Employment: Past and upcoming developments

Well into the new year, it is fitting to review some of the key legislative and case law developments from the EU during 2011 and touchbase on what 2012 may bring in the constant evolving world of employment law.

Negotiations over the Working Time Directive will be ongoing in 2012- Josette Grech

Last year saw mounting EU pressure on the member states to address the lack of female representation in top jobs. As part of its equality strategy, all publicly listed companies in Europe were asked in March to sign up to the Women on the Board Pledge for Europe. The European Commission asked companies to undertake to increase women’s participation on corporate boards to 30 per cent by 2015 and to 40 per cent by 2020. In July, the European Parliament seconded the Commission’s initiative by adopting a resolution on women and business leadership, which calls for a binding quota for women’s representation on company boards if rapid progress is not made. If the action taken by companies and the member states is found to be inadequate, the Parliament called on the Commission to propose legislation, including quotas, by 2012.

The European Works Council Directive, which applies to companies with 1,000 or more employees, became fully operational in 2011. European Works Councils are bodies representing the European employees of a company. Through them, workers are informed and consulted at transnational level on the progress of the business and any significant decision that could affect them. The directive envisages a more comprehensive duty to inform and consult worker representatives and trade unions are given a greater role in the creation of an EWC.

A general framework of working conditions for temporary workers in the EU was established by virtue of the Directive on Temporary Agency Work, which had to be transposed by last December by member states. The directive enshrines amongst others the principle of non-discrimination in relation to basic conditions of work and of employment, equal access to amenities and collective services at work and facilitate training access for temporary workers.

Besides these legislative interventions, 2011 will also be remembered for some landmark judgements in employment law, which clarified the law or set the way forward for more legislative enactments. In ‘Fuchs and Kohler v Land Hessen and Prigge v Deutsche Lufthansa AG’, the Court of Justice of the EU (CJEU) provided guidance on the compatibility of compulsory retirement at the age of 65 with the EU Equal Treatment Directive. The court held that compulsory retirement may be legitimate if its intent is to establish a balanced age structure in order to encourage the recruitment and promotion of young people, improve personnel management, or for the avoidance of performance disputes with older workers.

In ‘KHS AG v Winfried Schulte’, the CJEU decided an important case about whether national laws can place limits on the right to carry forward annual leave accrued by a worker whilst on sick leave. The court’s decision sanctions the placing of some limits on the ability of long term sick employees to carry forward accrued holiday to the subsequent year, on the basis that allowing a worker to take accrued leave several years after the leave year to which it related would not achieve the Working Time Directive’s purpose of enabling the worker to recuperate from the effort and stresses of that year.

A look ahead at 2012 will see that by the first quarter, the European Commission will review progress on the increase in the participation of female board members in companies. Governments and business groups have started introducing quotas or voluntary charters to begin working towards the targets set by the EU, but progress remains slow. The Commission will determine, from the results of its review, whether targeted EU-wide legal instruments backed up by sanctions is required to address the insufficient participation of women on corporate boards.

Negotiations over the Working Time Directive will be ongoing in 2012. The social partners have until September 2012 to reach agreement on the changes to the Directive, failing which it is expected that the European Commission will bring forward its own proposals. The Commission is expected also to progress a proposal concerning the enhanced enforcement of the Posted Workers Directive, its legislation governing employers who send employees to work in another member state.

jgrech@demarcoassociates.com

Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.