HR European news roundup - January 2010

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A selection of the latest European HR news from the Federation of European Employers (FedEE).

ECJ: Qualifying clause blocks age discrimination claims

The European Court of justice has just issued its findings in two age discrimination cases.

* The first case concerned the refusal of the fire service in the German city of Frankfurt am Main to consider a job application for an intermediate career post because the applicant had exceeded the maximum age limit for such a post. The court concluded, however, that "the maximum age for recruitment may be regarded, first, as appropriate to the objective of ensuring the operational capacity and proper functioning of the professional fire service and, second, as not going beyond what is necessary to achieve that objective." (Case C -229/08)

* In the second case the court was asked to rule on whether it was lawful for panel dentists in Germany to be required to retire at age 68. In the court's view the age limitation could be construed as discriminatory because it did not apply to dentists in normal practice. However, it would be up to a national court to decide if such a practice may still be legitimate because its aim was "to share out employment opportunities among the generations in the profession of panel dentist, if, taking into account the situation in the labour market concerned, the measure is appropriate and necessary for achieving that aim." (Case C -341/08).

Both cases illustrate the growing importance of a provision in the EU Equal Treatment Directive (2000/78/EC) which states that discrimination on grounds of age may be lawful where it can be "objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary". Thus far, there remains insufficient case law at a national level to determine whether employers have successfully argued that the dismissal of older workers is justifiable on the grounds that opportunities need to be opened up for the employment of younger workers.


Germany: 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.

Sweden: Sharply differing perspectives ahead of pay round

The year 2010 marks the beginning of the next major collective bargaining round in Sweden. Some 80 percent of all sectoral and other multicompany collective agreements are subject to renewal, affecting 3.3 million employees.
The current downturn has particularly hit the engineering sector where 20 percent of workers are now unemployed. Blue collar trade unions have also lost around 150,000 members since the last wage round in 1997.
Although LO, the principal trade union confederation, is calling for wage increases of SEK 620 (EUR 59.43) per month for full-time employees, the Confederation of Swedish Enterprise will resist any change in centralised wage rates, with any improvements confined to company level. More flexibility too will be sought, with the greater use of annualised hour arrangements.


Average negotiated wage rates in Austria rose over the year to November 2009 by 3.2 percent. The increases varied from 2.9 percent for skilled workers to 3.2 percent for unskilled workers. Women fared less well than men with an average increase of just 3 percent over the same period.

The French Supreme Court has found that a company's code of conduct drawn up to comply with US Sarbanes Oxley rules may not require employees to obtain the prior approval of their employer before using any internally transmitted information for their own in-house or external communications. The Court also ruled that a company's whistleblowing provisions could not cover such fields as intellectual property rights, confidentiality, discrimination or workplace harassment. (Appeal 08-17.191 no 2524)

A new statutory minimum wage of EUR 8.02 per hour has been agreed by the German government for the waste management industry. The Labour ministry is currently drawing up a wage regulation and it is likely to come into force by the end of March 2010.

The Dutch government has decided to expand its retraining scheme to include all employees who have received unemployment benefit for up to four weeks, as well as those threatened with dismissal. The payment of up to EUR 2,500 per employee has not been very popular to date because job applicants have not wanted to admit that their positions have been at risk.

The national minimum wage in Portugal rose on January 1st 2010 by EUR 25 to EUR 475 a month. This move is in line with the government's long established policy of raising the minimum wage to EUR 500 by 2011.

Employers in Romania who hire staff without establishing a written employment contract will now be subject to a fine of RON 4,000 (EUR 973). (Law 331/2009)

Russian Federation:
Payroll tax in the Russian Federation has now been replaced by mandatory social security contributions, payable directly to the pension authorities. Although contribution rates will initially be the same as under the payroll tax system, from next year the rate will rise. With effect from 1 January 2011 the employers of those earning up to RUB 415,000 (EUR 9,713) a year will be subject to a social security contribution rate of 34 percent, but all income in excess of that figure will be exempt.

A total of 11.86m new employment contracts were registered in Spain between January and October 2009, of which 90.4 percent were on a fixed-term basis. Temporary contacts have averaged 73 days this year, compared with 79 days in 2006.

United Kingdom:
The English Court of Appeal has ruled that employees working in another EU member state on a UK fixed-term contract have the right to claim their contract is permanent if it cannot be 'objectively justified'. The fact that internal staff regulations permitted the use of nine-year fixed-term contracts did not, in itself, provide such justification. The Court also decided that employees could bring claims before English employment tribunals for unfair and wrongful dismissal even though their employment took place outside the United Kingdom. (Duncombe and others v Secretary of State for Children, Schools and Families: EWCA Civ 1355 (2009)).

Copyright: FedEE Services Ltd 2009

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