Mettre à Jour: the European HR newswire

Sample Issue 2010/11: June 3rd 2010

EUROPE: AGREEMENT REACHED ON RESTRUCTURING PROGRAMME

Earlier this week General Motors (GM) signed a framework agreement with its European Works Council (EWC). This follows the recent conclusion of a cost savings agreement with the UK Unite union and unions representing workers at GM’s Opel division in Germany. These deals should achieve annual savings amounting to 265m euros.

Several governments have already agreed to provide substantial aid packages to GM operations in Europe. But Germany’s economics ministry has yet to decide whether it will provide the necessary loan guarantees required for the company’s restructuring exercise to go ahead.

In addition to widescale redundancies, the company plans to eliminate a non-consolidated payment scheduled to be paid to German employees for the period May 1st 2010 – March 30th 2011. A planned 2.7% general pay rise in Germany will also be postponed until January 31st 2012 and all vacation and Christmas bonuses will be reduced by 50%.

According to EWC Chairman Klaus Franz “The latest agreement includes an appendix on the next steps to be taken to find an investor for the company’s factory in the Belgian city of Antwerp” which is still officially scheduled to close at the end of next month.

GERMANY: THE RIGHT TO INFORMATION ABOUT JOB CANDIDATES

The German Federal Labour Court has asked the European Court of Justice (ECJ) to rule on whether a rejected candidate for a job has a right to access information about the employer’s eventual appointee.

The ECJ reference arises from a case initially dismissed by the Hamburg labour court [H 3 Sa 102/07] owing to lack of evidence on specific legal grounds. The applicant claimed that by not selecting her for interview an employer discriminated against her unlawfully on the grounds of her gender, age and ethnic origin under the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz). The applicant also claimed that she wasthe only candidate suitably qualified for the job and requested to know who was recruited to the job and on what criteria the decision was made. [8 AZR 287/08 (A)].

GERMANY: HOLIDAY ENTITLEMENT FOLLOWING ABSENCE

The German Federal Labour Court has recently further clarified last year’s ruling by the European Court of Justice (C-350/06 and C-520/06) concerning compensation for annual leave not taken due to sickness absence.
In Germany severely disabled employees are entitled to take up to five days additional leave each year, whilst collective bargaining agreements frequently provide for leave rights that exceed those laid down by the Federal Vacation Act. Does a severely disabled employee on extended sick leave have the right to claim compensation for these additional holiday entitlements?

According to the Federal Labour Court an employee may not forfeit their right to additional leave arising from their disability. However, extra holidays arising from a collective agreement does lapse at the end of the holiday year. [BAG 9 AZR 128/09].

IRISH REPUBLIC: COMPENSATION FOR STAFF FOLLOWING TRANSFER

The Irish Labour Court has arbitrated between the Health Service Executive (HSE) and trade unions representing health workers and administrative staff following changes made to contracts as part of a transfer of undertakings.

Staff choosing to move to the HSE disputed a reduction in ill- health benefits and protected pension entitlements after the transfer. The qualifying period for sickness benefits had increased from two to five years and staff could not retain their pension benefits if they resigned within two years of the transfer. Although the HSE offered staff 75% of the loss to enable them to buy private health insurance the trade unions had sought reimbursement in full. However, the court recommended that a long-term disability scheme be established to help bridge the gap in sickness benefits and they dismissed compensation claims for the adjusted waiting period in respect to pension entitlements. [CD/09/865,. LCR19799].

OECD: DECLINING GLOBAL COMPETITIVENESS IN MAJOR EU STATES

According to the Paris-based Organisation for Co-operation and Development (OECD) since the start of the economic crisis in the third quarter of 2008, unit labour costs (ULC) have risen by 4.6%, 4.5%, 3.7% and 2.3%, in the United Kingdom, Germany, Italy and France, respectively and have fallen by 2.4 % in the United States and 1.8% in Japan. The ULC index measures change in the ratio of total labour costs to real output. An increase in ULC indicates that growth in average employee remuneration and social charges exceeds the growth in labour productivity.

SPAIN: GOVERNMENT CONSIDERING UNILATERAL REFORMS

The Spanish government has vowed to go ahead with labour market reforms – even if no agreement is reached during talks with employers and trade unions. Prime Minister Zapatero has revealed that necessary measures will be put to the Cabinet on June 16th 2010, before going to parliament for a final vote.

The government has not yet revealed its reform package, but central to any changes will be a relaxation of Spain’s excessive statutory severance payments that dissuade employers from creating permanent jobs. It is also likely that employers will be given more scope and financial support for short-time working schemes and incentives to hire young workers.

UNITED KINGDOM: NEW GOVERNMENT TO REVIEW PENSIONS

The new UK government is reviewing the age at which state pensions may be claimed. Under current legislation the state pensionable age will be equal for men and women by 2020 and thereafter will rise to 66 between 2024 and 2026. It will then rise again to 68 by 2046. However, the Work and Pensions Secretary, Iain Duncan Smith, has indicated that the UK may need to follow the Danish system by indexing the pensionable age in line with longevity projections.

Further legislation announced by the government includes the indexation of state pensions to earnings from 2012 and scrapping the 1% rise in employers’ National Insurance contributions due to have been implemented next year. The new government has also promised to place a fixed quota on non-EU immigrant workers and to give all workers the right to request flexible working arrangements.

PAY, TAX AND BENEFIT TRENDS

AUSTRIA: Austria and Hong Kong have signed a double taxation agreement. This follows
hard on the heels of a similar agreement between Italy and Canada ratified by the Italian parliament earlier this month. Such agreements make it easier to post workers between territories that conclude them, as well as assist in combating tax evasion.

BULGARIA: The average monthly wages and salaries of private sector employees in Bulgaria whose pay is determined by collective agreement rose over the year to Q1 2010 by 11.4% to 583 leva (298.15 euros) per month.

ESTONIA: The Estonian government has recently approved draft legislation to raise the age
of retirement under the state pension scheme over the next 16 years. The current age of retirement is 63 for men and 60.5 for women. Women’s retirement age will rise each year until it equals that of men at age 63. The retirement age for both men and women will then increase by three months each year from 2017 until
it reaches 65.

FINLAND: A four-year collective agreement has been reached in the Finnish food industry,
following intervention by a national conciliator. The deal gives food workers an immediate increase of 0.9% and a further 0.6% in October 2010. Thereafter pay hikes will be index-related. A right to six days paternity leave has also been agreed and a special scheme established for those aged 50+ to improve their well-being at work. Although employers did not obtain the option to establish ten-hour shifts and a six-day working week, flexible working may now be agreed locally in the bakery sector and a task force is to be set up in the meat processing sector to examine working time issues.

GERMANY: The German Families Minister, Kristina Schröder, has now released details of
a care-leave bill to be presented to the federal Parliament this Autumn. The proposal will permit carers to work 50% of normal full-time hours and receive 75% of their salary for a period of two years, after which they would revert to full-time hours and continue to earn 75% of their salary until the difference is made up. Concerns have been expressed about this arrangement and it has been suggested that carers should pay a special contingency insurance in the event that they do not return to full-time hours and are therefore unable to repay the deficit built up during their care leave.

GREECE: The International Monetary Fund has assured employers and trade unions that the
Greek government’s bail-out package will not be conditional on the removal of 13th or 14th month bonus payments in the private sector.

ITALY: A new Italian decree has established a fund to support workers with disability.
Grants may be claimed by employers in order that necessary workplace changes can be made for disabled people whose ability to workis reduced by more than 50%. Reimbursable items include improvements in access to working areas, technological aids and the additional cost of insurance against accidents at work. Applications to the fund must be made by April 30th each year.

ITALY: The Italian government has frozen public sector salaries until 2013 and cut the
salaries of high-earners by 10%. They have also decided to freeze civil service appointments until 2013 and increase the retirement age for women employed in the public sector to 65 by 2016.

NETHERLANDS: Many employers in the Netherlands are delaying the conclusion of new
collective agreements until after the forthcoming general election on June 9th 2010. Until a new government is in place it will not be possible to estimate future tax changes or know what cutbacks will be made in state benefits – especially whether any progress is likely over the proposed bill for raising the state pension (AOW) age.

NETHERLANDS: A collective labour accord (CAO) has been reached between the Dutch Association of Temporary Work Agencies (ABU) and the CNV Dienstenbond, De Unie and LBV trade unions. This will increase the remuneration of temporary workers by 1% from July 5th 2010, followed by a further 0.5% increase on January 3rd 2011. The CAO will now be followed by a general declaration issued by the government making it binding on all temporary work agencies operating in the country. From next July the parties will use a new index as a basis for pay rises – derived from pay trends in the sectors where temporary workers are principally deployed.

PORTUGAL: The Confederation of Portuguese Industries (CIP) has proposed that public
sector workers should be paid their 13th and 14th-month bonuses in the form of a government bond. The CIP’s savings package as a whole would allow the government to reduce public spending by 12% over the next 8 years.

SERBIA: The International Monetary Fund (IMF) has agreed that Serbia may end its freeze
on public sector pay and state pensions imposed last year as a condition of IMF’s bailout loan. It remains unclear whether the entire public sector or just government officials will benefit from this decision.

SPAIN: Spain’s new austerity bill has introduced immediate public sector salary cuts ranging from 0.56% to 7% for civil servants to 15% for government ministers. The cuts will remain in
effect until 2011.

SWITZERLAND: The Swiss federal government is coming under pressure from employers over its plans to regulate chief executive remuneration packages. Under current proposals, bonuses and severance payments would be taxed more heavily and stock option rules tightened up. Salaries would also be capped in those financial institutions that have received government bailouts.

IN THE COURTS

DENMARK: According to the Danish Labour Court, the failure of an employer to effect a
pay-rise as soon as it becomes due will give rise to a financial penalty. In the case under review an employee had been promoted, but the necessary salary increase had not been discovered by them until 18 months after the change. The employer had reimbursed the staff member with interest, but the court nevertheless imposed a modest fine [Case No.AR2009.0464].

FRANCE: The French Cour de Cassation (Supreme Court) has clarified the legal position of
workers involved in a business transfer who continue, on a temporary basis, to perform some of their duties for their former employer. The court ruled that the new employer assumes responsibility for all employment contracts at the date of the business transfer. Furthermore, if a worker refuses to complete the transfer after a period of shared employment payment of severance compensation falls on the transferee [Judgements no. 08-42-065, no. 08-44.227].

FRANCE: A tribunal in Boulogne-Billancourt, France has been unable to conclude a
decision on the legitimacy of a dismissal on the grounds of employee disloyalty. Three employees of a French engineering company were alleged to have posted comments on an Internet social networking site that portrayed the company in a negative light. However, members of the tribunal were equally divided about whether such communications are private or whether online networking may be regarded as a public activity. A further hearing with a fifth adjudicator will follow.

IRISH REPUBLIC: Staff of a major private hospital group in Ireland have been advised by
the Labour Court to accept a pay cut of 4-5% from the beginning of May 2010, subject to no further pay cuts this year and a further review of pay at the end of the year. The court had accepted the group’s financial difficulties – even though trade unions claimed that the hospital operator was needlessly imitating pay reductions made in the public sector. The court ruled that the realignment of pay with the public sector was relevant, given that the group had sought to retain jobs in the face of its financial difficulties. [CD/10/305]

ITALY: The Italian Supreme Court has decided that failure by a company to display its
disciplinary code in ‘a place accessible to all employees’ does not necessarily invalidate a dismissal. The court found that dismissal for uncertificated absence was valid, in spite of a claim by the employee concerned that he had been “verbally suspended” and had sought immediate reinstatement. [Cass. 10/05/2010, no.11250].

ITALY: The Italian Supreme Court has ruled against dismissal for repetitive absenteeism
where an employer tolerated it for a prolonged period. The employer in this case carried out the dismissal after the employeehad taken a total of 572 days leave. However, the employee’s contract stated that the maximum permissible leave was 365 days. In the court’s view the employer’s delayed response and lack of timely disciplinary action led the employee to believe that the contractual limitation was not being applied. [Cass. 11/05/2010, no. 11342].

OTHER EUROPEAN HR NEWS IN BRIEF

CZECH REPUBLIC: The European Commission has closed legal proceedings against the Czech Republic because it complies with anti-discrimination Directives. Czech law now legally defines different forms of discrimination and bans discrimination on the grounds of disability.

EUROPEAN UNION: The European Commission intends to ratify the United Nations Convention on the Rights of Persons with Disabilities by the end of 2010. It is currently drawing up a new European Disability Strategy for 2010-2020 and plans to introduce measures to increase the employment rate of disabled people.

NETHERLANDS: A study carried out by SEO Economic Research on behalf of the Dutch
government has found that the Netherlands scores well on factors that attract highly qualified foreign immigrants – such as pay, employment conditions and ‘knowledge infrastructure’. According to the Economic Affairs Minister Maria van der Hoeven “Only the United States and Switzerland are even more attractive for the knowledge migrant than the Netherlands”.

GERMANY/SWITZERLAND: Last November the Swiss chemicals group Clariant announced the closure in 2011 of the dye factory on the German-Swiss border. In order to put pressure on negotiators as they finalise the company’s social plan trade unions have called a 24-hour strike and blocked six border road crossings – obliging motorists to sign a petition demanding that the company offer alternatives to redundancy, ways to mitigate its effects and generous severance terms to those who are laid off.

RUSSIAN FEDERATION: The Russian government has submitted a draft agreement to the
European Commission proposing the mutual abolition of entry visas. This would, if adopted, allow European Union and Russian citizens to make short visits to each others’ territories without having to follow the complex and time-consuming bureaucratic procedures that are normally involved.

SLOVENIA: A Slovenian government bill on student “mini-jobs” has begun its passage through the national parliament. If adopted it will limit such employment to 720 hours and 6,000 euros per year. The current law governing student part-time work allows students between the ages of 15 and 26 to work whilst in receipt of study benefits. Employers pay a 14% levy on the salaries paid and this funds scholarships and other student benefits – including the Slovenian Student Organisation’s mini-jobs referral service, the funding for which will be progressively cut each year under the new bill.

SWEDEN: An enquiry just published by the Swedish government recommends that all 40,000 immigrants who arrive in Sweden each year with a residence permit of 12 months or more should undertake a mandatory 60-hour induction course on the national constitution, the welfare state and “everyday life”.

UNITED KINGDOM: How far collective agreements can be incorporated into individual employment contracts remains a grey area under UK law. In a recent case before the High Court (Malone and Others v British Airways Plc) it was held that certain elements of collective agreements – such as aircraft crewing levels – were not “apt” for incorporation. In the court’s view, even should such clauses be accepted as fit for incorporation an injunction compelling an employer to comply with specific clauses in the collective agreement because they were part of individual employment contracts “would not be an appropriate remedy”.

FEDEE NEWS

UK EMPLOYMENT LAW

A full update of the UK employment law data in the FedEE knowledgebase has now been completed. This has been carried out by Nigel Moss, a senior employment lawyer with the international law firm Baker and McKenzie. FedEE members may now obtain online briefings about the Bribery Act 2010, Agency Worker Regulations, the latest immigration rules, the Equality Act, Regulations relating to time off for work-related study, additional paternity leave rights, the new ‘sick note’ system, and new fines for serious data protection infringements.

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