IR Notes

Following on from its white paper on the future of Europe, presented on 1 March, and the reflection paper on social Europe, published on 26 April, the European Commission on 10 May made public its reflection paper on harnessing globalisation. The text “aims to launch a debate on how the EU and its member states can shape globalisation in a way that anticipates the future and improves the lives of Europeans”. After asserting the benefits of globalisation both in the EU and the world, the Commission goes on to outline a certain number of challenges: unfair trade practices by third countries which have hurt industries such as steelmaking and shipbuilding; a failure to reciprocate when it comes to granting access to their domestic economy; a reduction in the number of jobs for those with a lower level of qualifications, resulting in redundant workers struggling to get a new job, especially when this means acquiring new skills, and even fiscal optimisation, which allows companies to pay their taxes in low-tax jurisdictions rather than in the countries where they produce. This practice deprives “EU governments of tax revenues” and contributes “to unfairness and the perception that global integration only benefits the bigger companies and well-off citizen”. Having listed the challenges, the Commission warns that this globalisation will be radically changed by the digitalisation of the economy. In response, it rejects the temptation of isolationism – “If we close our borders, others will do the same. We would all be losers” – and puts forward two courses of action: 1/ To develop economic cooperation, economic diplomacy and “instruments to ensure a level playing field”. 2/ Building resilience through better sharing of benefits and promotion of long-term competitiveness. Social policy forms an integral part of this, and success is attainable, the Commission appears to be saying, citing countries that are going in the right direction. It is therefore necessary to develop “high-quality education and training, such as in Estonia or Finland” which give citizens the skills and resilience they need to effectively adapt. “Active labour market policies and effective redistribution policies ensure social cohesion and help tackle social exclusion — as they do in Denmark, Sweden and elsewhere”. The Commission thus concludes that “harnessing globalisation therefore starts at home”. “Europe must act to more fairly share the benefits of globalisation in line with our principles of solidarity and sustainability”. On reading this document, the European Trade Union Confederation welcomed the efforts of the Commission which, it said, had “taken a long time” to acknowledge that “globalisation has to be fairer” (see press release). “The answer to globalisation,” explains ETUC Confederal Secretary Liina Carr, “is not to close borders […] but to apply rules that prevent a downward race to lower wages, bad employment conditions, social dumping and exploitation, and multinational companies dodging tax and avoiding labour law”. When the document was presented before the European Parliament, the MEPs “called for better protection for EU industry and workers and urged the EU to take the driving seat in promoting fair global trade” (see press release). A number of MEPs called for an action plan “to avoid a social race to the bottom” and argued for better redistribution of globalisation’s benefits by member states to their citizens.

• Due diligence obligations relating to so-called “blood minerals”: Regulation 2017/821 of 17 May 2017, laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas, has been published in the OJEU.

• The European social partners in the fishing sector stand up against forced labour: The European social partners in the sea-fisheries sector (ETF, Cogeca and Europêche) on 10 May signed a resolution calling on the EU to take up its responsibilities and end the forced labour practices suffered by workers from third countries in EU waters. The inspections of the International Transport Workers’ Federation (ITF) highlighted infringements including intimidation and threats, retention of identify documents, withholding of wages and debt bondage “These breaches […] that are harming fishermen and put them in inhuman conditions happen under the watchful eye of the European Union and its member states,” criticises Flemming Smidt, spokesperson of the workers’ representative. “This is completely unacceptable and unworthy for a Union that is condemning in the strongest terms such immoral practices outside EU waters!” (See press release.)

• Code on well-being at work: The code for well-being at work, which was promulgated on 28 April, brings together all the relevant regulatory provisions relating to workers’ well-being (see press release).

• New collective agreement in the financial sector: The social partners in the financial sector have concluded a new, 3-year collective agreement that provides for a general wage rise of 6% over three years, an increased contribution to the fund for developing the skills of the sector’s employees, greater flexibility in working time arrangements for companies within the framework of a company-level agreement, and the establishment of five working groups to deal with particular issues such as the evaluation of the time-bank system, on-call work/duty, and the health and safety of insurance agents (see UNI Europa press release).

New reform of the labour market: The Senate on 10 May definitively adopted a law modifying certain forms of employment. The law has two components: the first, which is being presented as the “Jobs Act” for the self-employed, modifies the status of non-salaried workers when they are not acting as self-employed entrepreneurs. These workers are to benefit from more protection (e.g. compensation in the event of serious illness, right to parental leave, payment of an allowance during maternity leave), especially if they work for a single principal. Elsewhere, the definition of economically-dependent (quasi-subordinate) workers is modified and their duties must now be defined by agreement. The second component introduces “smart working” as a method of work performance free from specific restrictions concerning the schedule or place of work and characterised by the use of technological tools. The practical arrangements are to be defined by agreement between the employer and the employee. Workers in this category will benefit in particular from a right to disconnect as well as coverage for accidents at work and when travelling to and from work.

Towards greater transparency surrounding wage inequality: The new programme for government, adopted on 11 May, puts forward new measures to reduce the gender pay gap, in particular by requiring companies with 50 and more employees to complete a wage survey to reveal the differences in pay between women and men. A similar system was set up in the United Kingdom at the beginning of the year for companies of 250 or more employees. The aim is to force companies to be transparent so that they will be prompted to eradicate differences in treatment. In other respects, the government wishes to achieve female representation on state boards of 40%.

• New legislation to reduce wage inequalities: During a press conference, the government presented the labour law component of the law of 15 December 2016 which allows employers to be fined from €251 to €25,000 when a difference in wages cannot be justified for objective reasons and is based on gender considerations. Companies are invited to use the Logib-Lux software to help identify possible causes of wage inequality.

Air France KLM: The European works council of the Air France KLM Group on 5 April issued a negative opinion on the planned closure of the Transavia base in Munich (Germany). The base, which opened in March 2016, was the subject of a closure decision by Transavia’s board of management on 10 February, which is “less than a year after the start of operations”, insists the EWC. The latter “deeply regrets” this decision and that “that its opinion is requested on a decision already taken” and that, in any case, any recommendations that the EWC might make “cannot be taken into account”. The EWC asked the management “to provide social monitoring of the 108 employees who will lose their jobs at the end of October 2017”, while at the same time expressing the view that their employer, Transavia NL, “has not done everything to support the employees who are losing their jobs”.

HelloFresh: The German company HelloFresh, which was formed in 2011 and delivers boxes to customers’ doors containing all the ingredients needed to prepare culinary recipes at home, has been converted to a European Company (SE) after concluding an agreement on the involvement of employees in the SE on 7 November 2016. The SE works council has three members, from Germany, the Netherlands and United Kingdom respectively. An additional member is to be appointed if the headcount exceeds 3,000 in a country. The SE works council meets once a year. In case of exceptional circumstances, it can be convened physically but also in the form of a teleconference, by email or other appropriate means of communication. The agreement rules out for the future any participation of workers in the supervisory board, as co-determination did not exist in the group at the time of conversion to an SE.

• UBS: The management of the Swiss bank UBS and a special negotiating body comprising representatives of employees of European branches on 11 August 2016 signed an agreement on the involvement of employees in the European Company (UBS Europe SE). The SE works council (SEWC) has at least one representative for each country having at least 30 employees. The SE works council has 15 members and elects from its members an executive committee comprising five people, including the chairman of the SE works council. The number of members of the executive committee will be increased if the number of members on the SEWC also rises (to 7 members if the SEWC consists of between 16 and 20 members). The SEWC, which meets at least twice a year, is competent for transnational matters, but not those affecting only one country, which seems to contradict the requirements of the directive on the involvement of workers in European Companies. Nevertheless, an extraordinary meeting of the SEWC can be called where a plan affects only one country but has implications for a number of employees equivalent to at least 1% of the headcount of the group. In other respects, the agreement allows members of the SEWC from at least four countries to approach management concerning matters which, according to them, require an extraordinary SEWC meeting to be called.

Schneider Electric: The management of Schneider Electric (110,000 employees) and the European trade union federation IndustriAll Europe on 18 May signed a European agreement on the anticipation and development of competencies and employment, which replaces a previous agreement on the subject signed in 2007. The new agreement establishes a “European skills and employment observatory” with a view to providing “an overview on how jobs are changing, in terms of volume and skills involved, over several years via a social diagnosis” based on various social indicators. To ensure employability is preserved and skills are developed, the agreement envisages in particular: a right for all employees to have an annual career development discussion. The aim is to establish a profile of the employee’s career history and if applicable define a career plan, and to identify mechanisms to allow employees to progress in their current or future position. The discussion may lead to job training or mobility being proposed. In other respects, the group “guarantees access to job training for all”, providing each employee with at least seven hours of training per year. The group also undertakes to attain a level of external recruitment of 42% of women and 50% of young people. The agreement contains a section on the management of reorganisations having consequences for employment, indicating a series of measures to be observed across all entities. Finally, to promote social dialogue at national level, the signatory parties “have decided that in each member country of the agreement which does not already have an employee representative body to set one up” (see joint press release of Schneider Electric and IndustriAll Europe).

Orpea: As part of an initiative aimed at organising the employees of multinationals in the social care sector (see press release), the European trade union federation EPSU on 4 and 5 May in Brussels brought together employee representatives of the French group Orpea (43,000 employees), the European leader in high dependency care, with a view to establishing trade union coordination (see press release).

• Unilever: Following the joint commitment on preventing sexual harassment at work adopted in January 2016, the management of Unilever and the signatory trade union federations IUF and IndustriAll Global Union have published a brochure (in English) as a reminder of the document’s content and to raise awareness among managers and union officials (see IUF press release).

Publication of the county-specific recommendations: the European Commission on 22 May presented its country-specific recommendations for 2017, in which it sets out its economic policy guidance for the individual member states over the next 12 to 18 months (see press release). The recommendations are available online, in English and in the relevant language version of the country concerned. This important document sets the tone for European policy as regards economic and social governance. The European Trade Union Confederation highlights some positive changes compared to previous years, although it directs some criticisms towards the Commission (see press release). A press release has not been issued by BusinessEurope.