07/05/2008: Growth of EEA unit labour costs
Although industrial labour costs per unit of output fell by 0.7% in the eurozone over the year to Q4 2007, they grew significantly in European Economic Area (EEA) countries outside the eurozone. The year to December 2007 saw industrial unit labour costs rise by 8.9% in Norway, 4.4% in Denmark, 3.3% in the UK and 3.2% in Sweden. In private-sector services such as retailing, hotels, transport and financial intermediation, unit labour costs grew by just over 2% throughout the EEA over the same period, but the lowest rise was in the UK (+0.5%).
Rises in unit labour costs indicate that the growth in average employee remuneration (and associated employment costs) exceeds growth in labour productivity. Such rises will narrow profit margins, fuel price inflation and ultimately feed back into a recessionary cycle in which productivity falls and employers are forced to shed labour at an ever-increasing rate.
02/05/2008: French public holiday reinstated
French employers should note that although Pentecost Monday (Whit Monday) ceased to be a public holiday in 2005, the holiday has now been officially reinstated. As it falls on Monday, May 12th this year and May 8th is also an official holiday, many employers will be giving Friday, May 9th as a bridging day off.
The Jewish festival of Shavuot has recently been added to the official holiday list in France. This does not mean that employers are obliged to give their Jewish employees leave on June 9th this year, but it is likely to be a popular reason for leave to be requested under RTT or other compensatory rest arrangements.
02/05/2008: Denial of sickness benefit unlawful
The Czech Republic's Constitutional Court has ruled that it is unlawful to deny sick pay to employees for the first three days of sickness absence. This is because the denial of benefits adversely affects those who are genuinely ill, even though the measure was introduced to discourage abuse of the sickness insurance system. Those denied pay for the three-day waiting period are also required to continue contributing to social security funds.
The Czech government now has two months to draft an amendment to social security legislation. This could well revert to the previous system, which set sick pay at 25% of normal remuneration for the first three days of absence and 69% thereafter.
30/04/2008: Minimum wage law still in limbo
Agreement has still not been achieved on the final text of Croatia's proposed minimum wage law. Employers want the wage to be set at 35% of the average wage but trade unions are pressing for the minimum wage be set at 41% of the average wage, rising each year to 50% by 2011. The current deadline for the Croatian cabinet to adopt the proposed law is May 15th 2008.
29/04/2008: Cutbacks in childcare support
Details are emerging about the planned cutbacks in Dutch state childcare support.
The changes will not take place until 2009 and the biggest losers will be families earning over 100,000 euros per year, who will no longer be entitled to any childcare benefit. The current facility for grandparents to receive financial compensation for acting as childcarers will also be removed, although some adjustment to income tax credits may be given for working parents to help them come to flexible arrangements with family members and friends.
As a consequence of the changes, the average parental contribution to childcare costs will rise from 19% to 23%, although those on lower incomes may continue to receive their current level of financial support.
25/04/2008: The missing 3%
Analysis of the latest harmonised consumer prices (HCIP) reveals a possible disparity of up to 3% in the published figures for the UK. The official figures show that price inflation is running at an annual rate of 3.6% in the eurozone, but at only 2.4% in the UK. However, over the past year, the UK's sterling exchange rate with the euro has cut the value of pound sterling by 14.4%. Around one-third of the UK's imports come from the eurozone countries and the fall in the value of pound sterling alone should have resulted in a price rise in the UK of 1.8%. The pressures on prices resulting from the global rise in oil and food prices will have impacted on the UK in a similar way to the eurozone countries, so why is price inflation in the UK 1.2% below that for the eurozone when economic conditions would suggest it should be running at 1.8% above the UK's continental neighbours?
One reason for the lower than anticipated increase has been the willingness of UK retailers and manufacturers to cut margins as input prices rise. However, it is also possible that recent delays in communicating UK price index changes to the EU's statistical agency in Luxembourg is due to a measure of political intervention in the light of public sector pay pressures, forthcoming mid-term local elections this May and concerns that any highlighting of the pound's exchange rate demise with the euro could raise questions about why the UK had not entered the eurozone at its inception in 2002.
22/04/2008: Boost to employee share ownership
The German government has announced proposals to encourage employee share ownership programs by introducing improved tax breaks and a number of financial incentives. Employees who are part of a share ownership program will be able to claim a tax break of 360 euros, up from the current ceiling of 135 euros. They will also qualify for higher levels of state subsidy to enlarge their company shareholdings. Companies will not be limited to setting up programs only for the issue of their own shares, but will be free to join multicompany investment partnerships.
22/04/2008: France gives interim SMIC rise
The minimum wage (SMIC) in France will rise on May 1st 2008 by 2.3% in an effort to compensate for the change in consumer prices since May 2007. A further rise will take place on July 1st 2008.
21/04/2008: Unions support national pay deal
The Irish Congress of Trade Unions (ICTU) has voted in favour of entering into negotiations with employers and the government on a new national wage agreement. ICTU's 50 member unions will be seeking pay increases that are at least in line with inflation, plus improved pensions and greater protection for agency workers.
20/04/2008: Powers of courts to rule on fixed-term workers Directive
The European Court of Justice (ECJ) has ruled that if an EU member state has wrongly implemented the EU Directive on Fixed-term Work (1999/70/EC), a national court has the jurisdiction to hear a claim based on the Directive itself.
The ECJ accepted that it was possible for a national court to rely on a clause (4(1)) in the framework agreement attached to the Directive giving fixed-term workers the right to equal treatment with comparable permanent workers, including the right to equal pay and occupational pensions. However, it found that a further clause (5(1)) preventing the use of successive fixed-term contracts was not unconditional or sufficiently precise for individuals to rely upon it before a national court.
Furthermore, a national court may give retrospective effect to a claim back to the date when the Directive should have been effective only if the national legislation itself includes a clause allowing such a retrospective effect.
Although this case concerns public employees in the Irish Republic, it will be of relevance to private-sector companies in Ireland and possibly elsewhere in the European Union. The specialised national court of any EU member state where national legislation is at variance with the fixed-term workers' Directive could receive a claim demanding equal treatment with comparable permanent workers. But the claim would be limited to all terms and conditions of employment except the duration of the contract itself, conditions applying to its renewal and any statutory social security rules that impact differently on fixed-term and permanent workers.
18/04/2008: Economy floating high on a bed of rising prices
The economy of Ukraine continues to expand and is generating rapid improvements in real disposable income despite a sharp rise in consumer price inflation.
The number of job vacancies rose by 11.2% between January and March 2008, whilst unemployment fell by 4.6% over the same period. However, consumer prices rose at a rate of 26.2% over the year to March 2008, up from an annual rate of 19.4% in January 2008. The principal driving forces for inflation have been increases in the costs of fuel (+50.5%) and food (+42.5%).
The latest available figures for disposable income reveal that over the year to February 2008, disposable incomes grew by 47.3%. After discounting inflation, this meant that the general standard of living had improved by 22.1% over the year.
17/04/2008: Weapons of words
The most frequent type of complaint received by Bulgaria's Discrimination Protection Commission during 2007 concerned racial prejudice. These complaints largely originated from the Roma community and often centered on the use of the term 'tsigani' (gypsies). Because this term is frequently used within the community itself, the Commission has established a working group to examine in what context the term may be considered to be pejorative and hence an indication of discriminatory behaviour.
14/04/2008: Employers achieve greater multiskilling and job flexibility
The Finnish Forest Industries Federation and the Paper Workers' Union have concluded a new collective agreement covering workers in the paper industry for the period from June 1st 2008 to March 31st 2010. The deal provides for pay increases averaging 4% during both 2008/9 and 2009/10. It also promotes the development of multi-skilled jobs, introduces incentives to participate in personal training plans, offers more scope to introduce flexible working hours and establishes greater levels of job security when companies undertake organisational restructuring.
11/04/2008: Accord on reform of labour relations
The two sides of industry in France have concluded an agreement on the representativeness of trades unions, the development of the social dialogue and the financing of trades unions.
The representativeness of trades unions will in future be determined by reference to factors such as their size of membership, income, financial transparency, independence and 'respect for republican values'. Within companies, unions will achieve recognition when they have gained at least 10% of votes in works council elections.
Also resolved after much debate were rules governing the appointment of Délégué Syndical (union shop stewards) and the operation of local trade unions in small and larger companies (over 50 employees). Procedures have also been agreed for local negotiations over terms and conditions in companies operating without Délégué Syndical.
The pooling of local election results will also determine the representation of individual unions within social welfare organisations, which are a key source of funding for the union movement in a country where only 8% of employees are members of a trade union.
A number of transitional rules will apply until January 1st 2009, after which a new law incorporating the agreement on labour relations reform should be in force.
08/04/2008: Life partners entitled to widower's pension
In a recent case heard by the European Court of Justice, it was established that a survivor's pension under a German occupational scheme must be classified as pay and therefore be subject to the EU Equal Treatment Directive (2000/78/EC). It was further noted by the court that Germany had established 'life partnerships', the conditions of which had gradually been made equivalent to those applicable to marriage. Consequently, a same-sex registered 'life partner' should enjoy equivalent rights to a widower's occupational pension as a married person. The fact that the scheme in question gave a right to surviving spouses that it denied to life partners amounted, in the court's view, to direct discrimination on the grounds of sexual orientation(C-267/06).
07/04/2008: Backdated deal at leading German retailer
A new 15-month pay agreement has been concluded covering German employees of Europe's fourth largest retailer, the Rewe Group. The deal gives 90,000 workers a general increase of 3%, backdated to January 1st 2008, plus 50 euros for every month worked in 2007 (when no agreement was in force) and a bonus payment equal to 12.5% of monthly remuneration. In return, employees will no longer receive premium payments for working up to 6.30 pm on Saturdays, although they will remain entitled to premium payments for working after 6.30 pm.
06/04/2008: Employers could face costly workplace refits
Norway's minister for family and equality issues, Anniken Huitfeldt, has proposed a new disability discrimination law to improve accessibility to transportation and buildings - including company vehicles, shops, offices and other workplaces.
A major problem in implementing such a law in Norway is that the Working Environment Act places a general prohibition on the collection of health information about employees or prospective employees. Although there is scope for claiming 'just cause' when a particular working environment is inherently dangerous for employees with certain individual conditions, such as the implantation of heart pacemakers, this data sensitivity restriction makes it difficult for employers to accommodate the majority of physical or mental health problems on a case-by-case basis.
The new law will circumvent the restrictions regarding employee privacy by requiring employers to introduce ramps and lifts of sufficient size to carry wheelchairs, and to optimise other workplace features (such as lighting and signage) even if they do not currently employ people with disabilities.
04/04/2008: Service and construction driving job growth
The number of jobs in the Netherlands during Q4 2007 was up 170,000 from one year earlier, representing an annual increase of 2.2%. Although the number of jobs in manufacturing and public administration was stable, job growth occurred in most other sectors of the economy. It was particularly marked in business services (+6.2%), hotels and restaurants (+3.6%), commerce (+ 3.0%) and construction (+2.5%).
03/04/2008: I&C regulations come fully into force
On April 6th 2008, the UK regulations on workplace information and consultation come fully into force and apply to all undertakings employing 50 or more people. FedEE has prepared a summary of its key provisions and details of employee participation rights in other European countries are also available to FedEE member companies.
03/04/2008: Will May 2nd be a public holiday?
Much confusion still exists about whether May 2nd will be a public holiday in Belgium this year. Because of the conjunction of Labour day and Ascension on May 1st, the Belgian government initially designated May 2nd as a public holiday. Then, on January 9th 2008, the acting Labour Minister announced that May 2nd would only be a holiday for banks. However, this decision has now been reversed again and May 2nd will be a public holiday unless another day has been designated under a sectoral collective agreement (before February 16th) or through a company-level agreement.
02/04/2008: All-night talks lead to 5.6% deal
After protracted negotiations, a collective agreement has finally been reached covering 40,000 employees in Norway's industrial and services sectors. It gives a general increase of 2 kroner (0.25 euros) per hour and 3 kroner (0.37 euros) per hour for certain low-income employees. This will raise average basic rates by 5.6% for those employed in public works and construction, fish processing, auto repairs, newspaper distribution, aluminium production, oil services, telecoms and emergency services. The deal also includes a transitional early retirement scheme that will partly be funded by the government.
31/03/2008: Rising eurozone price inflation
According to a flash estimate by the EU's statistical agency, Eurostat, the annual rate of consumer price (HICP) inflation rose in the eurozone from 3.3% in February 2008 to 3.5% this month.
31/03/2008: Prices to fall after price controls end
Even though government price controls in Malta end today, the annual rate of price inflation is likely to fall in April 2008. The controls were introduced on January 1st 2008 to create economic stability during the changeover to the euro (and ahead of the recent general election). The consumer price index (HICP) has consequently been stable at 103.7 since December 2007 and, although the ending of price controls is likely to lead to a price jump of around 1.7%, the annual rate of inflation is likely to fall because there was also a substantial price hike in April 2007. The annual rate of price inflation in April 2008 is therefore expected to be just 2.4%, down from 4% over the year to February 2008.
27/03/2008: Relaxation of foreign worker restrictions
The immigration quota for workers entering Estonia from non-EEA countries other than the USA and Japan has now been raised from 0.05% to 0.1% of Estonia's population. In future, foreign workers will be permitted to take up short-term jobs without having to go through full permit application procedures, provided that they are paid at least 1.24 times the salary received by Estonian employees carrying out similar work.
26/03/2006: Easing impact of price inflation
Austria’s coalition government has reached agreement on a number of measures to reduce the impact of inflation on workers with low incomes. The package includes exempting employees earning less than 1,100 euros per month from paying unemployment insurance contributions and bringing next year's pension increases forward by two months.
© FedEE Services Ltd 2008
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