IR Notes

The Coronavirus epidemic is highlighting the inadequacy of social protection systems when faced with a health disaster of this type. Certain effective social distancing measures are proving difficult to implement due to national provisions which discourage workers from following the instructions issued by the authorities. Therefore, the United Kingdom has passed emergency legislation to abolish the four-day waiting period before sick pay is payable. Workers will be able to claim sick pay from day one. But in the view of the British trade union confederation TUC, the measure still falls short because around two million workers who do not earn enough to qualify for sick pay are excluded (see press release), particularly insecure workers on zero-hours contracts. On 3 March, the Portuguese government decided that workers, in both the public and private sectors, who are required to go into quarantine and have no possibility of working from home, will receive 100% compensation from the social security authorities. In Croatia, at the beginning of March, 2,000 people were placed in isolation, at least 1,000 of whom, according to estimates, are workers. Of these, only 6% have claimed sick pay. One of the reasons is that a person placed in isolation, or who remains at home to look after a child whose school is closed, receives sick pay which is capped at 2,100 kunas (around 282 euros) for 15 days, whereas people who contract the virus will receive between 70% and 100% of their salary, in accordance with the applicable collective agreement. The low take-up of sick pay in the event of isolation suggests that employees are continuing to work remotely so as not to lose their wages, or have even agreed another reason for sick leave with their doctor so as to get a higher amount. This situation has led trade unions and NGOs to request an urgent amendment to legislation, warning that due to the risk of financial losses, there is the possibility that people who might have been in contact with infected people will ignore the self-isolation order and say nothing. The situation in Europe seems less alarming than in the United States where “sick pay does not exist in Federal American law”, which clearly risks “compromising the management of the Covid-19 epidemic”, as pointed out by Sarah Rozenblum, a public health and political sciences researcher at the University of Michigan, in an article published in the French newspaper Le Monde (06.03). Harmonisation across Europe would be desirable to guarantee treatment and no loss of wages for workers (salaried or not) who have to stop work. However, the Union would need to have competence in the area of social security.

European strategy to reduce gender inequality : on 5 March, the European Commission presented its European Gender Equality Strategy which should guide its work until 2025. Unveiled in a communication, this strategy covers all sources of gender inequality and violence against women. It establishes the principle of the “inclusion of a gender perspective in all EU policies and processes”. Some measures relate specifically to the labour market. Apart from the initiative relating to pay transparency, the other measures announced have no specific deadlines.

• Pay transparency: the most complete proposal is the one relating to pay transparency. In March 2014, the Commission published a recommendation on strengthening the principle of equal pay between men and women through transparency. As this non-binding text has had relatively little effect, the Commission has decided to “strengthen the rights of employees to get more information about pay levels” without placing an excessive burden on companies. It is, therefore, launching “an inclusive public consultation process” and “will be relaunching discussions with social partners”. Given the subject matter, social partners should be formally consulted to allow them to begin negotiations, should they wish. The findings from the consultation will be used to draw up proposals for binding measures which will be announced by the end of 2020. In other words, no binding measures will be adopted before the end of 2021, at best. So the Member States will not be transposing these measures into national law until at least 2023. 


• Improving the gender balance of company boards: the Commission intends to revive its proposal on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures, which was presented in 2012, but blocked by Member States. The key measure sets the aim of a minimum of 40% of the under-represented sex on company boards. Another area of focus is reducing the impact of the gender pension gap. The Commission says that it “will explore the provision of pension credits for care-related career breaks in occupational pension schemes”, that is pension schemes set up by the employer (not, therefore, statutory schemes over which the EU has no jurisdiction).


• Work/life balance: to enable women to flourish in the labour market, the Commission wants to “redouble efforts to enforce the work/life balance directive”. The aim is to offer “men and women a real choice to enable them to thrive on equal terms, both personally and professionally.” The Commission also wants to improve access to early years education and childcare “to support women’s participation in paid work and their professional development.” 


• Sexual harassment: the communication contains various references to combatting sexual harassment. The Commission intends to extend the areas of crime where harmonisation is possible at European level to specific forms of gender-based violence, including sexual harassment. It encourages Member States to ratify the ILO convention to combat violence and harassment in the world of work, to implement the existing EU rules on protecting workers from sexual harassment, and to raise people’s awareness of these rules. As an employer, the Commission also intends to adopt a “comprehensive legal framework” to combat all forms of sexual harassment in the workplace.

• Undeclared work: : on 2 March, the European Commission, for the first time, launched a European campaign to tackle undeclared work (v. press release). It involves the European Platform tackling undeclared work, set up in 2016, which will soon become part of the new European Labour Authority. The campaign, which is being conducted on social media (#EU4FairWork), is planning a week of action (16-20 March) with inspections in the sectors which are at risk.

Transfers of undertakings in bus transport : Reiner Grafe and Jürgen Pohle both worked as bus drivers for SBN, a bus transport company which operated routes for a local authority in Germany. This local authority launched a call for tenders which SBN could not win because it did not meet the technical and environmental standards required. OSL won the contract and SBN made all its employees redundant. It agreed a redundancy plan with employee representatives. OSL took on Reiner Grafe, but did not take into account his earlier period of service, so his pay was cut. Reiner Grafe is claiming compensation, as provided for by the redundancy plan, and Jürgen Pohle, who was not hired by OSL, is seeking the additional compensation set out in the redundancy plan. SBN is refusing to pay this compensation, arguing that Jürgen Pohle should have been taken on by OSL. The question for the Court of Justice was whether the new operator should maintain their contract of employment with their acquired rights in accordance with the requirements of directive 2001/23 of 12 March 2001 relating to the safeguarding of employees’ rights in the event of transfers of undertakings. OSL believed that it was not under any obligation to take on the employees because there had been no transfer of an undertaking, as it had not taken over the previous operator’s depot or any of its vehicles, but only a large number of its drivers and supervisory staff. To justify the fact that the mere taking on of the staff was not sufficient to prove a transfer of an undertaking, OSL relied on the ruling of the Court of Justice in 2001 that “bus transport cannot be regarded as an activity based essentially on manpower” (CJEU, 27 January 2001, case C-172/99, Liikenne). In a ruling on 27 February, the Court explains that it cannot be inferred from the 2001 ruling “that the takeover of the buses must be regarded in the abstract as the sole determining factor of whether an undertaking whose activity consists in the public transport of passengers by bus has been transferred”. Assessing the facts, it ruled that “the taking-over of the majority of the drivers must be regarded as a factual circumstance to be taken into account in order to classify the transaction concerned as a transfer of an undertaking” (CJEU, 27 February 2020, case C-298/18, Grafe and Pohle). The drivers, with their local knowledge and know-how, are considered an essential part of the company. So they should all have been taken on and their previous years of service recognised. The German court which referred the case to the Court of Justice will, therefore, have to restore the two drivers’ rights.

• Minimum wage : the European Commission has received the responses of the European social partners which it consulted on the introduction of decent minimum wages in the EU. Their conclusion is unanimous: it would be premature to enter into European collective bargaining on the issue. The employers’ organisation BusinessEurope delivered a well-argued and unambiguous response: the EU has no competence to intervene on this issue through a binding instrument, such as a directive. However, the issue can be addressed by the European social partners as part of the European semester, i.e. the system for coordinating the economic and budgetary policies of the Member States. The message from SMEunited, which mainly represents SMEs, is quite similar (see position paper). For its part, the European Trade Union Confederation, in its response, highlights all the barriers to EU action with regard to the issue. It will actively oppose any instrument if it could have a potential negative impact on trade union rights and national labour market models. Judging from their position papers, it is difficult to see which direction the Commission could take to achieve its ambition of enforcing a decent minimum wage for all workers.

An Uber driver considered an employee : the Court of Cassation has issued an important ruling (exceptionally translated by the Court into English and Spanish) in a case concerning a driver who had been working for Uber since October 2016, on an independent basis, before the platform permanently deactivated his account in April 2017 (see also the explanatory note published by the Court of Cassation). He then, therefore, instigated legal proceedings to have the contractual relationship binding him to Uber reclassified as a contract of employment, in order to get redundancy pay. Resuming all the factors which demonstrated a permanent relationship of subordination between the driver and Uber, the Court ruled that “the driver held a fictitious status as an independent worker and that Uber sent him instructions, supervised performance and exercised the power to sanction”. In response to this ruling which opens the way for further disputes, particularly involving the social security authorities which could demand the payment of social security contributions for large numbers of drivers, and for criminal proceedings for undeclared work, the French government aims to introduce an intermediate status between salaried employment and self-employment. After launching a mission, in January, to “define the different possible scenarios for creating a framework for representing digital platform workers”, the Minister of Employment reacted to this ruling by announcing another mission to “invent rules which allow both freedom and protection to protect workers, and to enable those who want to be self-employed to remain so but with protection, whilst offering a clear framework for platforms” (see interview given to Europe 1 radio station).

> For more national information, see the Collective Bargaining newsletter (February 2020) published by the European Trade Union Institute (ETUI), and the Flash Reports on Labour Law (December 2019 and January 2020) published by the European Commission.

Payment of fees to experts : on 17 January, the Central Arbitration Committee (CAC) – the British tribunal which specialises in industrial relations disputes – issued a ruling on a dispute between the European Works Council of the Princes Group and the central management of the 7,000-employee food-manufacturing group. The case concerned the closure of a British site with production being transferred to a site in Italy. The CAC firstly took the view that this was a transnational matter and that it was of sufficient import to justify calling an extraordinary meeting of the European Works Council, rejecting the management’s position on these two points. It then ruled that the European Works Council was entitled to appoint an expert to defend it before the CAC and that their fees should be paid by the employer, pursuant to the agreement establishing the European Works Council, which allows the council to appoint an expert of its choice, whose services will be paid for by the employer.

A guide to European Works Councils in transport : the European Transport Workers’ Federation (EFT) has published a guide to European Works Councils which is the culmination of a European project led by Syndex to create new European Works Councils in a sector, transport, where not many currently exist, and to improve the practices of the European Works Councils which do exist in this sector (see interview in IR Notes 130). The resultant guide provides useful information and advice on setting up European Works Councils, clarifies their role, and also contains exercises for use in training sessions.

Parental leave : on 6 March, the Spanish bank Santander (196,419 employees) announced the introduction of at least 14 weeks paid leave for mothers and four weeks for the secondary parent during the child’s first year (or possibly two periods of 15 days).  The first measure will lead to an increase in maternity leave in three countries (Argentina, United States, Mexico), and in six countries (Brazil, Chile, Mexico, Portugal, Poland and Uruguay) in the case of the second. These guarantees will be gradually extended across the whole group over the next three years (see press release).