IR Notes

The new European Commission formed by its president, Jean-Claude Juncker, appears to be placing greater emphasis on the social dimension of the EU than the previous team: 1. Two vice-presidents of the Commission will oversee social issues: on the one hand, the Latvian Valdis Dombrovskis will be responsible for a curious combination of the euro and social dialogue, and on the other, the Finn Jyrki Katainen is entrusted with employment, growth, investment and competitiveness. 2. The Commissioner for Employment and Social Affairs, the Flemish Christian democrat Marianne Thyssen (photo), represents a country which was a founder member of the Union and which, like Jean-Claude Juncker’s own homeland, has a strong tradition of social dialogue. She is “someone who understands the need for dialogue with trade unions,” Bernadette Ségol, the general secretary of the European Trade Union Confederation, was keen to stress. 3. Her mission letter gives her a right to intervene in the European Semester system, where she will be involved in drawing up recommendations for the Member States, particularly with regard to labour market reform. 4. The Directorate General for Employment and Social Affairs will pick up units from other DGs in charge of dossiers linked to training, equal treatment and the rights of persons with disabilities. These are some positive signals in support of social dialogue. The European parliamentarians of the Committee on Employment and Social Affairs will no doubt be looking to gain assurances about the more socially minded orientation of the new team when, on 1 October, they interview Marianne Thyssen, who has defined herself as the new Commission’s “social face”.

• Reducing the tax burden on labour: The representatives of the Member States of the euro area (Eurogroup) on 12 September adopted a statement concerning the common principles to be observed in order to reduce the tax burden on labour. “Shifting taxes away from labour is potentially the single most important boost for jobs right now,” Council President Herman Von Rompuy likewise declared on 16 September, (see speech, in English).


• Intervention in support of employees laid off by PSA Peugeot-Citroën: The European Commission on 11 September proposed to provide France with 12.7 million euros from the European Globalisation Adjustment Fund (EGF) (see press release). The amount is intended to help 2,357 workers made redundant by carmaker Peugeot Citroën Automobile (PSA) to find new jobs.


• Workshop for European works councils in the financial sector: The UNI Europa Finance federation held a workshop on 10 and 11 September in Potsdam (Germany) for trade union representatives of several major European banks (Deutsche Bank, Allianz, BNP Paribas Fortis, UniCredit, Barclays and Société Générale). The aim was for participants to improve their practical work in the European works councils (EWC) and to work to establish transnational trade union alliances in these groups (see press release, in English).

• No impediment to posting of workers from non-member states: The European Court of Justice has handed down a judgement (CJEU 11 September 2014, case C-91/13) which reminds the Member States that they cannot impede the entry onto their labour market of employees originating from non-member countries posted to their territory by a company from another Member state of the EU to carry out a service. In this particular case, Essent, a Dutch company, placed an order for the erection of scaffolding with another Dutch enterprise, which had in turn called in a German provider. The latter dispatched 29 Turks to work on the building site. The Dutch authorities imposed a fine of 264,000 euros on Essent for failing to obtain work permits for these nationals – wrongly in the eyes of the Court, which found the requirement of demanding a work permit excessive, and at the same time recommended a simpler system of declaration prior to posting.


• The effects produced by a collective agreement must continue to be observed if an undertaking is transferred: In the event of an undertaking being transferred, directive 2001/23 of 12 March 2001 provides that the transferee which takes over the employees shall continue to observe “the terms and conditions agreed in any collective agreement” until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement (Article 3 (3)). In a dispute resolved by the European Court of Justice (CJEU, 11 September 2014, case C-328/13, Austrian Confederation of Trade Unions), the question at issue was whether the principal of continued application is also valid if the collective agreement has been terminated just before the transfer and national legislation provides for the effects of the collective agreement to continue to be observed in the event of termination. The Court replied in the affirmative, ruling that the effects of the rescinded collective agreement continue to apply until the expiry of the observance period or the entry into force of a new collective agreement or a new individual agreement concluded between the employer and the employee.


• A public contract cannot impose compliance with the set minimum wage on employees working in another Member State: The European Court of Justice has delivered its judgement (CJEU 18 September 2014, case C-549/13, Bundesdruckerei GmbH) in an action brought by a German printing company against the city of Dortmund, which wished, in the context of a public contract, in compliance with regional legislation, to oblige both the printing company and its subcontractors to observe a minimum wage of 8.62 euros per hour. The company, which intended to assign part of the contract to a Polish subcontractor, challenged this provision – justifiably, in the eyes of the Court, which took the view that, while the set minimum wage corresponds “to that required in order to ensure reasonable remuneration for employees in the Member State of the contracting authority in the light of the cost of living” on that Member State’s territory, it “bears no relation to the cost of living in the Member State in which the services relating to the public contract at issue are performed and for that reason prevents subcontractors established in that Member State from deriving a competitive advantage from the differences between the respective rates of pay”. The regional provision “goes beyond what is necessary to ensure that the objective of employee protection is attained”.

• Trade union for people working from home: A trade union for home workers held its first congress on 16 July. Of the around 500,000 people who carry out their professional activity from home, only 8% are said to benefit from an employment contract and to pay social security contributions. The remainder belong to the informal economy. The trade union has proposed that its members should be able to register (and pay contributions and taxes) and that they should be paid in line with the minimum wage (equivalent to 174 euros per month) after five years of work.

• Higher minimum wage: On 15 September the government approved an increase in the minimum wage of 700 koruna (over 25 euros). This takes it to a new level of 9,200 koruna (approximately 333 euros), although it remains below the poverty threshold, which is set at 9,600 koruna (nearly 350 euros).


• Civil Service Act: On 10 September, following 13 years of discussions, the government approved an amendment of the country’s Civil Service Act which is scheduled to take effect on 1 January 2015. While the principal objective is to “depoliticise” public service – the EU was threatening to cease payment of European funding to the republic unless a law to this effect was passed – the new text is also likely to mean important changes to the working conditions of the 70,000 civil servants.

• Workforce thresholds: The social partners on 9 September defined their social agenda (“Relevé de suivi de l’agenda social“, in French). Their programme includes three negotiations, including one on social dialogue. This negotiation will begin in October and be concluded by the end of the year. It will deal with the question of workforce thresholds that trigger the set-up of staff representative bodies, as well as improving the way the latter work.

• Strategy to promote equal treatment: The equal opportunities minister Lydia Mutsch on 16 September presented a strategy comprising 11 steps for promoting gender equality, as well as a communication campaign urging women and men to work together to achieve this goal. A key measure is the introduction, from 2019 onwards, of a 40% quota of women in senior management positions in the public sector and in companies in which the state is a shareholder.

• Right to be accompanied during a preliminary interview: According to the labour code, a preliminary interview must take place between the employer and the employee prior to any disciplinary sanction. Case law was divided on whether the employee could be accompanied by an advisor or not. Explicitly following the example of French legislation, the legislator passed law No. 77/2014 (published on 26 June) which expressly stipulates that the employee has the right to be accompanied, if so requested, by a lawyer or representative of his or her trade union.

• Airbus: The negotiations are about to commence on an agreement to involve the workers in the future Airbus SE, whose constitution is scheduled for 2015. This will provide an opportunity to redefine the current architecture of the various European works councils of the group existing in particular at holding company level and in the different divisions.

• ArcelorMittal: The management and the representatives of the European works council must revise the steelmaking group’s EWC installation agreement in particular to bring the works council in line with the reduction in the group’s European workforce, which has gone down from 136,000 in 2006 to 82,000 at present. The number of members – 54, plus the same number of alternates – will no doubt be reduced.


• Microsoft: The negotiation to set up a European works council will not now be initiated after the Italian trade union CGIL, which had requested the opening of negotiation along with the CGT (France), finally withdrew its request. The directive relating to European works councils requires that such a request is formulated by employee representatives from at least two countries.

BNP Paribas: The management of the BNP Paribas bank on 16 September signed its second European agreement, following on from the one on employment sealed in July 2012 (see Interview). The new agreement concerns professional equality and was concluded with the UNI Europa Finance trade union federation, the FECEC and the three members of the EWC secretariat. The text deals with the topics of recruitment, promotion, access to vocational training and reversing the wage disparity between women and men by implementing an action plan at each group entity. The signatories also aim to promote diversity, the work-life balance and the establishment of women’s networks within the group. One provision allows for professional support during and on returning from maternity leave (see Press release, in French).

• H&M: The International Labour Organisation (ILO) and the textile group H&M (116,000 employees) on 15 September forged a partnership to promote sustainable global supply chains in the garment industry. The agreement will include joint work on industrial relations and wages, training and skills development in factories H&M source from, as well as strengthening employers’ and workers’ organisations in the global garment industry (see ILO press release)

• Employment and manpower costs: The number of persons employed increased by 0.3 % in the EU and by 0.2 % in the euro area in the second quarter of 2014 compared with the previous quarter, according to estimates published on 12 September by Eurostat. Eurostat has also released statistics on the pattern of labour costs (see press release) and on the job vacancy rate in the EU (see press release).


• Erosion of social justice: A study by the German foundation Bertlesmann Stiftung (Social Justice in the EU – A Cross-national Comparison, in English) has revealed a fall in the social justice index calculated by the foundation since 2008. The latest survey, following on from those conducted in 2008 and 2011, shows that the situation has deteriorated in numerous countries (Spain, Greece, Portugal, Ireland and Hungary). Most troubling in the foundation’s eyes is that social injustice is primarily impacting on the younger generations, since 28% of children and young Europeans are exposed to the risk of poverty or social ‘exclusion, compared to 26.1% in 2009.


• Towards a common migration policy: The European Commission and the OECD on 18 September published a joint report entitled “Matching economic migration with labour market needs”. The document makes the case for 1. Fostering intra-EU labour mobility to ensure a better allocation of skills; 2. Better integrating non-EU migrants to ensure a smarter use of their skills; 3. Attracting the skilled migrants needed on the EU’s labour market.

The new Commissioner for Employment and Social Affairs will be involved in drawing up the country-specific recommendations, the president-elect of the European Commission, Jean-Claude Juncker, has explained. What are they? These annual recommendations drawn up by the Commission indicate to the Member States the objectives to be achieved, in particular with regard to employment policy and labour market reform. The draft recommendations are drawn up in May and subsequently adopted by the college of commissioners. They are then discussed in the Council for adoption in July. After that, the Member States are invited to implement them. The European social partners are consulted as part of this process, and the Member States are also asked to consult their social partners on the implementation of the recommendations and the national reform programme, which they must submit to the Commission. See the Eurofound European Industrial Relations Dictionary (in English) for further information.