Latest news from the Federation of European Employers (FedEE)

Denmark: Anti-poaching law comes into force
The Danish Act on non-solicitation and no-hire restrictions has just come into force. A new agreement between companies limiting the solicitation or employment of a company's existing employees will now only be valid if the employees concerned are also a party to the agreement and are given monetary compensation for the imposition of the restriction.

A novel feature in this legislation is a provision for backdating its application. From July 1st 2009, any existing restrictions concluded before July 1st 2008 will also be covered by the Act. Companies therefore have one year in which to bring their non-solicitation and no-hire arrangements into line and make the subjects of agreements party to them.

ECJ: Court to take second look at forced retirement
The European Court of Justice (ECJ) has recently heard submissions in a UK case concerning mandatory retirement at the age of 65 (R v the Incorporated Trustees of the National Council on Ageing,  better known as the Heyday case) This case has been  overtaken by an ECJ ruling last October about retirement  clauses in a Spanish collective agreement (Palacios v Cortefiel Servicios SA) where the court found that compulsory retirement was lawful if 'objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market... provided that... the means put in place to achieve that aim of public interest do not appear to be inappropriate and unnecessary for the purpose'.

Irwin Mitchell, the law firm retained to present the Heyday case, has claimed that the Spanish case has helped rather than hindered its own arguments because it had been previously held that retirement dismissals were not within the scope of the EU Equal Treatment Framework Directive (2000/78/EC). Furthermore, the Spanish case hinged on the need for justification when applying mandatory retirement ages and, in the view of Irwin Mitchell, the UK has not presented clear justification for introducing regulations allowing forced retirement.

Ever since last autumn's UK Employment Appeals Tribunal case of Anna Johns v Solent SD, where the claimant was permitted to have their case stayed pending the outcome of the Heyday submission to the ECJ, a number of law firms have advised clients forced into retirement to submit claims to an employment tribunal in the hope that they would be stayed pending the Heyday ruling. In addition, there are many thousands of public sector workers who will be allowed to make a claim back to October 2006 if it is found that the UK incorrectly implemented age discrimination provisions in the Equal Treatment Framework Directive (2000/78/EC).

A ruling on this case from the ECJ is expected early next year.

EU: Launch of revised social agenda
The European Commission has just published a comprehensive
revision to its social agenda. This will include proposals for:

• A new anti-discrimination directive covering age, sexual orientation, disability and religion/belief.
• Amendments to the European Works Council Directive (See MAJ 2008/13)
• The application of a recently concluded social partnership agreement in the maritime sector.

The Commission will also publish discussion documents and 'green papers' on a wide range of social issues, including a report on ways to improve the social inclusion of Roma people.

Irish Republic: Problems ahead for pay talks
Negotiations over the next phase of Ireland's framework social partnership agreement 'Towards 2016' have been underway since April 2008.

When the agreement was launched in 2006, it included four staged pay increases for the private sector running through until September 2008. Although the agreement includes a clause allowing employers to opt out of the scheduled payments due to an 'inability to pay... in circumstances where this would result in serious loss of competitiveness and employment', parties to the agreement probably did not envisage that the economic climate twenty seven months hence would be so radically different. Today, many companies face competitiveness problems and calls have been made for a pay freeze in the public sector.

Talks have just resumed, but with the government still reeling from the rejection of the EU Lisbon treaty by Irish voters there is little appetite amongst ministers and officials to get into a drawn-out exchange with employers or trade unions. A future deal will be difficult to sell to trade unions given that the economic climate severely limits the scope for pay rises over the next 2-3 years.

Netherlands: Incentive to reduce commuting distance
A task force set up by the Dutch government to examine ways of reducing traffic congestion will, according to the newspaper Algemeen Dagblad, recommend that the current maximum tax-free expense allowance for an employee relocating their home closer to their workplace should be increased from 5,400 euros to 25,000 euros. Under existing tax rules, employers may provide such an allowance to employees who travel more than 30 kilometres to work per day if they decide to move their home to within a 10 kilometre radius from work.

Meanwhile the Dutch transport minister, Camiel Eurlings, has suggested a more immediate way to reduce travel congestion with a proposal to remove the 80 km per hour speed limit on motorways. According to the minister, congestion has increased average commuting time by 53 percent since 2000 and has cost the economy 2.7 to 3.8 billion euros. However, his proposal may be subject to a court challenge by environmental groups claiming that it will add to air pollution.

Other European news in brief

Belgium
An amendment has been made to the Belgian national collective agreement on telework (CLA 85) making it necessary for the teleworking agreement (required before teleworking is introduced) to contain a clause specifying the location of a workstation in the employee's home and normal working times. If an injury to the teleworker takes place outside the workstation or during times not normally worked, then the burden of proof will be upon the teleworker to prove that the injury is work-related.

Finland
Merger plans involving six Finnish trade unions appear
to have run aground over issues about collective bargaining and voting rights for retired members. Electricians working in the metal industry wish to have their own agreement and shop stewards whereas the aim of the proposed combined union is to have one collective agreement and a single union representative structure at each workplace. A further issue is the unwillingness of the metalworkers' union to give up voting rights for retired members.

France
The French minimum wage (SMIC) rose on July 1st by 0.9 percent to 8.71 euros per hour. The SMIC was previously increased by 2.3 percent on May 1st this year.

Germany
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 percent over the year to April 2008 and new orders rose by 16.7 percent. This has helped to produce a fall in the federal unemployment rate from 8.8 percent in June 2007 to 7.5 percent 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.

Italy
Average gross wages and salaries per employee in Italy rose over the year to Q1 2008 by 6 percent in the industrial sector and 5.3 percent in the services sector. The biggest increase in industry took place in electric, gas and water utilities (+7.15), whilst in services the biggest increase was in financial intermediation (+14.1 percent) and in hotels and restaurants (+6.6 percent).

United Kingdom
The UK Government Equalities Office (GEO) has
still not published its long-awaited Equalities Bill. However, the principal elements of the bill were made available last week in a government paper entitled 'Framework for a Fairer Future'. This sets out a package which includes greater scope for enforcing private sector equality measures through contract compliance, the banning of secrecy clauses that prevent people discussing their own pay and a provision extending the scope for using a positive action approach when hiring new staff. The GEO will shortly publish a more detailed paper on the content of the Equality Bill, setting out the government's response to last year's consultation.

July 2008

Copyright: FedEE Services Ltd 2008