Our regular human resources management news roundup from across Europe from the Federation of European Employers (FedEE).

"EUROPE: RINGING THE CHANGES FOR THE NEW YEAR

Slovenia took over the EU's six-month rotating presidency on
January 1st 2008. Other important changes in Europe
that took place on New Year's Day include:

AUSTRIA: Introduction of minimum pay level of 1,000 euros per
month in certain economic sectors.
AUSTRIA: New regulations for parental leave came into force.
CZECH REPUBLIC: Employers became responsible for paying first 14
days of sick pay.
CZECH REPUBLIC: Parental leave options came into effect,
providing for 2, 3 or 4 years' leave at different benefit
levels.
CZECH REPUBLIC: Employees dismissed for flagrant violation of
duties no longer eligible for unemployment benefits.
CZECH REPUBLIC: Czech anti-discrimination law came into force.
CYPRUS AND MALTA: Both countries adopted the euro.
ESTONIA: Parental Benefits Act Amendment Act came into force and
extended the period for benefit payments.
EU: European year of intercultural dialogue began (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 (see
below).
FRANCE: Smoking ban became effective in bars, casinos, tobacco
shops, discotheques, hotels and restaurants.
GERMANY: Minimum pay introduced in the postal sector.
GERMANY: Law on insurance contracts came into force giving new
rights for life insurance policyholders.
GERMANY: Partial smoking ban became effective in Bavaria.
HUNGARY: National pay policy began in the private sector (see
below).
HUNGARY: Labour market opened to almost all Romanian workers.
NETHERLANDS: Amsterdam's Schiphol airport brought 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 (see below).
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 came into force.
SLOVAKIA: Amended social insurance law came into force,
implementing second-pillar pension system reforms.
SLOVAKIA: The general euro introduction law became effective,
one year ahead of the expected adoption of the euro as
Slovakia's national currency.

NETHERLANDS: DISMISSALS VIA COURT COST MORE THAN VIA CWI

According to a study of 2006 data carried out by the Hugo Sinzheimer Institute, it costs employers in the Netherlands around 4.0bn euros each year to dismiss employees. It was found that each dismissal cost on average 17,000 euros in the private sector and 33,400 euros in the public sector. The principal cost elements were the severance package itself, payment of ongoing salaries until a court hearing or Centre for Work and Incomes (CWI) decision, administrative overheads and legal fees.

Average redundancy packages amounted to 6,000 euros and ongoing salaries 6,800 euros. Around half of all dismissals were carried out via the CWI and in about half of these cases employers did not have to pay any redundancy compensation. In cases that went to court for dissolution, 90% of employees received compensation. The average compensation received by an employee via a court was three times higher than individual dismissals via the CWI.

Higher-paid employees also tended to gain more generous severance packages than lower-paid employees. On average, an employee made redundant with a monthly income of up to 2,700 euros received two months' salary. Between 2,700 and 3,600 euros, this rose to three months' salary, whilst those on monthly salaries over 3,600 euros received 5.4 months' salary.


SWEDEN: TIGHTENING OF SICKNESS BENEFIT RULES

The Swedish government has issued a consultation document setting out proposals to reduce sickness benefit fraud. These include new assessment procedures for individuals who have claimed benefit for three months to see whether they could work for their existing employer in a different position. After six months, their capabilities would be assessed against other available jobs.

Claimants awaiting an operation or with an ongoing serious medical condition would be able to receive benefit for up to 30 months, but those regarded as at least partially fit to work would be required to return to work or try out a suitable new job. They would retain the right to return to their old position during a trial period. However, if they refused to work in either their old job or a new position they would lose their entitlement to sickness benefit.

ECJ: 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)

Other European news in brief:


BOSNIA-HERZEGOVINA:
The Balkan state of Bosnia-Herzegovina has initialled a stabilisation and association agreement with the European Union (EU). This is the first step towards EU entry and the main focus for the coming year will be upon police reform. Ethnic tensions remain a key concern for EU negotiators, but the agreement will encourage Bosnia's Serbs and Bosniak Muslims to work more closely together and achieve otherwise difficult compromises.

FRANCE:
The French Supreme Court has ruled that if a company relocates to another country in order to benefit from tax and other incentives, the move itself cannot be used as justification for redundancies. This is because it does not amount to 'action necessary to protect the competitiveness of the group's business', especially if it can be established from newspaper or shareholder reports that the overall business is healthy. For this reason, any consequent dismissals on economic(redundancy) grounds will be invalid.

GREECE:
The Greek Supreme Court has ruled that although employees who are trade union representatives enjoy a high level of employment protection, their dismissal is not an abuse of power by their employer if they acted "beyond the limit of union activities." The case in question involved a union representative who told a radio station that his company leased buildings that were not fit for habitation. The employee was dismissed and sued for slander after a subsequent study found that the buildings were in sound condition.

HUNGARY:
The two sides of industry have finally reached agreement with the Hungarian government over private-sector wage increases in 2008. The deal establishes a recommended range for negotiators of 5% to 7.5%. This outcome compares with a 10% claim from trade unions, a 5% offer from employers and an initial 4.5% proposal by the government. According to the Hungarian National Bank, the country will only be able to meet its inflation targets if pay rises can be kept within 6% next year.

SWITZERLAND:
The Swiss canton of Obwalden is the first canton to adopt a flat-rate tax system for individual income tax. The decision to cut income tax to 1.8% follows a referendum which secured support for the change from over 90% of the canton's electorate. The tax will be levied on all personal income above 10,000 Swiss francs (6,052 euros) per year. Residents also voted in favour of a cut in the corporation tax rate from 6.6 percent to percent.

TURKEY:
The Turkish gross minimum wage for workers aged 16+ has been increased by 4percent to 608.4 new lira (354.07 euros) per month.
A further increase of 5 percent will take place on July 1st 2008 to bring the gross minimum wage to 638.7 new lira (371.69 euros) per month.

Copyright: FedEE Services Ltd 2008

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