IR Notes

At the Employment and Social Affairs Council meeting held on 20 June, the Employment Ministers of the Twenty-Seven adopted a “general approach”, as finalised on 5 June (see IR Notes 232), regarding the proposal for a revision of the European Works Council directive put forward in January by the European Commission (see IR Notes 222). They will be able to commence negotiations with Parliament on this basis, as soon as it is in a position to adopt a negotiating mandate based on the Radtke report produced by Parliament’s Committee on Employment and Social Affairs (see IR Notes 228). The main changes introduced by the Council are set out in the following article (see Projects), but here are some initial observations: 1/ the representatives of the five Member States (Spain, France, Italy, Czech Republic, Slovenia) who spoke at the time of the vote all supported the text, despite some subtle differences emerging in their positions. For example, Spain hopes that Parliament will be able to apply tougher penalties in cases where employees’ rights to information and consultation are breached, whereas the Czech Republic reminds everyone of the need to avoid increasing the burdens imposed on companies. However, there is a full consensus in favour of this directive. 2/ Nicolas Schmit (photo), the European Commissioner for Social Rights, expressed his satisfaction that the text produced by the Council, “follows the balance” of the text of the Commission’s proposal, even though its provisions on sanctions have been “weakened”. 3/ He added that the Council’s general approach therefore constitutes a “solid basis for the upcoming inter-institutional negotiations”, meaning that the trilogue discussions might be able to move forward quickly, given that the positions of the Council and of Parliament are not too far apart. 4/ This general approach was adopted in record time, just four months after the Commission first put forward the proposal, emphasising the involvement of the Belgian presidency of the EU, which speeded up the pace of progress to reach an early consensus, with only its fourth compromise text. 5/ The intensive lobbying carried out by the employers’ organisations, which sent two letters to Member States’ representatives during the course of the discussions (see IR Notes 232, IR Notes 230 and IR Notes 228), failed to bring about any substantial changes to the proposal for a directive or to slow down the adoption process. 6/ A strong argument in favour of adopting the directive is the objective of strengthening social dialogue, which has (once again) become a key theme, for example with the adoption of the directive on adequate minimum wages. EU employers cannot object to this. 7/ It may be that the issue of revising the directive is, in itself, one of little interest to many of those involved: although these statistics are starting to be somewhat dated, around one half of EU Member States do not have a single company with its own EWC, and almost one half of EWCs are to be found in three Member States (Germany, France, Ireland). Moreover, the text applies to only a tiny minority of EU companies: those concerned are multinational companies, which find it hard to make a convincing argument for cutting the financial and administrative costs they have to pay. In summary, unless there is a dramatic turn of events at the new European Parliament, the revised directive should be adopted fairly quickly, perhaps even under the Hungarian presidency of the EU, which begins on 1 July this year.

Revision of the European Works Council directive : On 20 June, European Employment Ministers adopted the Council’s position on the proposal for a directive on the revision of the European Works Council directive (see Lead story and European works councils). One of the Council’s main interventions was to clarify the thorny issue of defining “transnational matters”, which are described as a source of “legal uncertainty” and affect the competence of EWCs. Thus matters shall be considered to be transnational “where they can reasonably be expected to concern” the Community-scale group of undertakings “as a whole, or at least two undertakings or establishments of the undertaking or group situated in two different Member States.” Two paragraphs have been inserted to make it clear that these conditions are met: 1/ where the “measures considered by management” of an undertaking “can reasonably be expected to affect employees of that undertaking or group, or its establishments in more than one Member State”; or 2/ where the measures considered by management “affect employees of that undertaking or group, or its establishments in one Member State, and their employees in another Member State can reasonably be expected to be affected by the consequences of those measures”. Recital 5 clarifies this provision by explaining that the second paragraph “is necessary to cover cases where undertakings envisage measures, such as lay-offs, redundancies or allocation of production activities and outsourcing of activities, which do explicitly target establishments in only one Member State but nevertheless can reasonably be expected to have consequences affecting employees of that undertaking in another Member State, for instance due to changes in the cross-border supply chain or production activities.” Moreover, the recital seeks to limit the EWC’s competence by specifying that the proposals in question must relate to “measures which could affect employees in a substantial way, i.e. in a way which does not affect them in a trivial manner and does not only concern individual employees or ordinary operational decisions”. Lastly, recital 5 states that “the standard of reasonableness should be objectively ascertained, having regard to the nature and purpose of the measures that are envisaged and the circumstances of the case”. Another of the changes introduced is the sanctions regime, which is likely to be a stumbling block with Parliament. The initial provisions detailing how Member States should determine the sanctions applicable to the offending company have been removed from the body of the directive and inserted in recital 18, which states that these sanctions must take into factors such as the size and financial situation of the company concerned (for example, based on its annual turnover), and the gravity, duration, consequences and intentional or negligent nature of the offence. Lastly, the Council has not abandoned its aim of renegotiating pre-existing agreements, with a view to bringing them into compliance with Article 6 of the future directive, which specifies the points to be included in an EWC agreement.

EU Talent Pool : On 13 June, the Council adopted its position on a proposal for a regulation establishing an EU Talent pool. This pool will be set up as an EU-wide online platform that will match profiles of jobseekers from outside the EU with job vacancies offered by EU employers, in shortage occupations (see press release). On 4 June, the European trade union movement sent a letter to decision-makers, setting out its opposition to this text, which “would greenlight recruitment sharks who use exploitative methods”. The text would “open the door to a race-to-the-bottom for the conditions of these workers and also encourage recourse to ever more exploitative cheap labour, at the expense of all working people”.

Ukraine : On 13 June, the Council approved the Commission’s proposal to extend the benefit of temporary protection for Ukrainian refugees, which was already due to run until 4 March 2025, by a further year, to 4 March 2026. Temporary protection allows refugees to access the labour market (see press release).

Hungarian presidency of the EU : Hungary has set out its priorities for its presidency of the EU, which begins on 1 July, under the slogan “Make Europe great again”. The main priorities of its work programme include strengthening EU competitiveness and stemming migratory pressure. In the field of employment and social policy, the “greatest challenge” is labour shortages. The presidency wants to achieve “a higher employment rate among the inactive working-age population”, especially among young people – by way of “better exploiting the potential of combining work with studying and student employment” – and among older workers, so that they can “remain in the labour market if they wish, even by taking on a job in addition to a pension”. Remedying these labour shortages will also involve “promoting work-life balance” and improving the quality of employment.  In the area of labour law, the presidency plans to “finalise the amendment of the directive on European Works Councils” (see Projects) and to “continue the discussion of the ‘traineeships package’ (directive and Council recommendation)” (see IR Notes 227). Lastly, it will commence discussions on the Commission’s forthcoming initiatives: the proposal for a directive on telework and the right to disconnect, and the proposed sixth revision of the directive on occupational safety limits for carcinogenic, mutagenic and reprotoxic substances, which will include standards governing exposure to cobalt.

A rise in industrial unrest : According to a study performed by the Hans Böckler Foundation, 2023 was a particularly turbulent year, with 312 labour disputes. More than 1.5 million working days were lost, i.e. double the corresponding figure for 2022 (674,000 days lost). However, when it comes to international comparisons, Germany’s figures are still below average: the annual average number of days lost to industrial action was 18 per 1,000 workers between 2013 and 2022. Belgium lies in first place, with an annual average of 103 days lost per 1,000 employees between 2013 and 2022, followed by France (92 days), then Finland (90 days) (see press release).

Co-determination in decline : A company that employs more than 2,000 workers in Germany is required by law to implement co-determination on its supervisory board, by assigning one half of the board’s seats to employee representatives (for companies with between 500 and 2000 employees, the corresponding figure is one third). However, a study performed by the Hans Böckler Foundation shows that there is decreasing compliance with this obligation, and in some cases, companies are even finding ways round it. The proportion of companies with equal representation of management and employees on their supervisory board fell from 67.5% in 2019 to 60.5% in 2022. Most family businesses and companies in the service and retail sectors have failed to introduce such equal representation arrangements on their supervisory board. The study confirms that adopting European Company (SE) status is often used as a way of circumventing this legislation: just one in six European Companies with more than 2,000 employees has shared decision-making arrangements in place (see IR Notes 231 and Co-determination).

Protecting workers against heat stress : After the weather forecasting authorities issued a written warning of high temperatures between 11 and 13 June, the Ministry of Employment and Social Security published a decree on 11 June, setting out guidance for employers. It stipulates that manual work performed outside within certain geographical areas must be suspended between 12 noon and 17.00 hours when the temperature reaches 40° C, or 38° C in the case of shipyard work. The only exceptions are parcel and meal deliveries made in air-conditioned vehicles. Such suspensions of work do not apply to economic activities involving major and socially critical infrastructure in the healthcare, transport and public services sectors, but the employers in question will have to apply the working-time organisation measures set out in a previous decree dated 3 June. If these obligations are breached, the labour inspectorate will fine the company 2,000 euros per employee (see press release).

Financial transparency : On 18 June, the IUF and EFFAT trade union federations called on the management of the multinational tourism company Club Med, which is owned by the Chinese conglomerate Fosun, “to provide transparent information about the group’s financial management to the union”, due to concern among its employees (see press release).

A group-wide social protection solution : On 5 June, the mining group Eramet (10,700 employees) signed a global agreement establishing a common core of employee benefits, which was negotiated with its global works council (Eramet Global Forum – EGF) (see IR Notes 212 and Global works council). In contrast to multinational companies that introduce social protection safeguards unilaterally, Eramet is one of the few groups to have negotiated these benefits with its workers’ representatives, who in this instance were EGF select committee members from Gabon, metropolitan France, New Caledonia, Norway and Senegal (see interview opposite). The agreement establishes three categories of cover: 1/ maternity and “women-friendly” working conditions: in addition to introducing 16 weeks of maternity leave on full pay, the agreement innovates on two points. Firstly, it requires “women-only changing rooms and toilets, plus appropriate personal protective equipment” to be provided. Secondly, it includes a “pay rise guarantee”, so that neither maternity nor adoption leave “will hold women back in terms of progress in earnings”. A female employee will receive any general increases awarded plus a personal pay rise corresponding to the average level of personal pay rises granted to her employee category. 2/ Healthcare and prevention: the agreement guarantees access to healthcare, health insurance cover, periodic monitoring of employees’ occupational health and the introduction at local level of two preventive actions per year. 3/ Death cover. The group will select insurers who will pay out a death benefit, representing 12 months’ earnings, to the beneficiaries of the deceased employee. The new maternity measures will come into force immediately, while the rest will be implemented by the end of 2026.