European Union: Eurovision Human Capital (Employment), October 2007

Last Updated: 18 October 2007
Article by David Whincup

Spanish Sub-Contractors In The News Again

At the end of August 2007 the Spanish Government approved further legislation aimed at both reducing the number of accidents at work and promoting stability of employment in the Spanish construction sector.

The construction sector in Spain employs 2.6 million workers (13% of the country’s active population) and accounts for a full 12% of Spain’s gross domestic product. Accidents at work are a big problem in Spain with almost 1,000 fatal and 1 million non-fatal accidents every year.

The new legislation includes a requirement that 30% of the workforce of sub-contracted companies must be on open-ended contracts by 2010 (workers are mainly engaged on temporary contracts at present). The increase is set in three stages with a target of 10% during the first 18 months, increasing to 20% during the second 18-month period.

A register (which must be available for review by labour inspectors, site management and trade unions) must also be kept on each construction site stating the number of sub-contractors operating on the site. The legislation also imposes strict requirements for the training of workers who face occupational risks and requires that companies keep records of the training undertaken.

Minimum Service Bill Adopted In France

On 2 August 2007 the French Parliament adopted a Bill relating to minimum public transport services. The Bill applies to both public and private transport providers and sets out a minimum service to be provided to the public in the event of a strike by transport workers or if there is a planned interruption to services. Under the Bill, transport users must receive free, clear and reliable information on the services that will run in the event of any disruption. Air transport is currently excluded from the legislation.

One of the main features of the Bill is that workers will have to declare their intention to strike 48 hours in advance of any strike. If they fail to do this, they will be subject to disciplinary action.

The Bill also seeks to establish a dispute resolution procedure whereby the unions must notify the employer company in advance of any plan to issue a notification of strike action (existing legislation requires this only in respect of public sector employers). Furthermore, where there is a dispute resolution procedure agreement in place between the trade union and the employer, a notification of strike action cannot be made until negotiations have broken down. Workers will not be entitled to payment during any strike.

The Bill provides for negotiations between trade unions and employer organisations relating to the points above with a view to reaching agreement if possible before 1 January 2008.

Needless to say, the unions see the bill as an attack by the French Government on the right to strike. There is also a concern that it might be the "thin end of the wedge" as there have been suggestions that, if successful, the legislation could be extended to other vital public sector services, for example, education or waste collection.

New Definition Of Self-Employed Worker In Spain

Under Spanish law, self-employed workers are defined as "those persons who carry out a trade or profession for economic gain on a regular, personal and direct basis on their own account, in the absence of any supervision or direction from a third party, whether or not they employ other workers on another’s account".

In July 2007 the Spanish Government approved a new law (the Statute of Autonomous Work) which introduced a new type of self-employed worker: the "economically dependent self-employed worker" – essentially a category of worker half-way between an ordinary employee and a self-employed worker (a type of engagement that has become common practice in certain sectors in Spain, such as transport or construction).

In order to fall within the definition of an "economically dependent self-employed worker", a worker must carry out a trade or profession for economic gain on a regular, personal, direct and predominant basis for an individual or company as their client, on whom they depend economically for at least 75% of their income generated by their work and professional activities.

One of the main objectives of the reform is to provide self-employed workers with a level of Social Security protection similar to that of ordinary employees, which is achieved by including them in the Special Self-Employed Social Security System.

Economically dependent self-employed workers are now obliged to register with that Social Security System and can specify the level of protection that they require ie, sick leave, accidents at work and/or occupational illness. The requested degree of protection will then determine their level of Social Security contributions.

Agency Workers Directive Back On The Agenda?

With little activity since discussions between Member States stalled in October 2004 – principally over the period after which temporary workers would gain full employment rights – the Agency Workers Directive looks like it may be reactivated. According to UK Employment Relations Minister Pat McFadden, the directive was to be discussed at an official level during September and, if reaction was positive, would be voted on by the EU Council of Employment in December.

The Department for Business, Enterprise and Regulatory Reform Secretary John Hutton has recently commented that the UK Government would only support the Agency Workers Directive if it protected jobs. Hutton said there were two tests that the wording of the directive needed to pass. "First, does it protect jobs and so advance the fundamental right to work? Will it continue to allow companies to go on creating jobs and promote rising national prosperity? And second, will it make a positive change for the most vulnerable working people?"

UK Leads Second Quarter European Job Losses

The quarterly European Restructuring Monitor report recorded 335 company restructurings in the second quarter of 2007. The restructurings resulted in 72,051 job losses and 95,598 job gains.

Most job losses were reported in the UK, followed by Poland, Italy, The Netherlands and Germany. Significant job expansion was recorded in Poland, Slovakia, the Czech Republic, France and Romania.

House Of Lords Rejects Further EU Laws

The UK House of Lords’ EU Committee recently published a report arguing that there was no need for the UK to agree to any further EU-inspired employment legislation.

The Report was drawn up in response to the European Commission’s Green Paper consultation about the need for labour market reform in the EU to meet the changing needs of businesses and workers in the 21st century.

It concluded that the relatively light regulation of the UK labour market, compared with some other EU Member States, has been advantageous in allowing a flexibility of employment arrangements which has benefited the UK economy. It said that it would therefore be unhelpful to introduce new EU-wide changes to labour law and recommended that the EU focus its efforts on promoting good practice rather than introducing further legislation. The EU’s view remains to be seen.

Minimum Wage Legislation Extends To 70% Of EU Member States

Recent data has revealed that 20 of the 27 EU Member States had national minimum wage legislation in place. Rates varied widely from €92 per month in Bulgaria to €1570 per month in Luxembourg. The proportion of employees receiving the minimum wage also differed between Member States, ranging from less than 1% in Spain to 17% in France.

French Minimum Wage Increased

The French minimum wage (known as the "SMIC" – salaire minimum de croissance) was increased by 2.1% from 1 July 2007. The hourly rate rose to €8.44 - approximately €1280 per month based on a statutory 35-hour normal working week.

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.

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