Latest News from the Federation of European Employers (FedEE)

Belgium: new agreements to benefit posted workers

An agreement between Belgium and Japan came into force on 1 January 2007 that will improve the position of individuals temporarily on assignment in one country from the other.

Employees posted by their employer to the other signatory country for periods of up to five years will in future be exempted from social security contributions in their host state, provided that they continue to pay them in their home state.

This period may even be extended beyond five years with the consent of the relevant authorities. Employees already on assignment and Belgian company directors who are officially self-employed will also qualify for the new exemption.

In a parallel move, Belgium has entered into an agreement with India to rectify the current situation where Indian workers posted to Belgium could find that they are not covered by the social security systems of either state. The agreement will give exemption from host state social security obligations provided that such payments are made in the home state.

Moreover, posted workers will also have the right to repatriate any accrued pension benefits from the host state to their home state on their return.

ECJ: Two fundamental rights in oppostion

A case recently heard by the European Court of Justice seeks to resolve a long-standing legal paradox that amounts to a questioning of the primacy of economic versus social interests in the operation of the European Union.

The case involves the reflagging of a vessel in another EU member state and the resulting conduct of a trade union to frustrate that action by seeking to impose a collective agreement in the country where the vessel's owner was situated.

This train of events raises the question of whether an undertaking's freedom of establishment rights (and rights under specific maritime regulations) outweigh the rights of a trade union to take strike action.

The outcome will be of significance to all multinational companies that are subject to collective bargaining in two or more EU member states. International Transport Workers' Federation and Finnish Seamen's Union vs Viking Line (C-438/05).

Sweden: New ITP pension plan

Sweden's new ITP cross-industry pension plan will now become effective on 1 July 2007, six months behind schedule. The defined contribution plan will gradually replace the former defined benefit plan. It will initially apply to all salaried 'white collar' employees born in or after 1979, but employees on the higher salary levels will be able to switch from the old ITP to the new scheme. A proportion of the old ITP plan will also be restructured on a defined contribution basis.

Contributions to the new plan will amount to 4.5 percent of annual salaries up to 333,750 kronor (EUR 37,045) and 30 percent of salaries above that threshold.

Before the new plan can be introduced into an organisation, approval from relevant professional bodies must be achieved and companies must register with an approved pension provider. Final approval has yet to be given to providers by the pension intermediary organisation, 'Collectum'.

Switzerland: Company to sue union over strike

The company Swissmetal has decided to sue the trade union Unia for losses arising from what it claims to have been an illegal strike last winter at its Reconvilier plant in western Switzerland.

The company argues that the strike took place in contravention of the metallurgy sectoral collective agreement, but Unia contends that the peace clause in the collective agreement only applies to the relationship between itself and the employers' association that signed the agreement. Thus, it argues, there was no contractual relationship with Swissmetal.

It is rare for a company to sue a trade union over strike activity and Unia's principal defence will provide an interesting test case for the legal standing of employers' organisations as signatories of collective agreements. Courts have long operated on the general assumption that the signature of an employers' association binds, at the very least, all members of the association. If Unia is successful with its legal argument, it could seriously question the basis of multicompany agreements in Switzerland and even elsewhere in Europe.

Other European news in brief:

Europe

Minimum statutory wage rates rose on 1 January 2007 in Bulgaria, Estonia, Hungary, the Irish Republic, Latvia, Luxembourg, Portugal, Romania, Spain and Turkey. For the new monthly rates, please visit our review of minimum wage rates.

http://www.fedee.com/minwage.html

France

The French National Institute for Research and Safety (INRS) has carried out a detailed study of 2,000 companies to discover the level and extent of exposure to carcinogenic substances at work.

The study has revealed that, at the time of the survey, 42,000 workers were exposed to formaldehyde, 35,000 to benzene, 13,500 to toluene, 5,600 to PVC and 4,000 to phenol.

These figures were initially revealed to the labour inspectorate, which has since carried out detailed investigations into the nature of such exposure. Its findings will form the basis for new health and safety measures to be announced by the labour minister, Jean-Louis Borloo, later this year.

Germany

German pharmaceutical and health care products group Fresenius AG has received shareholder backing to become a European Company (Societas Europaea, or SE). This will allow it to carry out business in other EU countries without having to operate under different company laws. It joins a select club of other companies that have now made the change to SE status, such as Allianz, Elcoteq, MAN Diesel and Nordea.

The Netherlands

The Dutch Supreme Court's Solicitor-General has issued an opinion stating that the legal costs arising from a dismissal case should be tax deductible for an employee. This facility existed previously, but was removed by a tax reform in 2001. There are 15,000 dismissal cases receiving full hearings in the Netherlands each year and in the five cases that prompted this statement the legal costs averaged EUR 4,669.

Malta

The first stage of Malta's state pensions reform programme began on 1 January 2007. Those aged under 55 on that date are now subject to an increase in their retirement age and those aged 45 or less will have to work until they reach 65. Once fully operational, the new pensions system will be based on a maximum contribution period of 40 years.

Individual pensions will be calculated on the best 10 years of contributions out of the last 20 years in an employee's working life. The maximum pensionable income ceiling will also be increased to 9,000 lira (EUR 20,914) per year.

Ukraine

A Ukrainian cabinet resolution approving a number of staged increases in the statutory minimum pay level has been backed by 376 deputies in the national parliament. The monthly rate will rise from 400 hryvnias (EUR 60.95) to 420 hryvnias (EUR 64.00) on 1 May 2007, to 430 hryvnias (EUR 65.52) on 1 August 2007, and to 460 hryvnias (EUR 70.10) on 1 December 2007.

United Kingdom

The UK government has just published its white paper 'Personal accounts: a new way to save'. This sets out proposals for a new compulsory savings plan for employees not enrolled in a company pension scheme.

From 2012, employers will be required to pay into the plan 3 percent of an adult employee's salary, up to a maximum payment of GBP 855 (EUR 1,271) per year. This will be topped up to 4 percent through tax relief. Employees will pay in a further 4 percent or more, with an upper limit of GBP 10,000 (EUR 14,862) during the first year and GBP 5,000 (EUR 7,431) in subsequent years.

16 January 2007

Source: The Federation of European Employers (FedEE) http://www.fedee.com

[Copyright: FedEE Services 2007]