EU-level developments in 2005

This article reviews the key legislative and policy developments that had an impact on industrial relations at European level in 2005.

Political context

The year 2005 started off with the arrival of the new European Commission, appointed at the end of 2004 and headed by Jose Manuel Barroso. The new five-year strategy (2005-09) presented in January 2005 introduced the new Commission’s orientation with a strong emphasis on competitiveness and economic growth. The new policy priorities are also reflected in the document, Financial Perspective for the years 2007-2013, which was debated in the European Parliament throughout 2005.

The draft treaty establishing a constitution for Europe, commonly referred to as the European constitution, was also high on the European political agenda. It was subject to public referenda in 2005 and was subsequently rejected in two of the Member States: France and the Netherlands.

During the first half of 2005, the Luxembourg government held the Presidency of the EU Council of Ministers. The priorities of this presidency in the employment and social field included a mid-term review of the Lisbon strategy and the progression of a range of legislative proposals, including the draft directive on the revision of the Working Time Directive, which is discussed in more detail below.

The UK government took over the presidency in the latter half of the year. The UK presidency focused on achieving the Lisbon employment targets, gender equality, corporate social responsibility and the progression of the proposed directive on services in the internal market (also known as the Bolkenstein Directive).

Legislative developments

In 2005, the new Commission reviewed legislative proposals in the pipeline. Some draft legislation progressed and was adopted, while other proposals were put on hold and 68 of them might even be abolished in an effort to minimise the ‘bureaucratic red tape’. Among those on hold with relevance to industrial relations is the Directive on Temporary Agency work, which will be discussed in more detail below.

Working time

There was a range of developments in relation to regulation of the working time. One of the most high profile was the ongoing debate of the EU Working Time Directive, based on a text proposed by the European Commission in September 2004. In May, the European Parliament approved a text amending the proposal. Most controversially, the clause allowing Member States to enable individuals to opt out from the maximum 48-hour week was eliminated, three years after the original legislation was adopted (EU0505205F). The Commission subsequently issued a revised proposal, attempting to find consensus between the Council and the Parliament .The proposal was discussed at the June 2005 Social Affairs Council (EU0506204F), but no agreement was reached. It was discussed once more at the December 2005 Council (EU0512205F) on the basis of a Commission compromise text, but again ministers failed to reach agreement and the debate is ongoing.

On-call work also featured in discussions about the revision of the EU Working Time Directive. The Commissions’ revision proposal, issued in 2004, contains new definitions of on-call working. According to this, on-call work would be split into two types: 'on-call time', defined as a 'period during which the worker has the obligation to be available at the workplace in order to intervene, at the employer’s request, to carry out his activity or duties'; and the 'inactive part of on-call time', which is a period during which the worker is on call within the meaning of on-call working as defined above, but 'not required by his employer to carry out his activity or duties'. These definitions are an attempt to clarify the status of on-call working following ECJ judgements on on-call working (the Simap and Jaeger cases - EU0310202N). These judgements ruled that all time spent on call should be calculated as working time.

Furthermore, in February, the Commission issued a draft directive giving legal effect to a social partner agreement on working time for mobile workers employed on cross-border services in the rail sector (EU0503202N). The directive covers rail workers who work on the rail network of at least two Member States and who cross national borders as part of their work. This proposal is based on the agreement concluded on 27 January 2004 between the EU-level social partners in the rail sector - the Community of European Railways (CER) for employers and the European Transport Workers' Federation (ETF) for employees. The agreement regulates rest periods, driving time and driving periods for these mobile workers in the rail sector, who are excluded from the 1993 Working Time Directive.

Temporary agency work

The proposal for a directive to regulate temporary work through agencies has been blocked in Council for many months now, due to disagreements within the Council over the content of the text. It was last discussed in October 2004 (EU0410204F). The fate of this proposal is now unclear, as following a screening process of other directives in the pipeline the Commission stated that it will 'reconsider the proposal in the light of future discussions on other proposals, thus leaving the proposal for a directive on temporary agency work in something of a limbo position.

Portability of supplementary pensions

In October, the Commission issued a proposal for a directive aimed at improving the portability of supplementary pension rights. The aim of the proposal is to increase the labour mobility and career development of European workers. The proposal covers issues such as the acquisition of supplementary pension rights, the preservation of dormant rights and the transferability of rights. This comes after two formal consultations by the Commission of the EU-level cross-sector social partners on this issue, in June 2002 (EU0207201N) and in September 2003 (EU0310205F). The social partners did not embark upon negotiations for an agreement on this issue, as their views on its regulation were too divergent.

Optical radiation

In September, during a second reading of the text, the European Parliament amended a proposed directive aimed at protecting workers against optical radiation,. The main amendment removes a controversial obligation on employers to take measures to protect workers against exposure to sunlight, devolving the regulation of this issue to national governments. This draft directive is the fourth and final part of the Commission’s original 1992 'physical agents' draft directive. The 1992 proposal was split into four parts in 1999: the other three topics covered - vibration, noise and electromagnetic fields (EU0405202N) have now all been adopted as separate directives. The text of the directive was subsequently referred to a conciliation committee and a conciliation text was formally adopted in February 2006.

Equality for men and women in employment

The Commission’s proposal to merge seven existing directives in the field of equality into a single instrument (EU0412206F) (formerly issued in April 2004) made progress during 2005. The Commission proposed this move as it feels that, in the interests of legal clarity and certainty and to reflect developments in European Court of Justice (ECJ) case law over the past 20 years; it would be a good idea to bring all of these directives together into a single coherent instrument. They are:

• on equal pay;

• as amended by Directive 2002/73/EC, on equal treatment as regards access to employment, vocational training and promotion and working conditions;

• as amended by Directive 96/97/EC, on equal treatment in occupational security schemes; and

• as amended by Directive 98/52/EC, on the burden of proof in cases of discrimination based on sex.

The European Parliament gave the proposal a first reading, under the co-decision procedure, in July 2005, and in December, the Council reached political agreement on a common position on the proposal (EU0512205F). The text is now due a second reading in the Parliament.

Policy developments

Job security/Anticipating and managing restructuring

At EU level, the debate on job security has been linked to the questions of how to manage change and industrial restructuring and how to ensure that globalisation is harnessed for the good of all. For example, in early April 2005, the European Commission published a communication outlining measures aimed at improving the EU’s capacity for anticipating and managing the impact of restructuring. The package of proposals includes enhanced coordination between key strands of EU policy, new and refocused financial support, adaptation of the regulatory framework and the greater involvement of the social partners. The communication also initiated further consultations with EU-level social partner organisations about restructuring and European Works Councils (EU0504202F). The EU-level social partners gave their views on this in July 2005 (EU0508204F).

On 8 April 2005, an informal Social Affairs Council was held, at which social affairs ministers discussed the issue of social responsibility in industrial restructuring. Ministers examined two main issues: the need for a coordinated policy for the anticipation of change; and the need for a constructive partnership to manage change, which benefits companies and employees (EU0505202N).

On the issue of job security within the context of globalisation, it was agreed at an informal EU summit in October that a proposal for the creation of a globalisation adjustment fund would be put forward, to equip workers to deal with the effects of globalisation (EU0511204F). In addition, in November, the European Parliament adopted an own-initiative resolution on the social dimension of globalisation, focusing on what can be done to ensure that workers and citizens are protected from the negative effects of this development (EU0512206F).

Equal opportunities and diversity issues

A range of developments in the area of equal opportunities and diversity took place over the course of 2005. In the area of gender equality, in March, Vladimír Špidla, EU Commissioner for Employment, Social Affairs and Equal Opportunities, proposed the establishment of a new European Institute for Gender Equality. This new body will be an independent centre of excellence at European level that collects, analyses and diffuses reliable and comparable data (EU0503205F).

In the area of gender mainstreaming, the third meeting of the EU high-level group on gender mainstreaming was held on 25 May 2005 (EU0506203N). This group is made up of senior civil servants from EU Member States who are responsible for promoting the gender dimension in the management of the EU’s structural funds. The two previous meetings of the group were held in June and November 2004. The work of this group consists of contributing to the development of tools and mechanisms to integrate the gender dimension at every stage of the regional and cohesion policy process. It also consults informally on a range of related issues and shares best practices.

Corporate social responsibility

Corporate social responsibility (CSR) has also featured in EU-level discussions over the past year. In November, the European Parliament adopted an own-initiative resolution on globalisation, which includes a section on CSR (EU0512206F). It states its belief that the social and environmental responsibilities of multinational companies should be clearly established and confirms its support for the Commission’s efforts to raise awareness among multinationals of their social responsibility. It also states that small and medium-sized companies should not be sidelined from active participation in the globalised economy and that the Commission should therefore provide networking incentives for these smaller firms.

EWC consultation

In April, the Commission issued a second consultation to the EU-level social partners on the EWCs Directive (EU0504202F), linking this with a second consultation on the issue of managing change and restructuring. The Commission encourages the European social partners to intensify ongoing work and to start negotiations with a view to reaching an agreement among themselves on the requisite ways and means for:

• implementing mechanisms to apply and monitor existing guidelines on restructuring, and a discussion on the way forward;

• encouraging the adoption of the best practices set out in the existing guidelines on restructuring;

• promoting best practice in the way that EWCs operate, with a view to making them more effective, more especially as regards their role as agents for change; and

• devising a common approach to the other points in the communication which are of concern to them, in particular: training, mobility, the sectoral dimension and the anticipatory aspect .

Actions of the social partners at European level

The EU-level social partners continued to be active during 2005 in a range of areas, giving their views on Commission initiatives, representing their members and participating in social dialogue activities.

Social dialogue

A number of developments in social dialogue at EU level took place during the course of 2005. The European Commission formally announced the establishment of an EU-level social dialogue committee (EU0501203N) in the chemical sector, thus bringing the number of sectoral social dialogue committees at EU level to 31.The committee will be made up of representatives of the European Chemical Employers Group (ECEG) and the European Mine, Chemical and Energy Workers’ Federation (EMCEF). The European chemicals industry employs around 2 million people and is the second largest industrial sector in Europe. It is the first large industrial sector to begin formal social dialogue at European level.

Also, both sides of industry took a common position in relation to a proposed directive on the regulation and evaluation of chemicals - REACH, where they are against further regulation in the chemical sector due to fear of job cuts.

With regards to social dialogue resources, on 1 February 2005, the European Commission announced the launch of a new social dialogue website (EU0502203N). The website, which is available in English, French and German, gives an overview and explanation of the history and development of the EU-level social dialogue process. A section of the website is devoted to the representativeness of the social partners involved in the dialogue.

Collective bargaining

In terms of collective bargaining coordination, in January the European Trade Union Confederation (ETUC) issued (EU0501207F) its latest annual report on collective bargaining developments, based on data from its member confederations. The report analyses trends in the light of ETUC’s guidelines on the coordination of collective bargaining in Europe, adopted in December 2000 (EU0101291N). It notes that average collectively agreed increases among the EU 15 countries are estimated to have ranged between 1.1% and 3.4% in 2004. The exception is Ireland, where the average agreed increase is reported to have been 7.6% in 2004. Increases were higher in the new Member States, ranging from 3.2% in Slovenia and Poland to 8% in Hungary and 6.9% in Slovakia. These guidelines are part of an ETUC strategy to avoid 'social dumping' and wage divergences, which trade unions believe will ultimately lead to a deterioration of the social climate in Europe. The guidelines also aims to coordinate wage claims so as to encourage an upwards convergence of pay and living standards in Europe. It is also intended to influence European macroeconomic policy and provide a social counterpart to the European Commission’s Broad Economic Policy Guidelines.

In October, the European Metalworkers’ Federation (EMF) held a collective bargaining conference, focusing on three key issues: collective bargaining coordination; the reduction of precarious employment; and the launch of a common demand on an individual right to training (EU0510205F). In November, the postal sector, the Universal Postal Union and Union Network International signed a cooperation agreement aimed at promoting social dialogue between the two organisations (EU0512202N.

Training and skills development

The issue of enhancing the skills of the EU workforce is central to the EU’s Lisbon strategy, which was re-launched following a mid-term review in 2005 (EU0504201F). The new Commission also stressed the importance of economic growth and creation of employment - ‘Partnership for Growth and Jobs’, as well as more national ownership for achievement of the Lisbon objectives.

In terms of social dialogue on the issues of training and skills development, the most noteworthy event of 2005 was the launch, by the EMF, of its first common demand (EU0510205F) for an individual right to training, guaranteed by collective agreement. EMF states that training is an 'essential tool' in the EU’s new employment strategy and in a knowledge-based society and can also help to safeguard the European social model.

Gender equality

In terms of specific actions, in March, the cross-sector EU-level social partners - theEuropean Trade Union Confederation (ETUC), the Union of Industrial and Employers’ Confederations of Europe/European Association of Craft and Small and Medium-sized Enterprises (UNICE/UEAPME) for the private sector employers, and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP), representing public sector organisations - concluded a joint text on gender equality. Aiming to enhance gender equality at the workplace, the 'framework of actions' focuses on four priority areas, giving guidance on how to increase equality by means of concrete actions. The text also gives details of 20 best-practice case studies (EU0509203F)

EWC

In addition, in early April, the cross-sector EU-level social partners published a joint statement on the 'lessons learned' from a programme of seminars that considered case studies of the operation of European Works Councils (EWCs) in nine leading companies (EU0505204F).

There were a range of European Works Councils-related developments in 2005. In April, EU-level employer and trade union bodies published the above-mentioned joint assessment of the operation of European Works Councils (EWCs) to date, based on case studies on the experience of a number of major companies.

Industrial action

2005 saw some coordinated industrial action and demonstrations, largely in protest against EU policy in specific areas. For example, in April, the European Transport Workers’ Federation (ETF) staged a European action day in defence of employment, social and trade union rights and in protest against any further deregulation of the civil aviation industry. A range of protest actions were staged around Europe on 19 April 2005 in order to give voice to its views on the restructuring of the civil aviation sector. In particular, the ETF states that airlines are being forced to restructure on a continuous basis due to the EU’s liberalisation of the sector and the advent of low cost carriers. This, it argues, is having a negative impact on employment levels, the quality of work and job security in the sector. It also believes that this has led to low wages and 'unacceptable' working conditions (EU0505203N).

In addition, in March, ETUC called for a demonstration in Brussels on the eve of the European Council. The aim of the demonstration was the defence of employment and social rights and the prevention of ‘blind deregulation' at the expense of social progress, as per the view of the ETUC directive on services in the internal market (EU0503201N).

Employee participation

With regards to developments in the area of worker involvement under the 2001 European Company Statute, in September, the German insurance group Allianz announced that it would merge with its Italian subsidiary RAS and create a European company under the European Company Statute. Negotiations with employee representatives will set up employee involvement provisions in the new company, which will be covered by German national implementing legislation (EU0511203N).

CSR

At sectoral level, a CSR statement was concluded in the hotels and restaurants sector in December 2004 (EU0501202N). At company level, global CSR agreements were concluded in: the French chemicals multinational Rhodia in January(EU0502206F); the European defence company EADS in summer 2005 (EU0507205F); the German-headquartered manufacturer Gebrüder Röchling KG, announced in August 2005 (EU0509201N); and the German-headquartered Schwanhäußer Industrie Holding GmbH (Schwan-Stabilo in September 2005 (EU0509205F).

Labour migration

The issue of labour migration has been at the forefront of EU-level debate in recent years, particularly since EU enlargement on 1 May 2004. In order to stimulate debate, in January, the Commission issued a Green Paper entitled ‘an EU approach to managing economic migration’. This aims to launch a process of in-depth discussion that will involve EU institutions, Member States and civil society on the most appropriate form of Community rules for admitting economic migrants, as well as the benefits of adopting a common framework on this matter. It concerns admission procedures for the economic migration of 'third-country' (non-EU) nationals and does not deal with the free movement of EU citizens within the Union (EU0501208F). The Commission issued a communication in November on priority actions for responding to the challenges of migration. The December Social Affairs Council held a discussion on the issue of migration and adopted its own text, entitled Global approach to migration: Priority actions focusing on Africa and the Mediterranean (EU0512204F).

Furthermore, in June, the Commission announced that 2006 would be the European Year for mobility of workers. The aim of this is to encourage EU citizens to work abroad and in different sectors in their home country, to enable them to benefit from new skills and experience (EU0508202N).

One specific issue under discussion during 2005 was the restrictions placed on nationals from eight of the Central and Eastern European new EU Member States, which are up for review in 2006. The Commission set up a high-level group to examine the issue of migrant workers and held its first meeting in September 2005 (EU0510202N). Its deliberations will form part of the review process.

Further policy developments

2006 promises to be an interesting year in terms of industrial relations and employment policy. The Austrian government will hold the Presidency of the Council in the first half of 2006, followed by the Finnish government. In the social field, they have set out a range of priorities (EU0601203F). With regards to employment they state that they want to ensure the success of the new, relaunched Lisbon strategy and implement the Member States’ first national reform programmes, drawn up within the context of the new strategy. In the area of labour law, they would like to achieve final adoption of the Working Time Directive and of the gender equality proposal and they wish to complete negotiations on the proposal for services in the internal market. They also state that they may one more take up discussions on the draft directive on temporary work.

In terms of new proposals and activities, the Commission, in its work programme for 2006 (EU0512201N) is expected to issue:

• a communication on the demographic future of Europe;

• a communication on future priorities for the EU’s common policy on illegal immigration;

• a Green Paper examining current labour legislation in the light of present trends. It is hoped that the Green Paper will be the catalyst for a debate on the main trends of recent years and on what needs to be done to modernise labour legislation;

• a communication on 'growth, prosperity and solidarity in an equal and democratic society: a roadmap for equality between women and men' , which will define EU objectives and actions aimed at achieving gender equality; and

• a communication on a new EU strategy on health and safety at work for 2007 to 2012.

With regard to social dialogue, the EU-level cross-sector social partners are expected, in early 2006, to agree on a new independent work programme of social dialogue activities. This new programme will replace the former three-year programme, which expired at the end of 2005 (EU0212206F).

Andrea Broughton, IRS