IR Notes

The automotive industry now finds itself at the foot of the climate change mountain and it can no longer simply tinker with software to put off the deadlines it faces – especially since the European Commission has now brought forward these deadlines, and on 14 July, will be presenting its “Fit for 55” strategy (see press release). This strategy translates the new target of a 55% (in relation to 1990 levels) cut in CO2 emissions, which replaces the current 40% target, into several European legislative proposals (see European Parliament fact file). These proposals include a revision of Regulation 2019/631 of 17 April 2019, setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles. On 7 July, shortly before this announcement, the European social partners in the automotive sector, in conjunction with NGOs, sent a letter to the European Commissioner Frans Timmermans, who is in charge of the European Green Deal. They call on the Commission to “come forward with a Just Transition framework for the automotive and wider mobility eco-system as a matter of urgency” in order to “support the anticipation and management of change”. The signatories deplore the fact there is currently no such framework for the 16 million workers concerned, in contrast to the Just Transition fund mechanism put in place for the 8.8m workers employed in energy-intensive industries and Europe’s carbon-intensive regions. This mechanism could act as a “model for a Just Transition for the automotive and broader mobility eco-system”.
For its part, in France, the CFDT’s metalworking federation (FGMM-CFDT) has published a report in conjunction with a NGO – the Nicolas Hulot Foundation (Comment relever le défi d’une transition juste ? [‘Meeting the challenge of achieving a Just Transition’]), with the aim of setting out several scenarios for the future of the French automotive industry, based on work carried out by the consultancy firm Syndex (L’électrification de l’automobile et l’emploi en France [‘The move to electric cars and employment in France’]). In the authors’ view, only one scenario “shows that we can respond to both social and environmental issues”: this involves restructuring “the industry’s production facilities around an integrated process comprised of engines – batteries – vehicles – recycling”, “ending the production of petrol and diesel vehicles in 2030, followed by hybrids in 2035” and becoming part “of the circular economy”. The aim here is to make a major contribution to meeting climate commitments, while stabilising the volume of employment between 2035 and 2050. In the other scenarios, the industry’s workforce could fall by up to 70%. This joint initiative taken by social partners and NGOs marks a turning point, and also emphasises the scale of the threats to jobs.

Slovenian Presidency of the EU : Slovenia is now taking over the EU presidency from Portugal for six months, before handing it on to France in January 2022 (see Council of the European Union). The role primarily involves coordinating the work of Member States on the Council, but each presidency can also exercise influence, on the margins, over the subjects under discussion. Its work programme states that Slovenia’s goal is to lead the Twenty-Seven to a political agreement on the proposal for a directive on adequate minimum wages in the EU. It will also try to reach a compromise with the European Parliament on revising the legislation on coordination of social security systems and to pursue discussions on the proposal for a directive on pay transparency.  It is also planning to work on the issue of demographic trends in labour markets. The aim is to reach a consensus (“adopt conclusions”, to use its words), firstly on “promoting quality work for a quality life for all generations”, and secondly “on the impact of digitalisation and artificial intelligence on gender equality in the labour market”. The Presidency “will also pay attention to the Western Balkan partners moving closer towards the principles of social Europe, with special emphasis on youth employment” (see website of the Slovenian Presidency of the EU).

• Working conditions in the aviation sector: On 8 July, MEPs held a plenary debate of the European Parliament on the pandemic’s impact on the aviation sector, and especially on employment and working conditions in this sector. The President of the Committee on Employment and Social Affairs, Lucia Duris Nicholsonova (Renew Europe), fears “cost-cutting and job losses”, while her counterpart on the Transport and Tourism Committee, Karima Delli (Greens/EFA) urges the Commission to plan “fully-fledged measures to combat social dumping”. Several MEPs have called for the sector’s social dimension to be developed within the framework of a revision of Regulation 1008/2008 of 24 September 2008 on common rules for the operation of air services. Agnes Jongerius (S&D) is concerned about unfair competition, which poses a threat to aircraft safety and suggests that the awarding of ATC slots should be conditional upon compliance with social rights and good working conditions.


• Due diligence: The European Trade Union Confederation (ETUC) has called on the European Commission to set a date for unveiling its proposal for a directive establishing a requirement to exercise due diligence. The text was due to be presented in June, but this deadline has now been postponed to October. The ETUC’s demand is based on the Global Rights Index published by the International Trade Union Confederation (ITUC), which highlights a trend of global worsening in breaches of trade-union rights and workers’ rights (see press release and summary). This report lists systematic violations in three EU countries (Greece, Hungary, Romania) and regular violations in three others (Belgium, Bulgaria, Poland).

Applying the minimum wage to posted workers : The Court of Justice has issued a ruling on a Hungarian case concerning a road haulage undertaking whose drivers are posted to France, and travel there by minibus to perform cabotage operations (CJEU, 8 July 2021, Case C-428/19, Rapudsped). The drivers were paid 10.40 euros per hour, that is to say, more than the minimum wage applicable to their sector in France (9.76 euros). However, they received only 3.24 euros per hour. According to the employer, the difference (6.52 euros) was made up by the amount of the daily allowance received by the drivers to cover the costs associated with posting and by the fuel saving bonus paid to them on a discretionary basis, in line with the savings they achieved. The Court of Justice first of all holds that a breach, on the part of a Hungarian undertaking, of the rules setting the French minimum wage, can be relied on by Hungarian drivers before a Hungarian court. As regards the compensation paid to cover the costs incurred by the drivers, the Court notes that this is clearly proportionate to the length of the posting period, to compensate for the disadvantages entailed in it. In this case, its amount can be taken into account, in addition to the wage paid, for the purpose of checking that the level of the French minimum wage has been reached. However, if the national court takes the view that this allowance is paid in reimbursement of expenditure actually incurred as a result of the posting, such as expenditure on travel, board or lodging, then it will not be taken into account for the purpose of calculating the minimum wage. The Court also rules on the issue of the payment made for fuel savings. Article 10 of Regulation No 561/2006 prohibits transport undertakings from paying their drivers any bonuses or wage supplements related to distances travelled and/or the amount of goods carried, which are “of such a kind as to endanger road safety and/or encourages infringement of that regulation”. The Court holds that “such a bonus would not be compatible with that provision if, instead of being linked solely to saving fuel, it rewarded such saving on the basis of the distances travelled and/or the amount of goods carried, in such a way as to encourage the driver to act in a manner that endangers road safety and/or infringes Regulation No 561/2006”.

> Note: On 15 July, the Court of Justice is due to issue a new ruling on two German cases relating to wearing of the headscarf by a special needs carer employed at a charitable association that runs child day care centres, and by a cashier employed at a drugstore. Both women wore the headscarf when they returned to work from parental leave and subsequently faced disciplinary measures. The Court is invited to clarify the concept of “indirect discrimination”, as well as the relationship between EU law and the law of the Member States as regards the protection of the freedom of religion (CJUE, 15 July 2021, Joined Cases C‑804/18 and C‑341/19, WABE and Müller Handels).

Rail sector : On 30 June, the European social partners in the railway sector (CER and ETF) reached a provisional agreement on promoting female employment in the sector. The text, which will be the first binding agreement concluded in this sector for 15 years, has yet to be formally approved by the executive bodies of the two organisations, with a view to being officially signed by the end of the year. “This agreement aims to attract more women to the rail sector, give women more protection and guarantee equal treatment in the workplace” (see press release).

• Collective bargaining agreement with CRBC : On 5 July, the trade union representing the construction industry (SGH) signed a new collective bargaining agreement with the main contractor in charge of building the Pelješac bridge, China Road and Bridge Corporation (CRBC). Among other things, the new agreement will regulate in greater detail the working hours of the labourers employed on building the bridge.

• Collective bargaining during the Covid-19 crisis : According to its official 2020 annual review, published on 5 July, collective bargaining has remained dynamic, despite the context of the pandemic. The number of branch-level agreements is just below the 1,000 threshold, and while the volume of company agreements in 2020 is lower than in 2019, it is above the 2018 level, a sign that the underlying trend is still upwards. According to the Ministry of Employment, “social dialogue has played an invaluable role in helping to manage the crisis”. (see press release, press pack and report).

Fine for abuse of algorithms : the independent administrative authority responsible for personal data protection (Garante per la protezione dei dati personali) has imposed a 2.6 million euro fine on Foodinho, an electronic delivery platform belonging to the Spanish group Glovo, for using algorithms that give rise to discrimination. This is the first decision of its kind made by the Italian authority, which conducted a joint inspection in association with the Spanish authority AEPD, within the framework of the EU’s GDPR regulation. The Italian authority emphasises that the company, which employs 19,000 delivery workers, failed to inform them adequately about how the algorithm works, and did not put in place appropriate guarantees to ensure that the results used to assess the performance of its delivery workers were both accurate and fair. The company also failed to put in place procedures to ensure compliance with its workers’ right to secure human intervention, to put forward their point of view and to challenge the decisions taken on the basis of these algorithms – which, in some cases, led to workers being excluded from the platform (see press release).

• Prohibition on dismissals set to gradually come to an end: The government is now gradually abolishing the prohibition on dismissing employees, which was introduced during the pandemic. The ending date of this prohibition varies in line with the “social buffer” used for paying compensation through the public short-time working fund (the Cassa integrazione). In the industry and construction sectors, which use the mechanism provided for by law, the prohibition on dismissing employees on economic grounds ceased to apply on 1 July. It will disappear on 31 October from the services and small business sectors, which can choose between alternative mechanisms to use – either the “solidarity fund” or payment by the State. Before the 30 June deadline, the government intervened by decree to extend the exception to the textile sector which, on account of the difficulties it is currently facing, will be entitled to take advantage of short-time working schemes, without incurring any penalties, through to 31 October. In manufacturing sectors, where employees can now be dismissed, companies that have already reached the maximum number of months covered by the Cassa integrazione, will be allowed to benefit from it for a further 13 weeks.

A four-day week : An evaluation report on the experimental scheme of working a 4-day week, conducted by the government and the city of Reykjavik from 2015 to 2019, was published on 4 July. The working week was reduced to 35-36 hours, without any pay cuts. The report, which covers 2,500 workers, i.e. more than 1% of the country’s active population, emphasises that productivity and service provision either stayed the same or improved in the majority of workplaces that experimented with the 4-day week. Workers’ well-being improved considerably across a range of indicators, from perceived stress and burnout to health and work-life balance.

Unfavourable opinion regarding a reorganisation : : On 23 June, the European Works Council of the Engie group published a unanimous and unfavourable opinion regarding the Group’s proposed reorganisation and the creation of the “Bright” holding company, which will affect more than 75,000 employees globally (80% of whom are in Europe). The Council emphasises that this holding company “will consolidate most multi-service subsidiaries globally, which will then be sold to a currently unknown buyer”. The EWC suspects that the operation is motivated primarily by financial rather than industrial reasons, and believes that “Bright” could be kept within the Engie group. If management nonetheless decides to pursue its goal of selling Bright, the EWC would then like to “reach a three-party agreement between the social partners, Bright and the future buyer, before the sale process is concluded”, in order to consolidate the buyer’s social commitments and ensure “a socially responsible investment”.

Exclusion of UK representatives : The European Works Council of the HSBC bank decided to challenge several Brexit-related decisions made by the bank’s central management, by taking its case to the Central Arbitration Committee (CAC), which is the UK authority responsible for resolving disputes involving EWCs. The bank had made the following announcements to the EWC: 1/ a change to the central management representative who, with effect from 1 January 2021, would be an Irish representative; 2/ a change in the governing law (from UK law to Irish law) applicable to the agreement establishing the EWC; 3/ all sites in the United Kingdom would cease to come within the scope of application of the agreement; 4/ the representatives of UK employees who had previously sat on the EWC would henceforth be excluded from it, even though they account for 8 of its 20 seats. The agreement establishing the EWC makes reference to countries forming part of the European Economic Area, both in respect of the operations covered and the appointment of members. Consequently, in a move that was to be expected, in their decision of 22 June, the CAC panel members upheld the employer’s decision to exclude the UK representatives with effect from the end of the transition period marking the UK’s permanent departure from the EU. On the other hand, they granted the EWC a period of time to instigate further legal proceedings to challenge the change of governing law.

European framework agreements suffer a slowdown: : In an article published in its journal Chronique internationale by the Institut de recherches économiques et sociales (IRES), which is managed by the six French trade-union confederations, researcher Udo Rehfeldt asks about  the reasons underlying the stagnation of international framework agreements (IFAs) and the decline in the number of European framework agreements (EFAs) (see European social dialogue). Using figures to support his case, he highlights the sharp rise in the number of transnational company agreements signed every year in the early 2000s, which “peaked” in 2008, “followed by a slowdown in the next decade”. The researcher argues that “this slowdown is the outcome of a stagnation in IFAs and a sharp decline in the number of EFAs signed each year”. He goes on to say: “in large measure, this decline is due to the adoption of mandating procedures by European trade-union federations”. These procedures, such as that applied by IndustriAll Europe, require a 2/3 majority of the trade unions of each country concerned, for the adoption of a negotiating mandate and for the approval of a draft agreement. Citing recent work, the author emphasises that the procedural requirements of the IndustriAll Global Union federation “are less strict”, and as a result, companies’ management bodies tend to prefer them. “To begin a negotiation, IndustriAll Global merely requires members to be notified of this, and for the purpose of adopting an agreement, it requires ratification by one half of the trade union representatives of the various countries concerned, representing one half of the workforce”. The author criticises the European Trade Union Confederation for its plans to request the European Commission and the ILO, which jointly manage a database of agreements of this kind, to “remove all agreements signed by parties other” than European or international trade-union federations. “Isn’t that like smashing the thermometer rather than seeking the cause of the illness, so we can cure it?”, asks Udo Rehfeldt.