During the reference period, three Directives in the area of social policy which we discussed earlier (see Report for Q1 and Q2 2019) were formally promulgated. Because of their likely impact on corporate practice and legal HR, we are coming back to these Directives with a brief outline and comments.
First, the Directive on Transparent and Predictable Working Conditions ('TPWC') was published on 11 July 2019 (Directive 2019/1152 of 20 June 2019, OJ, L 186). The TPWC Directive contains minimum rights for workers, particularly workers in the 'gig economy' or for those with unpredictable work patterns, including certain information rights, the right to take up another job in parallel with another employer, the right to request transition to another form of employment with more secure working conditions, limits on probationary periods, protection against adverse treatment (incl. dismissal) and the like. Member States have until 31 July 2022 to adapt or introduce national legislation in compliance with the Directive.
Some authors see this TPWC Directive as a very important step forward in the development of EU social policy, and indeed it goes far beyond its original intent (as a mere update of the old Written Statement Directive of 1991). Its personal scope is limited to 'workers' in the context of an employment relationship as defined by the law. It remains to be seen how national laws will evolve around workers in the gig economy to assess the actual scope of the Directive. The information rights contained in the Directive are a somewhat tightened version of the former 1991 Directive. Most importantly, though, the TPWC Directive extends some new basic rights to workers which may be quite relevant in the field, including prohibition of absolute exclusivity of services, some degree of predictability of working conditions, limits on on-call contracts, the right to request a move to more secure working conditions, free vocational training (which counts as working time), and protection against adverse treatment resulting from calling on these rights. With this Directive, it is said that genuine effect is being given to some of the principles in the European Pillar of Social Rights (2017).
We are in the process of preparing a comparative table indicating for all Member States (and beyond) to what extent national laws already comply with the Directive's provisions or require amendment. It will be issued and distributed before the end of October.
Second, the Directive on Whistle blower Protection ('WBP') adopted by the EU Parliament in April 2019 was formally approved by the EU Council on 7 October 2019. It is up for imminent publication in the Official Journal, and will come into effect 20 days after publication.
The WBP Directive seeks to strengthen the legal protection of whistle blowers within the EU by introducing minimum standards for the protection of persons reporting on breaches of EU law in a wide range of areas (incl public procurement, financial services, product safety and compliance, environment, food and feed safety, public health, protection of privacy and personal data, and the like). The protection extends to all reporting persons who acquire information in a work-related context, including those assisting the reporting persons, or facilitators or anyone who may suffer retaliation in a work-related context.
All companies with 50 or more workers and all financial services firms which are vulnerable to money laundering or terrorist financing irrespective of their headcount are required to set up and operate an internal whistleblowing reporting process. Such process should give employees and external persons the opportunity to report breaches of EU law through written, electronic, telephone or personal reporting means of communication. The reporting is supposed to cover beaches which have occurred or which are very likely to occur. The key concepts in setting up such process include (i) securing secrecy of the identity of the whistle blower(s), (ii) restricted access to the reported information or data (by appointment of an impartial person/department for follow-up on the report), (iii) clear information on the principles governing transmission of such reports to authorities and (iv) some procedural guidelines/guarantees (such as formal acknowledgment of receipt of the report within 7 days, and feedback to such report within 3 months). In addition, the member States are required to set up external whistleblowing reporting processes, in the context of which reporting persons may contact competent authorities. Similar principles to those governing the internal processes apply here.
Whistle blowers, i.e. all those persons who have reasonable grounds to believe that the information they report falls within the scope of the WBP Directive, are protected against any form of retaliation. This protection runs irrespective of whether the internal or the external reporting process is followed, and the protection is no longer conditional upon first reporting internally. However, public disclosure of (alleged) breaches may taint the level of protection granted to the reporting persons.
A wide range of acts have been classified as forms of retaliation, including termination, discrimination, negative appraisals, demotions, and threats or attempts of retaliation. In certain circumstances, the Directive reverses the burden of proof (notably where the claim of retaliation is based on the submission of a whistleblowing report followed by a suffered detriment). Finally, reporting persons shall be exempt from any allegations of breach of confidentiality (incl breach of data protection obligations or disclosure of trade secrets) and they cannot incur any liability resulting from the gathering of relevant information (provided no criminal offence was committed in doing so).
After entry into force, Member States will have 2 years to comply with the WBP Directive by introducing and/or amending national laws, and companies with between 50 and 250 employees will have an additional 2year period to set up internal whistleblowing processes.
Third, the Directive on Work-life Balance for parents and carers was published on 12 July 2019 (Directive 2019/1158 of 20 June 2019, OJ L 188).
The Directive introduces a number of rules designed to modernize the EU legal framework with the aim of better supporting a work-life balance for parents and carers, encouraging an equal sharing of parental leave regimes, and addressing women's underrepresentation in the labour market. It complements and strengthens rights which were previously extended through Directive 2010/18 (on parental leave, the result of a so-called framework agreement among the EU social partners).
More specifically, the Directive introduces the right to paternity leave (of 10 working days, at least paid by social security funding), setting the bar of current practices or laws among member States at a uniform level (currently only 17 Member States have such rules, of which 13 provide for paid leave). Moreover, the Directive introduces a right to parental leave of 4 months (before the child reaches the age of 8), of which 2 months cannot be transferred. The Directive strengthens the existing parental leave rights by guaranteeing paid leave (salary or social security benefits), by extending the time frame within which the leave can be taken, by securing part of the leave for fathers (so as to accomplish a better sharing of the leave), and by providing the right to paid leave for nearly all workers (irrespective of the nature, length and volume of the contract or the work). The Directive also introduces a right to carers' leave, where a worker providing personal care or support to a relative (or to a person who lives in the same household) is entitled to 5 working days' absence per year. Finally, Member States should allow time off from work on grounds of force majeure for urgent family reasons. The Directive does not require that any of these last two leaves (carer's leave, force majeure) are compensated.
In order to enhance the policy objectives listed above, the Member States shall also take the necessary measures to ensure that workers with children (up to at least 8 years) and carers have the right to request flexible working arrangements for caring purposes.
The rights extended in the Directive are sanctioned by protecting the eligible workers against any form of adverse treatment including dismissal and by requiring the Member States to introduce penalties for infringement.
The Directive must be transposed into national law by 2 August 2022.
Over the past few months, several interesting decisions were rendered by the European Court of Justice on Social Policy matters. The overview hereafter will address judgments in the area of discrimination, posting of employees and cross-border restructurings. Especially the 20 June 2019 preliminary ruling on the protection against dismissal for witnesses of discrimination received extensive media coverage, which is why we will start this overview by highlighting this particular judgment.
1. Employees defending or witnessing for a person protected under EU Directive 2006/54 should benefit from protection against dismissal
Link 20 June 2019, C-404/18, Hakelbracht & others v WTG Retail BVBA (ECJ) http://curia.europa.eu/juris/document/document.jsf;jsessionid=51B69F6BEFEACEC15656A979DC6DDB 68?text=&docid=215248&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=2613268 Legal Context European Directive n2006/54 of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation requires Member States to take the necessary measures to ensure the protection of employees against dismissals by the employer in response to a complaint within the company or to a procedure to ensure compliance with the principle of equal treatment. The protection provided by the Belgian Gender Law of 10 May 2007 is more limited, as the protection only exists for witnesses of certain facts (i) insofar as they bring a signed and dated document to the attention of the person to whom the complaint should be made or (ii) when they act as witnesses in court. Contents of the Judgement The ECJ ruled that where a person who purports to be discriminated based on his/her gender has launched a complaint, employees other than the person discriminated based on his/her gender should be protected as they may be disadvantaged by their employer for the support they have formally or informally given to the discriminated person. The ECJ uses a broad interpretation of the notion of protected employee witnesses under Article 24 of Directive 2006/54. Employers should therefore be cautious and seek legal advice before dismissing employees supporting a person that has lodged a discrimination complaint.
2. The employer must provide reasonable accommodation for the employee with an occupational disease qualified as a 'disability' before dismissing the employee based on 'objective reasons'
11 September 2019, C-397/18, DW v Nobel Plastiques Ibrica SA (ECJ) http://curia.europa.eu/juris/document/document.jsf?text=&docid=217624&pageIndex=0&doclang=EN& mode=lst&dir=&occ=first&part=1&cid=2643551
Article 1 and 2 of the European anti-discrimination Directive (2000/78) prohibit differences in treatment directly and indirectly based on several grounds including handicap. Moreover, Article 5 of the same Directive requires an employer to provide reasonable accommodation in order to ensure equal treatment for disabled persons.
Contents of the Judgement
In this case, Nobel Plastiques dismissed an employee who had a productivity of less than 60% and an absenteeism of almost 70% as a result of an occupational disease.
The Court ruled that, provided that the occupational disease meets the criteria of the concept of 'disability' (ECJ C 335/11, C-337/11, etc.), the employer must provide reasonable accommodations (Article 5 Directive 2000/78) in order to guarantee equal treatment of disabled persons. This means that employers shall take appropriate measures, where needed in a particular case, to enable a person with a disability to have access to, participate in, or advance in employment, or to undergo training, unless such measures would impose a disproportionate burden on the employer.
3. Modification of working hours in the context of parental leave
18 September 2019, C-366/18, Jos Manuel Ortiz Mesonero v UTE Luz Madrid Centro (ECJ) http://curia.europa.eu/juris/document/document.jsf;jsessionid=370121F518E8F70BCC66B8BBAA0019D 0?text=&docid=217867&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=548630
Directive 2006/54 aims to implement the principle of equal treatment of men and women in matters of employment and occupation. To that end it contains provisions in relation to access to employment, working conditions and pay. Directive 2010/18 implementing the revised Framework Agreement on parental leave lays down minimum requirements designed to facilitate the reconciliation of parental and professional responsibilities for working parents. The preliminary question was whether the Spanish provision, obliging the employee to reduce his ordinary working hours with a proportional reduction of salary, without providing the possibility to switch his variable working hours into a fixed working schedule while maintaining his ordinary hours of work, is contrary to these EU provisions.
Contents of the Judgement The ECJ ruled that the Directives do not apply here and that they do not contain a provision which would require Member States, in the context of a request for parental leave, to grant the employee the right to work for a fixed working time when his usual pattern of work is shift work with variable hours.
Posting of employees 1. Restrictions on financial administrative penalties and/or fines
Link 12 September 2019, C-64/18, C-140/18, C-146/18 and C-148/18, Maksimovic and others v Murtal (ECJ), http://curia.europa.eu/juris/liste.jsf?num=C-64/18 Legal Context The preliminary question for the ECJ related to the fact whether Austrian fines to comply with obligations in connection with the posting of employees (i.e. non-compliance with obtaining administrative authorizations and keeping salary documents) is compatible with Article 56 TFEU (freedom to provide services), Directive 96/71 (Posting of employees) and Directive 2014/67 (enforcement of Directive 96/67). Contents of the Judgement The ECJ justifies the existence of financial administrative penalties and/or fines under Article 56 TFEU and/or Directive 2014/67 provided for these measures are proportionate. It finds that provisions that lay down fines that vary depending on the number of employees concerned do not seem, in principle, disproportionate. Further it states that Article 56 TFEU must be interpreted as precluding national legislation from providing for, in the event of non-compliance with obtaining administrative authorizations and keeping salary documents, fines:
that cannot be less than a predefined amount; that are imposed cumulatively for each employee concerned and with no upper limit; supplemented by a contribution to the costs of proceedings up to 20% (in the event of rejection of
the appeal against the decision imposing such fines), and that are converted into several years' imprisonment, in case of non-payment.
Transnational restructurings 1. EWC opinion cannot delay transnational restructurings
Oracle Corp. had established a European Works Council (EWC) under the UK's Transnational Information and Consultation of Employees Regulation 1999 (TICER), requiring the EWC to be informed and consulted on transnational business proposals in particular circumstances. The Company had decided to close a number of sites in Europe. The implementation of this restructuring procedure was however delayed pending receipt of the EWC's formal opinion on the plans. The EWC considered that it had insufficient information to produce this opinion and that proceeding without this formal input represented a breach of TICER.
The Employment Appeal Tribunal (EAT) disagreed, holding that neither TICER nor its underlying European Directive required organisations to postpone management decisions pending a formal opinion from EWCs. Whilst the legislation contains prescriptive information and consultation obligations which must be adhered to as applicable, it did not intend to give EWC's powers to delay and/or veto management proposals; indeed TICER's underlying Directive had made clear that the power to provide "opinions" on company proposals should not "prejudice the ability of undertakings to adapt". There was therefore no basis upon which the obligations sought by the EWC could be read into TICER.
(see also Bird & Bird Employment update UK
Edition 9 2019 nr. 2 -
31 July 2019, UKEAT/0194/18/RN, Hinrichs & Others v Oracle Corporation UK Ltd (Employment Appeal Tribunal) https://assets.publishing.service.gov.uk/media/5d417c60ed915d09e0612459/Mr_HansPeter_Hinrichs___Others_v_Oracle_Corporation_UK_Ltd_UKEAT_0194_18_RN.pdf
This clarification is good news for multi-national employers with EWCs, who are concerned about their influence and ability to delay strategic and urgent international projects. It is true that a no-deal Brexit would under current plans - prejudice the ongoing operation of EWCs in the UK. However, the judgment removes another obstacle for project planning and provides a long-overdue interpretation the EU Directive in the meantime.
1. Conditions of platform workers top priority for new EU Commission
In the ongoing debate about the impact of digital revolution on jobs and society, the situation of online platform workers is high on the agenda. The incoming College of Commissioners, which is now expected to start its term in office on 1 December, has made of this issue a top priority. European Commission Presidentelect Ursula von der Leyen has given a mandate to both Margrethe Vestager, and Nicolas Schmit to look "at ways to improve the labour conditions of platform workers". During his recent hearing in the European Parliament, on 1 October 2019, Commissioner-designate Schmit said that the first step is to give a clear definition to the term "platform worker" and to establish what factors determine whether a worker is an employee or a self-employed. Since this is something that cannot be left to the diverging interpretations of different courts or even to be decided by the EU's top court, in his view, it is the Commission's task to clarify this issue. In addition, Schmit said that number ten of the European Pillar of Social Rights "Healthy, safe and welladapted work environment"- should be fully implemented also with respect to platform workers. This would ensure that they benefit from the same health and safety standards as all other EU workers. With reference to the Directive on transparent and predictable working conditions (see above), Schmit told the European Parliament that he will work closely with national authorities to ensure the relevant provisions will cover platforms workers. According to Schmit, regulation of the "collaborative economy" will require cooperation between different economic actors. He therefore launched the idea of organising 'very rapidly' a big conference gathering all relevant stakeholders to discuss the most controversial issues, including employment status, social protection, access to representation and collective bargaining. With a reference to the newly adopted Californian law regarding platform workers, he implied that if Silicon Valley, where most of the platforms were invented, is closing the gap between the digital revolution and social conditions, Europe cannot lag behind. In Schmit's view, Europe's social market economy cannot exist without dignified, transparent and predictable working conditions.
2. Insights into the EU Commission's plans to strengthen Europe's social dimension
On 1 October 2019, the EU Commissioner-designate for Jobs, Nicolas Schmit, highlighted the main objectives for the next five years in his hearing in front of the Employment Committee of the EU Parliament. Here is a brief overview of the main instruments we can expect to be on the agenda of the incoming EU Executive, which is due to begin its five-year mandate on 1 December:
- The European Pillar of Social Rights: the way forward
Schmit promised to take stock of this important political instrument and to develop an action plan to implement the Pillar both at EU level and in the Member States (see our discussion above on Legislative Developments). The action plan is intended to act as a bridge between the 18 principles contained in the political declaration and their translation into concrete actions, to be developed with full respect for the subsidiarity principle, whereby social and political issues should be dealt with at the most local level appropriate.
- Fair minimum wage
Commission President-elect Ursula von der Leyen gave a mandate to Schmit to "put forward a legal instrument to ensure that every worker in our Union has a fair minimum wage", while leaving open the question on the nature of the legal instrument in question. The Commissioner-designate said he is confident that all Member States do share a common interest in having "a guarantee for every European citizen to be able to live decently". On this basis, he intends to promote a dialogue with Member States and organisations dealing with poverty and inclusion.
- Skills Agenda
Schmit acknowledged that one of the greatest challenges is the relationship between Europe's social dimension and the digital revolution. New jobs created by digitalisation can be filled only if people have the necessary skills. In this context, a priority is to implement and update the European Skills Agenda, which will in turn require more investment in up-skilling and re-skilling.
- European Labour Authority
A crucial role in delivering the measures outlined above will be given to the newly established European Labour Authority (ELA). Its role would be in particular to facilitate the dialogue not only between EU Institutions and Member States, but also between the EU and the social partners. The Commissionerdesignate described himself as a "fan of strong social dialogues and strong social partners".
Overall, a main message coming from the hearing was that Europe needs social legislation that is up to date. Schmit emphasised that only by delivering measures that will be able to tackle new challenges such as digitalisation of both the economy and the society, as well as fully implementing existing tools, can the new College of Commissioners achieve the goal of creating "a fairer, more social and inclusive Europe".
Pieter De Koster
Partner Tel: +3222826081 firstname.lastname@example.org
Associate Tel: +3222826083 email@example.com
Associate Tel: +3222826031 firstname.lastname@example.org
Counsel Tel: +3222826084 email@example.com
Jehan de Wasseige
Associate Tel: +3222826029 firstname.lastname@example.org
Abu Dhabi & Amsterdam & Beijing & Berlin & Bratislava & Brussels & Budapest & Copenhagen & Dubai & Dusseldorf & Frankfurt & The Hague & Hamburg & Helsinki & Hong Kong & London & Luxembourg & Lyon & Madrid & Milan & Munich & Paris & Prague & Rome & San Francisco & Shanghai & Singapore & Stockholm & Sydney & Warsaw
The information given in this document concerning technical legal or professional subject matter is for guidance only and does not constitute legal or professional advice. Always consult a suitably qualified lawyer on any specific legal problem or matter. Bird & Bird assumes no responsibility for such information contained in this document and disclaims all liability in respect of such information.
This document is confidential. Bird & Bird is, unless otherwise stated, the owner of copyright of this document and its contents. No part of this document may be published, distributed, extracted, re-utilised, or reproduced in any material form.
Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated and associated businesses.
Bird & Bird LLP is a limited liability partnership, registered in England and Wales with registered number OC340318 and is authorised and regulated by the Solicitors Regulation Authority. Its registered office and principal place of business is at 12 New Fetter Lane, London EC4A 1JP. A list of members of Bird & Bird LLP and of any non-members who are designated as partners, and of their respective professional qualifications, is open to inspection at that address.