Draft EU employment legislation state of play, January 2011

The second half of 2010 saw disagreement between the European Parliament and the Council of the EU over amendments to the Pregnant Workers Directive, while the European Commission launched new consultations on revision of the Working Time Directive. Our six-monthly review looks at the main developments in draft EU employment legislation and examines the prospects for 2011.

On this page:
Adoption
New proposals
Discussions and amended proposals
Consultations
No progress
Prospects
Table: Draft EU employment legislation state of play.

The state-of-play table lists all important "live" items of employment-related draft EU legislation of general interest that are currently in the legislative pipeline. It does not include measures that were adopted prior to our most recent table (formerly known as the "social policy state of play"). It shows only those proposals that have yet to be adopted, or that have been adopted since the previous table was published. Proposals that have become dormant (defined here as not having been discussed in the Council of the European Union, or subject to any other significant movement, for more than two years) are not included.

For each proposal, the table provides the following information, as at 31 December 2010:

• the full title of the proposal;
• a reference to the issue of the Official Journal (OJ) of the European Union (external website) in which the proposal (and any subsequent revised versions) or adopted text was published. Laws appear in the Legislative ("L") series, while other instruments and proposals appear in the Communications ("C") series. Where proposals have not appeared in the OJ, the "COM" number of the document is given, where relevant;
• where appropriate, or available, the article of the Treaty on the functioning of the European Union (TFEU) on which the proposal is based; and
• where relevant, the dates of the proposal's submission to the Council of the European Union, the opinions issued on the proposal by the European Parliament (EP), the Committee of the Regions (CoR) and the European Economic and Social Committee (EESC), the submission of an amended proposal to the Council, and any Council decisions or debates, as well as the dates of the formal consultation of the social partners, where relevant. Any adopted proposals and formally signed agreements are identified with an asterisk.

Adoption

No new employment-related EU legislation was adopted in the second half of 2010.

One item of legislation listed as adopted in our previous table had not at the time been published in the OJ, but has appeared since. Directive 2010/41/EU on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity was published in OJ L180 of 15 July 2010 and must be implemented by the member states by 5 August 2012, whereupon the existing Directive on the same subject (86/613/EEC) will be repealed.

New proposals

The Commission proposed in July 2010 Directives on the treatment of two groups of non-EU workers coming to work in the member states - seasonal workers and "intra-corporate transferees" (skilled workers who are not EU nationals, who are temporarily transferred by multinational companies from a firm located outside the EU to branches or subsidiaries in the member states).

The draft Directive on the conditions of entry and residence of third-country (that is, non-EU) nationals for the purposes of seasonal employment would introduce a common EU admission procedure for seasonal workers, based on common definitions and criteria, in particular the existence of an employment contract or a binding job offer that specifies the remuneration, a valid travel document, health insurance and accommodation. It would set a maximum duration of six months per calendar year for seasonal work in the EU, while providing for a multi-seasonal work permit valid for three years or a simplified re-admission procedure for subsequent seasons. The Directive would also lay down common rules on working conditions and equal treatment with EU nationals. Member states would be free to decide how many seasonal workers they admit.

The draft Directive on the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer would establish a common set of rules for a new fast-track entry procedure to apply to the transfer of highly specialised staff from non-EU countries. Intra-corporate transferees would be granted entry to the EU on the basis of a combined residence/work permit. The scheme would apply to managers, specialists and graduate trainees only. Managers and specialists could be transferred to the EU for up to three years and graduate trainees for up to one year. The staff concerned would be given a clear legal status, including the same working conditions as employees posted to work in another member state by an EU-based company. Member states would decide on the number of transferees admitted.

In October 2010, the Justice and Home Affairs Council held a first exchange of views on the drafts. A number of ministers underlined the right of member states to determine the number of non-EU nationals to be admitted to their territories, taking into account the impact on national labour markets. Several ministers also called for greater flexibility in the proposed Directives, for example with reference to the time that seasonal workers and transferees could stay in the EU. Some delegations questioned if the rights accorded to non-EU nationals should be equivalent to those enjoyed by nationals of the host country.

The European Parliament will give the proposals a first reading in 2011. Some MEPs have argued that seasonal workers and transferees should be included in the general draft Directive on a single permit to work and reside in the EU, to avoid the risk of creating a "two-tier" migrant workforce.

The draft Directives form part of the EU's common immigration policy. The UK, along with Ireland, has a form of opt-out from this policy and can decide on a case-by-case basis whether or not to be involved in proposals based on it. The UK Government has decided not to take part in the adoption of the seasonal workers and intra-corporate transferees Directives or be bound by them. According to Damian Green, the minister for immigration, this is because of concern that participation might "impact on the United Kingdom's ability to determine who is admitted onto its territory and reduce its flexibility to adjust the criteria for the admission of third-country workers in the light of the United Kingdom's needs".

Discussions and amended proposals

The most high-profile EU employment law issue in the second half of 2010 was the draft Directive amending the 1992 Pregnant Workers Directive. After lengthy delays and disagreements, the Parliament gave the proposal - which was issued by the Commission in October 2008 - a first reading in October 2010. The Parliament strengthened many of the amendments originally proposed by the Commission and added provisions in a range of new areas. For example, the version of the draft Directive adopted by the Parliament would provide for: 20 weeks' maternity leave (the current Directive provides for 14 weeks and the Commission's proposal for 18 weeks) on full pay; two weeks of paid paternity leave; and a right to adoption leave.

The draft Directive is subject to co-decision between the Parliament and the Council. Under this procedure, if the Council approves all the amendments made by the Parliament at first-reading stage, a Directive is adopted immediately. This was never likely to happen in the case of the proposed Directive amending the Pregnant Workers Directive, and the opposition of many national Governments (including that of the UK) to the Parliament's proposals was confirmed at a meeting of the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council on 6 December. A very large majority of member states said that the amendments, notably the extension of the minimum maternity leave to 20 weeks on full pay, do not "constitute an appropriate basis for negotiations" between the Council and Parliament.

The next stage in the legislative procedure is that national Governments have to reach a common position among themselves, which will return to the Parliament for a second reading. Attempts will be made to find common ground, after a period of reflection and evaluation, probably based around elements of the Commission's original proposal, including the extension of minimum maternity leave from 14 to 18 weeks.

In the field of immigration policy, a draft Directive on a uniform application procedure for migrants wanting to work and live in the EU, and a common set of rights for these workers, was proposed in October 2007. Its legal base meant that it was subject to consultation between the Parliament and the Council, rather than full co-decision for the Parliament. The draft passed first-reading stage in Parliament in November 2008 and the Justice and Home Affairs Council reached a degree of consensus on the proposal in 2009. However, when the Lisbon Treaty came into force in December 2009, the legal basis of the draft Directive changed, which means that it is now subject to co-decision. The Parliament must therefore give a renewed first reading. This was due to occur at a plenary session in December 2010. However, during the debate, a series of amendments were approved resulting in an overall text that a majority of MEPs could no longer support. The amended proposal was rejected and sent back to the Parliamentary Civil Liberties, Justice and Home Affairs Committee and Employment and Social Affairs Committee for further work. The first reading has therefore been delayed.

Outside the strictly defined field of employment law, the Council continued discussions during 2010 on the draft Directive on "implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation". The Directive would extend the scope of Directive 2000/78/EC, which established a general framework for equal treatment in employment and occupation, beyond the workplace. It would provide for equal treatment in areas such as social protection (including social security and healthcare), education, and access to, and supply of, goods and services that are commercially available to the public, including housing.

Since the Parliament gave the proposal a first reading in April 2009, the EPSCO council has been trying to find a common position, but with little success. At a council meeting in December 2010, the Belgian EU Presidency reported that "there is no current prospect of achieving unanimity" on the proposal, as it stands. Given this lack of general agreement, and the complexity of the areas covered by the proposal, the Presidency has been focusing debate on the issues of financial services and housing.

Consultations

Under art.154 of the TFEU, before submitting proposals in the employment and social policy field, the Commission consults the EU-level social partners on the possible direction of EU action. Then, if the Commission considers EU action advisable, it consults a second time, on the content of the envisaged proposal. At that stage, the social partners may, under art.155, seek to negotiate a European-level agreement on the issue in question, which may substitute for EU legislation. Agreements reached may be implemented either by a Council Directive or "autonomously" by the signatories' national member organisations.

At central, "cross-industry" level, the social partners are: the European Trade Union Confederation (ETUC), plus the Eurocadres/CEC liaison committee, which represents managerial and professional staff unions; BusinessEurope (private sector employers); Ueapme (small and medium-sized enterprises) and Ceep (public services employers).

No first-stage consultations were launched in the second half of 2010 and only one second-stage consultation, on the review of the Working Time Directive.

In 2004, the Commission proposed a Directive amending the Working Time Directive. Despite lengthy negotiations and attempted conciliation, the Council and the Parliament were unable to reach agreement on the issue and the draft amending Directive lapsed in 2009. The Commission took the view that changes to the Directive were still necessary and in March 2010 it relaunched the process, by holding a first-stage social partner consultation. It suggested a comprehensive review of the Directive, aimed at identifying which of its provisions need to be adapted, simplified or clarified to take account of developments in the length and distribution of working time that have occurred since the Directive was originally adopted in 1993.

The Commission moved to the second stage of consultations on 21 December 2010. It has concluded that a revised Working Time Directive is necessary, in order to adapt the EU rules to changing working time patterns while respecting the rules' objective of protecting workers' health and safety, and to clarify critical issues of interpretation. It presents the social partners with two options.

The first option is a "focused review", looking only at two issues that urgently require resolution as a result of European Court of Justice case law. These are:

• whether or not on-call time at the workplace (when a worker is obliged to be present and ready to work if called upon) should be treated as working time, fully or partially; and
• when "compensatory rest" should be taken - this refers to situations where employees are obliged to delay taking their minimum daily rest period of 11 consecutive hours or minimum weekly rest period of 24 hours plus the 11 hours, and instead take equivalent time off at a later point.

The second option is a "comprehensive review", dealing not just with on-call time and compensatory rest, but also with:

• the future of the "opt-out" - the option for member states not to apply the Directive's maximum average weekly working time of 48 hours if a worker agrees to this individually;
• greater flexibility in the organisation of working time (relating to reference periods for averaging working hours, and to the role of collective bargaining in this area);
• work-life balance (for example, dealing with workers' requests to change their working hours and patterns);
• the definition of the "autonomous" workers (those who can determine their own working time) who may, under the current Directive, be exempted from the statutory 48-hour average weekly limit on working hours;
• the application of the Directive's limits on working time to employees who have more than one employer, or more than one contract with the same employer;
• the application of the Directive to specific sectors and groups of workers; and
• whether or not employees on long-term sick leave can accumulate paid annual leave entitlement over successive years.

The social partners have until 28 February 2011 to respond to the consultation, and to indicate if they wish to open negotiations over an EU-level agreement on revision of the Working Time Directive.

Second-stage consultations are awaited for: the protection of workers from exposure to environmental tobacco smoke at the workplace (first round of consultations in early 2009); and cross-border transfers of undertakings (first round in 2007). While the cross-border transfers issue appears to have been shelved, the European Commission has announced a second-stage consultation on environmental tobacco smoke in 2011.

A number of two-round consultation exercises have been completed over recent years without resulting in cross-industry social partner negotiations or, so far, any proposals for EU legislation. These include consultations on:

• "socially intelligent" corporate restructuring (2004 and 2005);
• improving workers' protection against musculoskeletal disorders (2004 and 2007);
• protecting workers from the risks related to exposure to carcinogens, mutagens and "substances toxic for reproduction" at work (2004 and 2007);
• the current exclusion of maritime workers from some areas of EU employment law (2007 and 2009); and
• minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) (2009 and 2010).

The Commission is planning to proceed with action on most of these issues in 2011, with draft Directives due to be proposed on work-related musculoskeletal disorders, maritime workers and electromagnetic fields. With regard to restructuring, the Commission will hold renewed social partner consultations, this time on a European framework for good practice in company restructuring.

On a sector-specific issue not included in our table, in October 2010, the EU-level social partners in the fishing industry opened talks under art.154 of the TFEU over an agreement that would implement a 2007 International Labour Organisation (ILO) Convention on working conditions in this sector. Any agreement reached will (under art.155) be given legal force, unamended, by an EU Directive and transposed into the national law of the member states.

No progress

The EPSCO council has not discussed the draft Directive on the portability of supplementary pension rights since July 2008. The proposal deals with the acquisition and preservation of pension rights, and enhanced information for workers. The main point of disagreement that appears to have halted council discussions is the maximum permissible duration of the "vesting period" (the period of active membership of an employment-related pension scheme required in order to trigger entitlement to a supplementary pension).

In a green paper on pensions issued in July 2010, the Commission sought views on how to proceed with the draft Directive and the issue of obstacles to cross-border mobility related to supplementary pensions. It suggested options such as setting up a cross-border EU pension fund for highly mobile workers and an EU-level "tracking system" to help mobile individuals keep track of their pension rights, and tackling discriminatory tax rules that can be an obstacle to the mobility of pensions. A White Paper on pensions, based on the Green Paper consultation exercise, is due in the third quarter of 2011 and may clarify the way forward.

The proposed Council Regulation on a statute for a European Private Company would create a new form of company that gives small and medium-sized firms and privately owned companies the same possibilities to operate on a Europe-wide basis, as the European Company statute gives public limited-liability companies. The draft Regulation relates principally to company law but is included in our table because it also deals with employee participation rules that apply to European Private Companies. At first-reading stage in March 2009, the Parliament proposed a strengthening of the employee participation requirements, and disagreements over participation have contributed significantly to preventing agreement in the Competitiveness Council, which has not discussed the Regulation publicly since December 2009.

In June 2010, the Parliament rejected a Commission proposal to amend Directive 2002/15/EC on the organisation of the working time of persons performing mobile road transport activities (a sector-specific proposal not included in the table). The 2002 Directive, which limits lorry and bus drivers' working hours, applies to employees only and not to self-employed drivers. However, it provided that, in principle, it should apply to self-employed drivers from March 2009, unless the Commission proposed legislation to the contrary. In October 2008, the Commission issued a draft amending Directive that would have maintained the exclusion of the self-employed. Following Parliament rejection of the proposed amending Directive, the Commission has announced that it will formally withdraw the proposal in 2011, leaving the current Directive in force, unamended.

Prospects

The second half of 2010 was a relatively quiet period for EU employment legislation. The revision of the Pregnant Workers Directive moved on a stage, with the Parliament finally giving its first reading and enabling the Council to start work on the proposal, while the Commission opened second-stage social partner consultations on the review of the Working Time Directive. The other main development was the proposal by the Commission of the Directives on non-EU seasonal workers and intra-corporate transferees.

It seems certain that 2011 will see rather more activity. The Commission has committed itself to issuing:

• a legislative initiative aimed at improving the implementation and enforcement of the Posted Workers Directive (96/71/EC) and ensuring the respect of posted workers' rights - this may take the form of amendments to the existing Directive or an additional Directive or Regulation;
• a draft Directive on work-related musculoskeletal disorders, consolidating provisions found in two existing health and safety Directives;
• amendments to several employment law Directives with a view to including maritime workers within their scope and giving seafarers the same level of employment rights as onshore workers; and
• a draft Directive amending the Directive (2004/40/EC) on the minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields).

With regard to social partner consultations on possible legislation, the Commission plans to launch:

• first- and second-stage consultations on further legislative measures to improve work-life balance, including paternity and carers' leave;
• first- and second-stage consultations on an "update" of the EU legislation implementing the principle of equal pay, examining how to tackle direct discrimination (eg through greater pay transparency) and various types of indirect discrimination (eg through pay audits and job evaluation);
• second-stage consultations on the protection of workers' health from risks related to exposure to environmental (ie second-hand) tobacco smoke at the workplace;
• first-stage consultations on a European framework for good practice in company restructuring; and
• first-stage consultations on a possible revision of the Directives on employee involvement in European Companies and European Cooperative Societies.

These consultations could lead to social partner agreements, which would in most cases be implemented by EU Directives. In the absence of agreements, the Commission is likely to propose legislation on these subjects.

Further, in close cooperation with the EU-level social partners, the Commission will review the impact on equal pay of arrangements such as part-time work and fixed-term contracts, and the effectiveness of the EU Directives on these arrangements (97/81/EEC and 99/70/EC respectively).

During 2011, the Commission will also be preparing a review of existing EU employment legislation, aimed at amending, clarifying or simplifying Directives, if justified by an impact assessment, and after consulting the EU-level social partners. From 2012, specific reviews will be conducted of legislation on employee information and consultation, discrimination, and health and safety.

With regard to initiatives already under way, national Governments will in 2011 start the difficult process of finding a common position among themselves on how the Pregnant Workers Directive should be amended. If they succeed, their position will pass to the Parliament for a second reading. If the Parliament approves the common position (which seems unlikely, given the differences on this issue between the two institutions), the Directive will be adopted. If not, the Parliament will propose amendments to the position, which will then return to the Council for a second reading. The Council may agree these amendments, in which case the Directive will be adopted. If it does not agree, the proposal will enter a Council-Parliament conciliation procedure. At present, the odds are that the draft Directive will end up in conciliation.

The social partners must decide in the opening months of 2011 if they want to open negotiations over an agreement on amendments to the Working Time Directive. Their responses to the first round of consultations on the issue suggested that their positions were too far apart to make this a realistic prospect. If the partners do not reach a deal, the Commission has said that it will issue a draft amending Directive in third quarter of 2011.

This article was written by Mark Carley, international editor.

European employment policy, practice and law, January 2011