IR Notes

On 23 April, the European Commission presented a proposal for a directive on whistle-blowers who report breaches of EU law (for scope see press release). And in terms of scope, the Commission encourages Member States “to go beyond this minimum standard and establish comprehensive frameworks for whistleblower protection based on the same principles”. All companies with more than 50 employees or with an annual turnover of over €10 million will have to set up an internal procedure to handle whistle-blowers’ reports (chapter II). All state, regional administrations and municipalities with over 10,000 inhabitants will also be covered by the new law. This protection will be of particular benefit to employees (art. 2.1, a) of the organisation concerned, together with self-employed persons (art. 2.1, b) who work with the organisation, managers (art. 2.1 c), interns (art. 2.1 c) and persons undergoing the recruitment process (art. 2.2). These protection mechanisms must include clear reporting channels, both within and outside the organisation (chapter III), to ensure confidentiality, and a three-tier reporting system consisting of: internal reporting channels or, if these do not work, reporting to a competent national authority, or if neither of these mechanisms works, public or media reporting. The proposal adds feedback obligations for authorities and companies, which must respond to and follow up whistle-blowers’ reports within three months if reports are submitted through internal reporting channels. The text prohibits all forms of retaliation against the whistleblower (chapter IV, art. 14). If he/she suffers any retaliation, he/she should have access to free advice and appropriate remedies (art. 15). The burden of proof will be reversed in such cases, so that the person or organisation involved must prove that they are not acting in retaliation against the whistleblower (art. 15.5). Whistle-blowers will also be protected in judicial proceedings, in particular through an exemption from liability for disclosing the information in question. Although many civil society stakeholders consider the proposed directive somewhat ambitious, the European Trade Union Confederation (ETUC) is arguing that the text should be extended to encompass labour law: “An employee could expose harm to animals or the environment but not to workers”, comments Esther Lynch, ETUC’s Confederal Secretary (see press release).
> See also the press briefing on the Commission’s proposal produced by the Greens/EFA parliamentary group

Proposal for a directive on cross-border conversions, mergers and demergers: On 25 April, the European Commission presented a proposal for a directive which defines common procedures at EU level to enable businesses to move from one EU country to another, merge, or demerge into two or more new entities in a cross-border context. The text includes a chapter on employee information, consultation and participation. As in the case of Directive 2001/86 on the involvement of workers, which accompanied the regulation on the status of a European company, the text includes provisions designed to avoid situations where the conversions that companies undergo may result in them being able to circumvent national legislation on employee participation. This is the aim of article 86l of the proposal which deals with the participation of employees in the company carrying out a conversion, where the protection of the rights of participation is put at risk by the operation. In principle, the company will have to follow the respective rules of the destination Member State, unless the national law of that Member State does not provide for the same level of the employees’ participation in the company’s management or supervisory organs. Based on a certain threshold of the number of employees covered by such a mechanism prior to the proposed operation, the company will have to enter into negotiations with the employees to determine their participation. The negotiations will be obligatory, and will have to result either in a bespoke arrangement regulating the involvement of employees or, in case no agreement is reached within six months, the standard rules of employees’ participation as laid down in the Annex to Directive 2001/86/EC will apply. In respect of the different types of operations covered by the directive, the text stipulates that specific information on matters affecting the employees concerned must be provided for staff representatives or, failing that, for all employees. Staff representatives should also receive any information distributed to shareholders and other stakeholders. The European Trade Union Confederation (ETUC) believes that the provisions “need serious improvement to ensure that workers are able to anticipate and influence management decisions. It must be clearly stated that existing participation rights cannot be watered down, now or in the future” (see ETUC press release).

• Regulating online platforms: On 26 April, the European Commission presented new rules for regulating the activities of online platforms (see press release). According to the European Trade Union Confederation (ETUC), the proposed measures fall short by limiting regulation of unfair practices to trading platforms which offer goods and services, and excluding so-called collaborative platforms such as Uber or Deliveroo (see press release).

• Vote on the “mobility package” on European Parliament committee: On 25 April, the European Parliament’s Employment and Social Affairs Committee adopted three opinions on the “road transport package”, which includes several legislative proposals (see website of the European Parliament’s Employment and Social Affairs Committee). Among other things, MEPS want to extend the new rules on the posting of workers to include the road transport sector and guarantee rest periods at home for drivers. The European Transport Workers’ Federation (ETF) is delighted with the amendments adopted by the committee (see press release).


• Assistance for employees made redundant by Air France: On 23 April, at France’s request, the European Commission offered to mobilise 9.8 million euros from the European Globalisation Adjustment Fund (EGF) to help 1,858 employees made redundant by Air France to find another job (see Commission’s press release).


• Dangerous substances: The European Agency for Safety and Health at Work has launched its pan-European campaign for “Healthy workplaces” which, as its theme for 2018-2019, has “Manage dangerous substances”.

• Inland navigation: On 23 April, the European social partners in the inland navigation sector adopted a joint declaration pledging to fight against the workplace violence faced by women and LGBTQI employees (see press release issued by the European trade-union federation ETF).

A collective agreement for tourism: On 18 April, the sectoral collective agreement for tourism and catering activities was signed between the Croatian employers’ association and the two largest trade unions in the sector. The agreement sets a guaranteed basic minimum wage for traditional jobs in the hospitality sector such as hostesses, waiters and cooks. Employees who perform the most basic tasks will receive a guaranteed gross wage of at least 4,700 kunas (627 euros). This is the basic minimum wage used to calculate supplements for working nights, Sundays and public holidays, and for overtime. The agreement encompasses all employers and workers in the sector.

• Tougher measures to combat fraud related to posting of workers: On 27 February, the government adopted a bill on the reform of apprenticeships, vocational training and unemployment insurance. The bill also provides for the introduction of tougher sanctions to combat fraud related to the posting of workers and illegal working, and reinforces the prerogatives of the labour inspectorate. The maximum fines that could be imposed under administrative law on any employer who fails to comply with the rules governing the posting of workers or with employment legislation applicable to posted workers will be increased from €2,000 to €3,000 for each posted worker affected by the offence, and from €4,000 to €6,000 for repeat offences. If an employer fails to pay such a fine, the labour inspectorate may order them to suspend the posting operation. The bill also includes a provision intended to combat letterbox companies by creating a new offence of undeclared work: ‘company formation fraud’ (see government press release and Ministry of Employment press release).

• Labour market reforms: On 23 March, the government presented a proposal for reform of the labour market to combat lack of job security and segmentation of the labour market, and also to boost the role played by collective agreements. Among other things, the proposal involves limiting the use of fixed-term employment contracts by reducing both their term (from three to two years) and the number of renewals permitted, which can no longer result in the term specified in the initial contract being exceeded. Another measure seeks to create an additional social security contribution that would be payable by employers who make the most use of casual labour and short-term employment contracts (see press release).

Dentsply Sirona: On 23 February, following the merger in 2016 of the American company Dentsply and the German company Sirona, neither of which had a European Works Council, the new American company Dentsply Sirona, which is specialised in dental equipment, signed an agreement on the establishment of a European Works Council. The agreement, which is governed by German law, stipulates that its provisions in the area of information and consultation also cover Switzerland and Turkey. It will also apply to the United Kingdom, if this country leaves the Union. The European Works Council can arrange to be assisted by a trade union expert at Annual Meetings and/or Managerial Committee Meetings. The agreement stipulates that management representatives of the various businesses are to be involved in information and consultation procedures, to ensure that employee representatives are negotiating with the right people. The group has approximately 7,000 employees in the EU, mainly in Germany (3,740), Sweden (997), Italy (609) and France (417).

• Orpéa: The special negotiating body responsible for establishing a European Works Council, working with the management of the Orpéa group (50,000 employees), a major player in the business of providing care and accommodation for the elderly, met for the first time, on 25 April, in the presence of two representatives of the European Public Service union (EPSU). EPSU plans to organise the employees of large groups operating in the care for the elderly sector, such as Orpéa and its competitor Korian (see below).  (see EPSU press release).


• Korian: Employee representatives of the Korian group (49,000 employees), which specialises in providing care and support for the elderly, held a meeting on 11 April, at the initiative of the European Public Service union (EPSU), for the purpose of setting up a network of trade unionists covering Germany, Belgium, France and Italy. The participants discussed the stages involved in setting up a European Works Council. (see EPSU press release).


• Safran: On 10 April, the management of the Safran aerospace group and its European Works Council signed an amendment to the agreement establishing the European Works Council (see IR Notes 96, 3. Companies). This amendment does not change the scope of the agreement, which continues to be limited to EU Member States, meaning that the British delegation will cease to be party to it, post-Brexit. In particular these changes include: 1° enhanced protection for European Works Council members, and in particular an obligation to inform the group HRD and the select committee of the European Works Council of any measures intended to terminate a member’s contract of employment, for a period of up to six months after the member’s term of office has come to an end; 2° a definition of transnational competence whereby the committee is notified but not consulted on matters relating to an important event involving European employees and a single Member State; 3° the right to pass on a summary of the discussions held at meetings to European employee representatives or, failing this, to the employees directly; 4° abolition of the criteria relating to workforce and sales turnover impacted, which justify calling an extraordinary meeting of the European Works Council; 5° securing the right for members to visit European sites subject to giving advance notice.

Danone: On 26 April, Danone’s CEO Emmanuel Faber announced the start of a consultation procedure with the group’s social partners, with a view to creating participatory governance based on the principle “One Person, One Voice, One Share”. The group will award one Danone share to each of the group’s 100,000 employees and create an “annual, amplified dividend-based incentive scheme”. Moreover, by the end of the year, each employee will be invited to actively engage with the company and create the future by helping to prepare the roadmap for Danone’s 2030 Goals (see group press release).

ArcelorMittal: At the initiative of the European trade-union federation IndustriAll Europe, approximately 50 trade union officials from the steelmaking group ArcelorMittal and the Italian steel producer Ilva, which ArcelorMittal plans to take over, met in Brussels on 26 April, to denounce the divestment decisions submitted by the company’s management to the European Commission, in order to comply with the demands of the EU’s DG Competition (see IndustriAll Europe press release). On 3 May, the participants adopted a joint declaration calling for the company’s industrial assets to be preserved.

• PSA-Opel: On 4 May, PSA and Opel employee representatives met for the first time, in Brussels, under the auspices of the European trade-union federation IndustriAll Europe.


• WestRock: On 20 April, the international trade-union federations UNI Global Union and IndustriAll Global Union set up a world trade union alliance within the American paper and packaging manufacturing group WestRock (45,000 employees), which was created in 2015, as a result of the merger between MeadWestvaco and RockTenn (see press release).

Regional mapping of unemployment: more than 80% of the European Union’s regions saw their unemployment rate for persons aged 15-74 fall in 2017 compared with 2016, and approximately 60% recorded a decrease of at least 0.5 percentage points, according to a Eurostat press release. However, regional unemployment rates continued to vary widely across the EU regions. The lowest rates were recorded in the Prague region (1.7%) in the Czech Republic and Trier (2%) in Germany, followed by the Czech regions of Central and South Bohemia, and the German regions of Lower Bavaria and Middle Franconia (each 2.1%).
> In brief: a study by the European Parliament on the Integration of refugees into the employment market in the three main host countries (Germany, Austria, Sweden) ; a study by the Friedrich Ebert Foundation on the partnership created by the United Auto Workers Union (UAW) in the USA and the German metalworkers’ federation IG Metall; the European Trade Union Institute (ETUI) has submitted a paper analysing the impact on the employment market of the austerity programmes implemented since 2009 in 11 EU Member States.