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Mettre à Jour: the European HR newswire
Issue 2007/14: July 12th 2007
FRANCE: COURT RULES AGAINST CNE CONTRACTSThe Paris Court of Appeal has ruled that the French CNE employment contract lacks legal legitimacy because, in the court's view, it infringes ILO Convention 158.The Contrat Nouvelle Embauche (CNE) was introduced in 2005 to permit companies with up to 20 employees to dismiss employees without justification during their first two years of employment. Although the CNE was upheld in October 2005 by the Conseil d'Etat, France's supreme court for administrative justice, and declared to be compliant with ILO convention 158, several lower French courts have sought to challenge its legality. The present appeal arises from a decision by the council of conciliation boards of Longjumeau, Essonne, which converted a CNE contract to one of unspecified duration.Article 4 of ILO Convention 158 states that 'the employment of a worker shall not be terminated unless there is a valid reason for such termination'. France has ratified this convention, but in most jurisdictions such instruments are regarded as standards to inform the drafting of employment legislation and not as fundamental rights that have direct effect through the courts. In a civil law country such as France, such challenges should be viewed as political acts of judicial defiance rather than definitive rulings on the legality of a statutory measure.IRISH REPUBLIC: PRELIMINARY HEARINGS FOR UNFAIR DISMISSALAn expert group set up to review employment litigation procedures in the Irish Republic has recommended the introduction of a preliminary process for dealing with individual cases prior to substantive hearings before the Employment Appeals Tribunal (EAT). The EAT was first established as the Redundancy Payments Tribunal in 1967, but today 95% of its time is taken up with unfair dismissal hearings. Awards recently made by the EAT have ranged from 5,000 euros to 14,300 euros. An important facet of the current EAT procedures is that if an employer does not submit a counter-statement when they are sent a copy of an application for a hearing, they will not be entitled to take part in the subsequent proceedingsNETHERLANDS: OVERHAUL OF TERMINATION PROCEDURESA proposal has been drawn up by the Dutch government to establish a standard scale of compensation for employee termination. For employees under 40 years of age, the compensation would be one month's pay per year of service. This multiplier would rise to one and a half month's pay for those aged 40-50 and two months for those aged over 50. A ceiling of 75,000 euros would be placed on total compensation (100,000 euros for older employees).The introduction of the standard compensation scale would remove the necessity for employers to seek permission from the Centre for Work and Income or a court before dismissal can take place. However, it would create an further obligation upon employers to retrain redundant staff to improve their chances of securing fresh employment.The proposal has now been sent to the joint employer/union Foundation for Labour (STAR), which will issue its opinion on September 1st 2007. Changes in termination rules are unlikely to be acceptable to trade unions and it is doubtful whether the Dutch coalition government will have the strength of purpose to seek parliamentary approval in the face of union opposition.EU: PORTABILITY OF SUPPLEMENTARY PENSIONSThe European parliament recently debated the EU draft directive on the portability of supplementary pension schemes. MEPs voted in favour of requiring EU member states to ensure that people leaving a job retain pension rights in line with employees in their former company and also supported a facility for former employees to withdraw their pension funds during a vesting period. However, they were opposed to workers who change jobs being granted the automatic and immediate right to transfer the corresponding sum to another supplementary pension scheme, including one in another member state.The European parliament has reworded the text to state that: 'This directive does not aim to limit outgoing workers' ability to transfer vested pension rights. To encourage the free movement of workers, member states should endeavour, as far as possible and in particular when introducing new supplementary pension schemes, gradually to improve the transferability of vested pension rights.'The amended draft will now be considered at a meeting of the EU council for employment, social policy, health and consumer affairs later this year.WORLD: RECENT DEVELOPMENTS IN EU COMPETITOR COUNTRIESThe Chinese Ministry of Labour and Social Security has issued a circular to local governments requiring them to introduce changes in minimum wage rates by the end of 2007 to compensate for sharp rises in the cost of basic items such as rice (+5.9%) and poultry (+26.5%) over the last year. The highest minimum wage is currently in Shenzhen (78.18 euros per month) and the lowest is in Jiangxi province (26.06 euros per month).A new labour law will also become effective in China on January 1st 2008. This requires employers to issue written employment contracts within one month of employees commencing work, to consult employees about working conditions, to give new rights to trade unions to conclude collective agreements, to place limits on the use of temporary workers and to introduce strong penalties for government officials who ignore labour abuses.In India, the Supreme Court has ruled that outsourcing activities carried out by a major US bank in India are not liable for Indian taxes. The reasons for this are that all activities consist of back office processing, all contracts are concluded by the US arm of the company and there is no permanent establishment in India.In South Korea, the Labour Ministry has announced that minimum wages will rise next year by 8.3% to 3,770 won (3 euros) an hour. The increase will directly affect 2.1 million workers, 13.8% of the country's working population.OTHER EUROPEAN NEWS IN BRIEFAUSTRIA: The Austrian trade chamber has reached an agreement with the Austrian trade union federation on the introduction of a national minimum pay level. This will be set at 1,000 euros per month (gross) for full-time employees and the rate will apply to all collective agreements that are effective from January 1st 2009.BULGARIA: Six Bulgarian private sector employers' organisations have concluded a national pay accord with the country's two leading trade unions. The deal sets a common baseline of 12.9% for pay rises during 2007, but with a upward adjustment to 14.9% if a 3% cut in social security charges takes place in October 2007. Companies that have already given pay increases this year which have equalled or exceeded the new pay norm will not be expected to increase pay any further in 2007.BULGARIA: The Bulgarian government has amended its regulations to allow dependants of EEA and Swiss citizens to be employed in Bulgaria without the need for a work permit.CROATIA: The Croatian government has announced that it is making 7% of shares in the Croatian oil and gas company INA available for purchase by company employees at a discounted price. Shares will be on sale from September at a basic discount of 5% on their market price, and there will be a further 1% discount for each year of an employee's service with the company. The government owns 44% of INA and is currently entering into a partnership with the Kazakh state oil and gas company Kazmunaigas for the joint development of gas fields.DENMARK: Following an amendment to the Danish Public Companies Act, the framework for board incentive schemes in companies quoted on the Copenhagen stock exchange (A/S) must now be approved in a prescribed form by shareholders at a general meeting. Schemes covering boards of directors and management boards must be notified to the Commerce and Companies Agency (Erhvervs-og Selskabsstyrelsen), the Copenhagen Stock Exchange and to the public via company websites. It is also necessary to enter provision for schemes into a company's articles of association.DENMARK: The tight Danish labour market has led UK transportation group Arriva to recruit one-third of its drivers and cleaners from early retirees and semi-retired people aged over 56. The company operates about 30% of Denmark's bus routes and almost all senior employees are employed on a part-time basis.EU: The EU's rotating 6-month presidency passed to Portugal on July 1st 2007. Priorities on the presidency agenda will be equal opportunities, immigration, the 'sustainability of social-protection services', the qualification and employment of young people and senior citizens, work-life balance, health and safety and 'protection of workers'.EU: The European works council (EWC) of ArcelorMittal was launched this week and takes over from separate EWCs that existed in Arcelor and Mittal prior to their merger. The new 54-member council represents 130,000 employees from across the European Union.FINLAND: When a company in Sweden or Estonia sends an employee in a company vehicle (or their own vehicle) to carry out an assignment in Finland, the Finnish authorities may impose a charge for local vehicle registration tax at any time from the day of entry. The European Commission has challenged this rule and, following an unsatisfactory reply, has decided to take Finland to the European Court of Justice for non-compliance with Directive 83/182/EEC.FRANCE: Negotiations between the French government, employers, and trade unions about reform of the labour market will take place every Friday from September 7th 2007 until the end of the year. The principal topics under discussion will be recruitment, employment contracts, termination, returning to employment and the restructuring of both the state employment agency ANPE and the unemployment insurance organisation Unedic.FRANCE: The French immigration minister, Brice Hortefeux, has been set a target by the new French president, Nicolas Sarkozy, to increase the proportion of immigrants who enter France for economic reasons from 7% to 50% of all immigrants. To help facilitate this, the president proposes that foreign students who complete their studies in France should be offered long-term residence permits and permanent visas.FRANCE: The Garnier division of leading French cosmetics company L'Oréal has been found guilty of racial discrimination by the French Supreme Court. Both Garnier and a recruitment agency used by the company have each been fined 30,000 euros and a former manager of the agency has been given a three months' suspended prison sentence. This case is the first time a major company has been found guilty of systematic racial discrimination in France. Further details of the case were reported in MAJ 2007/10.GERMANY: The German rail operator, Deutsche Bahn, has reached agreement with the Transnet and GDBA trade unions on a 19-month pay deal. Employees will receive an immediate one-off payment of 600 euros followed by a 4.5% increase in basic rates on January 1st 2008. Representatives of the GDL train drivers' union are continuing to press ahead with industrial action over the union's 31% pay demand in spite of two court injunctions. Union negotiators are scheduled to resume wage talks with Deutsche Bahn on Friday.GERMANY: Construction industry employers in the German lander of Lower Saxony and Schleswig-Holstein have finally reached agreement with the building trade union over a sectoral wage deal. The parties have requested the federal minister of labour to increase the minimum wage for construction workers to 13 euros per hour with effect from July 12th 2007.GERMANY: The Labour Court in Stuttgart, Germany has ruled in favour of a sales representative who claimed that his employer persistently subjected him to 'mobbing'. Over one hundred cases of prolonged mistreatment were recorded in detail by the claimant, including the removal of his company car, not having a company telephone for a week and demands for daily reports to be submitted to the company's personnel manager. Although a total of 87,000 euros had been claimed in damages, the court could not find a strong enough connection between the ill treatment received and subsequent health problems. It therefore awarded the claimant just 10,000 euros compensation for lost wages.HUNGARY: New tax rules came into force in Hungary on July 1st 2007. An individual is now regarded as a resident for tax purposes if their only permanent home is in Hungary, or their 'vital interests' (family and business) are in Hungary, even if they do not have a permanent home in the country. This change means that it is no longer necessarily sufficient to reside for 183 or more days outside the country to avoid Hungarian tax liability.IRISH REPUBLIC: New statutory minimum wage rates became effective in the Irish Republic on July 1st 2007. The minimum adult hourly rate has risen by 4.2% from 8.30 euros to 8.65 euros. Employees under 18 are now entitled to 6.06 euros per hour, whilst those turning 18 and securing their first job are entitled to 6.92 euros per hour in their first year of employment and 7.79 euros per hour in their second year of employment.LITHUANIA: Following representations from FedEE, the Justice, Freedom and Security Directorate-General of the European Commission is investigating a possible misdrafting of the Lithuanian law on legal protection of personal data. The current law requires employers to gain consent from individual employees before personal data may be sent to any foreign country - including other EU countries. This is contrary to the EU's Data Protection Directive (95/46/EC), which permits free movement of such data between EU member states provided that certain basic safeguards are in place.MALTA: An agreement has been reached between Malta's government and the Malta Dockers Union that will allow port charges to be removed altogether for cars and coaches with passengers, and reduced by 20% for containers and between 9% and 50% for most goods handled by the port. This reduction will be possible because a proportion of these charges will no longer be paid into the dockworker pensions and contingencies fund.NETHERLANDS: The forthcoming 150 euro excess on Dutch healthcare insurance claims may be modified further to allow higher excess levels for smokers and individuals classified as overweight. The Dutch health minister, Ab Klink, also wants health insurers to reimburse the costs of treatments to quit smoking and even sports-club membership fees if a doctor prescribes an exercise regime for the seriously overweight.NETHERLANDS: Air France-KLM has reached an agreement with the FNV Bondgenoten trade union on measures to end a dispute with cabin staff over excessive work pressures. Further staff will be added to long-haul flights and extra leave will be introduced. A 300,000-euro study of overwork among cabin crew has also been commissioned by the company.POLAND: 5,000 employees earning up to 4,000 zlotys (1066 euros) per month at leading Polish press distributor Ruch will receive an average monthly pay increase of 100 zlotys (27 euros) per employee with effect from July 1st 2007. Last month, Ruch employees voted to go on strike because the company rejected demands for pay increases averaging 22.75%.PORTUGAL: Employees in Portugal who wish to retire early are now subject to a higher benefit penalty. Employees may apply for an early retirement pension provided they have been contributing to the state scheme for at least 30 years. However, the benefit penalty for early retirement has been increased from 4.5% for each year below age 65 to a monthly rate of 0.5% for each month below age 65 that employees retire.SLOVAKIA: A number of important employee-orientated amendments to the Slovak Labour Code were approved by the national parliament on July 5th 2007. These include the improvement of severance rights, tighter controls on night work, limitations on overtime and fixed-term contracts, banning contractors from carrying out 'dependent work' and introducing a right for trade unions to have primacy over works councils in company decision-making.SLOVAKIA: The Slovak employers' federation and trade union confederation are holding talks on a new system to establish a national minimum wage determined by collective agreement. This move has led the Slovak government to withdraw its own proposal to increase the existing statutory minimum wage by 8.7% to 11.2% in October 2007.SWEDEN: A three-year collective agreement has been concluded covering all temporary agency workers in Sweden. Individual pay rates for full-time employees have been increased by 3.7% (to be not less than 719 kronor) with effect from June 1st 2007. Further rises of 3.5% (not less than 709 kronor) will become effective in June 2008 and 3.0% (not less than 700 kronor) in June 2009. New employees will also received a one-hour paid briefing by their trade union during the period when they start work.UNITED KINGDOM: The UK lost a total of 754,500 working days due to industrial action last year, five time more than in 2005. 87% of days lost were in the public sector, particularly in public administration and defence. Overall, days lost per 1,000 workers ranged from 53 in the north-west of England to just 5 in the south-east of England.UNITED KINGDOM: A survey carried out by the Association of Consulting Actuaries (ACA) has found that 80% of defined-benefit pension schemes in the UK are now closed to new entrants. The ACA survey also revealed that over the last five years, employer contributions to defined-benefit schemes have risen, on average, from 11.5% to 22.6% and employee contributions have risen from 4.3% to 6.1%.
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