New Developments in European
Labour and Employment Law:
What Employers Need to Know
February 21, 2013
Presenters
Moderator
Sasha Štěpánová, Associate,
Kocián Šolc Balaštík, Prague, Czech Republic
2
Presenters
Speakers
Catherine Barker, Managing Associate,
Addleshaw Goddard, London, England
Sascha C. Kuit, Associate, Boekle de Neree,
Amsterdam, Netherlands
3
Presenters
Speakers
Jan Tibor Lelley, Partner, Buse Heberer
Fromm, Essen Germany
Sophie Pelicier Loevenbruck, Partner,
Fromont Briens, Paris, France
4
Presenters
Speakers
Chiara Muston, Associate, Grimaldi Studio
Legale, Milan, Italy
Magdalena Pilarska, Associate,
Miller, Canfield, Paddock & Stone, P.L.C.,
Gydnia, Poland
5
New EU Data Privacy Laws
6
Data Privacy – Germany
European and national framework for
employee data privacy in the
European Union:
• The Data Protection directive 95/46/EC
of October 24, 1995
– Protection of individuals concerning the
processing of personal data and on the
free movement of such data
– Harmonisation of data protection within
the European Union
7
Data Privacy – Germany
• Germany: Federal Data Protection Act
(BDSG)
• United Kingdom: Data Protection Act
1998
• France: Act No. 78-17 of January 6 1978
on data processing, data files and
individual liberties (loi relative à
l’informatique, aux fichiers et aux libertés
(the DPA)), as amended, notably by the
Act No. 2004-801 of August 6 2004
8
Data Privacy – Germany
How EU and national agencies
enforce data privacy regulations
• Data protection authority in the EU:
– The European Commission
– The Working Party
– The European Data Protection
Supervisor (EDPS)
9
Data Privacy – Germany
• National data protection authorities
– Germany: The Federal Commissioner for
Data Protection and Freedom of
Information (Bundesbeauftragter für den
Datenschutz und die Informationsfreiheit).
– United Kingdom: Information
Commissioner’s Office
– France: National Commission on
Computers and Liberties (Commission
nationale de l’informatique et des libertés) 10
Data Privacy – Germany
Recent data privacy incidents in
Europe:
• Lidl case (large retail chain)
– Was monitoring its employees secretly
by cameras and detectives (2008)
– Found out private details about its
employees
– Lidl did not stop spying on its
employees even after the scandal
11
Data Privacy – Germany
• Lidle (cont’d)
– Consequence: Lidl was ordered to pay
a total fine of € 1,462,000; separate
fines for different stores of between €
10,000 to € 31,000
– In 2009, Lidl created a new scandal by
recording the illnesses of its employees
in their files
12
Data Privacy – Germany
• Deutsche Bahn case
– Employer was spying on its employees
and their family members to investigate
allegations of corrupt business practice
(2002-2005)
– Was monitoring the complete e-mail
communication of its employees (2007)
– Consequence: Several managers were
terminated and the company was ordered
to pay a fine of € 1,1 Million
13
Data Privacy – France
• Data privacy is protected by the CNIL
(National Commission on Computers and
Liberties/Commission nationale de
l’informatique et des libertés), whose role
is to inform employers and employees of
their rights and duties, protect, control,
regulate and punish.
– Financial sanctions up to 300 000 €,
– Public warning
– Suspension of the monitoring system 14
Data Privacy – France
• Compared to Germany, the CNlL
seems to be more inclined toward
prevention and symbolic sanctions.
• Nevertheless, there are a lot of
“hidden costs” when projects are
suspended because they are not in
compliance with the rules.
15
Data Privacy – France
• French procedure for database or
monitoring systems :
– Before implementation, the employer has to inform and consult the Works Council and Workplace Health and Safety Committee ( CHSCT), and make a declaration to the CNIL.
– The employer then has to inform the employees about the data collected.
– The data collected has to be strictly necessary to the activity.
16
Data Privacy – Poland
• The new laws probably will not directly
affect the employees’ situation – the
introduction of additional means of
protection in Member States is not
excluded in the draft Regulation.
• The catalogue of information that may
be required by employers from the
employment candidates is set forth in
the Labor Code.
17
Data Privacy – Poland
• Currently there are no indications that
the General Inspector for the Protection
of Personal Data will adopt a less strict
approach regarding the protection of
employees’ personal data.
• Requiring information other than what
is permissible, as well as non-
employment due to information on the
employee may be considered
discriminatory.
18
Data Privacy – Italy
• The employer is prevented from
gathering and processing any
personal or sensitive data that is not
relevant to assess the professional
attitude of the employee or
candidate.
19
Data Privacy – Italy
• Personal data may be processed by
employers only with the employee’s
written consent.
• Consent not required if the processing
is necessary to comply with obligations
imposed by the law, regulations, and
EU legislation or for the performance
of obligations resulting from a contract
to which the employee is party.
20
Data Privacy – Italy
• Sensitive data may be processed only
with the employee’s written consent and
the Data Protection Authority’s prior
authorization.
• Consent not required (but still subject to
the DPA’s authorization) if the
processing is necessary to comply with
specific obligations and/or tasks laid
down by laws, regulations or EU
legislation in the employment context.
21
Data Privacy – UK
• Current data privacy issues in the
UK
– ICO enforcement
– Blacklisting of workers
– Press and the Leveson inquiry
22
Data Privacy – UK
• The new EU data privacy laws and
how government agencies will be
aggressively enforcing these rules
– UK Government's view of the
Regulation
– Information Commissioner's position
23
Data Privacy – Netherlands
• The processing of personal data is
governed by the Personal Data
Protection Act (DPA) 2001
• Processing of personal data
requires prior notification to the
Dutch Data Protection Commission
• Specific provisions re data traffic
outside EU
24
Data Privacy – Netherlands
• New EU privacy legislation
• No reporting obligation, but own
resonsiblility
• Independent national privacy
authority; more powers
• EU rules also apply to data traffic
outside EU
25
Workforce Reductions,
Redundancies, and
Reorganizations
26
Workforce Reductions – UK
• When do you need to collectively
consult?
– "Proposing to dismiss" as redundant
20+ employees
– At one "establishment"
– Within a 90-day period or less
– As of April 2013, fixed-term workers
to be excluded from numbers
27
Workforce Reductions – UK
• Who should you consult?
– Appropriate representatives of the
affected employees.
– Affected employees? Employees
affected by the proposed dismissals/
related measures.
28
Workforce Reductions – UK
• Who should you consult? (cont’d)
– Appropriate representatives?
Trade union representatives
Standing employee representatives
Elected employee representatives
• Notification to the Secretary of State
29
Workforce Reductions – UK
• What should good consultation look
like?
– 100+ redundancies: at least 90
days before first dismissal (to be
reduced to 45 days in April 2013)
– 20-99 redundancies: at least 30
days before first dismissal
30
Workforce Reductions – UK
• What should good consultation look
like? (cont’d)
– Stage 1: provide written information
to representatives
– Stage 2: consult with "a view to
reaching agreement"
– Don't forget individual consultation
31
Workforce Reductions – UK
• What penalties exist for a failure to
consult?
– Maximum protective award of up to
90 days' gross pay per dismissed
employee
– Amount of award based on
seriousness of employer's breach
– Special circumstances defence 32
Workforce Reductions – Netherlands
• The Collective Redundancy
Notification Act (WMCO) if employer:
– Proposes to dimiss 20+ employees
– For economic reasons
– Within a period of three months
– At one establishment
• WMCO has been amended as of
March 2012 33
Workforce Reductions – Netherlands
• Employer must notify trade unions
involved, Works Council and Social
Security Board (UWV WERKbedrijf)
• Employer must consult with trade unions
• After notification in general one-month
waiting period applies before contract can
be terminated
• If employer does not comply employee
can annul termination within six months
34
Workforce Reductions – Germany
• Mass redundancies depending on
threshold, § 17 KSchG (Dismissal
Protection Act)
• Co-determination for Works Council, §§
111, 112 BetrVG (Works Constitution Act)
• Settlement of interest
(Interessenausgleich)
• Social Plan (Sozialplan): takes two to four
months
35
Workforce Reductions – Germany
• How to calculate severance payments:
0.5 to 1.5 or more gross monthly salary
per year of seniority
• Dismissal protection act: to show that
reason to terminate exists and social
election
• Crucial: quick negotiations and well
prepared timetable
• Avoid: Union strike against intended work
force reduction 36
Workforce Reductions – France
• For large collective dismissals (10+
employees within 30 days), companies
with 50+ employees have to set up
mandatory social measures (Plan de
sauvegarde de l’emploi); aim is to favor
firstly internal redeployment in the
company and the group it belongs to.
• The sanction for lack of consistency of the
PSE is very strict: nullity of the PSE makes
dismissals null and void.
37
Workforce Reductions – France
• The procedure is regulated by several
delays fixed by law, but they appear to be
more theoretical than practice.
• The delay in the minimum number of two-
round consultations of the Works Council
varies according to number of dismissals:
– 14 days between the first and the second
consultation for 10-100 dismissals
– 21 days for 100-250 dismissals
– 28 days for 250+ dismissals
38
Workforce Reductions – France
• Representatives always try to lengthen the procedure:
- They can ask for a certified accounting
- If the law already gives some guidelines
for the PSE content, the employer has to
answer every representative’s questions.
- They can negotiate on the delays
• In some instances, employers tend to
settle with a Voluntary Redundancies
Plan (Plan de Départs Volontaires).
39
Workforce Reductions – Poland
• Termination notice:
– In writing
– With due advance
– Providing for justified reason for
termination
– Consultation with trade unions,
employee council
– Protected groups of employees
40
Workforce Reductions – Poland
• Massive layoffs:
– Severance pay due
• The economic situation often forces
employers to change the
employment relationship to that of
independent contractors, which
allows minimizing the social
insurance contributions.
41
Workforce Reductions – Poland
• This may be deemed ineffective,
unless the former employee
becomes actually independent from
the employer in regard to the
manner and time of work
performance, as well as the liability
for results of his/her work.
42
Workforce Reductions – Italy
• Employers staffed with more than 15
employees
• Redundancies (at least five over 120
days)
• Information and consultation
procedure: purposes and timing
• Selection criteria
43
Workforce Reductions – Italy
• Finding an agreement with the
employees’ representatives is not
necessary to proceed with the lay-
offs but advisable: the “making-up”
effect.
44
Workforce Reductions – Italy
• What if …
– Oral dismissal
– Violation of information and
consultation procedure
– Violation of selection criteria
45
Balancing Work and Family
Commitments
46
Work-Family Balance – Italy
• Definition: attention to the individual
and his/her well-being both in the
work and private context
• Aim: to provide men and women the
means to achieve personal and
professional realization, which
impacts positively on individuals,
families, employers and, in general,
society
47
Work-Family Balance – Italy
• Work time policies – flexibility –
teleworking
• Equal opportunities
• Career development
• Talent retention
• Absenteeism reduction
• Well-being at workplace
48
Work-Family Balance – Italy
• Italian statutory provisions
• Best practices of European
businesses
49
Work-Family Balance – UK
• Current system
– Maternity leave
– Paternity leave
– Adoption leave
– Parental leave
– Emergency time off
– Ante-natal appointments
– Flexible working – parents/caregivers
50
Work-Family Balance – UK
• New proposals
– Flexible parental leave (2015)
– Better adoption rights (2015)
– Surrogacy rights (2015)
– Parental leave (extended 2013 and
2015)
– Ante-natal appointments (2015)
– Flexible working - all workers (2014) 51
Work-Family Balance – Netherlands
• Statutory maternity leave
• Statutory right to reduce or increase
working hours
• Protection from dismissal
• Parental leave
• Adoption leave
• Short-term and long-term care leave
52
Work-Family Balance – Germany
• Art. 3 GG (German Constitution)
– Gender equality; state must foster the
equal treatment
• § 1 AGG (General Equal Treatment
Act)
– Based on directive 2006/54/EC for the
realisation of equal treatment of men
and women regarding work, working
conditions, apprenticeships, etc.
53
Work-Family Balance – Germany
• §§ 1, 8, 11, 385 SGB III (Social
Security Code)
– Gender equality; compatibility of work
and family; encouragement by public
agencies
• Bundeselterngeld-/ Elternzeitgesetz
(Parental Leave Act - BEEG)
– Special arrangements in companies for
parenting
54
Work-Family Balance – Germany
• Bundeselterngeld-/ Elternzeitgesetz
(Parental Leave Act - BEEG) (cont‘d)
– Parents´ salary: approx. 67% of the
annual gross salary (§ 2 BEEG) for a
minimum of two months and maximum
of 12 months (§ 4 BEEG)
– Parental leave time until the end of the
child’s third year; flexible working hours
up to 30h/week (§15 BEEG)
55
Work-Family Balance – Germany
• Pflegezeitgesetz (Care Time Act -
PflegeZG)
– Employees might stay a certain time at
home to take care of family members
in need of care (approximately 10 days
off (§ 2 PflegeZG)), if the special need
is just temporary; at the most 6 months
(§ 4 PflegeZG)
56
Work-Family Balance – Germany
• Pflegezeitgesetz (Care Time Act -
PflegeZG) (cont‘d)
– Option to work part-time (§ 3
PflegeZG)
– Special dismissal protection for that
time (§ 5 PflegeZG)
57
Work-Family Balance – France
• The concern about balancing work and
family commitments is linked to the
employer’s responsibility to maintain
employees’ health (mental and physical).
• Since 2002, with the “asbestos” cases, the
jurisprudence has introduced a strict
obligation for the employer to ensure
security results.
58
Work-Family Balance – France
• This concern about employees’ health was
created at the beginning of the 2000’s; the
result is a new approach to working time.
• Compulsory collective bargaining on
gender equality has to end up with a
collective agreement, or at least an action
plan on balancing between work and
family commitments (working conditions,
part-time work, leaves, etc.)
59
Work-Family Balance – Poland
• Gradually extending the maternity and
paternity leave; as of 2013 the
employee may be entitled to one year
such leave.
• Growing protection of pregnant women
or parents, who take advantage of
various types of parental allowances,
against employment termination.
60
Work-Family Balance – Poland
• Little, yet growing, popularity of
flexible employment systems, such
as telework, flexible hours etc.
• Mixture of a part-time employment
and partial childcare leave.
• Employment during the parental
leave.
61
Regulating Age
Discrimination
62
Age Discrimination – Netherlands
Sources and Legislation
• International Treaties and conventions
(e.g. UN Covenant, EU Treaty)
• EU Directive 2000/78/EG
63
Age Discrimination – Netherlands
Sources and Legislation (cont’d)
• National Acts:
– Dutch Constitution
– Dutch Civil Code
– Equal Treatment Act
– Equal Treatment based on Age in
Employment Act
• Judgments of the Court of Justice EU
and national courts/commissions
64
Age Discrimination – Netherlands
Ethos
• Discrimination on the grounds of age
related to employment is prohibited
unless objectively justified, e.g.,
– Governmental labour market/employment-
related policies promoting the participation
of elderly or younger employees
– Statutory age limits
– Minimum conditions re: vocational training
and job starting
65
Age Discrimination – Netherlands
Scope
• Applies to all phases of employment:
– Job advertisements
– Recruitment
– Employment conditions
– Promotion
– Dismissal
66
Age Discrimination – Netherlands
Bringing Discrimination Claims
• An employee who feels discriminated by
the employer can bring a claim to:
– Human Right Authority (opinion is not
binding)
– Court
– Both HRA and Court
• A dismissal violating age discrimination is
null and void, provided employee invokes
nullity within two months after termination
67
Age Discrimination – Netherlands
• Examples
– Regulations regarding mandatory (early)
retirement ages (e.g., pilots)
– Seniority regulations (e.g., right to extra
holidays or reduction of working hours at a
certain age)
– Regulations to enter into (several
consecutive) fixed-term contracts until or
after a certain age
– Granting rights regarding length of service
68
Age Discrimination – Netherlands
• Guidelines
– The purpose of a regulation must serve a
general interest
– It must serve a social policy aspect and
not just the specific needs of an employer
– A regulation must be appropriate and
necessary to reach the goal
– If the goal can be reached in another non-
discriminatory way, the regulation is not
objectively justified
69
Age Discrimination – Germany
• General Equal Treatment Act
(Allgemeines
Gleichbehandlungsgesetz - AGG)
• Discrimination concerning the age is
forbidden within this legal framework
• Protection of every age group
70
Age Discrimination – Germany
• Recently it has gained in importance:
– Job advertisement: “looking for a young
team” is age discrimination and illegal
under the General Equal Treatment
Act; (Federal Labor Court 2010-08-19,
8 AZR 530/09)
71
Age Discrimination – Germany
– Forming a scheme for severance
payments using age-groups (§10 Para
3, No.6 AGG) is compatible with the
General Equal Treatment Act (Federal
Labor Court 2011-04-12, 1 AZR
764/09); employees up to age 29 years
get a factor of 80%, up to 39 years
90% and 40 years onwards 100% of
severance payment
72
Age Discrimination – France
• The employer cannot take into account only
the age in making a decision, as it would be
discriminatory and imply a nullity of the
dismissal and unenforceability of the
agreement.
• Nevertheless, age differential treatment is
allowed if two cumulative conditions, strictly
appreciated, are respected:
- Justified by a legitimate aim (maintain older
or/and younger workers in employment)
- Strictly necessary to the aim (proportionality).
73
Age Discrimination – France
• For example, differential treatment
according to age is possible for additional
compensation in collective dismissals
because employees are not in the same
situation:
– Older employees have more rights due to
their age than younger employees
– Public financial assistance will be different
according to age: the olders will be able to
have a full retirement pension 74
Age Discrimination – Poland
• It is unlawful to differentiate the legal
status of an employee solely on the
grounds of his/her age, unless
compliant with other provisions of law
(e.g., certain posts may be taken only
by persons of a given age) or
objectively justified by the kind or
conditions of work.
75
Age Discrimination – Poland
• Acquisition of entitlement to retirement
pension may not constitute a sole
reason for termination of the
employment relationship.
76
Age Discrimination – Italy
• Any agreement or action aimed at
discriminating an employee based on
age is null and void.
• Such discrimination may concern:
employment, termination, individual
transfer, assignment of tasks and
duties, and disciplinary procedures, as
well as any other action causing
prejudice to the employee
77
Age Discrimination – Italy
• Case law precedents:
– Proximity to pension age
– Employment of minors: salary and
automatic pay increase
78
Age Discrimination – UK
• Equity Act 2010
– Direct age discrimination
– Indirect age discrimination
– Harassment
– Victimisation
– Exceptions
79
Age Discrimination – UK
• Retirement Dismissals
– Default retirement age rules
repealed on 6 April 2011
– Must be “objectively justified”
Legitimate aim
Proportionate
80
Transfer of Undertakings
Protection of Employment
(TUPE)
81
Transfer of Undertakings – France
• Understanding the framework of
TUPE in three steps
• TUPE or dismissals: from a
protective rule to a controversial use
• Key points regarding the collective
status
82
Transfer of Undertakings – France
Understanding the framework of
TUPE in three steps
• What’s the aim of the TUPE legislation?
• When TUPE applies, the buyer has to
maintain all the employment contracts
• From a European and French law
perspective, there are three main steps
an employer needs to identify to
determine if TUPE applies or not.
83
Transfer of Undertakings – France
• Step 1: determine if seller’s activity
constitutes what the French and
European judges refer to as: autonomous
economic entity
• Step 2: determine if the main
characteristics of the autonomous entity
exist
• Step 3: determine if the identity of the
autonomous economic entity is
preserved.
84
Transfer of Undertakings – France
TUPE and dismissals: from a
protective rule to a controversial use
• French/European paradox
• Two kinds of risks
– Before the transfer
– During or after the transfer
• TUPE remains a protection against
dismissal for only 24 hours
85
Transfer of Undertakings – France
Key points regarding the collective
status
• After the application of TUPE, there is
an automatic “termination” of collective
bargaining agreements, but actually
during a fixed-time period, they survive
unless and until a new one is
concluded.
86
Transfer of Undertakings – France
• There are two main reasons for the
buyer to harmonize the collective
status
– Avoid individual advantages
(“avantages individuels acquis”)
– Avoid two employees, with the same
job, having different advantages
because of a former collective status
87
Transfer of Undertakings – Poland
• All existing individual employment
contracts remain valid and binding.
• The transfer of undertaking may not
be the sole reason for termination of
an individual employment contract.
88
Transfer of Undertakings – Poland
• Obligation to notify the trade unions
or employee representative in
advance. However, these bodies
have no power to oppose the
transfer.
• The provisions of a collective labour
agreement remain applicable for
one year from the date of transfer.
89
Transfer of Undertaking – Italy
• The employment relationship
continues with the transferee and
the employee maintains the
entitlements deriving from it
90
Transfer of Undertakings – Italy
• Joint responsibility for the claims the
employee had at transfer date
• Application of collective agreements
• The transfer of undertaking cannot
ground termination
• Substantial modification of work
conditions
91
Transfer of Undertakings – Italy
• For employers staffed with more
than 15 employees:
– Information and consultation
procedure
– Business crisis and agreement with
unions: is it possible to bypass
TUPE rules?
92
Transfer of Undertakings – UK
• TUPE 2006- current system
– When does TUPE apply?
Standard business transfers
Service provision changes (SPC)
– Key protections
93
Transfer of Undertakings – UK
• Proposals for reform
– Government consultation on reform
(closes 11 April 2013)
– Key proposal: repeal of SPC rules
– Key proposal: extend scope for making
fair dismissals and changing terms
– Changes into force in October 2013
94
Transfer of Undertakings – Netherlands
• Art 7:662 to 666 of the Dutch Civil
Code apply to transfer of undertakings
• Transfer must be a relevant transfer
• Obligation to inform and consult Works
Council in advance
• Consultation Trade Unions only in case
of a merger and transfer of > 50
employees
95
Transfer of Undertakings – Netherlands
• All employment conditions (including
those in collective agreement) transfer
• Joint and severally responsibility for
claims employees during one year
• Transfer cannot be a valid reason for
dismissal (except if ETO reasons are in
place)
• If employee objects to transfer,
employment contract ends automatically
96
Transfer of Undertakings – Germany
• § 613 a BGB (German Civil Code)
– If a company is transferred to a
purchaser, all employees of that
company are also transferred to the
purchaser together with all their
employment-related rights
– The same is true for a merger, property
transfer, splitting, etc.
97
Transfer of Undertakings – Germany
• European TUPE directive (77/187/EC and
2001/23/EC) implemented into law
• Transferred employees have a statutory
right to object to their transfer to the new
company within a month after having
received an information letter regarding
their transfer
– Consequence: employees who rejected
the transfer remain employed with their
former employer (seller)
98
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99