IR Notes

Following the adoption of Directive 2022/2464 of 14 December 2022 on Corporate Sustainability Reporting and IR Notes 196), on 31 July, the European Commission published Environmental and Social Reporting Standards (ESRS) in the form of a delegated regulation, supplemented by two annexes (Annex 1) provides a summary of the report and explanations to flesh out each point, and Annex 2 contains definitions). These texts have yet to be approved (or at least, not rejected) by the Council and Parliament. Once this stage has been completed, they will enter into force after they have been published in the OJEU (see Questions and Answers document). The 50,000 or so companies required to publish certain information relating to the issue of sustainability – from 2025 onwards, in the case of the largest companies – will be required to use these common standards. The aim is to ensure that companies throughout the EU publish comparable and reliable sustainability information. The report establishes twelve compulsory standards (ESRS) allowing companies’ impacts and sustainability performance to be assessed. These reports will have to comply with the principle of “double materiality” introduced by the directive. This is about “assessing how external events can affect companies’ performance, as well as making companies’ impacts on their economic, social and natural environment visible and quantifiable”, explains sociologist Dominique Méda (see Le Monde, 9.09.23). Two of these ESRS (ESRS S1 Own workforce and ESRS S2 Workers in the value chain) are specifically aimed at company workers (employees and non-employee workers) and their value chain. It is interesting to note that the document produced by the Commission does not go as far as the directive adopted by Parliament. For example, companies will have an extra year to incorporate a series of social indicators (training and skills development, number of days lost due to accidents at work or occupational illnesses, work-life balance, etc.) into their report. Similarly, the criteria of number of employees covered by a collective bargaining agreement is waived, during the first year, for employees outside the EU and the European Economic Area.

Exposure to lead and diisocyanates : On 7 September, by a large majority, the European Parliament’s Committee on Employment and Social Affairs approved its draft report on the proposal for a directive that aims to protect workers’ health by lowering occupational exposure to lead and diisocyanates (see press release and IR Notes 202). Negotiations with the Council, which adopted its position in June, can commence as soon as the report has been adopted at a plenary session of Parliament. There is currently no limit value for diisocyanates. MEPs accept the exposure limits set by the Commission, but call on it to launch a revision of these limits by 2029. As far as lead is concerned, the Commission’s proposal has reduced the limit values currently in force, but MEPs believe that they are still too high for female workers of child-bearing age. They are proposing that these values be revised once every five years, and that binding rules be introduced to provide better protection for women, and pregnant women in particular. They have also added the introduction of medical monitoring for all workers who are exposed to lead and its inorganic compounds. In the case of workers who have built up levels of lead in their blood far higher than the new limit values, measures must be taken to ensure that the lead levels in their blood subsequently fall, e.g. by assigning these workers to different tasks. MEPs also call on the Commission to put forward new rules concerning limit values for substances such as lithium, cobalt and benzene (see Carcinogens directive revision). The rapporteur is Danish MEP Nikolaj Villumsen (The Left), who has expressed her satisfaction at “a victory in the fight against harmful substances”.

> Reactions: The metalworking industries’ employers (represented by Ceemet) are concerned at the introduction of an exposure limit value of 0.03 mg/m3, which goes beyond what was agreed by the employers’ delegation on the European Commission’s Advisory Committee on Safety and Health. Ceemet regrets that MEPs did not add a transition period for these new limit values for lead, “which could have consequences for employment in our sector” (see post on LinkedIn).

State of the Union speech : On 13 September, the President of the European Commission, Ursula von der Leyen, delivered her latest State of the Union speech. Her term of office will come to an end after the European elections due to be held in June 2024. In the field of social affairs, she expressed satisfaction at the work completed by the Commission, citing the adoption of directives relating to the presence of women on company boards and to pay transparency, as well as the EU’s historic accession to the Istanbul Convention. She emphasised that “labour and skills shortages are reaching record levels”, pointing out that “Instead of millions of people looking for jobs, millions of jobs are looking for people.” Nevertheless, according to Eurostat, there were still 13 million job seekers in the EU in July 2023. One of the solutions advocated is to make it easier for parents to access employment by offering them childcare solutions. The other is to develop “qualified migration”. She also praised European social dialogue – which first began almost 40 years ago, at the château of Val-Duchesse, near Brussels, at the initiative of Jacques Delors (v. European social dialogue),– and announced that a social dialogue summit would be convened at the same location in the first half of 2024, under the Belgian Presidency of the EU. Finally, in a letter of intent accompanying her speech, Ursula von der Leyen announced a “follow-up” to the Val-Duchesse summit and an “initiative on rules on the European Works Council”.

> Reactions: Trade unions broadly regretted the failure to take account of the situation of citizens generally, and in particular that of workers who are struggling to make ends meet, due to inflation (see press releases issued by the ETUC, the Spanish confederation UGT and the Danish confederation FH). Speaking on behalf of the employers, Ceemet denounced the growing number of binding standards that had built up and overloaded companies during Ursula von der Leyen’s term of office, but also expressed satisfaction at her determination to upskill and reskill the EU workforce.

• Telework : Following two days of negotiations that failed to finalise the European framework agreement on telework and the right to disconnect, as set out in their work programme, the European social partners adjourned their discussions on 19 September. A further meeting has been scheduled for 23 October.

Strengthening collective bargaining agreements : Hubertus Heil (Foto, © Jana Legler), Federal Minister of Work, will put forward a law by the end of the year on strengthening collective bargaining agreements and adhering to negotiated wage levels. He is critical of the fact that barely one half of Germany’s workforce is covered by a collective bargaining agreement. One of the flagship measures of this project is that the Federal State will start to award public procurement contracts only to companies with a collective bargaining agreement in place (see press release).

Reduction in parental leave : On 13 September, with a view to transposing the European directive on work-life balance, Parliament’s Social Affairs Committee, with government support, passed a measure preventing two months of each parent’s parental leave being transferred to the other parent. The aim is to ensure that childcare duties are split more fairly between men and women. However, the trade unions’ view is that if just one parent takes the leave, its duration will be reduced from 24 to 22 months, and that this situation will be prejudicial to mothers, who in the vast majority of cases, are the ones who take parental leave. The trade unions believe this represents a curtailment of parental leave: Korinna Schumann, Vice-President of the ÖGB trade union confederation, is critical of this measure: “It’s as if they’re trying to remedy the skilled labour shortage by reducing statutory leave” (see press release).

Labour market reforms : Finnish trade unions are mobilising against labour market reforms (#SeriousGrounds). SAK condemns the plan to make the first day of sick leave unpaid; the easing of legal restrictions on dismissing workers; the fact that special grounds will no longer be required as justification for a fixed‑term employment contract of up to one year; the reduction in unemployment benefits; the imposition of personal sanctions (a 200 euro fine) against employees who take part in a strike that is deemed to be illegal; and heavier fines for trade unions (see press release).

Entitlement to paid leave : The Supreme Court [Cour de cassation, photo] has handed down several rulings setting aside French provisions in the area of paid leave because they have been deemed not to comply with EU law. Through the direct effect of Article 31, paragraph 2, of the Charter of Fundamental Rights, a citizen seeking justice benefits directly from the solution that complies with EU law. From now on, employees who fall ill or suffer an accident will be entitled to paid leave covering their period of absence, and in the case of an accident at work, paid leave entitlements will no longer calculated based on the first year of sick leave only (see access to rulings in the Court’s press release and information memorandum).

• Labour shortage : A new law intended to remedy the shortage of skilled labour came into force on 1 September 2023. It provides for major changes aimed at making it easier to recruit nationals of third countries (see press release).

Amendments to the Employment Code : On 12 September, the Chamber of Deputies approved an amendment to the Employment Code, which was put forward by the Ministry of Employment and “drafted following discussions with the employers and trade unions”, according to the Ministry’s press release. This amendment transposes several European directives and introduces “positive changes for pregnant employees, parents of children aged up to 9 and employees who are caring for dependants. They will now be entitled to apply to their employer for remote working”, says the Minister, Marian Jurečka. The code also lays down a number of general rules governing telework, which will only be possible on the basis of a written agreement with the employee. These changes allow the employer to offer employees a lump-sum payment to cover routine costs associated with telework, such as energy, heating and water. This amount will be tax-deductible.

Endometriosis, obesity and diabetes : The government is planning to finance six new projects examining barriers that prevent access to the labour market, including one looking at the impact of endometriosis on women’s participation and progression in the labour market.  The aim is to provide support for women suffering from this disease, in their careers. Endometriosis can affect 1 in 10 women, with symptoms including chronic pain and fatigue which can disrupt daily routines, fertility and mental health and time off work may be needed for coping with symptoms. Another project looks at how programmes to reduce obesity and type 2 diabetes can improve workforce participation (see press release).

Brexit : For the first time, the Court of Appeal of England and Wales has handed down a judgment concerning the fate of European Works Councils of companies whose registered office is in the United Kingdom. The case in question concerns the airline EasyJet and its EWC, which was set up without an agreement, based on the subsidiary requirements of UK labour law (“TICER” – the Transnational Information and Consultation of Employees Regulations), transposing the European directive. EasyJet’s EWC took its case to the Central Arbitration Committee (CAC), claiming it had suffered a breach of its right to be informed and consulted by the company about a restructuring. Management argued that the CAC was not competent to investigate this complaint, because TICER legislation no longer applied, due to Brexit. EasyJet claimed that its EWC was now governed by German law, as its German branch had been appointed to represent the airline on the EWC. The Court of Appeal confirmed that EWCs of companies based in the United Kingdom continued to exist if they had been set up before the end of the Brexit transition period, and that the CAC was competent to rule where a dispute arose. The company will therefore have to manage two separate European Works Councils, one of which is constituted under UK law and is subject to TICER legislation, and the other constituted under German law, even if this gives rise to practical difficulties.

> Recently published on line on IR Share: the Aker global framework agreement referred to in IR Notes 213.

A common core of employee benefits : The Veolia group (213,000 employees) has announced the launch of a programme aiming to ensure that every single employee enjoys a common core of employee benefits. This core package, which has been introduced unilaterally, offers every employee at least 10 weeks’ parental leave plus at least one week’s co-parent leave, health and death cover (a life insurance plan guaranteeing at least 6 months’ salary), support for employee “carers” and the option of one paid day off every year to volunteer with a charity or environmental protection organisation (press release). “This project was announced to the European group works council (CGE), but the council was not involved in negotiating it” explains Michaëla Sofer-Ayadi, who is a member of the CFDT trade union and secretary of the CGE. “Although it wasn’t reached through social dialogue, it’s still good news for workers, especially those outside the EU, who are the ones most concerned.”