IR Notes

On 13 May, the European Commission published its country-specific recommendations with regard to economic policy for 2015 and 2016. It calls on the member states to take measures to create jobs and stimulate growth. The adopted communication explains what the Commission expects in terms of employment policy and labour market reform. Marianne Thyssen (see statement, in English) calls upon the countries to make structural reforms and focus their efforts on “youth and long-term unemployment”. These reforms are aimed at removing obstacles to new hirings on open-ended contracts, such as “rigid dismissal provisions”, and “lengthy labour disputes”, in order to avoid encouraging the excessive use of temporary contracts, as in Poland. Their aim is also for “real wages to move in line with productivity developments and reflect differences in situations across industry and companies”.

• Migration policy: The European Commission on 13 May presented a communication on a European agenda on migration (in English) to promote legal migration and attract skilled workers to Europe in response to the decline in the working age population and to compensate for manpower shortages. Each country will be free to determine the number of people it allows to enter its territory, but the Blue Card scheme, designed to attract highly skilled third country nationals, has admitted only 16,000 people in two years and will be reviewed. A platform of dialogue with the social partners is to be established on this subject.


• Digital single market: On 6 May, the European Commission presented its package to create a digital single market in order to make cross-border e-commerce easier, to strengthen the growth of digital networks, and to accelerate the free flow of data. The trade union federations have been lukewarm in their response to this strategy, stating that it overlooks the impact of transitions on employment (see reactions of UNI Europa and IndustriAll). The tone on the part of the employers’ organisations such as BusinessEurope, CEEP and Etno is much more positive.

• New ruling on the definition of the term “establishment”: The European Court of Justice has added to its case law (see IR Notes 31). It has delivered a judgement in which it finds that Spanish legislation, which grants protection against collective redundancies when 10% of jobs in an “undertaking” having between 100 and 300 employees are under threat, is contrary to EU law (see press release). For the purposes of this calculation, and contrary to the directive – which calculates thresholds at “establishment” level – Spanish legislation takes into account the “undertaking” as a whole, that is to say including all its establishments. If, taking several establishments into account, the threshold of 10% is exceeded, the protection comes into play. This provision appears prima facie to be favourable to the employees, but the Court underlines that it may result in the employees of an establishment which, on its own, would meet the criteria for application of the directive, being deprived of the right to information and consultation.

Campaign against letterbox companies in the construction sector: The European Federation of Building and Woodworkers (EFBWW) will on 16 June unveil a campaign to denounce the phenomenon of letterbox companies being created in a member state where the social security costs are low (or in which the payment of social security contributions is inadequately monitored) without having any local economic activity.

• Night work in e-commerce: The government brought together the social partners in the sectors involved in online trading (logistics, distribution) at a “Round table on e-commerce” in order to initiate a social consultation on “a viable framework for night-time working” with a view to promoting the development of this sector.

• Pension reform: The Prime Minister, Boyko Borisov, wishes to raise the retirement age. The trade unions are completely opposed to this. The employers reject an increase in social security contributions. In the absence of an agreement, the current law provides for the retirement age (at present 60.8 years for women and 63.8 for men) to be extended by six months every year.

• Government wishes to strengthen social dialogue: Prime minister Bohuslav Sobotka is adopting a positive attitude in his dealings with the unions. Thus, a draft law provides for the state to contribute financially to the organisation of tripartite negotiations at national and regional levels. The minister of labour has proposed an amendment to the Labour Code which would allow trade unionists responsible for safety at the workplace to have their training costs reimbursed. This proposal awaits its second reading before parliament (further information in Czech).

• Discrimination: Law 28/2015 of 14 April, which took effect on 1 May, extends the list of types of discrimination contained in article 24 of the Labour Code to include sexual identity.


• Insolvency: Decree-law 59/2015 of 21 April implements the provisions of directive 2008/94 of 22 October 2008 on the protection of employees in the event of their employer becoming insolvent.

• Wage agreement at national level: The social partners on 14 May signed a wage agreement which provides for a 1% pay rise in 2015, going up to 1.5% in 2016. Should inflation rise above 2.5% over the 2015-2016 period, the text provides for an automatic review. The agreement must be respected by the trade union and employers’ organisations which signed it (CEOE, CEPYME, UGT and CCOO) and their members.


• Increase in women’s pensions: The council of ministers approved a bill to increase pensions for women with children, by 5% in the case of two children, 10% in the case of three children and 15% in the case of more than three children. The bill will go before parliament in the coming months.

• Safran: The European works council of the Safran group has published a press release in which the employee representatives use the example of the decision to close the Morpho Cards site in Germany to demand that the information and consultation procedure be respected, issuing a reminder that this procedure is “a prerequisite to the implementation of a project and cannot be carried out after”.


• Deutsche Bahn: In a press release, the European works council reiterated that it is in talks with central management on guarantees for employees affected by the creation in Romania of a shared service centre for accounting.

• Michelin: “We are in the process of negotiating an international framework agreement with Michelin,” states Kemal Özkan, assistant general secretary of IndustriALL, in an interview (in French) on the Multinationals Observatory website.

Minimum wage: The OECD has released a comparative study on “minimum wages after the crisis” in the 26 out of 34 OECD member countries that have a statutory minimum wage. The study shows that, in some countries, incomes of full-time minimum-wage earners can be well below the poverty line. In the Czech Republic, a lone parent with two children who is paid the minimum wage needs to work 80 hours per week to rise above the poverty rate line.

• Comparative study of the cost of labour in the EU: The German statistical institute Destatis has published a comparative study of the cost of labour in the EU. Among the countries with the highest hourly rates are Denmark (42 euros), Belgium (41.10), Sweden (40.20), Luxembourg (35.70) and France (35.20). In the EU as a whole, the average cost is 24.40 euros. At 31.80 euros, Germany is in eighth place.


• Employment rate: According to a survey carried out by Eurostat, the employment rate in the EU went up in 2014 to 69.2 %, although it still remains below its 2008 peak (70.3 %). The employment rate of women on the other hand reached its highest ever level, at 63.5 %.