IR Notes

The government established following the election of Emmanuel Macron as President of France has embarked upon the labour law reform promised by the incoming president. Following an initial consultation period with the social partners from 12 to 22 June focused on reforming collective bargaining, the government on 28 June adopted a so-called “enabling” bill which, after parliamentary approval, permits it to introduce legislative measures by way of executive decree in a way that is quicker than the conventional legislative process (see press kit). The bill lays the foundation for a series of seven executive decrees which are set to fundamentally change the French system of industrial relations by providing for the following: 1/ Decentralisation of collective bargaining, by redefining the role of sectoral collective agreements while giving greater powers to company-level negotiation. 2/ Amalgamation of all employee representative institutions (staff delegates, works council, committee for health, safety and working conditions) in a single body which, like the German Betriebsrat, could negotiate company- or group-level agreements. In return for this simplification, the bodies would be more closely involved in the employer’s decisions, while employee participation on company boards would be improved. 3/ Greater legal certainty for employers when they implement individual redundancies or redundancies on economic grounds as well as greater flexibility in the conditions under which fixed-term contracts and teleworking can be used, and the possibility of linking the duration of an employment contract to that of a specific project or assignment. 4/ Reduction in the number of sectoral collective agreements and tightening of procedures for extending collective agreements. 5/ Revision of the legislation concerning the recognition of occupational hardship and regulation of posted workers. The government will continue its consultation of the social partners over the summer before consulting the appropriate organisations on which the social partners sit and adopting the executive decrees from September onwards.

• Carcinogens or mutagens at work: The Council and the European Parliament on 28 June reached an agreement on a directive intended to help protect workers from exposure to carcinogens or mutagens at the workplace. One of the compromises obtained by the Parliament is that the European Commission will be required to assess the possibility of including reprotoxic substances in the scope of the directive by the first quarter of 2019 at the latest, and may present a legislative proposal on the matter (see Council press release).


• Certificates for people working in the inland navigation sector: The Council has reached an informal deal with the European Parliament on a draft directive setting up a common system of certificates for people working in the inland navigation sector in the EU. Crew members as well as boatmasters holding such a certificate will be able to practise their profession on inland waterways across Europe including the river Rhine (see Council press release).

• Assistance from the European Globalisation Adjustment Fund: On 21 June, the European Commission proposed to provide Finland with €3.5 million from the European Globalisation Adjustment Fund (EGF) to help 1,000 of the 1,248 workers made redundant by Microsoft Mobile Oy and its suppliers to find new jobs (see press release).


• European trade union movement against the services e-card: The European Trade Union Confederation (ETUC) has published a press release announcing its strong opposition to the services e-card proposed by the European Commission on the eve of an action led by the confederation and the European trade union federations EFBWW and UNI Europa.

Maintenance of employment contracts in the case of business transfer prior to insolvency: The European Court of Justice on 22 June ruled on a case from the Netherlands concerning the interpretation of articles 3 to 5 of directive 2001/23 dated 12 March 2001 relating to the transfer of undertakings (CJEU, 22 June 2017, case C-126-/16, Federatie Nederlandse Vakvereniging). The facts concern Estro Groep, which was the largest childcare company in the Netherlands with nearly 380 childcare centres and around 3,600 employees. With insolvency imminent, the management made use of a “pre-pack”, a practice applied in the Netherlands that allows some of the assets of a company to be taken over by a new business prior to the declaration of insolvency. By using this tool, a new entity acquired 243 of the 380 centres and retained almost 2,600 employees. However 1,000 employees were dismissed. Several of those affected contested the pre-pack procedure on the basis that the directive on the transfer of undertakings should have applied and guaranteed the transfer of their employment contract to the new company. While EU law permits a derogation from the obligation to maintain employment contracts in case of a transfer where the company is insolvent, the Court found that the pre-pack procedure is “not ultimately aimed at liquidating the undertaking” and that the economic and social objectives it pursues “are no explanation of, or justification for, the employees of the undertaking concerned losing the rights conferred on them by directive 2001/23 when all or part of that undertaking is transferred” (see press release).

• Agreement on pension reform: The governing coalition has just concluded an agreement with the Danish People’s Party that will see a pension reform adopted in the autumn which will allow Danes to extend their working lives and continue to pay contributions in order to improve their pension. This is not possible at present after the age of 65. The reform will also change the way in which pensions are received and reduce the possibilities for early retirement. The reform, whose aim is to extend the retirement age by six months in response to the increase in life expectancy, will be voted on in the autumn and introduced on 1 January 2018.


• Tripartite negotiations on training for adults: Following the agreement concluded on 17 March 2016 concerning the integration of refugees on the employment market and that of 19 August 2016 devoted to young people and their training, the government on 21 June announced that negotiations had begun on adult and continuing training, thus accomplishing its desire that the entire workforce should be as well prepared as possible for the labour market of the future.

Vouchers are back: The voucher scheme is a sort of cheque system allowing employers to pay workers for short-term jobs. It was reintroduced by the government following the repeal last April of the legal provisions regulating the scheme (decree-law No. 25/2017) in order to avoid having to hold the referendum demanded by the trade union confederation CGIL and intended to stop the use of this flexibility instrument. The government has now adopted decree-law 50/2017, which distinguishes between the tools intended for corporate use and those for families. Small enterprises with fewer than five employees will be able to access contracts for casual employment up to an annual limit of €5000 by means of a telematic system in conjunction with the National Social Security Institute (INPS). The contracts provide the employee with more guarantees in terms of wages and social security contributions than was the case with the previous vouchers. As for private individuals, they will be able to purchase “family booklets” for the payment of people they employ to carry out domestic work. The social security contributions will be lower in this case. Opponents claim the scheme is in breach of the Italian constitution, and the CGIL trade union, which had backed the call for a referendum, is threatening to bring an action before the constitutional court.

• New early retirement scheme: The government has adopted two decrees (Nos. 88 and 89) allowing workers to begin their retirement before the official age for retiring. The first measure allows early retirement to be taken after 41 years of paying contributions by people who started work no later than the age of 18. However, the beneficiary must also belong to one of the very disparate categories of disadvantaged workers, as a result of having done one of the heavy jobs identified in one of the decrees, having taken care of a disabled person or having been dismissed on grounds of incapacity. In addition, workers belonging to these categories will also be able to benefit from a further measure. They will be permitted to borrow a sum of money in order to receive a monthly allowance capped at €1500 from the age of 63 until the time when they can draw their old-age pension. For these beneficiaries, the state will assume responsibility for the loan. Workers who do not satisfy all the criteria may also have access to this type of loan, but they will have to repay it once they have retired.

• Collective agreement in the commercial sector: After some difficulty, an agreement was reached on 8 June between the Akademiker and Unionen trade unions, and the employers’ organisation Svenskhandel on services, management and the retail sector affecting more than 80,000 employees. The agreement applies from 1 May 2017 to 30 April 2020. While it provides for a wage rise corresponding to the guidelines issued by industry (+ 6.5% over three years), it introduces greater flexibility as regards the conclusion of fixed-term contracts, allowing people to be recruited freely for periods of at least seven days, unless an agreement stipulating shorter periods exists between management and the trade unions.


• Government plans to review legislation on the right to strike: Following a year of short strikes, lock-outs and disputes between the dockers’ union SDU and the company APM Terminals, which manages the port of Gothenburg, Sweden’s main container terminal, the government is assessing the damage caused to the country by the dispute and has announced its intention to review the legislation so as to prevent disputes of this kind.

Tereos: The French cooperative group Tereos (24,000 employees including 5,525 in the EU), a leader in the sugar, alcohol and starch markets, signed an EWC agreement on 4 May. The special negotiating body was assisted by the trade union federation EFFAT. Most of the group’s workforce is based in France (4,041 employees or 73% of the headcount), with others employed in the Czech Republic (543), Belgium (391), Spain (204), Romania (189) and UK-Ireland (134). Only countries with at least 100 employees are represented on the European works council. Each member must hold an office with his local trade union or as an employee representative. The EWC is to meet at least twice a year, for one day, so that attendees can return home in the evening “for reasons of work-life balance”. Members can meet the day before for a one-day preparatory meeting, as well as for a review meeting after the plenary, although this should not prevent them from returning home that same evening. The agreement states that “consultation of the EWC is not required prior to the information and consultation procedures of national bodies. The consultations of the EWC and national bodies may be carried out in any order or concurrently”.

• Michelin: At the last plenary meeting in early April, the secretary of the EWC announced the creation of working parties within the EWC to address specific topics such as health and safety at work. Otherwise, the EWC launched a study with support from a consultancy (S.Partner, a subsidiary of Syndex) on the “management of older workers”.