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Europe

1 June 01

EU roundup, including employment; rights of establishment; company law; justice and home affairs

Employment law is an area which has been fundamentally affected by the EU over the years – in areas from sexual discrimination to the rights of posted workers.  Employment law and issues surrounding rights of workers and how they fit into the larger picture of economic progress in the EU are very much at the forefront of debate in 2001 – in all of the EU institutions. Here we outline some of the questions currently being discussed

In the Council - employment issues and the EU Presidency programme

The Swedish Presidency of the EU finishes on 30 June and, for the second half of 2001, the Belgians will be in the driving seat.  The Belgian government has identified as one of the major themes of its presidency, issues surrounding employment including improving the quality in work (good working conditions, flexible work, skills development, etc), advancing equal opportunities and combating exclusion and poverty.  This strand very much reflects the Swedish Presidency’s position, for which employment was one of its three key policy areas, and formed a large part of the Stockholm summit which took place in March this year. The first special European summit dealing with employment and social issues was staged in Lisbon in March 2000.  It has been agreed to hold a similar such Council meeting each spring.

The Belgians, for their part, will be targeting the sustainability of social security and pensions systems and the strengthening protection for workers. To underline this, an informal Council meeting looking at employment affairs will be held in Liège in July, just after Belgium’s period in office begins.  Further meeting will take place in Brussels in November and December. The Belgian Presidency web page may be found at http://www.eu2001.be.

Commission takes firm stance on pensions

On 19th April 2001 the Commission adopted a Communication on “the elimination of tax obstacles to the cross-border provision of occupational pensions”. The Communication supplements the proposed pension fund Directive by dealing with the tax aspects of cross-border occupational pensions and is part of the move to promote mobility of labour in Europe. The Commission’s position is that discriminatory tax treatment of pension and life assurance policies is contrary to the fundamental freedoms of the EC Treaty. The Commissioner whose portfolio covers internal market matter – Frits Bolkestein – wants   national rules in this area to be examined for compatibility with the Treaty. A contravening Member State will be requested to amend its legislation and if it fails to do so, legal proceedings will be brought. One example of where national laws will be checked is that of tax obstacles to the cross-border transferability of pension capital. The Council and Parliament will now consider the Communication. The Belgian Presidency has undertaken to reach a compromise on the sustainability of pension systems by December 2001 at the latest.

European Parliament consults on workers

<>A public hearing, hosted by the Parliament’s Employment and Social Affairs Committee, was held on 25th April 2001 to discuss the success or otherwise of the implementation of the 1994 European Works Council Directive (EWCD). Despite the existence of some 650 Works Councils in Europe, they have not necessarily always been successful. One reason for this is the fact that powers of Councils created under the Directive vary according to national law. Some participants called for the EWCD to be strengthened and for penalties to be imposed on companies which attempt to circumvent the Directive. There were also suggestions that there should be a 50-worker threshold in one Member State, and 200 for two Member States, for the EWCD to be applicable. The employers’ lobby, UNICE, believes that changes to the EWCD would hit small and medium-sized firms. The Commission hopes to present its proposal for a revised EWC Directive in 2002, once the framework Directive on information and consultation of workers (http://europa.eu.int/eur-lex/en/com/dat/1998/en_598PC0612.html), which is awaiting a Council Common Position, is adopted.  It is expected that the parliamentary committee considering the Directive will adopt a position on 21 June.

ECJ rules on rights of cross-border workers

The European Court of Justice gave its ruling in case C-43/99 (Leclere) on 31st May.  The case concerned a Belgian living in Belgium but receiving an invalidity allowance from the Luxembourg government after having worked and made social security contributions in Luxembourg until 1981. Mr Leclere appealed against a decision by the Luxembourg government not to pay various child allowances on the basis that he was not resident in the country. A number of Member States intervened in the proceedings before the ECJ, reflecting the importance of the questions of principle raised in relation to cross-border workers and their rights.  The Court – sitting with an 11 member bench – gave a decision to the effect that it was valid under EU legislation to refuse to make the payment in question to a non-resident without discriminating against him.  Moreover, it was made explicit that a person receiving an invalidity pension who resides in a Member State other than the State providing his pension is not a worker within the meaning of Regulation 1612/68 on freedom of movement for workers within the Community and cannot benefit from the rights flowing from that status.

The full text of the decision can be found at www.curia.eu.int.