IR Notes

The days are long gone since social dialogue and collective bargaining were regarded as outdated practices that were incompatible with competitiveness and economic growth (see IR Notes 157 and Collective bargaining). Since the Juncker Commission held office, and particularly since the arrival of the Von der Leyen Commission, “collective bargaining is no longer seen as part of the problem but part of the solution”, emphasises Torsten Müller, a researcher at the European Trade Union Institute. For example, it is mentioned in several recent Commission initiatives: first of all, the proposal for a directive on minimum wages (see IR Notes 151), which invites Member States to achieve a target of 80% of workers being covered by collective agreements (compared to a European average of 56% in 2018). In this text, promoting collective wage bargaining is regarded as a method of leverage for raising minimum wage levels in Europe. The use of collective bargaining is also one of the solutions recommended by the proposal for a directive to improve the working conditions of platform workers (see IR Notes 176). It also features in the guidelines on the application of European competition law to collective agreements concerning the working conditions of self-employed workers. The aim is to allow them to negotiate collective agreements without these being regarded as ‘anti-competitive agreements’ that infringe competition law (see Collective bargaining and competition law). Another publication featuring social dialogue is the communication entitled Better working conditions for a stronger social Europe: harnessing the full benefits of digitalisation for the future of work, in which the Commission announces that it “will support social dialogue in platform work, through capacity-building activities for social partners, so that they can initiate social dialogue on algorithmic management”.
However, this multidimensional promotion of collective bargaining and social dialogue comes up against a major obstacle: social dialogue is very limited or even non-existent in some countries and/or sectors, and the actors involved in it – especially the trade unions – have been suffering a widespread decline for several decades now, which has been accentuated by the Covid-19 crisis.
Hence the new initiative unveiled by the Commission which, on 28 September in all likelihood, will put forward a package of measures to strengthen social dialogue. This will include:
1/ a communication on the role played by social dialogue in the EU, which among other things will have to explain how the agreements concluded by European social partners can be converted into directives, in order to bring an end to the controversy stirred up by the EPSU case (see EPSU case and IR Notes 169). It is expected to emphasise that a strong involvement of social partners is also key for ensuring “fair transitions to a climate-neutral and digital economy and for shaping the future of work.” It will also contain proposals for modernising social dialogue at EU level, among other things by adopting the suggestion made in Andrea Nahles’ report, of designating a specific person to be responsible for social dialogue at each of the Commission’s directorates-general, with the aim of involving European social partners more closely in EU policy-making, and even in policies not directly related to social issues (see IR Notes 157).
2/ A recommendation to Member States to strengthen social dialogue at national level. In a number of countries, “social partners lack capacity. This hinders their involvement in relevant reforms and policy-making and their ability to conclude collective agreements”, the Commission emphasises. “This affects the balancing of interests of both sides of industry and hampers finding well-adjusted solutions and negotiating wage developments”. The recommendation is expected to encompass three areas: 1/ consulting social partners on the design and implementation of economic, employment and social policies; 2/ encouraging social partners to negotiate and conclude collective agreements in matters relevant to them, while respecting their autonomy and the right to take collective action; 3/ support for increasing the capacity of social partners.

• Directive on transparent and predictable working conditions : Member States had until 1 August this year to transpose Directive 2019/1152 of 20 June 2019 on transparent and predictable working conditions in the European Union into their domestic legislation (see Commission press release and IR Notes 122). The Commission points out that States can rely on the European Social Fund Plus (ESF+) to adopt initiatives encouraging application of the new rules (see press release).

An autumn rich in social developments : The first EU legislation on adequate minimum wages is due to be adopted by Parliament in September (see Factsheet and press release issued by the European Parliament). A debate on this law is scheduled for the plenary session on 13 September. It should then be voted on at one of the subsequent sessions. This law obliges EU countries to ensure that their national statutory minimum wage allows a decent standard of living. The law should encourage genuine growth in wages and help to reduce in-work poverty and the gender pay gap (see IR Notes 151). The directive on improving the gender balance among non-executive directors of companies listed on stock exchanges, on which the Council and the Parliament have reached agreement, is due to be formally adopted at a plenary session. Once it has entered into force, it will introduce transparent recruitment procedures into companies, so that at least 40% of non-executive director posts or 33% of all director posts will be occupied by the under-represented sex (see Parliament press release and IR Notes 188). MPs will also commence negotiations with the Council on the Pay Transparency Directive (see IR Notes 159), which will oblige companies to disclose the pay of men and women who hold the same job and perform the same duties. This in turn will make it easier to produce wage comparisons and to highlight gender pay gaps (see press release issued by Parliament). The Czech Presidency of the EU has set itself the objective of reaching agreement on this law by the year end. It will then have to be formally adopted by the Council and the Parliament during the first half of 2023. Parliament will also pronounce on new rules concerning the use of artificial intelligence (AI). This legislation should set clear standards that reflect EU values and guarantee the protection of fundamental rights. A further challenge will be to turn this theme into a subject for social dialogue. As far as working conditions on digital platforms are concerned, the Czech Presidency’s ambition is to have a Council negotiating mandate adopted by the end of the year, so that negotiations can subsequently commence with Parliament. In addition, on 13 September, the European Commission is due to unveil its proposal to banish products derived from forced labour and, on 28 September, a proposal for a recommendation on minimum income and a proposal for a directive on the protection of workers exposed to asbestos. Lastly, the European Parliament’s Committee on Employment and Social Affairs will adopt the report produced by Dennis Radtke (EPP) on revision of the European Works Council Directive, which suggests that the report may be adopted at a plenary session by the year end.

The employer’s role in cases of harassment : The European Court of Human Rights (ECtHR) has pronounced judgment on a Romanian case concerning the sexual harassment inflicted on a cleaning lady by a station manager employed by the State-owned railway company. While the main point concerned failings on the part of the State and of the judicial system, the ruling nevertheless highlighted failings on the part of the employer, which would appear in their own right to constitute a breach of Article 8 of the European Convention on Human Rights (Right to respect for private and family life). The ECtHR notes that despite the existence of an internal policy prohibiting any behaviour harming a person’s dignity and encouraging the reporting of any harassment on the part of management, the head of passenger safety, who had been informed of the situation and listened to the parties concerned, had refused to examine the case and advised the victim to go to the police if she considered it necessary. He also subjected the victim to a confrontation with the station manager in his office without giving her advance warning. Moreover, there was nothing to indicate that he had referred the applicant to someone else at the company who might have been able to help her to solve the problem or that he himself had alerted the competent person at the railway company. The Court noted that no internal investigation had been carried out. In this context, the Court held that mechanisms had not been put in place at employer level to deal with sexual harassment in the workplace (see press release EN and ruling).

• Social services : European social partners in the social services sector (the Social Employers and EPSU) have embarked on a new European project (FORTE) to highlight the needs of the social services sector in terms of skills and training. The project will also address the need to ensure safe and healthy working conditions in the sector, so that the workforce needed can be attracted and retained (see EPSU press release and page dedicated to the project on the Social Employers website).

Purchasing power : the law on emergency measures to protect purchasing power and the amending finance law for 2022 have been published. To combat the effects of inflation, a “value-sharing bonus” will see employees paid up to 3,000 euros per year (or even 6,000 euros in companies that have already introduced profit-sharing agreements). No social security contributions or income tax are payable on this bonus by employees who have been paid less than 60,442.20 euros during the 12 months preceding its payment. With their employer’s agreement, every employee can also convert any days or half-days they acquire under the reduction in working hours (RTT) scheme between 1 January 2022 and 31 December 2025, into pay.

Labour market reform : Some of the key measures of the agreement on labour market reform are as follows: if a redundancy is disputed, the employee will leave the company immediately at the end of their notice period and will then receive unemployment benefit representing 80% of their wage. As far as the criteria governing collective redundancies are concerned, the employer is entitled to move away from the “last in, first out” principle. An employee on a fixed-term contract will be given a permanent contract after working for the same employer for 12 months (instead of 24 months as at present) during any given 5-year period. Subject to certain conditions relating to how long they have worked in the labour market, employees will be able to spend up to 44 weeks of training, while receiving 80% of their wage or salary, up to a limit of approximately 6,500 euros per month.
> Find out more: press release, analysis of the agreement sent by the employers’ organisation Svenskt Näringsliv and analysis by the Unionen trade union.

• Mental health : On 11 August, the Scottish government introduced a free online platform offering practical ways for employers to boost mental health in the workplace. It offers training courses, advice, guidance on the legal duties of businesses, and specialist third-party contacts. The government justifies this action by referring to recent research showing that poor mental health costs Scottish employers over £2 billion per year, and that for every £1 spent on mental health interventions, employers get back £5 in reduced sick days and increased productivity (see press release).

Ultra-liberal employment legislation : Despite the appeal issued by the European Trade Union Confederation (ETUC) and the International Trade Union Confederation (ITUC), on 17 August, President Zelenskyy signed into law Bill 5371, which excludes employees of companies with fewer than 250 employees from the scope of employment legislation and collective bargaining.  As a result, the terms of employment of 70% of Ukraine’s workers will be fixed solely by their individual contract of employment. In a joint letter to EU leaders, published on 24 August (see also joint letter of 14 July), the General Secretaries of ETUC (Luca Visentini) and ITUC (Sharan Burrow) emphasise that this law “will cause irreparable damage to the industrial relations in the country”.  The two confederations argue that “this law is a new stage in the persistent attack on trade unions of Ukraine, motivated by oligarchs behind the ruling party, and others, who do not care for the interests of the people.” Both trade union leaders call on the EU not to “stay silent about these actions” and to clearly and unequivocally condemn “these repeated acts, which are hostile to EU values and principles”.

Review : On 25 July, in Berlin, the Deutsche Post DHL group, and the international trade-union federations ITF and UNI Global Union reviewed the joint protocol signed under the auspices of the German National Contact Point for the OECD directives in 2016 and amended in 2019. Thanks to the new text, DPDHL, ITF and UNI have developed a joint work plan for the first time, focusing on seven issues: child labour, diversity and inclusion, working conditions, data privacy, forced labour, freedom of association and collective bargaining and environment (see joint press release and UNI Global Union press release).

Fundamental rights : On the 10th anniversary of the Siemens International Framework Agreement (IFA), an online meeting of employee representatives from European, Asian and American countries took place on 26 and 27 July. Among areas where progress is yet to be made, Kan Matsuzaki, Assistant Secretary General of IndustriAll Global Union, emphasises that local management is often not aware of the existence and content of the framework agreement, which is one of the known weaknesses of this type of agreement. He also wants a global framework agreement to be negotiated for Siemens Energy, a Siemens division that is now independent and listed on the stock market, in order to maintain the standards achieved at Siemens (see press release).

What regulation for telework in the EU? : As European Commission staff work on a possible initiative relating to telework and the right to disconnect, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) has just published a study, with the support of its network of national correspondents (which includes IR Share), of the regulation of telework in the EU and the recent changes this has undergone (see study and its executive summary). The study emphasises the diversity of the existing regulations, the importance of the role played by social dialogue and in particular by negotiations at company level, when it comes to regulating telework. It says that “shared standards are needed to protect teleworkers across the EU equally”, including with regard to the right to disconnect, and calls for a minimum level of harmonisation to apply across the regulatory framework. The study urges decision-makers to “facilitate cross-border teleworking” as this “is fully aligned with EU policies on promoting cross-border labour mobility in the European single market”.

• Algorithmic management : In a Policy brief, the European Trade Union Institute (ETUI) assesses the provisions of the draft directive on working conditions in platform work in relation to algorithmic management and highlights the inadequacy of the measures put forward by the Commission, while at the same time offering proposals for improvement.