Our latest roundup of news from the Federation of European Employers (FedEE).

EU: Combating illegal employment of non-EEA migrants
Although all EU member states have measures in place to outlaw the employment of non-EEA nationals without work or residence permits, the sanctions lack consistency and many of them fail to act as a strong deterrent to employers. For this reason, the European Commission has drafted a directive to combat illegal immigration by third-country nationals. This puts the onus upon the employer to check all immigration papers before making a recruitment decision. It also applies criminal penalties for repeated and multiple infringements, exploitative working conditions, knowingly employing victims of human trafficking and illegally employing minors.

The latest version of this draft directive has recently been approved by the European Parliament and is expected to be finally adopted by the Council of Ministers this spring. EU member states will then have two years to transpose the directive into national legislation.

Germany: Confusion about time credit transfers
Under an amendment to German flexible working regulations introduced on 1 January 2009, employees may transfer time- credits built up with one employer to a new employer, provided that both employers agree to the transfer. In practice, this has proved difficult to achieve, largely because former employers are unwilling in the present economic climate to make the necessary financial transfers, and also because time-credit agreements differ between enterprises.

Although the latest legislative changes were clearly intended to encourage the creation of life-long time-banking arrangements, many employees find themselves obliged to use up or 'cash in’ their time credits. Their other option is to ask their employers to transfer the value of the credits to the German pension insurance system in order to improve their pension benefits.

Netherlands: Accords only avenue for variable pay
The Dutch finance minister, Wouter Bos, has written to the lower house of parliament setting out government policy on remuneration in financial companies that receive state funding.

With retrospective effect from 1 January 2009, no bonuses may be paid to senior management of banks and insurance companies receiving government support and the only variable remuneration permitted for other staff will be that agreed through collective labour accords. Severance arrangements for senior management will also be subject to a maximum of one year's fixed salary. These limitations will apply until new individual company remuneration policies have been established with the involvement of supervisory board members appointed by the government.

Sweden: Groundbreaking agreement on short-term work

Engineering employers in Sweden have concluded a national short- time agreement with industrial union IF Metall. This will allow companies to reduce the workweek of full-time employees to two days, provided that a further day is provided for training and that employees are guaranteed 80 percent of their normal weekly pay.

This one-year deal is unusual in Sweden, where trade unions have traditionally opposed all temporary lay-off arrangements. Both parties have agreed to monitor its outcome and determine what impact it has on redundancy levels.

United Kingdom: Impending legislative changes

31 March and 6 April 2009, numerous changes in UK employment law will come into effect. These include:

• Alterations to the UK points-based immigration system making it harder for applicants to get a UK skilled migration visa.
• Overseas workers using the tier-1 category for skilled migration will need at least a masters' degree, rather than a bachelor's degree, if they have not already secured a job in the UK. They will also have to prove that their previous salary amounted to at least BPS 20,000 (EUR 21,646).
• An increase in the statutory annual holiday entitlement to 5.6 weeks (ie: 28 days for full-time employees). However, this total may include bank and public holidays.
• A new right for employees to request flexible working if their children are aged between 6 and 16. The regulation previously restricted this right to parents with children under 6 years or up to the age of 18 if their child was disabled.
• Increased penalties for failure to pay the national minimum wage.
• Repeal of the statutory dispute resolution procedures set out in the Employment Act 2002. These are to be replaced by a voluntary Acas code of practice. Failure by an employer to follow a formal procedure in relation to a dismissal will no longer render it automatically unfair - even if an employer cannot prove that dismissal would have still taken place if such a procedure had been followed. However, employment tribunals will be legally required to take the Acas code into account when considering relevant cases. Tribunals will also be able to adjust any compensatory awards made in these cases by up to 25 percent for unreasonable failure to comply with any provision of the code.

Other European news in brief:

Bulgaria

The Bulgarian government has declared 4 and 5 May 2009 to be additional public holidays this year. This will create a continuous holiday period from Friday, 1 May (May Day) to Wednesday, 6 May (St George's Day). To compensate for these changes, two Saturdays – 25 April and 9 May - have been classified as normal working days.

Cyprus

The Cyprus House of Representatives (parliament) has approved a bill to raise social insurance contributions from 1 April 2009. Over the next 30 years, contributions will rise every five years by 1.3 percent (0.5 percent each from employees and employers and 0.3 percent from the state). Currently, contributions amount to 16.6 percent of salary levels, but they will rise to 25.7 percent by 2039.

Denmark

The Danish government has agreed to pay compensation to 40 women who developed breast cancer following prolonged night shift working. The decision follows research by the UN's International Agency for Research on Cancer that has established a clear link between breast cancer and night work.

A report in the National Cancer Institute Journal has shown a 36 percent greater risk of breast cancer for women who had worked night shifts for more than 30 years, compared with a sample of women who had never worked at night.

Europe

Senior level pay cuts announced recently include a 25 percent salary reduction for the CEO of Telecom Slovenija, 17.5 percent cuts for top managers at the RTE public service broadcaster in Ireland, the scrapping of all bonus payments to first reports of management board members at Fortis bank Nederland and cancelled bonuses for the CEO of Swedish bank SEB and top managers at Swedish pension company AMF. In France, the four most senior Société Générale bank directors have bowed to pressure from the French government and handed back to their company a total of 340,000 stock options.

Finland

Airline Finnair has decided to appeal against a ruling by the Helsinki district court following a compensation award of EUR 25,000 for the dismissal of a flight attendant. The district court found that the airline was justified in dismissing the flight attendant for pilfering, but did not believe that the offence justified immediate dismissal. The employee was not in a position of special trust and had worked for the company for 34 years without any previous warnings for misconduct. The company was therefore obliged to pay the dismissed employee the equivalent of six months salary, plus compensation for outstanding holiday entitlement.

Greece

The Greek finance ministry has announced a one-off income tax payment of EUR 1,000-5,000 for those declaring earnings of more than EUR 60,000 a year. It has also announced that public sector workers earning more than EUR 1,700 a month will be subject to a salary freeze.

Netherlands

A novel scheme to assist companies in retaining highly-qualified 'knowledge workers' is currently being discussed by the Dutch Cabinet. Under the proposed plan, the government would step in if such workers faced redundancy and offer them employment at a state higher educational establishment for up to 50 percent of the working week, provided that they remained on their employer's payroll. According to the economic affairs minister, Maria van der Hoeven, 'losing our proficient knowledge workers now will lead to problems later, because skilful workers are not easy to find again'.

Portugal

Per capita private sector labour costs in Portugal rose on average by 3.8 percent (on a constant hours basis) over the year to Q4 2008. The highest increases were in the regions of Oporto, Lisbon and the Azores (+4.1 percent) and the lowest increase was in Madeira (+1.8 percent).

Romania

Average gross earnings in Romania rose by 16.9 percent over the year to December 2008. In industry, hourly earnings averaged 13.42 new lei (EUR 3.12), whilst in the finance sector, hourly earnings averaged ROL 40.08(EUR 9.33).
Overall net hourly earnings were 73.6 percent of gross earnings and, because of Romania's flat income tax structure, this proportion varied only slightly between sectoral earnings levels.

Russian Federation

Consumer prices in Russia rose by 4.5 percent from the beginning of the year to 10 March 2009 in spite of a 0.9 percent fall in the price of petrol. At a meeting of the Moscow city finance department, the head of the Moscow budget and finance commission, Igor Antonov, forecast that consumer prices could rise by 35 percent in Moscow during the course of this year.

Sweden

The general counsel to the Swedish equal opportunities ombudsman is currently carrying out a review of cases heard by the labour court (Arbetsdomstolen) to find out why no ethnic discrimination claim has ended in favour of the claimant since 2003. This includes 12 cases brought by the former office of the ethnic discrimination ombudsman.

FedEE news

Pay in Europe 2009
FedEE's Pay in Europe 2009 report will be published next month.
It will be available to paid-up members in pdf format in the members' area of our website. The report will provide benchmark salary data for 32 standard job positions in 47 European countries and territories at a common reference date of 1 February 2009.


Copyright: FedEE Services Ltd 2009