IR Notes

When it adopted the “Radtke” report on 2 February, the European Parliament called on the European Commission to present a recast of the European Works Council Directive 2009/38 by 31 January 2024 (see IR Notes 201 and European Works Councils). In reply, the Commission quickly announced that it was going to set in motion a consultation of European social partners, under Article 154 para. 2 of the Treaty (see IR Notes 203). Accordingly, on 11 April, it unveiled the first-phase consultation document for the purpose of gathering their opinions on the benefits of taking such an initiative (see European social dialogue). The document adopts Parliament’s proposed amendments: redefining the notion of transnational issues; reviewing the definition of consultation, to make sure that the EWC is consulted and is able to express an opinion before management comes to a decision; preventing the abuse of confidentiality rules as a means to limit EWC members’ access to information; a stricter deadline for negotiating EWC agreements (18 months instead of three years); guaranteeing access to justice and increasing the sanctions applicable in cases where employees’ rights to information and consultation are breached, by bringing them into line with those imposed by the GDPR regulation (a fine of up to 20 million euros or 4% of the company’s global turnover); granting the courts powers to suspend a company’s decision in cases involving a possible breach of information and consultation procedures; ending permitted exemptions by requiring all agreements, including pre‑directive agreements signed before September 1996, to be brought into compliance with the future directive; specifying the resources available to EWCs in terms of training or recourse to expert support; and strengthening the content of subsidiary requirements applicable in the absence of an agreement. On this basis, social partners are invited to answer three questions, by 23 May: Are the issues and possible areas for further EU action correctly identified? Is EU action needed to address the identified issues? Would you consider initiating a dialogue on any of the issues identified?
Once these opinions have been obtained, the Commission will be able to embark on the second-phase consultation of European social partners (Article 154 para. 3), to find out their opinions regarding a draft proposal for a directive. Here too, they will have six weeks to react. Although no time interval has been fixed between the two consultation phases, these are expected to follow on from one another quite quickly, so that the Commission can put forward a text before the end of the year, as requested by Parliament. At the same time, the Commission must analyse Parliament’s proposals, to check that they comply with the principles of subsidiarity, proportionality and enhancement of legislation, seeking to avoid imposing unnecessary burdens on companies. It will also receive the results of an impact assessment of these same proposals, to be performed by the consultancy firm ICF. The Commission believes it is unlikely that the social partners will tackle the subject during the consultation process, with a view to negotiating a European agreement (Article 154 para. 4), and is likely to present a proposal for a directive at the end of the year. It will then be up to the future Commission, which will come into being after the European elections in May 2024, to initiate the legislative process.

Labour market: : The government has passed two draft laws to address the country’s labour shortage and training requirements: 1/ A draft law facilitating access to the German labour market for foreign skilled workers, so that they can work or undergo training there. (see press release). 2/ A draft law devoted to a major training reform, which both guarantees young people the opportunity to complete a vocational training course with a company and thus gain a vocational diploma, and improves employees’ access to continuing professional development (CPD), in the form of financial support. Where training will permit jobs to be maintained within a company, employees who would otherwise face the threat of redundancy as a result of structural changes, will receive an allowance funded by the State (based on the amount of unemployment benefit they receive for short-time working), while the employer will pay their retraining costs (see press release).

Pension reform : The Constitutional Council’s decision on 14 April found in favour of the government (see decision and press release), which went ahead and, on 15 April, published amending finance law no. 2023-270 of 14 April 2023 for the social security system for 2023, reforming the pension system, despite unanimous opposition from the trade unions. The statutory retirement age has been raised from 62 to 64 (see IR Notes 205). The Constitutional Council rejected six measures, including “the seniors index”, which was intended to encourage companies to take steps to keep older employees in work, and the creation of a specific contract of employment for older workers. This reform has been unanimously denounced by the trade unions and adopted without the support of the National Assembly, while 80% of the working population have said they are against it. The outcome embodies a malfunction of social democracy, in which social partners are marginalised by a concentration of powers within the person of the French President. As regards the way in which this reform was implemented, for Dominique Rousseau, who is a professor of constitutional law, the Constitutional Council’s decision is an acknowledgement “that ministers produced ‘wrong estimates’ at the debates in Parliament, several procedures were used ‘cumulatively’ in order to speed up the process of passing the law and the combined use of the procedures implemented was ‘unusual in nature’ (see Le Monde). As Guillaume Duval explains in Social Europe, this reform “will have widened the gap between the people and the elites and increased again the potential for popular resentment against the system”. “Forcing those who lose out in the process of globalisation to work for longer will stir up social unrest that will be exploited by” the far right, warns political scientist Bruno Palier in Le Monde. This victory for the presidential camp merely heralds future defeats. The unions [intersyndicale] were invited to meet the President on 18 April, but declined to take part in any meeting before the demonstrations scheduled for 1 May.

Work-life balance : The “Work-Life Balance Act”, which transposes Directive (EU) 2019/1158 of 20 June 2019 on work-life balance into law, was signed into law on 4 April. It introduces a number of provisions that come directly from the directive, such as granting five days of unpaid leave for medical treatment to parents of children aged under 12 and to people who are looking after children, plus the right for parents and carers to request flexible working. However, the act goes further than the directive, by introducing five days’ leave per year for workers who are victims of domestic violence. They will receive an allowance paid by the employer, the amount of which has yet to be fixed by the government (see IR Notes 194). It also establishes the right for all employees to request remote working (less restrictive than the original proposal, see IR Notes 180). The ICTU trade union confederation is delighted with the new right for employees to request remote working and has announced that it would like to negotiate an increase with companies in the amount of leave granted in cases of domestic violence to ten days, and to have this paid at the full rate, because “anything less risks putting [victims] in further danger” (see press release).

Labour inspectorate : On 29 March, the executive board of the Italian Labour Inspectorate (INL) and the Association of Employment Consultants (Consulenti del lavoro) signed two memoranda of understanding, one on activities related to inspection and combatting abuses in the application of labour law and the other on use of the IT platform ASSE.CO, which is managed by the Association of Employment Consultants. The aim of expanding cooperation between the INL and this regulated profession, which advises companies on accountancy-related matters and legal affairs, has been strongly criticised by the trade unions, which are calling on the government to withdraw these texts. Maurizio Landini, the CGIL’s General Secretary, condemns this move: “What we’re seeing here is an outright privatisation of inspection activities; the autonomy of labour inspectors is being blatantly undermined” (see press release). The CGIL is critical of the fact that the labour inspectorate will have to issue notice to a company’s employment consultant before performing any inspections, and also that any companies in possession of a compliance certificate issued by the employment consultant will escape any risk of inspection. “These are shameful agreements”, adds Matteo Ariano, National Coordinator of the FP CGIL-INL. “They are neither in the public interest, nor will they enhance the effectiveness of inspection activities: instead, the thinking behind them is based on privatising, dismantling and disrupting Italy’s labour inspectorate” (see press release).

Towards a less flexible labour market : In a letter sent on 3 April to the Lower Chamber of Parliament, the Minister of Social Affairs and Employment set out details of the forthcoming “package” of labour market reforms, first outlined in July last year (see letter). The proposed measures are based on an agreement between the government and the social partners, concluded on the Economic and Social Council (SER) (see press release) on the basis of the opinion submitted by the SER (see press release). According to Piet Fortuin, President of the CNV trade union confederation, these reforms should “bring an end to the unbridled excesses of flexicurity” (see press release). This summer, the government will undertake a vast consultation regarding its plans, with a view to presenting the texts to Parliament in the spring of 2024. The measures envisaged seek to ensure that the country’s labour market will become less flexible and more secure than it is at present, by boosting the quality of the jobs on offer. The idea is that the form taken by an employment contract will match both the type of work in question and the worker’s preferences. The underlying principle is that structural employment should be organised on the basis of permanent contracts. The reform also plans to ban “zero hours” contracts and to exercise closer supervision over the use made of temporary work. After three consecutive temporary contracts with the same employer, it will no longer be possible to award a further contract until a five-year period has elapsed, instead of the current figure of six months. The SER emphasises that employers will be encouraged to sign permanent contracts, “as there will be more room for manoeuvre with the new contracts”. Another chapter of these reforms involves combatting the use of bogus self-employed workers: the distinction between a self-employed worker and an employee will be made clearer and it will become easier for those working for low rates to claim employee status. Compulsory and affordable disability insurance will also be introduced to protect self-employed workers. To offer small companies greater flexibility, the rules for reinstating an employee who has been on long-term sick leave will be made clearer and an employment continuity plan applicable in the event of a crisis – a kind of short-time working arrangement whereby the employee’s wage costs are partially funded by the State, in order to protect their job – can be drawn up, with the works council’s agreement (see press release issued by the CNV confederation).

Deliveroo case comes to an end : On 24 March, the country’s Supreme Court handed down its ruling on the issue of whether Deliveroo food delivery riders are employees. It rejected Deliveroo’s appeal, holding that the Appeal Court’s ruling that the “mission agreements” concluded with delivery riders should be classified as contracts of employment, does not contain any errors of law (see IR Notes 158). In light of factual circumstances such as Deliveroo’s use of a GPS system and an algorithm that “interferes to a significant extent in the way in which work is performed”, and regarding the terms governing how bonuses are awarded, the Court puts forward evidence indicating a “relationship of authority”. Consequently, it holds that the employment relationship meets the definition of wage-earning status, as set out in Article 7:610 of the Civil Code. The latter defines a contract of employment as “a contract whereby one party, the employee, undertakes to work for the other party, the employer, in return for remuneration over a given period of time”. It notes that “the freedom to come or not come to work, and to accept or decline missions, does not in itself rule out the existence of a contract of employment.” It also mentions the fact that more than two thirds of delivery riders earn less than 40% of the minimum wage and that the tax authorities take the view that their activity counts as a “pastime”, and is therefore not liable for VAT.  Relying on EU Court of Justice case law (CJEU, 4 April 2014, Case 413/13, FNV KIEM and IR Notes 24), which distinguishes between wage-earning and self-employment, the Supreme Court rules that while being a contractor is an indication that a person is not an employee, “not being a contractor may therefore indicate that they are an employee.”

Labour market reform: : The new Employment Code reform and its related legislation was definitively approved by Law 13/2023 of 3 April, which will enter into force on 1 May. This reform is intended to implement the “Agenda for Decent Work” (see IR Notes 202), which is based on four pillars: combatting precarious employment; exploiting young people’s potential in the labour market; promoting work-life balance; and promoting collective bargaining and worker participation. This law transposes both Directive 2019/1152 on transparent and predictable working conditions and Directive 2019/1158 on work-life balance for parents and carers. At the same time, it deals with the issue of platform work, establishing a specific presumption of the existence of a contract of employment, and imposing further restrictions on fixed-term contracts and temporary work. It includes several measures intended to promote collective bargaining, such as incentives for companies that have concluded or revised an agreement during the past three years. Compliance with this will be a pre‑condition for gaining access to public funds, including European funding, participating in procedures applicable to public procurement contracts and qualifying for tax incentives. The text also provides for collective labour agreements to be extended to include subcontractors and economically dependent workers. The legislative process in question has been long and somewhat chaotic. It was disputed by the employers, who called in vain on the President to refer the draft law to the Constitutional Court, arguing that the requirement for social dialogue had not been honoured, given that some measures were not debated on the Economic and Social Committee (see article in Expresso). The trade unions also believe that the reform offers insufficient protection for employees’ rights (see article in Publico).

Social dialogue : The management of Korian and the European trade union federation EPSU will meet on 21 April for an initial negotiation session, with the aim of producing a European Social Dialogue Ethics Charter. The negotiations will be conducted by management and a group of negotiators made up of trade union representatives appointed by EPSU and members of the SE European works council (CE-SE) select committee. Ahead of this meeting, “management have conducted interviews with all CE-SE members and management representatives from every country in order to establish their opinions regarding the status of social dialogue within the company and how things can be improved”, explains Mathilde Tabary, Korian’s head of industrial relations for Europe. Feedback was then given to the council’s select committee – with a view to preparing an action plan, with the idea of establishing a joint text – and subsequently to all CE-SE members. Mathilde Tabary continues: “The aim is to reaffirm that social dialogue is a major factor in the company’s transformation and to strengthen social dialogue at all levels, which is fully in line with the principles of inclusive governance that Korian wishes to construct on its journey towards becoming a purpose-led company.” One way to deliver this outcome could be to ensure that every country has its own social dialogue body, covering all entities within it (see EPSU press release).