IR Notes 138 – 25 March 2020
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  A question for…
Alain Supiot, Professor Emeritus at the Collège de France, and holder of the “Social State and Globalization: a Legal Analysis of Forms of Solidarity” Chair (1)

In an interview in the French economics magazine ‘Alter Eco, you emphasised, in relation to the Covid-19 crisis, that “only the shock of colliding with reality can awaken us from a dogmatic sleep” – in other words, can make us emerge from neo-liberal dogma. Does Europe possess the means to reconstruct itself on new foundations?
Criticism of how the European Union currently operates is nothing new. Dieter Grimm, a constitutional expert and a retired German Constitutional Court judge, has denounced a system of hyper-constitutionalisation, whereby the Union has vested a constitutional value in economic policies over which there is no national democratic control. In a text published in 2018 (2), several speakers taking part in a symposium entitled “Revisiting Solidarities in Europe” called for a space to be given back to politics and to democracy, in the face of a European Union that had dismantled national solidarities in the name of economic freedoms, yet without at the same time managing to replace these with European solidarities. The current health crisis extends deeper than the 2008 financial crisis, as it poses a challenge to people’s physical security: something that is the duty and the first responsibility of the State to protect. This pandemic is a harsh confirmation of the absence of European solidarity – as demonstrated by the reluctance of some countries to supply their neighbours with masks, or even the theft by one country of masks destined for another. This lack of solidarity is no great surprise. It was already apparent when countries were dealing with the migration crisis, or the monetary crisis suffered by the euro zone. We saw the EU demanding that Greek hospitals make 25% of their workforce redundant under the rescue plans drawn up at the time of the debt crisis, and subsequently condemning that country for the excessive hours that these cuts had forced hospital staff to work. There are many such examples. This health crisis may end up completely discrediting the European Union. On the other hand, it could also be an opportunity to assert the principle of solidarity above that of fair and undistorted competition, and to relaunch a Europe of projects, for instance by deciding to provide Europe with its own health system, so that it can deal effectively, and in coordinated fashion, with the next health crisis. A further example: Europe could equip itself with its own geolocation tools, or its own search engines: at present, it is entirely dependent on the United States for these. Success stories like that of Airbus show that such cooperation is possible, and does not depend on the impossible goal of 27 countries reaching agreement.


(1) Alain Supiot is the author of The Spirit of Philadelphia. Social Justice vs. the Total Market and Governance by Numbers. The Making of a Legal Model of Allegiance.


(2) The aim of this opinion piece was to initiate discussion of the deep-rooted crisis suffered by the institutions of the European Union and how it could be tackled. It was published in Germany in the Frankfurter Allgemeine Zeitung, in France in Le Monde, in Portugal in Il Publico, in Greece in Ta NEA, in Poland in Rzeczpospolita, in Dutch on the Doxaludo blog, in Spain in El País, and in English on the Open Democracy site. The Proceedings of the Symposium can be accessed on line.

 
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The team This issue was produced by Bernadette Allinger, Predrag Bejakovic, Francisco Gomez Abelleira, Ingel Kadarik, Ekaterina Markova, Sylvain Nadalet, Raquel Rego, Tamas Gyulavari and Frédéric Turlan.
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Lead story
An initial overview of measures taken at national level to deal with the consequences of the Covid-19 epidemic

The IR Notes editorial team is mobilising to keep you informed of the measures taken in each country to deal with the Covid-19 epidemic. With the help of our correspondents and contacts made with all Ministries of Employment and social partners in EU Member States, we can now offer you an initial overview. Resources are also being posted on line on the IR Share website and on our Facebook page. You’ll find information in English and French on the countries we haven’t been able to deal with in this edition. Please feel free to download from our website any documents that you think will be useful and/or post information on our Facebook page. We also encourage you to keep an eye on the pages dedicated to this crisis on the websites of the European Trade Union Confederation (ETUC), assisted by the European Trade Union Institute (ETUI), and also the website of the European trade-union federation IndustriAll Europe and the OECD’s  on line resource centre.  The IR Notes editorial team also contacted around 20 EWC secretaries to enable it to compile this initial overview of the action taken by European employee representatives. We invite you too, to share the initiatives you’ve taken, either via our Facebook page or by sending your story to us at: frederic.t@irshare.eu.


1. European Union
Social update

  • Recourse to State aid : On 20 March, the European Commission adopted a Temporary Framework designed to enable Member States to use the full extent of the flexibility allowed by the rules governing State aid, in order to support the economy in the context of the Covid-19 epidemic. This Temporary Framework provides for five types of aid: 1/ direct grants and selective tax advantages; 2/ State guarantees for loans taken by companies from banks; 3/ subsidised public loans to companies; 4/ safeguards for banks that channel support to the real economy; 5/ short-term export credit insurance (statement).


Case law

Successive fixed-term contracts : The Court of Justice has issued a ruling on a Spanish case that concerns health service workers in the city of Madrid, who have been employed on fixed-term employment contracts for several years (CJEU, 19 March 2020, cases C-103/18 and C-429/18, Ruiz and Alvarez (not available in English). The disputed legislation is very specific to the public sector and the solution is not really relevant to the private sector. However, the Court of Justice points out that Directive 1999/70/EC of 28 June 1999, concerning the Framework Agreement reached between ETUC, UNICE and CEEP on fixed-term employment, is intended to oversee recourse to successive fixed-term employment relationships and to limit any abusive recourse to such practices. It “is based implicitly but necessarily on the premise that workers, as a result of their position of weakness vis-à-vis employers, are likely to be victims of an abusive use, by employers, of successive fixed-term employment relationships, even though they freely consented to the establishment and renewal of those relationships”. Consequently, Clause 5 of the Framework Agreement “would lack any effectiveness if fixed-term workers were deprived of the protection that it guarantees them on the sole ground that they freely consented to the conclusion of successive fixed-term employment relationships.” (see also summary).


2. Member States
Germany

Relaxing the restrictions on recourse to short-time working : On 13 March, Parliament passed the bill submitted on 10 March by the Minister for Employment  (see press release), which facilitates recourse to short-time working. The arrangements entered into force retroactively on 1 March. Once short-time working measures apply to 10% of their workforce (rather than the previous figure of 30%), companies can apply to the authorities for financial assistance, after consulting their works council. The State will pay social security contributions on unworked hours in full (instead of at the rate of 50%, the figure that has applied since 1 January 2020). Employees will receive a payment for unworked hours representing between 60% (if they have no dependent children) and 67% (if they have one dependent child) of their net earnings (see factsheet produced by the DGB confederation). This replacement income figure may be higher where it is enhanced by collective agreements. For example, in the metalworking and electrical industry, a collective agreement was reached on 20 March for the state of North Rhine-Westphalia, whereby monies set aside for holiday allowances and other type of bonus payments, plus a “solidarity  bonus” of 350 euros per employee paid by the employer, would be used to supplement short-time working compensation payments, to bring the total figure up to* 80% of net earnings. The agreement grants employees an additional 8 days of paid leave to look after their children whose nursery or school is closed. This regional agreement looks set to be adopted in other regions of Germany (see press releases issued by IG Metall and GesamtMetall). On 23 March, the government submitted a further bill to Parliament, to facilitate access to social security payments, with specific measures aimed at families on low incomes and self-employed workers with few or no employees (see press release).


Austria

New short-time working arrangements : On 14 March, the government and the social partners reached agreement on short-time working arrangements, underpinned by a budget of 400 million euros (see press release issued by the ÖGB trade union confederation). This measure, which is designed to last for three months (but can be extended for a further three months), will provide financial assistance for those placed on short-time working, and even for workers who are laid off completely but temporarily. The payments made to workers amount to between 80 and 90% of their net earnings. The 80% rate applies to gross earnings of up to 2,685 euros before short-time working came into effect. The rate then rises to 85% where the employee’s gross monthly earnings are between 1,700 and 2,685 euros, and to 90% for gross remuneration of up to 1,700 euros. Where an employee has gross earnings of 2,000 euros, the total cost payable by the employer falls from a gross figure of 2,570.20 euros, including social security charges, to 530.50 euros where short-time working represents 50% of the normal working time, while the employee will receive 1,298.60 euros net instead of 1,442.90 euros net.
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The Ministry of Social Affairs website lists all of the legislation adopted. The ÖGB and the Chamber of Labour have set up a dedicated website: www.jobundcorona.at


Croatia

  • Economic measures : The government has implemented a number of measures that are purely economic in nature, in order to ease pressure on the cash flow of companies that agree not to make their employees redundant – in particular, deferring tax payments for three months. On 17 March, the trade union in the retail sector asked employers to protect their employees against the risk of exposure to Covid-19 (see note from our correspondent Predrag Bejakovic).

Denmark

A tripartite agreement : On 14 March, the government and the social partners signed a tripartite agreement on temporary wage compensation for private sector employees, to prevent redundancies going ahead in companies that were due to lay off either at least 30% of their workforce or more than 50 employees. From 9 March to 9 June, employees whose contract of employment is suspended will receive the full amount of their wages, up to a limit of DKK 23,000 (3,080 euros). The State will pay 75% of the amount of remuneration paid out by companies (see examples set out by the LH trade union confederation). During this period, employees will have to give up five days of their paid annual leave or of their days off in lieu. The government has adopted a number of other measures (see paper prepared by LH): unemployed workers reaching the end of their entitlement period will be granted an extra three months of benefit payments; self‑employed workers who experience a drop of 30% in their earnings will receive an allowance (75% of the amount lost, up to a limit of DKK 23,000).


Spain

A support plan representing 20% of GDP : The government has issued several decrees, one after the other, to deal with the Covid-19 crisis. The royal decree of 17 March is a response to the joint position adopted by the social partners. It contains a variety of measures designed to limit the impact of the crisis on the employment market: 1/ An individual right for employees to adapt their working conditions, so that they can look after either children who are having to stay off school or dependent parents. Unless this is simply impossible or represents a disproportionate burden for the company, the employee can decide to work different hours, whether by work rotation, home-working, etc. Their wages will continue to be paid in full. 2/ An individual right to reduce employees’ working hours by up to 100%, so that they can meet the care obligations referred to above. Their wages will be reduced pro rata. 3/ A simplification of the short-time working mechanism (ERTEs) and an extension of these arrangements to include employees who no longer have any work. Employees will receive unemployment benefit, regardless of the length of time for which they have been paying contributions. Employers can apply for exemption from the obligation to pay social security contributions. Unemployment benefits represent 70% of the basis of assessment, and are capped at 1,411.83 euros for those with two children, 1,254.96 euros for those with one child or 1,098.09 euros for those who have no children.
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For further details: see the factsheets produced by the trade union confederations UGT and CCOO.


Estonia

Allowances that will pay employees 70% of their earnings : On 19 March, the government announced a series of support measures, financed by a total budget of 2 billion euros (7% of GDP). The package includes the following measures: The country’s unemployment benefit fund has set up an earnings compensation scheme for employers who meet at least two of the following three criteria: i) their turnover has dropped by 30%; ii) they are not providing the planned level of employment to at least 30% of their employees; iii) they are having to cut the wages paid to at least 30% of their workforce by a figure of at least 30%. Employees who are laid off will receive compensation payments amounting to 70% of their gross earnings (up to 1,000 euros) per month for a period of two months, between 1 March and 30 May 2020. The employer is required to supplement this figure with a payment of at least 150 euros. Moreover, from March through to May, employees will receive sick pay from their first day of sick leave (whether or not their illness is linked to Covid-19), instead of from the 4th day, as at present.


France

Wholesale recourse to short-time working : one of the flagship measures implemented by the government is the enhanced package of short-time working arrangements, announced on 12 March (see package of measures and summary in English). Companies will pay compensation to their employees equivalent to 70% of gross earnings (approximately 84% of net earnings). Employees whose remuneration is less than or equal to the minimum wage will receive their full wage. The State will reimburse companies in full for gross wage and salary payments of up to 6,927 euros per month, i.e. 4.5 times the minimum wage. At 21 March, the State had already received more than 26,000 applications from companies for assistance. Taken together, these represent 500,000 employees and a total cost assessed at 2 billion euros. On 19 March, the Ministry of Employment published a questions and answers circular, setting out the rights and obligations of both employers and employees for the duration of the epidemic. It should be noted that teleworking must be implemented wherever the workstation in question permits this. The Ministry points out that Article L. 1222‑11 of the Employment Code allows recourse to teleworking without the employee’s agreement, in the event of the risk of an epidemic. Employees who are forced to stay at home in order to look after a child and who cannot telework will be placed on sick leave and will receive sick pay from day one. In addition, on 22 March, Parliament passed an emergency law entitling the government to enact various measures by means of issuing an order (i.e. with no parliamentary debate), notably in the fields of employment law and social security. This law also grants employers additional and unilateral powers to impose or change the arrangements covering the taking of all rest days. They can also change the days on which paid annual leave is taken (up to a limit of six days), under a company or branch-level agreement. The new law also allows the works council to be consulted on line, at shorter notice, and it abolishes the current system of days without paid benefit where employees fall sick, so that those insured under the social security scheme will receive benefits from their first day of sick leave. Companies in sectors that are vital to national security or to the continuity of French economic and social life will qualify for exemption from public policy rules and from contractual stipulations relating to working time, weekly rest periods and Sunday rest.


Italy

Joint Protocol for regulating the measures : Faced with the rapid advance of the epidemic, the government first of all passed a series of decrees to define red zones in the north of the country (decree of 1 March), to extend these protection zones across the entire country until 3 April (decree of 8 March), and subsequently to tighten restrictions still further with the closure of all shops (decree of 11 March). On 14 March, in conjunction with the social partners, the government then concluded a Joint Protocol for regulating the measures designed to combat and contain the spread of Covid-19 in workplaces. This protocol provides for a series of measures, seeking in particular to: encourage teleworking; suspend any activities that are not essential for production purposes; adopt anti-contagion safety protocols and limit to the essential bare minimum any movements of people within production sites (see details of these measures in a note drafted in English by the CGIL trade union confederation). On 17 March, the government adopted the “Care-Italy” decree, which includes postponing the main tax payments, providing support to the sectors most affected by the crisis, releasing funds to increase hospital capacity, hiring new medical staff and supplying personal protective equipment (PPE). This decree provides for support measures for workers, such as a one-off 600 euro allowance for self-employed, independent, performing arts and agriculture workers (within the limit of available funds); extending the “cassa integrazione” (short-time working) to sectors and companies not covered by this mechanism; an additional 12 days of paid leave for workers who have a dependant with disabilities (in addition to the 3 days already provided for, which apply to March and April); a 15-day extension of the amount of parental leave for education granted until the child is aged 12 (remunerated at up to 50% rather than 30%) or alternatively a one-off 600 euro payment  for hiring a baby-sitter (1,000 euros in the case of healthcare, police and army personnel); inclusion of quarantine days in sick leave; a 100 euro bonus in their March salary payment for all employees who continue to travel to their workplace, and a period of 60 days suspension of collective and individual dismissals on economic grounds. The 1 March decree had already authorised the use of teleworking, in the absence of an individual agreement with the employee concerned.


Netherlands

Up to 90% of the amount of employees’ wages to be covered for three months : The government has adopted a series of economic and social measures, all of which have been discussed with the social partners (see note issued by the trade union confederation FNV). A new temporary measure is under preparation, to help companies to hold on to their employees: employers who expect to see a fall of at least 20% in their turnover can apply for an allowance for a period of three months, representing up to 90% of their total wage bill, provided that they undertake not to dismiss their employees for economic reasons during this period. On 19 March, the Dutch Stichting van de arbeid / Labour foundation, which is a forum for the country’s social partners, decided, in conjunction with the government, to form a Committee of Unity and Decisiveness, which will meet each week, with the aim of “protecting incomes, jobs and business” (see press release). On 18 March, the Foundation firstly sent a series of recommendations to the social partners at sectoral and company level, and secondly put forward a number of proposed new measures to the government (see note published on the ETUC website).


Poland

A shield to protect against the crisis : The plan to safeguard the economy, put forward by the government on 18 March, for which the sum of 212 billion zlotys (approximately 46 billion euros, i.e. 10% of GDP) has been earmarked, encompasses a wide range of measures, some of which are designed to protect employment (see press release). Where companies find themselves in difficulties, the State will pay 40% of gross wages (up to the level of the average wage, i.e. approx. 463 euros). Workers employed under a civil law contract will be entitled to a gross monthly allowance of approx. 2,000 zlotys (438 euros). In the opinion of the social partners, who met on the Social Dialogue Council, “the proposed solutions, although important in detail, are not enough to calm the mood of workers and entrepreneurs.” (see joint position).


3. Companies
European Works Councils

How EWCs are reacting to Covid-19 : Following the cancellation of face-to-face meetings and international travel (Axa, Generali), and plenary meetings scheduled to take place in March (Coca-Cola European Partners, Korian, Merck), as well as negotiation (Worldline) or renegotiation (Generali) meetings, EWCs have been looking for ways to maintain their own continuity. Recourse to videoconferencing and conference calls is becoming increasingly widespread, not only for holding steering committee or executive committee meetings (Axa), but also for working parties dedicated to health and safety (LafargeHolcim) or even for EWC plenary meetings (Airbus SE, Merck). Some meetings are being held using an interpreting service (Airbus SE, Axa, LafargeHolcim, Merck,), while others are going ahead without an interpreter (Generali, Veolia). At Veolia, the new EWC secretary Michaela Sofer-Ayadi, is going to organise an informal meeting of the steering committee, via Google Hangouts, at which management will not be present, in order to hold discussions directly and report back to other members. “I’ll be using our internal resources”, explains Michaela Sofer-Ayadi: “I speak fluent English and French, so I’ll provide a translation for the French-speaking member. The British, Dutch and Polish delegates speak English, the Dutch delegate will translate for the German member and the lady who is our Polish delegate will translate for the Czech representative”. These meetings are held at varying intervals: at Generali, the EWC executive committee (comprised of the secretary and deputy secretary) and management meet twice a week, while at Airbus the EWC and the group’s management meet at least once a week, and in addition there are daily exchanges between executive committee members (BNP Paribas) or between the secretary and management (Solvay). Council members also use social media. Members of the Generali steering committee set up a WhatsApp group in January. At Lhoist, EWC members used a private Facebook group for an initial discussion.



  • Circulation of information during the Covid-19 crisis. The primary objective of these bodies is to enable information to circulate among workforce representatives and to monitor the situation in the various countries. “I’m trying to set up monitoring of the measures taken in each country”, says Hélène Debegnac, EWC secretary at LafargeHolcim. Patricia Nunez, deputy secretary of the Axa EWC, explains: “Videoconferencing with the European entities’ local delegates means we can satisfy ourselves that the measures being applied by the group will provide employees with sufficient protection, and at the same time make sure that a professional activity that is desirable for the long-term future of the company and of employment, keeps going.” For its part, the executive committee of the Generali EWC has compiled an Excel spreadsheet and circulated it to the steering committee, so that certain actions put in place within Business Units can be identified. Once the file has been completed, it will be sent to all EWC members, so that data from all of the countries concerned can be included. Its full contents will then be analysed and submitted to HR at central level, together with comments regarding coordination improvements to be made. Similarly, the executive committee of Safran’s EWC has compiled a questionnaire, which has been sent to all EWC members. The aim is to find out, at regular intervals, what’s happening with them. The EWC can also feed back the concerns of European employees to management. On 16 March, the EWC secretary of the construction group Eiffage sent a letter to management, asking it “about its intention to put in place more appropriate protection and support measures for its workforce in all countries”.

  • Restructuring operations suspended: It should be emphasised that the concrete measures put in place include the agreement reached, on 19 March, between the Unilever EWC and the group’s CEO, Alan Jope, whereby the planned restructuring, which might have led to factory closures, will be suspended for the duration of the crisis linked to Covid-19. “This is good news for now and it gives us an opportunity to revaluate the situation later on”, says EWC secretary Hermann Soggeberg with satisfaction. Likewise, the Verizon group’s EWC has secured an agreement to suspend all reorganisations currently in progress, until 1 June at the earliest.



Negotiations launched : At the beginning of March, a collective of 153 Google European employees, representing 11 countries, submitted a letter to management, asking it to set up a European Works Council. Management have agreed to start a negotiation with a view to setting up a body that will cover Google’s 35 or so European sites.


4. Studies and reports

  • Wage transparency measures: The European Parliament’s Committee on Employment and Social Affairs has commissioned a synthetic study (Equal Pay for Equal Work: Binding pay-transparency measures) related to measures advocated by the European Commission in 2014. The document offers a review of existing literature on the effectiveness of these types of measures and sets out the positions of the various stakeholders involved, emphasising in particular the passionate opposition of the three European employers’ organisations.

  • Platform workers: On 21 March, the European Commission published a comprehensive study designed to gather evidence on the working conditions of platform workers. This document is intended to nurture the thinking of the Commission, which plans to hold a conference on this subject in September, in preparation for an initiative aimed at enhancing the working conditions of people who will be working in the platform economy in 2021.