IR Notes

The European Commission on 13 December presented a proposal for a regulation aimed at revising the EU regulatory framework for coordinating social security. These complex rules permit the free movement of people, and workers in particular, within the EU. Their provisions ensure that citizens retain their social protection when they go to another Member State (see Commission press release). The proposal essentially concerns four areas: the access of economically inactive citizens to social services, long-term care benefits, unemployment benefits and family benefits. With this proposal, the Commission is seeking to satisfy those countries that wished to have more tools to combat social fraud and “social tourism”. The Commission is thus falling into line with the case law of the European Court of Justice by making the regulations relating to the coordination of social security systems subject to directive 2004/38 on the right of residence. The Member States will therefore have the power to decide, as they have been authorised by the Court of Justice, not to grant social benefits to mobile citizens which are economically inactive and do not have the legal right of residence on their territory. Economically inactive citizens have a legal right of residence only when they have means of subsistence and comprehensive health coverage. However, contrary to the concessions made to David Cameron prior to the Brexit vote, the Commission closes the door on any modification of the rules concerning the export of family benefits. They are due even if the child does not live in the host country, and the amount cannot be adjusted according to the standard of living in the Member State in which the child resides. In other respects, the Commission also attempts to improve certain rights for citizens. Thus, the maximum period during which jobseekers in another Member State may apply for the export of unemployment benefits has been extended from 3 months to 6 months or, at the discretion of the Member State, to the full duration of entitlement to unemployment benefits. The Commission proposal must also be read in conjunction with its planned revision of the posted workers directive, since several of its provisions are intended to strengthen administrative cooperation between the states, in particular with regard to verification of the Portable Document A1, issued by the employer which is posting workers to another Member State to certify that the latter are properly covered by the social security system of the country of origin. Furthermore, the Commission intends to play its part in combating letterbox companies. Thus, an employee shall be subject to the legislation of the Member State where the employer or undertaking’s registered office or place of business is situated only if the employer ordinarily carries out substantial activity in that Member State. Where this is not the case the employee shall be covered by the legislation of the Member State where the employer or undertaking’s main activities or centre of interest is located.

• Declaration in support of recasting the posted workers directive: The employment ministers from seven Member States (Austria, Belgium, France, Germany, Luxembourg, Netherlands and Sweden) published an opinion piece in Le Monde (12.12.) in support of the proposal to revise the directive on the posting of workers. In the eyes of the ministers, “posted workers must be able to benefit from decent living and working conditions and remuneration equivalent to that of workers in the host country from the first day of their posting”. It is noticeable that the signatories are all among the main receiving countries for posted workers. Not a single central or eastern European country has added its signature, a further demonstration of the rift on this issue between the “old” and “new” Member States.
  > Also see: Commission welcomes Council adoption of Directive improving the working conditions in the fishing sector (Press realease).

An employee who has suffered a dislocated elbow may benefit from the protection afforded to disabled workers: The Court of Justice of the European Union has already accepted that illness, even if curable, can lead to a disability, provided that the resultant limitation is “a long-term one” (CJEU, 11 April 2013, case C-335/11, HK Danmark). In a new judgement (CJEU, 1 December 2016, case C-395/15, Daouidi), the Court ruled on the case of a Spanish employee who suffered a dislocated elbow following a fall at his place of work. While on sick leave, he was dismissed for underperformance. The former employee contested his dismissal and argued that he had been the victim of discrimination linked to his disability. The Spanish judge referred the case to the European Court of Justice to determine whether the limitation of capacity suffered by the claimant could be described as “long-term”, consistent with the notion of “disability” pursuant to directive 2000/78. In this case, the medical condition suffered by the former employee is reversible. However as, six months after the accident, he was still in plaster and incapacitated from working, could this be termed a “long-term” limitation that would allow him to benefit from the protection envisaged for disabled employees? The Court did not rule this out. It noted that the fact an incapacity is classified as temporary in national law does not mean that it cannot be long-term in the meaning of directive 2000/78. In other respects, the Court found that the “long-term” nature of the limitation should be assessed in relation to the condition of incapacity, as such, of the person concerned at the time of the alleged discriminatory act. To assist the national judge, the Court went on to provide indications that would allow verification of whether or not the limitation of capacity was “long-term” in nature.

• Validity of prior authorisation of redundancies: This Wednesday the European Court of Justice is due to issue an important ruling on the validity of an authorisation to make collective redundancies in the light of the fundamental freedoms safeguarded under the Treaty. The case concerns a subsidiary of the LafargeHolcim group that wished, in 2013, to effect a restructuring programme in Greece that involved a site closure and job losses. The group contested the refusal by the administrative authority to authorise the collective redundancies. The Advocate General, in his opinion issued on 9 June 2016 (case- C-201/16), stresses on the one hand, that directive 98/59 does not preclude the Greek provision “which requires employers to obtain administrative authorisation prior to carrying out collective redundancies”. On the other hand, he assesses the compatibility of the prior authorisation provision with the fundamental freedoms of the EU. The Advocate General finds that the authorisation limited the freedom of establishment because it limits “an employing undertaking’s freedom to make collective redundancies since, unless the rule is complied with, those redundancies will be invalid. Such a rule thus directly interferes with the internal organisation of undertakings and with the management of their staff, possibly exposing undertakings to the risk of operating at a loss”. For the Advocate General, the freedom of establishment implies that a cross-border undertaking can “scale down and, ultimately, dissolve an establishment in a Member State (…) even if this is simply in order to pursue an economic activity in a Member State where it is more gainful”. In conclusion, the Advocate General finds that article 49 TFEU relating to the freedom of establishment, interpreted in the light of article 16 of the Charter, “precludes a provision such as the rule at issue. The fact that the Member State concerned might be going through an acute economic crisis, accompanied by very high unemployment rates, does not affect this”. It remains to be seen whether, in its ruling due to be issued today, the European Court of Justice will follow the opinion of its Advocate General. If this is the case, those states in which prior authorisation for collective redundancies exists will have to assess its compatibility with the principle of freedom of establishment.

Role of social dialogue in the transfor-mation of the European postal sector: The European social partners in the postal sector on 12 December adopted a joint declaration on the role of social dialogue in the transformation of the postal sector, based on analysis of the collective labour agreements signed by 16 national postal operators (see PostEurop press release).

• Pulp and paper sector seeks to promote training: In a declaration, the European social partners in the pulp and paper sector have called on policy makers to implement their recommendations relating to education and training, which were drawn up as part of a European project. In particular, these include the promotion of workforce versatility and adaptability and anticipation of future skills needs (see IndustriAll press release).
  > Also see: Metal industry – joint position “The impact of digitalisation on the world of work in the metal, engineering and technology-based industries, by European sector social partners”.

• Wage agreement in the metalworking sector: The wages of 120,000 employees in the metalworking and mechanical engineering sectors are to increase by an average of 1.68%, backdated to 1 November 2016. The pay rises vary from 1.2% to 2%, the highest rate of increase going to those on the lowest wage. The new minimum wage has been set at € 1,785.03 per month. Apprentices will receive a 1.75% rise, and employers undertake to continue paying travel expenses to hostel accommodation for apprentices who cannot stay at home and have to use public transport. The agreement is valid for one year.

• Marriage benefits to be extended to couples who have signed a cohabitation agreement: A presidential decree has just enacted a 2015 law which compels businesses to allow employees who have signed a cohabitation agreement and so wish to benefit from the same advantages as married couples. Businesses were awaiting this decree in order to incorporate the legal provisions in their employees’ contracts because certain details were not sufficiently clear in the legislation.

• Unified collective agreement in the metalworking sector: A new national collective agreement was concluded on 26 November between the three metalworkers’ unions (FIOM-CGIL, FIM-CISL and UILM-UIL) and the employers’ federation, thus bringing a period of separate agreements to an end. The agreement, concluded for a period of four years, will cover the whole metalworking industry (1.6 million employees). It guarantees a package of minimum measures, and the trade unions will be able to negotiate additional improvements at company level. The agreement will be put to a referendum of employees.

• Retirement age to be lowered: At the end of November, the Polish parliament voted to reinstate the former retirement age of 65 for men and 60 for women, thus overturning the decision taken in 2013 to raise the retirement age to 67 for both sexes. The change, which has just been adopted, still requires the president’s approval, but this appears to be a simple formality since the president was the driving force behind it. The law will take effect in October 2017.

• Extension of paternity leave: The government announced on 16 December that paternity leave will be increased from 13 days to four weeks on 1 January 2017. A royal decree is scheduled for adoption before the end of the year to implement this measure.

Covestro: The Bayer group subsidiary Covestro (formerly Bayer MaterialScience), one of the world’s biggest suppliers of polymers, has set up a European Forum. The agreement, signed on 16 November, covers the employees in nine European countries. It establishes a joint committee comprising the chairperson of the European Forum, his/her two deputies, and one member from each country having at least 100 employees. The joint committee will be informed regarding any exceptional circumstances and can be consulted by the management. If these circumstances affect more than half of the countries represented in the European Forum, the chairperson may, following consultation with the management, convene an extraordinary plenary session of the European Forum within ten working days.

• HeidelbergCement: The European Trade Union Institute has published the agreement dated 20 May 2016 setting up a temporary information and consultation body at European level at the German cement company HeidelbergCement in connection with its purchase of the Italian group Italcementi, both groups having previously had their own European works council. The agreement sets up a coordination committee composed of representatives of both works councils. It will meet “monthly” until closure of the transaction in order to be “regularly informed […] about the integration” of the Italian group in HeidelbergCement.

• LafargeHolcim: The international trade union federations IndustriAll, BWI and EFBWW on 10 December held a global day of action “to draw attention to the world’s largest cement maker’s widespread violations of workers’ rights”. The campaign’s objective is to kick-start negotiation of a global framework agreement with the cement group (see IndustriAll press release).


• Pirelli: The international trade union federation IndustriAll held the second annual meeting of the world trade union network of the Italian Pirelli group on 30 November-1 December 2016 in Turin (Italy). (See IndustriAll press release.)

One in six European workers is on a low wage: According to information provided by Eurostat, the proportion of low-wage earners among employees amounted to 17.2% in 2014 (see Eurostat press release). This means that they earned two-thirds or less of their national median gross hourly earnings. There are large differences between genders and age groups. In 2014, 21.1% of female employees were low-wage earners, compared with 13.5% of male employees. Moreover, almost a third (30.1%) of employees aged less than 30 were low wage earners, compared with 14% or less for age groups between 30 and 59. The proportion of low wage earners varied significantly between Member States. The highest percentages were observed in Latvia (25.5%), Romania (24.4%), Lithuania (24%) and Poland (23.6%). However, some western European countries were not far behind: Germany (22.5%), Ireland (21.6%) and the United Kingdom (21.3%). By contrast, fewer than 10% of employees were low wage earners in Sweden (2.6%), Belgium (3.8%), Finland (5.3%), Denmark (8.6%), France (8.8%) and Italy (9.4%).