IR Notes

The European Commission is currently finalising its road transport initiative which is due to be unveiled on 31 May, as announced by the responsible Transport Commissioner, Violeta Bulc. On the basis of the evaluation of the legislation currently applicable to road transport (see IR Notes 74, Social Update), the Commission intends to tackle the questions of safety, working conditions and fair competition in one fell swoop. To do this, it has carried out multiple consultations on an issue symptomatic of the woes besetting the EU: the sector is seeing unbridled competition, with companies that have engaged in social engineering in order to minimise labour costs, including the expansion of fraudulent practices and in particular the use of letterbox companies. The sector has come to stand for liberal excesses: social dumping is practised on a grand scale, and all the rules, such as those on cabotage, are being circumvented or interpreted in such a way as to reduce the cost of road transport. Bulgarian lorry-drivers criss-cross Europe for months on end in their vehicles, where they also spend their weekends, while motorway service stations in Germany are being transformed into campsites for truckers. The countries subjected to this race to the bottom have reacted individually to protect their own road transport sector: Germany has decided to apply its statutory minimum wage to all drivers crossing German soil or undertaking cabotage operations. France has issued a reminder that the minimum wage applies to drivers carrying out cabotage operations in France. Following Belgium, France and the Netherlands, Germany has also just approved a regulation that bans truck drivers from spending their 45-hour weekly rest period in their cabs. Like the revision of the posted workers directive, the sector’s future pits the countries of western Europe against their central and eastern European neighbours. On 31 January of this year, nine member states launched an “alliance” to combat unfair competition and abuses in the transport sector. The group – comprising Austria, Belgium, Denmark, France, Germany, Italy, Luxembourg, Norway and Sweden – does not include a single eastern European country. The Commission for its part intends to pursue countries that attempt to protect themselves where it finds that the free movement of goods and services is being affected (see Austria below). It is therefore high time that a European initiative is taken to improve how this sector is regulated. But “instead of attacking fraud, the European Commission intends to make it all legal,” explains Roberto Parrillo, chair of the ETF road transport section. The federation has in fact produced a document which, it says, summarises the first draft of the Commission’s proposal. Furthermore, to make its voice heard, the ETF has had 60 of its national affiliates sign a declaration on 5 April in Warsaw, calling on the Commission, the European Parliament and the member states “to adopt a road initiative to effectively combat social dumping and unfair competition”. The content of the initiative to be taken by the Commission will be a good indicator of any paradigm shift at EU level towards social progress, as was the wish expressed by Commission President, Jean-Claude Juncker, in order that the EU obtain a social “triple A” rating. If the unions are to be believed, this approach is still far from becoming reality.

During the presentation of the European Pillar of Social Rights (see IR Notes 74), the European Commission on 26 April adopted a series of initiatives which we return to below.

• Proposal for a directive on work-life balance: The Commission has presented a proposal for a directive on work-life balance. It grants new rights to employees and, much to the ire of BusinessEurope (see press release), repeals the current directive 2010/18 on parental leave, which was the result of an agreement concluded by the European social partners. The Commission proposes: 1/ To create two new types of leave: on the one hand, paternity leave of at least 10 working days around the time of birth of a child, and on the other, carers’ leave of five days per year in the event of illness of a direct relative. In both these cases, the leave creates an entitlement to be paid at least at sick-pay level. 2/ To improve the 4-month parental leave package by allowing it to be taken until the child is twelve years old (instead of eight at present) and making it non-transferable between parents in order to encourage take-up by fathers. It will be possible to take it on a full- or part-time basis. 3/ To create, for parents caring for children up to twelve years old and carers, the right to request flexible working arrangements, such as reduced working hours, a different work schedule or the option of working remotely.


• Commission launches two consultations of the European social partners: With the European social partners currently in the throes of negotiating their next multi-annual work programme, the Commission has put forward two topics for their attention: 1/ The modernisation of the rules on employment contracts by revising directive 91/533 EEC of 14 October 1991 which obliges employers to notify employees of a certain number of aspects of their employment relationship. The Commission wishes to speed up the revision of this directive to include a definition of the term “worker” encompassing the new forms of employment, and submission of the written document by the first day of employment at the latest, rather than “not later than two months after the commencement of employment” as at present. This would make it a further weapon in the fight against fraud. 2/ Access to social protection for all workers, having found that the rights and obligations associated with social protection have been developed over time primarily for workers employed on standard contracts, whereas protection has been insufficiently developed for people in self-employment and non-standard employment (see press release).


• Reflection on the future of social Europe: Following the publication of its white paper on the future of Europe, the Commission has unveiled its first reflection paper on the social dimension of Europe by 2025 (see press release). The text will allow a consultation process to be launched around three options: 1/ Limiting the social dimension to free movement. 2/ To allow those states which want to do more in the social field to do so. 3/ To deepen the social dimension of the EU. In this case, legislation would not only set minimum standards but, in selected areas, could fully harmonise citizens’ rights across the EU, with the aim of achieving a convergence in social outcomes.


• No revision of working time legislation: The Commission has adopted a communication aimed at clarifying the working time directive and providing “guidance on how to interpret various aspects of this directive in line with a growing body of case law”. “This will help Member States implement the acquis correctly and avoid further infringements,” the Commission hopes.


• No revision of EWC directive 2009/38: In a working document the Commission indicates that, later this year, it will publish the evaluation report on the implementation of directive 2009/38 relating to European works councils together with a guidance document “aimed at improving” its implementation and strengthening its legal certainty. In other words, the Commission does not intend to present a revision of the EWC directive.

Mandatory due diligence in the textile sector: In a resolution adopted on 27 April by a very large majority (505 for, 49 against and 57 abstentions), MEPs voted in favour of the adoption of “legislation on due diligence obligations for supply chains in the garment sector”, based on the OECD guidelines and similar to those relating to minerals from conflict zones. The initiative was welcomed by the European trade union federation IndustriAll as well as by the employers’ organisation Euratex, although the latter considers it necessary to avoid all forms of legislative intervention to make due diligence mandatory (see press release).

National authorities have only one channel if they wish to challenge an A1 certificate provided in connection with the posting of workers: The French authorities in charge of monitoring the social security liability of workers posted by a river cruises company based in Switzerland considered that the A1 (formerly E101) certificates provided to these employees by the Swiss social security system had not been issued in compliance with EU legislation. They held that the Swiss authorities should not have issued these certificates because the employees in question were carrying out their activity solely in the territory of France and not in Switzerland. This was therefore not a “posting” in the meaning of EU law. The French authorities had imposed a fine of € 2 million on the Swiss company. In a matter referred for a preliminary ruling by the French Court of Cassation (Cass., ass. plén., 6 November 2015, No. 13-25.467), the European Court of Justice has confirmed its case law, whereby the A1 certificate is binding on the competent institution and the courts of the host member state (CJEU, 27 April 2017, case C-620/15, A-Rosa Flussschiff GmbH). If the authorities of the host nation wish to challenge an A1 certificate, they must follow a precise administrative procedure, as envisaged by the regulations on the coordination of social security systems. This procedure must be followed “even if it were established that the conditions under which the workers concerned carry out their activities clearly do not fall within the material scope of the provision on the basis of which the E101 certificate was issued”.
> Also see: Following this ruling, Ryanair published a press release indicating that it will be pursuing a refund of the € 15 million wrongfully paid to the French authorities, which refused to accept the A1 certificates issued by Ireland for Ryanair personnel posted to its base in Marseille.

• Determination of the competent judge in a case involving air crew: The Advocate General of the European Court of Justice on 27 April issued his opinion in a matter concerning cases relating to employment contracts of Ryanair air hostesses and stewards carrying out their activities from the Belgian airport of Charleroi (CJEU, opinion 27 April 2017, cases C‑168/16 and C‑169/16, Sandra Nogueira). In the judge’s opinion, these cases come under the jurisdiction of the courts of the place “where or from which” the employees principally discharge their obligations towards their employer. After listing six criteria to be taken into account, the Advocate General took the view that the six criteria “unequivocally point to the courts of the place where Charleroi Airport is situated” (see Court of Justice press release). The Court of Justice will issue a ruling within the next six months.


• Compatibility of German legislation with EU law: The Advocate General of the European Court of Justice on 4 May issued his opinion in a case that has strongly mobilised the European trade union movement (CJEU, opinion, 4 May 2017, case C-566/15 and see IR Notes 60, interview). On reading his opinion (see Court of Justice press release), German co-determination should not be called into question. It remains to be seen whether this view will be confirmed by the Court of Justice.

• Social dumping in the road transport sector: The European Commission on 27 April launched an infringement procedure against Austria concerning the application of the Austrian law aimed at combatting wage and social dumping in the road transport sector. “Whilst fully supporting the principle of national minimum wages,” the Commission considers that the application of this legislation to all international transport operations involving loading and/or unloading on Austrian territory constitutes a disproportionate restriction of the freedom to provide services and the free movement of goods (see press release).

• Government finds the “Molière clauses” unlawful: The government on 27 April published an instruction intended to inform representatives of the state at département level that the so-called “Molière clauses” are illegal. Their aim is to impose the use of French on employees of companies bidding for public contracts opened to tender by certain regional authorities. This instruction may serve as an argument for companies prevented from bidding for public contracts because their employees who were due to be posted to work on building sites in France did not speak French.

DS Smith: DS Smith Packaging (26,000 employees), a leader in the manufacture of corrugated packagings, on 3 April announced the signing of an employee charter together with its European works council. The text is heralded by the group as “a wide-ranging statement” covering many aspects of the employee-employer relationship (see management press release).

• Unilever: The EWC of the Unilever Group has denounced the company’s plans to sell its margarine brands Flora, Bertolli and Stork, for £ 6 billion. The sale would affect 1,100 employees in the EU, says Hermann Soggeberg, chairman of the European works council, who is quoted by the newspaper The Telegraph (see article). The EWC is pressing the group for a 3-year job guarantee clause for the transferred employees.


• XPO Logistics: A world leader in the logistics sector, the American group XPO logistics (87,000 employees) has set up a special negotiating body with a view to establishing a European works council.

• LafargeHolcim: Some 40 activists mobilised by IndustriAll Global Union and Building and Wood Workers International (BWI) gathered at the venue of the group’s annual shareholders’ meeting in Zurich in order to make attendees aware of the on-going negotiations of a global framework agreement. During the annual shareholders’ meeting, according to IndustriAll, the company CEO pledged to sign the GFA before his departure in July 2017 (see press release).

Wage convergence in reverse: A new study published by the European Trade Union Institute confirms that wages in eastern European countries are no longer converging with those in the west. Wage inequalities between Poland, Hungary and the Czech Republic on the one hand and Germany on the other are greater today than they were in 2008. The figures are contained in a working document entitled “Why central and eastern Europe needs a pay rise” (in English) produced by Bela Galgoczi. In 2008 the average gross wage in Poland was 33% of the average gross wage existing in Germany; in 2015, it was down to only 29.3%; in Hungary, it was 31.9% in 2008 but only 25% in 2015; finally, in the Czech Republic, the equivalent figures were 34.9% and 30.9% respectively in 2008 and 2015. The study highlights a convergence that came to a halt in 2008 (also see IR Notes 73, Studies and reports). Since then, the gap has widened, and the convergence gains of the years 2000-2008 have been lost. The trade union movement intends to draw on these studies to call for pay rises in the countries concerned (see ETUC press release).