IR Notes

On Wednesday 24 February, the College of Commissioners took a position on initiatives aimed at enhancing the working conditions of platform workers by launching a first-stage consultation of European social partners (see press release) (see Collaborative economy). This initiative comes one week after the publication of several national judgments that refused to categorise delivery riders or Uber drivers as being self-employed. France’s Court of Cassation gave its approval for an Uber driver to be reclassified as an employee back in March 2020, (see IR Notes 137), and now the Supreme Court of the United Kingdom has reclassified the working relationship of an Uber driver as that of a “worker”, arguing that a worker could not be regarded as an independent contractor. This “worker” status is an intermediate one between that of an employee and an independent contractor, and grants workers a number of social rights, such as the right to be paid the minimum wage and to receive statutory paid leave (see judgment and press summary).  And on 16 February, in the Netherlands, the Amsterdam Appeal Court handed down a judgment reclassifying Deliveroo food delivery riders as employees, in a case defended by the FNV trade union confederation. “This ruling should bring an end to the debate regarding the status of delivery riders in the Netherlands”, says Nuna Zekić, Associate Professor at Tilburg University. “This has been the thrust of most of the judgments handed down by national courts in recent months”, confirms Valerio De Stefano, Professor of Labour Law at the Catholic University of Leuven (KU Leuven). The European Trade Union Confederation has expressed its satisfaction at these recent judgments (see press release) but it is calling for European-level legislation, because successive victories before the courts “sometimes only deliver justice for individuals or small groups of workers when platform companies continue to exploit millions of workers”. Consequently, it is expecting a great deal from the launch of consultations with European social partners: this is the first stage on the road to future legislation that still lies several years ahead. Nevertheless, the succession of judgments finding against a business model based solely on independent contractors controlled by algorithms is starting to have an impact. Some platforms are improving the working conditions of their workers in order to limit the scope for legal disputes, while others, such as the food delivery company Just Eat, in France, have decided to turn their self-employed workers into employees. Just Eat has announced plans to recruit 4,500 employees by the end of the year.

• European Commission’s plans for tackling social issues : Several social issues feature on the agenda of the meeting of the College of Commissioners scheduled for 3 March: 1) the Action Plan on the implementation of the European Pillar of Social Rights; 2) the long-awaited initiative concerning pay transparency measures, aimed at reducing the gender pay gap; 3) the strategy on the rights of persons with disabilities.

Adequate minimum wages : On 10 February, the European Parliament passed a resolution on “Reducing inequalities with a special focus on in-work poverty” in which MEPs offer their support for the European Commission proposal for a directive on adequate minimum wages in the EU (see IR Notes 151). Even though just over 200 MEPs abstained, 365 votes were cast in favour of the proposal (and 118 votes against). For its part, the Parliament’s Committee on Employment and Social Affairs has appointed the two MEPs who will be defending Parliament’s position in the discussions with the Council and the Commission. Two of the Committee’s heavyweights have been selected: Agnes Jongerius from the Netherlands (S&D) and Dennis Radtke from Germany (EPP). “Decent wages are a fundamental part of the European Pillar of Social Rights”, they explain. “Now is the time to implement this principle and we are ready to seize this unique opportunity.” (see press release). As far as minimum wages are concerned, Parliament is placing the emphasis on collective bargaining: Member States should “promote collective bargaining” and “adapt their national legislation where it hampers collective bargaining and the right to associate, negotiate and conclude collective agreements”. The aim is to ensure, either by means of collective agreements, or failing this by means of statutory minimum wages, “that no workers or their families are at risk of poverty and that everyone can make a living from their work and participate in society”. MEPs believe that the directive “should guarantee that statutory minimum wages – where applicable – are always set above the poverty threshold”. In other words, they should at least be equivalent to 60% of the median wage, which however is currently the case in just three Member states. Nevertheless, when setting minimum wages, social partners or Member States still need to take account of “their impact on competitiveness, job creation and in-work poverty”.

Reducing inequalities, teleworking, platforms and traineeships : The resolution on “Reducing inequalities with a special focus on in-work poverty” (see above) goes further than the issue of minimum wages and seeks to reduce poverty and inequalities. These objectives “can be achieved through instruments such as, but not limited to, a minimum income, minimum wages and minimum pensions under the first pillar” (see Basic income). Parliamentarians are also calling for: 1) A “legislative framework with a view to regulating telework conditions across the EU”, which “is necessary to ensure decent working and employment conditions in the digital economy”. 2) A legislative proposal covering platform workers, to ensure that digital platform workers “can benefit from the guarantees provided by existing labour laws and social security provisions, to improve the working conditions, skills and education of platform workers, and to secure predictable working hours for platform workers”. Furthermore, this proposal should also ensure that “platform workers are able to form workers’ representations and to organise in unions in order to conclude collective agreements”. 3) An “urgent” review of the European Quality Framework for Traineeships “in order to include the principle of the remuneration of traineeships and internships among the quality criteria”. Lastly, we can also report that MEPs rejected – by just one vote (319 for, 320 against and 57 abstentions) – the inclusion of a Social Progress Protocol in the European treaties to guarantee that equal emphasis is placed on the economic freedoms of the single market on the one hand, and social and labour rights on the other.

Dockers’ monopoly : The Court of Justice has issued a ruling allowing States to maintain legislation establishing a monopoly for dockers on handling activities in port areas. The case concerned a Belgian regulation requiring companies engaged in port activities to use the services only of dock workers who are recognised as such under this legislation. It prevents such companies from using their own staff or recruiting other workers who are not recognised. Admittedly this rule constitutes a restriction on freedom of establishment and on the freedom to provide services, but it is “justified by overriding reasons in the public interest”, namely that of ensuring safety in port areas and preventing workplace accidents. However, the Court holds that the intervention of a joint administrative committee in the recognition of dockers is neither necessary nor appropriate for attaining the objective pursued. (CJEU, 11 February 2021, Cases C-407/19 and C-471/19, Katoen and Middlegate, see press release).

Draft law on corporate due diligence : Article 1 of Germany’s Basic Law states that “Human dignity is inviolable”. Federal Minister of Work, Hubertus Heil (SPD), pointed out that it does not say ‘German dignity is inviolable’ as his justification for passing the bill relating to due diligence applicable to German companies. This bill seeks to protect human beings all over the world from any violations of their fundamental rights. On 12 February, Hubertus Heil announced that this text, which has been fiercely debated for a year now by the CDU-SPD grand coalition, will be adopted by the Bundestag’s current legislature, i.e. by September 2021. The bill will require companies to ensure that human rights are respected and that environmental protection regulations are adhered to, both in their own activities abroad and on their suppliers’ premises. In the first instance, from 2023 onwards, this law will apply to companies with more than 3,000 employees, and subsequently to companies with more than 1,000 employees, from 2024 onwards. The initial bill sponsored by Hubertus Heil had sought to impose this legislation on companies with more than 500 employees, from the outset. The compromise reached, following tough negotiations with the Minister of the Economy, Peter Altmaier (CDU), who is fiercely opposed to the idea of further restrictions being imposed on German companies, remains fragile, and the opponents of this bill have not yet given up the fight.

• Minimum wage : On 31 December 2020, the government passed a decree (no. 731/2020), formally noting the failure of social partners to reach agreement on the level of the minimum wage in 2021, though in so doing, it did not unilaterally decide to increase the minimum wage. Previously, when negotiations failed to reach a successful outcome, the government itself decided on the amount of the minimum wage for the coming year. In the end, the social partners reached agreement on 25 January regarding the amount of the minimum wage and of the guaranteed minimum wage. From 1 February 2021 onwards, the minimum wage is 167,400 HUF, and the guaranteed minimum wage is 219,000 HUF (an increase of 4%). However, the value in real terms of the minimum wage in euros fell by comparison with 2020, due to the devaluation of the Hungarian currency against the euro. It is worth 309 euros in 2021, as against 317 euros in 2020 and 311 euros in 2019. The value of the guaranteed minimum wage is 404 euros. The minimum wage and the guaranteed minimum wage are both significantly lower than the minimum wage in other countries in the region (Poland, Slovakia, Czech Republic, etc.).

• Metalworking : On 5 February, the Italian trade unions in the metalworking sector (FIOM-CGIL, FIM-CISL and UIL-UILM) concluded a national collective agreement providing for a wage increase and reform of the job classification system that has been in place since 1973. The trade unions also managed to strengthen collective rights and clauses covering gender-based violence and teleworking, including the right to disconnect outside office hours (see press release IndustriAll Global Union).

Combatting workplace bullying : A new Code of Practice for Employers and Employees on the Prevention and Resolution of Bullying at Work) entered into force on 23 December 2020. This code replaces the two previous codes that co-existed side by side: that of the Health and Safety Authority (HSA) dating from 2007, and that of the Workplace Relations Commission (WRC), from 2002. This code applies to all jobs in Ireland, i.e. to employees who work at a fixed location, from home or who are mobile. It contains practical guidance on the management of workplace bullying complaints and on the prevention of workplace bullying. It also seeks to achieve harmonious working relations, to promote equality and to set up conflict resolution mechanisms by encouraging prompt settlement of any disputes through mediation and conciliation. This code of practice has no legal force, but it is accepted as evidence under both the Industrial Relations Act 1990 and the Safety, Health and Welfare at Work Act 2005. (see press release).

• Resignation of an employee and Covid-19 : The Workplace Relations Commission (WRC), has reclassified the resignation of a female employee, two members of whose family are at-risk persons, as constructive dismissal and ordered the employer to pay her 5 weeks’ wages as compensation for lost earnings between the time she resigned from her old job and started her new job. The employee had asked if she could work from home and organise a rota with her two colleagues, taking turns to attend the office. The employer’s view was that home-working was not possible, and instead it suggested making changes to the layout of its offices. After taking sick leave, the employee felt that she had no alternative but to resign in order to protect her family members from the Covid risk that she continued to face at work, as the changes made to the office layout were either insufficient or non-existent.  The WRC held that “the respondent did not provide an adequate explanation as to why it did not accede to the proposal. The on-site essential nature of the role was covered by the rotating presence of operations coordinators and the significant online work could have been progressed remotely”. In the opinion of the WRC the employee “articulated a clear grievance and suggested how the work could be done in the safest way possible. This was not adequately considered by the respondent, leaving her with no real option but to resign”. This is the first decision of its kind to be made in Ireland which, despite not introducing the right to teleworking, requires the employer to prioritise the health and safety of employees and to take all possible measures to achieve this goal.

Change of applicable law : At the end of January, the management of the American Express Global Business Travel group and members of its EWC select committee signed an addendum to the European Works Council Agreement to take account of the consequences of Brexit. With effect from 1 January 2021, the addendum appoints the management of the Dutch subsidiary as central management’s representative on the EWC, in place of the UK subsidiary’s management. Accordingly, the parties have now chosen to place their EWC Agreement under the auspices of Dutch law, instead of UK law. Lastly, the agreement stipulates that the EWC’s UK members will continue to participate in it and that the United Kingdom shall continue to be subject to the Agreement. UK employees will continue to be taken into account for the purposes of determining the number of seats on the council and their allocation to the various countries represented.

Change of management representative : On 15 February, the Central Arbitration Committee (CAC), which is the UK authority responsible for resolving industrial relations disputes, issued a decision in a case brought against the management of Adecco by its European Works Council. Because of Brexit, the group, which has its head office in Switzerland, changed its central management representative on the European Works Council, and entrusted this responsibility to an Irish representative in place of the British representative. Management also announced that it wished to amend the agreement by placing it under the auspices of Irish law. As regards the appointment of a new central management representative, the CAC refers to the European Works Council agreement which, at the time of its latest revision, had already added a clause allowing management to appoint a new central management representative from an EU Member State, with effect from the end of the transition period following the United Kingdom’s actual exit from the EU, i.e. from 31 December 2020. In the CAC’s view, management had merely applied this clause and did not need to obtain the consent of a majority of EWC members. As far as plans to change the applicable law to Irish law are concerned, the CAC holds that the legal action taken by the European Works Council to challenge management’s plans was premature, as management had not made these changes unilaterally. However, “the CAC confirmed that the clause on the law applicable to Adecco’s EWC agreement – which currently provides for the application of UK law — could be amended only by way of agreement with ‘an absolute majority of the Employee Representatives’”, explains the EWC’s legal adviser, Philip Sack. This decision should act as a deterrent to managements of multinational companies who are considering unilaterally changing the law applicable to EWC agreements.

• Restructuring : On 10 February, the Schneider Electric EWC issued a detailed unfavourable opinion regarding a proposed reorganisation of the company’s Medium Voltage (MV) business, involving 370 job losses on two sites in Hungary and three sites in France. The EWC notes that management refused to allow the EWC to commission an economic assessment, arguing that this was a matter that concerned France only, whereas in the end, the EWC is being consulted about a reorganisation affecting both Hungary and France.

Energy transition : On 3 December 2020, the management of the Italian energy group ENI and the trade-union federations Filctem Cgil, Femca Cisl and Uiltec Uil signed an agreement on a new industrial relations model to support the energy transition process (see IndustriAll Global Union press release). Faced with the uncertainties and upheavals linked to the energy transition, the parties “acknowledge the need for an increasingly effective and participatory industrial relations system to accompany transformation processes”. This is about encouraging a “culture of the ongoing, continuous and inclusive bilateral relationship based on the quest for the best ways of achieving business growth and employee active participation” at all levels. The text establishes two joint committees: one is a group strategy committee and the other is a welfare committee. The parties also undertake to create a special committee to assess new ways of extending and applying “agile working” (teleworking).

• Salaire minimum : On 3 February, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) published the initial results of its annual update on minimum wages in 2021. Although most countries were cautious in the level of increase granted, low inflation rates meant that the value of minimum wages still went up beyond rises in consumer prices. The report emphasises that the policy response in the context of the Covid-19 pandemic is distinct from the approach taken during the 2008 global financial crisis, when many countries moved quickly to freeze nominal minimum wages.

• Returning to work after cancer : On 16 February, the Economic and Social Research Institute (ESRI) published a report on Returning to employment following a diagnosis of cancer: An Irish Survey). According to the authors, almost half of people returning to work after a cancer diagnosis reported that their diagnosis had a negative impact on their career. Females, younger workers, the self-employed and those working in the public sector are more likely to report a negative impact (see press release).