IR Notes

After several months of waiting, the big day has arrived for the revision of the EU Corporate Due Diligence Directive. The compromise text agreed upon by the European Parliament and Council negotiators in May (see IR Notes 253) will finally be put to a vote by MEPs this Thursday, October 9, during the Parliament’s plenary session. If the political balances found during the Employment and Social Affairs Committee vote are respected (see IR Notes 254), the text should pass smoothly. Only formal approval by the Council would remain before the directive is published. The question is whether the conservative MEPs of the EPP will follow their rapporteur, Dennis Radtke, or if the few months between the adoption of the compromise and the plenary vote have been used to weaken the majority. Aware of the risks, Isabelle Schömann, deputy general secretary of the European Trade Union Confederation, published a LinkedIn post outlining all the arguments in favour of the vote. She emphasized economic arguments to prevent the revision from being derailed by the current anti-regulation trend, which enjoys full support from far-right MEPs and some conservative deputies already tempted to ally with them to nullify the Due Diligence Directive. Isabelle Schömann sought to reassure businesses, highlighting that the text “does not impose new costs on companies that comply with the law”, does not create “new rights or procedures”, and “offers greater legal predictability, as it significantly reduces legal risks, providing opportunities for planning and cost savings.” Regarding the revision of the Due Diligence and Sustainability Reporting Directives, the Parliament’s rapporteur prepared two versions: one designed to be compatible with the pro-European majority, and another that could be adopted by a majority formed by the EPP and far-right parties. According to Andreas Rasche, professor at Copenhagen Business School, these options would exclude 70% of companies currently covered by the existing Due Diligence Directive and between 90% and 92% of companies covered by the current CSRD. This is no longer a matter of “regulatory simplification” but a return to “an era when sustainability was considered something only large companies could afford. The idea that voluntary action will fill the gap is wishful thinking, and research does not support it.” Furthermore, “flirting with a majority that undermines shared European values only fuels polarisation,” Rasche emphasises, expressing hope for a return to reason by Wednesday, the scheduled adoption date of the report (see LinkedIn post).

Gender pay gaps : On September 29, MEPs Irena Joveva (Renew Europe) and Mirosława Nykiel (EPP) presented a draft report to the Committee on Women’s Rights and Gender Equality on “the pay and pension gaps between man and women in the EU.” The report calls on the European Commission to present “a new and ambitious strategy on gender equality (…) and to propose a specific action plan to eliminate gender pay and pension gaps, with quantitative targets and a clear EU-level timetable.” A strategy that should in particular focus on “female-dominated sectors.” They also call for the swift and “rigorous” transposition of the directives on pay transparency and gender balance on corporate boards. Most importantly, they stress that the Pay Transparency Directive, “the EU’s main legislative instrument to tackle the gender pay gap”, must not be included in future omnibus simplification packages.

Violence against women : The European Transport Workers’ Federation (ETF) has published the first results of a survey on violence and harassment against women in the transport sector. The findings show that violence against women “is both widespread and systemic,” the ETF emphasizes. While third-party violence — that is, from passengers and users — was the most common (56%), 41% of incidents involved colleagues, managers, or supervisors (see press release).

Artificial intelligence : The European Trade Union Confederation (ETUC) has published a guide designed to help trade unions address the use of algorithmic management in the workplace. This handbook provides employee representatives with tools to ensure the protection of workers, working conditions, and rights when employers deploy digital systems to monitor and manage staff.

Collective agreement for temporary agency work : The Confederation of German Trade Unions (DGB) and the employers’ organisation GVP have reached a wage agreement under the new collective agreement for temporary agency workers (see IR Notes 257). The agreement provides for a 2.99% pay increase in January 2026, followed by 2.5% in September 2026, and 3.5% in April 2027. Leave entitlements, Christmas bonuses, and union membership premiums will also be upgraded (see DGB press release). The new collective agreement will enter into force on January 1, 2026, replacing the two previous agreements concluded by the employers’ organisations that merged to form GVP (see GVP press release).

Economic recovery plan : The government will establish a broad set of measures this autumn, including a programme focused on the labour market (see press release). The plan includes investments in vocational education and apprenticeships, initiatives to reintegrate long-term unemployed, and a tax relief for employees who continue working after retirement (see press release). A working group will also be established to design measures encouraging an increase in working hours and to freeze the threshold for supplementary income.

Employment of older workers : On June 25, the social partners in the insurance sector signed an agreement on the employment of experienced employees. This agreement builds on the National interprofessional agreement (ANI) of 14 November 2024 in favour of the employment of experienced workers, which still needs to be transposed into law. One of the main goals is to better integrate experienced employees and to support their career paths and transitions toward retirement. While the ANI requires negotiations on this topic every three years in branches and companies with more than 300 employees, the signatories recommend that companies with fewer than 300 employees also adopt the same approach. In addition, companies are encouraged to implement measures to support employees with caregiving responsibilities and to promote phased retirement.

AI regulation : A law passed on September 23 on artificial intelligence goes beyond the requirements of EU Regulation 2024/1689 of June 13, 2024, on AI. The text incorporates the guiding principles of the regulation but takes a more in-depth approach to the use of AI. Regarding working conditions, three articles stand out: Article 11 requires employers to clearly inform employees about the use of AI systems; Article 12 establishes a national observatory responsible for monitoring the impact of AI on employment, developing regulatory strategies, and identifying sectors most exposed to digital transformation; and Article 13 prohibits professionals from fully delegating their work to AI and imposes a clear and understandable obligation of transparency regarding its use.

Labour Code reform : The draft law on the reform of labour law, presented in July, is set to be discussed during a social dialogue meeting on October 9 and then debated in Parliament. The government argues that Portugal needs a more dynamic legal framework better suited to current economic challenges. The text, which amends more than 100 articles of the Labour Code, seeks to make working time more flexible, ease dismissals, and lift restrictions on subcontracting, citing the need to modernise the legal framework and boost productivity. The social partners remain cautious: employers’ organisations consider that these measures should not be used as bargaining chips in budget negotiations, while trade unions denounce a rollback of workers’ rights. Demonstrations have been held in Lisbon and Porto, organised by the trade union confederation CGTP-IN (see CGTP-IN press release).

Restructuring : During an extraordinary meeting of the Nestlé European Council for Information and Consultation (NECIC) on September 30, European employee representatives, through their employee co-chair Christophe Kauffmann (CFDT), appointed by the international trade union federation IUF, requested clarification from management on the planned sale of the Nestlé Waters business (5,500 employees in Europe), which has been under preparation since November 2024. Nestlé Waters is at the centre of several health and environmental scandals in France and Switzerland. The group is considering selling this activity within the next 12 months to a minority or majority partner, or to a joint venture. According to the CICEN communication, management confirmed that the selected partner would be required to share Nestlé’s core values and that consultations with trade unions would begin once the partner has been announced. During the meeting, NECIC appointed the consultancy Syndex to assist throughout the information and consultation process. Trade unions are demanding, in particular, that there be no job cuts or site closures; a written and binding guarantee ensuring the buyer complies with all social and legal obligations; consultation of employee representatives on the terms of the partnership and its impact; the creation of a monitoring committee with trade unions to oversee the implementation of commitments; and the continuation of a European Works Council after the sale, in order to ensure strong collective representation at the European level within the new entity.

OECD guiding principles : The French National Contact Point (NCP) for the OECD has published its final communiqué in the case against the ultra-fast-fashion group Shein. The procedure was initiated in 2023 by two French deputies who argued that Shein was not complying with the OECD Guidelines for Multinational Enterprises due to an economic model that is environmentally and socially unsustainable. In the absence of an agreement between the parties, the NCP identified several instances of non-compliance with the Guidelines and will monitor the implementation of its recommendations after six and twelve months. While acknowledging some progress, the NCP notes that the implementation of the company’s sustainability policy “shows several non-conformities” and points to “a clear lack of progress regarding transparency in governance and financial information.” The NCP calls on the group to integrate the OECD guiding principles, particularly regarding “due diligence with respect to its activities, products, and services, and its supply chains,” while also ensuring respect for “human rights and working conditions”.

Trade Unionism : Union membership continues to decline across the OECD, according to the latest data from the OECD/AIAS ICTWSS database, published on 30 September in a Policy brief. Union density has halved since 1985, falling from 30% to 15% in 2023/24. This downward trend is widespread, with a few exceptions such as Iceland, Belgium, and, to a lesser extent, Canada, Korea, and Norway. Unionisation remains much higher in the public sector (41.3%) than in the private sector (10.1%). By contrast, membership in employers’ organisations has remained relatively stable. Although increasing the share of employees covered by collective agreements has become an EU objective, the trend is not encouraging. Collective bargaining coverage rate has fallen from 47% in 1985 to 33.6% in 2023/24, with sharper declines in Central and Eastern Europe, the United Kingdom, and Greece. Coverage remains high in countries with multi-employer bargaining systems, supporting the case for strengthening this level of collective bargaining to improve working conditions and wages.

Civil aviation : Ghent University has published a compelling study on working conditions in civil aviation, ten years after its first report on atypical employment in the civil aviation. The results raise some concerns. For example, “workers in precarious or atypical jobs feel less empowered to raise objections or deviate from airline instructions,” even when safety considerations are at stake. “By contrast, those with stable and secure contracts demonstrate greater confidence in expressing concerns and acting accordingly.” Additionally, crew members employed as self-employed contractors “face the worst outcomes in terms of well-being, job security, fatigue, and safety, while agency employment presents moderate risks; direct employment remains the most favourable arrangement.”