Recent news archive: selections from Mettre à Jour, the European HR Newswire

10/06/2010: Spain moves closer to long awaited reforms
Talks have broken down between the Spanish government, employers and trade unions over a programme of proposed labour market reforms. It is now likely that the government will go ahead with its existing programme to increase workplace flexibility and reduce employee termination costs. The draft law will be debated by parliament early next week and is likely to be approved by a special Cabinet meeting on June 16th.

09/06/2010: Drastic measures to rescue crisis-hit economy
Hungary's new 29-point plan to revitalize its ailing economy includes a new 16% flat-rate of income tax, the removal of inheritance tax from "lineal relatives" and a reduction in corporation tax for small companies. 40% of civil service jobs will disappear and a new cap of 2m forints (7,071 euros) a month is to be placed on the salaries of senior public sector employees. Severance payments at state companies will also be limited at two months’ salary.

08/06/2010: Pay freeze in prospect under national accord
Negotiations over a new national pay accord have begun in Greece against the backcloth of a continuing financial crisis and IMF/EU bailout conditions that require minimum wages to be lowered and monthly limits on collective redundancies progressively removed.

Employers have called for a general private-sector pay freeze this year and the GSEBEE, which represents small and medium-sized enterprises, has proposed that pay increase be limted to 0.5% in 2011 and 2012. The trade union confederation GSEE is willing to make some concessionms on pay rises this year and in 2011 provided employers continue to pay 13th and 14th month bonuses and large-scale lay-offs are avoided.

08/06/2010: Right to waive indemnity payment
The Brussels Labour Court in Belgium has ruled that although an employee representative may not waive their right to a "protection indemnity" upon dismissal during their period in office, they may do so after the dismissal has been announced and their entitlement to an indemnity is known to them.

Under current statute law an employee representative is a protected worker and may only be dismissed by following a strict, formal procedure. If the procedure is not followed the representative is entitled to a special compensation payment (the protection indemnity) ranging from two to eight years salary.

03/06/2010: 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.

01/06/2010: Opening up borders between Russia and the EU
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.

30/05/2010: Business transfers and shared employment
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].

28/05/2010: Settlement finally reached in the food industry
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.

27/05/2010: Problems with draft care-leave scheme
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.

20/05/2010: 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 growth in labour productivity.

18/05/2010: Reform of the state pension system
The head of the Ukrainian Financial Services Commission, Vasili Volga, has announced that a bill on a new, unified retirement pension system is expected to be submitted to the Verkhovna Rada (Parliament) later this year. Currently 70% of Ukraine's retired population receive state pensions lower than UAH 1,000 (102 euros) a month. Under the new system pensions will be determined solely on the basis of length of service and an employee's previous working environment. The government has rejected proposed amendments to allow Ukrainian citizens working abroad full pension rights.

18/05/2010: Anxiety about injury recognised as cause for compensation
Although courts have often been called upon to determine whether particular health problems have arisen from exposure to asbestos, they have not been asked to consider whether compensation should be given for the mere threat of past asbestos exposure. Earlier this month the French Court of Cassation (Supreme Court) ruled that compensation was due to employees who worked ‘under constant anxiety about the risk of contracting asbestos-related illness’.However,the company in this case was not considered to be liable for the loss of income by former employees because they had taken advantage of the state ACAATA scheme that allowed them to retire early on 65% of their prior average earnings [Judgement no. 939/11.05.2010.]

14/05/2010: Clarification of maternity rights under social security rules
The Italian social security service (INPS) has clarified the rules on maternity benefits [Circular no. 62; 29/04/2010].

Mothers will be entitled to state payments during statutory maternity leave if they pay three months’ general social security contributions in the year preceding the expected date of birth or adoption. They must also contribute at least three months’ payments to a separate maternity fund in the 18 to 9 months prior to the birth or adoption.

Further INPS guidance includes:

* In the case of a premature birth, the mandatory leave not taken prior to the birth may be added to leave following the birth, and taken within 7 months of the birth.

* Welfare benefits are not payable to mothers who use their parental leave to undertake a new job, and they may be required to repay any benefits and social security received.

* Medical certification submitted to the employer for maternity allowance should be from a specialist physician working for the national health service (servizio sanitario nazionale or SSN). But employers may accept, or seek formal INPS approval for, documents from other medical professionals.

* An illness related to a pregnancy of up to 180 days duration (including abortions) may be authorised through simple certification by a general medical practitioner.

12/05/2010: Unemployment benefit capped
The Portuguese Minister for Labour has acted on requests from employers associations to reduce state benefits paid to the unemployed in order to increase their willingness to work. The government’s Stability and Growth Pact for 2010 now limits benefits to 75% of average net pay. Unemployed workers will be obliged to accept work paid at 10% more than the state welfare benefit during their first year of unemployment, after which they must accept work offers paid at their state benefit level.

11/05/2010: Budget deficits cast shadow on European recovery
The OECD predicts that the eurozone will continue to expand during the next 7-10 months, in spite of growing budget deficits. Its latest composite longer leading indicator has risen by 12.3 points over the last year and the strongest growth is predicted to be in Germany (+17.1).

These predictions are given further substance by the Purchasing Managers’ Index (PMI) which has recorded continued productivity improvements during the last twelve months, particularly in France. Gains were strong in both the manufacturing and service sectors.

Outside the eurozone,OECD figures suggest rapid expansion in the Russian Federation over the next six to nine months. Significant expansion is also predicted in the UK - with PM1 data revealing that output per worker has risen continuously since February 2009. However, the UK's budget deficit is forecast by the European Commission to hit 12% of GDP later this year - 2.7% higher than the crisis-hit Greek economy.

07/05/2010: Deadline set for accepting pay offer
Unions representing 22,000 employees of the European aircraft manufacturer EADS/Airbus in France have been given until May 13th 2010 to accept the company's latest 2.5% pay offer. This offer follows strike action during recent weeks at the company's operations in Toulouse, Nantes and Saint-Nazaire over a demand by the five unions representing the French workforce for a 3.5% pay hike.

06/05/2010: Minimum wage for temporary workers
German employers are being pressed by trade unions to conclude a collective agreement establishing minimum wage rates for temporary workers. The proposed hourly minimum wage is 7.60 euros in the west German states and 6.65 euros in east German states, rising to 8.19 euros and 7.50 euros respectively from November 2012.

05/05/2010: Streamlining labour market for foreign workers
A Bill before the Finnish parliament seeks to improve the system for issuing residence permits to foreign workers. In future, approvals will be the exclusive responsibility of the immigration service and labour inspectors will no longer be called upon to state if employee terms and conditions are adequate or whether there is already available labour to fill the vacancies for which the foreign worker is being recruited.

03/05/2010: Positive outlook for employment
According to the latest forecast, employment prospects in Switzerland are likely to improve significantly later this year. The Institute for Business Cycle Research in Zurich has predicted improvements throughout the industry and banking sectors and particularly in commerce and construction. Little improvement is, however, forecast for the hospitality sector.

03/05/2010: Tougher sickpay regime
The Romanian government has decreased the sickness absence period that may be approved by a medical practitioner from 45 to 30 calendar days per year. When a medical certificate is issued it will also need to be countersigned by the employee and include an address where they may be contacted during their absence. Spot checks may then be carried out by the police to determine if they are at the address or at a medical treatment centre. If they are not at either location their sickness benefits will be stopped.

26/04/2010: Pension reforms consultation launched.
France's Minister of Work, Eric Woerth, is holding a series of meetings with 'social partners' and independent experts about the government's proposed pension reform programme.

On April 22nd 2010 Woerth met with the public sector trade union leaders to press the case for bringing public sector pensions into line with the private sector. Currently, public sector workers retire on up to 75% of their earnings (minus bonus payments) averaged over the last six months of employment, whilst private sector workers receive pensions based on 50% of earnings received during the average of their most remunerative 25 years.

According to the Conseil d’orientation des retraites (a body that monitors the French retirement system), the state pension deficit is forecast to reach €10.7bn by the end of this year.

23/04/2010: Employers want new deal following general election
Dutch employers' organisations VNO-NCW and MKB are hoping to reach a deal with union confederations and the newly elected government later this year that will put a six-month ceiling on severance packages and limit unemployment benefit to 12 months. They also wish to establish a system of mobility bonuses to encourage workers aged over 50 to change jobs.

20/04/2010: Plans for parental leave put on hold
Due to the growing budget deficit in Germany the federal government has postponed its proposals to extend parental leave. The Minister for Families, Kristina Schröder, wants to allow fathers to take two additional months paternity leave and to provide for a longer part-time working arrangement for new parents.

19/04/2010: Extra public holidays in May
A national public holiday in Portugal has been declared for Thursday, May 13th 2010 to coincide with the scheduled visit of the Pope. Local half-day holidays will also operate in Lisbon on the afternoon of May 11th and Porto on the morning of May 14th.

15/04/2010: Deadline set for remuneration policies
Financial sector companies in Luxembourg must now take on board a new set of remuneration guidelines issued by the Financial Regulator.

Circular CSSF 10/437 requires banks, brokers and insurance companies to have written remuneration policies in place by June 30th 2010 and have them fully operational by the end of 2011. The policies must set clear performance standards for all remuneration elements, reward employees for longer-term performance and not encourage excessive risk taking. There must be an appropriate balance between fixed and variable components and a clear ceiling established for all bonus payments.

The guidelines also require financial institutions to provide transparent rules on the disclosure of remuneration data to shareholders. This will eventually be achieved by the 'Key Investor Information Document' (KIID) currently being rolled out by financial regulators across the EU.

14/04/2010: Short-time working to be extended
The German Labour Minister has announced plans to extend until June 2012 the refunding of social security contributions in respect to employees subject to short-time working arrangements. Under current legislation these payments were due to expire at the end of 2010.

14/04/2010: Workplace language training for immigrant employees
The Dutch Integration Minister, Eimert van Middelkoop, has established an interim fund under the Delta Project to encourage employers to provide workplace Dutch language training for immigrant employees. The courses must be established in conjunction with a junior college and grants are up to a maximum of 1,000 euros per employee and 25,000 euros per employer. The deadline for applications is October 31st 2010.

13/04/2010: Pressure on living costs
Although the German Bundesbank has predicted an annual 1% inflation rate for both 2010 and 2011 the cost of living in Germany has jumped dramatically over the past year - driven principally by energy prices. Over the year to March 2010 the largest changes have been in the price of heating oil (+35%), petrol and diesel (+20%), gas (+19%) and electricity (+3%). Furthermore, for the first time in a year the price of food has gone up (+0.3%).

09/04/2010: New budget changes 'maternity capital' rules
The Russian Cabinet has approved the 2010 draft budget allowing maternity capital to be claimed in less restricted ways. Maternity capital is available to parents who have a second child and subsequent children of three years old and over. The money may be used for a child’s education, house improvements, mortgage repayments or supplementing funded pensions for women.

Up until now there have been restrictions on how this money may be drawn and it is usually granted in the form of a welfare credit. However, under the new scheme, parents who have a second child will also be able to claim maternity capital worth 343,378 rubles (8,789 euros) as cash for house construction and funds may now be claimed during construction rather than only upon completion. Holders of maternity fund certificates will also be able to claim for buying new homes and building privately. The 12,000 rubles (307 euros) one-off grant and claims for mortgage and mortgage interest repayments will remain unchanged.

07/04/2010: Controversial equality bill to become law
The UK Equality Bill has now completed its passage through parliament and will be phased in from this Autumn. However, its future implementation will depend on the outcome of the forthcoming general election.

The new Act will integrate and harmonise existing anti-discrimination legislation and introduce further scope for 'positive action' during the selection process. Employers will generally be prohibited from asking health questions during employment interviews, although health screening will still be possible prior to an appointment being confirmed.

The Act will also incorporate existing case law on 'discrimination by association' and discrimination based on the erroneous perception that a job applicant has a protected characteristic. Larger employers will be expected (on a voluntary basis) to publish pay statistics, whilst Employment Tribunals will be given greater scope to make wide-ranging recommendations about ways to avoid future workplace discrimination.

07/04/2010: Elena proving to be intrusive and unworkable
Since January 1st 2010 employers in Germany have been required to submit information about employees on a monthly basis to a central "Elena" computer database.

Although the new system was designed to reduce bureaucracy it has proven to be a greater administrative burden, especially for small to medium enterprises. Moreover, 22,000 German citizens have signed a submission to the federal constitutional court complaining that the system infringes their right to privacy because it contains data about absenteeism, health, disciplinary warnings and participation in strike activity.

The widescale opposition to Elena has led the Justice Ministry to announce that it will soon be reviewing its operation and reducing the regular input requirements.

05/03/2010: Uncertainty over inflation prospects for 2010
The annual rate of consumer price inflation in Turkey moved back into single digits last month, after peaking at 10.1% in February 2010. The annual rate in March 2010 was 9.6% - which was still 4.5% above its level last October. The main price changes driving the overall level of inflation up over the last year have been alcohol and tobacco (+43.0%), Transport (+12.7%) and food (+11.2%). The Turkish Central Bank has forecast that the annual inflation rate may continue at its present level until mid-year, after which it is predicted to fall to 7.6% by December 2010. However, the Istanbul Chamber of Commerce has predicted a year-end annual inflation rate of between 11.2% and 13.4%.

29/03/2010: Week-long national strike postponed
A strike threat in the Swedish retailing sector will not now go ahead over the Easter period. The retail employers' association, Svensk Handel and the Commercial Employees' Union have both agreed to cooperate with a mediator to resolve the current dispute over pay rates and the use of agency workers.

25/03/2010: Welfare to work
An amendment to Bulgaria's Social Assistance Act is currently being drawn up by the Ministry of Labour and Social Policy. This will require recipients of welfare payments who have a capacity to work to perform at least 14 days "socially useful labour". The labour projects will be drawn up by municipalities and will be in the fields of landscaping, social, educational and medical services. Unemployed people will also be required to attend literacy courses.

23/03/2010: Code of conduct on loans to company directors
The latest report from Ireland's Comptroller and Auditor General reveals that a code of conduct is currently being drawn up as the basis for regulating loans to company directors. The code will require that all loans to directors, and loans to persons connected with directors, must be declared in annual financial statements. However, it is not yet clear what limitations will be placed on the issue or repayment of such loans.

19/03/2010: Windfall tax comes into force
The Supplementary Finance Bill (collectif budgétaire) has now come into force in France. This imposes an additional 50% windfall tax on all bonus payments to certain employees in the finance sector that exceed 27,500 euros a year. The tax is being applied retrospectively to income received in 2009, but payments made under approved employee profit-sharing schemes (intéressement and participation) are exempt. The employees covered by the new tax rule are those "who are financial market professionals with activities that are likely to have a significant impact and expose the bank to greater business risk".

19/03/2010: Tighter enforcement of child labour ban
The Dutch economic affairs ministry has announced that it is tightening up its ante child-labour policies. In future, stricter conditions will be imposed on companies investing abroad and greater financial penalties applied if it is found that a company employs children in any of its operations around the globe.

17/03/2010: Rise in sickness absence
Although absenteeism declined in Slovenia between 2000 and 2008 it rose again last year. According to the Health Insurance Institute (ZZZS), over 10m working days were lost due to sick leave during 2009, which cost the economy 900m euros in lost production.

17/03/2010: Parliament delays vote on maternity and paternity leave proposals
Concerted lobbying by employers groups and reservations by a number of national governments has led the European Parliament to postpone its final vote on new maternity and paternity leave rights until May 18th 2010. This is to allow an independent study to be carried out on the likely impact of 20 weeks maternity leave and two weeks paternity leave on each of the 27 EU member states.

16/03/2010: Right to refuse transfer of employer
The French Supreme Court has recently ordered that a staff delegate was not obliged to transfer to a new employer simply because the service contract covering his activities had been transferred to another company. Neither was the approval by a Labour Inspector any guarantee that the delegate's specially protected rights were being upheld. If the transfer of activities or ownership did not meet the precise requirements for 'a transfer of undertaking' set out under the Labour Code then no obligation existed for the employee to accept that their contract had been taken over by a new employer. Moreover, their refusal to transfer did not, in itself, constitute grounds for dismissal.[Soc Cass 03/03/10 ... 08-41.600]

11/03/2010: Major hike in minimum wage
Agreement has finally been reached between the Slovenian government, employers and trade unions to increase the national minimum wage by 22.9% over the next two years. It will rise immediately to 510.00 euros net, then in January 2011 to 530 euros net and finally in January 2012 to 562 euros net.

09/03/2010: Parents gain new right to four months leave
The EU Employment and Social Affairs Council has approved a proposal extending parental leave rights from three to four months. The new Directive (which replaces Directive 96/36/EC) also requires that at least one of the four months may not be transferred to the other parent. Employers must also give serious consideration to a request for a temporary change in working hours made by an employee returning to work after parental leave.

This measure transposes a framework agreement concluded by a number of EU employers' groups and the ETUC in June 2009. The new rights apply to all workers, including those on fixed-term contracts and temporary work agency contracts. However, EU member states remain free to decide whether the leave is paid or unpaid.

Member states now have two years in which to incorporate the changes into national legislation.

08/03/2010: Corporate gender gap
According to a report published this week by the World Economic Forum, just under 5% of CEO positions in 600 of the world's largest companies are held by women. The European countries with the highest proportion of female CEOs are Finland (13%), Norway (12%), Turkey (12%) and Italy (11%).

08/03/2010: Overhaul of Italy's creaking tax system
Italy's national employers' association Confindustria has agreed to join forces with trade union confederations CISL and UIL to press for tax reform. The move is supported by Italy's Economy Minister Giulio Tremonti, although he has warned that the necessary reforms will take time. A tax amnesty, which ends next month, has been highly successful in encouraging residents to repatriate funds held illegally overseas. During its first three months of operation 95bn euros were declared to the tax authorities.

4/03/2010: VAT on employee benefits
The Czech government has responded to the threat of nationwide strike in the transport sector by amending a recent law which had increased the tax payable on employee benefits. In January 2010 VAT on employee benefits such as subsidised food, accommodation and transit passes was increased to reflect their market value, rather than the price they are sold to employees. Although the KDU–ČSL Christian Democratic Party (which holds the balance of power in the coalition government) has agreed to make a concession on the new VAT rules, the Czech President has stated that he will veto any bill conceding to union demands. However, this will mean that the amendment will return to the lower house where the KDU–ČSL can ensure the overturn of the Presidential veto.

02/03/2010: Labour market improving for young workers
The Austrian labour market is currently providing mixed messages. Although Austria has the second lowest unemployment rate in the European Union, job vacancies remain low - with 15 people, on average, chasing every position. Unemployment over the year to February 2010 rose by 3.7% and 43.9% more people are now undertaking special government training schemes. However, the number of apprenticeships on offer by industry has remained stable and unemployment amongst 15-19 year-olds has declined for the third month in succession.

27/02/2010: Three-year pay freeze applies to business sector
Portugal's Ministry of Finance has decided to extend the public sector wage freeze announced earlier this month to all enterprises where the state has a financial stake.

Due to wide-scale nationalisation following the end of dictatorial rule in 1975, the state has a strong presence in sectors as varied as heavy manufacturing, utilities, transport, communications, banking and insurance. The latest announcement applies to companies where the state holds shares either directly, through other publicly owned organisations or in the form of a 'golden share'.

However, a number of enterprises have claimed that they will not be affected by the new austerity policy because they have recently concluded wage agreements. The electricity sector, for example, has just implemented a general 1.5% increase, whilst the airline TAP has reached a 1.8% deal.

26/02/2010: 36% of overtime hours not compensated
The number of employees working regular overtime hours in the Netherlands last year was only slightly lower than in 2008. Part-timers worked on average 4 hours a week overtime, whilst full-timers averaged 6.5 hours a week. 36% of regular overtime hours were paid and 28% compensated through additional time off.

23/02/2010: Two-year industry deal enhances leave and severance terms
A new industry-sector collective agreement has been concluded this week between the Confederation of Danish Industry and the trade union CO-industri.

The two-year deal runs until March 1st 2012 and will affect the pay, terms and conditions of 276,000 employees. It provides for increases in minimum hourly wage rates of 1.10 krone (0.15 euros) in the first year and 1.75 krone (0.24 euros) in the second year. This represents increases of 1.1% and 1.7% respectively.

As in many Scandinavian agreements the devil is in the detail. Employees will benefit from an additional two weeks parental leave (one week for each parent). Severance payments are also to be enhanced from May 1st 2010. In future redundant workers with at least three years service will receive a payment for the first month after their notice expires equal to the difference between their subsistence welfare payment and original salary, minus 15%. After six years service this allowance will be doubled and after eight years service it will be trebled.

Night shift workers will, in future, be offered health checks every two years. Furthermore, provided a local agreement is in place all shift workers will be able to save up to 40% of their shift premia and allowances in a 'free choice wage account' which can be used to pay for extra holidays.

Both sides of industry have also agreed to incorporate the terms of the Equal Pay Act into the national accord and to establish a special board to deal with violations of equal pay principles.

21/02/2010: National pay deal to curb creeping stagflation
A three-year national pay agreement has been concluded between the leading Spanish employers' association CEOE and two principal union confederations CCOO and UGT. The deal provides for a 1.0% increase in basic rates this year, 1.0%-2.0% in 2011 and 1.5%-2.0% in 2012.

Although Spain's economy remains in recession and unemployment is twice the EU average, many employees have continued to enjoy significant wage increases. According to the Bank of Spain the average collectively agreed pay increase in 2009 was 2.6%, whilst Spain's latest labour cost survey has revealed that the over the year to Q3 2009 wage cost for full-time workers increased by 4.1%. This is only 1.6% lower than at the onset of the present recession in Q3 2008.

18/02/2010: Narrowing of the gender pay gap
According to the official agency 'Statistics Iceland' the hourly pay differential between men and women narrowed between 2000 and 2007 from 24.8% to 15.9%. Across Europe as a whole the gender pay gap was 17.6% in 2007 - ranging from 2.4% in Malta to 30.3% in Estonia.

16/02/2010: Employers could be caught by state insurance trap
The current system allowing Dutch employers to choose between insuring for partial job disability (WGA) through a state or private insurer is currently under review by the Social Affairs Ministry. The deficit in public funding is rapidly growing and the Dutch government will soon have to choose whether to privatise the system completely or lock in those currently contributing to public funds and then significantly increase contribution rates. It may therefore be the right time for the 70% of employers currently in the state system to consider moving across to a private insurer.

15/02/2010: Government drops pension reform to secure national agreement
Negotiations between Bulgarian employers and trade unions will begin next week on a two-year national agreement. In the meantime, both sides are drawing up proposals for debate in the National Council for Tripartite Cooperation concerning measures to combat the current economic crisis. The government has also announced that its controversial pensions reform programme will be suspended until 2012 so that energies can be focussed on improving the labour market and achieving greater economic stability.

12/02/2010: Deal aims to modernise collective bargaining
A two-year agreement has just been signed by the local business confederation (CREEX) and trade unions in the Spanish region of Extremadura. This seeks to introduce the concept of 'flexicurity' into sectoral and company bargaining in the region and also to modernise the process of collective bargaining. During the next six months unions and employers will meet to discuss ways to revive the local economy and generate employment opportunities.

09/02/2010: Ban on genetic testing at work
New regulations on genetic testing by, or on behalf of, employers came into force in Germany on February 1st 2010. There is now a general prohibition against genetic testing, except in special circumstances where genetic characteristics may expose an individual to the risk of serious health problems in a particular job. The regulations also add genetic characteristics to those grounds already protected under anti-discrimination legislation. Moreover, employers may not penalise employees who refuse to undertake a genetic test.

08/02/2010: Spot fines for workplace privacy breaches
The Czech Ministry of Labour and Social Affairs is currently working on a Labour Code amendment that would give labour inspectors the power to impose fines on employers found to be infringing the privacy of employee communications. According to a recent survey by consultants Ernst and Young, four out of five Czech employers monitor employees' online activities and 58% limit their internet access.

08/02/2010: MEPs to debate pay equality and paternity leave
This week Members of the European Parliament will vote on a resolution calling for further measures to achieve gender equality throughout the European Union. The focus of the debate will be a report drawn up the Belgian socialist MEP, Marc Tarabella. This points to the continuing pay gap between men and women and calls on more EU member states to introduce paternity leave entitlements.

The most significant clauses for employers in the resolution are:

* Concern about the lack of response from the European Commission following a previous parliamentary recommendation seeking to revise the EU's current equal pay Directive.

* A proposal to make 22nd February 'International Equal Pay Day' and to establish a European charter of women's rights.

* The need for all EU Member States to acknowledge companies that take action to promote equality between women and men and facilitate work-life balance.

* The establishment of paternity leave on an EU-wide basis - closely linked to maternity leave rights.

* Legislation at EU member state level to introduce "binding targets" that will "encourage gender balance in corporate, administrative and political positions of responsibility".

Although the European Parliament has limited powers, its resolutions often influence national governments and shape the agenda for future EU legislation.

03/02/2010: Law to clarify representation rights
The Greek Labour Minister, Andreas Loverdos, has decided to introduce legislation which will clarify a long-standing dispute about how banks should be represented as employers during negotiations with the Federation of Bank Employee Unions (OTOE). This issue has held up progress towards a collective agreement covering the entire banking sector.

31/01/2010: Minimum wage null and void
The Federal Administrative Court in Leipzig Germany has ruled that the minimum wage operating in the postal sector is unlawful. The wage was set in January 2008 when Deutsche Post was privatised as part a liberalisation programme across the sector. However, the Court has decided that the German Government violated the rights of other postal companies by failing to consult them about an amendment to the wage regulation limiting its scope to enterprises whose main business was the delivery of mail.

28/01/2010: Portability of training rights
From now on, the work certificate issued to French employees upon leaving their employment must contain a statement about the balance of hours due under the employee access to training scheme (Droit Individuel à la Formation or DIF). Decree 2010-64 requires the certificate to include the number of unused DIF hours, the value of the benefit (the hours multiplied by 9.15 euros) and the name/address of the training agency responsible for its execution.

26/01/2010: Deadline approaches for alcohol and drugs policy
Employers in Belgium have until April 1st 2010 to establish an in-house preventative alcohol and drugs policy in response to the mandatory national collective agreement no 100. The policy may only be implemented after consultation with appropriate employee representative bodies or, in their absence, directly with employees.

26/01/2010: Employment service does not serve needs of large companies
The Austrian Court of Audit (Rechnungshof) has criticised the public employment service (AMS) for failing to secure employment for its clients in large enterprises. This is in spite of special programmes to collect data on job vacancies in the top 500 enterprises. Only nine key account managers operate to deal with major companies, although plans exist to double this number in the near future.

24/01/2010: Extension of identity card coverage
The UK border agency has introduced mandatory identity cards for non-European foreign skilled workers and their dependants. They are issued whenever the foreign national applies to extend their stay. The cards include the individual's facial image and fingerprint and shows whether they have the right to work or study legitimately under the UK's points-based immigration system.

20/01/2010: Age limit for calculating years of service discriminatory
The European Court of Justice has ruled that the existing requirement in Germany that years of service prior to age 25 are not taken into account when determining notice periods amounts to discrimination on the grounds of age. The case involved the dismissal of an employee with ten years service whose notice entitlement was based only on the three years she had worked for her company since her 25th birthday. This meant that she was entitled to just one month's notice instead of four months. (Case C-555/07).

19/01/2010: Growth in workplace inspections
Last year the Spanish labour and social security inspectorates carried out 224,492 spot checks on employers - an increase of 30% on 2008. The inspections led to the discovery of 29,357 social security violations, 8,148 workers found to be drawing unemployment benefit and 7,122 cases of foreign workers without permits.

18/01/2010: Reduction in long-term absence
The Swedish social insurance inspectorate has reported that reforms to the sickness absence system introduced in July 2008 have significantly reduced the number of people on long-term sickleave. Under the new rules employees must undergo medical examinations after both three and six months absence. This has led to a 60% rise in the number of people returning to work after six-months sickleave.

12/01/2010: Tax authorities clamp down on fake employee loans
All Bulgarian residents who are above the minimum working age are obliged this year to submit a tax return to the National Revenue Agency (NRA) by April 30th 2010, even if they are not normally required to do so. The NRA will enforce a new requirement for the declaration of all loans (except bank loans) received during the last year in excess of 10,000 leva (5,113 euros) and loans in excess of 40,000 leva (20,451 euros) received during the last five years. This is because interest-free loans from employers have frequently been used as a method of income tax evasion.

11/01/2010: Controversial ELENA database goes live
This month employers in Germany must begin submitting all payroll and employee absence data to the new central ELENA database.

Following an intervention by the Federal Data Protection Agency the Labour Minister, Ursula von der Leyen, has agreed that company works councils will have the right to receive a list of data to be submitted to the system and that participation in strike activity will not be specifically identified within the data. However, the minister has also decided to introduce a new section in the system requiring reason(s) for the termination of employment.

Currently German employers produce over 60 million separate income and other employment-related documents each year. A major advantage of the new system will be that from 2012 employers will no longer be required to issue individual monthly pay slips in paper form.

11/01/2010: More time for employers to submit action plans
The French Labour ministry has extended until April 1st 2010 the deadline for meeting new requirements for the employment of older workers. Companies with 50+ employees must have either entered into a collective agreement in favour of employing older workers, or established an approved action plan setting clear employment targets. Failing to submit a valid agreement or plan to the Direction Générale du Travail (DGT) by the revised date may result in a penalty payment equal to 1% of a company's payroll.

10/01/2010: Rising numbers outside healthcare net
The incidence of health insurance payment defaults in the Netherlands increased from 190,000 in 2006 to 304,000 in September 2009. Under the 2006 Health Insurance Act all residents are required to be insured. If an individual is in arrears for more than six months they are only entitled to emergency health treatment.

01/01/2010: Retirement age raised to 65 by 2026
The Estonian Cabinet has approved a new bill raising the retirement age to 65. The retirement age is currently 63 for men and 60.5 for women. According to the proposal the change will take place in two stages, with equalisation of the retirement age at 63 for both men and women by the year 2016. From 2017, it will then be gradually increased by three months a year until 2026.

22/12/2009: Training to be a factor in severance levels
The two principal parties in the Dutch coalition government have agreed in principle that the ceiling for severance payments for redundant workers should be geared to the training investment that the employer has made. No agreement has so far been reached about how the training element will be measured or how much impact it will have. However, this change is likely to be incorporated into a proposed Bill on severance payment limits that will debated by the lower house of parliament early next year.

21/12/2009: Deadline approaches for job subsidy scheme
Irish-based companies have until 2pm on Wednesday, December 23rd 2009 to apply for funding under the government's 'Employment Subsidy Scheme'.Companies may apply for funding if they employ ten or more full-time employees and the employees would otherwise face redundancy if support is not provided. The maximum subsidy is 9,100 euros for each full-time employee and 6,370 euros for each part-time employee - payable over the period to October 31st 2010. For further details visit http://www.employmentsubsidy.ie

15/12/2009: Road transport dispute ends
The road transport industry in France has agreed to a 4% wage hike, following the appointment of a mediator by the French government to avert strike action by the industry's 610,000 truck drivers. The deal follows an effective two-year pay freeze.

15/12/2009: Minimum wage to rise by 0.5%
The French Labour Minister Xavier Darcos has announced that the national minimum wage (SMIC) will rise on January 1st 2010 by 0.5% to 1343.77 euros gross per month (for a 35-hour week). A review of the SMIC now takes place on January 1st, rather than July 1st, each year. Earlier this month an expert group recommended that the SMIC should remain unchanged during the coming year.

14/12/2009: Continuing four-day week
The leading truck and bus manufacturer, Scania, has reached agreement with the metalworkers' union and white collar unions to continue the four-day week first establish in June 2009 for 12,000 employees in its Swedish operations. The extension will apply to all employees during the first quarter of 2010 and volume-dependent personnel also during the second quarter. The agreement suspends guaranteed bonuses and delays holiday supplements and retoactive payments. In return, the company has undertaken not to issue any lay-off notices for the next six months.

10/12/2009: Short-time scheme to continue for a further three months
Although the Dutch short-time working scheme (WW) was due to end this year, it has now been extended until April 1st 2010. However, no additional funds will be made available and therefore employers should submit their applications as soon as possible in the new year. So far 3,800 companies have secured part-time unemployment benefit for their employees under the scheme.

09/12/2009: Launch of new-style conference
It is set to be the most enjoyable HR event in 2010 - and it's happening in Ireland. FedEE's conference on 'Managing people across national frontiers' will follow a novel comedy-club format with a Compère, cabaret-style seating, short sessions for each speaker and the minimum use of powerpoint slides. For further details visit http://www.fedee.com/conference.shtml

07/12/2009: Temporary contracts used for most new hires
A total of 11.86m new employment contracts were registered in Spain between January and October 2009, of which 90.4% were on a fixed-term basis. Temporary contacts have averaged 73 days this year compared with 79 days in 2006.

04/12/2009: Minimum wage to rise by 5.6%
The Portuguese Prime Minister announced to Parliament today that the Government intends to increase the national minimum wage on January 1st 2010 by 25 euros to 475 euros a month. This move is in line with the government's long established policy of raising the minimum wage to 500 euros by 2011.

01/12/2009: Balkan citizens gain visa-free access
Citizens of Macedonia, Montenegro and Serbia will no longer have to queue in order to obtain visas for most EU countries. Visa-free access has been introduced today for nationals from all three countries wishing to enter the Schengen free-movement zone.

01/12/2009: Further rise in labour pensions
This week state 'labour pensions' in the Russian Federation will rise by 31.4%, the fourth increase this year. By the end of 2010 further increases will bring the average pension to 8,000 roubles (182.42 euros) a month. In order to pay for these increases employer social security contributions will rise by 8% to 34% from 2011.

30/11/2009: New leave rights for working parents
The European Council of Ministers for employment, social policy, health and consumer affairs has reached political agreement on a revised EU parental leave Directive. This implements an agreement concluded earlier this year between employers and trade unions at a European level. Under the new Directive:

* Parental leave is extended from three to four months per child.

* At least one of the four months cannot be transferred under any circumstances (and will therefore be lost if only one parent takes parental leave).

* Parental leave applies to employees on fixed-term and part-time contracts and to agency workers. It remains an individual right and may not be transferred from one parent to the another.

* Workers returning from parental leave have the right to request changes to their working hours and/or patterns for a set period. Employers must consider and respond to such requests for flexible working in the light of both their own and their employees’ needs.

* Employers are prohibited from treating employees less favourably because they assert their rights to take parental leave.

* EU member states may establish a qualifying period of up to one year before a parent has the right to take paid leave. However, in the case of successive fixed-term contracts with the same employer, the overall duration of such contracts is to be taken into account for the purposes of calculating that qualifying period.

Member states will have two years to bring into force laws to implement the revised Directive, or three years "if this is necessary to take account of particular difficulties or implementation by collective agreement"

26/11/2009: Corporate social responsibility
Annual company reports published in the Netherlands for all years starting after December 31st 2009 will have to include a section on corporate social responsibility. A revised version of the official 'guideline 400' on annual corporate reporting will shortly be published by the Economic Affairs Ministry. The guideline will also include a new requirement to include a statement on international supply chain management.

25/11/2009: Working lives set to increase by up to five years
A new method of calculating state pensions in Finland will be introduced next year. The inclusion of a 'life expectancy coefficient' in actuarial calculations will mean that a young person currently starting their first job will have to work for up to five years longer than a worker currently aged 60 to obtain an equivalent pension.

19/11/2009: Father entitled to paid maternity leave
The civil court of Florence Giampaolo Muntoni in Italy has recognised the right of a father to take the same paid time-off work as his child's mother during her pregnancy and following childbirth. The case against the Italian social security agency (INPS) claimed that the agency had denied the father compensation at 80% of his normal salary for the period from two months before to three months after the birth.

16/11/2009: Notification penalties for larger companies
From December 2009 the UK's HM Revenue and Customs (HMRC) will begin issuing warnings to companies with 50 or more employees that fail to notify them via their online service about new and terminated employees. Then from January 6th 2010, HMRC will start fining larger companies that continue to notify them in paper form. These penalties will range from £100 to £3,000 according to the volume of submissions. These requirements apply not only to British citizens resident in the UK, but also to foreign nationals posted to the United Kingdom. They also apply to foreign nationals returning home (from the U.K.) and British citizens posted abroad.

13/11/2009: New termination procedure
From next month Lithuanian employers will have to follow a new, simplified procedure when they terminate employees. An electronic submission form 2-SD will have to be completed stating the grounds for termination and the basis for calculating severance compensation. The form will be submitted over the Internet to the Social Insurance Board (Sodra) and they will inform the local labour exchange on behalf of the employer.

12/11/2009: Visa-free travel for Serbian nationals
It has been reported from a source in the European parliament that visa-free travel within the Schengen zone will commence for Serbian nationals on December 19th 2009. The Schengen free-movement area consists of 25 EU member states plus Iceland,Lichtenstein,Norway,and Switzerland.

11/11/2009: Growing concerns about discrimination
Around one in six people in Europe claim to have personally experienced discrimination during the past year, according to a survey report just published by the European Commission. 58% consider age discrimination to be widespread in their country compared to 42% in 2008, while 53% cite disability discrimination (up from 45% in 2008). Although one third of respondents to the survey were aware of their rights should they become a victim of discrimination or harassment, there were significant country differences. Awareness has increased since 2008 in the UK (+8 points), France (+7), Ireland and Sweden (each +6), but has fallen in Poland (-12) and Portugal (-11).

11/11/2009: Extra leave next year instead of pay rise
The national collective agreement (CAO) for the Dutch engineering and metal industries has frozen basic wage rates in 2010 and given workers an additional 3.5 days annual leave. Although employers may still opt for a pay rise instead of the extra leave period they will not be obliged to increase rates until 2011, when a modest rise of 1.5% will become due.

06/11/2009: Contracts to be registered prior to employment
The Romanian government has agreed to amend the Labour Code to require employers to register all employment contracts at least one day before they are due to commence. Currently registration with the labour inspectorate must take place within 20 days of an employee starting work. This change is designed to reduce illegal employment and has been put forward as a precondition for further funding by the EU, World Bank and IMF.

03/11/2009: Union challenges state funding for use of foreign labour
The Swedish Byggnads labour union has initiated court proceedings against the Oskarshamn regional government for contracting the services of a Swedish company using Polish labour hired at hourly pay levels below normal construction industry rates.

The union is bringing this case to test the limits of the 'Laval' European Court of Justice ruling where it was found that, in certain circumstances, a foreign company posting workers from their home state could justify the payment of workers below collectively agreed Swedish pay rates. This case will establish whether 'Laval' applies to companies based in Sweden and whether state bodies are legally accountable for the rates paid to workers from other EU states employed by contractors receiving state funding.

02/11/2009: Simplified system for taxing employee benefits
Dutch companies are to be given three years to adapt to a new employee benefits tax regime. The Finance Ministry will introduce a simplified scheme in 2011 for such items as bicycles, home-based computers, work clothes and company outings. The combined value of these items will be tax-free up to 1.5% of gross salary, after they will be taxed at 80% of their current value. However, employees will only be taxed on the proportion of the benefit that is for personal use and mobile phones will be automatically valued at zero.

Currently a bicycle supplied for travel to work purposes is tax-free up to a value of 749 euros, plus a separate sum of 82 euros for accessories. Furthermore, no bicycle must have been provided in the previous two years and an employee must use the company bicycle on at least 50 percent of commuting days. In future, these requirements will disappear - although employers will retain the option of giving employees 0.19 euros per kilometre cycled tax-free.

Whilst employers may continue to operate the old scheme until 2014 a ceiling of 454 euros per employee, per year will apply to staff trips, parties and other social events provided by companies that do not use the new "work-costs scheme".

26/10/2009: Failure to report cases of alleged bullying
The labour court in Mainz, Germany, has rejected a plea from a company's former employee that he was bullied, despite the fact that the court was presented with a 'bullying diary'.

The court decided that the evidence presented was not sufficient to award the employee any compensation as it was found that the employee had not followed company policy with regards to reporting the alleged incidents. The court stated that without any evidence that the company knew such bullying had occurred and had neglected to act on it, they could not rely solely on the diary which had been kept by the ex-employee. [9 Sat 199/09].

20/10/2009: Opposition to staff cuts and restructuring
A rescue plan for the Opel car manufacturing plant in Spain has been rejected by the company's trades unions. General Motors last month announced the sale of a majority stake in its Opel business to Canadian auto parts manufacturer Magna and its partner, the Russian state-owned Sberbank. Magna wants to cut around 1,300 of the 7,000 staff at the Opel factory in the northern town of Figueruelas and move some production to Germany. Strike action is set to take place on October 28th, 30th,November 3rd and 5th.

20/10/2009: Work subsidy and wider access to unemployment benefit
The Turkish government has approved a new labour law that provides incentives to companies to hire new workers, particularly the long-term unemployed. Initial labour costs are now subsidised through an employee social security credit. This continues for a period equal to that during which the new worker had previously been unemployed and received unemployment benefit. The new law also extends unemployment benefit to anyone who has made contributions for 600+ days and worked in their last job for at least 120 consecutive days.

19/10/2009: Implementation of directive to be delayed
The UK government has announced that the transposition of the European Union Agency Workers Directive (2008/104/EC) into domestic legislation is to be delayed until October 2011. Implementation will therefore occur just two months before the official deadline set by the EU.

19/10/2009: Online injury reporting system
From July 1 2010 employers, doctors and dentists in Denmark will be required to report occupational injuries to the Ministry of Employment via a new online system (EASY). Special exemptions will exist for those businesses that do not normally use computers, or do not have access to the internet.

15/10/2009: Fresh incentive for young workers
The Slovakian cabinet has agreed to remove the requirement that school leavers and graduates undergo a three-month waiting period after they have registered with their local labour office before they become entitled to receive a state self-employment allowance. This move should encourage young workers to offer their services on a freelance basis and establish their own enterprises.

12/10/2009: End of dispute at Polish airline
The Polish airline LOT has resolved a dispute with trade unions representing the majority of its employees. The company has undertaken to maintain the existing collective labour agreement until the end of next March and reduce the number of planned redundancies. At that point a number of bonus payments will be withdrawn so that the company may reduce costs.

12/10/2009: Net pay boost for the lower paid
Lower paid workers in Romania may soon qualify for tax-free pay increases. The Finance Ministry is currently meeting with both sides of industry to discuss a proposal to exempt from tax increases given to employees earning between 600 and 1,000 lei (140 - 233 euros) per month. This change would affect around 2.5 million employees.

08/10/2009: Tax changes as economic crises worsens in Latvia
The Latvian government has decided to introduce a raft of emergency tax measures. These include consolidation of the income tax base to include capital gains and dividend payments, a reduction in the value of allowable tax deductible investments and the introduction of a co2-based car tax,

06/10/2009: Partnership agreement not yet in prospect
Both sides of industry in the Irish Republic continue to leave the way open for renewal of the social partnership agreement. However, wide differences remain - with the national employers organisation IBEC calling for a pay freeze next year and leading trade unions such as SIPTU continuing their opposition to manpower reductions and all forms of pay austerity. SIPTU has recently lodged a claim for a 3.5% salary increase in the health sector.

06/10/2009: Plus ca change, plus c'est la meme chose
France’s highly controversial local business tax (la taxe professionnelle) is to be abolished from 2010. However, it will be replaced by a corporate land tax (une cotisation locale d’activité or CLA) and a further levy (une cotisation complémentaire or CC). These will jointly be limited to 3% of a company's value-added. Because large group companies would be the biggest beneficiaries of this reform, the government has decided to impose on them an additional flat-rate tax.

04/10/2009: Employer liability for third-party assault
A tribunal in Milan, Italy has refused to uphold a claim against an employer for assaults inflicted by third parties against an employee. It was maintained that an employer may only be accountable for damages resulting from their failure to comply with health and safety obligations, or to act in the best interests of an employee when a problem has been identified. Although the three assaults in question had taken place over a period of just two years, the tribunal took into account the nature of the company's business and the fact that one assault had occurred in spite of the presence of company security personnel.

02/10/2009: Malta aligns qualifications to new EU standard
Malta is one of the first countries to announce that its system of education and training qualifications are aligned to the new European qualifications framework (EQF). The EQF was adopted on a voluntary basis last year by EU member states. National qualifications systems should be linked to this common standard by the end of 2010 and all new qualifications should be formally designated according to eight reference levels (described in terms of learning outcomes) by 2012. Employers will then be able quickly to assess whether foreign qualifications meet the requirements of a particular job.

30/09/2009: Relaxation of work certificate requirements
The Polish Senate is currently debating a proposed change to the Labour Code that would reduce the administrative burden on companies employing fixed-term workers. Currently employers are obliged to issue a work certificate each time an employment contract expires. According to the draft amendment a work certificate would only have to be issued if an employee requests it, or when periods of employment extend (in aggregate) to two years.

29/09/2009: Deadline nears for decision on retirement age
The Dutch Cabinet has recently held discussions about raising the state pension age. The greatest support is for increasing the retirement age from 65 to 66 in one step and the earliest date this could happen would be in 2019. Five years later a further increase to age 67 would take place.

Employers and trade unions must give their opinion to the government this week at a meeting of the Socio-Economic Council (MAJ 2009/19). The nearest that both parties have come to a consensus has been around a proposal to make later retirement an option. Employees would continue to be able to retire at age 65, but on a reduced pension.

24/09/2009: Revision of 'special occupations' list
The Greek employment and social protection minister, Fani Palli-Petralia has announced that the government is planning to limit the number of jobs on the ‘arduous and unhealthy occupations list’. Employees in occupations on the official list are entitled to higher remuneration than those in otherwise equivalent jobs and are able to retire up to seven years earlier than normal. The General Confederation of Workers in Greece (GSEE) has opposed the move and has warned that it will boycott future negotiations with the government if a revised list is formally approved.

23/09/2009: Statutory minimum wage
The UK statutory minimum wage for adult workers will rise by 1.2% next month from £5.73 (6.34 euros) per hour to £5.80 (6.42 euros) per hour, with similar percentage increases for those on young worker rates. It is estimated that these changes will affect the pay of 1.4 million workers.

21/09/2009: Visa requirements to be relaxed
The EU Vice President for Justice, Freedom and Security, Jacques Barrot, has predicted that both Bosnia Herzegovina and Albania will meet the necessary criteria for visa liberalisation during the coming year. Currently citizens from all but one Balkan state must apply for a visa before entering the EU's free movement Schengen area. However, visa regulations for the neighbouring countries of Serbia, Macedonia and Montenegro are likely to be lifted from January 1st 2010.

22/09/2009: Sunday shopping rules
The Finnish government is considering the introduction of legislation that would allow all shops to open every Sunday. Shops are currently only allowed to open on a limited number of Sundays per year. The bill will be debated in the Eduskunta (national parliament) next month and, if adopted, the liberalised regime would be in place from January 1st 2010.

17/09/2009: Residence permits for creating jobs
The French Government has published a decree that will grant 10-year residence permits to foreign entrepreneurs and business people if they help to create (or save) 50+ jobs, or are willing to invest at least 10m euros in France. The permits will be issued if these conditions are met and if the investor holds 30% or more shares in the business. It is estimated that 1000 people will eventually receive permits, with 200 permits set to be awarded in 2010.

15/09/2009: Greater flexibility for working parents
In future, working mothers in the UK who only use six months of their twelve month entitlement to maternity leave will be able to transfer the remainder of the period to their partner. In such circumstances, fathers will continue to be entitled to two weeks paid paternity leave, but may additionally take three months paid parental leave, plus three months unpaid leave.

11/09/2009: Clear signs of a recovery in world economy
The OECD's latest economic predictions indicate that leading economies will make a fairly strong recovery later this Autumn and early next year. The "composite leading indicator" for the euro area suggests that an upswing may already be underway, led by Italy and France. Recovery in the Russian Federation is likely to be slower and more tentative, largely due to the severity of the downswing that its economy experienced during the last year.

08/09/2009: Change to redundancy procedures
The French National assembly has adopted at first reading a draft amendment to the labour code designed to ensure that employees of international companies who are at risk of redundancy are given the option of working for the same company in another country. In the event of such an offer the employee would be informed about the salary, terms and conditions applicable to the position. The employee would then have six days to consider the offer. If no response is forthcoming then their employer may assume that the offer has been refused.

04/09/2009: Compensation for private use of Internet
An employee has been forced to pay compensation to his employer following a ruling by the labour Court in Frankfurt, Germany. The employee had taken his company laptop on holiday to Croatia and accumulated a 31,000 euros bill through internet and roaming charges. Whilst the judge agreed that the employee was allowed to use the laptop, it was not proven by the employee that he used the internet for business purposes. Therefore, he could not justify the bill being paid by his employer [1 Ca AZ 1139/09].

01/09/2009: New higher rate income tax bands
The Slovenian Ministry of Finance has revealed plans to add two additional income tax bands, bringing the total number to five. If the latest proposed amendments to the Income Tax Act become law, those earning more than 30,500 euros p.a will have to pay 45% tax on income between 30,500 and 37,000 euros and those earning 37,000 euros or more will have to 50% tax on earnings above this threshold. In order to soften the blow, the government has offered to increase tax relief on certain items and reintroduce a tax offset on the cost of housing.

26/08/2009: No agreement on minimum wage
Employers representatives on the tripartite Slovak Economic and Social Council have blocked a government proposal to increase the national minimum wage by 8.1% on January 1st 2010. It will now be up to the government to decide whether to press ahead with changes in the absence of a social partnership agreement, or to freeze the minimum wage at its present level.

24/08/2009: Plans to reduce working week
A working group comprising of representatives from the Czech Labour and Finance ministries, employers and trade unions has been established with the aim of reducing unemployment and the threat of redundancy through the implementation of a four-day working week. Under the proposed scheme employees would work a reduced workweek for less pay, but would receive extra vocational training.

21/08/2009: More aid for economic participation of disabled workers
Employers who employ disabled workers in France are to receive more aid from the Association For the Financial Support of Disabled People at Work (Agefiph). Premiums will increase by 50% if the worker is under 30 and is employed on a young worker or apprenticeship contract, and will increase by 100% for those over the age of 30 employed on a adult worker or apprenticeship contract. To qualify for premiums the employment contracts must be for at least 16 hours per week or 720 hours per year.

20/08/2009: Minimum wage commission established
The German government have established a Minimum Wage Commission headed by SPD politician Klaus von Dohnanyi, with the aim of determining which industries could benefit from a government prescribed minimum wage. The Commission will start its formal deliberations on the 27th September 2009 and has already identified the meat industry and call centres, among others, as areas for regulation. It will also seek to expand current minimum wages in other industries and has estimated that by the end of the year four million more workers will be protected by a minimum wage.

20/08/2009: New entry regulations
The Russian Federal Migration Service (FMS) is to ease restrictions on foreign professionals and managers travelling to the country. Entry requirements will be relaxed for foreign nationals who will be completing jobs which require higher education. The assignment of quotas for managers has been abolished and new procedures for speeding up the processing of visa applications are to be implemented.

19/08/2009: New Bankruptcy legislation to help businesses
The Austrian government has agreed a number of amendments to the bankruptcy law which will allow more businesses to continue trading and avoid insolvency.

Under the current regulations more than 50% of applications for bankruptcy protection are rejected and the companies are forced to declare themselves insolvent, offering little protection for employees. The new regulations will reduce the recoverable debt owed to creditors from 75% to 50%, suspend the termination of employees with permanent contracts for a minimum of six months, and allow the business to continue operating in its premises without being evicted. If approved by the national parliament, the revised law will come into effect on January 1st 2010.

17/08/2009: Poor take-up of redundancy selection option
Few employers in the Netherlands have so far taken up a new option during reorganisation exercises. Since August 1st 2009 the criteria for redundancy selection have been relaxed. This allows employers to make a business case for retention by declaring certain staff indispensable during the redundancy selection process. Although the mirroring principle remains (requiring redundancies to be distributed over the various age categories) employers are now permitted a 10% deviation in order to retain staff with key individual skills or potential.

13/08/2009: Liberalisation of Sunday opening
Danish business minister Lene Espersen has proposed that the 1904 'Shop Law' be scrapped so that Danish shops could open on Sundays. At present an amendment to the 'Shop law' allows shops to remain open for 21 Sundays per year. If accepted, the new law would allow businesses to open for 30 Sundays per year from the Summer 2011, with the ending of all Sunday trading restrictions by October 2012.

11/08/2009: Parental leave amendments proposed
The Cyprus government, unions and employer's associations have agreed to several amendments in parental leave legislation. The new law will extend parental leave to all persons who have children under the age of 18 (the age limit was previously six years old), and extend the annual parental leave entitlement from four weeks to five weeks for persons who have one or two children, and to six weeks if an employee has three or more children. The notice period for taking parental leave will be reduced from five weeks to three weeks.

11/08/2009: No compensation due for withdrawal of regular duties
The German federal labour court has rejected an appeal from an employee who claimed that additional tasks he performed over the course of 18 years, and the payment he received for such tasks, were not overtime payments and could not therefore be withdrawn. Although the court agreed that the duties did not amount to overtime, they were not detailed in his employment contract. Therefore, their withdrawal was valid and the employee was not entitled to compensation [BAG, 5AZR 133/08].

07/08/2009: Employers must check authenticity of papers
The Dutch Council of State has ruled that employers are responsible for checking the authenticity of employee work permits and identity cards and may be liable if they are later found to have been falsified. The decision arose following an appeal by a Chinese restaurant against a fine of 8,000 euros by the Dutch Social Affairs Ministry. However, the council did not require employers to go so far as to use special equipment or even a magnifying glass to discover falsifications. Liability would arise only if it was clear from a general inspection that irregularities were present.

06/08/2008: New package of anti-crisis measures
Bulgaria's National Council for Tripartite Cooperation (NCTC) has agreed to reconvene next Monday in order to draw up a number of anti-crisis measures. In preliminary discussions, the social partners agreed to withdraw a one-year 'active ageing' programme for retirees after it had attracted only 20% of its target participation level.

Top of the agenda for the re-established NCTC will be the recent successful challenge before the Supreme Administrative Court by the trade union Podkrepa concerning a government ordinance on unemployment benefits. The court's decision has made it very difficult for the National Social Security Institute to continue operating the benefits system.

04/08/2009: Final approval for Sunday opening hours
The French Senate has approved a bill permitting retail businesses in Lille, Marseilles and Paris to trade on Sundays. Employees working on Sundays will be entitled to be paid double time and, in the absence of a collective agreement, employees regularly working on Sundays will have the right to take off three Sundays a year.

03/08/2009: Labour Code amendments
The Latvian parliament (Saeima) has approved at first reading its most extensive set of changes to the Latvian Labour Code since 2002. Amendments include requiring job advertisements to specify the person responsible for applicant selection, a provision allowing employers to terminate employees on long-term sick leave, an obligation for employers to retain employment contracts within the workplace, and new record-keeping requirements for employees on aggregated working time. The amendments will face two more readings before being made law.

31/07/2009: Falling wages during economic downturn
According to the Central Service for Statistics and Economic Studies in Luxembourg (Statec), the average gross wage in Luxembourg fell by 0.3% in 2009. Statec attributes this decline to a reduction in working hours and short-time working. The highest fall took place in the construction industry with average wages down by 0.6%.

28/07/2009: Croatia to introduce emergency income tax
The Croatian government has decided to introduce a 3% 'crisis tax' on incomes, increase VAT by 1% and suspend zero VAT rates. The changes will come into force on the 1st August 2009. The crisis tax will apply until the end of 2010 and will be payable by employees and self-employed workers with salaries of more than 3,000 kunas (409 euros) a month.

27/07/2009: Launch of long-term jobs strategy
The Ukrainian government has approved a new long-term employment strategy. The National Social Program for the Retention and Development of Labour Potential will run until 2017 and seeks to bring one million people into the labour market and achieve improvements in workplace health and safety.

27/07/2009: Talks break down in spite of compromise offer
Negotiations on a 'social pact' in Spain have finally broken down. According to economics minister Elena Salgardo, the failure of talks was due to the intransigence of the national employers organisation Ceoe, whilst industry minister Miguel Sebastian commented that "the attitude of the business organization has left much to be desired". Moving to take advantage of the impasse the General Secretary of the trade union CC.OO, Ignacio Fernandez Toxo, has called upon the government to go ahead with "necessary" reforms rather than allow the failure of tripartite social dialogue to lead to inaction.

In a document submitted to the government, Ceoe has stressed that it has never broached the sticky subject of lowering firing costs or sought to reduce the current rights of workers. Instead, it had proposed a 5% reduction in social security contributions and, in order to reach a compromise position, had offered to accept a half percentage point cut in social security payments for this year and a one percentage point cut in 2010.

24/07/2009: Minimum director remuneration burden for small companies
An increasing number of small companies registered as BVs in the Netherlands are finding it difficult to meet the legal obligation to pay the director with the largest shareholding (or DGA) a minimum of 40,000 euros a year. In some companies, this figure may be even higher because, under company law, the DGA must be paid at least as much as the best-paid employee. MKB, the employers association for small companies, has written to fiscal affairs state secretary Jan Kees de Jager calling for DGA rules to be relaxed, especially in loss-making companies. However, he has made it clear that he is unprepared to accede to the MKB's demands.

22/07/2009: Expansion of on-the-job qualifications
The Spanish Government has approved the introduction of 28 new professional and vocational qualifications that could benefit up to 10m of the country’s workers. This reform, which is aimed at those who have not followed traditional training routes, would allow qualifications to be gained on the job, and would provide employers with a better basis by which to grade their employees and develop their skills.

22/07/2009: Measures to encourage the employment of disabled people
The Dutch Central Bureau for Statistics has just reported that the number of people receiving disability benefits rose from 167,000 in 2007 to 178,000 last year. With new illnesses now qualifying as disabilities, costs are likely to escalate over the next few years.

To counter this trend, the government is in consultation with employers' associations concerning the introduction of a special logo on recruitment advertisements welcoming disabled applicants. 21% of collective agreements concluded since March 2009 have included clauses relating to the employment of disabled workers. Furthermore, the Dutch social affairs ministry will introduce vouchers in September 2009 offering free advice to employers on the benefits of employing people with disabilities.

22/07/2009: Reform of vocational training system
A new bill has been adopted by the French National Assembly (parliament) that seeks to make it possible for every individual to gain at least one vocational qualification during their working life. If the bill is approved by the Senate, the government will make available 900m euros during 2010 to fund training courses for 700,000 poorly-qualified workers and unemployed people. Existing rights through individual training leave (CIF) and allocated training days (DIF) will be extended and workers will also have the right to request from their employers an 'orientation and training passport' setting out their qualifications, training and work experience.

21/07/2009: One in three attend higher educational institution
According to a recent report published by the Eurydice Network, one-third of all 20-22 year olds in the European Union (EU) now participate in higher education and one-fifth more women participate than men. It costs an average of 8,400 euros a year to educate a student in an EU public-sector university. However, costs range from 18,400 euros in Cyprus to just 2,600 euros in Latvia.

20/07/2009: Work experience and qualification bonuses to continue
The leading party in Bulgaria's new coalition government, GERB, has proposed the introduction of new laws aimed at increasing economic growth and creating more jobs. Measures include reviving the agricultural sector, reducing licensing fees for employment agencies, and expanding student loans to allow for a better-skilled workforce.

The party is committed to keeping traditional service bonuses for workers. The bonuses, which benefit older workers and reward long service, have been criticised by the International Monetary Fund (IMF) for restricting the entry of older people to the employment market, as employers opt for younger workers on fixed-term contracts to avoid paying the bonus. The IMF claims it is a short-term fix for a longer-term problem in a country with one of the lowest minimum wages in Europe.

17/07/2009: Liberalisation of Sunday working rules
The French National Assembly has voted to allow retail outlets in Paris, Marseilles, Lille and numerous tourist centres to open seven days a week. If ratified by the Senate, the liberalisation of Sunday trading could affect over 1,000 retail zones and shopping malls across France. Opponents to this measure have threatened to challenge it before the constitutional council on the grounds that employees in tourist areas would not be entitled to premium payments for Sunday working, whereas employees in major cities would be entitled to be paid double time and to take compensatory time off work.

15/07/2009: UK inflation slips as deflation hits eurozone
The UK consumer price index rose by 1.8% over the year to June 2009, down from 2.2% recorded in May. This easing of inflationary pressure was largely due to the price of food, non-alcoholic drink and furniture. However, the movement of consumer prices in the UK is widely at variance with deflationary trends in the eurozone, where prices declined by 0.1% over the year to June 2009.

14/07/2009: Decision soon on new employment package
The Spanish employers' organisation Ceoe will decide this week whether to accept a number of measures recently proposed during talks with the government and trade union confederations CCOO and UCT. The principal changes will be:

* The extension from six months to a year of a 420 euros a month payment to unemployed workers who have exhausted their normal benefit payments.

* A reduction in employer social security contributions

* A new approach to combat absenteeism.

* Greater collaboration between temporary work agencies and the public employment service.

The government has not given its weight to a further proposal involving the creation of a new employment contract with dismissal indemnification limited to a maximum of 20 days per year of service.

12/07/2009: More flexibility during redundancy selection
A temporary relaxation of redundancy selection procedures is likely to be introduced in the Netherlands on August 1st 2009. Although employers will have to continue using a 'mirroring' method based on age group to make their selections, they will be able to exclude a small number of key personnel. UWV, the government agency that checks redundancy requests, will be less strict in its criteria if employers characterise certain employees as 'indispensable'.

10/07/2009: Tighter regulatory framework for employment agencies
The Irish government has now published the Employment Agency Regulation Bill. This requires that employment agencies offering a service in the Irish Republic (even if based abroad) must be licensed in Ireland unless otherwise licensed or regulated in another member state of the European Economic Area (EEA). A last-minute amendment to the bill also prohibits the use of agency workers to provide cover during an official strike or lock-out. Once approved, the new law will operate alongside an agency sector code of practice currently being drawn up by Department of Enterprise, Trade and Employment.

10/07/2009: Strong signs of recovery in the eurozone
The latest OECD composite leading indicators (CLI) point to an upturn in the world economy. The CLI for the eurozone increased by 1 point in May, although it was still 4.7 points below its value in May 2008. Some improvement was also evident in the UK economy, after a fall of only 2.7 points from a year earlier. However, recovery appears to be slower in the two worst-hit European countries covered by the OECD figures, with Germany (-11.8 points) and the Russian Federation (-20.7 points) still bottoming out.

The CLI has proven to be a reliable predictor of turning points in business cycles, with actual peaks and troughs in economies generally following between three and eight months after being forecast by CLI trends. Improvements in the eurozone economy have now been registered for four successive months, so it is likely that a slow upswing may begin this autumn, particularly in France and Italy.

08/07/2009: Rise in short-time earnings threshold
Workers in Portugal may now receive extended state compensation for short-time work, provided that the average monthly income for family members is lower than 461 euros a month. The previous limit was 365 euros. In May 2009, there were 324,000 employees receiving the new subsidies for full or partial unemployment, an increase of 58% compared to a year ago. This still leaves 165,000 jobless people without any rights to support from the state.

08/07/2009: Employers must have performing rights licence
Swedish companies with more than 40 employees may soon have to pay between 25,000 kr and 40,000 kr (2,260-3,617 euros) a year for a copyright licence if they wish to play music in the workplace. The Swedish Performing Rights Society (STIM) is currently writing to some 3,000 companies to inform them about their obligations under the Act on Copyright in Literary and Artistic Works (1960).

30/06/2009: Raising pensions to the living wage
On July 3rd, the Russian state Duma (parliament) will vote on second and third readings of the pensions bill. This measure is designed to bring all pension payments up to at least the level of the 'living wage' by January 1st 2010. Due to the current economic downturn, mandatory pension and medical insurance premiums will not be increased until 2011. This will mean that state funding of the welfare system will have to rise by 700bn roubles (15.9bn euros) next year.

01/07/2009: Swedish presidency seeks to head off collapse in short-time working
Sweden takes over the EU presidency from the Czech Republic today. The new presidency will principally concern itself with economic recovery, controlling public debt, tackling international crime, climate change and securing an Irish 'yes' vote to the Lisbon treaty this October so that an EU constitution can be introduced.

On the HR front it can be expected that EU-wide controls will be proposed on top executive pay in the financial sector. The Swedish prime minister, Fredrik Reinfeldt, has also been talking about a more "pro-active labour market", by which he means greater government intervention to secure work for the unemployed, more funding for training, and innovative ways to prevent wide-scale redundancies if short-time arrangements cannot be sustained later this Autumn.

24/06/2009: Short-time scheme a victim of its own success
The Dutch social affairs secretary, Piet Hein Donner, has announced to the lower house of parliament that all the funding originally made available for the part-time unemployment (short-time) scheme has now been exhausted - only three months into its current phase. Although pressure exists from the CDA and PvdA government coalition parties and both sides of industry to provide additional funding for the scheme, it is likely that any further support will require stronger financial justification by applicant firms and be directed only to key personnel.

19/06/2009: Social partners sign up to extension of parental leave
A revised framework agreement on parental leave has now been signed by a number of EU employers' groups and the European Trade Union Congress. The agreement increases the duration of parental leave from three to four months and gives employees returning to work the right to request changes in their working hours, or other working conditions. It also guarantees that employees will not be subject to unfavourable treatment because they exercise their parental leave rights.

The European Commission will now move ahead with a proposal to incorporate these changes into EU law through an amendment to the Parental Leave Directive (96/34/EC).

17/06/2009: Threat of deflationary spiral closer to reality in Europe
According to the EU statistical agency Eurostat, the overall rate of consumer price (HICP) inflation fell to 0.0% in the eurozone over the year to May 2009. This compares with an annual inflation rate of 3.7% last May.

The collapse in demand for goods and services and the high euro exchange rate has led to price deflation in six eurozone countries: the Irish Republic (-1.7%), Portugal (-1.2%), Spain (-0.9%), Luxembourg (-0.9%), France (-0.3%) and Belgium (-0.2%). In Germany, inflation stands at 0.0% and in Austria 0.1%. The only eurozone countries with annual inflation rates above one percent are Malta (+3.4%), Finland and the Netherlands (+1.5%) and Slovakia (+1.1%). Outside the eurozone, price inflation continues to be significant in all countries except the UK and Switzerland and ranges from 1.1% in Denmark to 5.9% in Romania. In Switzerland, prices have fallen by 1.1% over the last year, but in the UK, deflationary pressure has been even higher, with prices falling to 2.2% below their level in May 2008.

16/06/2009: Lifting of visa restrictions by end of 2009
At a meeting of EU foreign ministers today, approval was given for the lifting of visa restrictions for citizens of Macedonia, Montenegro and Serbia. A visa-free regime between the EU and these Balkan states is now likely to be introduced by the end of 2009 provided they meet the necessary criteria.

16/06/2009: Action to stem the looming jobs crisis
A meeting between the French government and both sides of industry has been arranged for June 24th 2009. At the top of the agenda will be the operation of short-time working, improved job flexibility and the employment of young workers.

This month, millions of young people across Europe leave school or university to seek work in a depressed job market. In April 2009, the youth unemployment rate (under-25s) was 18.7% in the EU compared to 14.7% last April. In France, 600,000 young people are about to leave school at a time when, according to the state employment bureau, Pole Emploi, recruitment intentions are down by 23.8%. Employment opportunities are expected to be particularly depressed in northern France, Poitou-Charentes, Limousin, Centre and Auvergne.

Last week, meanwhile, the French National Assembly (parliament) adopted at first reading the text of a private member's 'job creation' bill. This measure seeks to reduce current restrictions on the loan of labour between companies, to permit part-time workers to extend weekly working hours on a temporary basis, to reduce the maximum period during which employees are entitled to training on full pay from three to two months, to establish an automatic tax credit for small companies that employ young workers and to encourage the introduction of teleworking.

12/06/2009: Legislators refuse to cap executive pay
The Swiss Senate has rejected a proposed general limitation on salaries and special payments to senior managers. Instead, it voted in favour of shareholders having a right to recommend remuneration policy constraints for board-level positions. The proposal will now be discussed by the federal house of representatives and, if a consensus is achieved, the matter will eventually be subject to a national referendum.

11/06/2009: Entitlement to holiday pay
The UK's final court of appeal, the Law Lords, has ruled that employees may not forfeit their holiday pay entitlement accumulated during sick-leave periods. This is provided that they make a claim for unpaid holiday pay upon termination of employment and within three months from the last in a series of withheld payments that are due (Commissioners of Inland Revenue v Ainsworth and ors).

Earlier this year, the European Court of Justice ruled that employees absent from work on sick-leave continue to accrue annual leave and that untaken leave resulting from such absence periods must be carried over between holiday years.

09/06/2009: Creation of extended midsummer holiday
This year, Monday June 22nd will be an extra bridging public holiday in Latvia. This will create a five-day break from Saturday, June 20th to Wednesday June 24th 2009. To compensate for this change, Saturday, June 27th will be a normal working day.

05/06/2009: Price inflation rate falling quicker than expected
The annual rate of consumer price inflation in the Russian Federation fell from 13.2% in April to 12.3% in May. Overall, prices rose by 0.6% in May, but the increase in Moscow was 0.7% and in St Petersburg it was 0.3%. The Russian Central Bank's inflation forecast for 2009 of 13% now appears to be too high and a more realistic figure would be between 9% and 10%.

03/06/2009: 13.7% rise in minimum wage
The national minimum wage in Croatia rose by 13.7% on June 1st 2009 from 2,747.00 kunas to 3,123.22 kunas a month. This change is the first triggered by the formula set down by the new Minimum Salary Act and has been introduced despite employers' concerns that it could increase the level of job losses.

02/06/2009: Companies must issue corporate governance reports
An important amendment has been made to the Estonian Accounting Act. This introduces a statutory requirement for all annual reports published by Estonian registered public limited companies (covering reporting periods after June 30th 2009) to contain information on compliance with the corporate governance recommendations that have been adopted by the Tallin stock exchange.

01/06/2009: RSA scheme to benefit unemployed and low paid workers
A new safety net is introduced in France today for workers on very low incomes. The Revenu Minimum d'Insertion (RMI) and single parent allowance (API) have been abolished and replaced by the Revenu de Solidarité Active (RSA).

The RSA may be claimed by French workers who receive incomes below the official subsistence level (set according to family size). It will also act as an incentive for unemployed people who do not qualify for unemployment benefit to find work. This is because, during the first three months of new employment or training, the individual will be able to retain full entitlement to RSA. Thereafter, they will be able to retain 62 cents of their RSA entitlement for every euro earned from their new job. However, claimants must be at least 25 years old, or have dependant children or be expecting a child. RSA may be withdrawn if the claimant refuses two suitable job offers.

Employees on low incomes who wish to receive their first RSA payment due on July 5th now have until June 15th to apply.

01/06/2009: Improved support for many short-time workers
Employees in the Netherlands who move onto the government's temporary short-time working (part-time jobless) scheme will now also be able to claim regular overtime payments from the unemployment benefit (WW) fund. To qualify for this additional benefit, a weekly average of at least five hours overtime must have been worked for 52 weeks prior to the employee being transferred to short-time working.

27/05/2009: Further burden for French employers
From January 1st 2010, companies in France with 50 or more employees will have to pay a 1% payroll levy if they have not concluded an agreement or established an action plan concerning the employment of older workers.

The agreement/plan must operate for a maximum of three years and must set out targets for retaining employees aged 55+ and recruiting people aged 50+. Employers are obliged to draw upon at least three measures from a list contained in the enacting decree and also to set out follow-up methods for achieving the objectives. In companies with less than 300 employees, it will be possible to meet these requirements by compliance with an industry-wide collective agreement.

26/05/2009: Pensions rise by 4.8%
The average value of state pensions in Spain has risen over the last year by 4.8% to 852.75 euros a month. The highest pensions are currently paid in the Basque country (938.01 euros a month), whilst The lowest pension are paid in Galicia (629.18 euros a month).

26/05/2009: Major hike in health insurance costs
Health insurance premiums in Switzerland are set to rise over the next year by an average of 15%. In cantons such as Obwalden, Uri, Berne and Glarus, the increase could be as high as 20%.

22/05/2009: Race to conclude double taxation treaties
Both Luxembourg and Switzerland are seeking to remove themselves from the OECD's 'greylist' of non-cooperative countries that fail to meet international taxation standards. Both governments fear that, if action is not taken, possible sanctions may be applied against financial companies that continue to operate in their territories. They have therefore set a target of concluding at least twelve double taxation treaties with other countries by the end of the year - the minimum number required to be removed from the 'greylist'.

20/05/2009: Wide differences in tax on jobs
The OECD's latest annual report on taxation of wages reveals that the total cost of employers and employees social security and income tax as a proportion of total labour costs ranged last year from 22.9% in the Irish Republic to 56% in Belgium. The biggest fall in the 'tax wedge' last year was in Poland (-3.18%) and Turkey (-3.00%). The biggest increase was in the Netherlands (+0.69%).

18/05/2009: Fall in visa volumes
Since Poland entered the Schengen free movement zone in December 2007, the number of visas issued to nationals from non-EU eastern European countries such as Ukraine and Belarus has halved. Citizens from these states now face more demanding selection criteria, tougher procedures, longer delays and higher administrative fees than before Poland entered the zone.

14/05/2009: Reform of vocational training rights
The French National Assembly (parliament) is scheduled to debate a new vocational training bill in June.

The bill is based on an agreement concluded between employers and trade unions earlier this year. It divides training into that carried out during the normal working day, for which an employee is entitled to receive their normal remuneration, and that undertaken outside normal working hours, for which an employee would be entitled to an allowance equal to half their remuneration. Employees would also become entitled to transfer their accumulated allocation of training time (DIF) to be used during a period of unemployment or within two years of joining a new employer. Access to individual training leave (CIF) will be widened, and further measures will be established to assist job applicants with few formal qualifications.

Once an employee has been in post for two years, they will become entitled to an assessment of their training needs. Further assessment will then take place every five years.

12/05/2009: Spain seeks cooperation to stem immigration
A bilateral agreement has been signed to achieve closer control on the numbers of Ukrainian workers entering Spain. Some 275,000 Ukrainians have entered the country since 2001, mainly to work in sectors such as construction and tourism which have recently been heavily hit by the economic downturn.

Under the agreement, visas will only be issued to Ukrainian workers if there is a clear shortage of available skilled labour in a particular field. However, legal immigrants will have immediate access to social security provisions and enjoy equal employment and family reunion rights. Both countries will also cooperate on arrangements for the return of employees after employment contracts come to an end.

11/05/2009: Growth outlook improves
The latest OECD economic prediction figures indicate that a recovery is now in prospect for some EU countries. Composite leading indicators for France and Italy are in their third successive month of improvement, whilst the UK has achieved a positive trend for two consecutive months. This would suggest that Italy could lead the way out of the current recession with a slight improvement in GDP this summer. However, although the pace of decline in the predictive indicator for the German economy has slowed in recent months, it could be early next year before German GDP trends are likely to reverse.

05/05/2009: Permanent workers rise by 70,200
Although the total number of wage earners with temporary contracts in Spain declined by 1,044,600 over the year to Q1 2009, the number of workers with permanent contracts increased by 70,200.

In Spain's two-tier labour market, employers have been reluctant to hire workers on permanent contracts because of the prohibitively expensive level of compensation that must be paid when terminating such workers. But fixed-term workers who have been subject to two or more contracts with the same company in the same job for more than 24 months (within any 30-month period) may now claim permanent employment contracts. It is likely to be the exercise of this right that has caused the increase in the total number of permanent workers, in spite of the current economic downturn.

05/05/2009: Compensation for additional holidays
The Bulgarian government has announced that in compensation for the two additional bridging public holidays on May 4th and 5th 2009, employees will work on two forthcoming Saturdays - May 16th and 30th 2009.

05/05/2009: Collapse of national pay talks
A last-ditch attempt by the Irish government to secure a revised social partnership pay deal came to nothing this weekend. An offer by employers for a bilateral agreement covering the private sector has also been rejected by Ireland's largest trade union, SIPTU. Whilst employers are seeking a pay freeze until 2011, unions are still clinging to the 21-month 6% deal concluded early last autumn, which allows exemptions only where companies are experiencing severe economic difficulties.

05/05/2009: Further curbs on executive pay
Portugal's finance ministry has issued an official notice requiring all companies owned by a public body or receiving state support to remunerate managers in a transparent, moderate and ordered way. Base salaries must be fixed by reference to the market and variable remuneration subject to a clear upper limit, with payments geared to the longer-term performance of the enterprise and the risks being undertaken.

01/05/2009: Impact of downturn on jobs highest in Spain
The brunt of the economic downturn in the European Union is being felt by Spain and the Baltic states. The overall EU unemployment rate in March 2009 was 8.3%, up from 6.7% in March 2008. However, over the last year, the unemployment rate in Spain has risen from 9.5% to 17.4% and unemployment in Latvia and Lithuania now stands at 16.1% and 15.5% respectively. In the under-25 age group, EU unemployment affects 18.3% of the workforce, but in Spain it is running at 35.4%.

01/05/2009: Commission establishes framework for remuneration
Two recommendations on the remuneration of traders in financial institutions and the directors of listed companies have been adopted by the European Commission. These underline the principle that pay must be linked to performance whilst, at the same time, 'promoting sound and effective risk management'. The pay determination process must also be transparent and be subject to adequate supervision by shareholders.

29/04/2009: Minimum wage extended to six more sectors
A revised German employee assignment law has just been published. Collective agreements already set statutory minimum wage rates in the building, electrical handicraft, janitorial and postal sectors, and the new regulations extend minimum wage protection to employees in six further sectors - care of the elderly, security services, refuse collection and disposal, vocational and further education, industrial textile services and hard coal mining (special work). The rates will also have to be paid by foreign companies posting employees to Germany to work on assignments in these sectors.

28/04/2009: Relief for employers following working time impasse
Talks between the EU Council and Parliament on ending the current opt-out from the 48-hour week have finally broken down. The 15 EU countries that currently apply the opt-out may now continue to benefit from the greater flexibility it allows. However, a danger still exists that the European Commission may try to use the European Court of Justice to challenge the legality of national employment laws under current EU working time rules.

24/04/2009: Early signs of recovery in the eurozone
The composite purchasing managers' industry and service index for the eurozone jumped from 38.3 in March to 40.5 this month. France's business confidence index also rose from 68 in March to 71 in April, whilst the Ifo economic institute reported that its German business climate index rose from 82.2 to 83.7 over the last month.

24/04/2009: Major cut in pay differentials
The Romanian Cabinet has adopted a draft law that will reduce the maximum pay differential in the public sector from x72 to x15. The highest bonus payable will also be limited to 30% of basic pay.

23/04/2009: Reform of the sickness absence system
An amendment to the Sickness Benefit Act has been proposed by the Danish Ministry of Employment. The bill introduces a new 'fitness to work' certificate designed to encourage employees to minimise their absence period. Employers will be required to conduct an interview with employees during the first four weeks of sick leave and to pass on a completed interview report to the social security authorities. Employees who are absent from work for more than eight weeks will have the right to request a work resumption plan.

20/04/2009: Challenge to pension scheme cost distribution
The lower house of the Dutch parliament is currently debating a proposal that would require insurance companies operating corporate and individual pension schemes to be more transparent and to spread operating costs equally over the entire contribution period. Currently, employees who change jobs in the early phase of a scheme find that they have not built up any pension entitlement because of the front-end loading of operating costs common to insurance-based schemes.

16/04/2009: Call for pay moderation
National talks between the Finnish government, employers and trade unions have resumed following a stand-off between the government and unions over a proposal to raise the retirement age to 65. At this month's meeting, employers called for zero pay growth during the rest of 2009. This view was supported by the prime minister, Matti Vanhanen, who indicated that the income tax system would be used to encourage pay freezes or to keep pay increases at a minimal level. The next tripartite meeting has been scheduled for the middle of next month.

14/04/2009: Bringing practices into line with European neighbours
Turkey's labour ministry is currently in discussion with opposition parties about two proposed labour reforms. The first of these is an amendment to the labour union law to permit public servants to bargain collectively and take strike action. The second proposal is to declare May 1st as Labour Day and make it a public holiday.

14/04/2009: Reducing abuse of paid sick-leave
Under new government proposals, the Lithuanian state social insurance fund (Sodra) will no longer be responsible for providing financial support to employees on sick leave during the first three days of absence. If the proposed bill goes ahead, employers will be obliged to remunerate employees for the first two days of absence, followed by one unpaid 'waiting day' before Sodra steps in with sickness benefits at 85% of the average remuneration level.

09/04/2009: Denmark to open up its labour market
On May 1st 2009, Denmark will open its labour market to workers from Bulgaria and Romania. Although all citizens of EEA states will be able to work in Denmark without a work permit, foreign companies posting workers to the country must submit a prior notification to the register of foreign service operated by the Danish Commerce and Companies Agency. Companies providing a service in Denmark must also register for VAT at least eight days before the service commences.

05/04/2009: Employers given deadline to reach agreement
The Irish Labour Court has refused to endorse a 10% cut in building and construction sector wage rates. This is because the court believes that actual wage rates have been higher than the minimum rates in recent 'boom years'. The court has given employers and trade unions one month to conclude a new sectoral collective agreement. If no agreement has been reached by this deadline, employers or trade unions can apply to the court for a 'definitive recommendation'.

05/04/2009: Steel industry pay deal
Steel industry employers in the German states of North-Rhine-Westphalia, Lower Saxony and Bremen have concluded an agreement with the trade union IG Metall. This provides a one-off payment of 350 euros this year and a 2% increase from January 1st 2010. A facility will also exist to shorten workweeks from 35 to 28 hours in order to avoid redundancies. The current agreement will run until August 31st 2010.

02/04/2009: Deadlock over working time reforms
Negotiation between the EU Council and European Parliament on reform of the Working Time Directive have ended without agreement after a marathon session of all-night talks. This means that there will be only one further opportunity for negotiators to achieve a compromise before the deadline for discussions ends in early June. The reforms would affect 15 EU countries that currently apply opt-outs from the 48-hour working week.

02/04/2009: Suspension of work visas
The Czech immigration authorities have suspended work visas for four countries - Moldova, Mongolia, Thailand and Ukraine. They have also renewed the existing three-month ban on Vietnamese workers. These countries are the principal source for Czech employers of unskilled labour from outside the EEA.

31/03/2009: Removal of permit restrictions
A bill has been introduced into the Danish parliament which lifts all work and residence permit restrictions on citizens of the new EU member states with effect from May 1st 2009. If it is adopted, the only remaining restriction on workers from EU member states will be a requirement to notify the regional state authorities about their presence in Denmark if their stay exceeds three months.

31/03/2009: Opening of borders completed
Passport controls at Swiss airports have now been removed for citizens of EU Schengen zone member states. This follows the removal of road and rail passport checks last December, and completes Switzerland's entry to the 25-state borderless Schengen zone.

26/03/2009: Greek pension system discriminates against male workers
The European Court of Justice has found that the Greek state pension system applies employment age conditions and rules on minimum periods of service that are less favourable to men than women. Although it would be lawful to include provisions in the system to compensate women for the disadvantages they experience because of the shorter duration of their working lives, the court found that the Greek Pensions Code is not designed to offset such disadvantages.

24/03/2009: Proposal to resume wage talks
The Irish Business and Employers Confederation (IBEC) has written to the Irish Congress of Trade Unions offering to resume discussions on a new national wage agreement. The letter points out, however, that any agreement would have to address 'the need for pay to be frozen for a significant period, and for the normal industrial relations machinery to be utilised in a manner that ensures the swift and orderly resolution of disputes, without recourse to any form of industrial action whatsoever'.

24/03/2009: Labour accords only avenue for variable pay
The Dutch finance minister, Wouter Bos, has written to the lower house of parliament setting out government policy on remuneration in financial companies that receive state funding.

With retrospective effect from January 1st 2009, no bonuses may be paid to senior management of banks and insurance companies receiving government support and the only variable remuneration permitted for other staff will be that agreed through collective labour accords. Severance arrangements for senior management will also be subject to a maximum of one year's fixed salary. These limitations will apply until new individual company remuneration policies have been established with the involvement of supervisory board members appointed by the government.

23/03/2009: Unusual ruling on business transfers
The Spanish Supreme Court has recently ruled that the decision of a company to outsource its cleaning staff did not amount to a business transfer because only staff were reassigned to the service company and no assets had been transferred. Ironically, the fact that staff had objected to the change of employer meant that one further condition of a transfer, employee consent, had not been met.

20/03/2009: Right to a redundancy payment
Next month, the States of Jersey (the parliament of the Channel Island of Jersey) will debate an amendment to the British crown dependency's employment legislation that would introduce protection for employees who are made redundant. The principal change will be a right for all those with two years' or more continuous employment to receive a payment on redundancy equal to one week's pay for each year of service (up to a fixed earnings cap). If accepted by the legislature, the new provisions would come into force by early 2010.

20/03/2009: Controversey about taxation of employee benefits
According to the prime minister of Bosnia & Herzegovina, Nedzad Brakovic, the tripartite Economic and Social Council has agreed to increase the scope of income tax to cover such benefits as free canteen meals and transport to work. This assertion has, however, been denied by the national employers' association and the Confederation of Independent Trade Unions.

18/03/2009: Fewer work accidents
Industrial accidents in Spain declined by 10.3% last year, with serious accidents reduced by 18%. Spain has a relatively low number of accidents at work compared with other EU countries, but the number of fatal work accidents is consistently higher than in other EU states.

16/03/2009: A third of employees work outside normal hours
According to figures just published by Statistics Norway, one in three of all employees in Norway work outside the period 6am-6pm/Monday-Friday, mostly as part of a shift work arrangement. Almost half of employees aged 15-29 work outside normal daytime hours and such work patterns are significantly more common for women than men.

11/03/2009: Pay in Europe 2009
FedEE's Pay in Europe 2009 report will be published next month. It will be available to paid-up members in pdf format in the members' area of our website. The report will provide benchmark salary data for 32 standard job positions in 49 European countries and territories at a common reference date of February 1st 2009.

10/03/2009: Offshore workers not entitled to additional 'annual leave'
In a test case before an employment tribunal last year in Aberdeen, Scotland, it was ruled that seven North Sea drilling operatives and catering staff had the right to take two weeks' holiday in addition to the long field breaks they receive as compensation for working offshore. However, the employment appeal tribunal in Edinburgh has now found that offshore workers already receive sufficient statutory leave as an implicit element in their two-weeks-on/two-weeks-off duty cycle. This decision is likely to affect the contractual rights of around 500 offshore workers (Transocean International Resources Ltd v Mr R T Russell and Ors).

06/03/2009: President blocks equal treatment reforms
The Estonian president, Toomas Ilves, has refused to sign the Gender Equality Act, Equal Treatment Act or Employment Contracts Act because of a technicality over parliamentary procedures. These Acts contain a number of key amendments such as the establishment of a definition of harassment on grounds of gender, a new procedure for resolving complaints concerning discrimination and a provision making it unlawful to ask for information about gender during the recruitment process.

05/03/2009: New six-day holiday in Bulgaria
The Bulgarian government has declared May 4th and 5th 2009 to be additional public holidays this year. This will create a continuous holiday period from Friday, May 1st (May Day) to Wednesday, May 6th (St George's Day). To compensate for these changes, two Saturdays - April 25th and May 9th - have been classified as normal working days.

5/03/2009: Court sidesteps age discrimination question
The European Court of Justice (ECJ) has finally published its conclusions on an important test case concerning the legality of obligatory retirement at a fixed age.

The ECJ noted that the EU's Equal Treatment Framework Directive (2000/78) does not require EU member states to draw up a specific list of exceptions (derogations) to the equal treatment rule. However, it decided that it is legitimate to permit differences in treatment on the ground of age in order to pursue 'social objectives' such as those based on employment policy, the needs of the labour market, or requirements for vocational training. But such factors must be in 'the public interest' and are not matters that can be determined at the level of an individual employer with the purpose, for example, of reducing costs or improving competitiveness.

The ECJ has asked the UK high court that referred the case to determine, in the light of its advice, whether UK retirement legislation is based on a 'legitimate aim' and whether 'the means chosen were appropriate and necessary to achieve it'. As such concepts as 'public interest' and 'necessary' are so easily interpreted as fitting any political standpoint, the UK court is now left in a difficult position. It may decide to clarify and precisely define such concepts and thereby challenge the legality of current retirement rules, or to allow such terms to represent anything that the UK government wishes them to mean. (ECJ Case C-388/07).

09/03/2009: Groundbreaking agreement on short-time work
Engineering employers in Sweden have concluded a national short-time agreement with industrial union IF Metall. This will allow companies to reduce the workweek of full-time employees to two days, provided that a further day is provided for training and that employees are guaranteed 80% of their normal weekly pay.

This one-year deal is unusual in Sweden, where trade unions have traditionally opposed all temporary lay-off arrangements. Both parties have agreed to monitor its outcome and determine what impact it has on redundancy levels.

04/03/2009: Government backtracks on pay and hours deal
In response to pressure from the European Commission, the Greek government is making sharp cuts in its 2009 spending plans. These include a unilateral revision of last December's collective agreement with unions representing hospital doctors in order to curtail promised pay increases. It now remains uncertain whether the reduction of working time set out in the deal will be implemented, especially the new 13-hour ceiling on all shifts and the reduced 48-hour workweek to replace the normal 56-hour week.

03/03/2009: Register of directors' loans
Under new financial service rules, Irish banks and building societies must now disclose in annual company financial statements details of all loans to directors. They are also required to maintain a register of such loans and make it accessible to shareholders. The details to be held include the maximum value of outstanding loans, interest due, and provisions for loans that are not honoured.

03/03/2009: Restrictions on labour agencies
The Czech government has introduced new regulations to crack down on gangmasters involved in the hiring and exploitation of foreign workers. In future, employment agencies may only operate within a limited range of occupations and all jobs offered must require at least secondary education.

25/02/2009: Additional support for redundant employees
The Polish government has revealed a proposed emergency measure to provide interest-free loans of between 500 and 1200 zlotys (108 and 258 euros) to employees made redundant who are consequently unable to meet their mortgage commitments. The scheme has not yet been finally approved by the government, however, and is currently opposed by the labour minister, Jolanta Fedak. If it goes ahead, it is likely to operate until the end of 2010 and the loan will be repayable to the labour fund between two and ten years after the payment was received.

23/02/2009: Parental leave in the melting pot
The Finnish social affairs and health minister, Liisa Marja Hyssala, has established a committee to review the current parental leave system. Its main goal will be to encourage fathers to take a greater share of parental leave. The favoured approach at present is a proposal put forward by the gender equality minister, Stefan Wallin, which gives both parents the right to take up to six months' leave and then to divide a further six months' leave between them.

20/02/2009: No layoffs necessary at car manufacturer
Renault's Romanian subsidiary, Dacia, is planning to increase production by 10% from March 9th 2009. This is largely a result of rising demand for its Logan and Sandero models in France and Germany. As a consequence, the company has reversed its earlier announcement to lay-off all 3,000 workers on its third daily shift.

20/02/2009: Construction sector seeks pay cut
The Irish Construction Industry Federation has applied to the Labour Court to modify the current Registered Employment Agreement so that employers may introduce a 10% pay cut and a subsequent freeze on wage rates for 190,000 workers in the building and construction sector. This application is opposed by the construction unions, which are continuing to press for the 3.5% wage increase due under the now largely defunct national pay deal.

20/02/2009: Decline in foreign workers
The number of foreign workers making contributions to the Spanish social security system fell last month for the sixth successive month. Foreign workers now make up around 10% of the Spanish workforce, and their principal countries of origin are Morocco (238,888), Romania (234,198) and Ecuador (215,481). Half of these workers are employed in the hotel, construction and motor vehicle repair sectors.

20/02/2009: Heavy fines for 'irregular work' infringements
The Portuguese labour inspectorate (ACT) has revealed that in 2008, employers were fined a total of 5m euros for employing illegal and 'undeclared' workers. ACT visited 21,000 establishments and also secured 2.5m euros in unpaid social security contributions.

17/02/2009: Transfer of pensions to the state scheme
Recent falls in the stock market have led many employees to complain about shrinking yields from their insurance-based pensions. For this reason, the Croatian government has announced amendments to the Pension Insurance Act, which will allow employees to transfer their pension insurance funds and contributions to the basic state system.

13/02/2009: Three countries outperform rest of Europe
According to figures published by Eurostat, the economies of three European countries continued to grow between Q3 and Q4 2008 and over the year as a whole. Annual rates of growth were achieved by Cyprus (+3.0%), Greece (+2.6%) and Slovakia (+2.7%). In contrast, the average GDP for all 27 states of the EU fell by 1.1% over the year to Q4 2008. The biggest falls were in Latvia (-10.5%), Italy (-2.6%), the UK (-1.8%) and Germany (-1.6%).

11/02/2009: ESB turns its back on national pay accord
The Irish utility company ESB has reacted quickly to criticism about its recent agreement to pay the 3.5% instalment due under the now largely abandoned national wage accord (MAJ 2009/02). The CEO has taken a 10% pay cut and senior managers have accepted 5% cuts in their basic salaries. The company is now seeking a two-year pay freeze for its 8,000 employees and wishes to introduce a less generous pension scheme for future hires.

09/02/2009: Swiss vote to extend free movement of workers
The Swiss electorate voted in a referendum on February 8th to open up their labour market to Bulgarian and Romanian workers, subject to work quotas. Workers from ten of the countries that joined the EU in the last five years are currently subject to these quotas, but Switzerland plans for them to be removed for workers from the majority of these countries by 2011 and for Bulgarian and Romanian workers by 2016.

06/02/2009: World economy bottoms out
Although the OECD's predictive composite leading indicators (CLI) for December 2008 continue to point to a rapidly weakening outlook for the world's leading economies, the overall rate of decrease has itself slowed in recent months. This provides some evidence that the current downturn is likely to bottom out during the first six months of 2009.

Contrary to the IMF's recent projections published in last month's world economic outlook, the UK does not appear to be facing a sharper downturn than other leading economies. The CLI for the UK is just 4.4 points below its long-term average, compared to a drop of 6.2 points below for the eurozone and 9.1 points for Germany. The rate of slowdown in the UK's CLI has also fallen each month during the period from August to December 2008.

05/02/2009: Czech parliament stalls on equal opportunities measure
The Czech Chamber of Deputies (national parliament) has decided to postpone once again a vote on its long outstanding anti-discrimination bill. The Czech Republic is the only remaining EU country not to incorporate the EU Equal Opportunities Framework Directive (2000/78/EC) into national law. The bill has, however, previously been voted through by the chamber, but it was vetoed by the state president, Vaclav Klaus.

04/02/2009: Substantial cut in employment costs
Finland's latest economic stimulus package includes the removal of employers' obligations to pay social security contributions. This measure alone is likely to save employers a total of 830m euros this year.

02/02/2009: German rail deal
A collective agreement has been concluded covering Deutsche Bahn workers. It provides for improved staff rostering, a lump sum payment of 500 euros, an immediate increase in basic wage rates of 2.5% and a further 2% in January 2010.

30/01/2009: Rapid fall in eurozone inflation
According to a flash estimate issued by Eurostat, the EU's statistical office, the annual rate of eurozone consumer price inflation fell to 1.1% in January 2009. This compares to 1.6% in December and 3.2% in October 2008.

30/01/2009: National budget sets pay and pensions rises for 2009
Romania's new cabinet has agreed to increase pensions and public sector pay by 5% this year. The increases will take place on a staged basis in May and November 2009. The finance minister, Gheorghe Pogea, has also revealed that social security contributions will rise by 3.3%.

27/01/2009: Parliament votes to extend minimum wage
The German Bundestag (lower house of parliament) has decided to extend minimum wage protection to workers who are operating under temporary contracts or who are employed in the security, nursing, mining, waste removal and laundry sectors. The Bundesrat (upper house of parliament) must decide next month whether to support the bill.

A decision will be made shortly by the federal government about the establishment of a minimum wage for temporary agency workers. A minimum wage already exists for construction workers and cleaners in Germany, whilst postal workers are still awaiting the outcome of a court decision that declared their minimum wage to be unconstitutional (MAJ 2009/01).

23/01/2009: Report calls for later retirement age
A report drawn up by the Finnish Economic Council at the request of the government has recommended that the normal retirement age should be raised in line with increases in life expectancy and that incentives to retire early should be removed. Currently, the minimum age for partial retirement is 58 and full retirement is possible at 62. If the report's recommendations are implemented, the retirement age would increase by 4.5 years over the next 40 years.

21/01/2009: Sick leave periods qualify for annual leave
The European Court of Justice (ECJ) has ruled that a worker on sick leave does not lose the right to be paid for annual leave that they have been unable to take because of their sickness absence. This decision follows a joint review of cases referred by the Landesarbeitsgericht in Germany and House of Lords in the UK.

The right to take sick leave is not governed by EU law, but the right to take annual leave is covered by the Working Time Directive. In the ECJ's view, there are no preconditions that apply under the Directive to the taking of annual leave and therefore EU member states must require employers to grant a minimum level of four weeks' leave each year. Any accumulated leave must be taken within the holiday year (or recognised carryover period), but when this is not possible, because of the length or timing of sick leave, an employee must be allowed to take their outstanding leave entitlement after they return to work. If an employee has any outstanding annual leave due to a past sick leave period at the time of their termination, they will be entitled to be paid an allowance in lieu for the leave they have been unable to take
(joined cases C-350/06 and C-520/06).

20/01/2009: Temporary lay-off scheme extended
The Dutch cabinet has extended its ATV scheme until March 1st 2009. Under the scheme, companies experiencing a fall in sales of 30% or more over two consecutive months may apply for financial support from state unemployment funds to cover 70% of the salary costs for workers who are temporarily laid off. The latest companies to apply for funding are in the chemicals and plastics industries.

16/01/2009: Deflationary trend raising real wage costs
Consumer prices (HICP) across the EU peaked in October 2008 and fell over the period to December 2008 by 0.5%. However, in Austria, the Irish Republic, Spain, France, Portugal and Slovenia, consumer prices have been falling since last June and overall falls in price levels have exceeded 2% in Cyprus, Luxembourg, Malta and Slovenia.

Although deflation normally refers to a general reduction in the level of prices over a complete year, the trend is now clearly established in many countries and is raising real wage costs, even when employers apply a pay freeze.

13/01/2009: Economic stimulus measures
The German government has announced a major economic stimulus package amounting to 50bn euros over two years.

The package will include a reduction in the lowest rate of income tax from 15% to 14%, a cut of 0.6% in health insurance premiums and a one-off child allowance bonus of 100 euros. Citizens with cars older than nine years will receive a guaranteed payment of 2,500 euros when they scrap such a car in order to buy a new 'environmentally friendly' vehicle. If they purchase a vehicle before June 30th 2009, it will be exempt from road tax for one year and this exemption will be extended to two years for cars in the lowest emission categories.

Meanwhile, in France, a plan was implemented last month to give a rebate of 1,000 euros to drivers who scrap vehicles more than ten years old and buy a new low-emission model.

13/01/2009: Job subsidy plan moves ahead
The Slovenian national assembly (parliament) will shortly debate a bill that will provide job subsidies to companies that agree to cut the working week rather than make employees redundant.

Under the proposed plan approved by the parliamentary labour committee on January 12th 2009, subsidies will only be granted if an agreement has been reached between a company and a representative trade union. Companies reducing the workweek from 40 to 36 hours will receive 60 euros per worker and those reducing the workweek from 40 to 32 hours will receive 120 euros per worker. The subsidy will be available for a period of six months, during which redundancies will be prohibited and recipient companies will not be permitted to pay out executive bonuses.

The move to introduce job subsidies arises from a collective agreement reached between employers associations and trade unions last year. It has little support within the Slovenian labour ministry and the Labour Minister, Ivan Svetlik, has pointed out that it would be far cheaper for the state to support unemployed workers than to give subsidies to a high proportion of the national workforce.

09/01/2009: Support for laid-off employees
The extended ATV scheme will shortly come to an end in the Netherlands. This scheme allows companies experiencing sharp downturns in sales revenues to reduce their output, with the unemployment benefit system picking up the tab for the remuneration of laid-off workers. So far, 165 companies have taken advantage of the scheme, with ATV payments covering the costs of 260,217 man-hours.

09/01/2009: Employers could face criminal sanctions
From next year, HR managers in the Czech Republic employing non-EEA workers who do not have valid work permits could face up to five years' imprisonment. A new bill criminalising the employment or harbouring of illegal immigrants has now been approved by the Czech Senate and is awaiting the president's signature to give it legal effect.

07/01/2009: Improvements in parental benefits
This month, the maximum statutory maternity pay in the Czech Republic has doubled from 14,370 koruny (548.40 euros) up to 28,890 koruny (1,102.53 euros). Women who have not made contributions to the sickness fund will receive a flat-rate payment of 7,600 koruny (289.99 euros) a month. Fathers may now take up to one week of paternity leave on the birth of their child and may also take time off work to share in the care of an older sick child.

05/01/2009: Public holiday carryover to end
The Lithuanian government has announced its intention to repeal Article 161/2 of the Lithuanian labour code, which requires that all public holidays falling on a Saturday or Sunday are moved to the following Monday.

05/01/2009: Extra holiday to celebrate low tax status
The government of Gibraltar has announced a special one-day public holiday on Monday, January 12th to celebrate its recent victory in the European Court of Justice. The court found that the Gibraltar government had lawfully maintained a low corporate tax regime and that this did not constitute a system of covert state aid.

23/12/2008: Czech to take over presidency of European Union
The Czech Republic will take over the six-month rolling EU presidency from France on January 1st 2009. The next meeting of Ministers for Employment and Social Affairs will take place in Luhačovice on 22–24 January 2009.

19/12/2008: 15 days' leave for Bulgarian fathers
The Bulgarian parliament has adopted an amendment to the Labour Code, at second reading, that gives working fathers the right to take fifteen days' paid leave from work upon the birth of their child. With the mother's consent, fathers will also be able to take up to six months' paid care leave when the child is aged between six months and one year old. These amendments came into force on January 1st 2009.

17/12/2008: Parliament votes to end working week opt-out
The European parliament has voted at second reading to phase out (over three years) the current voluntary opt-out facility from the 48-hour maximum working week. MEPs have also agreed that any period of on-call time should count as working time. This brings the parliament into direct conflict with the views of the EU council and it is likely that the matter will now be referred to conciliation - the last stage of negotiations when the views of MEPs and member state ministers cannot be otherwise reconciled.

17/12/2008: Price inflation falls from 3.2% to 2.1% in one month
The annual rate of price inflation (HICP) in the euro area has fallen from +3.2% in October to +2.1% last month. This is largely due to a reduction of 8.7% in petrol costs, a fall of 2.2% in telecommunications charges, and little change in prices for cars and clothing. The lowest annual inflation rates over the year to November 2008 were in Germany (+1.4%), Portugal (+1.4%) and France (+1.9%). The highest rates were in Belgium (+3.2%), Finland (+3.5%) and Malta (+4.9%). Outside the eurozone, annual rates ranged from +1.2% in Switzerland to +19.8% in Iceland.

15/12/2008: Major companies agree to retain staff
Germany's finance minister, Peer Steinbrueck, has announced that the country's largest 30 Dax-listed companies have agreed to apply a voluntary no-redundancy policy and organise company training programmes as an alternative to downsizing. The chancellor, Angela Merkel, has agreed to meet the companies on January 5th 2009 to discuss what measures will be necessary to support this initiative. It remains uncertain, however, how long these companies are to be expected to sustain the redundancy ban.

15/12/2008: Belgian accord allows continued wage indexation
A mediator has achieved a consensus between Belgian employers and trade unions over renewal of the national inter-professional agreement. The deal will preserve wage indexation throughout 2009-10.

The deciding factor persuading the unions to step down from their inflated claims appears to have been a concession by the government to allow workers to be paid an increase by their employers in the form of tax-free vouchers for food or environmental products. This could amount to 125 euros in 2009 and 250 euros in 2010. The National Bank of Belgium expects indexation to increase wages by around 3.3% next year.

12/12/2008: National pay and minimum wage accord
Employers and unions in Hungary have agreed to a general wage increase of between 3% and 5% in 2009, together with an increase in the monthly minimum wage from to 69,000 forints (257.82 euros) to 71,500 forints (267.16 euros).

12/12/2008: Social security charges and sick pay obligations
A number of changes to the social security system will come into effect in the Czech Republic next month:

* Instead of the planned 2.5% reduction in income tax, employee social insurance will be cut by 1.5% (subject to Senate assent).

* Employers will become responsible for paying the first 14 days of sick pay. The minimum sick pay will be 25% of normal remuneration for the first three days and 60% thereafter. 50% of employer sick pay will be reclaimable from the state.

* Sickness insurance premiums will be reduced from 3.3% to 2.3%.

* Czech social security contributions must be paid by contractual employees who have been hired out to Czech employers by non-EU based companies (unless their country has concluded a social security agreement with the Czech Republic). The Czech company bearing their salary costs will also have to pay employer contributions.

* Maternity benefit will rise from 69% to 70% of the daily assessment base.

The current (2008) daily assessment base is 100% of gross earnings up to 550 koruny, plus 60% of gross earnings from 550 koruny up to 790 koruny. Gross earnings greater than 790 koruny are exempt.

10/12/2008: Reform of retirement provisions
The French Senate has adopted a law that will allow an employee to retire at any age between 65 and 70, provided they inform their employer of their intention before they reach 65. The measure will become effective on January 1st 2010.

Meanwhile, a legal amendment that came into force this summer has proven to be badly drafted and is now being urgently revised. The amendment was intended to make it more difficult for employers to carry out involuntary retirements before the normal retirement age. Under the text of the law as it stands, however, the newly introduced higher severance indemnities would appear to apply equally to voluntary as well as involuntary retirements.

10/12/2008: Employees win back right to deduct commuting costs
The German constitutional court in Karlsruhe has ruled that the federal government acted unconstitutionally when it removed a tax allowance for commuters who travel less than 20km to work each day. This decision will leave it open for around 20m commuters to make retrospective tax claims back to 2007.

09/12/2008: Pay offer in line with price inflation
Pay negotiations are currently underway in the Austrian banking sector. During the second round of talks, employers have offered a general salary increase of 2.9% plus a single lump-sum payment of 200 euros. This offer is within the OECD's 2.6%-3.3% range of price inflation forecasts for Austria during the current full year.

04/12/2008: Mediator appointed to achieve national accord
A mediator has been appointed in an attempt to break the deadlock that has taken place during negotiations over the Belgian inter-professional agreement for 2009-10. Although employers' representatives have accepted the continuation of wage indexing in the private sector, they have stood firmly against any further concessions and have been seeking to achieve union agreement to a number of cost-saving measures.

The national multi-industry pay accord provides the framework for bargaining across more than 70 sectors in Belgium. Although the government is not officially a party to the agreement, it can intervene, as it did in 1996, to impose its own terms if the parties fail to agree. The labour ministry can also offer incentives to achieve agreement and it appears that an offer of improved unemployment benefits has already been tabled.

01/12/2008: New measure to help avoid redundancies
The Dutch government has agreed to the extension of its ATV scheme, which allows employers to introduce short-time working, with lay-off days funded through the unemployment benefit system (WW) at 70% of normal hourly pay rates. This facility is currently restricted to companies suffering emergencies, such as factory fires, that lead to falls in sales revenue of 20% or more.

Employers have until January 1st 2009 to apply for up to six months funding from the new scheme. To qualify, they must have experienced a 30% drop in sales revenue over two months preceding their application. In return for funding, companies are expected to undertake the training or retraining of surplus staff.

To date there has been a total of 43 ATV applications, of which 10 have been approved. The government has limited total funding to 200 million euros and therefore companies should act soon before the funding pool dries up.

01/12/2008: UK pension rules penalise cross-border workers
The European Commission is pressing the UK to amend legislation that may penalise those making contributions to a foreign pension fund. UK tax authorities deny deductibility if no information is supplied by the foreign fund about the date when pension payouts will become due or the capital value of the pension. The denial of deductibility particularly affects EU cross-border workers who move to the UK whilst continuing with a pension fund established in their state of origin.

27/11/2008: Share-linked bonus payments
The lower house of the Dutch parliament has voted in support of a proposal to discourage the payment of bonuses linked to a company's share price to executives earning in excess of 500,000 euros a year. Under the proposal, a company making such payments will not be able to write them off against corporation tax. If approved by the Dutch Senate, this provision will take effect next year.

26/11/2008: Labour costs rise faster than earnings
According to the Irish Central Statistical Office, average earnings in the industrial sector rose by 3.8% to 19.55 euros an hour over the year to Q2 2008, whilst over the same period, average hourly labour costs rose by 5.7%. During the latest quarter, industrial employees worked an average of 1.8 hours' overtime each week and only 2.2% of employees received the national minimum wage.

24/11/2008: 200-euro commuter car park levy
The recently published Irish finance bill includes a new annual levy of 200 euros on employees who park their cars in company car parks. The levy will only apply to workplaces in the cities of Cork, Dublin, Galway, Limerick and Waterford. Concessions will be available for part-time and shift workers and drivers with disabilities will be exempt. If the bill is approved by parliament, the levy will be applied from January 1st 2009 and will collected through payroll deductions.

20/11/2008: EU economy down, but not yet out
The latest OECD figures for changes in GDP reveal that the European Union's economy contracted by just 0.2% in Q3 2008. This does not yet amount to a recession because GDP has not fallen for two successive quarters.

According to the EU's own forecasts, GDP will grow by 1.4% this year, but only by 0.2% in 2009. Although the construction sector is being particularly badly hit, the public sector has so far remained virtually untouched by the economic downturn.

17/11/2008: New deal on Sunday trading
The Federation of Finnish Commerce has reached an agreement with the services trade union, PAM, over the complete relaxation of Sunday trading laws. Currently only large stores are allowed to be open for business on Sundays during the summer and just before Christmas. Under the new agreement, all shops would be able to trade year-round on Sundays. However, individual employees would be able to opt out, Sunday work would be at premium rates, and every employee would be entitled to weekly rest breaks that include at least 22 Sundays and 17 weekends a year.

This agreement now clears the way for the Finnish government to legislate for the removal of existing statutory restrictions.

13/08/2008: Eurozone prospects to improve next year.
The latest economic projections from the Organisation for Economic Cooperation and Development (OECD) indicate that the eurozone is already at the lowest point in the current downturn and that the euro economy will begin to grow once again from Q3 2009. The harmonised index of consumer price inflation is predicted to fall from an average annual rate of 3.9% in Q3 2008 to just 1% in Q3 2009 and to remain at around 1.3% throughout 2010.

12/11/2008: New scheme to reduce redundancies
Employers and unions in the Netherlands are currently discussing a 'credit crisis bridging scheme' to shorten the workweek of employees in companies affected by the downturn. The scheme would last for between six and eighteen months, during which time employees would continue to receive their normal remuneration. However, employees subject to the scheme would undertake training during their lay-off periods and their employers would receive interest-free state credits equal to 70% of the remuneration due for the cut in working time (repayable after the scheme ends).

Employers and unions in the Netherlands are currently discussing a 'credit crisis bridging scheme' to shorten the workweek of employees in companies affected by the downturn. The scheme would last for between six and eighteen months, during which time employees would continue to receive their normal remuneration. However, employees subject to the scheme would undertake training during their lay-off periods and their employers would receive interest-free state credits equal to 70% of the remuneration due for the cut in working time (repayable after the scheme ends).

The Dutch government appeared at first to be in favour of the scheme and it has gained the personal support of the social affairs minister, Piet Hein Donner. However, a meeting with employers and trade unions scheduled for earlier this week was cancelled and the proposal will now be discussed during the cabinet meeting on Friday.

11/11/2008: Parliament approves revised labour code
Portugal's parliament has now approved extensive revisions to the labour code. The changes include scope to:

* Extend probationary periods from 90 to 180 days, unless a contract is temporary or with a previous employee. However, after four months service, the minimum notice period will be 15 days.

* Increase average working time to 50 hours a week for periods of up to two months.

* Transfer workers to other tasks for up to six months, unless such a change will 'seriously disadvantage the worker'.

* Arrange with employees to create a working time reserve. This will permit the employer to extend working time up to 200 additional hours per year, paid at the normal (rather than a premium) rate.

* Concentrate full-time weekly work schedules into three or four days.

* Introduce new 'intermittent' employment contracts, which provide a minimum of 6 months' full-time employment per year (of which 4 months must be continuous). However, fixed-term contracts will be limited to a total duration of three, rather than six years.

* Simplify the disciplinary and dismissal process.

Maternity leave is to be extended to five months at full pay, or six months at 80% of pay if at least one month is taken by the newly-born child's father.

Employees will also enjoy a new entitlement to take 30 days' leave per year to care for sick children under the age of 12, 15 days' leave to care for older dependant children and a further 15 days to care for other close relatives. This right extends to grandparents who have responsibilities to grandchildren.

Employees wishing to file a claim for unfair dismissal will have to do so within two months of their termination date. The previous limit allowed them to file claims at any time during the subsequent 12 months.

The new legislation will come into force on January 1st 2009.

07/11/2008: President may veto early retirement bill
Poland's Sejm (lower house of parliament) has approved a bill which will reduce by 75% the number of workers eligible to retire up to five years early through a 'bridging pension'. The bill limits early retirement principally to those born after January 1st 1948 who, until 1999, worked in difficult physical or psychological environments.

This measure must still be passed by the senate and signed by President Lech Kaczynski. During the parliamentary debate, the president submitted an amendment to allow the changes to be gradually phased in. This was rejected by MPs and it is therefore possible that a presidential veto may be applied.

05/11/2008: Picketing declared unlawful
Retailing chain Carrefour has secured a court order requiring picket lines to be dismantled at ten of its Belgian hypermarkets and free access given to both customers and those willing to work. This controversial ruling has raised a number of questions about the right to picket peacefully and use other actions that impede business operations.

03/11/2008: Inflation falls in eurozone
According to a first estimate by the EU's statistical office, Eurostat, the annual rate of monetary union consumer price inflation (MUICP) in the eurozone fell from 3.6% in September to 3.2% in October 2008. This will ease the way for the anticipated interest rate cut by the European Central Bank later this week.

31/10/2008: First major test case for AGG law
The presiding judge at the Labour Court in Wiesbaden, Germany has announced that a decision will be given on December 18th 2008 in the case of Sule Eisele-Gaffaroglu v R+V Insurance, Germany's highest profile discrimination case.

An employee of R+V is claiming 433,000 euros in damages for alleged discrimination by her employer. The complaint stems from a period of maternity leave during which the claimant was replaced by someone on a permanent basis. On returning to work, the complainant had been given a different position with lower earnings potential, whilst her old position had been upgraded. As a consequence she initiated a court action on the grounds of gender, pregnancy and ethnic origin (because of her Turkish background).

An out-of-court offer of 7,000 euros in settlement of the claim has been refused by the employee, who continues to work in her newly-assigned position. This case is proving to be the first major challenge under Germany's two-year-old equal treatment law (AGG). It has so far dragged on through the labour court with hearings in February, May and October of this year. Whatever the outcome in the lower court, it seems that it will find its way to the Federal Labour Court and - because of the points of legal principle in question - some German lawyers are already talking about a referral to the European Court of Justice.

29/10/2008: Control of employee absence
A study carried out by one of Spain's leading business schools, Esade, has found that 39% of employees had been absent from work during the last year. Surprisingly, 30% of employers in Spain do not have any procedures for controlling absenteeism. In companies where such procedures exist, the methods employed are primarily negative (sanctions) rather than positive (incentives or rewards).

27/10/2008: Cutbacks hit temporary workers
Employers throughout Europe are responding to the present downturn by focusing first on the number of temporary workers they employ. This is particularly evident in the automotive and engineering components sectors and in countries such as Spain where one-third of the labour force are on temporary or fixed-term contracts. In Belgium, temporary work agencies are experiencing major cuts in demand with a fall of around 12% in temporary work placements compared with last autumn.

27/10/2008: Prices begin to decelerate
According to the Russian central bank, the consumer price inflation rate is now slowing down. In September 2008, the annual rate was 15%, but during the first 20 days of October 2008, the daily increase was 0.031% compared with 0.052% during the same period last year. This has led the bank to predict that the annual rate will fall to 13% (+/- 0.5%) by the end of the year.

24/10/2008: Finland upbeat in spite of general downturn
Employment in Finland increased by 25,000 between Q2 and Q3 2008, or by almost 1% of the total workforce. Over the year to September 2008, unemployment fell by 5.1% and new vacancies reported to job centres grew by 4%. In September 2008, Finnish consumers remained upbeat about inflation prospects and household finances, although they believed that it was a more favourable time to save than to spend or raise a loan.

24/10/2008: Return of bonus payments
Directors and senior managers rewarded for results that were subsequently found to have arisen from mismanagement could find past bonus payments and even pay rises being clawed back by company boards. The first signs of this have emerged recently in a private German lending bank. The bank has asked one existing and five former top executives to repay bonuses each worth over 500,000 euros.

20/10/2008: Central bank raises growth forecast
The Slovenian central bank has raised its GDP growth forecast for 2008 from 4.2% to 4.5%. The rate of growth is expected to fall next year to 3.5%, but to rise again to 4.1% in 2010. Although price inflation is likely to average 6.1% this year, it is expected to fall to 3.5% next year and to 2.8% in 2010. The central bank's governor, Marko Kranjec, has confirmed that the country's banking sector continues to trade solvently and that no government intervention is likely to be necessary.

17/10/2008: 2009 pay rises below price inflation
FedEE has now revised its consumer price and salary budget projections for 2009. In two-thirds of the countries reviewed, there remains some scope for pay to rise in line with prices or even to increase real spending power. However, there are eleven European countries where real pay levels will need to fall if price inflation is to be brought back down to government target levels. These countries are Belgium, Bulgaria, Estonia, Hungary, Iceland, the Irish Republic, Latvia, Lithuania, the Russian Federation, Spain and Ukraine.

17/10/2008: Commission clamps down on HGV loophole
The European Commission has adopted an amendment to the Directive on Working Time in Road Transport (2002/15/EC). This proposal is designed to put an end to the practice of classifying road haulage (HGV) drivers as self-employed, even though they remain economically dependent upon one firm. If it is approved by the European Parliament and Council of Ministers, employers will no longer be able to side-step normal working time rules by requiring employees to declare themselves as freelance drivers.

16/10/2008: Tax limit on severance packages
A French parliamentary committee has voted unanimously for an amendment to the 2009 Finance Bill establishing a ceiling of 200,000 euros on executive 'golden parachutes'. If a company wishes to offer a severance package of more than 200,000 euros, it will not be able to offset the additional cost against corporation tax. Parliament will begin debating this amendment on October 20th 2008.

15/10/2008: Signs of price deflation after the summer surge
Seven European countries experienced a modest level of price deflation between August and September 2008. The countries where consumer prices (HICP) fell slightly were Belgium, the Czech Republic, France, Germany, Hungary, Spain and Switzerland. Annual price inflation rates are expected to fall during the next year and some economists are even predicting a general deceleration of year-on-year inflation rates to below governmental targets of 2.0-2.2%.

13/10/2008: New immigration rules come into force
This month, a new immigration law comes into force in Luxembourg. It introduces a combined work and residence permit, called a residence authorisation, that must be applied for by third-country nationals (non-EEA citizens) before entering the country. This document is not required by such individuals coming to Luxembourg on business trips for a maximum period of three months in any year. However, they must still declare their presence to the municipality where they reside within three days of their arrival in the country. Third country nationals working in other EEA states may be assigned to work temporarily in Luxembourg provided that they have the appropriate permits to live and work in the other member state.

13/10/2008: High level of workplace harassment
A survey report just released by Portugal's Board for Work Inspection reveals that 40% of female employees claim to have suffered sexual harassment in the workplace. However, few cases are formally reported to employers. During 2007, only 300 complaints were subject to disciplinary proceedings and only three such investigations led to an accused party being dismissed.

08/10/2008: 28% of defined benefit schemes remain open
Results from the latest survey of UK workplace pension provision have just been published by the National Association of Pension Funds. These show that although 28% of defined benefit schemes remain open, one-third of trustee boards operating such schemes are considering either switching to a defined contribution structure or taking austerity measures.

Pension funds continue to diversify their portfolios with a sharp reduction in the proportion invested in UK equities. Between 2006 and 2008 there was a rise from 27.7% to 31.2% in the proportion of funds held in fixed-interest assets.

The average contribution level for defined contribution schemes amounts to 11% from employees and 7% from employers. The average size of an individual saver's fund is £13,500.

06/08/2008: Compulsory TB screening
The Czech Republic's chief health officer has announced that all immigrants may soon have to be screened for tuberculosis (TB). Before entering the country to work, foreigners will be required to submit a certificate confirming that they do not suffer from TB. They will then undergo a further mandatory check once they have commenced work. This will be paid for by their employer. Tighter restrictions may also be introduced for workers from Mongolia, Romania, the Russian Federation and Ukraine.

03/10/2008: Early retirement preserved, but leave may be reduced
The Danish government has rejected proposals from the independent 'Work Commission' to raise the qualifying age for early retirement and introduce measures to encourage people to work beyond the age of 65. Under the existing voluntary early-retirement pay scheme known as Efterløn, Danish employees may make additional social security contributions from the age of 30 to allow them to retire on a reduced salary at age 60.

At a recent meeting between the government and both sides of industry, it was agreed in principle that employees should be able to trade in some of their annual leave period for additional remuneration. However, Harald Borsting, president of the trade union confederation (LO), insisted that any reduction in leave entitlement should result in payments at overtime premium rates and be subject to income tax concessions.

30/09/2008: Working hours lost through disputes
The number of working hours lost through labour disputes in Italy during the period from January to June 2008 was 75% higher than in the equivalent period during 2007. However, there were 23% less hours lost than during the first half of 2006 and a sharp decline in the loss rate was evident this May and June.

30/09/2008: Principal players discuss priorities for 2009
Discussions on a wide range of employment-related issues took place yesterday between BSP, the principal party in Bulgaria's coalition government, and both sides of industry. Concerns were expressed about responsibility for funding future health and social security provisions. The finance minister, Plamen Oresharski, revealed that in the draft 2009 budget the ratio of contributions was 8:10:12 between employees, employers and the state. Unions pressed for an increase in the minimum wage next year above the planned rate of 240 leva (122.72 euros) per month, whilst BSP agreed to bring forward a new bill on the settlement of labour disputes.

25/09/2008: Epiphany holiday may be restored
The Polish parliament is scheduled to vote early next month on the restoration of January 6th as a public holiday. If the proposal is adopted, however, it may be in exchange for the loss of May 1st as a public holiday.

24/09/2008: Removal of fee for pharamaceutical representatives
Following the annulment of a provision in Hungary's Act XCVIII by the Constitutional Court, pharmaceutical companies operating in Hungary will no longer be required to pay an annual fee of 5m forints (20,000 euros) for each person qualified and employed to promote medicines.

22/09/2008: Blanket smoking ban
Anti-smoking laws are currently being enforced with particular strictness in Amsterdam, the Dutch capital. Recent reports suggest that public authorities are applying a no-smoking policy to those on outside terraces and even people standing in the street.

22/09/2008: Voluntary repatriation scheme
The Spanish government has approved a voluntary repatriation scheme for non-EU citizens who are currently unemployed. This will provide an immediate payment equal to 40% of the maximum unemployment benefits for which they qualify, followed by the balance of benefits once they have returned to their home state. Those who sign up must undertake not to return to Spain for at least three years, although they will be guaranteed the reissue of work and residence permits once that period has expired. It is not yet clear whether such individuals may still be entitled to gain entry to other EU member states and therefore have the right to cross back into Spain on short visits using a Schengen visa.

19/09/2008: Bilateral deal to benefit Indian companies
A new social security agreement between France and India has now been approved by the Indian government. The agreement removes the obligation to pay French social security contributions if employees of an Indian company are sent to work in France for periods up to five years, provided that social security contributions continue to be paid in their home state. Those on short-term assignments who have made contributions to the French system will, however, be entitled to retain any acquired benefits after returning to their home state.

16/09/2008: EU projections ignore steady rise in profits
Recent predictions of economic gloom by the European Commission and European Central Bank ignore the fact that many European companies in non-financial sectors have substantially increased their profit margins in recent years and are in a good position to weather the current downturn. The revised short-term economic projections issued by the Commission are also distorted by statistical adjustments that may hide the true changes in the economies of EU countries.

For richer, not poorer: why the EU economy will continue to grow

10/09/2008: Agreed limit to dismissal compensation
An accord on dismissal compensation has been reached between the Dutch social affairs minister, Piet Hein Donner, employers organisation VNO-NCW, and trade union confederation FNV.

Currently Dutch courts use the 'magistrate's formula' (sometimes termed the 'county court' or 'ABC' formula) to determine compensation levels. This produces a general entitlement to one month's salary per year of service, but with enhancements for service over the age of 40 and adjustments in the case of 'fault' by either party. The new accord places a future limit of one year's salary on dismissal compensation for all employees earning annual salaries of 75,000 euros and above, whatever their age or service record.

Parliamentary backing for the accord remains uncertain because it does not have the support of CNV (the second biggest union confederation) or the MHP management union. Even if the upper limit becomes law, it will still only apply to cases resolved through the courts and employees will remain free to negotiate more generous termination packages with their employers.

09/09/2008: Proposed amendment to Pregnant Workers' Directive
A draft amendment to the EC Pregnant Workers' Directive (92/85/EEC) has recently been drawn up and will be presented to EU commissioners next month by Vladimir Spidla, the EU employment and social affairs commissioner. This proposal increases maternity leave from 14 to 18 weeks and gives women the right to receive their normal salary in full for the entire duration of the leave period. If approved, the amendment would then begin its course through the European Parliament and Council of Ministers. Commissioner Spidla admitted to a gathering of Czech journalists recently that the proposal would 'take a long and probably hard way to be implemented'.

08/09/2008: Autumn budget to benefit employers
Sweden's coalition government has announced that it intends to cut statutory employers' social security contributions by 1% next year. It also plans to reduce corporation tax from 28% to 26.3% and to introduce measures that will reduce the cost of employing young people.

04/09/2008: End in sight for blanket reporting requirement
According to Dutch daily newspaper Het Financieele Dagblad, the Dutch tax authorities are set to end a requirement that all employers report the hiring of new employees at least 24 hours before they commence work. The current penalty for failing to make a timely report is 1,134 euros per infringement. It is understood that the Cabinet will announce the change on September 16th 2008, but that a new system will not be finally worked out until the end of the year. The most likely approach is that the reporting obligation will be retained only for those companies in sectors where there is a high risk of illegal labour.

02/09/2008: Concerns about 'green line'
The European Commission has expressed concern about the number of illegal immigrants passing across the 'green line' that divides the Turkish-controlled enclave of northern Cyprus from the southern half of the island, which is controlled by the Republic of Cyprus. The green line regulation has been in force since the Republic joined the EU on May 1st 2004. It applies to the movement of persons, goods and services between the Greek and Turkish Cypriot communities.

01/09/2008: Inflation falls in the eurozone
The annual rate of HICP inflation in the eurozone fell in August to 3.8% from 4% over the year to July 2008. This reduction was largely brought about by changes in oil prices, which have fallen almost 20% since reaching a record $147.27 per barrel during July 2008. The latest unemployment figures for the eurozone have now remained constant for four months in a row and have even slightly improved in France, Germany and the Netherlands.

The European Commission will be publishing its interim economic outlook for the European Union on Wednesday, September 10th 2008. This will include specific forecasts for economic growth and price inflation in France, Germany, Italy, the Netherlands, Poland, Spain and the UK.

28/08/2008: Tax blow for employee shareholders
A financial reform package has been approved by the Greek government that introduces a new 10% tax on capital gains from share sales and also a further 10% tax on share dividends. Capital gains are currently taxed at 0.15% and dividends are tax-free. If approved by the Greek parliament, these tax changes will come into effect on January 1st 2009.

This decision comes at a time when stock prices are already depressed and improved market confidence will be a critical prerequisite for economic recovery. It will also hit executives and other employees currently participating in share ownership and share option schemes. Although the Greek government plans to reduce the middle band of income tax by one percentage point each year between 2009-2014, this will not offset the new tax liability for those with a substantial stake in their enterprise.

25/08/2008: Threat to executive company cars and 4x4s
A forthcoming Swiss referendum could result in company fleet managers having to look for smaller and less polluting cars for those in senior management. Under the Swiss democratic system, any legislative proposal supported by a petition containing at least 100,000 signatures must be put to a binding national vote. The youth section of the green party have collected 150,000 signatures in support of this latest proposal, which leaves it up to the Federal Government to set precise limits. However, it would not affect vehicles already on the road or those used in agriculture and forestry.

25/08/2008: Green cards to be launched next year
The Czech Chamber of Deputies has approved a bill that will replace the existing system of residence and work permits with a much simpler 'green card' approach.

If the bill is backed by the Senate and the Czech president, from January 1st 2009 a Czech employer unable to fill a job vacancy within 30 days of it being advertised will be able to put it on a central registry. In parallel with this process, nationals of approved non-EEA countries will be invited to apply for two-year green cards through the Czech embassies in their home countries. If successful, they will be entitled to apply for vacancies posted on the new central register. The green card will entitle them to take up any job from the register offered to them. Employers will then only have to inform the immigration authorities that the job has been filled and supply the green card number for the immigrant to legally begin work and take up residence in the Czech Republic.

21/08/2008: Social security exemption for share options
Although the favourable tax treatment given to share options that met certain criteria has now been abolished in Italy, a late amendment to Decree 112/2008 means that such proceeds remain exempt from both employer and employee social security contributions. This concession applies to options exercised after June 24th 2008.

18/08/2008: Weak impact of equal treatment law
The German government has just published a review of the country's AGG anti-discrimination law that came into force on August 18th 2006. The review claims that although an earlier independent report had estimated that the cost of introducing the AGG would amount to 1.73 bn euros, the actual cost to date has been just 26 million euros.

One reason for the low cost of implementing the law has been the tight deadline for raising claims. If a job applicant believes that they have been refused employment on discriminatory grounds, they must raise their claim within two months of receiving the rejection from an employer (S15(4) AGG). Courts have also been quick to throw out cases believed to be frivolous and, because there is no facility under German law to gain punitive damages, the awards obtained by litigants have generally been modest.

12/08/2008: Frustration for employers as work permits hit quota limits
The Federal Migration Service (FMS) has stopped accepting applications for the employment of foreign workers in the Russian administrative areas of Moscow, St Petersburg (including the whole surrounding Leningrad region), Voronezh, Tula, and the Ivanovo regions, as well as in Karelia, Komi, and Dagestan.

These areas have reached their annual quotas and therefore many companies are currently being prevented from bringing in foreign workers. The problem seems to have arisen from the failure of some companies to submit their future foreign labour forecasts for 2008. This led to lower quotas being set than were actually required.

A revision to the quota for migrant workers has been promised by the FMS as soon as a government decree has been drafted and approved. This is likely to raise the annual quota for the whole of the Russian Federation from 1.8 million to 3.1 million workers. In the meantime, the Ministry of Social Development (MSD) has ordered that top company executives and administrators should not be subject to existing quotas. It remains uncertain, however, whether the FMS will follow the MSD order.

11/08/2008: Unions propose poorer pay deal for those on middle incomes
The private sector committee of the Irish Congress of Trade Unions (ICTU) has decided that, during the coming pay round, unions should seek pay increases of 130 euros per month for employees earning less than the average industrial wage and a minimum of 5% for those with higher earnings levels. If such a demand was conceded by employers, workers earning between 2,601 and 3,166 euros per month would receive increases of less than 5% and experience a significant narrowing of pay differentials.

This move by the ICTU comes hard on the heels of the recent collapse in national pay talks under the 'Towards 2016' social partnership agreement. According to the president of the SIPTU union, Jack O'Connor, there is a general acceptance in trade union circles that 21 years of social partnership is now over. SIPTU claims that a 3% pay deal over 8 months reached with the Society of the Irish Motor Industry for 5,000 mechanics and office staff is a sign that local bargaining is already underway. However, the motor trade deal was struck well before national social partnership talks broke down.

For companies that made their first pay increases in September 2006 under the initial 27-month phase of the national agreement, the next pay round is due to begin on January 1st 2009.

06/08/2008: Countdown to launch of revised equality law
Employers in Sweden have until the end of the year to prepare for the introduction of changes under the Anti-Discrimination Act (2008). This measure establishes age and 'transgender identity and expression' as new grounds for claiming workplace discrimination and extends protection to trainees and temporary workers. It also increases the amount of damages payable to victims of unequal treatment or harassment in the workplace. The government has merged four ombudsman roles and appointed Katri Linna to head up a new anti-discrimination authority. Linna was formerly the deputy ethnic discrimination ombudsman.

04/08/2008: Unions reject proposed austerity period
The latest round of national pay talks in the Irish Republic has ended without agreement. Trade union representatives rejected out of hand a proposal tabled by employers for a six-month pay freeze followed by a modest increase covering a further period of 15 months. Although many individual employers will now be directly targeted with union pay claims, companies will be hard pressed to sustain any rise in labour costs without further fuelling price inflation and reducing their employee headcounts.

01/08/2008: Enhanced rights for working parents
A bill currently before the Turkish parliament sets out a number of proposals to enhance the maternity and paternity rights of public service employees. The draft law establishes a right to 16 weeks' maternity leave on full pay, after which fathers will be able to take up to six months' unpaid paternity leave. Upon completion of maternity leave, women will be entitled to return to work without any change to their terms and conditions and to have time off each day to breastfeed their child.

30/07/2008: Clampdown on illegal workers and pay practices
The German cabinet will today discuss a range of measures to combat tax evasion by employers and employees. At the top of the agenda is a proposal to require workers in the construction, cleaning and hospitality industries to carry identity documents at all times. The cabinet will also decide whether new employees will be obliged to register with the state pension scheme as soon as they start work, rather than by the date when they are first paid.

29/07/2008: Labour code reforms must await summer recess
Parliamentary debate about proposed amendments to Portugal's labour code has been rescheduled for September 2008 due to delays in drafting these amendments. The changes, agreed with the social partners in May 2008, include the introduction of time banking and compressed workweeks, extension of parental leave, reductions in social security contributions for employers hiring certain workers on open-ended contracts, a new legal framework for company-level collective bargaining and simplification of the disciplinary procedure required prior to employee dismissal.

28/07/2008: Liberalisation of labour market in prospect
The Italian Senate is currently debating a draft decree that contains proposals to relax restrictions on fixed-term employment contracts and remove an employee's right to reinstatement. If the current draft of the bill is adopted, employers would be free to hire employees on unlimited rolling six-monthly contracts. Moreover, courts would not be able to order reinstatement of an employee or conversion of a temporary job to a permanent position. In the event of an irregularity in the employment relationship, the employee's only right would be to compensation ranging from 2.5 to 6 months' salary.

Although the government has stated that it does not support the amendments to the draft decree, which is designed to open up the Italian economy to greater competition, it has not intervened at the report stage of the Senate debate. The social affairs minister, Maurizio Sacconi, may therefore be hoping that some elements of the proposal will be retained in the bill in spite of strong opposition from left-wing parties and trade unions.

25/07/2008: Radical overhaul of working time rules
The French Senate has voted to adopt the bill on economic modernisation passed by the National Assembly earlier this month.

This measure gives employers the freedom to negotiate with employee representatives at a company level (or in their absence, individual employees) on the length of the working week and the buying-out of RTT (compensation days).

The basic 35-hour week will be retained, but employees will be able to work up to 405 overtime hours each year at a minimum premium of time + 25%. Executives and some other white-collar workers whose annual working time is measured in days will be permitted to work up to 235 days per year (or 282 days in some circumstances) provided they are compensated by a 10% premium for each extra day worked in excess of 218 days per year.

23/07/2008: Crackdown on pay arrears
According to the Moldovan Economics and Trade Ministry, pay arrears fell by 30% from January 2007 to June 2008. Total arrears in the country's private sector now amount to 50 million lei (3.28 million euros). This represents an average of 6.5 hours of unpaid labour for every private sector worker. An investigation by the labour inspectorate to determine the reasons for sustained arrears in some enterprises is now taking place and businesses will be closed if they are considered to be insolvent.

22/07/2008: Widening gender gap
Malta's latest labour force survey reveals that, between Q1 2007 and Q1 2008, women's average earnings (excluding overtime, allowances and bonuses) fell from 84.9% to 80.9% of average male earnings. The principal falls were in craft and related trades (85.1% to 75.7%), the professions (88.4% to 82.6%), and clerical work (87.5% to 86.0%). In Q1 2008, the smallest gender pay gaps were in construction (95.1%) and public administration (89.6%), whilst the biggest gaps were in agriculture (51.7%) and finance (65.2%). Much of the sectoral pay gap may be due to differences in the normal working hours of men and women, but changes in working time are unlikely to account for the overall widening of gender relativities.

22/07/2008: Average earnings top 1,000 euros per month
During May 2008, the average gross monthly earnings of an employee in Croatia was 7,625 kunas (1057.39 euros). The statutory minimum gross monthly wage is now 2,747 kunas (380.97 euros).

18/07/2008: Flat-rate tax on overtime
Employees in Italy whose gross earnings are up to 30,000 euros per year may now benefit from a flat-rate income tax of 10% on all overtime pay they receive. This facility has been introduced on a provisional basis until December 31st 2008, but is likely to become permanent if the experiment proves successful.

17/07/2008: Discrimination on grounds of child's disability
The European Court of Justice has ruled that an employer would breach the principle of equal treatment if they discriminated against an employee on the grounds that they were the primary carer for a disabled child. It is not necessary for the employee to themselves be disabled for a breach to occur. Similarly, unwanted conduct amounting to harassment on such grounds is also unlawful. In both cases the burden of proof will fall on the employer, who must prove that no breach of equal treatment rules has taken place (Coleman v Attridge Law and Steve Law: C-303/06).

16/07/2008: Freedom of movement for university graduates
The German federal cabinet is meeting today to discuss a proposal to allow a partial opening up of the German labour market from early next year. The plan put forward by the labour ministry would give free access for university graduates from all EEA member states. It also lifts quota restrictions on graduates from outside the EEA. However, employers would need to demonstrate that there were few potential German applicants for vacant positions. A minimum annual income threshold would still apply for non-EEA nationals, but this would be reduced from 86,400 euros to 63,600 euros.

14/07/2008: Public statements may be actionable even without a victim
The European Court of Justice has published its findings concerning a discrimination case where there was no identifiable complainant.

The case in question arose from a Belgian company director's public statement that his organisation would not hire applicants of a particular ethnic origin. According to the court, the lack of an identifiable complainant 'does not permit the conclusion that there is no direct discrimination' within the meaning of EU Directive 2000/43/EC.

The requirement for a reversal of the burden of proof in such cases means that an employer making discriminatory statements would have to prove that they had not infringed the principle of equal treatment. If they were unable to establish such proof, a national court would then be obliged to apply sanctions that are 'effective, proportionate and dissuasive'. In the absence of an identifiable victim, the sanction should, in the court's view, consist of 'an adequate level of publicity' and an award of damages to the equal opportunities body bringing the proceedings.

11/07/2008: Italy and Russia buck the trend
The latest OECD composite leading indicators suggest that Italy and the Russian Federation could herald a future upturn in the European economy.

According to the OECD, eurozone countries will continue to experience a slowdown in the rate of economic growth over the next six months. But there is no evidence of a coming recession, and almost all European countries are still likely to end the year with larger real economies than in January 2008. Italy was the first major European economy to experience a downturn in the present cycle and the OECD figures show that its rate of economic growth is likely to pick up by early next year. The Russian Federation, on the other hand, has barely been touched by the global downturn and looks set to continue expansion of its economy in spite of price inflation levels being well in excess of government targets.

09/07/2008: Employers put off by summer jobs incentive
Although many employers in Romania would like to take advantage of an incentive to employ students during the summer holidays, the bureaucracy involved in claiming the incentive is proving to be a barrier.

Under law 72/2007, an employer may reduce the social security contribution due for such workers by deducting 50% of the national minimum wage from the salary base on which social security is calculated. However, the incentive only applies to 60 business days each year and is subject to a licence from the state employment authorities. To obtain the licence, employers must submit a wide range of documentation, including a certificate from each student's educational institution confirming their student status and stating their holiday period.

Once a licence has been obtained, it is then necessary to submit monthly time sheets and payroll records plus further documentation to gain approval for submission of a reduced employer contribution.

07/07/2008: Price inflation prevents minimum pay hike
The Romanian government has decided not to increase the minimum monthly pay from 500 lei (139 euros) to 540 lei (150 euros) as planned this month. The Government Ordinance of January 1st 2008 made the change conditional on the achievement of improved labour productivity, overall economic growth and an annual consumer price inflation level under 3%. As the inflationary target has been exceeded the Romanian prime minister, Calin Popescu-Tariceanu, has decided that an increase in the minimum salary would be 'irresponsible and counter-productive' because it would add inflationary pressures and further diminish spending power.

07/07/2008: New tax-free business travel allowance
Employers in Belgium may now reimburse employees up to 0.3093 euros per kilometre tax-free for use of their own vehicles for business purposes.

04/07/2008: Growing backlog hits employers
Employers in Spain are experiencing growing court delays as the judicial system fails to keep up with rising levels of litigation. Spanish courts will have to deal with a total of 8.57m applications for hearings this year, up 3.6% from 2007. This represents 185 cases for every 1,000 members of the population. The annual backlog for social and employment cases is around 350,000 and in many courts it is taking more than two years to achieve a hearing. This has led to the increasing use of alternative forms of dispute resolution and compromise agreements.

04/07/2008: Gearing up to remove EU border controls
The Bulgarian foreign ministry is working to improve its visa systems and border controls with non-EU states in readiness for entry to the Schengen zone in 2011. 24 countries have so far applied the Schengen provisions and opened up their internal borders to fellow members within the zone. The only EU countries committed to remain outside the zone are the UK and the Republic of Ireland.

02/07/2008: Making it pay to work
The Dutch Social Affairs Ministry has announced that individuals becoming jobless on or after July 1st 2008 will have just one year to obtain further employment. If they do not succeed, they will be required to accept any lower-paid job that they are offered or lose their unemployment benefit (WW). A financial incentive is being introduced for jobless individuals trading down in the labour market as they will initially be able to retain 70% of their unemployment benefit on top of the pay from their new job.

02/07/2008: Shrinking labour pool in EU's largest national economy
The German labour market continues to prosper on the back of rising output and industrial new orders. German industrial production (excluding construction) rose by 5.2% over the year to April 2008 and new orders rose by 16.7%. This has helped to produce a fall in the federal unemployment rate from 8.8% in June 2007 to 7.5% in June 2008. The improvement has been particularly marked in one of Germany's poorest states, Mecklenburg-Western Pomerania, where unemployment had fallen to its lowest June level since reunification.

30/06/2008: Headline pay deals much higher than rise in labour costs
Collectively agreed pay increases in the French private sector rose by 4.3% during the year from Q1 2007 to Q1 2008. Over the same period, labour costs increased by an average of 2.5% and consumer prices by 3.2%.

27/06/2008: Complete smoking ban introduced
A smoking ban in Dutch hotels, bars and restaurants will come into force on July 1st 2008. A general ban in workplaces outside the hospitality sector, together with railway stations, trains and other public places has been in operation since January 2004.

27/06/2008: New presidency to focus on immigration
France takes up its presidency of the European Union on July 1st 2008. One of the first acts of France's president, Nicolas Sarkozy, will be the launch of a new EU 'immigration pact'. This will commit EU member states to strengthen border controls at crossing points with non-EU countries, to create a common procedure for repatriation of illegal immigrants and to refrain from issuing wide-ranging amnesties for those without work or residence permits.

25/06/2008: New HR service centre
All 13 Dutch government ministries (except defence) will pool their human resources and payroll departments by 2011. The new centre, named P-Direkt, is expected to produce annual savings of 280 million euros.

23/06/2008: SMIC to rise by 0.9%
The French minimum wage (SMIC) will rise on July 1st by 0.9% to 8.71 euros per hour. The SMIC was previously increased by 2.3% on May 1st this year.

19/06/2008: Overtime bill gets to first base
The French Council of Ministers has approved a bill prepared by the labour minister, Xavier Bertrand, which is designed to reform current limits on overtime working. The bill creates a new facility for employers to reach company-level agreements with workforce representatives establishing new work schedules permitting a ten-hour day and 48-hour week. The proposal will now be submitted to the Senate and National Assembly for debate.

16/06/2008: Eastern European economies still expanding fast
Domestic demand is continuing to drive economic growth in eastern EU states. Retail spending over the last year has jumped by 25.3% in Lithuania, 22.8% in Bulgaria and 13.8% in Romania. In the established EU states, Finland (+11.3%) is bucking the otherwise sluggish pattern of retail spending.

The prospects also look good for the rest of 2008 with new industrial orders up in Estonia (+8.7%) and Poland (+5.9%). Established EU states are also benefiting from a rush of new business. Over the last year, new orders have risen by 43.6% in Denmark and 9.9% in Portugal. During April 2008 (the latest month for which figures are available), new orders rose by 8.3% in Sweden and 4.1% in the Netherlands.

13/06/2008: Referendum result not setback for EU business
A referendum in the Irish Republic has voted against the EU's institutional reform programme and thus effectively blocked implementation of the Lisbon Treaty. Ratification of the Treaty by all EU member states would have introduced few changes of significance to anyone outside the higher reaches of EU political circles and would have had little impact on the business community. Although many employers have expressed concerns about the Treaty's incorporation of the Charter of Fundamental Rights into European primary law, the Charter is annexed to the existing Nice Treaty and most of its provisions are established elements in EU social and employment policy.

12/06/2008: Unions step up lobbying ahead of EWC proposals
On July 2nd 2008, the European Commission will publish a number of draft amendments to the 1994 European Works Councils (EWC) Directive. These changes will create an obligation on multinational enterprises to inform and consult their EWC before making public any large-scale reorganisation of their business. The EWC's role during the conduct of mergers and acquisitions will also be clarified and elements of the original directive updated to take into account more recent directives such as the European Company Statute (2001/86/EC) and the EU Framework Directive on Works Councils (2002/14/EC).

The European Commission has decided to go ahead with its own proposed amendments following two attempts to encourage EU social partners to negotiate a voluntary agreement on changes to EWC rules. The European Trade Union Congress (ETUC) and Union Network International (UNI) have stepped up their lobbying of both the European Parliament and EU member states in support of the amendments. The principal argument they have agreed to use is that both investors (including pension and private equity funds) and stock markets around the world are increasing pressures on companies to increase profit margins, become more global, and make drastic changes to the way they are run and structure of their workforces. In the view of trade unions, such pressures should not be at the cost of jobs, pay or working conditions and EWCs are an important means to achieve that balance.

10/06/2008: Agreement on temporary workers and working time measures
European Union (EU) employment ministers have agreed to adopt a long-standing proposal for a directive on temporary workers and to accept a number of modifications to the existing working time directive.

The new draft temporary workers measure grants them equal rights to pay, sick pay and holidays as permanent employees in user companies after 12 weeks operating in the same post. EU employers will also now be subject to a new upper limit on individual work-weeks which may not exceed 78 hours in any one week and an average of 60 hours (or 65 hours if inclusive of on-call time) over any three-month period. Moreover, no waiver to work beyond 48 hours per week may be signed by a new employee until they have been employed for at least one month - although contractors working for periods of up to ten weeks will be able to opt out of the 48-hour week immediately.

In order to create greater legal certainty concerning a number of European Court of Justice rulings about the treatment of 'on-call' arrangements, ministers have decided that a clear distinction should be made between 'on-call' time when an employee must be at station in readiness to perform their duties and 'standby time' when an employee 'is on alert but is not held by their employer to carry out their normal activities or functions'. It will be up to national legislation or collective bargaining to determine if standby time is to be counted as working time.

The next port of call for both measures will be the European parliament where these latest compromise positions will be strongly opposed by socialist MEPs. It therefore remains doubtful whether the proposed changes will have legal effect in EU member states - at least before 2010.

09/06/2008: Unemployment continues to fall
In the eurozone, the standardised unemployment rate was 7.1% in April 2008, the same as the previous month and 0.4% lower than one year earlier. Across the European Union as a whole, the unemployment rate was lowest in Denmark (2.7%) and the Netherlands (2.8%), and highest in the Slovak Republic (10.0%) and Spain (9.6%). Since 2005, the unemployment rate has fallen sharply throughout the new EU member states, with the most dramatic improvement taking place in Poland where the rate has changed from 17.7% to just 7.7%.

06/06/2008: New sick pay rules approved by parliament
The Swedish parliament has voted in favour of an amendment to the state sickness benefits system. From July 1st 2008, employees will continue to receive sick pay from their employer for the first 14 days of absence, but longer-term sickness absence will be subject to a new set of restrictions. When an individual has been absent for 90 days, they will be assessed in consultation with their employer to determine if they could carry out alternative workplace duties. Should this be possible, the employee may still claim a reduced level of welfare assistance called 'activity compensation'. If the employee remains absent for more than 180 days, they will be assessed once again to discover if their medical condition would allow them to undertake alternative employment with another employer. The maximum benefit for those remaining on state sickness benefit after this time will be 364 days (in any 450-day period).

Employees in the Swedish private sector are currently absent for an average of 1.2 times per year and the average number of sick days per employee is 1.37 for men and 1.15 for women. Those working for an employer subject to a collective agreement with a trade union affiliated to the Federation of Salaried Employees in Industry and Services (PTK) receive supplementary sick pay for the first three months of absence to bring total compensation to just under 90% of normal salary. After three months of absence, salaried employees receive an ITP disability pension up until their 360th day of absence. The new state sick pay rules will not affect the structure of the salaried employee scheme, but the ITP disability pension will be increased for those subject to activity compensation.

03/06/2008: Flawed labour cost data
The European Union's statistical agency Eurostat has just published its annual yearbook for 2008 entitled 'Europe in Figures'. This contains figures on the level and structure of labour costs for 2006, the latest year for which such statistics are available.

According to the country-by-country breakdowns, the average labour cost for EU countries amounted to 20.35 euros per hour and hourly labour costs ranged from 1.65 euros in Bulgaria to 32.16 euros in Sweden. However, the breakdown of labour costs into wages and salaries, employer social security contributions and 'other costs' reveals that the overall figures are seriously flawed for a number of EU member states.

Average wage and salary figures for many countries are in some instances higher than official figures for the countries concerned and employer social security contribution rates are substantially inflated for countries such as Denmark, the Netherlands, Sweden and the UK. In Denmark, for example, the employers contribution is cited as equal to 10.9% of labour costs, even though there is no formal social security contribution from employers in Denmark and only a nominal flat rate contribution payable to a 'Labour Market Supplementary Pension Scheme'. Moreover, in the UK, the social security contribution is cited as 18.4% of labour costs when the rate payable in 2006 was actually less than 11% (12.8% of wages and salaries above £97 a week) before 'contracting out' rebates are taken into account.

Employers should take great care when using official labour cost figures produced by Eurostat. A more accurate source of international wage and social security data is the annual 'Taxing Wages' report published by the OECD.

http://tinyurl.com/647hnb

02/06/2008: Retirement link to life expectancy
Austria's coalition government has agreed to link the normal retirement age to future changes in actuarial life expectancy rates. This will help to limit changes in state pension contributions by extending the working lives of employees. The proposed reforms were not accepted by several leading members of the Social Democratic Party, however, and the proposals will therefore be put to a vote of parliament later this year.

30/05/2008: Parental leave increasingly popular male benefit
According to Finland's social insurance institution (Kela) 6% of all paid parental leave days are taken by men. The 55,200 fathers who took parental leave in 2007 represented an increase of 26% since 1998.

29/05/2008: Companies urged to combat child labour
At the recent meeting of EU foreign ministers in Brussels it was agreed that action should be taken to dissuade companies from marketing products manufactured with child labour. In addition to authorising further research in this field, ministers have decided that a commitment to eradicate child labour will be included in future international treaties with all countries where the practice is common.

The government of Maharashtra, India's third largest state, has pledged to eliminate child labour by the year 2010. However, the most common reports of adverse working conditions for children concern Bangladesh. The World Day Against Child Labour is on June 12th 2008.

27/05/2008: Relaxation of work and travel rules
Later this year, the French labour market is likely to be opened up to workers from eight of the ten countries that joined the EU on May 1st 2004 (Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia and Slovenia). This is well ahead of the May 1st 2009 deadline for labour market liberalisation.

The European Commission has begun talks with Bosnia-Herzegovina on a Stabilisation and Association Agreement, paving the way for visa-free travel between Bosnia-Herzegovina and EU member states. The relaxation of borders between Finland and the Russian Federation is also in prospect. Finland's new minister for foreign affairs, Alexander Stubb, has proposed that visa-free travel should be introduced. However, such a move would require more personnel at border crossings, improvements in immigration technology and the standardisation of travel documents.

23/ 05/2008: Minimum wage set to rise by 12.5%
The Croatian government has submitted a new minimum wage bill to the national parliament. If approved, the minimum monthly pay level will increase on July 1st 2008 from 2,441 kunas (336.76 euros) to 2,747 kunas (378.98 euros). The increase would affect 7.6% of the Croatian workforce and lift their basic pay to 39% of the national average.

20/05/2008: President vetoes anti-discrimination bill
Despite being approved without amendment by the Czech Senate in April 2008, the new anti-discrimination bill has yet to become law because it was vetoed last week by President Vaclav Klaus.

The Czech Republic is the last EU member state to comply with the EU Directive on Equal Treatment (2000/78/EC). The proposed legislation would have provided equal access to education, work, health care and social benefits, irrespective of age, race, ethnic origin, sexual orientation, health, religion or opinion.

To satisfy critics in the Czech senate, a resolution was passed in association with the bill. This states that the senate refuses to identify with the character of legislation that 'artificially encroaches upon the natural development of society, does not respect cultural differences of EU countries and places the demand of equality over the principle of freedom of choice.'

The blocking of this bill comes after the European Commission has repeatedly threatened proceedings against the Czech Republic for not complying with the directive. It will almost certainly lead to the republic being subject to a substantial ongoing fine by the EU until the measure becomes law.

19/05/2008: Berlusconi's proposed give-away budget
Silvio Berlusconi's newly formed government will decide on Wednesday whether to go ahead with a proposal to abolish taxation on an Italian citizen's first residence and introduce a new 10% flat tax-rate on overtime, productivity bonuses, and other fringe benefits. These measures are expected to cost the Italian exchequer around 5bn euros per year.

18/05/2008: Tight deadlines not fazing Czech workforce
Although four out of every five workers in the Czech Republic are generally satisfied with their working conditions, more than two-thirds of them claim that they have to work to tight deadlines or at high intensity for a significant proportion of their working day. According to a working conditions survey carried out by Dublin-based EU agency Eurofound, 31.3% of workers are contacted about work-related matters outside normal working hours (EU average 22.1%) and 18.7% are employed on a teleworking basis (EU average 8.3%).

20/05/2008: Policy U-turn on agency workers
Following pressure from the UK government, the Confederation of British Industries (CBI) has reached agreement with the Trade Union Congress (TUC) on equal rights for agency workers. The deal gives agency workers the right to equal pay with permanent staff employed by their user company once they have been on an assignment for 12 weeks. They will also be entitled to statutory sick pay and pension contributions from their user company, but not to the benefits of occupational schemes.

The UK government will incorporate this agreement into new legislation to be presented to parliament this autumn. It will also seek to convince other EU member states that the new UK legislation should form the parameters of the long debated (and currently shelved) EU directive on agency workers.

This agreement represents a major climbdown by the CBI and UK government from their previous opposition to the basic principles set out in the proposed EU agency workers' directive. Although both claim that refusal to accept pay protection for 'temps' would have threatened the UK's 48-hour opt-out from the EU working time directive, the principal reason for the U-turn is because the UK government was unwilling to challenge the legality of the proposed directive (and the existing fixed-term workers' directive) under article 137(6) of the EU Treaty and Article III/210(6) of the new EU Constitution. This clearly states that EU social and employment measures 'shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.'

16/05/2008: Sharp rise in workplace fatalities
Over the first four months of 2008 there were 24 workplace fatalities in the Republic of Ireland. If this level of incidence continues, fatalities will amount to 72 this year, up from 67 in 2007 and 50 in 2006. Construction and agriculture continue to be the principal sectors where fatalities occur, accounting for 14 of the 24 deaths this year.

16/05/2008: Little evidence of decline in EU labour market
This week the OECD published its latest composite leading indicators predicting future trends in the world's leading economies. These figures continue to point to a slowdown in the eurozone and the UK. The Russian Federation is the only major player bucking the trend, with its leading indicator up 3.1% over the year to March 2008. According to the OECD figures, the EU economy should already be well into a period of economic slowdown, led by Germany with a 3.6% fall in its CLI index over the year to March 2008. Little evidence has yet appeared, however, of this downswing across the EU.

Over the year to March 2008, unemployment in the European Union fell by 0.6%. Falls over this period were particularly strong in Poland (-2.6%), the Slovak Republic (-1.5%) and Germany (-1.3%). Countries moving against the trend were Spain (+1.2%), the Republic of Ireland (+1.0%) and Hungary (+0.3%).

In Germany, GDP growth has exceeded all expectations. Its economy grew by 1.5% between Q4 2007 and Q1 2008, compared with just 0.3% growth during the equivalent period in 2006/7. In the context of the European labour market, however, the Netherlands is the most buoyant economy. During Q1 2008, unemployment accounted for just 2.6% of the civilian labour force and unfilled vacancies outstripped the level of unemployment at 2.8% of the civilian labour force.

13/05/2008: Single market for researchers
The European Commission is concerned about the geographical barriers that exist for researchers working within the EU. Many graduates with research degrees move away from research when they enter the job market and a significant proportion leave the EU, mainly to work in the USA. On May 22nd 2008, the Commission will be publishing a report entitled 'Better Careers and More Mobility: A European Partnership for Researchers'. This will look at ways to establish a single and open European labour market for researchers, making it easier for them to take advantage of job opportunities across national borders.

12/05/2007: Slovakia gets green light on euro entry
The European Commission has found that Slovakia has now complied with all the requirements to join the eurozone. Its recommendation that Slovakia becomes the sixteenth member of the currency union on January 1st 2009 must now be approved by the Council of the European Union in July 2008.

12/05/2008: Move to counter IT shortfall
Although Switzerland has been rated by the World Economic Forum as the third most IT-networked country in the world, a sharp decline has taken place over the last three years in the number of students taking degree-level IT courses in Swiss universities. To reverse this trend, the Swiss federal government has declared 2008 as the year of IT and a number of organisations will be funding programmes to encourage IT training in secondary schools. In response to this initiative, the Zürich canton has already introduced IT lessons into 80% of its secondary schools.

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.

25/03/2008: Measures to assist lower paid and unemployed
The official cost of living (subsistence) rate in the Russian city of Moscow rose to 6,624 roubles (179.83 euros) per month at the beginning of March 2008. In an attempt to reduce poverty, the city authorities are planning to raise the current local minimum wage to 7,500 roubles (203.60 euros) per month in September 2008 and also to increase unemployment benefits to the minimum wage level from their current range of 720 to 2,880 roubles (19.55 to 78.18 euros) per month. Companies employing disabled people would also enjoy improved tax concessions and new city funding schemes to assist workplace training.

21/03/2008: Government moves ahead with minimum wage law
The Croatian prime minister, Ivo Sanader, has informed both sides of industry that, in the absence of a voluntary agreement on a draft minimum wage law, the government will draft its own bill and submit it to the national parliament by May 1st 2008.

17/03/2008: EU inflation rate steady at 3.4%
Over the year to February 2008, the harmonised index of consumer prices rose by 3.4% across the EU, unchanged from the year to January 2008. This compares with an annual rate of +2.1% last February. The main cost components leading to this increase have been education (+9.7%), food (+5.8%) and transport (+5.4%).

17/03/2008: Schengen area extended to airports
On March 31st 2008, the provisions of the Schengen area will be extended to airports in Estonia, the Czech Republic, Lithuania, Hungary, Latvia, Malta, Poland, Slovakia and Slovenia. This is the second phase in the creation of an enlarged border-free area within the EU, following the lifting of controls at land border crossings and sea ferry terminals on December 21st 2007.

15/03/2008: Sweden increases scope of equal treatment legislation
A comprehensive anti-discrimination bill has been submitted to Sweden's Riksdag (national parliament). The draft law incorporates the EU Directive establishing a general framework for equal treatment in employment and occupation (2000/78/EC of 27 November 2000 ) by extending protection to include discrimination on age and sexual orientation grounds. It replaces six existing laws in the equal opportunities field and also establishes a new supervisory authority, the Office of the Discrimination Ombudsman. If the measure gains parliamentary support, it will become effective on January 1st 2009.

11/03/2008: Dutch government seeks to reel in executive pay
The Dutch cabinet appears poised to introduce a 30% levy on bonuses and golden handshakes paid to top executives. However, the penalty is likely only to be applied to those with annual incomes above 500,000 euros, if their bonuses or exit payments amount to more than their annual salary. Tax penalties could also be imposed on top executives who pay themselves through substantial contributions to pension funds with the highest penalties being reserved for fund managers owning stakes in the funds they are managing.

11/03/2008: Greater mobility for foreign managers
A ministerial decree (MoJ #11176) has been issued in the Russian Federation allowing foreign citizens in most managerial positions to perform work activities outside the geographical administrative division for which their work permit was issued.

10/03/2008: Decline in job vacancies
A rapid fall in the number of private sector job vacancies took place in Latvia during the period from September to December 2007. Total private sector vacancies fell by 30% and the sharpest decline was in manufacturing (40.1%). However, over the same period, there was a slight increase in the number of available jobs in transport, storage and communications.

09/03/2008: Minimum wage violated rights of competitors
The Administrative Court in Berlin has ruled that a minimum wage introduced in Germany's postal sector on January 1st 2008 was unlawful because it violated the basic rights of companies that are competitors of Germany's main postal delivery firm and former state monopoly Deutsche Post. The German government will appeal against this decision to a higher court, but the Berlin court has left open the question whether the declaring of a minimum wage for protectionist purposes was also unconstitutional.

07/03/2008: Germany signals economic recovery
The OECD's latest composite leading indicators (CLI) predict that Germany is entering a period of economic stability at a point above its long-term GDP growth level. This is the fourth month in succession that Germany's all-important 'ratio to trend' figure has remained virtually unchanged. With the largest national economy in the EU, Germany could well lead the way out of the current downturn. The first sign that this might be happening is in Italy, where the economy has been on a downward spiral for the last 12 months. In January, Italy's CLI moved up 0.4 points from the previous month, whilst in the eurozone as a whole, the CLI fell by only 0.1 points in January compared to a fall of 0.3 points in December 2007.

05/03/2008: National minimum wage to rise by 3.8%
The UK Prime Minister, Gordon Brown, has announced that national minimum wage rates will rise on October 1st 2008 by 3.8%. The adult rate will rise from £5.52 to £5.73, the rate for 18-21 year-olds will increase from £4.60 to £4.77, while the 16-17 year-old rate will rise from £3.40 to £3.53. The change will affect almost one million workers, two thirds of whom are women.

The government has rejected a recommendation of the Low Pay Commission that 21 year-olds should be included in the adult rate. However, funding for the enforcement of the national minimum wage has been increased in real terms and the Employment Bill, currently before Parliament, will establish tough new penalties for rogue employers who underpay staff. This will include the facility for serious cases of non-compliance to be tried in a crown court.

04/03/2008: Minimum wage hike
The Albanian government has increased the monthly minimum wage by 10% to 16,000 leks (127.99 euros) in order to compensate workers for recent changes in the price of basic foodstuffs. It has also increased the rate of unemployment compensation by 14.2%.

03/03/2008: Holiday carryover period ending
Polish employers must ensure that employees take any outstanding holiday due in 2007 by the end of this month. Failure to do so may result in the national labour inspectorate taking court action, resulting in a possible fine of up to 30,000 zlotys (8,523 euros).

28/02/2008: Change in sick-leave reporting rules
From July 1st 2008, employers in the Netherlands may no longer be obliged to report to the social security agency (UWV) when an employee has been on sick-leave for 13 weeks. The social affairs minister, Piet Hein Donner, has drawn up a draft legal amendment delaying the reporting obligation until the 42nd week of absence. However, employers failing to report at this point will be subject to a fine of up to 455 euros.

27/02/2008: Dismissal of employee undergoing IVF treatment
The European Court of Justice has ruled that an employer would not be infringing the pregnant workers' directive (89/391/EEC) if they dismissed a women who was undergoing in-vitro fertilisation treatment, but the fertilised ova had not yet been transferred into her uterus on the date when being given notice. However, her dismissal would infringe the equal treatment directive (76/207/EEC) if the female employee was in an advanced stage of in-vitro fertilisation treatment - inasmuch as it could be established that the dismissal was essentially based on the fact that the woman had undergone such treatment (Case C-506/06).

26/02/2008: All periods spent offshore are not work or on-call time
A Scottish employment tribunal in Aberdeen has decided that offshore oil and gas extraction workers on normal two weeks on/two weeks off rotas are not entitled to take their entire annual paid leave entitlement onshore.

In a 150-page ruling, the tribunal rejected the trade union argument that all time offshore should count as working time (Jaeger principle). They further argued that the four-week minimum annual holiday entitlement set out under the EU Working Time Directive should be taken equally from time spent offshore and onshore. This means that offshore workers may take an additional two weeks leave on top of the 26 weeks' compensatory rest they already enjoy.

25/02/2008: Major changes planned by labour ministry
Bulgaria’s labour and social policy minister, Emiliya Maslarova, has announced that the monthly poverty threshold for 2008 has been set at 166 leva (85 euros) and that the average monthly wage is forecast to rise to 500 leva (256 euros) by the end of the year. The average monthly wage in Bulgaria in Q4 2007 (excluding annual bonus payments) was 451 leva (231 euros)

The minister also announced plans for a 9.5% rise in state pensions from July 1st 2008 and an eventual reduction in social insurance contributions by 9%, which will be partly achieved by shedding 12% of the ministry's manpower.

21/02/2008: Pay hike in trendsetting steel sector
German steel companies in the north-western German states of North Rhine-Westphalia, Lower Saxony and Bremen have reached a 13-month agreement with the trade union IG Metall. A non-consolidated bonus of 200 euros will be payable this month and basic wage rates will rise next month by 5.2%. The deal will provide a framework for forthcoming negotiations in the east German states and also in Saarland later this year.

The settlement follows a wave of warning strikes earlier this month involving 39,000 workers. It falls short of IG Metall's initial claim for an 8% increase in basic rates and negotiators could not reach agreement on a shorter working week for older workers. However, the deal represents the biggest steel sector increase in the last 15 years.

20/02/2008: Draft amendments to the Polish Labour Code
The Polish Ministry of Labour and Social Policy has now completed consultations with interested parties on the extension of maternity leave. Draft amendments to the Labour Code will shortly be submitted to the national parliament.

Under the proposals, maternity leave for mothers giving birth to their first child would initially increase from 18 weeks to 20 weeks. The leave would then be extended in stages until reaching 26 weeks by 2014. At the same time, leave for mothers giving birth to second and subsequent children would rise initially to 31 weeks and then to 39 weeks by 2014.

This change is part of a package of reforms designed to improve state pension contribution subsidies for those on maternity leave, encourage employers to retain the services of women returners and encourage companies to introduce workplace childcare facilities. The proposed implementation date for all these reforms is January 1st 2009.

18/02/2008: Employment contract bill
The Estonian social affairs ministry has drafted an employment contract bill that would make it easier to dismiss staff. It would also reduce statutory notice periods and replace earnings-related unemployment benefit with an allowance averaging 3,000 kroon (192 euros) per month.

14/02/2008: Constitutional court rules equality act lawful
Spain's constitutional court has dismissed a challenge to the 2007 gender equality law made by the Spanish Popular Party (PP). The principal objection made by the PP was to a requirement for political parties to apply gender quotas to candidate lists for elections. The effect of the challenge was to suspend implementation of the law 3/2007 that originally came into force on March 24th 2007. The new law incorporates EU equality directives and establishes an obligation on companies employing over 250 people to negotiate equality plans with their employees.

08/02/2008: Increase in migrant workers sparks policy change
Over the year to Q4 2007, the number of Swedish-born workers employed in Sweden increased by 1.6%, compared with an increase of 6.1% in the number of foreign-born workers.

This sharp growth in foreign workers has led Sweden’s government to propose that immigrants should have to find jobs and housing before being allowed to bring in family members. The migration minister, Tobias Billstroem, has asked a special rapporteur to submit recommendations for an amendment to current immigration regulations. The minister claims that Sweden is (with Belgium) one of only two EU countries that do not require immigrants to demonstrate that they are able to financially support their foreign-based relatives before residence permits are issued.

08/02/2008: Larger tax-take for companies
The corporate tax bill increased by 8% in Sweden last year, whilst income tax payments by individuals rose by 5.4%. The majority of increased income tax receipts arose from local government taxes on personal income.

A rise of 3.5% in consumer prices and an increase of 2.5% in GDP during 2007 account for much of the increase in tax revenues, but this still leaves a real increase of around 2% in corporate taxation at a time when the Swedish economy is facing a significant downturn.

06/02/2008: Surge in private sector pay
Average gross monthly remuneration in Moldova increased by 20% over the year to December 2007 to stand at 2,630 lei (160.38 euros). Pay levels fell in fishing, mining, and public administration and increased by only 8% in transport and communications, 10.3% in agriculture and 14.1% in construction. In all other sectors, the average increase was between 22.7% and 48.7%. Finance remains at the top of the sectoral pay league with average monthly pay reaching 7,632 lei (465.56 euros) at the end of last year.

05/02/2008: Agency workers and implied contracts with end users
The UK Court of Appeal (civil division) has published its ruling in an important agency worker case (James v London Borough of Greenwich). The court upheld the judgement of the employment tribunal and EAT by discounting the claim that an implied contract of employment existed between the end user and the agency worker.

In the view of Lord Justice Mummery, an implied employment contract must be necessary in order to explain why a worker has provided services to a particular end user or 'the fact of the end user's payment of the worker via the agency'. But in this case, there were genuine express contracts between both the worker and the agency and the end user and the agency, leading Mummery to consider that 'an implied contract cannot be justified as necessary'.

He went on to conclude that 'the question whether an "agency worker" is an employee of an end user must be decided in accordance with common law principles of implied contract and, in some very extreme cases, by exposing sham arrangements. Just as it is wrong to regard all "agency workers" as self-employed temporary workers outside the protection of the 1996 Act, the recent authorities (ie: principally the Dacas and Muscat cases) do not entitle all "agency workers" to argue successfully that they should all be treated as employees in disguise'.

31/01/2008: Eurozone unit labour costs fall
The OECD's latest quarterly figures indicate that over the year to September 2007, labour productivity outstripped increases in labour costs within the eurozone, leading to a 0.7% fall in unit labour costs. Europe's largest annual changes in unit labour costs over the same period were, however, registered outside the eurozone - with a 12.4% increase in Norway and a 7.3% fall in the Slovak Republic.

31/01/2008: Discrimination by association
Advocate-General Poiares Maduro has advised the European Court of Justice (ECJ) to rule that Council Directive 2000/78/EC should apply to employees who, although not themselves disabled, suffer direct discrimination and/or harassment in the field of employment and occupation because they are associated with a disabled person (C-303/06).

If the ECJ rules in line with this advice, it could open the way for the extension of employment protection by association to other discrimination grounds covered by the EU equal treatment framework Directive. This would therefore oblige employers across the EU to ensure that employees are not subject to unequal treatment because they are related to, cohabit with or care for a disabled person, a person dependant because of their age, someone from a particular religious group, an atheist or a member of the gay community.

30/01/2008: Retention of vacation entitlement during sickness absence
An adviser to The European Court of Justice (ECJ), Advocate General Verica Trstenjak, has issued her opinion in a case concerning the effects of employee absence upon vacation entitlement.

The Landesarbeitsgericht Düsseldorf (Germany) lodged a reference for a preliminary ruling from the ECJ for an interpretation of Article 7(1) of the Working Time Directive (2003/88/EC). The main question at issue was whether workers must receive minimum annual paid leave of four weeks if their absence makes it impossible to grant the leave within the year in question - or during any carryover period laid down in national law.

In the Advocate General's view, Directive 2003/88/EC must be understood to mean that employees have a right to receive a minimum of 4 weeks' paid annual vacation. If the employee has been unable to take their full vacation because of illness in the vacation year, it should be granted at a later time.

According to this opinion, upon completion of the employer-employee relationship, an employee is entitled to financial remuneration for vacation not taken because of prior sickness absence. Moreover, a worker who is absent for the entire year does not lose their entitlement to annual vacation or payment in lieu of vacation that has not been taken (C-350/06).

In the further case of C. Stringer et al v Her Majesty's Revenue and Customs submitted to the ECJ, Advocate General Trstenjak has also taken the view that a worker on indefinite sick leave is entitled to designate a future period as paid annual leave. However, they may not take this leave during a period in which they would otherwise be on sick leave (C-520/06).

29/01/2008: Streamlining anti-discrimination legislation
Sweden's minister for integration and gender equality, Nyamko Sabuni, has announced that the country's seven anti-discrimination laws are to be merged into a single composite equality law. At the same time, the existing four equality ombudsman positions will be merged into one and the level of compensation for the victims of discrimination will be substantially increased.

25/01/2008: Tax relief for all commuting costs
Germany's federal court of auditors has ruled that the removal of tax deductibility from the first 20km of daily commuting costs is unconstitutional. In the view of the court, all travel to and from work is a legitimate work-related expense. This ruling must still be ratified by the constitutional court and will have to overcome strong opposition from the federal finance ministry, which maintains that the current commuting rule is constitutional. It will, however, give some encouragement to employees who have already submitted a claim for tax relief in full pending the outcome of the legal challenge (cases VI R 17/07 and 27/07).

24/01/2008: Recession, what recession?
Whilst newspaper journalists have been warning about an imminent recession, current evidence indicates only a temporary slowdown in the rate of economic growth.

The conventional definition of a recession is two successive quarters without economic growth. During the last two available quarters, GDP at constant prices for the EU27 countries has risen by 0.5% (Q2 2007) and 0.8% (Q3 2007). Over 2007 as a whole, the EU economy grew by 2.9% and during 2008 the rate of growth is predicted by the European Commission to fall slightly to 2.4%. In fact, across the EU, real unit labour costs have fallen through each of the last five years for which statistics are available (2002-6) and the latest unemployment figures show that the proportion of people out of work fell from 7.7% to 6.9% over the year to November 2007.

Even the OECD's monthly longer leading indicator points to no more than 'a moderate slowdown in economic activity' over the next six months, with Germany and the UK faring better than the other leading EU economies. Company stocks may continue to decline in value for some time, but changes in secondary stock trading prices will take many months to filter through into sales figures or restrictions on company borrowing. There is a strong prospect that companies will be able to ride out the first half of 2008 and that downsizing will be largely confined to smaller firms and businesses in the service sector that cannot sustain growth by tapping into global markets.

17/01/2008: Social insurance subsidy for R&D personnel
The Turkish economics minister, Mehmet Simsek, has announced a new programme to reduce the costs of research and development activities and to encourage highly-qualified professionals to seek work in Turkey. Towards this end, the Turkish government has decided to pay 50% of social insurance premiums for employees in research and development. This rate will rise to 90% for employees who have a doctoral research degree.

17/01/2008: Fall in level of annual wage inflation
Average gross wages in the Hungarian business sector rose by 7.6% to 196,793 forints (771.83 euros) over the year to November 2007. This was a sharp reduction on the 9% wage inflation that took place over the year to October 2007.

15/01/2008: Germany enters 2008 pay round with deal it cannot afford
The German rail operator Deutsche Bahn AG has reached an agreement with the GDL train drivers' union that increases basic pay rates by 8% in March 2008 and by a further 3% on September 1st 2008. This highly inflationary deal has been reached following 10 months of negotiations and a series of strikes that have been damaging to the German economy. The company has revealed that the sharp increase in payroll costs brought about by the wage agreement will result in increased rail fares and labour shedding throughout its operations. It may also help to dissuade the ECB from making the all-important short-term cut in interest rates necessary to encourage economic growth across the eurozone.

10/01/2008: Reform of collective bargaining law
A working group has been established in Bulgaria to draw up amendments to the collective bargaining law based on proposals submitted by leading members of the ruling coalition. The main amendment goes beyond the only comparable legislation in Europe, the Norwegian system of compulsory mediation, by requiring trade unions to submit their disputes to an arbitration court. This body would be able to seek evidence and views from all interested parties, including the labour ministry, and its decisions would be final.

Bulgarian trade unions have strongly rejected this proposal and threatened to call a general strike this spring if it is included in the parliamentary Bill. To ally union fears about curtailment of their right to strike, the government has offered several seats on the working group to the main trade union confederation, Podkrepa.

10/01/2008: Government to back wage cartels
Germany's coalition government has agreed to introduce industry-specific minimum wage rates if union and employer associations make joint requests for them to do so before the end of March 2008.

This move marks a major departure from the establishment of minimum wage rates to combat poverty, towards a system that gives state backing to wage cartels designed to reduce foreign competition. Although fixing the price of labour to prevent undercutting by new market entrants is clearly in breach of EU competition rules, the European Court of Justice has been unwilling to declare such a practice as unlawful. Nevertheless, multicompany collective agreements could be vulnerable to challenge if it was established that the setting of industry-wide labour rates was the result of a collusion to favour domestically-based companies. But if collective agreements across entire economic sectors are backed by the government, a practice already well established in countries such as France and the Netherlands, the risk of any challenge under EU competition rules is effectively removed. This is despite the fact that it severely reduces the scope for market entry based on wage competition.

This new departure by the German government demonstrates its belief that industry-wide collective agreements are no longer strong enough as a defence against foreign competition and need state backing to prop them up.

31/12/2007: Changes ahead for the New Year
Slovenia takes over the EU's six-month rotating presidency on January 1st 2008. A number of other important changes take place on New Year's Day. These include.

Austria: Introduction of minimum pay level of 1,000 euros per month in certain economic sectors.
Austria: New regulations for parental leave come into force.
Czech Republic: Employers become responsible for paying first 14 days of sick pay.
Czech Republic: Parental leave options come into effect, providing for 2, 3 or 4 years' leave at different benefit levels.
Czech Republic: Employees dismissed for flagrant violation of duties not eligible for unemployment benefits.
Czech Republic: Czech anti-discrimination law comes into force.
Cyprus and Malta: Both countries adopt the euro.
Estonia: Parental Benefits Act Amendment Act comes into force and extends period for benefit payments.
EU: European year of intercultural dialogue begins (launch on January 7th-8th in Ljubljana, Slovenia).
Europe: National minimum pay rises in Bulgaria, Estonia, Hungary, Latvia, Malta, Poland, Portugal, Romania, Spain and Turkey.
France: Smoking ban becomes effective in bars, casinos, tobacco shops, discotheques, hotels and restaurants.
Germany: Minimum pay introduced in the postal sector.
Germany: Law on insurance contracts comes into force giving new rights for life insurance policyholders.
Hungary: National pay policy begins in the private sector.
Netherlands: Amsterdam's Schiphol airport brings in a total smoking ban.
Norway: Workers from most of the new EU countries may now commence employment upon submission of an application for a work permit.
Norway: Deadline for public companies to achieve at least 40% female board membership.
Poland: Introduction of fees for national and Schengen zone visas issued to workers from Ukraine and Belarus.
Romania: Second-pillar pension law comes into force.
Slovakia: Amended social insurance law comes into force, implementing second-pillar pension system reforms.
Slovakia: The general euro introduction law becomes effective, one year ahead of expected adoption of euro currency.

The flash estimate for EU price inflation over the year to December 2007 will be published on January 4th 2008, whilst the next meeting of the European Central Bank council to discuss eurozone interest rates will take place on January 10th 2008.

28/12/2007: Revised Turkish minimum wage
The Turkish gross minimum wage for workers aged 16+ has been increased by 4% to 608.4 new lira (354.07 euros) per month with effect from January 1st 2008. A further increase of 5% will take place on July 1st 2008 to bring the gross minimum wage to 638.7 new lira (371.69 euros) per month.

24/12/2007: Minimum wage to be set at official subsistence level
Agreement on the future reference point for the Russian minimum wage has been achieved during talks between the federal government, employers and trade unions. From December 2008, the minimum wage will be set to correspond with the minimum cost of living, unless economic factors intrude to prevent such a readjustment. The national monthly minimum wage in the Russian Federation rose from 1,100 roubles (30.92 euros) to 2,300 roubles (64.66 euros) in September 2007. This compares with a subsistence level wage of 2,451 roubles (68.13 euros) per month in Q2 2007 (Decree N841 of December 4th 2007) and an 'average living wage' for Russia as a whole of 4,414 roubles (124.06 euros) per month.

20/12/2007: EU opens up borders
Nine new countries join the EU's border-free zone at midnight today, although controls at airports will remain in place until March 30 2008. The Schengen zone, within which people may travel without showing passports, has been extended to the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Hungary will open up its labour market to almost all Romanian workers from January 1st 2008.

18/12/2008: Unions may not undermine freedom to provide services
Although the right to take collective action remains a fundamental right under EU law, a trade union's exercise of that right is becoming increasingly circumscribed by recent European Court of Justice (ECJ) case law.

In 2004, a Latvian company posted workers to Sweden to carry out a construction project. The Swedish SB construction union intervened and when pay negotiations broke down they blockaded all the company's Swedish sites. The company reached agreement with the Latvian building sector union, but this did not lead to any lifting of the blockade. The company was eventually forced to abandon its Swedish projects and subsequently went into liquidation.

How justified was the Swedish union in taking such action? The ECJ agreed that the right to take collective action must be recognised as a fundamental right under EU law and that collective action for the protection of workers from 'social dumping' may carried out in the public interest. However, the right to take collective action must meet two key criteria. Any restriction on the provision of services may only be justified if it pursues a legitimate objective compatible with the EU treaty and is justified by overriding reasons of public interest. It is not sufficient simply to claim public interest if the resulting action makes it more difficult for a company to operate in another EU state. Neither is the signing of a collective agreement a necessary means to prevent social dumping, especially when an EU member state lacks any provisions setting down minimum pay levels.

The ECJ has also established a new obligation upon member states when regulating the posting of workers from other EU states. National rules must take into account collective agreements that are in force within an employer's home state. Failure to do so would, in the courts view, discriminate against such undertakings "in so far as under those national rules they are treated in the same way as national undertakings which have not concluded a collective agreement." It is not clear what material difference such a condition will have, but the existence of a collective agreement covering employees in the home state would appear to provide employers with at least a partial defence when facing alleged infringements of job posting rules. (Case C-341/05: Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and Others)

18/12/2007: Minimum wage rises by 5.7%
The statutory minimum wage in Portugal will rise on January 1st 2008 from 403.00 euros to 426.00 euros per month. The minimum monthly rate is scheduled to rise to 450 euros in 2009 and to 500 euros by 2011.

17/12/2007: Winners and losers in wealth generation
Between 2004 and 2006, the growth in GDP/head relative to the EU average (corrected for purchasing power differences) was greatest in Estonia, Latvia, Romania and Norway, whilst the largest relative falls took place in Italy, Germany and the UK.

17/12/2007: Changes in labour costs
Over the year to Q3 2007, hourly labour costs increased by 30% in Latvia, 23.2% in Romania, 20.6% in Estonia and 20.1% in Lithuania. Over the same period, hourly labour costs grew by just 0.9% in Germany, 1.9% in Finland and 2.5% in Greece, Austria and Sweden. The highest EU labour cost growth took place in the construction sector, where costs jumped by 5.4% over the year to Q3 2007 compared with 3.6% in the service sector and 3.4% in industry.

12/12/2007: Court limits trade union rights
The European Court of Justice has ruled that the right of a company located in one EU state to establish its operations in another EU state may not be diminished by a trade union seeking to induce the company to enter into a collective agreement. For a trade union to lawfully justify any industrial action against a company exercising its rights to freedom of establishment, it must first prove that jobs or employment conditions were jeopardised or under serious threat. It must then be in a position to demonstrate that the action chosen was 'suitable for ensuring the achievement of the objective pursued and does not go beyond what is necessary to attain the objective'.

This ruling has been widely reported as giving trade unions the freedom to take action to prevent employers from using cheaper workers from EU countries with fewer labour rights. But the court has, in fact, issued a judicial conundrum to national courts. Although trade unions do have the right to take action against a company for moving its operations to another EU state, they may only do so in line with highly restrictive criteria that will often be impossible to meet. [C-438/05: ITWU & FSU v Viking Line ABP & Oü Viking Line Eesti].

Next week the European Court of Justice will deliver its judgement in the case of Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and others (C-341/05). This will further clarify how far trade unions have the right to use blockades in order to dictate the terms of the European Union's single market.

11/12/2007: Changes to wage and pensions indexation
Under an agreement made by the Luxembourg Tripartite Coordinating Committee in March 2006, the automatic indexation of wages in Luxembourg has been partially suspended until 2010. The increase due in August 2007 was delayed until December 2006 and no index-linked increase will be paid in 2007. The next increases are due in March 2008 and January-March 2009 (the effective month will depend on the price of oil). The indexation of annuities and pensions has also been staggered with a 1% increase in July 2007 and a further 1% increase in July 2008.

06/12/2007: Labour inspectorate ends routine visits in many sectors
The Dutch labour inspectorate (Arbeidsinspectie) has announced that in future it will only be carrying out spot checks in sectors that are known to have a high incidence of illegal labour or that offer pay rates below the minimum wage. The focus will thus be upon construction, waste management, agriculture and horticulture, the newspaper distribution business, the meat and fish-processing industry and companies benefiting from state job subsidies. Companies in other sectors will normally only be visited if the inspectorate receives a serious complaint.

06/12/2006: Minimum wage in return for higher offset
The minister for social security for the Channel Islands state of Jersey has proposed that the minimum wage on the island be raised by 7.4% from April 1st 2008. This will bring the adult rate to £5.80 (8.05 euros) and the trainee rate to £4.35 (6.04 euros). As a quid pro quo, employers will be able to offset higher costs for provision of living accommodation or living accommodation with food.

03/12/2007: Paper sectoral wage deal
UK trade union Unite is to ballot its members on a new sectoral agreement in the UK paper industry. The deal negotiated with the Confederation of Paper Industries increases basic wage rates by 3.65%, with effect from February 1st 2008.

03/12/2007: Changes in social security contributions
With effect from January 1st 2008, the minimum income level upon which social security is charged in Bulgaria will rise to 220 leva (112.48 euros) per month. The upper limit for contributions will, however, remain at 1,400 leva (715.83 euros). At the same time, contributions to mandatory pensions insurance will rise for employees from 8.05% to 8.8%, but will fall for employers from 14.95% to 13.2%.

27/11/2007: Parliament votes for 10% flat-tax
Bulgaria’s parliament has voted at first reading to approve an amendment to the taxation law introducing a 10% flat rate of income tax. If the new tax comes into force, it will be the lowest of its kind in Europe and will help to increase the size of the formal economy in a country where over one-third of all workers receive untaxed cash payments for their services. The other European countries currently operating flat-tax systems are Albania, Romania and Slovakia.

27/11/2007: Pressure on employers to address equal pay issues
The French labour minister, Xavier Bertrand, has announced a new system of heavy fines (set as a proportion of payroll costs) to penalise companies not actively involved in measures to rectify equal pay problems. A bill to introduce the new sanctions will be published during the first quarter of 2008 and they are likely to come into effect from January 1st 2010.

26/11/2007: Agreement on minimum wage
Estonian employers and trade union organisations have now reached agreement about revision of the national minimum wage. From January 1st 2008, the gross wage rate will rise by 20.8% to 4,350 kroons (278.02 euros) per month.

19/11/2007: Hungarian non-manual earnings rise by 9.1%
The average gross monthly earnings of manual workers employed in the Hungarian business sector rose by 7.5% to 119,578 forints (469.76 euros) over the year to September 2007. During the same period, average gross monthly earnings for non-manual workers rose by 9.1% to 265,879 forints (1044.61 euros). The largest annual increases were received by non-manual workers in the construction sector (+18.2%) and the metal industry (+13.0%).

12/11/2007: Serving notice on disabled employees.
Employers should take great care when dismissing a disabled employee with notice in Germany. For a dismissal to be valid, it must be given prior approval by the office of integration (Das Integrationsamt). However, if an employer issues a termination letter and later withdraws it before it comes fully into effect, the authorisation will be used up and a later termination of the same employee may only take place with fresh authorisation. (Federal Labour Court 1 AZR 425/06)

09/11/2007: Rapid rise in prices and pay levels
The head of the Romanian central bank, Mugut Isarescu, has been urging the government to keep a lid on inflation and make sure that wage increases do not exceed increases in productivity. Nevertheless, consumer price inflation (HICP) rose by an annual rate of 6.1% to September 2007, whilst over the same period, average gross monthly remuneration in Romania rose by 29% to 1,411 new leu (412.80 euros). Average net remuneration in September was 860 new leu (251.98 euros) per month.

05/11/2007: Change of heart about commuting tax allowance
Since January 1st this year, employees in Germany have only been able to claim commuting costs as an expense against income tax if they live more than 20 km from their workplace. The legality of this change is currently being challenged before the Federal Constitutional Court, but in the meantime, the coalition government appears to be making a policy 'U-turn'. Reports indicate that it intends to reintroduce the tax concession next year for all commuters, but at a reduced rate of 25 cents per km, rather than the former 30 cents per km rate.

02/11/2007: Growth of older workers
Over the year to Q3 2007, the number of people aged 55-66 in the Norwegian labour force grew by 2.3%, compared with a 0.7% increase in participation amongst the general population aged 15-74. Around two-thirds of 55-66 year-olds are now in employment and much of the increase in labour force participation is due to an increase in full-time work and the later retirement of female workers.

31/10/2007: Progress report on EU enlargement
On November 6th 2007, the European Commission will publish a progress report on EU enlargement. This will examine the accession status of three candidate countries (Croatia, Macedonia (FYROM) and Turkey) and four potential candidate countries (Albania, Bosnia Herzegovina, Montenegro and Serbia).

30/10/2007: Removal of state allowance
A recent amendment to Romania's social protection order number 116/2006 affects the rights of workers who have been subject to collective redundancy programmes. Such workers will no longer receive a monthly state allowance if they turn down a job offer, or refuse to attend a training programme to which they have been assigned.

29/10/2007: First public holiday under new ban
This summer, the Polish Sejm (Parliament) voted through an amendment to the Labour Code that forbids trading for most enterprises on twelve public holidays during the year. The first holiday to come under the new restriction is All Saints' Day on November 1st 2007. Self-employed workers plus certain educational and cultural institutions, utilities, public services, petrol stations and pharmacies will be allowed to work. However, all other businesses will be required to give their staff the day off.

29/10/2007: No agreement yet on minimum wage
The Confederation of Estonian Employers has refused to sign an agreement increasing the minimum wage from 3,600 kroons (231 euros) to 4,800 kroons (307 euros) per month next year. Talks with the Confederation of Estonian Trade unions are scheduled to continue in three weeks' time.

25/10/2007: Unit labour costs on the increase
Latest data from the OECD indicates that unit labour costs (ULC) are rising in many European countries and particularly in the market services sector. This is of concern to employers because a rise in unit labour costs indicates that pay rises are exceeding improvements in labour productivity and thus generating price inflation which, in turn, reduces a firm's competitiveness.

Over the year to Q2 2007, ULCs in industry rose fastest in Norway (+11.3%), Denmark (+5.3%), Italy (+2.6%), Sweden (2.2%) and the UK (+2.0%). However, ULCs declined in Austria (-5.5%), the Slovak Republic (-5.1%), Finland (-3.7%), Poland (-2.8%) and Portugal (-2.8%). ULCs in market services rose in all the OECD's European member countries except Germany (-0.1%). The biggest increases were in Hungary (+10.5%), Denmark (+5.1%) and the Irish Republic (+5.1%).

22/10/2007: Breakthrough in commercial sector
A new three-year collective agreement has finally been reached in Finland's private commercial sector, following intervention by a national arbitrator. 170,000 workers in the retail and wholesale trade will receive increases in basic pay rates of 3.5% from October 1st 2007, 2.8% from May 1st 2008 and 3.5% from May 1st 2009. There will also be a further overall increase of 1.5% next year as a reward for accepting a new pay system. Other elements of the deal include improved maternity, adoption and paternity payments, more time off at weekends and acceptance of a certificate from a nurse as an alternative to a physician to justify sick leave.

18/10/2007: Social security charges on share options
The parliamentary social affairs committee in France has voted to impose a 2.5% employers' contribution on the grant of share options and a further 2.5% contribution when the options are exercised. If these proposals became law, companies would also pay a contribution of 10% on all options granted to company CEOs as part of their remuneration. All contributions would be paid into to the mandatory health insurance and state pension schemes. A full debate on these proposals is scheduled for the National Assembly on October 23rd 2007.

17/10/2007: Austria opens up labour market
The Austrian economic ministry has announced that it will be widening access to the Austrian labour market on January 1st 2008 for further categories of workers from all new EU member states. Access under Austria's freedom of movement provision will be increased from three to fifty occupations - including skilled metal and electronic manufacturing workers, construction trades, motor mechanics and crane operators. Full access for skilled workers from the new member states will be given from January 2009 and this will be widened to include all workers from 2011.

15/10/2007: Rise in tax-free income allowance
Income tax thresholds in Cyprus are due to rise following parliamentary approval of several measures to protect lower-paid workers. The government's proposal increases the tax-free income threshold from 10,000 pounds (17,067 euros) to 10,750 pounds (18,347 euros) this year, and to 11,350 pounds (19,372 euros) in 2008.

09/10/2007: Changed holiday dates
This year Latvia's National Day on November 18th falls on a Sunday. The public holiday has therefore been moved to November 19th. In 2008, Independence Day on May 4th also falls on a Sunday. This public holiday has also been moved and will take place on the following Monday, May 5th.

09/10/2007: Removing cap from maternity benefits
The Croatian government has approved a proposal to allow maternity benefits to be paid without limit during the first six months of compulsory maternity leave. Currently, benefits are calculated by averaging the pay received over 26 weeks preceding the commencement of maternity leave, but state insurance benefits may not be higher than 4,257 kuna (581 euros) per month. Removal of the upper earnings threshold would improve benefit levels for more than one-quarter of all those taking the initial period of maternity leave.

03/10/2007: Taxing stock options
The French government is planning to introduce a requirement for employers and employees to pay social security contributions on all gains made though stock options. The proposal will be put forward in time for the forthcoming parliamentary debate on the 2008 Social Security Finance Bill.

01/10/2007: Overtime tax incentive comes into force
A new law permitting French private-sector employees to receive overtime pay free of income tax and social security deductions came into force on October 1st 2007. This measure is likely to affect 18 million employees, although it remains uncertain how much it will encourage employers to increase the availability and level of overtime working.

28/09/2007: Confusion over public holiday
The decision by the Vatican to alter the official date for St Patrick's Day in 2008 has caused some confusion for Irish employers. The change has come about because the traditional date for St Patrick's Day falls in Holy Week next year. However, although the Church festival will take place on Saturday, March 15th, the bank (public) holiday on March 17th will remain unchanged.

27/09/2007: European snapshot reveals gender differences
In the European Union, 31.6% of women and 7.8% of men work part-time, whilst 14.6% of women and 13.5% of men are subject to temporary contracts of employment. The latest European labour force survey (LFS) also reveals that an average EU employee's working week is 33.5 hours for women and 40.9 hours for men. Although the overall employment rate for women in the EU is 57.4% compared with 71.5% for men, the female employment rate is much higher in Sweden (70.2%), Denmark (72.4%), Norway (72.8%) and Iceland (81.0%)

21/09/2007: Holiday rights in retailing
A new trading ban has come into force in Poland designed to protect employees' holiday rights. The new law makes it unlawful for a retail outlet to open on any of the 12 national holidays unless their services are necessary to 'social utility or everyday needs of the population'. This means that many vehicle service stations and pharmacies will be able to remain open, but large supermarkets will probably be forced to close on such days.

18/09/2007: Real wages grow by 2.5%
Year-on-year private sector wage growth in Hungary was 10.8% in July 2007, down from 11.4% in the previous month. With HICP consumer prices rising by 8.3% over the same period, the real increase in spending power was 2.5%.

17/09/2007: M&T bill to increase HR transparency
A draft decree on takeovers submitted to the Dutch parliament last Friday contains a number of points of concern for the HR practitioner. These include the requirement that all publicly-quoted companies making bids must issue a prospectus within 12 weeks of announcing their bid and this must contain details about the bonuses that executives will receive as a consequence of the intended merger or takeover. The prospectus must also contain a statement about how the proposed change will affect the situation of employees in all companies involved in the business transfer.

10/09/2007: Trade unions continue to decline
A review of trade union trends carried out by FedEE has found that union membership across Europe has fallen by 16.4% during the last two years. The biggest falls have occurred in Poland, Romania and the Slovak Republic.

The most remarkable trend in the older EU member states is taking place in Sweden, where the country's traditional high union density has been affected by several reforms introduced by the present government. This has led to a decline in union membership of around 10,000 people per month during first eight months of this year.

The membership claims of trade unions are now often based on a high proportion of retired and unemployed workers. In Germany, retired workers account for one in five of all union members, whilst in Italy, almost half of all members of CGIL and CISL-affiliated unions are not economically active.

03/09/2007: Minimum wage moving closer to subsistence level
The national minimum wage in Russia more than doubled on September 1st 2007. The rate increased from 1,100 roubles ( 31.56 euros) to 2,300 roubles (65.99 euros) per month. However, the subsistence level for a Russian adult is 4,000 roubles (114.72 euros) per month and the government does not plan to bring the minimum wage into line with the subsistence level until 2011.

30/08/2007: Spot fines for Pension Act infringements
Employers in the Irish Republic will soon run the risk of summary fines for non-compliance with Pensions Board requirements. New regulations introduced under the Social Welfare Law Reform and Pensions Act come into force in September 2007. These permit the Pensions Board to write to an employer notifying them of an alleged offence and ordering them to remedy the offence 'to the satisfaction of the Board' and pay a fine within 21 days or be subject to prosecution.

Infringements covered by the system of spot penalties include failure to register the scheme with the Board, non-payment of annual fees due, or unwillingness to supply information required by the Board. Fines must be paid from personal or general company accounts and not out of pension scheme funds.

29/08/2007: Belgium relaxes restrictions on free movement
The Belgian government has modified its 'Limosa' procedures for monitoring business visitors from other EU member states. It has now been agreed to exempt from such declarations all visits to attend 'scientific congresses'. Moreover, employers with staff attending business meetings in Belgium will no longer need to complete Limosa forms, provided the visits by each staff member do not exceed 60 days per year or last for longer than 20 days per meeting. However, once these changes have been introduced this autumn, there will still be a requirement for employers and end users to have in place internal systems to track staff movements into and out of Belgium.

22/08/2007: Proposed cap on legal fees.
A draft parliamentary bill prepared by the Polish government places a cap on the maximum hourly fees that may be charged by law firms. The proposal, which limits hourly fees to 30% of the Polish monthly minimum wage, is designed to improve access to legal services. However, even after the proposed 20% rise in minimum wages next year, the maximum hourly fee would be just 337.8 zlotys (88.12 euros) per hour.

International law firms have carried out repeated lobbying in recent weeks, and a report in the online journal Legalweek indicates that the Polish government may now be having second thoughts. However, a further area of uncertainty arises from the likelihood of a parliamentary election this autumn and subsequent horse trading if a new coalition government is formed. On September 7th, a motion for dissolution will be put to the Polish parliament. If the motion is passed, an election must follow within 45 days.

17/08/2007: Power shortages cut working hours
Many Albanian employers have recently cut working hours to deal with the current power crisis. This summer's drought has lowered Albanian reservoirs and reduced the ability of hydroelectric stations to generate electricity. The heat wave affecting the Balkans has led at the same time to an increased use of air conditioners. As a result of this, the Albanian Energy Corporation has told government offices and businesses that electricity supplies cannot be guaranteed for longer than five hours per day.

16/08/2007: Changes to public holidays in 2008
The Russian federal government has exercised its new powers under the labour code to change a number of public holidays next year.

* May 4th 2008 has now been declared a working day, even though it is a Sunday. This is to accommodate a three-day holiday from May 1st to May 3rd.

* Both Thursday, June 12th 2008 (Constitution Day) and Friday, June 13th will be taken together as public holidays. In exchange, employees will work on Saturday, June 7th.

* Both November 3rd and November 4th (People's Unity Day) will form a further two-day public holiday. Once again, this will be achieved by designating the previous Saturday (November 1st) as a normal workday.

08/08/2006: Bulgaria to introduce flat tax next year
The Bulgarian finance minister, Plamen Oresharski, has announced that a 10% flat tax on all individual income will be introduced next year and that social security contributions will be reduced. This change will boost the net pay of middle and higher income groups who currently pay income tax at marginal rates of 20% to 24%. However, it will sharply reduce the net incomes of lower paid workers earning less than 450 leva (230 euros) per month, because they will be required to pay tax for the first time.

06/08/2007: Legal right could change labour relations balance
A modification of the Romanian Labour Code gives employees a new right to claim damages against their employers for 'financial or moral prejudice'. This means that a worker will be able to sue their employer if they believe they have been subjected to undue work pressure, disrespectful treatment or harm to their public image.

Romania's labour minister, Paul Pacuraru, is highly critical of this measure. He has pointed out that 'moral prejudice' cannot be objectively measured, and it will therefore be up to individual judges to draw their own subjective conclusions about the merits of a particular case. He is also concerned that the change could alter the climate of labour relations at a time when the country is seeking to take advantage of its new EU membership.

02/08/2007: Relaxation of work restrictions
Restrictions were relaxed last month on workers entering Poland from Belarus, Russia and Ukraine. A three-month (extendible) work visa will now be granted upon presentation of a work offer letter from a Polish employer. It will then be possible for workers from these countries to work up to six months each year without the need for a full work permit

02/08/2007: Growth of foreign workers in Norway
The number of foreign workers with work permits in Norway has grown by 72% over the last year, with the vast majority coming from Poland and Lithuania. 79% of immigrants are men seeking work in Norway's booming construction sector.

23/07/07: Plan to increase labour flexibility
A number of amendments to the Czech labour code have been proposed by the labour minister, Petr Nečas. The changes to be debated by the national parliament this autumn include:

* Freedom for employers to vary working hours to meet fluctuations in production levels and redeploy employees due to altering weather conditions, without the requirement for employee consent.

* The removal of current restrictions on young workers aged 16-18 so that they may work for a full 40-hour week.

The labour minister is also planning to introduce incentives for companies to open up more part-time job opportunities for parents with children under the age of 12.

20/07/07: Holiday clash in 2008
In 2008, the Labour and Ascension public holidays in many countries will both fall on May 1st. The last time this happened was in 1913 and it will not reoccur until 2160. Few governments have issued advice to employers on how to deal with this issue. However, Luxembourg has offered employers several options:

* Where the worker must continue working on May 1st, the employee should be paid double time for working on May 1st and be given a day off as compensatory holiday.

* Where the worker is given a day off on May 1st, but would normally work through a public holiday on that day, they will be entitled to normal remuneration for that day plus one day off as compensatory holiday.

* Where the worker would normally have taken May 1st as a public holiday and continues to do so, they will be entitled to two days' compensatory holiday.

All compensatory days must be taken within 3 months of May 1st 2008. The other countries that will have a clash of two public holidays on May 1st 2008 are Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Liechtenstein, Poland and Sweden.

17/07/07: Proposed liberalisation of work permit policy
The Swedish migration minister, Tobias Billström, has announced a proposal that will enable employers to recruit outside the EEA states (and Switzerland) without the need to secure a work permit prior to a candidate taking up work in the country.

It would be sufficient for an employer to prove that they have advertised without success through the Swedish Labour Board and the European Union's EURES system, and also that they are offering pay and terms and conditions in line with sectoral collective agreements. New hires would initially be given two-year visas, but these could be extended by a further four years if they are still employed at the renewal date.

The proposal will now be subject to consultation with interested parties before being submitted for parliamentary approval. It could become law by the second half of 2008.

12/07/07: Green light for tax-free overtime
The French National Assembly has voted to allow overtime to be remunerated free of income tax and with a reduced level of social security contributions. All employees will be covered by the change, including those paid on piece-rates. The overtime of part-time workers will be limited to 10% more hours per week tax free. Executives will only qualify for overtime concessions if they work for more than 218 days per year and relinquish compensatory rest periods. The deadline for implementation is October 1st 2007.

10/07/07: Back on track
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.

06/07/07: Court rules against CNE contracts
The 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.

05/07/07: National accord sets 12.9% pay norm
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.

02/07/06: Rise in minimum wage rates
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.

24/06/07: New tax package due for debate next week
The new tax package developed by the incoming French government has been scheduled for debate by the National Assembly on July 2nd 2007. Drawn up by Prime Minister Francois Fillon, the tax and finance bill seeks to exempt overtime work above 35 hours per week from income tax and employer social security payments, to exempt those under 26 from income tax on all earnings up to 15 times the monthly minimum wage per annum, to make mortgage interest payments tax-deductible, to abolish inheritance tax for 95% of households, and to put a 50% cap on overall individual taxation.

20/06/07: Minimum wage control to cover more sectors
The German cabinet has agreed to extend minimum wage controls to 10-12 economic sectors where 50% or more of the workforce is covered by collective agreements. Currently, such protection is confined to construction workers and office cleaners.

14/06/07: Earnings rise by 3.7%
Over the year to April 2007, UK average earnings (excluding bonuses) grew in the private sector by 3.7%. The biggest annual increases were in mining and quarrying (+9.5%), engineering and allied industries (+5.3%) and in wholesale trade (+5.3%).

12/06/07: Extra time off for working parents
Although the Cyprus government has agreed to extend maternity leave from 16 to 18 weeks and improve maternity grants, no decision has yet been made on the labour minister's proposal to make a one-off payment to parents having a third child. The draft legislation, which will shortly be submitted to parliament, also contains a proposal to increase parental leave from 13 weeks to 26 weeks in the case of twins and 39 weeks in the case of triplets.

11/06/07: Smoking ban in hospitality sector
The Dutch cabinet has agreed that a ban on smoking in hotels, restaurants and events that use caterers will be introduced from July 1st 2008. Smoking will still be allowed in cafes and bars, but not in areas where customers are being served. Although smoking is prohibited in other workplaces, a special exemption has so far applied within the hospitality sector.

06/06/07: More countries sign up to eCall
Austria and Germany are the latest countries to commit themselves to supporting the introduction of the eCall accident notification system. Nine EU member states have now given their support to a system that could save the lives of over 1,000 company vehicle drivers each year.

eCall enables a vehicle that has crashed to make an automatic call giving its location to an emergency centre. The problem of accident victims being too badly injured to call for assistance is therefore removed and the response times of emergency rescue services are reduced by 50% in rural areas and 40% in urban areas.

30/05/07: Continuing wage arrears
The Moldovan labour inspectorate has reported that employers had wage arrears amounting to 87.5 million lei (5.3 million euros) on April 1st 2007, equivalent to the average monthly remuneration of 45,000 employees. In 2006, labour inspectors fined employers a total of one million lei (60,000 euros) for repeated or long-standing wage arrears.

29/05/07: French government to encourage longer working hours
According to the AFX news agency, the new French government will be announcing later this week its proposals to cut the taxation of overtime pay. This measure was one of the key election promises of new French president Nicolas Sarkozy.

24/05/07: Unions may not block freedom of establishment
What rights has a trade union to impede a company from relocating its operations to another EU country and to frustrate the company's operations following relocation? This is the central question raised in an ongoing European Court of Justice case.

In 2003, Finnish ferry company Viking Line sought to reflag its vessel as Estonian so that it could compete effectively with Estonian ferry services. The Finnish Seamen's Union (FSU) opposed this move and sought the assistance of the International Transport Workers' Federation (ITF) to ensure that no other union would agree to negotiate with the company. Although subsequent negotiations with the FSU led to a new manning agreement, the ITF did not withdraw its circular to affiliated unions and so Viking Line decided to seek injunctive relief in the commercial court in London. The ITF appealed against the resulting injunction and the UK Court of Appeal sought the assistance of the European Court of Justice (ECJ) by asking it to issue a preliminary ruling.

Although the ECJ has not yet provided its response to the questions posed by the UK Appeal Court, Advocate-General Poires Maduro has just published his opinion. This puts forward the view that an employer does have the right to invoke EU freedom of establishment rules upon a trade union and that the promotion of EU social policy does not lead any trade union body to be exempt from rules permitting a company to provide services between EU member states. Although a trade union may take limited collective action to restrict relocation to another EU state, it will be up to the courts to determine if a specific type of action is lawful.

In conclusion, the Advocate-General states that freedom of establishment rules in the EU treaty are opposed to 'a coordinated policy of collective action by a trade union and an association of trade unions which... has the effect of partitioning the labour market and impeding the hiring of workers from certain member states in order to protect the jobs of workers in other member states'. Thus, trade unions may not block (or threaten to block) an undertaking from carrying out its business across national borders or moving its operations to another EU country. If EU rules allowed such action, they could, in Advocate-General Maduro's view, generate 'an atmosphere of constant retaliation between social groups in different member states, which could gravely threaten the common market and the spirit of solidarity embedded in it' (ITF & FSU vs Viking Line ABP and OU Viking Line Eesti. Case C-438/05).

22/05/07: Slovakia's economic revolution
Real incomes increased by 8.5% in Slovakia's industrial sector over the year to March 2007. Rising living standards have resulted in an increase in employment within many consumer-related sectors. Since March 2007, the number of employees in the sale and maintenance of motor vehicles has risen by 20.3%, in retail trades by 8.2% and in hotels and restaurants by 6.3%. Although the main sector experiencing net job losses has been telecommunications (-7.9%), workers remaining in this sector have also enjoyed the biggest wage increases (+19.8%) in the last year.

22/05/07: Job growth in competitive sector
A total of 93,600 new jobs were created in the competitive (market) sector of the French economy during the first quarter of 2007. Although 9,400 jobs were lost in industry, this was more than compensated for by 91,700 new jobs in service companies and 11,300 new jobs in construction. France continues to advance rapidly towards a service economy with industry now accounting for only 23.5% of all jobs in the competitive sector.

16/05/07: Two more countries to join eurozone
The European Commission has concluded that both Cyprus and Malta have met the economic requirements for them to be admitted to the eurozone. The Commission has therefore proposed to the Council that both countries adopt the euro on January 1st 2008. The final decision will be taken by EU finance ministers in July 2007.

16/05/07: More childcare, but no national minimum wage
Germany's ruling coalition has reached agreement on a plan to triple the number of daycare places for children under the age of three to 750,000 by 2013. Families who raise their children at home will also receive an additional state allowance.

Although the coalition partners have been unable to agree on a national minimum wage, Germany's labour minister Franz Muentefering has been given the green light to single out further industries in which to apply minimum wage orders for foreign workers similar to those already established in the construction and cleaning sectors.

11/05/07: Dutch transport sector agreement
Organisations representing employers in the Dutch road transport sector have agreed a national collective agreement with sector trade unions. The accord gives employees an increase in basic rates of 3.2% with effect from June 1st 2007 and a further 1.5% in April 1st 2008 to cover the period until the next review on October 1st 2008. Employees will also receive a non-consolidated bonus payment of 350 euros in December 2007.

08/05/07: Metal industry pay norm breaker
A collective agreement covering metal industry companies in the German state of Baden-Wuerttemberg is worth more than twice the 2.5% offer tabled by metal industry employers during two rounds of negotiations across the country in recent months.

The deal, which may become a model in other German regions, gives employees two unconsolidated payments of 400 euros in April and May 2007, a rise in basic rates of 4.1% from June 2007 and a further increase of 1.7% in June 2008 to cover just 5 months until the start of the next wage round.

Although the deal has been heralded as being worth just 3.3%, this does not take into account the initial (albeit unconsolidated) payments and the compounding effects of the two increases. In fact, the total transaction will cost metal industry employers an average of 5.3% during the full 19-month period - much closer to the 6.5% claim made by the trade union IG-Metall at the start of wage negotiations.

01/05/07: Netherlands opens up labour market
The Dutch parliament has finally agreed to open up its labour market to all workers from the countries that joined the EU on May 1st 2004.

The immigration authorities (IND) have now implemented the decision so that nationals of the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia no longer require a permit to work in any sector of the economy. The IND does, however, require nationals from these new member states to register their presence in the country once they have been resident for three months.

Nationals from Bulgaria and Romania remain subject to work permit restrictions. Work permit applications made on behalf of citizens of these countries will only generally be considered by the IND if a position cannot be filled by candidates from elsewhere in the EU.

01/05/07: Public sector pay deal
A new collective agreement has been concluded this week covering Norway's central government and municipal employees. This provides an across-the-board increase of 4.8%, which represents an annual rise of 9,500 kroner (1,170 euros) for the average public employee.

30/04/07: Price pressure builds across Europe
There was a sharp increase in consumer price inflation in March with the monthly increase averaging 0.6%, compared with 0.3% in February. The largest rises were in Greece (+2.5%), Latvia (+1.4%) and Cyprus, the Netherlands and Portugal (+1.3). However, there was little or no increase reported for Belgium, Bulgaria, Romania and Slovakia.

The highest annual rates of price inflation remain in Turkey (+10.0%), Hungary (+9%), Latvia (+8.5%) and the Russian Federation (+7.4%), whilst by far the lowest annual rate is in Switzerland (+0.2%).

25/04/07: Three-year deal in building and construction sector
A new national collective agreement in the Swedish building and construction sector gives a 10.2% increase in average wage rates over the next three years. Employers have also conceded a one-day reduction in annual working time in 2008 and a further one-day reduction in 2009 without loss of earnings.

Pressure by trade unions to include clauses relating to 'inspection fees' in the agreement have been successfully outflanked. The 1.5% fees paid to trade unions by all employees have been ruled by the European Court of Human Rights as unlawful in respect to non-union members. However, employers have agreed to run the risk of contravening data protection legislation by handing over to unions details of wages paid to employees, so that union officials can check that sector rates are being paid.

19/04/07: Different retirement ages unlawful
The Croatian constitutional court has ruled that different retirement ages for men and women under the state pension system contravene articles 14 and 55 of the constitution. The current retirement age for men is 65, whilst for women it is age 60. The court has given the government until 2019 to rectify this difference.

16/04/07: Substantial increase in minimum wage
Russia's Federation Council (upper house of parliament) and state Duma (lower house of parliament) have approved a bill to increase the minimum monthly wage from 1,100 roubles (31.41 euros) to 2,300 roubles (65.67 euros) on September 1st 2007. The bill also raises the level of fines for employers found to be paying wages below the minimum rate.

11/04/07: New EU working time rules
Statutory working time changes for road transport workers have now come into force across the European Union (Regulation (EC) No. 561/2006).

Daily working time limits of nine hours (extendable to 10 hours twice a week) remain, but drivers of heavy goods and passenger transport vehicles must no longer work more than 56 hours per week or 90 hours during any two consecutive weeks. A driver is now required to take a 45-minute rest break every 4.5 hours, although this may be split into two shorter breaks if required. Daily rest periods may only be split into two rather than three periods (3 hours plus 9 hours). Drivers must also be given 45 continuous hours off work every week, which may be reduced to 24 hours if a block of compensatory time is given by the third week after the reduction was made.

10/04/07: Polish companies investing in eastern neighbours
A recent report in Poland's Nowy Dziennik newspaper claims that, in the last three years, 1,800 Polish companies have opted to invest in Russia and Ukraine to compensate for labour shortages following the exodus of skilled manpower to western EU states. Although corporation tax is higher in both countries, labour supply is good and wage rates are substantially lower than in Poland.

10/04/07: Public sector pay deal
A national collective agreement has been reached between the Italian government and unions covering the country's three and a half million public sector workers. The deal gives public sector workers an average increase of 101 euros per month, backdated to January 1st 2007. In return, the government has gained the support of the unions for introducing a performance-related pay system, greater job flexibility and more scope to carry out redundancy programmes.

04/04/07: Revised code of practice on workplace bullying
The Irish Health and Safety Authority has just published its revised code of practice on workplace bullying. The code will come into force on May 1st 2007.

The new code requires that companies should first attempt to resolve complaints of workplace bullying within the workplace. If complaints cannot be resolved internally, an independent investigation will be carried out by a Rights Commissioner. Companies will be required to keep records of all complaints made by employees and to specify a competent person responsible for handling problems when they arise. Although failure to follow an HSA code is not in itself an offence, evidence of failure may be used in court actions against employers.

27/03/07: The narrowing European pay gap
The pay gap between Europe's richest and poorest countries has fallen significantly over the last six years. According to FedEE's latest Pay in Europe report, the gross median hourly earnings of employees in Denmark were 65 times (65x) higher than in Moldova on February 1st 2007. This compares with a pay gap of 70x in 2006 and 91x in 2001.

The report also reveals differences in pay between those in senior management positions and those in unskilled service sector positions within individual countries. This differential varies from 12.9x in Moldova and 11x in Latvia to just 3.9x in Norway and 4.1x in Malta.

The Pay in Europe 2007 report provides hourly wage and salary data for 32 standard job positions in 48 European countries and territories at February 1st 2007. It is available free of charge to members of the Federation.

21/03/07: Arbitrator intervenes as talks break down
Negotiations over a new collective agreement for 600,000 employees in the Danish transport, dock and service sector have broken down and the parties have now met with state arbitrator Asbjørn Jensen. Whilst there is a broad understanding on a wide range of employment issues, strong differences remain about what pay increases should be made within particular occupational groups. The arbitrator has therefore ordered a 14-day cooling off period, which may be extended to 28 days if no deal has still been reached by early next month.

21/03/07: New restrictions on hiring Bulgarian workers
Agreement has been reached between the Greek and Bulgarian labour ministries to restrict the hiring of Bulgarian workers by Greek companies. In future, Bulgarian nationals may only be recruited through Greece's state employment agency (or private companies licensed by the agency). All job offers must be accompanied by a clear statement about pay, leave, working conditions and social security arrangements.

20/03/07: Fall in strike activity
The number of days lost through labour disputes in Ireland last year was the lowest on record. The construction sector accounted for 65% of days lost and the biggest overall year-on-year fall was recorded in Q4 2006, when there were just 1,090 days lost compared to 22,588 days lost in Q4 2005.

14/03/07: Discrimination during recruitment
An experiment carried out on behalf of the French ministry of employment has found that 80% of French employers who called candidates for a job interview preferred those with names of French origin to those with names of African origin. The investigation covered 2,440 vacancies and involved the submission of similar CVs from candidates with differing ethnic pseudonyms.

These results are even more dramatic than those from a study carried out in Italy during 2002-3, where it was found that out of 633 initial telephone calls, 521 people with native Italian names were called to interview compared to only 379 for those with Moroccan names.

10/03/07: IND ignores parliamentary decision
Although a majority of the lower house of the Dutch parliament voted to open up borders on March 1st 2007 to all workers from the countries that joined the EU on May 1st 2004 (MAJ 2007/05), the Dutch Immigration and Naturalisation Service (IND) is refusing to implement the decision. IND officials are claiming that the change of government invalidated the parliamentary vote and that a decision on fully opening up the borders is unlikely to take place before May 1st 2007.

06/03/07: 27.9% rise in average earnings
According to Latvia's Central Statistical Bureau, average gross monthly earnings increased by 27.9% between Q4 2005 and Q4 2006. The biggest rises were in education (41.1%) and construction (35.8%), whilst the smallest rise was in transport, storage and communication (4.9%). 14.1% of average earnings resulted from incentives, year-end bonus payments and holiday allowances. These variable income elements were particularly important in public administration and defence, where they accounted for around one-third of total remuneration.

05/03/07: Collective agreements cover 44.5% of employees
The Spanish Ministry of Labour and Social Affairs (MTAS) has reported that 4,324 collective agreements were registered in Spain during 2006. These covered 8.9 million of Spain's 20 million employed population and brought into effect an average increase of 3.22% in basic wage and salary rates. 54.7% of agreements included a wage guarantee clause linked to the cost of living, 21.6% included an undertaking to reduce normal daily working hours and 21% contained a commitment to ensure equal treatment between men and women.

07/02/07: Statutory guidance ignores EU expansion
The UK Home Office has not updated its guidance on the employment of workers from the new EU member states, creating a situation where employers could find themselves unwittingly ignoring recent statutory requirements. The current guidance, which contains a defence referenced by section 8 of the Asylum and Immigration Act 1996, fails to take account of the worker's registration scheme for eight of the ten countries that joined the EU in May 2004, or of the accession of Bulgaria and Romania to the EU in January 2007. It is therefore still a defence under the Act for employers simply to ensure that a prospective worker possesses:

'a passport or national identity card, issued by a State which is a party to the European Economic Area Agreement or any other agreement forming part of the Communities Treaties which confers rights of entry to or residence in the United Kingdom, which describes the holder as a national of a State which is a party to that Agreement.'

The Home Office has confirmed to FedEE that its official guidance has not been updated to take into account recent EU expansion and that the statutory defence provided remains in force. However, it has pointed out that its on-line guidance for prospective employees includes (albeit confusing) information on the worker registration scheme and work permit rules for Bulgarian and Romanian nationals.

06/02/07: Solidarity tax to boost pensions
A draft law drawn up by the Romanian conservative party and approved by senators in the Economic Commission would introduce a special 1% solidarity tax on all companies with an annual profit of over 100,000 euros. The proceeds of the tax would be used to increase the value of pensions that are below the minimum wage. The bill will have a difficult passage through the legislature because it is currently opposed by the Romanian government.

05/02/07: Wages may be pushed above national norm
Private sector employers and trade unions in Hungary have finally agreed to a national wage norm for 2007. Although the agreement is for increases to range from 5.5% to 8%, inflationary pressures are likely to force actual wage increases beyond this range. In its latest report, the World Bank has predicted that further increases in energy prices and government excises will push inflation up to an annual rate of 8% by the end of Q1-2007.

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Archive: Selected press releases

The new year introduces many changes that are of significance to employers across Europe. Germany takes over the EU presidency and the EU expands by 30 million people through the accession of both Bulgaria and Romania. Slovenia joins the eurozone and minimum wage rates increase in several leading economies such as the Irish Republic, Spain, and Turkey.

Cross-border merger activity is likely to increase from Q1 2007 onwards as companies respond to the Sevic European Court of Justice ruling and EU member states implement the EU cross-border mergers directive (2005/56/EC) ahead of the deadline for incorporation in December 2007.

January 1st 2007

• Germany takes over presidency of the EU.
• Accession of Bulgaria and Romania to the EU.
• Slovenia joins the eurozone as its thirteenth country member.
• Launch of European Year of Equal Opportunities for All.
• European globalisation adjustment fund launched with 500m euros each year to assist workers made redundant due to international competition.
• Improved benefits payable to German working parents of children born on, or after, this date.
• End of transitionary period for on-call payments in Germany. All time spent at the disposal of an employer at a workplace or at another place determined by an employer is now classified as working time - even if the employee is not required to be carrying out active work duties.
• New Czech Labour Code comes into force (with constitutional errors to be subsequently amended).
• Introduction of new rights for Czech working fathers to receive part of paid maternity leave instead of their partners.
• Reduction in Dutch corporation tax from 29.1% to 25.5% .
• Compulsory language and culture test introduced for immigrants in the Netherlands.
• Large increase in upper limit for French EPP tax allowance granted to assist workers on low incomes.
• Irish Republic places limit on the use of tax breaks for those with high incomes.
• New 'early intervention' sickness absence procedure commences in Norway.
• Effective date for new minimum wage for construction workers in Norway.
• Employers in all Swiss cantons required to use the new salary certificate (certificat de salaire) for recording payments to employees.
• Substantial incentives for IT companies introduced through new Russian tax code.
• Statutory minimum wage increases due in Bulgaria, Croatia, Estonia, Hungary, the Irish Republic, Latvia (agreed increase of 33%), Malta, Poland, Portugal, Romania, Spain and Turkey.

January 2nd 2007

• Ban on smoking in workplaces and almost all enclosed public spaces in Jersey.
• National holiday in Bulgaria to celebrate EU accession.
• French Senate scheduled to begin debating new legislative bill on the modernisation of social dialogue.
• Wage negotiations in the German chemical industry scheduled to begin.

January 15th 2007

• Russian federal law on foreign nationals comes into force.

February 1st 2007

• New French law on smoking in enclosed public places comes into force.

March 1st 2007

• Maternity benefit entitlement in the Irish Republic increased from 22 to 26 weeks.
• Liechtenstein government launches new job market service.
• Final increase under Italian national metal industry sectoral agreement. New agreement to be concluded.

March 31st 2007

• End of consultation period on European Commission green paper about modernising labour law to meet the challenges of the 21st century'.
• End of consultation period on European credit system for vocational education and training.

April 1st 2007

• New Dutch Working Time Act comes into force.
• Increase in living wage for disabled persons in Ukraine.
• Increase in paid maternity and adoption leave entitlement in the UK applies to women having babies after this date.

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A yawning pay gap exists between rich and poor countries in the European Union, with German and Dutch workers earning six times more per hour than equivalent workers in Slovakia.

According to Pay in Europe 2006, a report published today by the Federation of European Employers (FedEE), the top ten countries and territories in the European pay league are

1: Denmark, 2: Norway, 3: Switzerland, 4: Liechtenstein, 5: Luxembourg, 6: Germany, 7: Guernsey (Channel Islands), 8: Isle of Man, 9: The Netherlands and 10: Finland.

At the bottom of the league table are 44: Albania, 45: Ukraine, 46: Bulgaria, 47: Belarus and 48: Moldova.

Speaking at the launch of FedEE's Pay in Europe 2006 report today, the Secretary-General of the Federation of European Employers, Robin Chater, pointed out that although there are large differences in the gross pay received by workers across Europe, the picture changes dramatically once tax, social security, holiday bonus supplements and differences in spending power are taken into account. 'These factors all tend to narrow the gap between countries,' he said. 'For example, although median gross hourly earnings in Spain is only 30% of that in Denmark, the real net spending power experienced by the typical Spanish worker is actually 70% of that enjoyed by an equivalent Danish worker.'

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Research carried out by the Federation of European Employers (FedEE) has revealed that the average employee in every EU country works well in excess of their basic contractual hours and that the main reason for this is to cover for colleagues who are taking time off. In countries such as Belgium, France and the Netherlands, more than 20% of employees are absent from work at any given time, whilst in Sweden, work absence amounts to 29.9%. This means that other staff have to work additional time to complete the tasks of their missing co-workers.

Social benefits such as paid annual leave and sickness absence, maternity and parental leave, and part-time working all reduce the staff numbers available for work in any typical week. The governments of many EU member states have further enhanced these entitlements and created additional rights such as paternity leave, sabbaticals and leave to care for dependants. Legally enforceable collective agreements have also gone beyond basic statutory rights to introduce even more opportunities to take time off, and double holiday pay received by workers in some countries makes it more financially rewarding to be on annual leave than at work.

Although additional time-off rights might be seen as an opportunity to generate extra jobs, the fragmented nature of absence due to such factors as sickness, emergency childcare or attendance at ante-natal clinics has meant that the cover required varies from day to day. No jobholder can be expected to have the skills to work in the accounts department on a Wednesday, meet a technical sales representative on a Thursday and then end the week acting as secretary to the production director.

The research has also dispelled a long-standing myth that the UK, with the most liberal working time regulations, has longer working hours than any other EU country. At 44.8 hours a week, average working hours for full-time employees in the UK are similar to those in Austria (44.7 hours) and less than the Netherlands (45.5 hours). This may be explained by the fact that employees are absent from work for only 15.5% of the time in the UK, whilst this figure rises to 23% of the time in the Netherlands.

Commenting on the findings, the Secretary-General of the Federation of European Employers, Robin Chater, said that "rather than seeking to prevent those who wish to work longer hours from improving their income levels, the focus of EU policy makers should be on removing the causes of work absence that are the main reason for obligatory additional working time.

"Our research clearly indicates that it is well meaning policy makers who have created the long working hours culture, not greedy employers seeking to avoid an increase in employee headcounts. Now it is up to the EU and individual governments to wake up to the fact that staff time-off entitlements are the real working time issue and not the questions of standby time or opt-outs from the maximum 48-hour week."

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Employers who impose punitive absence policies on their employees may be defeating their own objectives by reducing the overall health levels of their workforce. According to Robin Chater, Secretary-General of the Federation of European Employers (FedEE), sickness absence policies can only be effective if they address the wider issue of employee wellness in a positive way. "Whenever an employee with influenza feels obliged to attend work, they put all their colleagues at risk of catching the virus. It is much more cost-effective to ensure that staff receive annual flu vaccinations and are given assistance to distinguish between flu and the common cold."

A heavy-handed approach to sickness absence also compounds problems such as stress and depression. Around half of all sickness absence is due to psychological conditions and a high proportion of such cases are work-related. Managers who focus exclusively on 'lost time ratios' and disciplinary procedures will fail to produce the financial returns their policing methods seek to achieve. Their actions could even give rise to substantial damage claims from employees for psychiatric injury.

FedEE has today launched a model company wellness policy to promote a broad, positive and proactive approach to sickness absence. The policy encourages employees to take greater responsibility for their own health issues and sets out detailed methods for managing sickness absence in ways that benefit both a company and its employees. It also incorporates elements that employers frequently manage in isolation from each other, such as job enrichment and equal treatment for those with HIV/AIDS.

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At the beginning of 2005 statutory minimum wage rates throughout Europe rose by more than 50% above increases in living costs.

12 of the 26 countries that operate legal minimum rates revised them on January 1st. In all of these countries, with the exception of Turkey, the changes were at or significantly higher than the level of annual price inflation. In the Czech Republic, for example, minimum rates rose by 7.2% against an annual inflation rate of 2.6%.

The level of the pay safety net remains a highly controversial question in most European states. Minimum rates have been frozen by the Dutch government since 2003 as part of its austerity programme, whilst in France, the introduction of the 35-hour week led to widely differing rates that have only just been standardised. In Spain the socialist government of Jose Zapatero relented last week to trade union pressure by agreeing to index minimum wage rates. In Bulgaria, the government's desire to raise the minimum wage by 25% later this month has been strongly opposed by the International Monetary Fund, but in Russia, the state Duma (parliament) has approved a series of increases in minimum rates that will give rise to an 83% increase over the period from December 2004 until May 2006.

The weakening of sectoral collective bargaining in Germany has recently led politicians to suggest that a statutory minimum wage should be introduced, particularly as negotiated wage rates continue to differ between the east and west German Lander. This debate is likely to resurface during 2005 with Chancellor Schröder's reforms obliging unemployed people to take low paid jobs.

Although the introduction of statutory minimum rates might create an inflationary ripple throughout a country's economy, there is little evidence to suggest that it causes any lasting economic damage. A recent study carried out by the London School of Economics concerning the 1999 introduction of a minimum wage in the UK found that the reform only affected 6-7% of all workers, and that its economic impact only lasted for the two months following the introduction of statutory minimum rates.

According to Robin Chater, Secretary-General of the Federation of European Employers (FedEE), statutory minimium wage rates appear to have a stabilising affect on pay levels in countries where they are in force." He points out, however, that "the problem for some states such as Portugal and many poorer eastern European states is that minimum rates remain well below the level of subsistence and do not provide a realistic starting point for company pay scales."

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2005 is set to be a year of transition and uncertainty in the European Union. At a political level, governments will be striving to gain the backing of citizens for the new EU constitution, whilst social and employment ministers will continue their struggle to put some substance into the Lisbon agenda's goal of making the EU the most competitive and dynamic knowledge-based economy in the world by 2010. Towards the end of 2005, negotiations on EU membership will begin with Turkey, a country that could become a powerhouse for future economic growth throughout the region.

The EU's textile industries will come under severe pressure due to the WTO's removal of trade quotas, whilst the processes of privatisation and market liberalisation (especially in the energy sector) will near completion in many new EU states such as the Czech Republic. 2005 is also the year when the EU's Emission Trading Scheme will begin, a measure that is sure to place increasing demands on companies to reduce CO2 and other atmospheric pollutants.

Luxembourg takes over the EU Presidency on January 1st 2005. This affluent, landlocked state is no longer the smallest in the EU, but future arrangements for shared presidencies will mean that this is the last time it presides over Europe on its own. One of the principal tasks for Luxembourg Prime Minister Jean-Claude Juncker will be to arrange for Bulgaria and Romania to sign up to join the EU in 2007.

Politicians and European Commission officials will need to focus on demystifying the operation of the EU for ordinary citizens and reducing the administrative burden placed upon employers by public bodies. Under the UK's presidency during the second half of 2005, we may even see a modest level of deregulation as EU measures are directed towards establishing the conditions to compete with flexible and low cost production areas in the Far East.

2005 will be crunch time for several important EU proposals, outstanding Directives, and European Court of Justice decisions in the employment field. During the next few months, for example, the European Court of Justice (ECJ) is due to issue its ruling on North-Western Health Board v Margaret McKenna (C-191/03). If the court follows the advice of its Advocate-General, employers across Europe will have to make extensive modifications to their sickness absence policies.

According to Robin Chater, Secretary-General of the Federation of European Employers (FedEE), 2005 is the year in which the EU truly needs to prove itself as a competitive economy. "The pace of change is certainly not slackening at a European level," he said today. "The recent conclusion of a social partner agreement in the European chemical sector, for example, shows how rapidly new labour relations structures can emerge to challenge employers' strategies and assumptions."

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Every employer knows that being taken to court is a costly and time-consuming process, but the risks of court action are particularly high in some European countries and foreign companies are even more vulnerable than local employers.

A typical large company in Belgium can expect to defend 28 court cases brought by present or former employees every year, but a similar firm in Sweden faces an average of only one case every ten years. According to FedEE's litigation league table, Belgium ranks with Poland and the Netherlands as one of the three litigation capitals of Europe, whilst employers in Sweden and Finland rarely need to enter a courtroom.

So what makes employees so keen to go to law in some countries and not in others? In Scandinavia, despite the mass of employment legislation, there are many ways for employees to resolve disputes without the need for court action. In Belgium, however, although it is relatively easy for employers to dismiss staff, there is no formal system for dispute resolution outside the courts.

In the Netherlands, litigation figures tend to be inflated by the need for permission from a court or the regional employment authorities before an employee may be dismissed. In the Slovak Republic, the volume of cases is affected by the sheer amount of time taken to get through the courts - an average of 22 months. And if formal conciliation processes do not work, they will in themselves serve to delay litigation - a particular problem in Poland, Spain and Italy.

UK employers often complain that they face an excess of tribunal applications, but the number is modest by European standards and only one in every four applications leads to a tribunal hearing. From October 2004, the number of UK applications can be expected to fall as statutory dispute resolution procedures take effect.

FedEE's principal purpose is to educate HR professionals in how to avoid needless litigation. Our comprehensive employment law programme has become a key resource in this field since its launch two years ago, offering 24/7 access to the expertise of top legal practitioners in different European countries. Now, with the introduction of on-line certification, HR professionals have a standard by which they can measure their knowledge of international employment laws.

With our new certification scheme, managers can assess the knowledge of their HR staff and deal with any gaps in their expertise. Training is offered in the form of audio-visual webcasts covering 16 different countries, which may be viewed on-line in the members' area of the website. On-line assessment is on a country-by-country basis and certificates are available as soon as a pass level has been achieved. These have been designed so that they may be printed for display purposes, attached electronically to a CV, or incorporated into the new 'Europass' due to be introduced by the European Commission next year.

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Today, more companies than ever are establishing operations across the European Union. But how well-informed are managers about the employment laws in the countries where they set up shop? Compliance has become a critical element in the success of EU expansion, yet many companies are getting it seriously wrong.

Hiring and firing staff in Europe is surrounded by legal pitfalls. For example, an employment contract in France will not be valid unless it is written in French. In the Netherlands, no-one may be made redundant until the employer has gained prior permission from the regional employment office or a court. Other areas of employment law may be complex in their detail; if an employee wishes to change to part-time hours in Germany, their employer's right to refuse depends on whether it is a general request, or within the context of parental leave.

The penalties for getting it wrong can be severe. Earlier this month, the plant manager of an Italian snack food manufacturer faced accusations in a French court that he had ordered the removal of production lines without first consulting the plant's workforce representatives. If the case is lost, he could face a substantial fine and one year's imprisonment. In Germany, over 600,000 cases are brought before labour courts each year. This means that a typical company with around 1,000 employees must find the resources to defend a new tribunal case once every three weeks.

FedEE's on-line employment law programme has become a key resource in this field since its launch two years ago, offering 24/7 access to the expertise of top legal practitioners in different European countries. Now, with the introduction of on-line certification, HR professionals have a standard by which they can measure their knowledge of international employment laws.

With FedEE's new certification scheme, managers can assess the knowledge of their HR staff and deal with any gaps in their expertise. Training is offered in the form of audio-visual webcasts covering 16 different countries, and these may be viewed directly on-line or downloaded for internal presentations. On-line assessment is on a country-by-country basis and certificates are available as soon as a pass level has been achieved. These have been designed so that they may be printed for display purposes, attached electronically to a CV, or incorporated into the new 'Europass' due to be introduced by the European Commission next year.

Speaking at the formal launch of the new certification scheme, FedEE's Secretary-General, Robin Chater, said, "No company operating in more than one European country can afford to ignore this important resource. I am sure that FedEE certification will rapidly become an essential stepping stone in the development of human resource professionals at a European level".

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What are the prospects for human resource management in the ten countries joining the European Union on May 1st 2004? In the second of a series of briefings on EU accession, the Federation of European Employers (FedEE) examines the development of the HRM approach and contrasts the different reporting relationships and functions to be found in typical human resource departments throughout Europe.

Across the ten EU accession states there are few signs of the strategic, business-orientated approach that sets HRM apart from the routine activities of traditional personnel management roles. Many eastern European countries joining the EU are adopting the top-heavy German two-tier board structure and find it hard to shake off their past bureaucratic approaches to HRM.

Companies operating in the accession states face management tasks that are vastly different from elsewhere in the EU. The working week is longer than in the established EU states, with more than twice as many people employed on shifts, working on Sundays and having second jobs. The typical worker in an accession country has less autonomy and more years of service with their current employer than their counterpart in an established EU country.

According to Robin Chater, Secretary-General of FedEE, "the prospects for human resource management in countries such as Poland and the Baltic states may well be influenced by the sharp drop in unionisation that is taking place throughout eastern Europe and the need to manage individual work commitment as the economies grow rapidly to reach western European levels."

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With all to play for, what can the former communist countries joining the European Union on May 1st learn from the experiences of existing EU states?

FedEE's review of the prospects for eight of the new European Union (EU) member states has concluded that they need to avoid the mistakes of most current EU members. Only five countries stand out as examples to follow - the Netherlands, Ireland, Finland, Austria and Germany.

Above all, Germany was singled out for its high level of labour productivity, wage stability and "capacity to modify its employment policies in a relatively painless way".

Despite some criticism of its continued east-west wage divide and inability to fully utilise the skills and potential of its female workforce, Germany was ultimately considered the best model for the new member states to follow.

The review is part of a series of briefing papers on EU accession by FedEE's Secretary-General, Robin Chater. Speaking at its launch today Mr Chater said that:

"The accession states are likely to experience a threefold increase in their labour productivity during the next five to ten years. The choice is open to them to use this improvement in competitivess wisely and become the powerhouses of the new Europe, or to fritter it all away in trying to buy all the trappings of western society before establishing high-performance market economies".

He went on to point out that "The experiences of countries such as Greece, Portugal, Spain and Sweden that have joined the European Union during the last 25 years suggest that it is all too easy to waste the opportunities that EU entry can bring".

© FedEE Services Ltd

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