IR Notes

Faced with a crisis, European States are either going their separate ways or coming together. In the space of just a few days, the European Union has moved in a federalist direction with the suggestion of an emphasis on environmental and social issues, thanks to the support of the Franco-German duo. On 18 May, the German Chancellor Angela Merkel and the French President Emmanuel Macron put forward a recovery plan; its most spectacular measure is to allow the European Commission to borrow 500 billion euros from the markets on the EU’s behalf (see Declaration). This money will be focused on the “most affected sectors and regions”, and is intended to “increase investments, in particular in the digital and green transitions”. In the field of social affairs, the recovery plan also mentions “a fair EU regulation for digital platforms”, and the need to reinforce “social convergence and speed up the discussion on the EU framework for minimum wages adapted to national situations”. This strategic change of direction has received support from the German trade union confederation DGB, and from the five French trade union confederations affiliated to the European Trade Union Confederation. In a statement (see text published on the CFDT website), the six signatories express their approval of plans to boost “solidarity between EU Member States with additional debt linked to the coronavirus crisis being pooled, so that the cost of this debt does not end up being paid by employees, as part of the efforts to build a stronger social Europe. By showing in this way that they want greater social convergence, our two countries appear to be expressing the desire to build a deeper social Europe”. In an interview given to Deutschlandfunk (on 22 May), DGB President Reiner Hoffmann emphasised that the trade unions in Austria, the Netherlands and Denmark (whose governments are refusing to agree to pooling of debts) support the Franco-German initiative. The ground had thus been prepared for the European Commission which, on 27 May, unveiled its proposed “Next Generation EU” recovery plan. This goes even further than the Franco-German proposal, with plans for 750 billion euros to be borrowed on the markets, including 500 billion in the form of subsidies (repayable by Member States pro rata to their contribution to the EU budget, i.e. mutualisation) and 250 billion in the form of interest-free loans to Member States, in addition to the 100 billion euros’ worth of loans that may be granted within the framework of the SURE scheme (see legislation below). Furthermore, in order to repay this debt, the Commission plans to raise taxes to ensure that it has enough revenue (“own resources”). “This is a historical turning point for the EU”, emphasises Jean Quatremer in the French daily newspaper Libération (28 May), “given that debt-carrying capacity and therefore budgetary autonomy are one of the key attributes of a State”. However, the EU is still faced with the task of convincing the most sceptical governments, as the plan requires unanimous approval if it is to go ahead. The employers’ organisation BusinessEurope says: “If adopted by member states, [the plan] will help boost investment, protect jobs and reduce business closures” (see press release). “As a European social partner”, BusinessEurope “will aim to make sure that the resources gathered are used effectively, notably in support of long-term economic growth and employment-enhancing reforms”. The Commission’s “ambitious” plan has been welcomed by the European Trade Union Confederation (see press release).

“Sure” regulation published : EU Regulation 2020/672 of 19 May 2020 “on the establishment of a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) following the COVID-19 outbreak” has been published. This instrument is intended to encourage States to borrow from the Commission on favourable terms compared to the rates they would be able to secure for themselves on the financial markets, in order to finance their short-time working schemes (see IR Notes 139).

The Commission has adjusted its work programme : On 28 May, in light of the Covid-19 crisis, the European Commission put forward, in the form of its recovery plan (see Lead story) an adjusted work programme, after publishing the original version in January this year. The initiative relating to “Fair minimum wages for workers in the EU” has been postponed to Q4 2020, while the legislative initiative on “binding pay transparency measures” has been kept in Q4 as originally scheduled, as has the “LGBTI Equality Strategy”. The “Updated Skills Agenda for Europe”, which is intended to remedy the current skills deficit among the working population and young people in particular, has been postponed from Q1 to Q3 2020. The youth guarantee scheme, aimed at the vocational integration of young people who are not in education, employment or training (NEETs), has been kept in Q2. Uncertainty persists regarding the European Unemployment Reinsurance Scheme, which had been scheduled for Q4 2020; the Commission is now indicating the adoption of a temporary instrument, i.e. the SURE initiative, (see above), though it does not specify a date for putting forward a permanent scheme. It should also be noted that the Review of the Non-Financial Reporting Directive has been delayed to Q1 2021. While nothing seems to have disappeared, there is, on the other hand, still no announcement regarding a new European strategy for health and safety in the workplace which, despite the impact of the Covid-19 crisis on the world of work, has not been included in this work programme, to the consternation of the European Trade Union Confederation (ETUC) (see press release). Nevertheless, ETUC has expressed satisfaction that the “pay transparency” directive, which the European trade union movement had mobilised to support, is being maintained.
> See also, for the Commission’s initial work programme, IR Notes no. 133.

Country-specific recommendations : On 20 May, the European Commission presented its country-specific recommendations within the framework of the European Semester, which provides economic policy guidance to EU Member States (see press release and access to Country-Specific Recommendations, which are available in English, German, French and in the language of the country concerned). The recommendations, which will have to approved by the Council, are structured around two objectives: 1/ In the short-term, mitigating the severe socio-economic consequences of the Covid-19 pandemic. 2/ In the medium-term, achieving sustainable and inclusive growth which facilitates the green transition and the digital transformation. “While there is no single model that serves as a reference, in some Member States there is clearly room for a better functioning social dialogue and a greater involvement of social partners in policy design and implementation.” (see communication from the Commission on recommendations).
> Reactions: the European Trade Union Confederation believes that the recommendations about public investment for social and economic recovery are a marked and positive change from past recommendations (see press release).

Posting directive : In his conclusions delivered on 28 May, the Advocate General of the EU Court of Justice, whose opinion is followed in 80% of cases by the Court when delivering its ruling, rejected action for annulment of Directive 2018/957 of 28 June 2018, amending Directive 96/71 concerning the posting of workers (see case C-620/18 and case C-626/18, not available in English). This 2018 directive seeks to guarantee fair competition between EU companies by reducing the risks of social dumping and to provide better protection for posted workers. The Advocate General therefore calls on the Court to dismiss the actions for annulment brought by Hungary and Poland against a directive that reduces their “competitive advantage” resulting from their lower labour costs in relation to those of the countries to which they post employees (see press release issued by the Court).

Telecommunications : On 26 May, the European social partners in the telecommunications sector launched a two-year European project that aims to identify initiatives empowering women and older workers to access new ICT job opportunities within the telecommunications sector (see press releases issued by UNI Europa and ETNO). In conjunction with the employers organisation GSMA, they also issued a joint statement calling on the authorities to take action to prevent attacks against mobile network installations (notably 5G). The signatories state that such acts are endangering the health and safety of workers.

• Cash management: On 18 May, the European social partners in the cash management sector issued a joint statement, calling on institutions and governments to support the cash cycle which, due to the fact that the citizens are turning away from using cash as a result of the Covid-19 crisis, is at risk of “dropping to a level where it will no longer be sustainable”. This situation will have an “immediate impact on the jobs of service workers across private security”, as well as more broadly on “financial services, printing, logistics and commerce” (see UNI Europa press release).

Supervision of work carried on in abattoirs : The succession of Covid-19 clusters discovered in German abattoirs has prompted the Federal Minister of Work, Hubertus Heil (SPD), to put forward a bill to improve occupational health and safety in the meat industry (200,000 employees) and thereby “bring an end to organised irresponsibility” within subcontracting chains (see press release). The law, which provides for tighter controls, prohibits the use of workers employed on contracts with temporary work agencies, with effect from 1 January 2021. Only fully-fledged employees will be allowed to work at companies whose main business is slaughtering animals and meat processing. Employers will be required to notify the competent authorities of the place of residence and place of employment of any foreign workers. The law will impose an obligation on employers to keep an electronic record of their working hours, so that these can be monitored effectively (see summary).

The unionisation rate has risen to 23.5% of the working population : British trade unions appear to be reversing their historical decline in terms of membership numbers, thanks in part to the growing number of women joining their ranks. According to official new figures published on 27 May, British trade unions have gained 91,000 members since 2019. This is the third year in a row that the figure has risen, after years of decline. 6.44 million people now belong to a trade union, compared to 6.23 million in 2016, which was the lowest level reached. The unionisation rate has risen to 23.5% of the working population, compared to 23.4% in 2018 and 23.3% in 2017 (see TUC press release).

Sexual harassment : On 18 May, an international coalition of trade unions, including the European trade-union federation Effat and IUF, submitted a complaint to the OECD’s National Contact Point (NCP) in the Netherlands, alleging systemic sexual harassment in McDonald’s restaurants worldwide. This is the first time that a complaint alleging sexual harassment has been submitted to an OECD NCP (see press releases issued by Effat and IUF). Furthermore, it is based on the notion of “systemic sexual harassment” which amounts to denouncing a corporation’s cultural tolerance of sexual harassment-related offences. Lastly, this complaint is directed against both the company and its franchisees, meaning that the case is relevant to other multinational companies operating with a significant element of franchising, such as in the hotel industry. Effat believes that McDonald’s response to harassment and to gender-based violence – as defined by its refusal to assume any liability for abusive behaviour in its franchise stores – is a breach of the OECD’s Guidelines for Multinational Enterprises which, according to the complaint, make it clear that corporations cannot hide behind franchise arrangements when it comes to addressing these issues.
> In each country, the National Contact Point promotes the OECD’s Guidelines for Multinational Enterprises (other languages) and responsible business conduct. The NCP can be called upon to examine cases involving allegations that these Guidelines have not been followed. In such cases, it acts as a non-judicial mediation body, which offers the parties a platform for dialogue, with a view to helping to resolve their disputes, on the basis of the Guidelines.
> See also the recent complaint filed by the trade unions against Teleperformance, with the French NCP (see press release issued by the French NCP and IR Notes no. 141).

A database of measures linked to the Covid-19 crisis : On 18 May, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) launched a database logging the measures taken by the government or the social partners at all levels, in each EU Member State, to deal with the Covid-19 pandemic. The database, known as Covid-19 EU PolicyWatch, contains details of nearly 500 such measures and will be updated and supplemented in June and October. A summary of the report – COVID-19: Policy responses across Europe –, which draws on the main content of the database, is under preparation and will be published in June 2020. Most of this content concerns measures taken to help businesses to stay afloat, notably in the form of direct subsidies (61 measures), access to finance (52) and deferrals of social security or tax payments (46). A second significant set of measures seek to provide income support for people in employment, e.g. short-time work (47 measures), to extend income support to workers not covered by any kind of protection scheme (33) and to grant workers paid sick leave (24) (see COVID-19 EU PolicyWatch page).

• A global overview of short-time working schemes: the International Labour Organization (ILO) has published an appendix to its Temporary Wage Subsidies study, setting out details of short-time working schemes in more than 40 countries, 15 of which are EU Member States. Its study offers a summary of the various mechanisms put in place and recommendations based on best practice.
  > See also Guidance note for A safe and healthy return to work published by the ILO and (see IR Notes 139, The European Commission (rightly) backs a policy of short-time working).