Keeping you up-to-date on the most significant developments of employment law at the EU level
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The previous report in this series, covering the first quarter of 2019 outlined the main provisions of three Directives which were adopted in March – April of this year (in relation to gig economy workers, whistle-blowing and work-life balance).
With these three Directives, the legislative activities in the then current EU legislature came to an end. Indeed, with the elections for the new European Parliament on 26 May 2019, and the widely commented appointment of the members of the new European Commission (headed by Mrs U von der Leyen), a new legislature will take the helm as from September 2019 onwards. Hopefully, the next issue in this series will have the possibility to outline the European Commission's main policy objectives in the field of social policy and employment matters in particular.
Case – law
In the second quarter of 2019, several decisions were rendered by the European Court of Justice on social policy matters. Especially the 14 May 2019 preliminary ruling on the recording of working time received extensive media coverage, which is why we will start this overview by highlighting this particular judgment.
Working time | In short
1. Obligation to record working time
14 May 2019, 61/2019, CCOO v Deutsche Bank SAE
Member States must require employers to set up an objective, reliable and accessible system enabling the duration of daily working time to be measured. Following the opinion of advocate general Pitruzzella, the Court considered that Member States must safeguard the fundamental right of every worker to a limitation on the maximum number of working hours and to daily and weekly rest periods, as this right is enshrined in the Charter of Fundamental Rights of the European Union as well as in the Working Time Directive (2003/88). In the absence of an effective system for measuring time, there is no way to guarantee these limitations will be observed. The Member States have a broad discretion in deciding on the means to attain this protection, having regard, as necessary, to the particular characteristics of each sector of activity or e.g. the size of an undertaking.
For further analysis of this decision see this link; for a copy of our client-only transnational survey of the impact of this decision in the various jurisdictions where Bird & Bird has offices: please send an e-mail to [email protected].
Discrimination | In short
1. France: Calculation of compensation payments for workers on part-time parental leave
8 May 2019, C-486/18, Praxair v Ms RE
The French framework agreement on parental leave was considered not compliant with the principle of equal pay for male and female workers, as provided for under art 157 TFEU, in that it entitles previously full-time workers on part-time parental leave to compensation on the basis of a reduced salary and thus indirectly discriminates against women who make up the largest group (96 % of workers) to choose to take such parental leave.
2. Spain: Calculation of retirement pensions for part-time workers particularly disadvantageous to female workers
8 May 2019, C-161/18, Villar Laiz v INSS and TGSS
Spanish legislation on the calculation of retirement pensions for part-time workers indirectly discriminates against women if it puts women at a particular disadvantage compared to men. If the Spanish national Courts find the statistical evidence on more women than men having part-time careers is valid and significant, the Court considered the applicable system whereby a reduction factor is applied to the calculation of retirement pensions goes beyond what is required to attain the objective of financing the social security protection and would fall short of the principle of equal treatment for men and women in matters of social security (Art 4(1) Council Directive 79/7/EEC of 19 December 1978).
3. Austria: Discrimination on grounds of age within the Austrian system of remuneration and advancement of State officials and contractual public servants
8 May 2019, C-24/17, Austria v M. Leitner
Notwithstanding legislative reviews aimed at eliminating discrimination on the basis of age, the current system whereby professional experience acquired before the age of 18 is not taken into account is still considered discriminatory. As long as measures to re-establish equal treatment have not been adopted, an official or contractual public servant who is thus discriminated against is entitled to receive the payment or financial compensation from his employer amounting to the difference between the amount he should have received if he had not been discriminated against and the amount he actually received.
Transfer of undertaking | In short
1. Criteria for assessment of a transfer where a Bank ceases to provide certain investment services and transfers this activity to another legal entity
8 May 2019, J Dodic v Bank Koper Alta Invest C-194/18
A bank had decided to cease its investment activities and offered its clients the possibility to pursue this service with a second undertaking. One of the bank’s stockbrokers declined the offer made by the Bank for a new employment contract for other tasks, contesting his subsequent dismissal as a result of what he considered a transfer of undertaking. Following a request for preliminary ruling, the Court reiterates that the decisive criterion for establishing the existence of a transfer of an undertaking or a part thereof is the fact that the economic entity retains its identity, as indicated inter alia by the fact that its operation is actually continued or resumed. This is solely for the national courts to assess, on the basis of all the facts characterising the transaction concerned, whether that condition is met, taking into account (1) the type of undertaking (2) the assets transferred, both tangible assets such as buildings or property as well as intangible assets, (3) whether or not employees or customers were transferred and (4) the degree of similarity between the activities carried out before or after the transfer. The fact that the clients of the first undertaking remained free to entrust the management of their assets does not preclude a transfer of undertaking to have taken place, nor can the number of clients that are transferred be deemed decisive, or the continued cooperation between first and second undertaking be considered relevant.
2. The applicability of the Directive is not conditional upon the transferee continuing to exist beyond a particular time
13 June 2019, Ellinika Nafpigeia v Panagiotis e.a. C-664/17
The fact that transferor and transferee envisaged the pursuit of the activity by the transferee but ultimately also the transferee’s future liquidation does not preclude this situation from falling within the scope of the Directive. The protection of employees under the Directive will therefore only cease in a situation where it is the transferor who is the subject of bankruptcy proceedings or analogous insolvency proceedings.
3. Scope of the definition of “employee”
13 June 2019, C. Correia Moreira v Municipality of Portimao, C 317/18
Where national legislation may provide different levels of protection to different categories of employees, the directive merely ensures that the protection an employee enjoys under the national legislation is not diminished solely because of the transfer, as its purpose is to ensure that the employment relationship continues after transfer as before and without placing the worker in a less favourable position. That would be the case if an employee is required to first undergo a (public) competitive selection procedure and secondly have a new employment relationship with the transferee.
4. Protection of employees where transfer of undertaking occurs in the context of proceedings for judicial restructuring with a view to maintaining all or part of the transferor or its activity
16 May 2019, C. Plessers v Prefaco NV, Belgische Staat, C-509/17
In principle the protection of employees in case of transfer of an undertaking does not apply to a transfer where the transferor is the subject of bankruptcy or analogous proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of a competent public authority. Proceedings for judicial restructuring by transfer under judicial supervision do not meet these requirements. In this context the rights of employees to continue to work for the new employer on the same terms as those agreed with the transferor must therefore be safeguarded. Where national law entitles the transferee to choose the employees whom it wishes to keep on, it is contrary to the protection of employees against unjustified dismissal in the event of a transfer of an undertaking.
Social security | In short
1. Migrant workers – seafarer maintaining his residence in his Member State of origin
8 May 2019, SF v Inspecteur van de Belastingdienst, C-631/17
The mere fact that a worker carries out his activities outside the territory of the EU is not sufficient to exclude the application of the EU rules on free movement of workers. Hence, the Latvian seafarer, residing in Latvia and working for an employer established in the Netherlands, retained a sufficiently close link with EU territory for his situation to fall within the scope of the regulation on the coordination of social security systems, even for the duration of his activity on board a vessel of his employer’s flying the flag of the Bahamas and sailing outside the territory of the EU.