IR Notes

As predicted, the Court of Justice upheld the opinion delivered by its Advocate General in January this year (see CJEU, opinion, 20 January 2020, Case C‑928/19 and IR Notes 156 in the appeal by the European Public Service Union (EPSU) against the European Commission. The federation criticised the Commission for its refusal to submit to the Council a proposal for a decision to implement an agreement concluded by the European social partners as a directive, in order to make the content of the agreement applicable in all Member States. The Court of Justice confirms the ruling handed down by the EU court and attacked by the EPSU. The court takes the view that “when the Commission receives from the social partners concerned a request to implement [an agreement] at EU level”, it must not only “examine the representativeness of the signatories to that agreement and the legality of its clauses”, but also “assess whether, in the light inter alia of political, economic and social considerations, implementation of the agreement at EU level is appropriate” (see CJEU, 2 September 2021, C-928/19, EPSU and press release issued by the Court).  In other words, when the social partners conclude an agreement, the Commission’s role is not limited to purely legal oversight: it has a broader discretionary authority – based on the fact that it holds sole power of initiative at EU level – enabling it to decide whether to submit an agreement to the Council or not submit.
Obviously, the European trade union movement has expressed its disappointment. That same day, EPSU General Secretary Jan Willem Goudriaan, who first raised the dispute, expressed his dissatisfaction: “This is a very damaging ruling. It is now for the Commission to undo the harm it has caused, restore trust and work with the social partners on a transparent processing of EU sectoral and intersectoral social partner agreements.” (see press release). Luc Triangle, General Secretary of IndustriAll Europe, is equally critical: “Trade unions are shocked to see the ECJ disregarding social dialogue when it has proved its value in dealing with the COVID-19 crisis”, (see press release). For its part, the ETUC announced that it now wants “an urgent meeting with the European Commission to seek clarity and confirm a process that ensures that social partner agreements” can progress into EU law as the EU treaties envisage. Esther Lynch, ETUC Deputy General Secretary, comments as follows: this “ruling reinforces the widely held view that the European Court of Justice struggles to understand labour/industrial relations and should have a dedicated labour chamber with judges with relevant experience.” (see press release).
For its part, the Commission can only be satisfied with this outcome. A Commission spokesperson offers the following explanation: “The Court stated that the Commission retains its power of initiative in circumstances where the social partners call for their agreement to be implemented at EU level by way of a Council decision”, adding for the benefit of IR Notes readers: “the Court’s view is that a different interpretation of Article 155 would result in the interests of the social partners – who are the sole signatories to an agreement – taking precedence over the Commission’s remit of promoting the general interest of the European Union.”   For the moment, “at this stage, the Commission is unable to offer a detailed analysis of its effects”. Under the European Pillar of Social Rights Action Plan, adopted on 4 March (see IR Notes 159), the Commission has promised an initiative for 2022, aimed at sustaining a social dialogue at both EU and national level. With this project in mind, it launched an informal consultation of European social partners in May of this year. The aim is therefore to reopen a dialogue in the coming months and to review the role played by European social partners at sectoral level, as well as the resources to be mobilised at EU level in order to sustain their dialogue.

Democracy at work : The European Parliament’s Committee on Employment and Social Affairs has taken formal note of the 208 amendments made to the draft report submitted by MEP Gabriele Bischoff (S&D), entitled “Democracy at work: A European framework for employees’ participation rights and the revision of the European Works Council Directive”. These amendments will undergo an initial scrutiny this Thursday 9 September, and the rapporteur is keen to reach a broad consensus on this text. Among the most hotly debated amendments will be those seeking to remove from the report the provisions aimed at providing better protection for workers who benefit from worker participation in organisational decision-making (co-determination) when their company is converted into a European company or involved in a cross-border merger. The report could be adopted by the Commission in late October, paving the way for its adoption at a plenary meeting in November. It is interesting to read the amendments proposed by Dennis Radtke (EPP), who is going to start drafting another report specifically dedicated to revision of the European Works Council Directive. His amendments are certain to feature in this forthcoming report. For example, he asks for the European Works Council’s opinion to be “taken into account in company decisions and […] delivered” before consultation is completed at the respective level. He also calls for amendments to “ensure access to justice for special negotiation bodies and European Works Councils”, to “introduce effective, dissuasive and proportionate sanctions”, to “include joint ventures, franchise systems and contract management in the scope of the Directive” and to “secure that ‘representative agent’ and ‘central management’ location are based upon objective criteria” (see amendment 203).

Dismissal linked to a disability : On 15 July, the Court of Justice issued a ruling concerning a prison guard who, from birth, had suffered from a hearing defect in his right ear. He had worked as a warder in an Estonian prison for nearly fifteen years, before management decided to dismiss him on the grounds that his hearing acuity did not meet the minimum sound perception thresholds set by a regulation relating to prison staff health requirements and supervision, which came into force in 2013. After noting that this regulation “establishes a difference in treatment based directly on disability” (see. Disability), the Court holds that a “concern to ensure that [prison services] remain operational and function smoothly” thus constitutes “a legitimate objective” that may warrant discrimination being applied. Moreover, “the fact that a person’s hearing acuity has to meet a minimum sound perception threshold as determined by national legislation, may be regarded as a ‘genuine and determining occupational requirement’, within the meaning of Article 4, paragraph 1, of Directive 2000/78 du 27 November 2000, for the purposes of working as a prison guard.” However, the Court of Justice notes that hearing tests are conducted without the subject wearing a hearing aid, whereas the requirements covering visual acuity allow the subject to wear glasses or contact lenses. It also notes that the regulation applies in general terms to all guards “without any possibility of a waiver, regardless of the establishment to which they are assigned or the job they do”. Lastly, it points out that the directive obliges the employer to provide “reasonable accommodation” to enable a person with a disability to have access to, participate in, or advance in employment. In the Court’s view, EU legislation is at odds with the disputed regulation, which makes it “absolutely impossible to continue to employ a prison guard whose hearing acuity does not meet the minimum sound perception thresholds set by this regulation, without permitting a check to be made as to whether the employee in question can discharge the said duties, if necessary after reasonable accommodation has been provided” (CJEU, 15 July 2021, Case C-795/19, Tartu Vangla no English version available).

• Remuneration of stand-by time: In a ruling relating to the application of Directive 2003/88 of 4 November 2003, concerning certain aspects of the organisation of the working time of a member of military personnel, the Court of Justice describes, in very clear terms, the disconnect between the way in which certain periods of stand-by time are treated as actual working time (see On-call working), for health and safety reasons, and the way in which actual working time is remunerated; the latter may differ from the remuneration paid for hours actually worked. It points out, as it did recently in the ruling of 9 March 2021 (Case C-344/1, Radiotelevizija Slovenija), that “the way in which workers are remunerated for periods of stand-by time is not covered by Directive 2003/88 but by the relevant provisions of national law. Consequently, that directive does not preclude the application of a law of a Member State, a collective labour agreement, or an employer’s decision which, for the purposes of the remuneration of guard duty, makes a distinction between the treatment of periods in the course of which work is actually done and those during which no actual work is done, even if those periods must be regarded, in their entirety, as ‘working time’ for the purposes of that directive.” Thus, a stand-by period during which “the member of military personnel is required to remain at the barracks to which he or she is posted, but does not perform actual work there” may be “remunerated differently than a stand-by period during which he or she performs actual work”. This applies to all workers (CJEU, 15 July 2021, Case C-742/19, B.K.).

• Works councils’ environmental competence : Law no. 2021-1104 of 22 August 2021 combating climate disruption and boosting resilience against its effects has broadened the competence of economic and social committees (French acronym ‘CSE’ – the new name for works councils) in respect of environmental issues. The CSE is required to consider the environmental consequences of the decisions taken by the employer. The employer must inform and consult the CSE about the environmental consequences of its plans relating to the company’s organisation, management and general progress, for example a restructuring. The employer must also inform it of the environmental consequences of the company’s activity. The competence of the expert assisting the CSE on economic, social and financial matters is extended to encompass environmental issues.

• Suspension of unvaccinated employees : Several courts dealing with the substance of a case have accepted that an unvaccinated employee can be suspended without pay. It should be borne in mind that in Italy, the obligation to be vaccinated applies only to staff in the care sector. In these cases, employers have suspended employees who did not have a “health pass”, not as a sanction, but because their health status (not having a vaccination certificate issued by an occupational health doctor) was incompatible with the duties assigned to them (contacts with service users, enclosed spaces, etc.). These decisions are taken on the basis of the obligation incumbent on the employer to provide a safe working environment, and refer in particular to the inclusion, by European law, of Covid-19 in the list of biological agents against which the employer has a duty to protect its employees. The employers do not appear to be collectively opposed to the idea of a general obligation for all workers to be vaccinated, but the trade unions fear this will be used as a pretext to dismiss or discriminate against workers.

• Financial sector : On 1 September, the Government Council gave its agreement to the declaration confirming that the 2021-2023 collective labour agreement for bank employees would be generally binding (see press release). This agreement was renewed by all of the social partners, via an agreement dated 11 June (see press release issued by LCGB and the employers’ organisation ABBL). In particular, the new agreement introduces the right to disconnect and provisions covering the prevention of psychosocial risks. It was signed at the same time as the new collective labour agreement covering the insurance industry.

Change of governing law :

On 11 August, in a dispute between the European Works Council (EWC) of HSBC bank and its management, the Central Arbitration Committee (CAC), which is the UK authority responsible for resolving disputes involving EWCs, delivered a surprising decision concerning the multinational company’s change of legal representative at EU level. It should be borne in mind that multinational companies whose registered office is not in the EU have to appoint a representative, in an EU country, who will be responsible for relations with the group’s European Works Council. Like many multinational companies, HSBC had appointed its legal representative in the UK and negotiated the creation of its EWC under UK law. Once the UK left the EU, HSBC management unilaterally decided to appoint a new legal representative in Ireland. It took the view that as a result of this move, the agreement would then have to be subject to Irish law, without the need for a revised agreement, approved by a majority of EWC members. The CAC agrees with HSBC management and holds that a change of representative means that the law governing an agreement will change automatically, without the need to first obtain the EWC’s approval. This decision could have serious consequences for all EWCs of multinational companies that decide to transfer their representative from the UK to another Member State. For example, they would no longer be able to bring legal action before the CAC, as UK law would no longer apply to the agreement.

Disagreement over restructuring : On 19 July, the international trade-union federation IUF published a press release supporting the unfavourable opinion delivered, on 28 June, by the Danone Consultation and Information Committee (CIC) (its European Works Council) regarding the “Local First” reorganisation, which seeks to achieve 700 million euros’ worth of savings through 4,406 job losses (a net figure of 2,267 job losses when recruitment is taken into account). Based on the information provided by management and the expert report, the opinion is critical of “the frenetic pace of reorganisation”, which “weakens the staff and increases employees’ exposure to stress and psycho-social risks”. The project is “essentially motivated by stock exchange considerations” and risks, due to “the externalisation of certain functions”, leading “to the transfer of jobs to low-cost countries” (e.g. information technology). The CIC calls on management to “ensure a regrading and training programme that works well for employees and compensates those who cannot be regraded in accordance with the extent of the detriment suffered”.

Fundamental rights and social responsibility : On 1 September, the Board of Management, the General Works Council and the World Employee Committee of the German car maker Daimler and the international trade union federation IndustriALL Global Union have renewed their global agreement on social responsibility and human rights. The first agreement was signed in 2002. In particular, IndustriAll highlights the parties’ desire “to find solutions in countries that have not ratified” the ILO conventions that Daimler pledges to honour; the fact that the agreement contains “strong commitments and binding obligations for management at all levels” and a “clear commitment on neutrality of the company in the case of union organizing drives”. This agreement also includes a reference to ILO convention 190 on violence and harassment at work and sets out details of the policies and mechanisms put in place for exercising due diligence along entire supply chains. The new text also contains a paragraph on the use of artificial intelligence, to ensure that it remains under human control (see IndustriAll Global Union press release and Daimler press release).