A selection of the latest European HR news from the Federation of European Employers (FedEE).

EU support for redundant workers
The EU Budgets Committee has approved aid totalling EUR 9.7m from the European Globalisation Adjustment Fund (EGF) to assist the reemployment of 1,783 redundant workers in Germany, Denmark and Portugal. German workers in the Arnsberg and Dusseldorf regions have recently been made redundant from five automotive industry firms, whilst six wind-turbine firms in Denmark have left 325 workers jobless and 680 employees in Portugal have been left jobless by the closure of a footwear manufacturer. The EGF assists in finding such workers new jobs through the funding of retraining and job-search activities.

EU: Age of retirement becoming later in most EU states
The average exit age from the EU labour force rose from 60.5 in 2004 to 61.4 in 2009. In 2009 the countries with the highest average exit ages were Sweden (64.3) and the Netherlands (63.5) whilst the countries with the earliest exit ages were Slovakia (58.8) and Hungary (59.3 percent).

Netherlands: Green light for high cost secondment scheme
The Dutch government has affirmed its intention to continue to back the exchange of ‘knowledge workers' between employers and academic research institutes, following the success of the initial scheme. From 2013 both the posting of ‘knowledge workers' to institutes and vice versa will be given a significant level of state financial support.

The initial scheme arose during the global financial crisis when employers were offered the chance to second ‘knowledge workers', rather than dismiss them. A total of 1,900 workers made use of the scheme at a cost to the government of EUR 180m.

Netherlands: 2.5 percent pay target
The Dutch FNV trade union federation has set a 2.5 percent target for next year's pay round. The second largest trade union group - the CNV - has not yet published its 2012 pay demands.

Netherlands: Social costs continue to mount
The Netherlands spent 30 percent of its national income on social benefits last year and expenditure grew by 5 percent between 2009 and 2010. The largest slice of expenditure was on pensions, sickness and healthcare provisions. However, unemployment benefit costs have grown by 50 percent since the economic crisis of 2008 and these figures exclude welfare costs met directly by employers - such as up to two years sick pay per absent employee.

Netherlands: Relaxation of pension rules
The Dutch Finance State Secretary, Frans Weekers, has announced that the government is going to relax the regulation that taxes people's occupational pensions if they partially retire after age 60 - but continue to work part-time. In the past not only were pension payments taxed in full, but they were also limited to 40 percent of the normal full retirement pension.

Portugal: Government presses unions to accept employment protection reforms
The Portuguese government has begun talks with the trade unions on its controversial Labour code reforms. Discussions have cantered on broadening the interpretation of what constitutes ‘just cause' when opting to dismiss an underperforming worker. Under the new proposals, employers would be able unilaterally to terminate an employee's contract should they be found to have become less productive or have consistently failed to meet objectives. These objectives could also be altered at any time during an employee's contract - providing the employer could justify the need for the change.

Current legislation allows for a worker to be removed from a post due to their failure to adapt to new challenges or objectives, but the employer remains obliged to find the worker a new post carrying out similar work. Under the new provisions, a company will no longer be required to offer a new position and may simply dismiss the worker. So far, trade unions have responded negatively to the proposed changes.

Meanwhile, Portugal's two principal trade union confederations have taken up divergent positions regarding the launch of a statutory severance compensation fund designed to meet 50 percent of dismissed workers' severance payments. The UGT supports the proposal, but is seeking clarification about how future severance payments would be made, whilst the CGTP is refusing to endorse the reform and is threatening national strike action in support of its position.

Portugal: Special tax on thirteenth month payments
The Portuguese government has passed a bill to impose an additional tax on workers' Christmas bonuses. The bonus (also called the thirteenth month payment) is equivalent to one month's salary and has hitherto been subject to the same tax and social security deductions as on normal pay. Prime Minister Coelho has stated that the government is introducing a one-off tax for this year of 50 percent on any amount above the mandatory monthly minimum wage of EUR 485.

 France: Proposed restrictions on religious observance
France's High Council for Integration has recommended a number of highly controversial changes to the Labour code which would allow companies to include in their internal work rules clauses relating to clothing, religious insignia and religious practices.

The new report is a response to growing concerns from some employers regarding religious demands - such as time-off for prayers or for specific types of food in company cafeterias. Although France has banned religious dress in state schools and the wearing of full facial veils in public, no law currently exists covering religious issues that may arise in the private-sector workplace.

The report's author, Alain Seksig, claims that giving force to rules restricting religious observance in the workplace would ensure equal treatment for all employees and protect employers from litigation based on religious discrimination.

France: Tax loophole closed
The French National Assembly has voted unanimously in favour of removing a facility for multinational companies to reduce their corporation tax liability by allowing them to include in their taxable income in France any deficits arising in their foreign subsidiaries.

Germany: Insurance pay deal
A 24-month collective agreement has been reached in Germany's private insurance industry. The Employers' Association for Insurance Companies and Verdi, the United Services Union, have agreed to a staggered wage increase - with 3 percent paid on September 1st 2011, followed by 2.2 percent on October 1st 2012. All 160,000 employees covered by the deal will also receive a lump sum payment of EUR 350.

Spain: Election spurs government to tackle youth unemployment
The Spanish government has approved a new package of labour market reforms ahead of the general election on November 20th 2011 that are aimed at fighting the country's current unemployment crisis.

Under the proposed changes, fixed-term contracts will no longer be automatically converted into permanent contracts after two years. A new type of job contract will also be introduced aimed at people between the age of 16 and 25 who are without qualifications. This approach - modelled on a similar system in Germany - will operate for one or two years and include a training element for 25 percent of the employee's time. Employers taking on an unemployed person using this type of contract will be exempt from making social security payments for the duration of the contract.

Spain: Unpaid leave period cannot be extended unilaterally
In Spain, employees with at least one year's service are entitled to take an unpaid extended leave of absence for a period of between four months and five years.

The Spanish Supreme Court has recently considered whether an employee is entitled to unilaterally extend the length of an agreed leave period as long as they do not extend it beyond the maximum period of five years.

The employee in question requested an extension of his initially agreed one year period of leave for an additional two years - but his company rejected the request. The court ruled in the company's favour, holding that an employee cannot unilaterally extend the duration of extended absence. This follows from the fact that the employee is required to identify the duration of the leave at the time they make the request.

Belgium: New protection for working fathers
The Belgian parliament has passed new provisions to protect against dismissal of fathers taking leave on the birth of a child. It has also improved employee protection in cases where a working father requests the conversion of their current or former spouse/partner's unused maternity leave into additional paternity leave.

Fathers may take up to 10 days' paid paternity leave on the birth of their child. The new law protects the employee from dismissal for three months from the date on which they inform the employer of their intention to take the leave. During this period the employee may only be dismissed for reasons unrelated to the leave - and the burden of proof is on the employer to establish that their dismissal is unrelated. The penalty for non-compliance with this provision is an indemnity equal to three months' remuneration on top of the termination indemnity.

In addition, parliament has increased the length of an employee's protection against dismissal when they request to convert unused maternity leave into paternity leave. A father is now protected from dismissal from the date when he informs his employer of his intention to take additional paternity leave until one month after the end of the leave. The new law also provides that if the employee is dismissed for reasons relating to additional paternity leave, an indemnity equal to six months' remuneration is payable on top of his termination indemnity.

UK: Junior executive women earn more than men
New research on UK executive pay levels conducted by the Chartered Management Institute claims that, if the current trend continues, equal pay for male and female senior executives will not be achieved for almost 100 years. Male senior executives are currently paid over GBP 10,000 (EUR 11,260) more than their female counterparts. However, pay for female senior executives is rising faster than that for males (a 2.8 percent increase last year as opposed to a 2.3 percent increase for men) and at a junior executive level, women now earn marginally more than men.

ECJ: New ECJ ruling on age discrimination
The European Court of Justice (ECJ) has clarified the application of the directive on equal treatment in employment and occupation which prohibits any work-related unequal treatment based on an employee's age. In its judgment the court confirmed that in implementing the directive, member states may provide for a difference in treatment based on physical capabilities which are related to age - but only where it is a genuine and determining requirement for being able to carry out a professional activity.

The case in question related to the collective agreement applicable to the German airline Lufthansa that prohibited pilots from continuing to perform their duties after the age of 60. The Federal Labour Court asked whether this was compatible with EC law. The ECJ held that the age limit constituted a disproportionate requirement and was not a necessary measure for the protection of public health and security. It justified this by the fact that under international regulations pilots aged between age 60 and 64 may only continue to fly if they are part of a crew in which other pilots are under 60 years of age. Therefore, if this condition is met the automatic termination of all pilots' contracts at 60 years of age represents discrimination on the grounds of age. [C-447/09, Reinhard Prigge, Michael Fromm and Volker Lambach v. Deutsche Lufthansa AG.] See http://tinyurl.com/5v7cn9k

ECJ: Incremental rules protected during business transfers
The European Court of Justice (ECJ) has ruled that where an employee is covered by a collective agreement that makes length of service a factor in determining remuneration levels the transferee must take steps to protect established incremental rights. Furthermore, where equivalent services are being performed before and after the transfer no substantial loss of salary may be suffered (Case C-108/10).

© Copyright: FedEE Services Ltd 2011