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You are here: Home Employment Employment Information European HR news roundup - November 2008

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14/11/2008European HR news roundup - November 2008

European HR news roundup - November 2008 Our latest roundup of news from the Federation of European Employers (FedEE).

EC: Autumn economic forecast
 
The European Commission's autumn economic forecast indicates that GDP growth across the European Union will slow to 0.2 percent in 2009 and the unemployment rate rise by 0.8 percent. However, EU consumer price inflation will fall from 3.9 percent to 2.4 percent. In 2010, GDP is expected to rise by 1.1 percent, although unemployment will continue to worsen due to improvements in labour productivity. In Germany, Europe's largest national economy, no growth is forecast for 2009, although the unemployment rate is expected to remain fairly stable and average earnings are expected to rise from 2.5 percent to 3.1 percent in 2008.

EU: Clarification of applicable law

All employment contracts in the EU signed after 17 December 2008 will be subject to EC Regulation 593/2008 unless they contain a specific 'jurisdiction clause'.

This regulation states that the applicable law for an employment contract is that in force in the country where an employee 'habitually works' - even if they are temporarily assigned to work in another EU member state. If the appropriate jurisdiction cannot be determined in such a way, the applicable law shall be that of the country where they were hired. On rare occasions where the nature of the job 'taken as a whole' does not comply with either of these criteria because the contract is 'connected to another EU member state', then the law of that state will apply.

Czech Republic: Legislative changes in the pipeline

Consultations on further amendments to the Czech labour code will shortly be completed. The proposed changes include increased probationary periods, an extension of fixed-term work limits to three years, a reduction in statutory compensation during the operation of non-compete restrictions and provision for managerial salaries to include an implicit element covering overtime hours.

A new bill on private pension schemes was recently approved in principle by the Czech cabinet. Under this planned bill, current pension funds would be converted into pension companies offering a wide range of services to clients. The obligation to guarantee minimum levels of return on pension funds would be repealed, although an option would exist for a scheme in which the original investment would be fully protected. The full draft bill will be submitted to the cabinet by mid-January 2009 and could come into force as early as January 2010.

Further legal changes in the pipeline are the delayed employee sickness insurance provisions effective on 1 January 2009, and the new provisions for employee accident insurance that are due to come into force on 1 January 2010.

Germany: First major test for AGG law

The presiding judge at the Labour Court in Wiesbaden, Germany announced that a decision will be given on 18 December 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 EUR 433,000 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 was given a different position with lower earnings potential, whilst her old position was 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 EUR 7,000 in settlement of the claim was 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 so far dragged on through the labour court with hearings in February, May and October 2008. 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.

Italy: Talks falter on bargaining reforms

Discussions about changes in the structure of collective bargaining took place since early summer between Italy's three principal trade union confederations (CGIL, CISL and UIL) and the employers' federation Confindustria. Italy's traditional two-tier system of industry and company-level agreements is breaking down and new arrangements are long overdue.

Both sides agreed that the normal duration for future agreements should be three years (down from four years at industry level), but employers want to increase the scope for variations in pay at a local level and make pay increases more dependent on company productivity. They also proposed that a ban on industrial action should apply from six months before an agreement is due to expire, until one month after the expiry date.

The CGIL confederation effectively abandoned negotiations, but talks continue with the remaining two union confederations. In mid-October, a position paper was drawn up by CSIL setting out the current position of each participating union on 'reform of the contractual model'. However, without the involvement of CGIL, the largest confederation, little worthwhile progress can be made.

OTHER EUROPEAN NEWS IN BRIEF

Belgium:
An analysis of 216 collective agreements concluded during company restructuring exercises in Belgium over the period 2006 to 2008 uncovered a number of important trends. The study, published by law firm Claeys and Engels, reveals that average consultation periods rose from 80 days in 2006 to 88 days in 2008. Blue-collar workers are progressively being given longer notice periods and more companies are now involved in helping redundant employees to find new jobs.

Bulgaria:
The Bulgarian education and science minister, Daniel Vulchev, announced plans to require that all advanced qualifications in higher education should be printed with a centrally approved and produced hologram. An estimated 250,000 counterfeit diploma and degree documents were produced by Bulgarian fraudsters, each at a cost of around BGN 2,000 (EUR 1,023). The addition of holograms will not, however, put an end to the trade in false qualifications for older workers.

EU:
A study carried out by the International Labour Organisation (ILO) concluded that a minimum wage covering all 27 EU member states would be unrealistic because it would have to be set too low for many countries. The co-coordinator of the study, Daniel Vaughan-Whitehead, told Reuters that 20 of the 27 countries presently operate mandatory minimum wage systems that range widely from EUR 114 to more than EUR 2,000 a month.

France:
France's junior employment minister, Laurent Wauquiez, warned large employers that they should not use the global economic downturn as an excuse to undertake mass redundancies or move production abroad. In a recent interview on RTL radio, he claimed that his department established a surveillance and intervention mechanism to ensure that companies would only take actions adversely affecting their workforce if they were in genuine financial difficulties.

Germany:
Engineering employers in the German state of Baden- Wuerttemberg offered trade union IG Metall a pay deal worth 0.8 percent in November and a further 2.1 percent from January 2009. This is the first engineering pay offer in the present round and could set the trend for further offers elsewhere in the sector.

Hungary:
Average gross monthly pay levels in Hungary increased by 7.2 percent over the year to August 2008. However, the increase was just 4.9 percent in manufacturing and 4.7 percent in construction.

Netherlands:
The Dutch cabinet agreed that legislative changes affecting companies will in future become effective on either 1 January or 1 July of the relevant year. There will also be a minimum period of three months between the publication of a bill and its introduction. According to a cabinet statement, this means that companies and institutions will have time to prepare for the new legislation. However, it will be possible for some exceptions to be made, especially when there would be a high cost to companies because of a delay.

Poland:
An amendment to the Polish labour code just came into force requiring employers to train and appoint staff to provide first aid in the workplace. Medical dressings,instruments, equipment and facilities will have to be provided on-site according to employee numbers and the risks that they face.

Portugal:
A survey report just released by Portugal's Board for Work Inspection reveals that 40 percent of female employees claim they 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.

Spain:
A study carried out by one of Spain's leading business schools, Esade, found that 39 percent of employees were absent from work during 2007. Surprisingly, 30 percent 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).

United Kingdom/Europe:
Earlier in 2008, the head of a leading UK law firm emailed colleagues to warn them about misuse of its taxi expense policy. As the downturn advances an increasing number of companies are looking at ways to reduce cost items such as employee transport, healthcare and entertainment. According to a recent report by business consultants Mercer, more than half of European companies are anticipating a cut in employee health benefits, whilst a survey by the UK's Institute of Directors found that around one-quarter of employers are making cuts in staff entertainment, including Christmas parties.

12 November 2008

Copyright: FedEE Services Ltd 2008.


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