The transformation of labour law Catherine Barnard Trinity

The transformation of labour law Catherine Barnard Trinity

The transformation of labour law Catherine Barnard Trinity College, Cambridge Introduction Agenda for new skills and jobs: A European contribution towards full employment: Flexicurity policies are the best instrument to modernise labour markets: they must be revisited and adapted to the post-crisis context, in order to accelerate the pace of reform, reduce labour market segmentation, support gender equality and make transitions pay. the crisis has highlighted the urgent need to pursue labour market

reforms: Flexible and reliable contractual arrangements. the decentralisation of collective bargaining or the revision of existing contractual arrangements [such as] the use of open-ended contractual arrangements, with a sufficiently long probation period and a gradual increase of protection rights greater weight on internal flexibility in times of economic downturn. ... [I]nternal flexibility can help employers adjust labour input to a temporary fall in demand while preserving jobs which are viable in the longer term. the adjustment of work organisation or working time (e.g. short-time working arrangements). External flexibility remains essential in case of necessary structural adjustment in order to allow an efficient reallocation of resources

Overview of the reforms to labour law Examples of reform Decentralisation of collective bargaining Spain, Greece Adjustment of working time Increasing the annual limit of overtime (eg Hungary from 200 to 250 or even 300 hours if set up by collective agreement) Reduction in overtime pay (eg Portugal 50%, for first hour of overtime, 75% for additional hours and 100% for overtime in holidays and Sundays). This has changed to 25%, 37.5% and

50%) Extension of reference period for calculating working time (eg Hungary from 3 mths to 4 mths to one year) Examples of reform (contd) Relaxation of the rules relating to hiring and firing Reduction in levels of compensation Introduction of probation periods Individual redundancies made easier Collective redundancies Shorter periods of consultation

Less use of third party intervention Reduction in role of social plan Examples of reform (contd) Atypical contracts Extending the maximum period of fixed term contracts(eg Czech republic from 2 to 3 years with two renewals or increasing the number of permissible renewals) Creation of new types of contract Youth contract in Greece (hire workers up to age 25 on wages 20% lower than the previous rate for jobs Training and education contract for unskilled people below the age of 30 in

Spain with considerable exemptions from social security contributions for employers during the contract and one conversion of the contract into a normal open-ended one Revision of the existing contractual arrangements Red lines for some states Position in Spain Contracts of indefinite duration Common indefinite contracts Open ended contract in support of employers (less than 50 staff)

(2012) Fixed periodic contract (seasonal work, start and end dates known) Fixed discontinuous contract (seasonal work, start and end dates not known) Dismissal compensation: 33 days per year worked up to a maximum of 24 months salary Fixed term contracts

Structural (3 reasons) Task contracts up to 3 years Peak demand up to 6 months Replacement contracts Others Practical training contract 6mths to 2 yrs)

Apprenticeship contract (1-3 yrs) Retiree replacement contract Contract for the disabled Dismissal compensation: 10 days per year worked (for task and peak work contracts) Position in the UK Different types of contracts unknown in law (historic state abstensionism): single contract All sorts of contractual permutations exist but these are descriptive terms eg

Part time, fixed term, agency contracts Term-time, zero-hours contracts, compressed hours, job sharing, annualised hours, flexi-time, staggered hours Zero-hours contracts: where people agree to be available for work as and when required, but have no guaranteed hours or times of work (ACAS) hospitality, caring and higher education sectors (CIPD says 1 million (3-4%), ONS estimates for the fourth quarter of 2012 suggest 250,000 people were on zero-hours contracts (0.8% of the total workforce)) Little regulation of what goes into a contract

Easy to vary contracts in time of crisis: may be consensual or unilateral (eg reduction in hours, sabbatical arrangements) Cuts to the minimum wage Greece the minimum wage has been cut by 22% and 32% for young workers; reduction of monthly salaries of all public sector employees. Premiums for holidays (Christmas and Easter) and of annual leave reduced drastically. Prohibition of any salary increases (in the future) for civil servants and public sector employees through either

collective agreements or individual employment contracts. Position in Portugal Portugal, the crisis, labour market reforms and the Charter Portuguese bailout Challenge to the reforms All unsuccessful eg Case C-134/12 Ministerul Administraiei i Internelor (MAI) v Corpul

Naional al Poliitilor - Biroul Executiv Central [2012] ECR I-000; Case C-434/11 Corpul Naional al Poliitilor v MAI [2011] ECR I-000 Case C-128/12 Sindicatos dos Bancrios do Norte 2. Is the salary cut made by the State, by means of the Lei do Oramento de Estado para 2011, applicable only to persons employed in the public sector or by a public undertaking, contrary to the principle of prohibition of discrimination in that it discriminates on the basis of the public nature of the employment relationship?

3. Must the right to working conditions that respect dignity, laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that it is unlawful to make salary cuts without the employee's consent, if the contract of employment is not first altered to that effect? ... Sindicatos dos Bancarios: CJEU 11. Toutefois, il convient de rappeler que, aux termes de larticle 51, paragraphe 1, de la Charte, les dispositions de celle-ci sadressent aux tats membres uniquement lorsquils mettent en uvre le droit de lUnion et que, en vertu de larticle 6, paragraphe 1, TUE, qui attribue une valeur contraignante la Charte, celle-ci ne cre aucune comptence nouvelle pour lUnion et ne modifie pas les comptences de cette dernire (voir ordonnances Asparuhov Estov e.a., prcite, point 12;

du 14 dcembre 2011, Corpul Naional al Poliitilor, prcite, point 15, ainsi que du 10 mai 2012, Corpul Naional al Poliitilor, C-134/12, point 12). 12 Or, malgr les doutes exprims par la juridiction de renvoi quant la conformit de la loi de finances pour 2011 avec les principes et les objectifs consacrs par les traits, la dcision de renvoi ne contient aucun lment concret permettant de considrer que ladite loi vise mettre en uvre le droit de lUnion. 13 La comptence de la Cour pour rpondre la prsente demande de dcision prjudicielle nest donc pas tablie See also Case C-264/12 Sindicato Nacional dos Profissionais de Seguros e Afins Role of Portuguese Constitutional Court

Portuguese reforms Portuguese MoU: ensuring that the aggregate public sector wage bill as a share of GDP decreases in 2012 and 2013 and reducing pensions above EUR 1,500 according to the progressive rates applied to the wages of the public sector as of January 2011, with the aim of yielding savings of at least EUR 445 million. Lei do Oramento do Estado para 2011 (budget law predated the bailout), Chapter III of which made special provision for public sector workers. Article 19 was headed pay reduction. Article 19(1) provided for a 3.5% pay cut for salaries of between 1500 and 2000 euros and a 10% cut on salaries above 4165 euros.

These pay cuts were unsuccessfully challenged before the Portuguese Constitutional Court. Portuguese challenges 2012 budget: the suspension of the 13th and 14th month salary ECJ refused to hear the case Constitutional Court in Acordo 353/2012 found that Article 21 violated the principle of equal treatment 2013 budget: maintained most of the cuts Constitutional Court in Acrdo do Tribunal Constitucional 187/2013

declared the budget unconstitutional for breaches of the principle of equality The same happened in 2014 in respect of the 2014 budget, albeit that the focus of this case was on different measures (Acrdo do Tribunal Constitucional 413/2014) Example of the involvement of others Question in the EP (http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+E-2014005633+0+DOC+XML+V0//EN) 'A recent report by the UN Special Rapporteur Cephas Lumina (UN A/HRC/25/50/Add.1) has found that the austerity measures being taken by the Greek Government as part of the fiscal adjustment programme are undermining the protection of the fundamental rights enshrined in international UN Conventions and the EU Charter of Fundamental Rights. The report recommends that creditors (and hence the EU) abide by a

number of principles, including: a) no provision of aid involving interventionist and humiliating policies that undermine development and human rights; b) the inclusion of the reduction of unemployment and poverty as measurable targets in the adjustment programme; and c) transparency in negotiations. On the basis of the above, will the Commission say: 1.How does it view the positions adopted in the report on the violation of rights, including by the EU institutions, and the above recommendations that are also addressed to it? 2.What will it do to put an end to the violation of rights in Greece, as part of its obligations under the Charter of Fundamental Rights?' Commission response 'The Commission is committed to ensuring that, when EU law applies, CFREU rights will be respected. However, as regards

[adjustment] programme documents [such as the MoUs], we are not dealing with EU law but with instruments that have been agreed between Greece and its creditors: consequently, the Charter cannot be invoked. It is up to Greece to ensure its international obligations regarding fundamental rights are upheld. [Nevertheless,] The ECtHR has declared that the specific measures taken by the Greek authorities are not in breach of the ECHR.' Conclusions OECD report on Spain (Dec. 2013) The changes of internal-flexibility and collective-bargaining regulations have contributed to the significant wage moderation observed in Spain over the past year, .... While

this wage moderation is affecting workers living standards, there is already evidence that it has started yielding its dividends in terms of employment performance and has contributed to sav[ing] jobs.

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