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2006 Report on Industrial Relations in Europe

2006 Report on Industrial Relations in Europe

Outline of the Community (European Union) legislation about 2006 Report on Industrial Relations in Europe

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Employment and social policy > Social dialogue and employee participation

2006 Report on Industrial Relations in Europe

Document or Iniciative

Report of the European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities – Industrial Relations in Europe 2006 [Not published in the Official Journal].

Summary

Social dialogue is a social policy tool, which has particular importance in the revision of the Lisbon Strategy adopted in 2005. In fact, the participation of social partners is essential in achieving the Strategy objectives and making the European Union (EU) the most competitive knowledge economy in the world.

Employee representation and the capacity of employers’ organisations varies depending on the Member State. As such union density, defined as the ratio between actual and potential membership, is generally lower in southern Europe and in Central and Eastern Europe. This density also varies depending on the sector of activity, gender or age of employees. The power and structure of employers’ organisations are also relatively diverse. Their density is generally higher than that of trade unions, except in the Nordic countries.

Autonomous collective agreements enable a free definition of wage policies and working conditions and can be used to establish social rights. The current trend is for agreements to be used to derogate from some legal standards.

Employee representation in the workplace is one of the distinctive features of the Community’s industrial relations system. Differences exist between Member States in terms of the structure of national representation models, but also in terms of sector of activity, establishment size and occupational category. Lack of representation is more significant in the private sector than in the public sector. The requirement for informing and consulting workers is regulated by Directive 2002/14/EC.

Building the capacity of new Member States and candidate countries to manage industrial relations is a priority, pursued through technical cooperation actions. In particular, these actions aim at encouraging the participation of social partners in fora at European level and strengthening tripartite dialogue at national level.

The 20th anniversary of the launch of the European social dialogue presented an opportunity to assess its progress, which is characterised by an increased autonomy of European social partners. This Report highlights the importance of tripartite dialogue in meeting the Lisbon objectives. In particular, bilateral dialogue is used for implementing flexicurity and lifelong learning models, as well as the autonomous European framework agreement on teleworking. The multi-annual work programme for European social dialogue (2006-2008) should encourage future progress.

Between 2004 and 2006 Community legislation was developed in different sectors. Directives were adopted in the areas of health and safety at work, regarding the exposure of workers to electromagnetic fields, to carcinogens and mutagens and to artificial optical radiation. The Agreement on mobile workers carrying out cross-border interoperability services was implemented by Directive 2005/47/EC. In 2005 the Commission presented a Communication on employment and restructuring companies. In addition, a new Directive regulates cross-border mergers of companies and employee consultation procedures.

Progress has also been made in tackling discrimination and equal treatment in matters of employment. Provisions relating to mobility, workers’ right to residency and the coordination of social security schemes have been simplified. Since 2006 E-forms have been replaced by the European health insurance card for European Union (EC) and European Economic Area (EEA) citizens.

The labour market of today is moving towards greater flexibility, atypical working conditions and increased diversity in terms of contracts and working hours. Employment flexibility could present a risk to social cohesion. Together with other risk factors, it could result in the creation of vulnerable situations.

Flexibility should be balanced out by different factors such as economic growth, stable job creation, internal flexibility in companies and improving the quality of work. If economic results cannot be directly linked to a social dialogue model, industrial relations systems with strong union representation and where the social partners participate in the political process tend to be more competitive. This is the case when trade unions and employers’ organisations act in a coordinated way.

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Outline of the Community (European Union) legislation about Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

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Regional policy > Review and the future of regional policy

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Document or Iniciative

Communication from the Commission of 12 June 2006 – The Growth and Jobs Strategy and the Reform of European cohesion policy – Fourth progress report on cohesion [COM(2006) 281 – Not published in the Official Journal].

Summary

This fourth progress report on economic and social cohesion follows on from the publication of the third progress report in May 2005. It concerns inter alia:

  • the cohesion programmes implemented in the new EU Member States following the May 2004 enlargement;
  • preparations for the 2007-2013 programming period, in particular the Interinstitutional Agreement signed in May 2006 by Parliament, the Council and the Commission on the Financial Perspectives for 2007-2013;
  • the relaunch of the Lisbon Strategy in 2005.

ECONOMIC AND SOCIAL DISPARITIES

In 2005 the EU economy was characterised by continued moderate growth. In the period 2000-2004, the average growth of the gross domestic product (GDP) of the 25 EU Member States (EU-25) was little more than 1.5% per year. However, the Commission anticipates that growth will pick up and exceed 2% across the EU between 2005 and 2007.

Disparities

With regard to disparities between Member States in terms of GDP, the report notes that the new Member States are growing faster than most of the EU-15 countries. However, convergence is still a long-term perspective.

In 2004, the average overall employment rate reached 63.3% (64.7% in the EU-15 and 56.0% in the EU-10). In order to reach the Lisbon Strategy’s employment rate target of 70% by 2010, 24 million new jobs would be needed in the EU-27 (EU-25 plus Romania and Bulgaria), which represents an increase of almost 12% on current employment levels.

Trends in disparities

This Communication gives an overview of the disparities between objectives and the disparities within each objective for the regions to be targeted by cohesion policy for the period 2007-2013 .

Disparities between objectives

The 100 Convergence regions (regions where GDP per capita is less than 75% of the EU average, 2000-2002) are characterised by low levels of GDP and employment, as well as high unemployment. Their total share in EU-27 GDP in 2002 was only 12.5%, although they account for 35% of the population.

Disparities within each objective

Under the Convergence objective, there are several regions with GDP per capita below 25% of the EU average in 2002, all of which are in Romania and Bulgaria.

The employment rate in the 155 regions covered by the new Regional Competitiveness and Employment (RCE) objective is 10 percentage points higher than in the Convergence regions.

In 2002, 10% of the EU-27 population living in the most prosperous regions accounted for over 19% of total GDP for the EU-27, compared with only 1.5% for the 10% of the population living in the least wealthy regions.

Research and development (R&D) and Information and communication technologies (ICT)

R&D is a key factor in determining a region’s innovative capacity. 35 regions, which account for 46% of total R&D expenditure in the EU-27, have R&D intensities exceeding the Lisbon target for an EU-wide average of 3% of GDP. In 47 regions (3.5% of GDP in the EU-27) R&D expenditure is below 0.5% of GDP.

Across the EU as a whole, almost half of all households had Internet access in 2005. There are marked differences between Member States, with penetration rates exceeding 70% in the Netherlands, Denmark and Sweden, whereas they are around 20% in Lithuania, the Czech Republic, Hungary, Slovakia and Greece. In today’s Objective 1 regions, only around one third of all households have Internet access.

POLITICAL BACKGROUND

Financial resources

With regard to the execution of the budget in 2005, a total of 27.1 billion was committed under the European Regional Development Fund (ERDF), the Cohesion Fund and the pre-accession fund designated for candidate countries (ISPA), and 11.2 billion for the European Social Fund (ESF). For the four Structural Funds, Cohesion Fund and ISPA taken together, payments made in 2005 reached more than 33 billion.

Based on the conclusions of the European Council in December 2005 and the adoption of the Interinstitutional Agreement of May 2006, the cohesion policy budget for the period 2007-2013 will amount to 308 billion (0.37% of the gross national investment (GNI) of the EU-27). The new Member States would receive 51.3% of total cohesion policy resources (an increase of almost 165% compared with the period 2004-2006).

Cohesion Policy 2007-2013 and the Growth and Jobs Strategy

In July 2005 the Commission published a Communication on the Community Strategic Guidelines for cohesion policy in 2007-2013, which:

  • provide a framework for the new programmes to be supported by the ERDF, the ESF and the Cohesion Fund;
  • reflect the role of cohesion policy as the principal instrument for contributing to growth and employment, in accordance with the renewed Lisbon agenda.

Cohesion policy is a key instrument in contributing to the Growth and Jobs Strategy, as:

  • cohesion policy represents one third of the Community budget;
  • strategies designed at local and regional levels must also form an integral part of the effort to promote growth and jobs;
  • the December 2005 European Council proposed that quantitative expenditure targets should be set for the new cohesion policy programmes for 2007-2013 so that a certain percentage of the funds will be used for purposes clearly linked to the Growth and Jobs Strategy (“earmarking” – 60% for the Convergence objective and 75% for the RCE objective).

Innovations in the new programmes

For the new programmes, specific initiatives have been launched to promote financial engineering for start-ups and micro-enterprises, combining technical assistance and grants with other instruments. There are three such initiatives:

JASPERS (Joint Assistance in Supporting Projects in European Regions), a new technical assistance partnership between the Commission, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD);

JEREMIE (Joint European Resources for Micro to Medium Enterprises), a new initiative in partnership with the European Investment Fund (EIF) in order to improve access to finance for business development;

JESSICA (Joint European Support for Sustainable Investment in City Areas), enhanced cooperation between the Commission, the EIB, the CEDB (Council of Europe Development Bank) and other International Financial Institutions (IFIs) on financial engineering for sustainable urban development.

As a complement to the Strategic Guidelines, the Commission will present a Communication on the contribution of urban areas to growth and jobs in the regions.

Related Acts

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].

Communication from the Commission of 25 January 2006 to the Spring European Council – Time to move up a gear: The new partnership for growth and jobs [COM(2006) 30 final – Not published in the Official Journal]. 
This annual activity report (AAR) contains several recommendations regarding cohesion policy.

Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [Official Journal L 277 of 21.10.2005].

Sanctions against the employment of illegally staying non-EU nationals

Sanctions against the employment of illegally staying non-EU nationals

Outline of the Community (European Union) legislation about Sanctions against the employment of illegally staying non-EU nationals

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Internal market > Living and working in the internal market

Sanctions against the employment of illegally staying non-EU nationals

Document or Iniciative

Directive 2009/52/EC of the European Parliament and of the Council of 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals.

Summary

The directive requires Member States to prohibit the employment of illegally staying non-EU nationals. It lays down common minimum standards on sanctions against employers who infringe the prohibition. Member States may decide not to apply the directive to illegally staying non-EU nationals whose removal has been suspended and who have been granted permission to work under national law.

Employers’ obligations

Employers are obliged to:

  • require non-EU nationals to produce a residence permit or another authorisation to stay before taking up employment;
  • keep copies of the permit or authorisation for the duration of the employment, in case of inspection by the national authorities;
  • notify the authorities within the period established by the Member State when they employ a non-EU national.

In cases where the employer is an individual who engages a non-EU national for private purposes, Member States may provide for a simplified procedure of notification. Member States may decide not to require notification when the non-EU national has been granted long-term residence status.

Sanctions

Member States must ensure that infringements are subject to effective, proportionate and dissuasive sanctions, including:

  • financial sanctions in relation to each illegally employed non-EU national;
  • payment of the costs for returning the illegally employed non-EU nationals.

The financial sanctions may be reduced for individuals employing illegally staying non-EU nationals for private purposes, provided that the working conditions were not exploitative.

Member States must ensure that employers are liable to make back payments, such as outstanding remuneration, including the cost of sending it to the employee’s country of origin, and social security contributions. To calculate the back payments, the employment relationship is presumed to have lasted for at least three months unless proved otherwise.

Member States must put in place the necessary mechanisms whereby illegally employed non-EU nationals may claim any outstanding remuneration from their employers. The non-EU nationals must be informed of their rights before their return is enforced.

Member States must ensure that employers are also, if appropriate, subject to other measures, such as:

  • exclusion from entitlement to some or all public benefits, including EU funding for up to five years;
  • exclusion from participation in a public contract for up to five years;
  • recovery of benefits granted up to 12 months prior the detection of the illegal employment;
  • temporary or permanent closure of the establishment.

Member States must also ensure that where an employer is a subcontractor, the contractor of which the employer is the direct subcontractor will be held liable in addition to or in place of the employer. However, contractors that have undertaken due diligence obligations defined by national law will not be liable. Member States may also provide for more stringent liability rules in relation to subcontracting.

An intentional infringement constitutes a criminal offence when the employer:

  • persists in his/her non-compliance;
  • employs a significant number of illegally staying non-EU nationals;
  • employs such persons in particularly exploitative working conditions;
  • employs victims of trafficking in human beings;
  • illegally employs minors.

Inciting, aiding and abetting this conduct must also constitute a punishable criminal offence.

Criminal sanctions may be accompanied by other measures, including publication of the judicial decision. Legal persons can also be held liable.

Complaints and inspections

Member States must ensure that illegally employed non-EU nationals can lodge complaints against their employers either directly or through designated third parties. Those working in particularly exploitative conditions may be issued residence permits for the duration of their proceedings on a case-by-case basis, under arrangements comparable to those provided for by Directive 2004/81/EC on the residence permit issued to third-country nationals who are victims of trafficking in human beings and who cooperate with the competent authorities.

Member States are required to carry out effective and adequate inspections based on regular risk assessments to control the employment of illegally staying non-EU nationals.

Background

The Commission suggested these measures in its communication of 19 July 2006 on policy priorities in the fight against illegal immigration. The European Council (15-16 December 2006) endorsed this suggestion, inviting the Commission to present proposals.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2009/52/EC

20.7.2009

20.7.2011

OJ L 168 of 30.6.2009

The Community Lisbon Programme: proposal for 2008–2010

The Community Lisbon Programme: proposal for 2008–2010

Outline of the Community (European Union) legislation about The Community Lisbon Programme: proposal for 2008–2010

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Employment and social policy > European Strategy for Growth > Growth and jobs

The Community Lisbon Programme: proposal for 2008–2010

The Commission intends to strengthen the Community Lisbon Programme (CLP) and is proposing ten objectives for the period 2008-2010. In order to ensure optimum implementation of the CLP, it is counting on effective collaboration between the various European institutions, and on close monitoring.

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 11 December 2007 – Proposal for a Community Lisbon Programme 2008–2010 [COM(2007) 804 final – Not published in the Official Journal].

Summary

The Lisbon Strategy has proved its worth. Since its relaunch in 2005, more than 6.5 million jobs have been created in Europe and unemployment has fallen to its lowest level for 25 years. Growth has also been sustained.
However, given that Europe is now confronted by a worldwide economic slowdown and must face unprecedented long-term challenges (ageing of the population, globalisation, climate change, dependence on energy imports, etc.), the second phase (2008-2010) of the Community Lisbon Programme (CLP) would appear to be crucial.
Against this backdrop, the Commission means to draw lessons from the 2005-2008 phase, particularly as regards the implementation of the strategy.

Strengthening and renewing the CLP

In order to complement the CLP, the Commission is pinpointing ten objectives which offer either genuine Community-level added value or show significant impacts on growth and jobs within the European Union (EU). The selection of the objectives is on the basis of sound economic analyses and policy priorities.

These objectives are based on the integrated guidelines and rest fully on the four priority areas of the Lisbon strategy, namely:

  • investing in people and modernising labour markets;
  • energy and climate change;
  • strengthening economic competitiveness;
  • promoting knowledge and innovation.

Investing in people and modernising labour markets

Human resources which are better adapted to the needs of labour markets are both the key to European competitiveness worldwide and the basis for more independent living. This will require:

  • a renewal of the Social Agenda;
  • improved coordination of instruments to better anticipate EU-wide labour market developments and needs;
  • greater comparability and recognition of qualifications;
  • development of a common policy on immigration, with the introduction of a “blue card” scheme for highly qualified migrants representing a first step in this direction.

Unlocking business potential, especially of SMEs

Small and medium-sized enterprises (SMEs) make up more than 99% of all businesses and employ 67% of the EU’s total workforce. The potential for growth and jobs in SMEs is still not being fully exploited. In order to support SMEs throughout their life-cycle, the Commission plans to:

  • adopt a European Small Business Act for the benefit of small-scale enterprises;
  • undertake a specific screening of the acquis communautaire from an SME perspective and introduce exemptions from administrative requirements of EU legislation wherever possible;
  • ensure the implementation of the various European programmes to reduce administrative burdens, with the aim of a 25% reduction by 2012.

The Commission is also proposing new measures for the financial services market. In particular, it plans to implement the services Directive and, more specifically, to establish the Single Euro Payments Area. SMEs will be the first to benefit from this removal of barriers to market access, for example by being allowed to choose an EU-wide tax base.

Investing in knowledge and innovation

The Commission is introducing a new dimension: the creation of a fifth freedom on the single market – based on the three components of the knowledge triangle, i.e. research, innovation and education – for the purpose of setting up a European research area. This will require a concentration and a more effective use of R&D resources and common calls for projects. Finally, it is crucial that the European Institute of Innovation and Technology (EIT) be made operational.

The Commission is also proposing to create more favourable conditions for the financing of innovation and to improve SMEs’ access to finance for new technologies. In this connection, the creation of a Community patent would not only improve the current patent litigation system but would also increase legal certainty, leading to a greater investment readiness among SMEs.

Energy and climate change

Among the objectives identified by the Commission, Nos 8 and 9 are concerned with energy policy and climate change in the context of the Community Lisbon Programme. The internal market for electricity and gas must be completed by introducing an emissions trading scheme. It is therefore crucial that legislation be passed in order to meet the EU’s targets of achieving at least a 20% reduction in greenhouse gas emissions and a 20% renewable energy share by 2020.

In addition, industrial policy must be geared to sustainable consumption. The Commission is thus proposing to establish an internal market for environmental technologies and promote the development of European lead markets for energy-efficient technologies. To this end, Community funds must be used to develop a market in low-carbon products and technologies. The Commission also plans to review the energy taxation Directive in order that other fiscal instruments can be used to promote low-energy products.

As regards the external agenda, where the opening-up of Europe and the defence of its legitimate interests go hand in hand, bilateral negotiations with the main trading partners are the main concern of the foreign-policy element of the Community Lisbon Programme.

The Commission should also work to conclude the Doha multilateral trade negotiations. In order to make for a more coordinated approach by the EU, the Commission is proposing to introduce annual reports on countries and sectors in which barriers to trade still exist. Improving the framework for the enforcement of intellectual property rights against counterfeiting is also a priority which can be achieved through more effective cooperation between customs authorities.

Implementation of the CLP

The ten priority objectives need to be closely monitored by means of annual reports. This would allow a systematic assessment of progress made, which would form the basis for the Commission’s annual autumn reports. The Spring European Council must take stock and provide further direction as part of its annual overall assessment of the Lisbon Strategy on Growth and Jobs. The programme will also be subject to a mid-term review to enable any adjustments to be made to the ten priority objectives.

The Community’s financial resources for improving growth and economic adjustment derive from cohesion policy programmes of the European Agricultural Fund for Rural Development (EAFRD), the Lifelong Learning Programme and the European Globalisation Adjustment Fund. It is estimated that two million additional jobs will be generated by these funds by 2015. The Communication also proposes that a close follow-up be undertaken by each of the institutions and all the Member States in order to achieve the ten objectives.

Related Acts

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 – Implementation Report for the Community Lisbon Programme 2008 – 2010 [COM(2008) 881 final – Not published in the Official Journal].
The Commission presented the first annual report on the outcomes of the Community Lisbon Programme 2008 – 2010. This report evaluates the outcomes of the first year the programme has been implemented. It proposes new objectives in-line with the priorities of the European Economic Recovery Plan and complementing the reforms being carried out by Member States.

Thus it concerns:

  • improving the skills of workers, modernising the labour market and social protection systems, according to the terms of the renewed Social Agenda. Further efforts are needed to assess the needs of the labour market, as well as to remove the regulatory constraints which act as a barrier to mobility, recognition of qualifications and access to pension and social protection systems. The Commission will make proposals for an immigration strategy, aimed at placing value on the abilities of migrants;
  • increasing the development potential of enterprises, in particular small and medium-sized enterprises (SMEs). The EU shall guarantee SMEs have access to finance and shall reduce Community administrative burdens by 25% by 2012. Enterprises will benefit from the strengthening of the single market for financial services;
  • making Europe a leading knowledge and innovation economy and society through the creation of the European Research Area, open and competitive on an international level. Also by improving conditions for innovation (finance, investment and legal certainty);
  • finalising the energy market and combating climate change. With the aim of making the energy supply secure, the EU has committed to reducing greenhouse gas emissions by 20% by 2020. Industrial production must be aimed at achieving objectives related to energy efficiency and sustainability;
  • opening up new opportunities for trade, market access and international investment. The Community is working to conclude the Doha negotiations under the framework of the WHO, and to lead bilateral negotiations with its commercial partners. The Community promotes the improvement of international standards and regulatory cooperation, particularly with regard to combating counterfeiting.

Green Paper on Modernising Labour Law

Green Paper on Modernising Labour Law

Outline of the Community (European Union) legislation about Green Paper on Modernising Labour Law

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Employment and social policy > European Strategy for Growth > Growth and jobs

Green Paper on Modernising Labour Law

The aim of this Green Paper is to initiate a public debate in the European Union (EU) on the modernisation of labour law in the light of trends in European labour markets. They must become more flexible and guarantee optimum security. Labour law has an essential role to play in this regard. Promoting debate on this issue would allow the implementation of a suitable, proactive regulatory framework. Managing innovation and change well means that labour markets must take on board three main aspects: flexibility, job security and segmentation.

Document or Iniciative

Commission Green Paper of 22 November 2006 entitled “Modernising labour law to meet the challenges of the 21st century” [COM(2006) 708 – not published in the Official Journal].

Summary

In this Green Paper, the Commission identifies the main challenges regarding the gap between the existing legal frameworks and the realities of the labour market.

The aim is to involve the Member States, the social partners and other interested parties in an open debate, in order to look at how labour law can help to promote flexibility in conjunction with security, regardless of the type of employment contract.

The Commission plans to organise a public consultation over a four-month period based on the questions asked in this Green Paper. A follow-up communication at the end of the public consultation will be adopted by the Commission in 2007.

The Commission acts as a catalyst to support the action of the Member States, since protection of working conditions depends mainly on national legislation. At EU level, the social acquis supports and complements the action of the Member States.

Developments in European labour markets

Labour markets in Europe are changing primarily in line with rapid technological progress, more intensive competition in the face of globalisation and the development of consumer demand. This is leading to changes in the organisation of work and working time, pay and the number of workers employed in various stages of the production cycle.

This change has led to a diversification in types of employment contracts, with new categories of workers (such as those hired through temporary agencies) being created. The relationship between the law and collective labour agreements is thus developing in parallel. These collective agreements can be used to adapt the legal principles to the specific economic situations and circumstances of particular sectors.

At Community level, the EU has legislated in order to ensure that the new forms of more flexible working are associated with certain minimum social rights for all workers, in terms of both part-time work and fixed-term work. On the other hand, no common position has been adopted by the Council on a proposal for a directive on working conditions for temporary workers hired through agencies.

Proliferation of atypical forms of contract

These contracts include fixed-term and part-time contracts, on-call contracts, zero-hour contracts, contracts for workers hired through temporary employment agencies, and freelance contracts.

Freelance workers choose to work independently, despite a lower level of social protection, because it offers them more direct control over their conditions of employment and pay. The proportion of total employment represented by workers recruited on atypical contracts has risen from more than 36% in 2001 to almost 40% in EU-25 in 2005. Freelance workers represent 15% of the total workforce. Fixed-term work has risen from 12% of total employment in 1998 to more than 14% of total employment in EU-25 in 2005.

This greater diversity of contracts has certain negative effects. A succession of short-term, low-quality jobs with insufficient social protection can lead some people into a vulnerable position. The Commission would like to point out that the risk of vulnerability on the labour market affects primarily women, older people and young people recruited on the basis of atypical contracts.

Modernisation of labour law: questions for discussion

This Green Paper is intended to promote discussion on various issues associated with the modernisation of labour law, such as:

  • employment transition involving the move from one status to another. The chances of entering the labour market, staying there and making progress vary considerably. Employment protection legislation and the rules on contracts at national level both have a significant impact on transitions between employment statuses, in particular as regards the long-term unemployed or those working in insecure jobs;
  • legal uncertainty associated mainly with these forms of atypical employment. The phenomenon of disguised employment, when an employee is not considered as such in order to hide his real legal situation and avoid certain social costs, is widespread. The lack of legal clarity regarding the definition of freelance workers, for example, may lead to gaps in the application of the law. The idea of “economically dependent work” covers situations coming under neither the concept of regular employment, nor that of freelance work. There is no employment contract drawn up in such a case. Even if these workers are not in a situation of vulnerability, they remain economically dependent on a single customer, employer or principal for their income and may not fall within the scope of labour legislation;
  • temporary agency work is a three-way relationship between a company, a worker and an agency. The complexity of these relationships is compounded when these workers are involved in long subcontracting chains;
  • working time, subject to Community harmonisation, is also influenced by developments on the labour markets. The Directive on certain aspects of the organisation of working time had still not been adopted by the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) by the end of 2006;
  • the mobility of workers in the light of the different definitions of a “worker”. The mobility of workers is being jeopardised because the EU leaves it to the Member States to define the term. The Commission takes the view that having to refer constantly to national rather than Community law in this regard could weaken protection for workers;
  • undeclared work is a persistent and worrying aspect of today’s labour markets. As the main factor in social dumping, it is responsible not only for the exploitation of workers but also for distorting competition. In a Resolution adopted in 2003, the Council called on the Member States to resolve this problem by means of preventive measures and penalties, as well as by concluding partnerships between the social partners and the public authorities at national level.

Tackling the pay gap between men and women

Tackling the pay gap between men and women

Outline of the Community (European Union) legislation about Tackling the pay gap between men and women

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Employment and social policy > Equality between men and women

Tackling the pay gap between men and women

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 18 July 2007, entitled ‘Tackling the pay gap between women and men’ [COM(2007) 424 final ? Not published in the Official Journal].

Summary

The principle of equal pay for men and women has been a part of the Treaty of Rome since 1957. Article 157 of the Treaty stipulates that the Member States must ensure that the principle of equal pay for equal work or work of equal value is applied. Furthermore, reducing the pay gap is one of the objectives of the European Strategy for Growth and Jobs.

In practice, the situation is still problematic. As pointed out in the Roadmap for equality between women and men, the pay gap has remained practically unchanged over the last ten years, despite the measures and means implemented in tackling it. According to official figures, in 2005 women earned on average 15 % less than men at European Union level, i.e. an improvement of only two percentage points compared with the 1995 level and in marked contrast to the considerable increase in the female employment rate.

The majority of the causes linked to this gap cannot be attributed to objective criteria. Women achieve a higher pass-rate at school and account for the majority of graduates in all the Member States. Why, therefore, do they not achieve better conditions on the labour market and why is their productive potential not fully exploited?

The European Commission alone cannot tackle the pay gap. For that reason, the efforts of all the interested parties will have to be harnessed, beginning with the Member States and the social partners, which together hold most of the power to make decisions and take action.

A complex and persistent problem

 Differences in pay can be explained by a series of objective criteria:

  • individual characteristics (age, level of education, experience acquired);
  • factors connected with the job (profession, type of contract or working conditions);
  • aspects directly linked to the company (economic sector, size).

There may also be instances of open discrimination in which a woman receives less pay than her male colleague for the same job.

However, objective differences and discriminatory practices are not enough in themselves to explain why a pay gap still exists.

On the other hand, the pay gap may also reflect inequalities linked to the labour market. Such inequalities affect mainly women and include:

  • horizontal segregation of the labour market: women are concentrated in a much smaller number of sectors and professions than men, and these sectors and professions are generally less highly valued and less well paid;
  • vertical segregation of the labour market: women are employed mainly in less well-paid jobs and encounter greater obstacles to their professional advancement (only one third of women in companies within the EU);
  • traditions and stereotypes: these influence particularly the choice of education courses, the evaluation and classification of professions and also employment patterns;
  • the difficulty of balancing work and private life, which often, for women, leads to part-time working and career breaks, with a negative effect on women’s careers.

Statistics show that the pay gap increases with age, the level of educational attainment and length of service: wage differences exceed 30 % in the 50 to 59 age bracket (as opposed to 7 % in those under 30) and exceed 30 % amongst graduates, but are only 13 % amongst workers who have completed their secondary school studies. Lastly, they may stand as high as 32 % amongst workers with more than 30 years’ experience in a company, whereas the pay gap is only 22 % amongst workers with between 1 and 5 years’ service.

Tackling the inequality in pay between women and men

In order effectively to help reduce the pay gap, the Commission is drawing attention to the following measures:

  • improved application of existing legislation, accompanied by awareness-raising campaigns;
  • fully exploiting the European Strategy for Growth and Jobs, particularly via European financial support in all its forms (Structural Funds);
  • promoting wage equality amongst employers, essentially appealing to their sense of social responsibility;
  • supporting the exchange of good practices at Community level and involving the social partners in that process.

Background

The elimination of the gender pay gap is a core element of European policy on gender equality. It is included in the majority of instruments implemented at European level:

  • the Roadmap for equality between women and men (2006-2010);
  • the European Strategy for Growth and Jobs;
  • the European Pact for Gender Equality;
  • the Structural Funds;
  • annual reports published by the Commission since 2004.
Key terms used in the act
  • Pay gap: The pay gap measures the relative difference in the average gross hourly earnings of women and men within the economy as a whole. It is one of the structural indicators used to monitor the European Strategy for Growth and Jobs.

Equal treatment of temporary workers

Equal treatment of temporary workers

Outline of the Community (European Union) legislation about Equal treatment of temporary workers

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social dialogue and employee participation

Equal treatment of temporary workers

Proposal

Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work.

Summary

Temporary workers * are employed by a temporary-work agency * and temporarily placed at the disposal of user undertakings *. In terms of the basic working and employment conditions, the temporary workers and the workers recruited directly by the undertaking for the same type of post receive equal treatment.

This Directive applies to public and private temporary-work agencies, and to user undertakings engaged in economic activities whether or not they are operating for gain. After consulting social partners, Member States may decide that the Directive does not apply to employment contracts within certain public programmes, specifically vocational training, integration or retraining.

Working and employment conditions

The principle of equal treatment applies to the basic working and employment conditions relating to:

  • the duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays;
  • pay.

Workers receive equal treatment with regard to:

  • the protection of pregnant women and nursing mothers;
  • the protection of children and young people;
  • equal treatment for men and women;
  • protection against discrimination based on sex, race or ethnic origin, religion, beliefs, disabilities, age or sexual orientation.

However, Member States may authorise the social partners to define specific working and employment conditions for temporary workers.

After consulting the social partners, Member States may also provide the option to derogate from the principle of equal pay for temporary workers who have a permanent contract of employment (PCE) and who continue to be paid between two postings *.

Access to employment, training and services

Temporary workers must be free to conclude an employment contract with the user undertaking at the end of their posting. They must therefore be kept informed of vacancies for permanent employment. Their participation in training programmes must be encouraged, whether within the temporary-work agency or the user undertaking.

Access to the amenities and collective services of the user undertaking (specifically canteens, childcare facilities and transport) must be open to them, and in principle under the same conditions as other workers.

Representation and information

Bodies representing workers are constituted according to a threshold calculated using the number of employees in an undertaking or establishment. Temporary workers are taken into account in this calculation within the temporary-work agency which employs them. However, Member States may also decide to count them within the user undertaking.

When a user undertaking presents the employment situation to the social partners, it must provide information on the temporary workers.

Penalties

Member States must lay down effective, proportionate and dissuasive penalties in the event of infringements of national provisions enacted under this Directive. They should also ensure that legal or administrative recourse exists in case of breaches of the obligations of this Directive.

Context

Members States shall review the restrictions or prohibitions applicable to temporary work by 5 December 2011 at the latest. These limitations may be justified only on grounds of the general interest.

Key terms used in the act
  • Temporary worker: a person with a contract of employment or an employment relationship with a temporary-work agency with a view to being posted to a user undertaking to work temporarily under its supervision.
  • Posting: the period during which the temporary worker is placed at the user undertaking to work temporarily under its supervision.
  • Temporary-work agency: any natural or legal person who concludes contracts of employment or establishes employment relationships with workers in order to post them to user undertakings for temporary postings.
  • User undertaking: any natural or legal person for whom and under the supervision of whom a temporary worker works temporarily.

References

Act Entry into force Deadline for transposition into the Member States Official Journal

2008/104/EC

5.12.2008

5.12.2011

OJ L 327 of 5.12.2008

2009 Ageing Report

2009 Ageing Report

Outline of the Community (European Union) legislation about 2009 Ageing Report

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social measures for target groups: disability and old age

2009 Ageing Report

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 29 April 2009 – Dealing with the impact of an ageing population in the EU (2009 Ageing Report) [COM(2009) 180 final – Not published in the Official Journal].

Summary

The Commission uses the projections presented by Eurostat in 2008 as a basis to report on the long-term effects of demographic ageing.

The economic impact of ageing

According to these projections, the employment rate will increase from 65.5 % in 2007 to 70 % in 2060. The employment of women and older workers is also likely to rise, as will net immigration levels. However, these developments will only slow down the overall fall in employment, due to the shrinking working age population. While there are now four workers for every retired person, this will move to two workers for each elderly person in 2060.

The ageing population will also have consequences on the annual growth of the Gross Domestic Product (GDP) and labour productivity will become the main source of economic growth.

The impact of ageing on public finances

Member States will be faced with new budgetary constraints. The reform of pension schemes should ensure that services are matched to the needs of the elderly whilst tightening the eligibility requirements for receiving a public pension and developing funded schemes.

The increase in demand for care is likely to lead to an increase of 1.5% in European GDP by 2060. Furthermore, the duration of care will increase and public cover for the elderly will be developed. On the other hand, medical research should be a significant growth factor, as should services for senior citizens.

Lastly, despite a fall in the birth rate, spending on education and lifelong training will prove to be essential in fostering productivity and human capital.

The impact of the international financial crisis

The programme of structural reforms aimed at allowing the EU to meet the demographic challenge involves the adoption of a series of measures aimed at achieving balanced budgets, reducing the public debt, increasing employment and productivity, and guaranteeing the viability of social protection and healthcare systems.

However, in 2009 Member States should give priority to the European Economic Recovery Plan. In this context, the Commission presents amended objectives to prepare for the ageing population. National measures should promote:

  • birth rates, by creating favourable conditions for families;
  • labour market participation , aiming particularly at young people and older workers. The participation of older workers involves adapted working conditions and healthcare;
  • economic productivity and progression towards a knowledge-based economy. In this regard, investments should be made in education, new technologies and services for the elderly;
  • conditions for receiving migrants. The international financial crisis has consequences on the situation of developing countries and migratory flows. However, migrants may also face more difficulties finding a job in Europe;
  • the viability of public finances and continuing reforms related to the demographic decline.

The measures taken at Community level are framed by the Stability and Growth Pact which forms the basis for the Broad Economic Policy Guidelines (2008-2010), and the Renewed Lisbon Strategy. The Commission encourages:

  • strengthening of budgetary supervision and the coordination of national policies;
  • reform of national pension schemes;
  • protection of financial markets, particularly concerning their impact on pension schemes;
  • regular evaluation of progress and needs in the areas of education, training, research and development.

European Year for Active Ageing

European Year for Active Ageing

Outline of the Community (European Union) legislation about European Year for Active Ageing

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social measures for target groups: disability and old age

European Year for Active Ageing (2012)

Document or Iniciative

Decision No 940/2011/EU of the European Parliament and of the Council of 14 September 2011 on the European Year for Active Ageing and Solidarity between Generations (2012) (Text with EEA relevance).

Summary

The 2012 European Year acts as a framework to promote active ageing and solidarity between generations. The European Union (EU) faces a rapidly ageing population and decreasing birth rate.

It is therefore necessary to improve employment opportunities and working conditions for older workers, but also to improve their inclusion in society and to encourage healthy ageing. The actions carried out take account of equal treatment between people and gender equality.

Objectives of the European Year

The EU encourages and supports initiatives by the public authorities of its Member States, whether they take place at national, regional or local level. The social partners, actors in civil society and entreprises are also encouraged to carry out actions to promote solidarity and cooperation between generations.

The activities organised at European level and in the EU countries shall:

  • raise awareness among the general public of the importance of older persons’ participation in society and the economy;
  • stimulate debate, exchange of information and mutual learning between participating countries in order to promote good practice and cooperation;
  • offer a framework for commitment and concrete action to develop activities and innovative solutions, but also to set new long-term policy objectives;
  • combat age discrimination, particularly with regard to employability.

Operation

The European Year is open to participation by EU Member States, candidate countries and countries of the Western Balkans and the European Economic Area (EEA). Actions may also be organised in cooperation with competent international organisations.

In order to ensure that the activities are properly coordinated, each participating State shall appoint a national coordinator. In addition, the Commission shall be responsible for coordinating the Year at European level during meetings between the national coordinators and the various actors concerned.

REFERENCES

Act Entry into force Deadline for transposition in the Member States Official Journal

Decision No 940/2011/EU

24.9.2011

OJ L 246 of 23.9.2011

Employment Committee

Employment Committee

Outline of the Community (European Union) legislation about Employment Committee

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social dialogue and employee participation

Employment Committee

Document or Iniciative

Council Decision (EC) No 98/2000 of 24 January 2000 establishing the Employment Committee.

Summary

In order to promote coordination on employment and labour market policies, the Tripartite Social Summit for Growth and Employment was established in 2003. It institutionalises the informal summits held since December 2000.

Likewise, the Employment and the Labour Market Committee (ELMC) was set up in 1997. Its objective was to assist the Council in the employment field. This Committee basically fulfilled the functions associated with the European Employment Strategy (” Luxembourg process “), i.e.:

  • collective examination of the national employment reports;
  • preparation of the joint employment report by the Commission and the Council;
  • drafting of an opinion on the employment guidelines.

Following the entry into effect of the Treaty establishing the European Communities (Article 130), as amended by the Treaty of Amsterdam, the ELMC was replaced by the Employment Committee. The new Committee takes over from the ELMC and has been modified with a view to making it work more smoothly.

Mission

The mission of the Employment Committee is to:

  • promote the taking into account of the objective of a high level of employment in preparing and implementing Community policies and measures. It formulates opinions at the request of the Council of Ministers, the European Commission or on its own initiative, and prepares the discussions of the Employment, Social Policy, Health and Consumer Protection Council at the request of the Presidency of the Council of the European Union;
  • contribute to the procedure of adopting the major economic policy guidelines in order to ensure that they are consistent with the employment guidelines and contribute to synergy between the European strategy for employment, the coordination of macro-economic policies and the economic reform process;
  • promote exchanges of information and experience between Member States and with the Commission in these fields;
  • participate in the dialogue on macro-economic policies at Community level.

Membership

The Member States and the Commission each appoint two members of the Committee and they may also appoint two alternates. With a view to strengthening the Committee’s political clout, the members of the Committee and the alternates are selected from among senior experts possessing outstanding competence in the field of employment and labour market policy in the Member States. The Committee may call on external experts where appropriate to its agenda.

Operations

The Committee elects its chairperson from among its members for a non-renewable term of two years. The Chairperson is assisted by three vice-chairpersons. Meetings are convened by the Chairperson, either on his own initiative or at the request of at least half of the members of the Committee.

The Commission provides the analytical and organisational support for the Committee.

The Committee establishes its own rules of procedure.

The Committee may entrust the study of specific questions to its alternate members or to working groups. In such cases, the presidency is assumed by either the Commission, a member or an alternate member of the Committee, appointed by the Committee. The working groups may call up experts to assist them.

Liaison with other bodies

The ELMC consulted management and labour on an informal basis. The draft decision provides that the Committee shall consult management and labour and leaves a certain margin for manoeuvre as regards the mechanisms of this consultation, which must be established by the Committee.

The Employment Committee has been established to achieve improved coordination and to consolidate relations between the committees. Hence the draft decision provides that the Committee will work as appropriate in cooperation with other relevant bodies and committees dealing with economic policy matters, i.e. the Economic and Financial Committee (provided for in the Treaty) and the Economic Policy Committee (established by a Council Decision), the Social Protection Committee and the Education Committee.

Council Decision 97/16/EC establishing the Employment and Labour Market Committee ceases to exist.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Decision (EC) No 98/2000 24.01.2000 OJ L 29 of 04.02.2000