Social partners reach draft framework agreement on fixed-term contracts
After 10 months of intense negotiations, during which success did not always appear likely, the central EU-level social partners - ETUC, UNICE and CEEP - reached a draft framework agreement on fixed-term employment contracts on 14 January 1999. The deal aims to enshrine the principle of non-discrimination between open-ended and fixed-term contract workers and to establish a framework to prevent abuse arising from the use of successive fixed-term contracts. The agreement must now be ratified by each organisation's governing body.
On 14 January 1999, the Union of Industrial and Employers' Confederations of Europe (UNICE), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) and the European Trade Union Confederation (ETUC) reached a draft framework agreement on the rights of workers on fixed-term employment contracts. This brings to an end 10 months of intense negotiations, during which success did not always appear a foregone conclusion.
Following consultations by the European Commission on "flexibility in working time and security for worker"s, the rights of fixed-term contract workers were initially intended to be part of a general set of negotiations on all "atypical forms of employment". However, as UNICE was not prepared to negotiate on the rights of part-time and fixed-term employees at the same time, arguing that the issues pertaining to such employment contracts were too diverse, in 1996 the social partners initially entered into negotiations on part-time work, under the mechanisms set out in the social policy Agreement annexed to the Maastricht Treaty on European Union. These negotiations were successfully concluded with the signing of a framework agreement on part-time work in June 1997 (EU9706131F), and a Directive (97/81/EC) to implement the agreement was subsequently adopted by the EU Council of Labour and Social Affairs Ministers in December 1997 (EU9712175N).
In the same month, UNICE declared its willingness to negotiate with ETUC and CEEP on fixed-term contracts on the basis of the social policy Agreement (EU9802183F). The first meeting of the negotiating group took place on 23 March 1998 (EU9804198N).
In 1997, temporary and fixed-term employment made up 11% of male employment and 13% of female employment in Europe (according to the Commission's 1998 Employment in Europe report) and represents a growing phenomenon across the majority of the Member States. More importantly, temporary employment accounted for all of the net addition to employment of men and 40% of the net addition to the employment of women in the EU between 1994 and 1997. The proportion of employees on temporary and fixed-term contracts is particularly high in Spain, Portugal and Finland. These employees currently often suffer from lower levels of employment protection and of work-related benefits.
At the outset of the negotiations, ETUC was therefore particularly keen not only to enshrine the principle of non-discrimination against such workers, but also to establish a framework for the use of fixed-term contracts in the EU to counteract what it perceived to be the abuse of successive fixed-term contracts (or "chain contracts") to undermine secure employment relationships. UNICE, on the other hand, was keen to see liberalisation of the use of fixed-term contracts, which remains severely restricted in a number of Member States.
The draft agreement
In the preamble to the draft agreement on fixed-term contracts, the social partners highlight that its conclusion illustrates the positive role they can play in the European employment strategy, particularly in relation to achieving a better balance between "flexibility in working time and security for workers". In addition, they underline their recognition that fixed-term employment relationships respond, in certain circumstances, to the needs of both employers and workers. The social partners state that the agreement is intended only to set a framework of minimum requirements, recognising that their detailed application needs to take account of different national, sectoral and seasonal situations.
The agreement applies to fixed-term workers with the exception of those placed by temporary work agencies. The social partners express their intention to consider the need for a similar agreement relating to the employees of such agencies in due course.
Clause 1 of the agreement states that the purpose of the framework agreement is twofold:
- to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination; and
- to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
Clause 2 provides the opportunity for Member States or social partners to specify that the agreement should not apply to certain groups of workers - ie those in initial vocational training relationships and apprenticeship schemes and those in employment contracts which have been concluded within the framework of a specific publicly-supported training programme.
For the purpose of the agreement, clause 3 defines a fixed-term worker as a person "having an employment contract or relationship entered into directly between an employer and a worker where the end of the employment contract or relationship is determined by conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event".
The principle of non-discrimination is central to the agreement and clause 4 specifies that fixed-term contract workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract. In addition, length-of-service qualifications relating to entitlement to conditions of employment are to be the same for fixed-term workers as for permanent workers, except where different length-of-service qualifications can be justified on objective grounds.
Clause 5 aims to establish some universal regulations for fixed-term workers. It states that Member States, after consultation with social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce one or more of the following measures:
- provision of objective reasons justifying the renewal of such contracts or relationships;
- specification of a maximum duration of successive fixed-term employment contracts or relationships; and
- specification of the number of renewals of such contracts or relationships.
Member States, in consultation with social partners, are also called upon to define the conditions under which fixed-term employment contracts are to be regarded as successive and shall be deemed to be contracts or relationships of an indefinite duration.
Clause 6 enshrines the principle that fixed-term workers should have equal access to training opportunities and should be informed about vacancies in the undertaking to provide them with the opportunity to secure a permanent position.
It is specified in clause 7 that temporary workers should be taken into account when calculating company workforce-size thresholds for the purpose of the application of national and European legislation.
In clause 8, employers are called upon to give consideration to the provision of appropriate information to existing workers' representative bodies about fixed-term work in the undertaking.
This draft agreement has now to be approved by respective statutory bodies of ETUC, UNICE and CEEP (due to occur on 16-17 March 1999 in the case of the ETUC executive committee). Should it find approval, the social partners can ask the Commission to present the agreement to the Council of Ministers, for implementation through a Directive under Article 4 (2) of the policy Agreement annexed to the Maastricht Treaty, thus making the terms of the agreement legally binding for all the Member States. If adopted, such legislation could have a significant impact on current legislation and practices in a number of Member States (EU9802183F), particularly where no restrictions are currently applied to the maximum length of fixed-term contracts. With regard to non-discrimination, the UK and Ireland are among the few EU countries which currently have no legislation specifying equal rights between employees on fixed-term and open-ended contracts. (Peter Foster, Tina Weber, ECOTEC Research & Consulting)