IR Notes

The European social partners in the steel sector have welcomed the decision adopted on 24 March by the European Commission to impose provisional anti-dumping duties of up to 25.2 % on stainless steel cold rolled flat products from China and up to 12.0 % on imports from Taiwan. This measure, designed to put an end to dumping of these products – which are used to manufacture the interior of washing machines and dishwashers, for example, as well as cars – has been welcomed by the employers’ organisation Eurofer (see press release) which had brought an anti-dumping complaint before the Commission in May 2014. According to Eurofer, the Chinese and Taiwanese steel industries are producing at overcapacity and are seeking to “flood” the European market (see press release, in English). Thus, imports from these two countries grew by 70 % between 2010 and 2013 and their market share in the Community market increased by 64 % in the same period. Consumption of these products increased by only 4% over the same period. The implementing regulation adopted by the Commission outlines the investigation carried out and found “a weighted average undercutting margin of between 9.6 % and 11.3 % for the imports from the countries concerned on the Union market”. In brief, the prices of the imported products were undervalued by 10.5% on average. The Commission concluded that “the Union industry had suffered material injury”. Thus, “production volume decreased by 5%, leading to a decrease in capacity utilisation of 8%”. Its market share decreased by around 5%. “Employment decreased by 11% while labour cost increased by 8%.” In addition, “investments decreased by 17%”. For its part, the IndustriAll trade union federation – which had sent a letter to the Commission in support of Eurofer’s action – expressed its satisfaction with the decision and urged the Commission to protect the European social model from unfair social dumping (see press release, in English). The Commission will take a definitive decision this summer.

• Adoption of the European strategic framework on health and safety at work: The Employment and Social Affairs Council on 9 March adopted a Strategic Framework on Health and Safety at Work 2014-2020. The text, which is the delayed successor to the previous 2007-2012 strategic framework, does not contain any legislative proposals. The document presents the three pillars of the new strategy: 1. To improve the implementation of health and safety legislation in SMEs by reducing the administrative burden; 2. To prevent work-related diseases in particular by tackling new and emerging risks (occupational cancers, psychosocial risks and musculoskeletal disorders), as well as the risks linked to new technologies and new materials. 3. Adaptation of workplaces and work organisation to meet the needs of older workers. The Commission is called upon “to improve the legislation on carcinogens, reviewing existing and adding new binding occupational limit values”. As a new task, it must also “ensure that the necessary steps are taken to achieve consistency between the diverse pieces of legislation on OSH and legislation on chemicals such as the REACH Regulation”.


• New budget headings for social dialogue: As happens every year, the European Commission on 12 March published the terms of reference of the budget headings allowing grants to be received for implementing projects relating to: 1. Information and training measures for workers’ organisations; 2. Measures for information, consultation and participation of representatives of undertakings ; 3. Measures to support social dialogue. Note that the closing date for the submission of applications under the first call for proposals is very soon (8 May). To get an idea of the projects for which finance can be obtained (implementation of a European framework agreement, training for members of European works councils or of managers, etc.), the Commission has published the list of projects (in English) which were awarded grants in 2014 for each budget heading.


• Staff representatives at the ECB express concern at the employment situation: On behalf of its members employed by the European Central Bank (ECB), the IPSO trade union on 27 March sent a letter (in English) to the governors of the national central banks in which it denounces permanent understaffing and its negative effect on the work environment. A survey of 900 employees conducted by employee representatives highlights that 31% of employees are exposed to the risk of burnout and that 36% show signs of exhaustion. Furthermore, 4.5 % have reported having suicidal thoughts.


• Seafarers’ directive: The Employment and Social Affairs Committee of the European Parliament on 1 April adopted the report presented by Elisabeth Morin-Chartier (EPP group) on the proposal for a directive on seafarers, amending the directives granting information and consultation rights to employees. The text received a very large majority (47 votes in favour, 3 against).

• Sugar: The European social partners in the sugar industry (CESF and EFFAT) on 19 March published a statement, to express their concerns about the crisis affecting their sector and ask the European Commission to help them to prepare for the end of the quota system scheduled to occur in 2017 (see EFFAT press release).


• Metallurgical sector: CEEMET, the European employers’ organisation representing the interests of the metal, engineering and technology-based industries, has published its response (in English) to the public consultation launched by the European Commission on the revision of the working time directive. CEEMET believes that any reform of this directive, which it describes as “designed before the digital age”, must “represent a clear break with the past”, in particular by leaving the social partners free to decide how to organise work and rest.

• A disabled person working in a specialist centre is considered as a worker: The European Court of Justice has quite logically come to the view that a disabled individual working in a business adapted to the needs of disabled persons in order to offer them paid employment (even if the remuneration is clearly below the legal minimum wage) is considered to be a “worker” in the meaning of directive 2003/88 on the organisation of working time (CJEU, 26 March 2015, case C-316/13, Fenoll v. “La Jouvène” centre for employment of disabled workers – CAT) (available only in Spanish and French at present). However, the employee in this case, who was demanding payment for untaken annual leave, has seen his request refused because he cannot directly invoke the directive. In addition, the case relates to a period before the Charter of Fundamental Rights of the EU, which guarantees the right to paid annual leave, took effect, thus precluding the Charter from being invoked. The complainant is thus left to pursue remedies against the Member State which has maintained provisions in its internal law that do not comply with the directive.


• Clarifications concerning the applicability of social security legislation: The European Court of Justice has delivered a judgement in a case whose interest lay in determining which legislation covers an employee working outside the territory of the EU (in this particular case, on a vessel in international waters), while resident in a Member State (the Netherlands) for an employer established in another Member State (Switzerland, which is considered a Member State for purposes of the application of Regulation No. 1408/71 on the coordination of social security systems). Was he permitted not to pay social security contributions in the Netherlands, as he submitted and as was the case when his previous employer was based in the Netherlands? According to Regulation No. 1408/71, the worker in question should have been subject to the law of Switzerland, that is to say of the country in which his employer was established. However, taking the circumstances into account, “if, pursuant to Regulation No. 1408/71, that legislation entails him being insured under a voluntary insurance scheme or not being insured under any social security scheme, that national will be subject to the legislation of his Member State of residence” (CJEU 19 March 2015, case C-266/13, Kik).


• Composition of the provider’s team may be an award criterion for a public contract: According to the European Court of Justice, the contracting authority may, in connection with a tendering procedure – for the provision of services of an intellectual nature, training and consultancy – introduce a criterion which allows “evaluation of the teams specifically put forward by the tenderers for the performance of the contract and which takes into consideration the composition of the team and the experience and academic and professional background of the team members” (CJEU 26 March 2015, case C-601/13, Ambisig). Such a clause is in compliance with directive 2004/18 of 31 March 2004 on the awarding of public contracts.

• Unilateral check on posted workers is illegal: On 26 March the European Commission decided to refer Belgium to the Court of Justice for failing to recognise the “A1 portable documents” of posted workers who claimed they were paying their social security contributions in the Member State which issued the documents concerned. These documents must be accepted by the other Member States. The Belgian authorities have taken the liberty of refusing to recognise these documents and subjecting the workers concerned unilaterally to Belgian social security legislation. This position results from a desire to combat fraud but is contrary to EU law. Should any doubts arise concerning such documents, there is a specific procedure between the Member States for verifying the documents’ validity or if necessary declaring them invalid. However, the authorities of a Member State are not permitted unilaterally to decide not to recognise these documents (see Commission press release).

• Major tension in the energy sector: Serious tensions have arisen between politicians and the social partners of the energy sector. The trade unions denounce the fact that the employers hold them responsible for the poor financial health of the companies in the sector. The Podkrepa trade union has thus published an open letter to counter the attacks in the press mounted by the representative of the confederation of employers and industrialists, who claims that the sector is in the hands of an oligarchy which is robbing the government and consumers, as well as those of a former minister for the economy and energy, who considers that Communism still rules in the state-owned companies of the sector because of the quality of employment and social services.

• Implementation of the management of posted workers: A decree dated 30 March 2015 outlines a large number of provisions of the so-called Savary Law No. 2014-790 of 10 July 2014 on the posting of workers. With effect from 1 April, companies which post employees to work in France will be subject to the increased declaration and appointment formalities stipulated by the decree. In other respects, French companies which employ detached workers must also respect the new formalities and are obliged to ensure that their direct and indirect subcontractors fully respect the fundamental rights due to their posted workers. They must also make sure that payment of the minimum wage is respected along the entire subcontracting chain. As of now, all these obligations are stated in detail.

• Wage agreement in the chemicals sector: The social partners in the chemicals industry – the employers’ organisation BAVC and the IG BCE trade union (661,000 members) – on 27 March signed a pay deal valid for 17 months which provides for: 1. A 2.8% pay increase; 2. A progressive rise in the employers’ contribution to the so-called “demographic fund”, whose purpose is to finance schemes in support of older workers. The employers, currently paying 338 euros per employee per year into the fund, will have to contribute 550 euros in 2016 and 750 euros in 2017 (see IG BCE and BAVC press releases, in German).

Airbus Group: The management of Airbus Group on 4 March signed an agreement on the Airbus Group SE works council and its derived Division European Committees with the special negotiating body. The agreement comes as part of the group’s conversion to a European Company (SE). In keeping with the spirit of the agreement of 23 October 2000 on the European works council of EADS, the new agreement creates an SE works council and three European committees at the level of the divisions (Airbus, Defence & Space, Airbus Helicopters). The text gives details of their allocated competencies and of the coordination of information and consultation procedures. National committees may be added to this constellation “upon request of the SE works council and subject to prior agreement of the management”. The European committees are competent “when a project that has a major impact on the employees’ jobs, health, safety or working conditions concerns a single Member State and exceeds the responsibility and competencies of the management bodies in said Member State”. The timetable for the information and consultation procedure, which must always begin at European level, is to be negotiated for each dossier between the management and the SE works council and/or division committee. Failing this, the timeframe stated in the agreement shall apply. The text also states the different degrees of confidentiality for information provided by the management. The latter must also confirm the work specification for any expert appointed by the European committees, and verify that it is reasonable and appropriate. Like the SE works council/division committees, central management is also permitted to disseminate the expert’s report.

• Deutsche Post DHL Group: At the plenary meeting on 26 March of the DPDHP forum, which was attended by 50 members of the European works council and 25 members of the European Management Forum, Elmar Kallfelz, chairman of the EWC, issued a statement on the use of temporary agency workers in the group to central management. The members of the EWC wished to enter into a negotiation with management on this subject, with a view to arriving at a European agreement which would essentially transfer the regulations contained in EU directive 2008/104/EC to the group. These negotiations about an agreement were rejected by central management which said that such an agreement did not fall within the DPDHL Forum’s area of responsibility. In its statement, the EWC made clear its claim to receive “suitable information” in line with the directive on the use of this form of employment in the group. It stated that it would be sending a related list of demands to central management in the near future.


• Barry Callebaut: At the extraordinary meeting of the European works council of the Swiss group Barry Callebaut (9,300 employees, including 3,844 in Europe), which specialises in making chocolate and cocoa products, the management informed staff representatives of its intention to implement the collective dismissal of 37 workers in five countries as part of a project to create a shared service centre in Poland. The EFFAT trade union federation has published the contents of a statement from the European works council on its website.

• Safran: The French Safran group (45,000 employees) (EN) on 25 March signed a European framework agreement on developing skills and career paths with the IndustriAll European trade union federation. The text focuses on the following areas: 1. Anticipating future changes to profession; 2. Developing and securing career paths for employees (including the establishment of “career development interviews” to be held at intervals to be defined locally); 3. Promoting professional mobility as a means of developing employees’ skills. The agreement is illustrated by examples of best practice in the different countries and defines 5 monitoring indicators.

• Slow decline in unemployment: The EU28 unemployment rate was 9.8% in February, compared to 9.9% in January (10.5% in February 2014). This is the lowest rate recorded in the EU since September 2011. In the euro area, the unemployment rate was 11.3% in February, also down on January (11.4%) and on February 2014’s rate (11.8%) (see Eurostat press release).


• Slight rise in the cost of labour: The hourly labour costs increased by 1.4% in the EU and by 1.1% in the euro area between 2013 and 2014. In the EU, seven countries saw a decrease in the cost of labour: Ireland (–0.2%), Hungary (–0.5%), Portugal (–0.8%), Croatia (–1.6%), Sweden (– 2.2%), Cyprus (–2.8%) and the Czech Republic (– 3.8%). In 2014, the average hourly labour costs were estimated at 24.60 euros in the EU and 29.20 euros in the euro area; this masks a gap extending from 3.80 euros in Bulgaria to 35.9 euros in Luxembourg (see Eurostat press release).

In response to the challenge of how to reconcile the demands of the single market, with its implicit increase in worker and retiree mobility (although this remains relatively weak compared to the hopes of the EU’s founders) and the necessary protection of citizens exercising their right to mobility, the founding Member States of the EU had three choices: to establish a single social protection system applicable to all countries; to create a social security system specifically for mobile workers; or to act so that all the national social security systems are able to operate alongside each other, while guaranteeing everyone’s rights. It was the latter option which led to the adoption of Regulation No. 1408/71 on the coordination of social security schemes. As an indication of how complex this text was, some years ago the European Commission had banned its two experts on the text from travelling in the same aeroplane… Coordination is based on four principles: citizens must not be compelled to contribute to the social security systems of two Member States; nationals and citizens who have exercised their right to mobility must enjoy equal treatment; when calculating benefits, periods of insurance, employment or residence in other countries are taken into account; and the principle of benefit “exportability”: a citizen who is entitled to a benefit (a retirement pension for example) can receive it even if he changes his country of residence. (Find out more from the European Commission website).