EC: Social policy state of play
The second half of 2003, with the Italian government at the helm of the Council of Ministers, saw the formal adoption of the Regulation and Directive on a statute for a European Cooperative Society (ECS) and worker involvement in an ECS. It also saw new proposals: on cross-border mergers, which contains provisions relating to employee participation; and on equal treatment in the access to goods and services, which will have an impact on private pension provision. However, no progress was made on the proposal for a Directive on terms and conditions for temporary workers.
The table contains all important "live" items of draft social policy legislation of general interest to our readers that are still in the legislative pipeline. The table does not contain those measures that were adopted prior to the most recent table . It shows only those proposals that have yet to be adopted, or that have been adopted since the previous table. Proposals that have become dormant (defined here as not having been discussed in Council for more than two years) are not included.
For each proposal the table provides the following information, as at 19 December 2003:
the full title of the proposal;
a reference to the issue of the Official Journal of the European Union* - the OJ - in which the proposal (and any subsequent revised versions) was published. Laws appear in the Legislative ("L") series, while other instruments and proposals appear in the Communications ("C") series;
where appropriate, or available, the Article of the EC Treaty on which the proposal is based; and
where relevant, the dates of the proposal's submission to the Council, the Opinions issued on the proposal by the European Parliament (EP) and the Economic and Social Committee (ESC), 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. Adopted proposals and formally signed agreements are identified with an asterisk.
There is one piece of unfinished business from our last table: Directive 2003/41/EC of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision was published in OJ L235 on 23 September 2003.
Adoption
July 2003 saw the formal adoption of the proposal for a European Cooperative Society, consisting of a Regulation and an accompanying Directive on the employee involvement arrangements to be applied in a European Cooperative Society. This proposal was progressed following the formal adoption on 8 October 2001 of the Regulation for a European company statute and the accompanying Directive on worker involvement in a European company. Last year, at the 3 June 2002 employment and social affairs Council, ministers agreed on a general approach to this dossier but, as there have been substantial amendments to the text since the EP's Opinion, given in January 1992, the Council decided to reconsult the EP. The EP finally examined and voted on the texts on 14 May 2003, making a number of amendments. The Council reached political agreement on the texts at its 2-3 June 2003 social affairs Council. Formal agreement was reached on 22 July 2003 after a process of legal and linguistic checking of the texts and the Regulation (EC) No.1435/2003 on the Statute for a European Cooperative Society and Directive 2003/72/EC were published in OJ L207 on 18 August 2003. For details of the text on worker involvement, see European Cooperative Society adopted .
New proposals
Equal treatment in access to goods and services
On 5 November 2003, the Commission issued a new proposal aimed at laying down a framework for combating discrimination based on sex in the access to and the supply of goods and services (Equal treatment proposal may affect private pension provision ). Although this new proposal does not relate to equal treatment at the workplace, it is of interest as it has implications for private pension provision. It is based on Article 13 of the Treaty establishing the European Community. While seeking to prohibit discrimination in access to and the supply of all available goods and services, it allows for justified exceptions, such as where a good or service was intended exclusively or primarily for members of one sex, or where the skills required for its delivery were different for each sex.
The proposal explicitly sets out to tackle the issues of premiums and benefits in the insurance sector. For example, in a majority of cases, women pay higher premiums than men for pensions and annuities, or their plans pay out less per year, whereas men tend to pay higher premiums for life insurance. These differences are justified by the insurance industry by citing the fact that women live longer than men. However, the Commission states that this justification is not necessarily valid as there are factors that are not linked to sex that are equally important in establishing life expectancy, such as socio-economic or marital status, the region in which a person lives and levels of smoking. When these factors are removed from the equation, the difference in life expectancy between men and women can be between zero and two years.
The proposal, which is subject to the consultation procedure, is awaiting consultation in the EP, likely in the spring of 2004.
Proposal on cross-border mergers
On 18 November, the Commission issued a new proposal for a Directive on cross-border mergers of companies with share capital. This is the latest attempt by the Commission to address this issue. Previous attempts have always been delayed by the issue of worker involvement. However, in the light of the agreement on worker involvement in a European company, reached in October 2001 (European Company Statute adopted ), the Commission believes that a proposal for a Directive on cross-border mergers could contain similar worker involvement provisions.
The proposal contains specific provisions relating to employee participation, seeking to address fears that in the case of cross-border mergers the process might be hijacked by companies which, faced with having to live with employee participation, might try to circumvent it by means of such a merger. It provides that the cross-border merger remains subject, with regard to rights other than those of participation in the acquiring company or in the new company created by the cross-border merger, to the relevant provisions applicable in member states. The change of employer resulting from the merger operation must have no effect on the contract of employment or employment relationship in force at the time of the merger, which is automatically transferred to the new owner.
Likewise protected after the merger are all acquired rights of employees agreed under a collective agreement, and their rights to old-age, invalidity or survivor's benefits under statutory social security schemes.
It contains special provisions concerning a situation in which the protection of acquired rights of participation is put at risk by the merger. This is relevant only in a situation where one of the merging companies has a compulsory or voluntary participation regime and the law of the member state where the company created by merger is to be incorporated does not impose compulsory employee participation. If the merging companies fail to reach a negotiated solution, the participation system that best protects the acquired rights of the workers and which already exists in one of the merging companies is extended to the company created by merger.
This proposal has caused some anger among employer representatatives. UNICE, the European-level organisation representing private sector employers, has stated that the proposal is "unacceptable" and is particularly critical of the Commission for proposing it without "specific consultation of stakeholders".
The proposal is awaiting a first reading in the EP.
Agreements
The draft joint text on the issue of restructuring (Orientations for reference in managing change and its social consequences), concluded in June 2003 between the European social partners (Joint text on restructuring ), has now been approved by the executive body of UNICE. However, the executive committee of the ETUC, meeting at the end of October 2003, decided to "take note" of the text rather than give it formal approval. The text is not a formal joint social partner agreement and therefore does not require formal endorsement. Nevertheless, this development is reported to be due to differing views within the ETUC on the content of the text, with some delegations criticising it as too weak. As a result, the legal status of the joint text is rather unclear.
Consultation and amended proposals
Review of the working time Directive
On 5 January 2004, the Commission launched its long-awaited consultation on the operation and possible review of the 1993 working time Directive (Consultation on working time ). An examination of the so-called "opt-out" of the maximum 48-hour week provision of the Directive was due by 23 November 2003.
This relates to article 18(b)(i) of the Directive, which allows member states not to apply the Directive's provisions relating to maximum weekly working time. This essentially allows employers not to enforce a 48-hour maximum working week if the consent of the individual employee is given, workers do not suffer any detriment and the employer keeps records which may be examined by competent authorities.
The UK has included this possibility in its implementing legislation and it is thought that the practice of opting out of the 48-hour maximum working week is widespread. Other countries, notably France and the Netherlands, have made use of the opt-out for certain sectors, such as health.
In its consultation document, the Commission invites responses from interested parties on the opt-out, the operation of reference periods for calculating working time, the definition of working time (following recent ECJ judgements in the area of on-call working), and measures to improve the balance between work and family life. Responses are invited by 31 March 2004.
Harmonising social legislation in road transport
A modified proposal for a Regulation harmonising social legislation in road transport was issued by the Commission on 11 August 2003, following an EP first reading of the text on 14 January 2003. The initial proposal was issued by the Commission in October 2001 with the aim of updating a Regulation that dates from 1985. The proposal contains working time provisions that sit alongside those contained in the new Directive on the organisation of working time for mobile workers in road transport. The ESC gave its Opinion on the text on 29 May 2002 and the EP gave the text a first reading on 14 January 2003, at which it made a number of amendments. A revised text was subsequently issued in August 2003. The text is now awaiting discussion in the Council, with a view to reaching a common position. It will then be returned to the EP for a second reading, under the codecision procedure.
Exposure to carcinogens or mutagens
The past six months have seen some progress of the revised proposal, issued by the Commission on 20 March 2003, to codify Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related to exposure to carcinogens at work. The EP gave the text a first reading under the codecision procedure on 2 September 2003, at which it approved the Commission's proposal. The text is now awaiting a common position in the Council. This is purely a codifying process, which will not entail any changes to the content of the 1990 Directive.
Risks arising from electromagnetic fields
At the October 2003 social affairs Council, ministers reached political agreement on a common position on the physical agents proposal, which concentrates on the exposure of workers to risks arising from electromagnetic fields. The original physical agents proposal was issued by the Commission on 23 December 1992, dealing with four physical agents: noise; mechanical vibration; electromagnetic fields and waves; and optical radiation. In 1999 it was decided to focus on each of these four issues separately. Thus, a Directive on vibration was adopted in May 2002 and on noise in December 2002.
The proposal on electromagnetic fields was discussed at the June 2003 social affairs Council and again in October 2003, where ministers reached political agreement on a common position. Once the common position has been formally adopted, the text will be returned to the EP for a second reading under the codecision procedure.
The fourth physical agents issue, optical radiation, will be the subject of future Council deliberations.
Portability of supplementary pension rights
There has been some progress during the past six months on the issue of the portability of supplementary pension rights. The first consultation was launched by the Commission on 12 June 2002, in which it invited the social partners to give their views on this issue. It argued that some framework is needed at European level, given that there is currently no general framework, which hampers freedom of movement. After considering the social partners' responses, the Commission launched the second stage of consultations on 15 September 2003, stating its belief that a social partners' agreement was the most appropriate instrument to regulate this area.
In its reply to the Commission's second consultation, UNICE has stated that any EU-level instrument in this area should deal with the cross-border portability of supplementary pensions only and should not tackle the conditions for acquisition, preservation and transferability of supplementary pension rights at national level, as this would interfere with member states' competence in this area. Further, it stated that it would not like to enter into European-level social partner negotiations on this issue, although it does see merit in organising a technical seminar within the context of the social dialogue process at EU level in order to make a joint contribution to the debate on how to alleviate the obstacles to cross-border labour mobility, linked to supplementary pensions.
Reform of social security Regulation 1408/71
The past six months have seen much progress in attempts to reform Regulation 1408/71, which regulates the application of social security schemes to employed persons and their families moving within the European Community. It is aimed at simplifying Community legislation in order to remove obstacles to the free movement of persons created by the co-existence of different national social security systems. A proposal to replace the Regulation was issued by the Commission in 1999. It is subject to unanimity in the Council and also to the codecision procedure. At the 1-2 December 2003 social affairs Council, ministers reached unanimous partial political agreement on the text (with the exception of the annexes) (December social affairs Council ). The two most controversial issues related to the provisions contained in the unemployment chapter.
The first concerned the payment of unemployment benefits to frontier and seasonal workers, where there were concerns about the cost of unemployment benefits to be provided by the state of residence to unemployed persons who did not reside in the state in which they were previously employed. Since the state of residence had not received any contributions from the worker, as the worker had not worked in this state, it was proposed that the state of last activity should, within certain limits, reimburse the costs of unemployment benefit provided by the state of residence.
The proposal accepted by all delegations provides that the reimbursement will be for a period of three months, extended to five months where the person has, in the previous 24 months, spent at least 12 months employed or self-employed in the state to whose legislation they were last subject. In the case of relations between Luxembourg, on the one hand, and France, Belgium and Germany, on the other, arrangements will be the subject of separate bilateral agreements.
The second issue concerned Luxembourg's request for a specific transitional period in view of the need to reinforce its employment services, which would result from frontier workers being able to register additionally with the employment service of the state of their last activity. It was agreed that a two-year transitional period should be granted to Luxembourg.
The Permanent Representatives Committee will now continue work on the annexes, with the aim of enabling the Council to reach full political agreement by the end of 2003.
Takeover bids Directive
The EP gave the text of the Commission's new proposal on takeover bids a first reading on 15 December 2003. This proposal is of interest as it contains provisions relating to the information and consultation of workers or their representatives in the event of takeover bids. The previous Commission proposal for the regulation of company takeover bids had lapsed in July 2001 following rejection of a conciliated text by the EP on 4 July 2001.
Deciding to restart the legislative procedure, the Commission convened a high-level group to look into this issue in September 2001. After examining the group's findings, reported in January 2002, the Commission issued a new proposal on 2 October 2002.
The text will now be returned to the Council where ministers will try to reach a common position.
No progress
Temporary work proposal
No progress has been made over the past six months on the Commission's proposal for a Directive on the working conditions of temporary workers. It had been hoped that political agreement on a common position could be reached in the June 2003 Council, under the outgoing Greek Presidency. However, this was not the case due to continuing differences of view between the various delegations - at present, a blocking minority of four member states, the UK and Ireland, supported by Denmark and Germany - persists.The main issues of contention are:
the need for a specific derogation in order to help unemployed people gain access to the labour market;
a review and possible deletion of restrictions to temporary agency work; and
the nature of the exemption from the principle of equal treatment between agency workers and user company workers, in addition to the length of the so-called qualifying period during which an exemption may be put into place.
At the time, it was stated that work on this dossier would continue, under the Italian Presidency. However, this issue has not featured on the agendas of any of the social affairs Councils organised by the Italian Presidency and so no formal discussions on this have taken place.
The Irish government will take over the Presidency at the beginning of 2004, although this dossier is not mentioned in the Irish Presidency's priorities (SeeIrish Presidency's priorities ).
Data protection at work
On 31 October 2002, the Commission launched a second consultation of the social partners on the issue of data protection at work. This follows a first consultation exercise begun on 27 August 2001. Although two Directives currently regulate data protection, the Commission believes that a separate Community instrument is necessary to regulate the issue of data protection at work. On 6 January 2003, UNICE issued its response to the Commission, stating that it did not intend to open EU-level negotiations on this issue. It states that existing regulation in this area is adequate and believes that additional rules could hamper the development of IT in the EU and be detrimental to competitiveness. It also asked the Commission to prepare a report on implementation of this legislation in the member states.
Social security
There has been no progress over the past six months on the proposal for a Council Regulation amending Regulation (EEC) No.1408/97 as regards its extension to nationals of third countries. The aim of this proposal is to extend to nationals of non-EU member states, but who are living in the EU, the provisions of Regulation 1408/71/EEC on the coordination of social security schemes. Political agreement on a common position was reached at the December 2002 social affairs Council.
Prospects
The second half of 2003 sees the Irish government taking over at the helm of the EU Council of Ministers for a six-month term.
The draft legal instrument that still has the highest profile is the proposal for a Directive on working conditions for temporary workers, despite the fact that it has been shelved for the past six months. Whether progress will be made during the first half of 2004 depends on the priorities of the Irish government and it looks as though this dossier will not feature as a priority. Ireland forms part of the blocking minority of four countries. If no progress is made during the first six months of 2004, the baton will be passed to the Dutch government, which takes over for the second half of 2004.
There are a number of areas of social partner consultation that are either imminent or likely to progress over the next few months.
For example, the Commission stated in its June 2000 five-year social policy action programme that it intended to consult with the social partners on the establishment of EU-level dispute resolution procedures and mechanisms. Since then, work has been progressing on this issue - a Commission-funded report giving details of existing dispute resolution mechanisms in EU member states was published in 2002 and the Commission is thought to have been working on the detail of its consultation paper to the social partners over the past few months. It is therefore likely that a consultation on this issue will be launched at some point in the future.
In its 2003 work programme, the Commission made a commitment to issuing a social partner consultation paper in October 2003 on a revision of the 1994 European Works Councils Directive. According to the text of the Directive, "not later than 22 September 1999, the Commission shall, in consultation with the member states and with management and labour at European level, review its operation and, in particular, examine whether the workforce size thresholds are appropriate with a view to proposing suitable amendments to the Council, where necessary." In the meantime, it asked the ESC to give an exploratory Opinion on the revision of the Directive, which it gave in September 2003 (EESC Opinion on EWCs Directive revision ). In this, it noted the main achievements of the Directive and pointed out a number of areas of weakness, including the question of useful effect and timeliness in the area of information and consultation. The Commission is expected to issue a consultation paper to the EU social partners on the revision of the EWCs Directive once it has assessed this Opinion.
The coming months might see some progress on the issue of stress at work. Negotiations between the ETUC, UNICE and CEEP on this issue began on 18 September 2003, following the decisions by the executive bodies of the ETUC and UNICE to authorise negotiations, taken in April and June 2003, respectively. These negotiations were provided for by the social partners joint multi-annual work programme for 2003 to 2005 (Social partners set out their three-year work programme ).
Enlargement
On 1 May 2004, 10 new member states will join the EU. These are: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia. This will be the most significant enlargement of the EU to date, taking the number of member states from 15 to 25. Although all candidate countries are required to adopt the full body of EU law before joining, this enlargement exercise will have profound consequences for EU employment and social policy, not least due to the diverging character of the labour markets, social dialogue and industrial relations traditions and practices of the candidate countries.
Discussions on a European Constitution
Finally, the European Council met on 12 December 2003. Among other things, it debated the draft EU Constitution, drawn up by the European Convention during the first half of 2003 (Social implications of draft EU constitutional Treaty ). The draft amends the Treaties in the light of enlargement and provides for the integration of the charter of fundamental rights, which includes a number of rights in the employment and social policy field, into the text of the new Treaty. This gives the charter legal status. It also extends the process of qualified majority voting to a range of additional policy areas and introduces changes to the operation and composition of EU bodies such as the Commission, the EP and the European Council.
However, ministers failed to reach agreement on the text, principally due to disagreements over the future calculation of qualified majority voting in the Council. Spain and Poland want to retain the current calculation, which gives them 27 votes each, rather than go over to a new, simplified system from 2009 as provided for by the new draft. Under the new system, a qualified majority would be a majority of member states, accounting for three-fifths of the EU population.
The issue has now been referred to the Irish Presidency and only time will tell whether the member states will succeed in reaching a compromise before the 10 new member states join.
* Copies of the Official Journal may be obtained from: Office for Official Publications of the European Communities, 2 rue Mercier, L-2985 Luxembourg, tel:+ 352 499 281, fax: + 352 48 85 73; or in the UK from: Stationery Office, International Sales Agency, 51 Nine Elms Lane, London SW8 5DR, tel: +44 (0)20 7873 90 90, fax: + 44 (0)20 7873 84 63.
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EMPLOYMENT AND REMUNERATION |
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EQUAL TREATMENT |
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IMPROVEMENT OF LIVING AND WORKING CONDITIONS |
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INFORMATION, CONSULTATION AND PARTICIPATION |
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HEALTH PROTECTION AND SAFETY AT THE WORKPLACE |
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FREEDOM OF MOVEMENT |
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PROTECTION OF EMPLOYEES |
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