactive and could be applied to terminations that have occurred in the past twelve months. Without rapid legislative intervention, several years are likely to pass before a ruling is received from the Supreme Court that would unify case law.

• European Parliament aims to curtail social dumping: On 14 September MEPs adopted, by a large majority (458 for, 199 against, 34 abstentions), the own-initiative report presented by the Socialist MEP Guillaume Balas (S & D) concerning the fight against social dumping in the EU. The report, which offers a definition of social dumping, is particularly interested in fraud and social dumping linked to the posting of workers. In particular, it calls on the Commission to combat letterbox companies and social dumping in the road transport sector. The vote largely in favour suggests that the European Parliament is unlikely to obstruct the proposed recasting of the posted workers directive, even if a certain number of MEPs from eastern Europe – whose parliaments are opposed to the revision – preferred to abstain or voted against the report.


• 20th anniversary of the European Works Council Directive: The European trade union federation IndustriAll on 22 September celebrated the passing of the directive on 22 September 1994 (and entry into force two years later), which has given rise to the around 1,100 EWCs currently in operation. It also mentions the 30th anniversary of the very first EWC, which was set up voluntarily in a French group. The federation underscores the contribution made by EWCs, while at the same time pointing out certain weaknesses that should be resolved in a future revision of the directive (see press release).

Successive temporary contracts cannot be used to compensate for a structural deficit in permanent posts: The Court of Justice of the European Union has ruled in a case concerning a Spanish nurse recruited on a fixed-term contract in 2009 for the “provision of certain services of a temporary, auxiliary or extraordinary nature” (CJEU, 14 September 2016, case C-16/15, Perez Lopez). Thereafter, this same reason was used seven times as the basis for successive contracts. As a result of measures to tackle the crisis taken by the government, all occasional contracts were terminated as of 31 May 2013, including hers. The nurse therefore sought reclassification of the successive contracts as permanent. In the eyes of the Court, it was inadmissible that fixed-term contracts should “be renewed for the purpose of the performance, in a fixed and permanent manner, of tasks in the health service which normally come under the activity of the ordinary hospital staff.” The Court reiterated the findings of the referring court, which described the use of precarious contracts in the health sector as “endemic” (estimating that 25% of all healthcare staff are employed on a temporary basis). In the view of the Court of Justice, “in fact, those needs are fixed and permanent”.

• Sanctioning abuses of precarious employment relation-ships in public authorities: Two other cases ruled on by the European Court of Justice underline that Spanish legislation is not compatible with the framework agreement on fixed-term work (directive 1999/70 of 28 June 1999) (CJEU, 14 September 2016, cases C‑184/15 and C‑197/15, Andres and Lopez). This legislation does indeed confer the right to remain in post upon persons employed by the authorities under an employment contract governed by the rules of employment law in the event of misuse of successive fixed-term employment contracts. However, this right is not conferred on staff employed by those authorities under administrative law. According to the Court, this situation “would be likely to undermine the purpose and practical effect of the framework agreement”. At the same time, these rulings denounce an overly complex judicial procedure for those workers seeking to have their fixed-term contracts reclassified as permanent where there has been abuse resulting from the use of successive fixed-term employment contracts.

• Paternity leave for 2017: The chamber of deputies on 14 September passed on first reading a measure allowing male employees to benefit from one week’s leave following the birth of a child from 2017. The new fathers will then receive daily remuneration corresponding to 70% of their gross salary, which is equivalent to the rate currently received by women on maternity leave. The paternity leave should be taken in the six weeks following the birth.

• Reform of the Labour Code: The Lithuanian parliament on 14 September passed a controversial reform of the Labour Code despite the veto of the Conservative president. Among other things, the reform provides for an increase in working time, reduction in the number of days’ leave for employees and shorter redundancy notice periods.

• Public contracts to take companies’ employment practices into account: In July, the Polish president ratified the reform of the code governing public procurement contracts. It should allow public sector purchasers (ministries, local authorities, etc.) to take criteria other than price into account more when choosing a service provider, in particular the use by contractors of genuine employment contracts and the employment of vulnerable people (workers aged over 50 or with a disability).


• Ban on dangerous professions only for pregnant women and nursing mothers: To bring the legislation into line with EU law, in particular the principle of non-discrimination, the lower chamber of parliament (the Diet) unanimously adopted an amendment to the Labour Code restricting the ban on particularly arduous or dangerous professions to pregnant women and nursing mothers. Until now, the ban actually applied to all women. The government is to designate the professions concerned by decree.


• Minimum wage for self-employed and atypical workers: The rising number of people working for companies on a non-standard employment basis, such as self-employed workers or those employed under contracts based on the performance of a particular task, are to benefit from a minimum rate of pay to prevent abuses. The parliament has adopted a bill aimed at introducing a gross minimum hourly wage of 12 zloty (2.80 euros) for forms of employment referred to as “atypical” (self-employed workers and contracts based on the performance of a particular task, but excluding piecework contracts). The law was ratified by the Polish president on 5 August. As the government proposal to raise the gross monthly minimum wage to 2,000 zloty (467 euros) with effect from 2017 was confirmed at the same time, the minimum hourly rate will then also go up to 13 zloty (3.03 euros).

Controversy surrounding union leaders’ salaries: An investigation published by a major Romanian daily newspaper (EVZ) has revealed that certain senior trade union figures are ending up with very high incomes. Thus, Eugen Luha, vice-president of the Confederation of Free Trade Unions of Romania, CNSLR-Fratia and president of the gas workers union, receives more than € 22,000 per month, while the president of CNSLR-Fratia, Leonard Barascu, is paid a monthly salary totalling € 9,360, which is extremely high in a country where the average monthly wage is around € 420. The daily newspaper, which quotes other trade union leaders whose salaries and assets are astonishingly high, ascribes this situation to accumulated income from several organisations, and the awarding more or less officially of generous bonuses by their trade union organisations.

• Quota for female representation in the boardroom: The government has announced the tabling of a bill that will impose a 40% quota for women on the boards of listed companies, under threat of a fine. The new legislation should become law in 2017.

• Autostrade: The Italian group Autostrade per l’Italia, which specialises in the construction of tolled motorways and management of the associated services and technologies (10,153 employees) on 8 July concluded a European works council agreement. The EWC has six seats, all occupied by representatives of the Italian workforce apart from one Polish member. The special negotiating body was supported by the SindNova institute, which will also organise the future training of members.


• Coty: Following a change in ownership which saw the demise of the Lucresca SE works council which had covered the employees of the Coty cosmetic group, the management of the Coty group and employee representatives have negotiated a new EWC agreement. The text, made available in the database of the European Trade Union Institute, provides for a consultation procedure involving the European works council in exceptional circumstances according to a fixed timeframe, without exception unless otherwise agreed between the parties, of up to five weeks after information has been transmitted to the select committee.


• Visteon: A new EWC agreement was signed by the automotive supplier Visteon on 24 May 2016 governed by British law. The text, made available in the database of the European Trade Union Institute, in particular provides a visiting right for members of the European works council to sites in the countries they represent to inform employees about the EWC’s activities. The EWC can also be supported by one external expert, whose services will be paid for by the company, and by a trade union expert. If an issue has a major impact on employment in one member state, an information process only, involving the select committee, is envisaged, albeit without the provision for a consultation. The latter is reserved exclusively for matters defined in the agreement as transnational.

Sanofi: The pharmaceutical group is going to set up a special negotiating body in 2017 with a view to establishing a world group council. Sanofi, which has 115,000 employees worldwide, with slightly under half of them in Europe, already has a European works council. However, the latter would be merged with the group works council in France – a representative body covering the 27,000 French employees – to produce the proposed world council. “The envisaged option,” explains Stéphane Galiné (CFDT), secretary of the EWC, “is to stick more to a variable geometry model, such as the one at Renault, which could be convened on a global, European or national scale depending on the subjects for information and/or consultation”. The move would represent an initial step towards global social dialogue in the group, which has not yet negotiated an international framework agreement. Ahead of this, a negotiation will be opened to revise the current EWC agreement. It concerns the application of French legislation requiring large companies to appoint two directors to represent the workforce on their management boards. The agreement currently provides for five employee representatives on the board. The management intends to return to the format required by law: two worker directors, one of whom is appointed by the EWC.

• HeidelbergCement: More than 30 workers’ representatives from the German cement group HeidelbergCement have met to discuss the integration of Italcementi, which was acquired by HeidelbergCement in July 2016, and the negotiation of a possible global framework agreement (see press release). The request was backed by the vice chair of the HeidelbergCement European works council, Norbert Steinert (IG BCE).


• STMicroelectronics: Trade unionists within the Franco-Italian STMicroelectronics group (43,000 employees) met under the auspices of the IndustriAll Global Union international trade union federation, and launched a trade union network (see statement and press release).

• Belgians have a positive view of trade unions: 72 % of Belgians have a positive view of trade unions, according to the European Trade Union Institute, which highlights this as the main finding of a university survey of around 1,900 voters conducted between October 2014 and June 2015 (see press release).