UK: New European Measures

Last Updated: 30 October 2002
Article by Paul Goulding QC

This article is based on a paper presented to an Employment Lawyers Association workshop on 3 October 2002. The paper together with others presented to the workshop and other occasional employment papers are available on the Blackstone Chambers website at www.blackstonechambers.com

There are a number of new and proposed European employment measures recently adopted or currently under consideration by the institutions of the European Union and the British government. This article considers the more important of these developments.

The Information and Consultation Directive1

This Council Directive originated with a European Commission proposal in November 1998 aimed at "establishing a general framework for informing and consulting employees in the European Community".2 A "common position" on the proposal was agreed by the Council in June 2001, and approved by the European Parliament in February 20023.

The Directive was adopted on 11 March 2002 and published in the Official Journal of the European Communities on 23 March 2002.4 Implementation by the member states is due by 23 March 2005.5

The UK Department of Trade and Industry issued a consultation paper in July 2002 on issues raised for the UK by the Directive, inviting comments by 11 December 2002.6 This is the initial stage of a two-stage consultation procedure on framing UK legislation to implement the Directive. The government has said it will consult at a later stage on specific legislative proposals.

The purpose of the Directive is "to establish a general framework setting out minimum requirements for the right to information and consultation of employees in undertakings or establishments within the Community" (Article 1). Its requirements will apply, according to the choice made by member states, to undertakings employing at least 50 employees in any one member state, or establishments employing at least 20 employees in any one member state. "Undertaking" is a public or private undertaking carrying out an economic activity, whether or not operating for gain. "Establishment" means a unit of business defined in accordance with national law and practice.

The right to information and consultation covers:

  • Information on the recent and probable development of the undertaking’s or the establishment’s activities and economic situation;
  • Information and consultation on the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular where there is a threat to employment; and
  • Information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.

Consultation, defined as "the exchange of views and establishment of dialogue between the employees’ representatives and the employer", shall take place:

  • While ensuring that the timing, method and content are appropriate;
  • At the relevant level of management and representation;
  • On the basis of information supplied by the employer and the opinion which the employees’ representatives are entitled to formulate;
  • In such a way as to enable employees’ representatives to meet with the employer and obtain a response, and the reasons for that response, to any opinion they might formulate; and
  • With a view to reaching an agreement on decisions within the scope of the employer’s powers likely to lead to substantial changes in work organisation or in contractual relations.

The European Company Statute7

The first draft Council Regulation on a European Company Statute (ECS) was issued by the European Commission in 1970.8 Despite its amendment in 1975, the proposal met with significant opposition within the Council of Ministers, and negotiations finally ground to a halt in 1982. Following its inclusion in the Commission’s 1985 White Paper9, the Commission issued a revised draft in 198910, removing the employee participation elements from the ECS Regulation and placing them in an accompanying Directive.

This tortuous history continued, through various proposals, most notably the Davignon Report11, to political agreement at the Nice summit in December 2000. The legal basis of the proposal is Article 308, the "catch-all" Article whereby the Council can take appropriate measures to obtain one of the objectives of the Community.

The final versions of the ECS Regulation and the Directive were adopted by the European and Social Policy Council on 8 October 2001, and published in the Official Journal of the European Communities on 10 November 2001.12

The ECS is a new legal instrument based on Community law that gives companies the option of forming a European Company (Societas Europaea, SE). A European Company will be able to operate on a Europe-wide basis and be governed by Community law directly applicable in all member states.

Directive 2001/86/EC governs the involvement of employees in the affairs of European Companies, requiring that arrangements for employee involvement must be established in every European Company in accordance with a negotiating procedure or, under certain circumstances, in accordance with the statutory provisions set out in an annex to the Directive (Article 1).

The Directive defines "involvement of employees" as "any mechanism, including information, consultation and participation, through which employees’ representatives may exercise an influence on decisions to be taken within the company" (Article 2(h)). These terms are themselves further defined in Article 2, the definition of consultation in the ECS Directive being somewhat stronger and more specific than that used in the European Works Councils Directive.

The Directive entered into force on 10 November 2001. Member states must adopt the laws, regulations and administrative provisions necessary to comply with the Directive no later than 8 October 2004 (the date that the ECS Regulation comes into force), or ensure by that date at the latest that management and labour introduce the required provisions by way of agreement.

No later than 8 October 2007, the European Commission must, in consultation with the member states and with "management and labour at Community level", review the procedures for applying the Directive, with a view to proposing suitable amendments to the Council where necessary (Article 15).

Proposed Agency Workers Directive13

On 20 March 2002, the European Commission adopted a proposal for a Directive on the working conditions of temporary workers. This followed the failure of the social partners to reach agreement.

The Directive would apply to contracts of employment or employment relationships between a temporary agency (the employer), and a worker who is posted to a user undertaking to work under its supervision.

Temporary agency workers during their employment with the user undertaking are to be treated no less favourably than a comparable worker in that undertaking, unless the difference is objectively justifiable (the non-discrimination principle).

A comparable worker is defined as a worker in the user undertaking in an identical or similar job, taking into account seniority, qualifications and skills. Basic working and employment conditions are defined as conditions relating to:

  • the duration of working time, rest periods, night work, paid holidays and public holidays;
  • pay;14
  • work done by pregnant women and nursing mothers, children and young people; and
  • action taken to combat discrimination on the grounds of sex, race or ethnic origin, religion or beliefs, disabilities, age or sexual orientation.

The government published a consultation paper during summer 2002 on the potential impact of this proposed Directive in the UK.15 The government is seeking views by 18 October 2002 on:

  • The impact of the proposal on the UK labour market as a whole, and on agency workers in particular;
  • Any evidence of current problems with temporary agency work in the UK; and
  • Views on whether there are any alternatives to regulation that would satisfactorily meet the objectives of the proposed Directive, or any other perceived problems with agency work.

The report of the rapporteur (leke van den Burg) was discussed by the European Parliament’s Social Affairs Committee on 10 September 2002. The vote of that Committee was scheduled for 1 October 2002, with a further vote in plenary session due on 23 October 2002. The proposal is also likely to be discussed at the Social Affairs Council meeting on 7-8 October 2002.16

Fixed Term Work17

The social partners reached a Framework Agreement on fixed term work on 14 January 1999. Directive 1999/70/EC implementing this Framework Agreement was adopted on 28 June 1999. Member states had until 10 July 2001 to implement the Directive or one more year if necessary to take account of special difficulties.

The objects of the Directive are :

  • to improve the quality of fixed term work by ensuring the application of the principle of non-discrimination; and
  • to establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships.

The UK government has sought to implement the Directive by The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.18 These came into force on 1 October 2002.

The main provisions of the Regulations include the following:

  • The Regulations apply generally to employees only, rather than the wider definition of workers;
  • A fixed-term employee has the right not to be treated less favourably by their employer than a comparable permanent employee, unless objectively justified. This provision also applies to pay and pensions, which are not covered by the Directive.
  • Employees will no longer be able to waive their rights to a redundancy payment on the expiry of their fixed-term contracts.
  • The completion of a task contract will count as dismissal for unfair dismissal purposes.
  • Fixed-term employees will be considered as permanent employees if they have been employed on successive fixed-term contracts for a period of four years or more without justification on objective grounds (this only applies from 10 July 2002).

The government estimates that 1.1-1.3m people work on fixed-term contracts in the UK, and that 25,000-53,000 employees will benefit from the principle of less favourable treatment.

Complaint of a breach of the rights provided by the Regulations will be to an employment tribunal which will have power to make declarations, order compensation and make recommendations.

Part Time Work19

The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 implemented the EC Directive on Part-Time Work. This Directive originated in a Framework Agreement reached between the social partners and establishes the principle of non-discrimination between part-time workers and comparable full-time workers.

Amendments to the Regulations governing part-time workers came into effect on 1 October by means of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (Amendment) Regulations 200220. The Amendment Regulations introduce two changes.

The first change relates to fixed-term workers. Previously a fixed-term worker was deemed to be employed under a different contract and so could not be identified as a "comparable worker". This deeming provision has been repealed so that henceforward a fixed-term worker may be a comparable full-time worker for the purpose of the principle of non-discrimination.

Secondly, the Amendment Regulations repeals Regulation 8(8) of the 2000 Regulations which limited the remedies which a tribunal may make, following a finding of less favourable treatment under an occupational pension scheme, to a period of two years prior to the presentation of the complaint. The effect of this change is to bring the Regulations into line with the House of Lords judgment in Preston v Wolverhampton Health Care Trust (No 2).21 The amendment extends to treatment under the rules of the scheme as well as in terms of access to the scheme.

Young Workers

The Government published draft Regulations22 on proposed amendments to the Working Time Regulations 1998 with the aim of implementing certain provisions of the Young Workers Directive.23

The effect includes regulating the working hours of young workers, both generally and particularly in relation to nightwork, and providing for adequate supervision during nightwork. The government invited comments by 6 September 2002.

Working Time

The union Amicus has complained to the European Commission about the UK’s alleged failure properly to implement the Working Time Directive by means of the Working Time Regulations 1998. The complaints are:

  • There is no obligation on employers’ to enforce workers’ rights to rest breaks and holidays (in contrast to working time and nightworking rights).
  • There is no obligation on employers to keep records of time worked voluntarily above normal working time.
  • Overtime hours on night shift are excluded from the count towards normal hours.

The Commission wrote to the UK government on 21 March, requesting its response by 21 May. The Commission has received the UK government’s response which it is in the process of considering. The commencement of infringement proceedings against the UK is an option open to the Commission.

Paul Goulding QC is a barrister at Blackstone Chambers.

1 See Goulding (ed), European Employment Law and the UK, Chap. 8 (Carley and Hall), paras 8-71 to 8-86/2; Carley and Hall (ed), European Works Councils Bulletins.

2 [1999] OJ C2/3.

3See European Parliament first reading approval to draft Directive (April 1999), [1999] OJ C219/223; EU Economic and Social Committee opinion (July 1999), [1999] OJ C258/24.

4 Directive 2002/14/EC, [2002] OJ L80/29-34.

5 To accommodate the UK and Ireland, implementation may be phased in 2005 (for undertakings with 150 employees or establishments with 100), 2007 (100 and 50 respectively), and 2008 (50 and 20 respectively).

6 DTI, High performance workplaces: the role of employee involvement in a modern economy (2002). For more detail on reaction in the UK see: DTI memorandum to House of Commons Trade and Industry Select Committee (Nov 1998); Financial Times, 12 November 1998; Report of the House of Commons Trade and Industry Select Committee (May 2000); UK Government review of collective redundancies (announced Jan 2001).

7 See Goulding (ed), European Employment Law and the UK, Chap. 8 (Carley and Hall), paras 8-87 to 8-104; Carley and Hall (ed), European Works Councils Bulletins.

8 [1974] OJ C93.

9 European Commission, Completing the internal market, COM (85) 310 final.

10 [1989] OJ C263.

11 European Systems of worker involvement, Final report, May 1997.

12 Council Regulation (EC) No,2157/2001 on the Statute for a European Company and Council Directive 2001/86/EC supplementing the Statute for a European Company with regard to the involvement of employees, [2001] OJ L294.

13 See Goulding (ed), European Employment Law and the UK, Chap. 2 (Simmons & Simmons), paras 2-06 to 2-08; Directive shows a temporary concern by Charlotte Davies in Employment Law Journal 31 (2002) 5.

14 The UK government takes the view that basic employment conditions should not include pay as this is not permitted under Article 137(6) of the EU Treaty.

15 The consultation paper can be found on the DTI website at www.dti.uk/er/agency/directive/htm.

16 Some member states have reservations about the proposal, as do UNICE, the employers’ organisation.

17 See Goulding (ed), European Employment Law and the UK, Chap. 2 (Simmons & Simmons), paras 2-09 to 2-21.

18 SI 2002/2034. These Regulations followed government consultation which commenced in January 2002, inviting comments by 15 April 2002: www.dti.gov.uk/er/fixed/consult2.htm.

19 See Goulding (ed), European Employment Law and the UK, Chap. 2 (Simmons & Simmons), paras 2-256 to 2-311H.

20 SI 2002 No. 2035.

21 [2001] IRLR 237.

22 www.dti.gov.uk/er/individual/youngconsult.htm.

23 94/33/EC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.