West Thames HR Exchange ClubOctober 7th 2003

Royal Holloway University of London

Agenda

9.00 Welcome, merger with HR4BIZ, minutes of last meeting– Jacquie Mahoney, CHRP

9.10 Works Councils and the Communications Process – Mary Ahmad, CHRP

9.40 European Legislation - Update – Andrew Strathdee, CHRP

10.15 Coffee Break10.30 Occupational Health in the Workplace

– Melanie Miles, Well Aware Occupational Health Services 11.00 Round Robin – general discussion of current ‘hot topics’12.00 Coaching

– Lynn Dowding12.30 Any other business, upcoming seminars and masterclasses,

and items for the next meeting12.45 Lunch

European Works Councils and all that!

Mary Ahmad

Corporate HR Partners Ltd

Background

• European Works Council Directive adopted in September 1994 and implemented 1996

• UK had not signed up to Social Charter

• UK signed up in June 1997 and new Amsterdam Treaty came into force May 1999

EWC Directive

• Requirements for informing and consulting employees at European level

• At least 1000 employees across Member States and at least 150 employees in two or more

• Written request from at 100 employees in two or more Member States

EWC Directive cont…..

• Management refusal to negotiate for six months or no agreement after three years the statutory model comes into effect

• Agreements before December 1999 (UK) are exempt from directive

• No request and no desire – no EWC

EWCs Status October 2002

• European Trade Union Institute (ETUI) figs– 600 companies have set up EWC– 1800 meet threshold requirements– US, UK and German companies 15% each– France 10%

UK EWC Situation

• Legislation– Valid Request

– Special Negotiating Body (SNB) all employees

– Company has six months to commence neg.

– Three years to conclude written agreement

– Complaints to EAT

– Penalty up to £75,000

– Confidential information can be withheld

– SNB/EWC Members have protection

UK EWC Experience

• Management view:– Benefits

• Improved cross-business co-ordination

• Better thought out corporate strategy

– Less positive• Bureaucracy to set up and run EWC

• Unfulfilled employee expectations

UK EWC Experience cont…..

• Typically EWC meets twice per year, once soon after financial results

• Topics– Top-level company strategy– Operational matters eg new technology

• Costs– £150K - £250K per year

Information and Consultation of Employees Regulations 2005

• Intent to develop High Performance Workplaces

• Head office or principal place of business in Great Britain

• Implementation– 150 or more employees March 2005– 100 – 149 employees March 2007– 59 – 99 employees March 2008– Under 50 not affected (97% of UK Companies)

Trigger……

• Valid request made by employees– In writing and dated– Supported by 10% of employees

• Management iniative

• Further requests cannot be made for 3 years

• Six months to reach agreement

The Agreement

• In writing and dated• Cover all employees• Give circumstances in which employees

will be informed/consulted• Be signed by employer• Be signed by employee representatives

– Approved by 50% of employees – writing/ballot

What must be shared

• Recent/future business development and economic situation

• Structure and future development of employment

• Decisions that could lead to substantial changes in work organisation or contractual relations

How must consultation take place…..

• Appropriate timing method and content• On basis of information provided by

management or opinions expressed by representatives

• Representatives to meet with relevant levels of management

• With a view to reaching agreement• Confidential information can be withheld

Issues….

• Disputes on implementation go to Central Arbitration Committee (CAC)

• Penalty of up to £75,000

• Employees protected in respect of unfair dismissal

• Employees cannot contract out or be contracted out

Pre-existing Agreements

• Agreements must be– In writing– Cover all employees– Have been approved by employees– Say how consultation will take place

• Must be re-negotiated if 40% of workforce want it

Anticipated Benefit

• Establish trust

• Reduced resistance to change

• Increase employee morale and motivation

• Reduced absenteeism

• Lower turnover

What should we do now…..

• Consider establishing pre-existing agreement

• This takes time

Where are we now?

• Let’s share what we are doing or what we may be thinking about doing.

What’s New in Europe ?

Quick review of what’s happening in EU countries

Andrew Strathdee

EU

• Membership– New members:

• Czech Republic – Referendum approved June

• Poland – Referendum approved June

• Latvia – Referendum approved September

• Estonia – Referendum approved September

• Cyprus – No vote planned – accepted entry

EU

• Works Council Directive– Review of Directive commenced in September– Consultation phase under way requiring any

submissions.

EU

• Pensions– 2nd Stage consultation paper re portabilityof

supplementary pension rights in occupational schemes

– Aimed at those who change employment to another EU country

– Issue, moving requires freezing contributions in current fund and joining new scheme

– But major problems will need to be solved

EU

• EU favours cross-sector collective agreement to address:– Maximum length of qualifying period

– Vesting periods

– Choice between preservation or transfer

– Preservation of preserved rights

– Method of calculation of transfer values

• Proposal for social partners to act otherwise, legislation.

EU

• More on Pensions!– More research approved to look at:

• Policies to protect and maintain 2nd and 3rd pillar schemes (Occupational and private)

• Choice of defined benefit vs defined contribution

• Gender dimension (equal retirement ages and actuarial valuations)

EU

• Working Time– September ECJ Ruling– German case re hospital Doctor Jaeger – is “on call” a rest period?– Ruled that time spent in Hospital on call constitutes “is in its

totality, working time, even when doctor is permitted to rest when not required.”

– Requires Germany to amend working time legislation– Inmplications EU wide since ruling continued:

• This covers when an employee is called upon to remain apart from their family and social environment and has less freedom to manage the time when services not required

• Overnight Business Trips?

EU

• Agency Workers Draft Directive– Draft text has been amended, but still no

agreement on the “common position”– Opposition mainly from UK and Germany– Main problem over “qualifying period” before

which equal terms have to be granted – UK and Germany holding out for 6 months.

– Discussion continues……….

EU

• Anti-Spam regulations may have unexpected effect in HR and soon - Oct 31st!– HR emails could contravene if an email to a job

applicant contains background product literature as an attachment or links to marketing materials, or company slogans!

EU

• Equality legislation overhaul – consultation paper– New countries requires greater legislative certainty as

current law is found in several Directives

– Proposal to :• Consolidate into a single text without changing current law

• Producing new legal code to consolidate

• Recast legislation completely and introduce changes

EU

• Race Equality– Deadline for transposition into National Law

was July 2003• NO notifications from any Members State have

been received to confirm compliance!• Despite well established laws in many states still

need to implement new parts on harassment and provision of Discrimination board

• New States must include by May 2004• EU five year campaign to increase awareness

Austria

• Anti- Discrimination Legislation– Consultation ended September– Transposition of EU Directive due December

• Prohibits discrimination on– Sex– Race/ethnic origin– Religion– “world view”– Age– Sexual orientation– Creates Ombudsman and extends role of Commission– Excludes disability, but this is covered by regional legislation

Belgium

• Educational Leave– Workers entitled to time off for education paid

through national fund supported by contributions from State and employers

– Receive normal pay up to ceiling, indexed– From September 2003 increased to €1960 from

€1920– Limit of €2500 unindexed for employees over

45 or made redundant

Belgium

• National Labour Council – Agrees extension of agreement to statefunded early

retirement to bridge those aged 56 or over and with 33 years service AND 20 years in nightwork up to normal retirement age.

– Extended pay agreement for white collar workers not covered in sector agreements, triggered by Automatic indexation – 2% in April.

– Predicted 2% in June 2004, +€22 to the minimum wage and all pay for those covered by the agreement

Cyprus

• EU has given Cyprus a warning about progress on Anti-discrimination Directive

• Must be implemented before entry will be permitted – i.e. by May 2004

Denmark

• Closed Shop Agreements– Bill to outlaw closed shops failed to gain sufficient

parliamentary support– Been part of programme since 2001, introduced 2003– Postponed due to opposition by one Opposition party

which holds balance of power!– Claims closed shop protects Danish workers against

cheap labour imports.– Government is embarrassed as currently defending

closed shop in two cases at European Court of Human Rights

Denmark

• Gender Pay Gap persists– Review of Equal Pay shows gender pay gap– Blue collar – 14 – 15%– White Collar 20%– Even after “fair” factors taken into account, gap

is 4% and 7%

Denmark

• Temporary Agency Workers arbitration– Arbitrator found in favour of claim that temps

should be paid same as Perms on same work at same company

– Action brought by electricians union against employer

– Decision was that collective agreement for employer should apply – these were NOT subcontracted staff

Estonia

• As reported last time, EU continuing to place pressure on Estonia over perceived failure to implement social and employment directives before accession next May– Has only implemented Working Time Directive– Anti-discrimination laws not yet ready

• Nothing else to report

Finland

• Proposed extension of Parental Leave– Proposed that employees who have 6 months

service over twelve months will be entitled to partial leave to care for child until end of year 2 of secondary school. (This increases current entitlement and reduces qualification)

– Parents may share care but both cannot be off work at same time

Finland

• Bullying and Harassment– New legislation under H&S legislation

introduced in January making employers responsible for preventing

– Fivefold increase in cases reported, but blamed on increased awareness rather than increase in harassment.

France

• Pensions– New law mentioned last time was adopted in

July and came into force on 21st August

• Minimum Wage– Increased 28th June by 5.3% to €7.19 per hour

France

• 35 Hour Week– Suggestions that “U” turn possible on 35 hour

week and that public holiday be given up!– Only ten sectors have implemented– Small employers have been able to find ways to

continue 39 hour week– Employers claim negotiations not worth effort

France

• Headscarf Ruling!– Ruling on case involving “religious symbols in secular

state”!– Female telesales employee allowed to wear Muslim

headscarf whilst in non customer facing employment. Transferred to customer facing and was dismissed for refusing to remove headscarf

– Found dismissal unfair• She had some customer contact in telesales• Contract included mobility clause permitting transfer to direct

customer facing position, so company had partly condoned.

Germany

• Health Reform Reform Agreed– Current legislation by payroll deduction 50:50

employer / ee– Objectives for legislation are:

• Reduce costs and payroll deductions by 1.4% by 2006, funded by increased patient contributions

• For proposed changes see next slide

– Major objections as employees carry brunt

Germany

• Proposed changes• Patients to pay 10% of cost, min €5, max €10• €10 for all doctor/dentist visits • €10 per day inpatient treatment to 28 days up to 2%

of income• Employees to pay for sickness benefit and dentures

by insurance payroll deduction• Removal of death and birth grants from current state

benefits• Increase in “Healthcare efficiency”

Germany

• Recovery of Company Property– Court ruling permits companies to require

return of company property (eg laptops) before notice period ends.

Germany

• Protection against dismissal legislation– Due January 2004

– Redundancy criteria can only be• Length of service

• Age

• Number of dependents

– Employees agreeing to accept can have ½ years salary for each year of service

– New businesses can have fixed four year contracts for first four years (currently 2 years)

Greece

• Nothing to report

Ireland

• Redundancy Pay Act– First six months of operation– As a result of increased entitlements, employers have

started to treat company ex gratia payments as inclusive of state statutory payment.

– (reminder – state entitlement is now 2 weeks per year of service)

• National Pay Deal Disputes– Three disputes started….– Watch this space….

Italy

• Labour Market reform introduced – September called Legge Biagi– Introduces new types of employment contracts

• Job share, “on call” and “occasional”• Forbids spurious “independent” contracts

– Legalises private employment agencies– Establishes on-line job exchange– Introduces “staff leasing” agencies permitting permanent hire of

staff through sub-contractors– Introduces “self certification” of jobs into permanent, self

employment, etc– Next stage - reduction of labour protection measures - will prove

much more difficult.

Italy

• Pension Reform– “Small” changes to be introduced– Currently 60% of people between 50 and 54

leave the labour market, highest in EU– Wage net of social security in 2002 was lower

than “seniority pension”!– Incentives to be introduced to raise average

retirement age to 60 by 2008

Italy

• Equality Directives transposed into national law in August– Equal Treatment forbids discrimination on

grounds of religion, personal conviction, disability, age, and sexual orientation

– Applies to public & private sectors, introduces direct and indirect discrimination

– Equality Framework provides for equal treatment regardless of race or ethnic origin

Lithuania

• National Minimum Wage increased (September 1st)

• From 430 litas (€125) per month to 430 litas (€130) pm

• 17% of Lithuanians are on minimum!

Netherlands

• Equal Treatment Directives transposition proceeding very slowly – current Dutch law quite comprehensive so this is cause – not a priority!

• Unemployment Benefits under review– Unemployment benefit - when runs out “follow on”

benefit was paid – now scrapped– After unemployment benefit ends, transferred to

means-tested benefit– Bridging benefit for over 57.5 years age scrapped (last

time reported part of cost of unemployment for these transferred to employer)

Netherlands

• Banked Salary Scheme introduced in 2004 Budget – September– Work Life measures

• Salary can be banked tax free• But company savings schemes will lose tax protection• Effective Jan 1 2004• All employees eligible• Can save 12% of gross salary per year up to max of 1 ½ years • Can be used to buy time for:

– Care leave– Study leave– Partial early retirement - up to 50% time off for 2 years prior

to retirement

Netherlands

• 2004 Wage round discussions commence – October

• Government austerity programme introduced to cut €17B from Budget to restore competitiveness

• Pay rises for 2003 so far, well above forecast

• So, punch up expected!

Norway

• Nothing to report

Poland

• Legislation in Parliament to transpose 13 EU Directives prior to May 2004 deadline– Major provision

• Written contracts defining major terms• Working time

– 8 hour day, 40 hour week over 5 days, but averaged over 4 months by agreement

– Minimum rest break 15 mins, 11 hours over 24hours and 35 hours continuous weekly rest to include Sunday

– One hour lunch break by employer– Annual O/t quota of 150 hours replacing 4 hours daily– Annual leave from 18 to 20 days after one year service– 26 days after ten years service

Poland

• Temporary Agency Workers– Transposes EU Directive– Bans use of temps on dangerous work, replace strikers, or to fill

redundant positions in last three months– Agencies can hire on fixed term contracts for assignment– T’s & C’s must be in writing– Notice periods required - 3 days for two weeks, one week for longer– Max of 12 months work with any single employer over 36 months,

or 36 months of to cover permanent absent for that long– If declared redundancy in last six months prohibited to use temps– Can’t employ own staff as temps– Leave of 2 days per month of service

Portugal

• Last time - New Labour Code passed in April– Not yet promulgated – President “sitting on it”– Employers approve, Unions Oppose– Unions have pressurised President to send to

constitutional court– Court ruled Four Articles violated constitution– Government has redrafted for implementation

in December!

Portugal

• Labour Code Changes:– Transposes 16 EU Directives into Law– Covers employment contracts, working time, atypical

work, dismissals and strikes as well as TU law, representation, employment of minors, students and foreigners

– Expected to take effect Jan 1 2004

• Retirement– Retirees under 65 has increased by 80% in three years,

25% of whom are under 60! 1999 legislation is the cause!

Russia

• Nothing to report.

Slovakia

• Payroll taxes to be cut– From Jan 2004, total payroll taxes to be cut

from 50.8% to 47.55%– This reduces employer costs only!

Spain

• Spanish Pensions– Commission now due to report, but have

ducked major issue – over what period to calculate pensions – left to government ot propose. (Currently last 15 years)

– Limits options for early retirement and increase cost of making older staff redundant

PLVS ARLV T

Spain

• Three month visas– Quota of immigrants to be given temporary

three month visas to enter Spain and seek employment

– Currently must have obtained work first and obtain visa through employer

– Operative Jan 2004

PLVS ARLV T

Spain

• Electronic Registration of Employment Contracts– All employment contracts in Spain must be registered

– State Employment service offers electronic service

– Since April, 8000 new contracts been registered of all types

– Once approved, still have to present written confirmation!

PLVS ARLV T

Sweden

• Rejected Euro in Poll!• International Labour Organisation Censures

Sweden– Sweden has breached ILO convention by

increasing retirement age from 65 to 67– Introduced law to give right to retire up to 67

but in so doing made all collective conventions unable to be agreed with earlier retirement!

– Requested to review!

South Africa

• National Assembly amends Skills Development Act and Unemployment Insurance Act

• Provisions remove bureaucracy and extend definitions to give more unemployment assistance to disadvantaged groups such as domestic employees and those with multiple employers and seasonal workers

• Employment Equity Deadline• All employers with more than 150 must prepare employment

equity plans and submit reports on progress by 1st October every year

• Failure results in R500,000 fine. • Good employers to receive Awards for Good Practice

Switzerland

• Nothing to report

Coffee

Occupational Health in the Workplace

Melanie Miles, Well Aware Occupational Health Services

Round Robin

CHRP Salary Movement 2004 Survey

• Features of 2004 data– The sample:

• C. 50 companies participating or promising data when available

• Range from Large to small

• Hi-tech and Pharma predominate

• Most have participated for many years

• Data for greater number of countries (2003, 19 – 2004, 28)

CHRP Salary Movement 2004 Survey

• Features of 2004 data– The Data:

• Significant number of companies giving zero movement

• At top end, movement is much lower than in previous years, so data is quite a tight distribution

• Few companies exceed 5.0% anywhere, except high inflation countries

• UK movement = 3.5% (but mode is 4.00%)

• If you want more data – participate – its free!

• Have limited data for a wider range of countries, APAC and LATAM, Middle East

Coaching

Lynn Dowding

Any Other Business?

Lunch