IR Notes

On 11 November, MEPs sitting on the European Parliament’s Committee on Employment and Social Affairs adopted, by a large majority (37 votes in favour, 10 against and 7 abstentions), the report on the proposal for a directive to improve the adequacy of minimum wages in the EU, first presented by the European Commission in October 2020 (see IR Notes 151). Discussions between Member States are also making progress, and the Employment and Social Affairs Council is expected to reach a political agreement (a “general approach”) at its meeting on 6 December. Parliament and the Council will then be able to embark on negotiations aimed at reaching a joint text, with a view to the directive being adopted under the French Presidency of the EU (during the first half of 2022). The negotiations will be difficult, because Parliament has strengthened the text proposed by the Commission, whereas the Slovenian Presidency of the EU has continually watered it down, in order to obtain the agreement of a majority of governments.
The Commission’s proposal is for “setting adequate levels of minimum wages”, though no further details are provided. The compromise amendments adopted on 11 November show that MEPs are going further and want this text to set “adequate and fair levels of minimum wages in order to ensure at least a decent standard of living of workers and their families”. The proposal for a directive does not impose any indicators that States must use to assess whether the minimum wage is adequate, but MEPs, for their part, plan to force States to use the two indicators commonly applied at international level, i.e. 60% of the gross median wage and 50% of the gross average wage, which will make comparisons easier. MEPs are also rejecting the idea, contained in the Commission’s proposal, of allowing Member States to waive the imposition of a minimum wage, either by authorising them to apply deductions from the remuneration paid to workers at a level below that of the statutory minimum wage, or by setting minimum wages below the level of the statutory minimum wage for certain categories of workers, such as workers with disabilities.
MEPs also stated that the text applies to all workers, in both the private and public sectors, and that collective bargaining for the purpose of setting minimum wages must be undertaken with “trade unions”, rejecting the vaguer formulation of “workers’ organisations”. They also want to strengthen the role played by collective bargaining:  the Commission wants 70% of workers to be covered by a collective agreement setting a minimum wage, but MEPs have raised this figure to 80%. It should be emphasised that this threshold was achieved by just six States in 2018, according to the Commission’s impact study, whereas 10 countries had reached the threshold of 70%. Significant progress will therefore be required to reach this level via the implementation of a national action plan, and this will undoubtedly deter more than one government. Co-rapporteur Agnes Jongerius (S&D, Dutch), quite rightly declared that “this legislation is a break with the past. During the previous crisis, lowering minimum wages and dismantling sectoral collective bargaining was the harsh medicine prescribed to many member states. Now, we are fighting to increase statutory minimum wages and to strengthen collective bargaining in Europe”.

Transparency of financial information : On 11 November, the European Parliament definitively adopted the directive amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (see legislative resolution). MEPs followed the Council’s position, approved on 28 September (see IR Notes 173), thereby paving the way for the adoption of this directive, which is commonly referred to as the “public country-by-country reporting directive” (CBCR). It should be borne in mind that “this directive will require multinational undertakings with revenue of more than 750 million euros to disclose publicly, in a specific report, the income tax they pay. This reporting will also contain a “list of subsidiary undertakings included in the consolidated financial statements of the ultimate parent undertaking”, plus a “brief description of the nature of their activities” and “the number of employees on a full-time equivalent basis” (Article 48c). As pointed out in recital 4, “public country-by-country reporting is also likely to have a positive impact on employees’ rights to information and consultation as provided for in Directive 2002/14/EC establishing a general framework for informing and consulting employees in the European Community, and, by increasing knowledge of undertakings’ activities, on the quality of the dialogue that takes place within undertakings”. The directive will shortly be published in the OJEU. Evelyn Regner (S&D), text rapporteur and President of the Committee on Women’s Rights and Gender Equality, posted the following comment on Twitter, “I’m proud to say today, that the European Parliament has not only heard the people’s calls for transparency in taxation for large corporations, but also answered these calls”.

• Support for restructuring: On 8 November, the European Commission proposed supporting 320 workers dismissed by 50 companies in the automotive sector in the Aragon region in Spain, who lost their jobs due to the COVID-19 pandemic and the shortage of semi-conductors. The total cost of these support measures is estimated at 1.7 million euros, 85% of which (1.4 million) will be paid by the European Globalisation Adjustment Fund, to help these people find new jobs through further education or training. The Aragon region will pay the rest (300,000 euros) (see press release).


• Consultation on a just transition: On 29 October, to nurture its thinking with a view to presenting a “Council Recommendation on addressing social and labour aspects of the just transition towards climate neutrality”, the European Commission launched a public consultation open to everyone (accessible in all EU languages), which ends on 19 November. The recommendation will provide Member States with guidelines on how to complete a just transition towards climate neutrality.

Railway sector : On 5 November, European social partners in the railway sector (CER and ETF) signed an autonomous agreement aimed at promoting employment of women. According to the signatories, this agreement will “make history as the first [European sectoral] agreement” on this topic (see European social dialogue). The aim of the agreement is to: 1) attract more women to the railway sector, in particular also in areas where women are largely under-represented; 2) increase gender diversity in the railway sector and put an end to gender-based professional segregation; 3) create an appealing working environment to position the railway companies and the sector as an attractive employer for women and to retain them in the long term; 4) create a work environment that abolishes stereotype thinking and male-dominated culture as a condition to retain women in the railway companies and the sector; 5) eliminate gender discrimination; 6) ensure equal opportunities for women and men in the railway sector at all levels and in all areas; 7) achieve gender equality. To this end, within 24 months, each business affiliated to the CER will define and implement a gender equality and diversity policy, taking into account the measures proposed in the eight policy areas specified by the agreement. Rebalancing the gender split in this sector is already a longstanding concern of the social partners, who in 2007, adopted Joint recommendations for a better representation and integration of women, which are monitored by means of reporting (see annual report, issued in 2020) (see press releases issued by the CER and ETF with access to the agreement in all EU languages). “There is not one single measure that will lead to an increase in the share of women workforce in the railway sector, but rather the package of measures as a whole,” says CER Executive Director Alberto Mazzola. “In 2 years’ time when we reassess the agreement, we will be able to say what had the most impact and identify shortcomings and therefore improve the text. I think the key point is that now companies will have a gender and diversity policy in place – even if most of them already did, there is now a common basis with specific requirements to take into account for such policy area. This will also allow for a better monitoring of the situation and see the progress made.”

• A significant rise in the minimum wage : The minimum net monthly wage for 2022 will be 3,750 HRK (€500), i.e. an increase of 10.3%, and for the first time, its level will be above 50% of the average net wage (actual figure: 52.7%). The gross minimum wage in 2022 will be 4,687.50 HRK (€627). This rise is stipulated by a government decree, issued on 28 October, following consultation with all social partners. In August, the median wage was 6,014 HRK (€802). The new minimum wage will therefore represent 60% of the median wage, which is in fact one of the thresholds suggested by the European Commission’s proposal for a directive on adequate minimum wages in the EU (see Lead story). The Croatian Employers’ Association (CEA) believes that such a large increase is inappropriate, given the current economic situation, and that it could jeopardise the viability of employers in labour-intensive sectors such as textiles and leather, in a context of rising raw materials and energy prices (see article on the vecernji website).

Compulsory vaccinations : Since 1 November, under government decree no. 598/2021, employers have been entitled to insist that employees must be vaccinated as a condition of their employment, in order to protect the health of other people in the workplace, depending on the nature of the workplace and the job in question. If an employee is unable to prove, within 45 days, that they have been vaccinated at least once, the employer can then grant them unpaid leave and relieve them of their duties. After one year’s unpaid leave, the employer can then terminate the working relationship with immediate effect, without citing any other reasons. This regulation was passed without any consultation with the social partners, even though certain employers’ organisations had been calling for such a rule. In practice, only a handful of employers are implementing this decree by insisting on vaccination, because a labour shortage is the main problem in many sectors, and employers fear that they will lose workers.

Climate Action Plan : On 4 November, the government presented its Climate Action Plan 2021, which sets out all of the measures to be taken, in each sector of the economy, in order to cut global greenhouse gas emissions by 51% by 2030, and to put the country on the path to achieving a net reduction in its emissions by no later than 2050. The document contains a chapter on just transition, placing the emphasis on social dialogue “which is core to developing a vision for how to implement the just transition framework”. However, this is a broader interpretation of social dialogue, which encompasses citizens and the self-employed, whilst at the same time including social partners on a specific body, known as the National Dialogue on Climate Action (NDCA). The document also contains a specific chapter on just transition for the Midlands region, which is due to gradually phase out peat extraction. Attention is also devoted to education and training, to ensure that the country will have the skills needed to develop new areas of vocational specialisations linked to the green economy.

• Teleworking : On 5 November, Parliament approved a new law on teleworking in the form of an amendment to the Employment Code. This amendment was passed in haste prior to the dissolution of Parliament, after the State budget had been rejected. This reform has been debated since March 2021, due to the pandemic’s impact on the number of people working remotely. In point of fact, 23.1% of employees were engaged in teleworking in the 2nd quarter of 2020 (see INE press release). The previous law, which was introduced into the Employment Code in 2003, for the purpose of transposing the European framework agreement on teleworking (revised in 2009), has proved inadequate to cope with the new issues arising (see also “A question for…” opposite).

Purchasing a subsidiary : The Engie group has chosen to sell its multi-technical services businesses, which are grouped together within its Equans subsidiary (76,000 employees), to the French group Bouygues. The latter will integrate its Energy & Services business into Equans, thereby taking the number of employees to 96,000 (see Bouygues press release and presentation). The Engie EWC, which auditioned all of the candidates planning to take over Equans (see IR Notes 173), has published a press release setting out its analysis of the offers submitted, though without expressing a preference for any of the candidates. In this document, the EWC argues that the contractual definition of social guarantees in an agreement “between the acquiring party and labour partners is required, so that the agreement can be legally enforceable. In concrete terms, all commitments made shall be formally defined (in all likelihood fully or partially in the SPA agreement) within a specific agreement so that the commitments are not only made between Engie and the acquiring party, but also between the new owner and [Equans’] personnel representatives”.

• Maintaining temporary membership for the United Kingdom: The management of the French pharmaceuticals group Sanofi and its EWC have concluded a supplemental agreement keeping the company’s UK employee representatives on the EWC on a temporary basis, during the 4-year EWC term that has just begun. A negotiation will commence at the end of this term, to determine whether this arrangement should be permanent or not.


• Digitalisation: The EWC of the Italian insurance company Generali has set up a new 9-member working group to focus on projects linked to digitalisation and its consequences for employment and vocational specialisations. The EWC and management will also shortly be embarking on discussions aimed at shaping the contours of the future “new normal”, and in particular, the use of teleworking.

Harassment and trade-union rights : The management of the Spanish hotel chain RIU Hotels & Resorts (24,000 employees) and the international trade-union federation IUF have signed two agreements relating to union rights and sexual harassment (see Harassment and violence at work), which is the first global agreement on this subject “built on the new International Labour Organization standard, Convention 190, on the elimination of gender-based violence and harassment in the world of work,” says the IUF (see press release). The agreement states that “if a RIU employee is found to have engaged in sexual harassment, the person concerned will be subject to sanctions, including the possibility of dismissal, regardless of their position within the company”.  The text of the agreement is also aimed at clients, who are to be informed of the company’s “zero tolerance policy in terms of sexual harassment”. This entitles local management to eject a client, following a complaint of sexual harassment made by an employee.

Pressure on the Irish government : Representatives of Ireland’s main trade union SIPTU (200,000 members) have called on the Irish government to take action to end the practice employed by multinational companies that appoint their EWC representative in Ireland or decide to transfer their headquarters to Ireland, thereby “seeking to circumvent the European Works Council (EWC) directive and so undermining workers in other EU states’ conditions of employment”. The union is calling on the government to strengthen the Irish transposition of this directive. “SIPTU has made an official complaint to the EU Commission about how negatively the EU Directive on EWCs has been transposed into Irish law”, explains Denis Sheridan (SIPTU’s expert on EWC matters), particularly as regards the absence of appropriate sanctions for Irish companies that do not comply with the directive.  According to SIPTU, it is estimated that “nearly 100 firms have made this move and have then curtailed the operation of their EWC” since Brexit (see press release).

• Trade-union networks: On 3 November, around 50 trade union representatives from the Caterpillar global union network met to discuss collective bargaining and working conditions (see IndustriAll Global Union press release). On the previous day, 30 or so trade union representatives from John Deere sites in Europe, Brazil and the US met online to discuss the economic and collective bargaining situation in the company worldwide and develop joint strategies for future social dialogue with the company (see press release).

Teleworking and occupational health : The European Agency for Safety and Health at Work has published a report examining the occupational safety and health issues associated with teleworking, and the measures and regulations put in place to prevent and manage these issues. Semi-structured interviews with employees and employers from three selected countries (Spain, France, Italy) highlight the positive and negative aspects of teleworking during the pandemic. The report ends with recommendations aimed at ensuring that teleworking can continue to function on a long-term basis, while at the same time protecting the safety and health of workers, and it emphasises the important role played by social dialogue and collective bargaining at company level.

• Long-term carers: The Policy Department for Economic, Scientific and Quality of Life Policies of the European Parliament has published a report (Policies for long-term carers), at the request of the Committee on Employment and Social Affairs, providing an in-depth analysis of formal and informal carers working in the long-term care sector in the EU, based both on a literature survey and on data analysis. It examines the characteristics of the care workforce, the types and forms of (atypical) employment, and working conditions. It contains a series of recommendations aimed at political decision-makers.