IR Notes

On 22 November, the European Parliament definitively adopted the proposal for a directive on “improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures” (see Parliament resolution and press release). MEPs approved the Council’s position (see Council position), after it gave the green light on 17 October (see press release), based on the compromise reached on 7 June (see press release). The directive will shortly be published in the OJEU. Member States will have two years to transpose it into their domestic law. In 2021, just 30.6% of directors on the boards of the largest listed companies were women, with significant differences evident from one country to another (ranging from 45.3% in France, due to its tight legislation, to 8.5% in Cyprus, see Gender statistics database). Although the situation has gradually improved in the EU (23.6% of board members were women in 2016, compared to 8.2% in 2003), the voluntary steps taken by businesses do not appear to be enough on their own, hence the need for this legislative initiative (see study commissioned by Parliament and Gender equality strategy. The directive states that listed companies with more than 250 employees will have to meet one or other of the following objectives by 30 June 2026 at the latest: members of the under-represented sex to hold either 1/ at least 40% of non-executive directorships; or 2/ at least 33% of all directorships, whether executive or non‑executive.
Companies that fail to meet these targets will have to adapt the candidate selection processes they use to appoint or elect their directors, using clear criteria, formulated in neutral and unambiguous terms. Where candidates have the same qualifications and skills, priority will be given to the one from the under-represented sex. Once a year, businesses will have to publish information concerning the representation of women and men on their boards, and the measures they have taken with a view to meeting the targets set. Each country will publish an “easily accessible and centralised” list of companies that have achieved either of these objectives. Those that have not done so will have to explain why, and describe the measures they have already taken or planned. States will be required to introduce effective, proportionate and dissuasive penalties. The judicial body will have powers to impose a fine on the company and/or to annul or nullify a decision concerning the selection of directors, where it is in breach of the directive’s rules. In 2030, the Committee will prepare an evaluation report on the directive and announce whether it advocates extending the directive to unlisted companies with more than 250 employees. At a press conference, one of Parliament’s co‑rapporteurs, the Austrian MEP Evelyn Regner (S&D), made it clear that Parliament would have liked to go further by including SMEs or other management posts. Undeniably, although this directive is based on a proposal that dates back some years (for the record, the Commission first presented it in 2012) and is not very innovative compared to some domestic legislations, its adoption will strengthen the requirement for a balanced representation of women in all management posts. As part of their role, European Works Councils will also be able to oversee its application and extension to other management posts.

Wage norm : After the three trade union confederations submitted a complaint to the ILO Committee on Freedom of Association, the ILO has decided that the wage norm law (the so‑called “law of ’96”) constitutes a breach of ILO Convention No.98 (the Right to Organize and Collective Bargaining) (see report of the Committee on Freedom of Association). This law, which was revised in 2017, stipulates that once every two years, a wage norm is to be adopted at cross-sector level, with the social partners’ participation. It involves setting a maximum margin for wage cost rises, which will then apply to the various levels of collective bargaining in the country. From the trade unions’ point of view, capping wage rises in this way leaves the social partners no freedom of manoeuvre in the context of wage negotiations. The ILO believes that the law is harmful to the social partners’ autonomy. It is not the government’s place to use a law to determine the criteria governing wage negotiations. In response, the trade unions are calling on the government to revise the law (see press releases issued by FGTB and CSC). The employers’ organisations are refusing to agree to a revision of this law and are using this decision to challenge another mechanism: the automatic index-linking of all wages to inflation, which, in their view, is depriving social partners of their autonomy of negotiation.

• Unfitness for work: the law of 30 October 2022 enacting miscellaneous provisions relating to unfitness for work . It contains three labour law measures relating to an employee’s unfitness for work due to sickness or an accident (see press release).

Environmental fact sheets : With the help of the Ministry of Ecological Transition and of Demographic Challenge, the trade union confederation UGT has compiled a number of fact sheets aimed at workers and trade union officials, with a view to making known the UGT’s position on the various environmental and social challenges associated with ecological transition. These fact sheets cover 8 areas, such as climate change, the circular economy, waste disposal and environmental, economic and social sustainability. The aim is to let employees “contribute to the trade unions’ eco-social vision of a just ecological transition” and be part of the forthcoming measures, by way of collective bargaining and social dialogue within their company or business sector (see press release).

Labour market reform : Parliament has definitively passed the bill enacting emergency measures relating to the functioning of the labour market, with a view to achieving full employment. This law amends a number of the rules of the unemployment benefit system, including adapting some of the parameters governing payment of unemployment benefit in line with the economic climate. The bill also establishes a procedure allowing employers to consider that an employee who relinquishes their post will be deemed to have resigned (see Ministry of Employment press release).

• European law: On 23 November, the government adopted a bill adapting domestic law to EU law in a number of areas, including social security legislation (see press release). This law will transpose Directive nos. 2019/1158 of 20 June 2019 on work-life balance for parents and carers (IR Notes 112 and IR Notes 124) and 2019/1152 of 20 June 2019 on transparent and predictable working conditions (see IR Notes 89 and IR Notes 101). It takes account of certain EU Court of Justice rulings, e.g. the redundancy money payable to an employee who has been on part-time parental leave must be calculated on the basis of their full-time working arrangements before going on parental leave, in accordance with a CJEU ruling (see IR Notes 120).


• Negotiation on value-sharing: On 8 November, the social partners embarked on a cross‑industry negotiation on value-sharing within businesses. The aim is to allow companies’ profits to be shared more fairly with employees. The government has invited the social partners to work on three areas: 1/ spreading the benefit of the various existing value-sharing mechanisms (profit-sharing, employee participation, employee savings schemes, employee share ownership, etc.) more widely, especially within smaller companies; 2/ simplifying these various mechanisms; 3/ directing employee savings schemes towards “important priorities in the general interest”, such as the ecological transition.

Right to request remote work : On 9 November, the government approved the inclusion of the right to request remote work in the bill on work-life balance, which is expected to come before Parliament by the end of the year. This step will fast-track the introduction of the new right, which was previously the subject of a separate bill (see IR Notes 180). The new legislation grants all employees the right to request remote work. On the other hand, the right to request any other type of flexible working, such as reduced working hours or adjusted working patterns, will continue to be limited to parents and carers. Compared with the original plan, the government has abolished the long list of specific grounds upon which an employer could refuse a request to switch to remote working, and replaced it with a general obligation requiring the employer to consider both their own needs and the needs of employees when considering a request. The employer will also have to abide by a code of practice covering flexible and remote working, which will be published at the same time as the law.

> See also: Government press release and news update issued by the ICTU trade union confederation, which expresses satisfaction at the government’s promise to consider extending the right to request all types of flexible working (and not just remote working) arrangements to all employees, two years after the legislation has come into force.

• Living wage: The government has announced the introduction of a national living wage for employees, which will be set at 60% of hourly median wages. It will be introduced over a four‑year period. The first step will be an 80% increase in the National Minimum Wage from 1 January 2023, which will rise to 11.30 euros per hour. This will be followed by gradual increases in the National Minimum Wage until it reaches 60% of hourly median earnings. In 2026, the national living wage will replace the National Minimum Wage (see press release).

Redundancy plan for self-employed workers: : The FNV trade union confederation has reached agreement with Deliveroo on a redundancy plan in the context of the food delivery company’s withdrawal from the Dutch market. This decision means that the jobs of its 9,000 delivery riders will disappear on 30 November. The FNV has secured a redundancy payment for all delivery riders who have completed at least one year’s service, equating to 38% of their income over the past 12 months, plus a supplement reflecting their length of service. This is a rare example of an agreement concluded by an employees’ trade union in favour of self-employed workers (see press release).

CSR working parties : On 13 September, the management of the construction group Vinci and members of the special negotiating body instructed by the European Federation of Building and Woodworkers (EFBWW) and the European Federation of Managers in the Construction Industry (FECC) concluded their negotiation of the revision of the European Works Council agreement. “The text will boost the European Works Council’s resources and make it more efficient”, says its secretary, Alexandra Charton (of the French trade union CFDT). The agreement, which covers member countries of the European Economic Area and Switzerland, keeps the United Kingdom within its scope of application. In terms of resources, the agreement increases the annual number of hours allotted for the work of the secretary (from 200 to 400) and of select committee members (from 120 to 130), while leaving the figure for other EWC office holders unchanged (at 50 hours). It sets the EWC’s annual budget at 55,000 euros. Among other things, this will be used to finance travelling expenses incurred by select committee members within their home country, specific training courses for select committee member and IT hardware purchased for EWC replacement persons. One of the main innovations in the revised agreement is the creation of a permanent CSR committee, which will meet at least twice a year. This committee will be responsible for ensuring that the group’s CSR undertakings, as set out in the Vinci joint declaration on occupational health and safety, the Vinci environmental guidelines and “any future documents produced by working parties” are properly applied. “In addition to this committee”, says Alexandra Charton, “the main area for improvement in terms of CSR is setting up ad hoc working parties on specific subjects, defining how they work and the resources to be allocated to them, in conjunction with management (programme, deliverable expected, etc.)”. They will focus on “subjects associated with the transnational challenges currently facing the group”, such as health and safety, responsible subcontracting and due diligence. These working parties, which are made up of 5 members, will be able to invite internal experts to participate in their work and, in the case of the EWC budget, external experts.

Social commitments and combatting absenteeism : On 17 November, the management of the Korian group and its EWC issued a joint declaration on social commitments and reducing absenteeism. This document is the outcome of discussions held by an EWC working party devoted to the causes and consequences of absenteeism (see press release EN). Six main families of absenteeism factors were identified: working conditions and the working environment, quality of management, working habits, the employee’s personal circumstances, their unsuitability for the job, and mental or physical overload. EWC members from six different countries shared their experience and defined a series of social commitments. These social commitments, which are a way of helping to combat absenteeism, come under three headings: quality of management and the atmosphere at work; work management and rosters; and social and psychological support. Each member country of the group will define and implement action plans in these three areas. All of these commitments will be monitored twice a year by the new SE Works Council set up on 18 November to replace the previous EWC, after Korian was converted into a European company (SE) in June 2022 (see press release and IR Notes 189). At least twice a year, absenteeism figures will be released to the trade unions in each country, so that “the most at-risk categories, broken down according to gender, age bracket, length of service or type of activity” can be identified. This business sector is facing serious staff shortages, and the aim is to reduce unplanned absences that may lead to disruption of the service, “which may in turn give rise to an overload of work for the employees present on the days in question”.

Brexit : On 4 November, the Employment Appeal Tribunal (EAT) issued a judgment in a case involving the airline EasyJet and its European Works Council. The company’s management disputed the jurisdiction of the Central Arbitration Committee (CAC), which is the statutory body responsible for hearing EWC disputes in the United Kingdom. The EAT finds in favour of the EWC, confirms the CAC’s jurisdiction and holds that the UK’s TICER legislation applicable to EWCs, which was amended at the time of Brexit, “would continue to apply to EWCs that had been established before the end of the Brexit transition period” (see Brexit and labour standards).

The “Next Normal”: : At the plenary meeting held on 22 November, the management of the Italian insurance group Generali and its EWC adopted a joint declaration on the new sustainable way of working (editor’s note: it will be posted on line after both parties have checked and signed it). It lays down principles governing the new forms of hybrid working, which combine on-site work with remote work. The declaration introduces the right to disconnect completely from the system and from working tools after the working day has come to an end, and to ignore business communications outside working hours or during rest periods. The European Works Council will be responsible for following up the declaration. “This text will have an impact in countries where employees have little bargaining power”, explains EWC secretary Carole Bourner (a CFDT union member), “which primarily means those countries where the company does not have many employees, and most of the countries of Central and Eastern Europe, where social dialogue is fragile. Employees and their representatives will be able to use this declaration as the basis for commencing a dialogue with their management. For its part, central management will communicate with local managements regarding the agreement, with a view to commencing a dialogue”.