IR Notes

On 10 October, Keir Starmer’s Labour government unveiled its plans to reform employment law, by enhancing working conditions and redressing those aspects of current employment legislation that are most unfavourable to workers. These reforms, which were promised for the government’s first 100 days in office, include a bill (Employment Act Bill) and a policy paper (Next Steps to Make Work Pay), with a number of other measures that will be referred for consultation, such as the right to switch off and a ban on unpaid internships (see government press release). The policy paper also announces longer-term reforms in areas such as the parental leave system, which at present “does not support working parents”; paid leave for carers; regulating workplace surveillance technologies; revising the legislation covering transfers of undertakings (TUPE); improving occupational health and safety, in ways that include raising awareness of neurodiversity in the workplace and protecting workers who are exposed to extreme temperatures; and revising the system in place for handling public procurement contracts, so that social criteria can be taken into account and employment law requirements tightened.
At a personal level, the Employment Act Bill abolishes the requirements for a minimum qualifying period for paternity leave and parental leave. It announces a new entitlement to at least one week’s bereavement leave. The bill removes the four-day waiting period before sick pay becomes payable. It also provides greater protection against harassment, forcing the employer to take “all reasonable steps” to prevent sexual harassment in the workplace, and furthermore, makes employers responsible for tackling harassment perpetrated by third parties, on whatever grounds.
In the area of job security, the bill makes protection against unfair dismissal a right from day 1 of employment. In addition, drawing lessons from the scandal involving the ferry company P&O (see IR Notes 182 and IR Notes 201), the bill prohibits ‘fire and rehire’ dismissals, whereby a company dismisses employees who refuse to accept either less favourable working conditions or a pay cut, so that they can be replaced with cheaper labour. An exception is provided for if the company is at risk of bankruptcy. While not banning “zero-hours contracts” outright, the bill requires employers to offer a guaranteed number of working hours to those of their workers who have either a “low” number of guaranteed hours or no fixed hours.
At collective level, the bill provides for employee representatives to be consulted in connection with redundancies involving more than 20 people during a 90-day period, including for redundancies at several establishments owned by the same company. The new legislation also includes a number of amendments designed to facilitate access to trade unions in the workplace and to secure recognition, in ways that include reducing union affiliation thresholds, of their right to conduct collective bargaining. Moreover, it obliges employers to inform workers of their right to belong to a trade union, and it repeals the recent legislation restricting the right to strike, which “failed to prevent a single day of industrial action while in force”.
The government is thus attempting to engineer a reset of employment relationships. However, this will be a gradual process, as many of the measures will not come into force until 2026. In contrast to the fears aroused in connection with the post-Brexit period (see Brexit and labour standards), the government is distancing itself from the Conservatives’ plans to boost business competitiveness by opting for all-out deregulation and scrapping EU laws, in order to enhance the United Kingdom’s appeal in the eyes of investors. It is a relief to see that the Labour government is refusing to back such a policy, which would amount to “social dumping”.

“Platform” directive : On 14 October, the Council gave the green light for final adoption of the directive on improving working conditions in platform work (see IR Notes 226). This directive will enter into force once it has been published in the EU’s Official Journal. Member States will then have two years to incorporate its provisions into their domestic law. It should be borne in mind that this law establishes a presumption of employment for digital platform workers as soon as “facts indicating control and direction […]” are found (Article 5.1). Moreover (see Chapter V), it grants platform workers – whether self-employed or recognised as employees – a number of new “digital rights” with regard to algorithmic management (see  Platform work). The text also invites Member States to take “adequate measures to promote the role of the social partners and encourage the exercise of the right to collective bargaining in platform work” (Article 25).

Difference in treatment justified : On 4 October, the EU Court of Justice pronounced judgment on a Spanish case concerning indirect discrimination between flight deck crew and cabin crew employed by the airline Air Nostrum. The Court did not follow the opinion published by its Advocate General (see IR Notes 232). Under two separate collective agreements, flight deck crew enjoy a daily subsistence allowance of between 65 and 100 euros, depending on whether the flight in question is a domestic or an international one, whereas cabin crew receive between 37.06 and 59.06 euros for the same flights. Given that 93% of flight deck employees are men, and 93% of cabin crew are women, the Court of Justice was asked to rule on whether this was a case of indirect discrimination (see Indirect discrimination). The Court agreed that this was indeed unequal treatment but inferred from Article 4 of Directive 2006/54 that such a difference in treatment, as regards the pay of the workers at issue in the main proceedings, could constitute indirect discrimination on grounds of sex only if that pay were paid “for the same work or for work to which equal value is attributed”. It points out that in order to assess whether workers are performing the same work or work of equal value, account should be taken of a range of factors, including the nature of the work and training and working conditions. The Court asserts that “cabin crew members and pilots clearly do not perform the same work”. Furthermore, these workers do not receive the same training nor do they have the same responsibilities. Consequently, this difference in treatment cannot be regarded as indirect discrimination on grounds of sex (CJEU, 4 October 2024, Case C-314/23, Air Nostrum).

CJEU upholds “Mobility Package” : In a judgment dated 4 October, the Court of Justice approved, with one exception, the European legislation governing working conditions in the road transport sector (the “Mobility Package”), as adopted in 2020 (see Mobility package). This legislation had been contested by a number of Member States, especially East European countries. The Court states that by introducing the “Mobility Package”, the EU legislature had sought to strike a new balance between the interest of drivers in enjoying better working conditions and the interest of employers in carrying on their transport activities under fair commercial conditions (CJEU, 4 October 2024, Case C‑541/20 to C‑555/20, Lithuania / Parliament and Council). The Court confirmed the validity of several contested provisions, such as the prohibition on drivers taking their weekly rest periods in their vehicle, but annulled the obligation requiring vehicles to return to their home country every eight weeks. It held that the EU legislature had not established that it had sufficient information to enable it to assess the proportionality of that measure. European social partners in the sector have expressed their satisfaction with the judgment, but are also disappointed with the decision to overturn the provision regarding return of vehicles.  The employers’ organisation IRU wonders whether the Commission will now try to build a case with more information around the proportionality of that measure or whether the judgment “will put an end to the EU attempt of requesting operators to bring trucks home in addition to the necessary visits for mandatory technical inspections” (see press release). The European trade union federation ETF argues that “this decision is a significant setback for efforts to combat unfair competition and labor rights violations, as well as a serious blow to the economic and social sustainability of the industry.” This provision ensures that there is a direct and genuine link between the Member State of establishment and the company’s economic activity in another Member State. The ETF therefore believes that the Commission should now address the insufficiencies in terms of information, as noted by the Court of Justice, “and reinstate this measure” (see press release).

Cannabis in the workplace : Social partners in the chemical industry (IGBCE and BAVC) have updated their 1996 sectoral agreement in response to the partial legalisation of cannabis. In addition to workplace safety issues, the agreement emphasises the need for dialogue around addiction in order to protect companies and raise awareness of at-risk behaviours. Employers are encouraged to put in place discussions on the effects of cannabis, in order to guarantee workers’ safety and productivity (see press release).

Collective bargaining agreement in the retailing industry : On 25 September, social partners in the retail sector signed its first collective bargaining agreement, which will cover the 28,000 companies and 250,000 employees concerned (see Ministry of Employment press release). The message jointly promoted by employers and trade unions is that companies can only be competitive if their workers experience job satisfaction, which in turn is conditional on these companies being competitive. Consequently, the agreement seeks to enhance working conditions with a view to safeguarding jobs, protecting the retail sector and boosting its competitiveness. The President of Croatia’s Retail Union said that both parties intend to further develop social dialogue, at both sectoral and company level (see press releases issued by the Union of Autonomous Trade Unions of Croatia (SSSH).

Discrimination against LGBTI persons : On 8 October, the Council of Ministers passed a royal decree implementing all of the measures promoting equality and non-discrimination against LGBTI persons in corporate environments, as provided for by the agreement concluded between the Ministry of Employment and the social partners. Companies with more than 50 employees will now have three months to initiate the negotiation of a memorandum of understanding dealing with harassment situations linked to sexual orientation, identity and gender expression, together with preventive practices and detection mechanisms. If no agreement is concluded within six months, the company will be required to implement the measures enacted by the decree. This decree will permit implementation of Article 15 of the “Ley Trans” [‘Trans Law’], passed in February 2023, which requires large corporations to promote equality for LGBTI persons in the workplace. Collective labour agreements will also have to include provisions taking into account the reality of diverse LGBTI families, spouses and unmarried partners.

Female company directors and equal pay : A study performed by the German Institute for Economic Research (DIW Berlin) reveals that the gender pay gap in Finnish companies managed by women is more than two percentage points lower than that reported by companies led by men, and it is even close to zero in some sectors. In particular, female directors of small companies have a greater margin of discretion when it comes to setting wages and salaries, thereby contributing to a reduction in inequalities (see press release). However, the study also emphasises that the gender pay gap remains significant in male-dominated sectors, even when the companies concerned are led by women.

Berry pickers : On 10 October, the government unveiled a proposal to introduce a number of amendments to the Seasonal Workers Act, with the aim of enhancing the status of berry pickers. These changes mean that foreign workers employed as wild berry pickers will no longer be allowed into the country on an ordinary tourist visa. Companies will be required to employ foreign pickers based on a contractual employment relationship, granting them permission to enter the country, in order to prevent abuses linked to exploitation and human trafficking (see press release).

Sunday working : On 11 October, the Government Council passed a bill amending Article L. 231-4 of the Employment Code, relating to Sunday working in the retail industry. This will allow employers to ask their employees to work for up to eight hours on Sundays, instead of four hours, which is the current limit. Employees will continue to receive a 70% higher hourly rate of pay for all hours worked on Sundays. The Ministry of Employment comments that “the move to allow up to eight hours of Sunday working reflects current trends taking place in a changing society and workplace, and offers employees the opportunity to enjoy a more flexible work-life balance” (see Ministry of Employment press release).

Occupational health and safety : On 3 October, Suez group management and the European Federation of Public Service Unions (EPSU) signed a new European agreement on health and safety in the workplace, superseding the previous agreement concluded in 2014. The agreement includes “concrete provisions on a range of health and safety issues from the operation of heavy machinery to mental health and the right to disconnect to the fight against harassment and violence”. The negotiations commenced in November 2023 and were led by Christine Chiffre, Chair of the Suez EWC, EPSU and a special negotiating body made up of representatives from all countries represented on the European Works Council (see EPSU press release). EPSU policy officer Tuscany Bell said: “By tackling both emerging and well-established health and safety risks, the new Suez agreement can be seen as a model at European level, and not just for the waste and water sectors.”

A stronger global agreement : On 10 October, the management of the Spanish textile group Inditex (160,000 employees) renewed its global framework agreement, concluded in 2009, with the IndustriAll Global Union federation. The initial text has been supplemented by a number of new provisions concerning: 1/ “Fair digital transformation”, which introduces a right for retail workers to be consulted regarding Inditex’s use and implementation of these tools; 2/ Fighting gender-based violence; 3/ Workplace inclusion, with a focus on retention of workers who offer “functional diversity”; 4/ Extending the rights covered by the agreement to include employees of franchised operations (see press releases issued by IndustriAll Global Union and Inditex).

Collective bargaining and AI : France’s Centre d’études de l’emploi et du travail [‘Centre for Research into Employment and Work’] has published a study analysing company agreements signed in France between 2017 and 2024 that mention artificial intelligence. Although these agreements account for just a fraction of the total (242 out of more than 285,000 agreements signed), their number has risen by a factor of 2.5 in recent years. Negotiations around AI are focused primarily on employment-related issues, “reflecting concerns and questions regarding safeguarding of jobs in a context of digital transition”. The authors argue that “it is vital to expand the dialogue to include workplace transformations brought about by AI”, in order to “direct the use of AI towards improving working conditions and better meeting workers’ needs, with beneficial long-term effects on employment”.