IR Notes

At the Employment, Social Policy, Health and Consumer Affairs Council meeting held on 21 and 22 June, Ministers of Employment reached agreement on three sets of proposals (two for directives and  one for a revision of existing rules) in the area of social security: revision of the regulations on coordination of social security systems (see Council press release), a new directive on work-life balance (see Council press release) and a directive on transparent and predictable working conditions (see Council press release). Once the European Parliament has finalised its position on these texts, the two institutions and the Commission will embark on negotiations with a view to adopting these three directives at first reading, before Parliament reaches the end of its term, with the European elections to be held in June 2019. The search for a compromise will not be easy, because Parliament on the one hand is seeking to enhance the proposals for a directive put forward by the Commission, whereas the Council, on the other hand, has just decided to reduce the scope of the goals set out in these proposals. The proposal for a directive on work-life balance (see IR Notes 75) establishes rights to paternity leave lasting at least ten days, to five days’ carers’ leave per annum in the event of illness of a close relative and to parental leave, for which remuneration is payable for 1½ months. In the Council’s view, however, this is too generous. It wants to leave States the right to determine the length of the carers’ leave and the amount of the allowance payable for such leaves. The proposal for a directive “on transparent and predictable working conditions in the European Union” (see IR Notes 89), for its part, plans to oblige an employer to inform a worker of the conditions applicable to their contract or employment relationship on his/her first working day and not within a period of two months as stipulated by the current directive 91/533. The proposal also extends this obligation to encompass all workers, within the meaning of Court of Justice case law. The Council has reduced the proposal’s ambitions regarding the deadline for providing information to workers: certain essential information will have to be given in writing within one week after starting work, and not on the first day. Other information on aspects of the employment relationship, which are deemed less vital, will have to be provided to the worker within one month after the employment relationship has come into being. The proposal no longer seems to include the definition of a worker as adopted by the Court of Justice and instead adopts the national definition of a worker “who has a contract of employment or an employment relationship as defined by law, collective agreements or the practices in force within each Member State”. By removing the substance from two of these proposals for a directive, European Ministers of Employment are indirectly highlighting the fragility of the European Pillar of Social Rights (see IR Notes 74, Lead story) whose deployment is based merely on the good will of Member States. In other words, it is being built on sand rather than solid foundations.

Reactions to the positions adopted by the Council on the two social directives (see Lead story): Several MEPs have expressed their regret on this issue. “It’s a step in the right direction” says Agnes Jongerius, MEP and spokesperson for the S&D Group for Employment and Social Affairs, “however it is a shame that the most fundamental question, namely to whom the rights and duties in this directive apply, is being left to the Member States.”  She is also unhappy with the decision to leave Member States to decide on the level of remuneration payable for parental or for carers’ leave, thus denying the Union the opportunity to adopt a harmonised provision (see press release). Describing the Council’s position as “very disappointing”, MEP Elisabeth Morin-Chartier (EPP) said she hoped that the text adopted by Parliament would be “better”. Even the European Commission has not hidden its disappointment. Marianne Thyssen, the European Commissioner responsible for this area, acknowledges, as far as the directive on transparent and predictable working conditions is concerned, that she had “advocated for a more ambitious approach” (see press release). In the case of the directive on work-life balance, she hopes to work with Parliament to change the situation “for many couples and families who face the daily challenge of combining work and family life.”.  “The adoption of a general approach on the two Directives is a good sign”, according to the General Secretary of the European Trade Union Confederation (ETUC), but he also expresses disappointment at the watering down of certain proposals contained in the text (see press release). This position is not shared by the European employers’ organisation BusinessEurope, which welcomes the “more realistic” choice made, i.e. that of leaving the level of remuneration granted for such leave and the definition of a worker to Member States’ discretion (see press release).

• Combatting discrimination: On 22 June, the European Commission published a recommendation calling on Member States to create stronger independent bodies to implement the directives on equality and fighting discrimination. (see press release).


• Brexit: The social partners are expressing growing concern at the slow pace of the Brexit negotiations, which will result in the United Kingdom leaving the EU, from March 2019 onwards. In a press release, the European employers’ organisation representing the interests of the metal, engineering and technology-based industries (CEEMET) has called for an extension of the transition period. For their part, and for the first time in their history, the European andf British social partners adopted a joint declaration inviting the Brexit negotiators to consult them in order to seek practical solutions (see press releases from BusinessEurope and ETUC).

• Metal industries: On 27 June, the European social partners in the metalworking sector (IndustriAll Europe and CEEMET) signed a pledge to promote apprenticeship and thus joined the European Alliance for Apprenticeships (EAfA) (see press release issued by IndustriAll and CEEMET).


• Shipping industry: On 26 June, the social partners in the shipping industry (ECSA and ETF) decided to work together to increase women’s participation in the shipping industry (they currently account for just 2% of the workforce) (see ETF press release).

Redundancy money paid following a worker’s refusal to accept changes to a contract of employment must be guaranteed: A female Spanish employee was offered redeployment on economic grounds, to a site located more than 450 km from the place where she lived. She refused to accept this move and opted, under Article 40 of the Workers’ Statute, for termination of her contract of employment. This was accepted by her employer, who had to pay her more than 7,000 euros as redundancy money. After making an initial part payment, the employer was placed in insolvency proceedings. When it was asked to pay the balance, the Wages Guarantee Fund (Fogasa) refused to pay the money owed to this employee on the grounds that the compensation being paid to her was based on termination of a contract of employment at the worker’s request and was therefore not covered. The Court of Justice held that Article 3, sub-paragraph 1, of Directive 2008/94 of 22 October 2008, on protection of employees in the event of their employer’s insolvency, “must be interpreted as meaning that, where, according to the national legislation in question, some forms of statutory compensation payable on termination of a contract of employment at the worker’s request and those payable in the case of dismissals on objective grounds (…) fall within the concept of ‘severance pay on termination of employment relationships’, within the meaning of that provision, statutory compensation payable on termination of a contract of employment at the worker’s request on account of a transfer of workplace by the employer, obliging the worker to change residence, must also fall within that concept.” (see CJEU, 28 June 2018, case C-56/17, Checa Honrado).

• Gender change and retirement pensions: the Court of Justice has delivered a ruling (CJEU, 26 June 2018, case C-451/16) stating that a person who has changed gender cannot be required to annul the marriage which he or she entered into before that change of gender in order to be entitled to receive a retirement pension at the age provided for persons of the sex which he or she has acquired (see press release).

Preventing burn-out: On 15 June, the Council of Ministers approved a draft royal decree relating to projects aimed at primary prevention of burn-out at work (see press release) as provided for by the 2017-2018 cross-industry agreement. An employer in the private sector or a particular professional field will therefore be entitled to submit an application for a subsidy to support pilot projects that are developing an integrated and multidisciplinary approach to primary prevention of psychosocial risks in general and burn-out in particular (see press release).

• New collective agreements in the financial sector: On 28 May, the three trade unions Aleba, OGBL and LCGB and the employers’ organisation ACA signed the new 2018-2020 collective labour agreement applicable to insurances companies (see press release). Earlier, on 9 May, the social partners in the banking sector – these same trade unions and the employers’ organisation ABBL – reached agreement in principle on a renewal of the collective bargaining agreement applicable to the banking industry (see ABBL press release and Aleba press release).
  
  > More news: we are now publishing, on the IR Share website, the Monthly Flash Report produced on behalf of the European Commission by the European Centre of Expertise (ECE), based on reports submitted by their network of experts. The document contains a comprehensive update on trends in employment law and case law in Member States.

ArcelorMittal: As part of the current information and consultation process organised in the context of the ArcelorMittal group’s takeover of the Italian steel producer Ilva, on 29 June ArcelorMittal’s European Works Council (EWC) expressed an initial opinion stating that for the moment it is against the takeover. However its position might change and become positive if management: 1) offers “future guarantees covering the company’s plants and employees – both those who are to leave the group and those who are to remain within the group”; 2) ensures, by means of an agreement, “that Ilva and its employees will be successfully integrated into the group”; 3) resumes “a social dialogue that will provide high-quality and transparent information and will guarantee that the EWC’s representatives have the framework they need for this purposes. This objective must be locked in.” “Under these circumstances”, the opinion adds, “we will support this process”. Admittedly the text of the opinion is critical of the company’s management, but the main criticisms are aimed directly at the European Commission, which is accused of “a denial of social democracy and a failure to respect the wishes of ArcelorMittal’s European bodies.”

• Korian: The special negotiating body (SNB) tasked with establishing a European Works Council within the French group Korian (49,000 employees), which is a European market leader in the nursing care field, met for the first time on 25 and 26 June and attended a training session organised by the European Trade Union Institute (ETUI) (see press release).


• Siemens: The European Works Council (EWC) of the Siemens group held its annual meeting on 23 and 24 May, at Bratislava (Slovakia). Much of the time was devoted to the process of a merger between the Siemens Mobility Division and the Alstom group. Members of Siemens EWC discussed the possibility of delegating certain information and consultation rights to EWC sub-committees, e.g. to cover the transport business. The three representatives of Alstom’s EWC invited to attend the meeting requested, with the unanimous support of Siemens EWC, a guarantee of job security for all European employees, like that already obtained by German and French employees via an agreement (see report).


• Tata Steel: On 11 June, members of the Indian steel producer Tata Steel’s EWC declared that they were “still not convinced” that the proposed merger “with ThyssenKrupp would be in the best interests of Tata Steel Europe’s operations and the employees we represent” (see update issued by the Reuters agency).

• Evotec: The German pharmaceuticals research service provider Evotec plans to set up a special negotiating body to negotiate an agreement on worker participation as part of the process of converting itself into a European company (“SE”).

• Caterpillar: The worldwide trade union network established by IndustriAll Global Union met on 25 and 26 June, at Sagamihara (Japan), on a site that is in the process of closing down (see press release).


• Coca-Cola: The coordination group established by the European trade-union federation Effat for Coca-Cola’s business in Europe, met on 19 June, in Hamburg, to review both the restructuring processes currently under way and the negotiations relating to the EWC of Coca-Cola European Partners, and also to present and discuss the outcome of the EFFAT comparative study analysing the various collective bargaining agreements applicable in Coca Cola’s business in the EU (see press release).

An assessment of employment on digital platforms: On 27 June, the European Commission published a report on digital platform workers in Europe, based on a survey covering 32,000 people in 14 Member States. According to this report, one adult in ten has already used on-line platforms at least once to provide services. While it remains a sporadic secondary source of income for the majority of people, 2% of the adult population work more than 20 hours a week or earn at least one half of their income via on-line work platforms. Among the countries examined by the study, the United Kingdom has the highest proportion of people working mainly via digital platforms (4.3%), followed by the Netherlands (2.9%) and Germany (2.5%), while Finland (0.6%), Romania (0.8%) and Slovakia (0.9%) are at the other end of the spectrum.

• Consequences of the electric car’s development for employment: The Fraunhofer Institute has performed a study (see press release), at the request of the IG Metall trade union and the main German car makers and equipment suppliers, on the impact of electrification on staff requirements for production of powertrains (see IndustriAll press release). This study develops three scenarios establishing the impact of decarbonisation on jobs in the car industry. If these figures are extrapolated to the European level, in the first scenario, which more or less reflects the Commission’s current proposals, “67,000 automotive workers are at risk of losing their job”, emphasises IndustriAll. In two other scenarios, 108,000 and 210,000 jobs respectively are at risk of disappearing.


• The Posting of Workers Directive turns its back on competitiveness based on low wage costs: This new directive marks “a sea-change to the previous approach”, emphasises the European Trade Union Institute (ETUI) in a Policy Brief devoted to adoption of the Posting of Workers Directive. “The journey embarked upon to secure an agreement has been a complex one … but the outcome is impressive”, according to the authors, for whom the directive, whose key measures are equal pay and the option of applying non-extended collective agreements, “has ushered in a radical change of the rules” by ending wage competition within the EU.