IR Notes

The EU Court of Justice has just found in favour of a German temporary worker, who was claiming an overtime payment of 72.32 euros from his employer, in a decision that will cost companies dear, not only in Germany but in all likelihood, in other countries, too. The temporary worker worked 13 days in August 2017, corresponding to 121.75 hours, then took ten days of paid leave, rather than completing 84.7 hours of work if he had not taken this leave. The applicable collective bargaining agreement provides for an additional allowance of 25% in respect of overtime hours worked beyond the threshold of 184 hours work in one month. The employer applied this provision of the agreement strictly, and did not pay the additional allowance for the month of August, arguing that the employee had actually “worked” 121.75 hours during that month. As leave is paid on the basis of equivalence to hours worked, it does not take account of any hours not actually “worked”. For his part, the temporary worker argued that the 84.7 hours that he would have completed if he had worked should be included in the calculation, and thus added to the 121.75 hours that he did actually work, making a total of 206.45 hours, thereby triggering payment of the 25% overtime supplement for the 22.45 hours completed over and above the threshold of 184 hours. The Federal Labour Court to which the temporary worker took his case – after losing twice before lower courts – asked the Court of Justice to rule whether Article 31, paragraph 2, of the Charter of Fundamental Rights of the European Union, and Article 7 of Directive 2003/88/EC concerning the organisation of working time (see Annual Leave) “must be interpreted as precluding a provision in a collective labour agreement under which, in order to determine whether the threshold of hours worked granting entitlement to overtime pay is reached, the hours corresponding to the period of paid annual leave taken by the worker are not to be taken into account as hours worked”. The Court of Justice notes that the exercise by the temporary worker “of his right to leave had the effect that the remuneration received for August 2017 was lower than that which he would have received if he had not taken leave during that month” (paragraph 38). It holds that “a mechanism for accounting for hours worked […] under which taking leave is liable to entail a reduction in the worker’s remuneration, which is reduced by the supplement provided for overtime actually worked, is such as to deter the worker from exercising his or her right to paid annual leave during the month in which he or she worked overtime” (paragraph 40). However, nothing should deter an employee from taking some or all of his or her four weeks of paid annual leave. This is both a matter of health and safety and, as a “principle of EU social law, [is] not only particularly important, but is also” laid down in the Charter of Fundamental Rights of the European Union (CJEU, 13 January 2022, Case C-514/30, Koch Personaldienstleistungen).

Social priorities of the EU’s French Presidency : The French President, Emmanuel Macron, has addressed the European Parliament to set out his vision of the EU and the priorities set by the French Presidency. In the field of social affairs, in a departure from the Presidency’s programme (see IR Notes 177), he highlighted several initiatives being treated with the same level of importance, thus implying that France will take forward several texts without setting any priorities. He said he wants the EU to offer “high-quality, skilled and better-paid jobs for everyone, with decent minimum wages”. He then called for efforts “to cut the gender pay gap, to create new rights for digital platform platform workers, to introduce quotas for women holding seats on companies’ management boards, and to combat all forms of discrimination”. This, he said, was “not just a matter of words or promises”, but about “texts we will collectively be receiving in the next few weeks, on which I want us to deliver concrete results during the coming six months” (see speech and video).

• Support for dismissed workers: On 20 January, the European Commission put forward a proposal to support 450 workers who had lost their jobs in the car industry in the Spanish region of Catalonia, with a package from the European Globalisation Adjustment Fund worth €2.8 million. Spain applied for support from the fund, to help workers laid off by ten Nissan suppliers, following the car maker’s announcement that it would be closing its production plant in Catalonia (see press release).

Social dialogue in the care and education sectors : The European Foundation for the Improvement of Living and Working Conditions has completed a gargantuan task, based on several representativeness studies, by drawing up a landscape report, which attempts to explain how social dialogue operates in the care services and personal services sectors, which at the present time come under four different European sectoral social dialogue committees (central government administration, education, human health, and local and regional government), and also in the social services sector, which does not currently have its own sectoral social dialogue committee. In total, the report covers 57 million employees in the EU and considers the various types of employers operating in these fields (public sector, for-profit private sector, not-for-profit private sector, etc.), who are sometimes in competition with one another and whose relative significance varies from one country to another. Alongside the two European trade union federations recognised as being representative, i.e. EPSU and CESI, Eurofound’s report includes the trade union federation UNI Europa, which is established in hospitals and private social services, and the employers’ organisation Social Employers, which also represents private social services. These two organisations are not represented on the four sectoral social dialogue committees. In total, the report lists 500 trade unions and around 400 employers’ organisations. It emphasises the examples of cooperation that already exist among actors and the various instances of overlapping between different sectors, without expressing an opinion on the desirability of creating a fifth sectoral social dialogue committee for social services. However, the European Commission now has a roadmap to hand for the purpose of reorganising social dialogue in these sectors. The European trade union federations welcomed the report in a joint statement and call on “all organisations [to] cooperate in a new  social dialogue structure”.

Increases in the minimum wage : The statutory minimum wage rose to 9.82 euros per hour on 1 January, with a further rise (to 10.45 euros) planned for 1 July 2022, and the Federal Minister of Labour has now confirmed the promise made in the coalition’s programme: the minimum wage will be raised to 12 euros on 1 October 2022. According to the trade union confederation DGB, “if a minimum wage is to keep poverty at bay, it needs to be based on a benchmark of 60% of the average income of a person in full-time employment. In Germany, this means at least 12 euros per hour” (see press release).

• Allowing employees to defer their leave if they fall ill : At the National Employment Council [Conseil national du travail] meeting on 21 December, the social partners delivered an opinion on bringing domestic law into compliance with EU Court of Justice case law, regarding the issue of employees deferring paid leave in the event of illness. After the European Commission threatened to initiate infringement proceedings, the Minister of Employment demanded that the social partners reach agreement on solutions in this area. At the present time, the law does not allow workers who find themselves unable to take their full holiday allocation during the year corresponding to their paid leave allowance, to defer any days of holiday to the following year. Likewise, the legislation does not allow them to take their leave at a later date if they fall ill during their holiday period, and thereby lose the benefit of leave days coinciding with their illness. The social partners emphasise that the solutions found are not intended to “call into question long-established arrangements” that have been agreed on for the last 60 years and form an “indivisible whole”, which the government will have to abide by when it transposes them into law. Moreover, the new legislation is not due to enter into force until 1 January 2023. The trade union confederation FGTB has expressed its satisfaction at the compromise reached (see press release).

Family leave reform : On 8 December 2021, Parliament definitively adopted the family leave reform, which will enter into force in August 2022 (see government press release). The reform will give both parents a quota of 160 parental allowance days until the child reaches the age of two. Parents will be allowed to transfer up to 63 parental allowance days of this quota to the other parent, other custodian, their spouse or the spouse of the other parent. Parents can use their days of parental leave allowance over several periods. In the context of paid employment, they will be entitled to either split the leave into four parts or to take part-time parental leave, while benefiting from a partial allowance. For the final stage of pregnancy, there will be a pregnancy allowance period of 40 daily allowance days. This quota of days will have to be used in a single continuous period and started 14–30 days before the estimated date of birth. In addition, the reform will introduce the right to take unpaid carers’ leave for up to five days per year, based on the Work-life Balance Directive of 2019.

Platform workers : As provided for by Order 2021-484 of 21 April 2021, which established collective representation for workers employed by platforms providing a private passenger car with driver [French abbreviation: VTC] – in other words, mainly those working for Uber – and by platforms using scooters and bikes to deliver their goods, the government published Decree no. 2021-1791 of 23 December 2021 relating to the election being held to assess the likely number of platform workers requiring representation. Furthermore, the Decree of 10 January fixed 9 to 16 May 2022 as the voting period (see press release issued by the Ministry of Employment). Once workers’ representation has been put in place, collective bargaining with platform representatives can commence, with a view to improving the working conditions of these workers who, according to the government’s way of thinking, continue to be self-employed. Building up a sectoral social dialogue in this way “from scratch” assumes significant levels of participation, both on the part of workers themselves and of the organisations representing them in these elections.

• Combatting the phenomenon of in-work poverty : On 18 January, the government presented a report by a working group, describing various tools for helping workers out of poverty. One quarter of Italian workers earn a low wage that is 60% below the median wage, and more than one in ten of them is living in poverty (i.e. in a household whose net income is 60% below the median wage). The report puts forward five proposals. They include: introducing a minimum wage in certain sectors of activity; tighter control of the minimum wages set by collective wage agreements and of the future statutory minimum wage set for specific sectors; and creating an allowance, paid by the State, to supplement low incomes (see press release, report and summary).

• LO confederation at odds with ETUC over the minimum wage: After adopting a statement at its Congress in December, condemning the proposal for a directive on adequate minimum wages in the EU (see press release), the trade union confederation LO is still angry with the European Trade Union Confederation (ETUC), which supports this proposal and would like it to see it adopted as soon as possible. According to the Nordic Labour Journal, LO has stopped paying its membership fee to the ETUC and will no longer take part in the organisation’s meetings (see article)

> Note: The Italian trade union confederation CGIL has published a detailed analysis of the 2022 Finance Law (see IR Notes 177), which contains a number of social provisions. The article on the labour market reforms in Spain, written by our expert Francisco Javier Gomez Abelleira, is still available on line. Flash Reports on Labour Law for September, October and November 2021 are now available on line.

Helping autistic people into the labour market : On 29 December, the government set out a support programme to help persons with disabilities to find a job. The 26,000 people employed at government job centres will be given training to improve the service provided to disabled people, and 15 Jobcentre Plus sites will be testing an autism framework, designed with the National Autistic Society (NAS). According to the NAS, one in 100 people is autistic and there are around 700,000 autistic people in the UK. The framework will ensure that meetings with autistic clients held at Jobcentres take place in an appropriate environment, and that local employers are educated in the additional requirements of autistic workers (see press release).

A new EWC : The British metals, energy and mining group GFG Alliance (31,000 employees) has established a European Works Council for its 18,000 European employees. The agreement, which was concluded on 5 November 2021 under Czech law, covers the group’s three divisions: Liberty Steel Group, Alvance Aluminium Group and Simec Energy Group. The text covers ten countries, including North Macedonia and the United Kingdom, whose 5 representatives make up the third-largest delegation, behind the Czech Republic and Romania, each with 7 members. In total, the EWC comprises 32 members (capped at 35) and a select committee comprised of one representative per Member State, i.e. 10 members in total. This EWC plays an important role in organising appropriate procedures with management, when exceptional circumstances arise. The agreement contains an adaptation clause, which also covers the eventuality of a Member State leaving the EU. The EWC meets twice a year and is consulted on the usual topics, as well as matters of health and safety, environmental issues and corporate social responsibility. Council members enjoy a right of access to company sites, and to 5 days of training once every two years. The EWC may be assisted by experts and a coordinator appointed by the IndustriAll Europe trade union federation. The EWC also includes three permanent working groups (one on health and safety, and two others concerning specific activities). The confidentiality clause requires management to state, in respect of each piece of information declared as confidential, the reason(s) why it is deemed confidential, for whom and for how long. The confidentiality obligation does not apply within the EWC, or to the company employees’ representatives or to the employees’ representatives on the supervisory board (see press release).

Disputes : The European Works Council of the Austrian group Mayr Melnhof Packaging (12,500 employees), which specialises in producing cartons, has condemned the group’s management for using a gap in Austrian transposition law as a pretext for not granting the EWC the resources it needs in order to operate. In point of fact, Austrian law does include provisions intended to ensure that the special negotiating body has all of the resources it needs to operate, with a view to negotiating a European Works Council agreement, and criminal sanctions are applicable if these resources are withheld. However, these provisions do not make any express reference to the operation of an existing EWC. As its rights were not being respected, the EWC referred the matter to an administrative authority, and called for the employer to face penalties under criminal law. In the end though, this authority decided not to take any action. It concluded that although central management was required by law to provide the resources involved in setting up the EWC, it was not obliged to assume the latter’s operating costs. Consequently, although penalties under criminal law were the only measures likely to act as a deterrent, the authority was unable to impose these on the employer. The EWC has therefore taken its case to the Vienna administrative court, with a view to having the matter referred to the EU Court of Justice for a preliminary ruling that Austrian law is in breach of EU law.

• Health and well-being : At the plenary session of the Axa group’s EWC on 30 November 2021, Axa’s CEO Thomas Buberl, and Council secretary Hedi ben Sedrine (see photo), added further content to the charter for the global health and well-being program for Axa Group employees, first signed in November 2020 (IR Notes no. 153). This “phase II” of the charter, includes access to tele-medical consultations, digital prevention and health information programs, and appropriate medical support in the event of serious illness, for the group’s 153,000 employees worldwide (see Axa press release).

Corporate Social Responsibility : On 20 January, the French energy group Engie (170,000 employees) signed a Global Framework Agreement on Fundamental Rights and ENGIE’s Social Responsibility with the three trade union federations IndustriAll Global Union, PSI and BWI and the four representative French trade unions CFDT, CFE-CGC, CGT and FO (see International Framework Agreement). The agreement adopts the usual standards applicable to global framework agreements, as well as the commitments given in the global agreement on fundamental rights, social dialogue and sustainable development concluded by Engie in 2010, and the group’s global agreement on health and safety in the workplace, signed in 2014. An innovation in the text is the invitation to its signatories to examine, within twelve months after the signature of the agreement, how international trade union federations can contribute to developing and monitoring the whistleblowing system triggered by violations of ethical commitments and of the vigilance plan, which are intended to prevent serious breaches of human rights. This plan and its associated yearly review will be published at the “World Forum” established by the agreement, which is a body that will oversee application of the group’s global agreements. Engie is giving a global commitment to provide a basic level of social protection, including the following minimum benefits: 1) 14 weeks’ maternity leave and 4 weeks’ paternity leave, all fully paid; 2) incapacity benefit: minimum coverage equivalent to 12 months’ wages; 3) healthcare benefit: coverage of hospital costs up to a minimum of 75%; 4) death cover for all of its employees including the payment of a minimum capital sum equivalent to 12 months of gross salary. The first two of these benefits are to be implemented within the next three years, but the other two were brought forward and have already been in place since the onset of the Covid-19 crisis (see IR Notes 141). The agreement also contains gender equality commitments, including setting the goal that one “half of managerial positions will be occupied by women by 2030”. Another noteworthy development is Engie’s commitment to actively support the principles of a “Just Transition” in accordance with the guiding principles of the ILO, and “to ensure that a Just Transition, redeployment and adequate training take place, while ensuring the protection of workers’ rights and interests”.
> See also: press releases issued by Engie, IndustriAll and PSI.

Work-life balance : In a working paper published by the European Trade Union Institute (ETUI), researcher Kalina Arabadjieva calls for lessons to be learned from the Covid-19 crisis, which has accentuated inequalities between men and women, with a view to reshaping the Directive 2019/1158 on Work-Life Balance. To tackle these inequalities, she is calling for a radical reshaping of current norms, entailing provisions for a “much lengthier, fully remunerated and flexible parental leave”, and for amendments to be made to other EU legislation, such as that on working time, by limiting employers’ rights to refuse requests for flexible working. These changes will also entail completely re-imagining the way in which unpaid domestic work can be reconciled with professional responsibilities, or even recognising a “right to care”, so that workers, regardless of gender, can perform the task of looking after others, “alongside their job”.