IR Notes

On 21 February, the EU Court of Justice delivered an important ruling in a case concerning the application of the Working Time Directive to voluntary fire officers and, more generally, to workers on stand-by duty (CJEU 21 February 2018, case C-518/15, Ville de Nivelles v. Rudy Matzak). The case concerns Rudy Matzak, a fireman from the town of Nivelles (Belgium), who has to be available for work in the evenings and at weekends, one week in four. However, he is remunerated only for the time spent on active service. The periods that the firefighter spends on stand-by duty without having to carry out any professional tasks, are not remunerated. While on call, he has to remain contactable by telephone, and, if necessary, must attend the fire station as quickly as possible, and in all cases, within a period of no more than eight minutes. He was dissatisfied by the remuneration level paid for time spent on call, and submitted an appeal to the Nivelles employment tribunal, which accepted most of his claims by means of a judgment on 23 March 2012. Given the potential impact of such a decision on the town’s public finances, but also more broadly on Member States’ budgets – written observations have been submitted by the Belgian, French, Dutch and British governments –, news of the position adopted by the Court of Justice was keenly awaited. The town of Nivelles referred this matter to the Brussels employment court, which in turn referred it to the Court of Justice. The latter came down clearly on the side of the employees: it does not accept the existence of a waiver to exclude firefighters from the scope of application of the directive, nor an option for Member States to adopt a less restrictive definition of working time. As regards the question of remuneration, the Court is upholding its case law: Member States are at liberty to set the remuneration payable for working time or rest periods, and the directive only deals with the concept of working time from the viewpoint of health and safety at work, for the purpose of checking compliance with the maximum number of working hours. Beyond this consideration, there is no reason why on-call hours should not be paid at a lower rate than hours worked. Lastly, the Court points out that the concepts of “working time” and “rest periods”, within the meaning of Directive 2003/88, constitute concepts of EU law which must be defined in accordance with objective characteristics, by reference to the scheme and purpose of that directive, which is intended to improve workers’ living and conditions (see CJEU 10 September 2015, case C‑266/14, Federación de Servicios Privados del sindicato Comisiones obreras, point 27). The Court emphasises that “the obligation to remain physically present at the place determined by the employer and the geographical and temporal constraints resulting from the requirement to reach his place of work within 8 minutes are such as to objectively limit the opportunities which a worker in Mr Matzak’s circumstances has to devote himself to his personal and social interests”. In the light of those constraints, the fireman’s situation “differs from that of a worker who, during his stand-by duty, must simply be at his employer’s disposal inasmuch as it must be possible to contact him”. The time thus spent on this stand-by period must therefore be classified as working time. This decision meets the objective of the directive, but will be a costly one for the authorities.

• Adjustment Fund set to provide support for Goodyear employees: on 9 February, the European Commission proposed making a payment to Germany worth 2.1 million euros, from the European Globalisation Adjustment Fund, to support the retraining and return to employment of 646 former employees made redundant when the tyre manufacturer Goodyear closed its Philippsburg plant in the Baden-Württemberg region of Germany (see press release).


• European Economic and Social Committee calls for an end to austerity policies: in an opinion dated 15 February, the European Economic and Social Committee advocated the inclusion in EU treaties of a recommendation inviting EU institutions to implement policies aimed at economic cooperation, growth and solidarity when future crises occur, rather than severe austerity policies (see press release).

• Discussions on macroeconomic trends in the EU: the Council Presidency, the European Central Bank and the European Commission met with European social partners to to discuss the macroeconomic outlook and how to make the economy more resilient (see Council press release).

Can a pregnant employee be dismissed as part of a collective redundancy scheme? EU law (Directive 92/85) prohibits the dismissal of pregnant workers and workers who have recently given birth or are breastfeeding as “the risk of dismissal for reasons associated with their condition may have harmful effects on their physical and mental state” because, the Court of Justice has added since the Danosa ruling (CJEU, 11 November 2010, case C‑232/09, Danosa, points 60 and 61), the “particularly serious risk that pregnant women may be prompted voluntarily to terminate their pregnancy”. A pregnant employee cannot therefore be dismissed on the grounds that she is pregnant, or for facts associated with this condition, such as repeated absences. The Court of Justice has already ruled that an employer cannot take either a decision to dismiss an employee or the steps of preparing for her dismissal, such as searching for and finding a permanent replacement for the relevant employee on the grounds of the pregnancy and/or the birth of a child (CJEU, 11 October 2007, case C‑460/06, Paquay, point 33). But does a pregnant worker enjoy protection against any type of dismissal? This same directive excludes “exceptional cases not connected with their condition” from the scope of such protection. Can a collective economic redundancy procedure, i.e. one not related to the individual worker concerned, constitute such an exception and allow a pregnant employee to be dismissed?  The Court of Justice answers in the affirmative: “a reason or reasons, not related to the individual workers concerned, for making the collective redundancies (…) fall(s) within the exceptional cases not related to the condition of pregnant workers”. In these circumstances, the employer can dismiss an employee provided that it gives valid written reasons to justify such dismissal. Those reasons “can be, inter alia, economic, technical or relating to the undertaking’s organisation or production”. The employer must “inform the pregnant worker of the objective criteria chosen to identify the workers to be made redundant”. The Court of Justice also takes the view that Directive 92/85 does not impose a duty on Member States, in cases where a pregnant woman is being made redundant, to afford her “priority status in relation to being retained” or “priority status for redeployment, applicable prior to this redundancy” (CJEU, 22 February 2018, case C-103/16, Guisado).

• Taxi drivers protest against Uber: starting on 8 February, taxi drivers organised three days of action in Prague, to protest against alternative transport services such as Uber and Taxify. There are estimated to be around 8,300 taxi drivers in the Czech capital, and they regard such services as unfair competition, because they are not subject to the legal restrictions imposed on taxis (registration of vehicles, concessions, taximeters, etc.). The government has promised to amend the law, so as to remove the differences between taxis and operators of alternative services.
  > Further information (in Czech).

• Reforms to unemployment insurance: on 22 February, the social partners completed a draft national cross-industry agreement on vocational training. The text enables employees who resign from their job with a “vocational retraining plan” to receive unemployment benefit, on certain conditions. It proposes the introduction, for the benefit of all self-employed workers, of a public unemployment insurance scheme to be financed by taxation and supplemented by private schemes. The social partners are urging all industries to embark on negotiations aimed at reducing the use of short-term contracts. If these negotiations do not reach a successful outcome, the government is being invited to set up a “bonus-malus” coefficient system for payment of companies’ unemployment benefit contributions.

• The right to denigrate a former employee: in a ruling on 31 January 2018 (no. 2357/2018), the Court of Cassation pronounced judgment on the question of an employer’s right to harm the image of an employee who has been dismissed. A bank sent a letter to its 3,000 customers and displayed notices in its branches, blaming the errors of a former employee for the financial difficulties it faced. The press reported on this initiative. The dismissed employee called on his former employer to pay him compensation for this act of libel. And he won his case. However, the Court of Cassation referred the case to the Court of Appeal, requesting it to apply the constitutional principle of freedom of expression that enables all citizens, including employers, to criticise others. Thus an employer is entitled to discredit its former employee provided that this communication is not intended to persecute the employee in question, that the communication obeys a general interest, even if this is limited to addressees of the communication, and that it corresponds to the reality of the facts.

Cargill: on 7 February, the management of the US group Cargill, which specialises in supplying food ingredients and in commodity trading, signed an Agreement for the Establishment of the European Works Council of Cargill with a special negotiating body. This new agreement is based on Directive 2009/38, and thus supersedes the previous one. “It was a very long and at times difficult process but we are happy with the outcome”, says Enrico Somaglia, Company Policy Officer at the European Trade Union Federation EFFAT (see press release). The agreement applies to Member States of the EU and the European Economic Area plus, regardless of its status vis-à-vis these other two entities, the United Kingdom. The committee will meet once a year for a three-day plenary session and will appoint a select committee made up of six members who should represent different countries if possible, and should be sufficiently fluent in English to enable them to communicate. The select committee will meet three times a year and once with management. The select committee can invite local employee representatives from the country hosting the meeting to attend. It will be informed in the event of any exceptional circumstances and has powers to call an extraordinary information and consultation meeting, which can be opened up to members representing the country or countries affected by the plan. The agreement provides for the European Works Council’s information and consultation process dealing with transnational issues to always commence before national procedures are triggered. The committee can be assisted by one or two experts of its choosing. It will have an annual budget, managed by the select committee, to cover the costs of meetings, training and the services of experts and even a legal expert in the event of a dispute.

Oracle: on 12 February, the Central Arbitration Committee (CAC) in London delivered its judgment in a dispute between the Oracle European Works Council and the group’s management. On 27 March 2017, the management, in a conference call, had informed members of the European Works Council of a restructuring, which would involve a number of countries and 380 job losses. The Council believed that management had violated a number of the provisions of the British TICER law, which enacts directive 2009/38 on European Works Councils.  The Council, which is one of the few set up in accordance with the subsidiary requirements of the directive, criticised management for: 1. not providing enough financial information to enable it to carry out a detailed assessment of the proposal; 2. providing information only on job losses and not on other parameters such as quality of service or customer satisfaction; 3. beginning to lay off staff even before the European Works Council had been informed; 4. holding a virtual meeting with the European Works Council, whereas the regulation relating to the operation of the Council stipulates that physical meetings should be held; 5. telling attendees that the presentation given during the meeting was strictly confidential. In short, this is a fairly common situation, whereby the European Works Council is presented with a fait accompli. The CAC took the view that the meeting held on 27 March was not sufficient to meet the employer’s obligations in terms of information and consultation. The CAC considered that it could only be an information-giving event, which should then have led to consultation. The confidentiality requirement imposed by the employer was considered unreasonable, and there was no evidence that any disclosure would have caused any harm to the business. The CAC ruled that management should have provided information to enable the European Works Council to assess the impact of the plan on all employees, and not, as the employer claimed, simply on those who would lose their jobs. However, management was under no obligation to provide some of the financial information requested by the European Works Council. As far as the CAC was concerned, the aim of these requests was solely to check or challenge management’s decision, and according to the CAC, this is not something within the competence of the European Works Council. Finally, as to whether management should wait until the Council issues its opinion before implementing its decision at national and local level, the CAC deemed that the legal provisions covering the coordination of procedures at European and national level “do not indicate that the management cannot apply its decision before the European Works Council issues its opinion”.