HR Exchange Forum January 12th 2005 Royal Holloway University of London

1. HR Exchange ForumJanuary 12th 2005Royal Holloway University of London

2. Agenda 9.00 Welcome, minutes of the last meeting, membership update - Jacquie Mahoney, Corporate HR Partners 9.10 What’s New in Europe – Andrew Strathdee, Corporate HR Partners 9.50 ‘Information and Consultation – What is involved and what does HR need to do’ - Joy Hankins, Laytons Solicitors 10.35 Coffee Break 10.45 Round Robin - general discussion of current ‘hot topics’ 11.30 ‘Why Age is an Issue Now’ - Ian Brown, Employers Forum on Age 12.20 Any other business, items for the next meeting. 12.30 Lunch

3. What’s New in Europe ? Quick review of what’s happening in EU countries Andrew Strathdee

4. EU • Statistics • Labour costs • EU25 Annual Labour costs up 2.4% • Lowest increase Germany – 0.9% • Unemployment • EU25 Average 8.9% (Number unemployed 19.1M) • Lowest Luxembourg 4.3% (UK 4.5%, 3=) • Mid Finland 8.7% • Highest Poland 18.6% • cf US 5.5%, Japan 4.7%

5. EU • Audit shows “cooking the economic books” rife • EU has conducted audit of member states reporting of economic figures and has found misreporting • EU contributions depend on certain key statistics and upper limit is 1.24% GDP • Spain for example has been caught excluding all immigrants (6.2% of population) from GDP statistics

6. EU • Commission prosecutes Countries for failure to implement anti-discrimination rules by Dec 2003 • Dec 2004 EC announced action at ECJ against Austria, Germany, Finland, Greece, Luxembourg • Only France, Spain, Italy and Sweden have fully transposed rules into national legislation • Rest of coutries infringement procedures being applied • Next investigation promised is into implementation

7. EU • Working Time Directive Revision • Meeting in Brussels 7/12/04 • Failure to reach agreement on revision • Attempts to be made under Luxembourg Presidency to resolve • Reminder of main points • Individual opt outs retained, but should be subject to collective agreement (where possible) • Time spent on callout not actually worked is not working time • 48 hour week calculations more flexible

8. EU • Framework agreement on Work-related Stress reached between social partners (08/10/04) • Aims • to enable partners to increase awareness and understanding • Provide framework to identify, prevent and manage • Harassment and violence at work are stress elements, but not included in this agreement • Employers have responsibility to protect health of workers, workers have responsibility to to comply with protective measures • Risk assessment to identify and tackle issues

9. EU • European Company Statute and Employee Participation Directive • Implementation deadline 8 October 2004 • Only six states incorporated into domestic law so far • Austria, Belgium, Denmark, Finland, Iceland, Sweden • Rest are being monitored

10. Austria • Benchmark New Collective agreement in metal-working harmonises blue and white collar pay setting • This was Autumn pay round Union Objective • First agreement concluded in benchmark industry which will influence other sectors • Increase was 2.5%

11. Belgium • National Wage agreement 2005/6 • Little progress made, estimated less than 30% chance of agreement without Government intervention • Employers have tabled tough conditions for agreement • Universal 40 hr week • Greater flexibility in working • Temporary wage freeze • Abolishment of Wage indexation • Abolishment of early retirement • “Turkeys voting for Christmas!”

12. Cyprus • Pancyprian Federation of Labour has proposed that there should be new legislation providing for • trade union recognition • extension of collective agreements • workers to receive an annual bonus worth one month's pay(13th Month) • Cyprus Workers' Confederation (SEK) supports Govt Proposal to increase retirement age in public sector from 60 to 63

13. Czech Republic • National Bank predicts wage hike • Overall wages growth predicted at 6.5 – 7.0% in 2005 • This is based on public sector increases • Private sector predicted at 4.5% • (CHRP survey said 3.5%)

14. Czech Republic • New Act On Employment October 2004 • Changes to unemployment benefit rules • Tougher anti-discrimination provisions – to deal with issues over recruitment, on grounds such as ethnicity, religion and age.

15. Denmark • New Equality Protection Law in draft • Will provide better definition of sexual harassment in the workplace • University Survey shows employees want more flexibility within collective agreements • Cafeteria approach sought by 75% of employees • E.g. choice between higher wages, higher pension contributions or more time off

16. Estonia • No agreement on 2005 Minimum wage (set at EEK 2480) • Unions seek EEK 2800, employers EEK 2600 • Dispute over meaning of 2001Agreement that MW should be 41% of National average wage by 2008, currently 32% • Government leaves social security contributions at current level • Unions and employers both sought cut to reduce unemployment and costs

17. Finland • Industrial troubles in Finland affect National Incomes Agreement • Government refuses to intervene in disputes in chemical, transportation, ports and food supplies • Employers have therefore withdrawn from discussion on new national incomes agreement until disputes over. • Result - deadlock

18. France • Draft Bill introduced on disability, introducing minimum wage for disabled employees at 80% of normal MW – targeted implementation for July 2005 • Collapse of Private Sector Union Membership • Union membership halved over last 25 years • Current rate of membership 5.2% of working population, which is causing problems with consultation etc.

19. France • Termination of employment row rumbles on • Reminder – certain clauses of 2002 Modernisation law related to employers rights to dismiss were suspended by new government and this ends early 2005 • Neither Employers nor Unions would agree to negotiated amendment so government drew up new law • Major confrontation with Unions has led to Government withdrawing two key elements from this – redundancies to safeguard competitiveness and refusal by employees to accept modification of essential contractual conditions. • Adverse response by employers likely

20. Germany • Investor Protection Law will become law in 2005 • Shareholders can challenge decisions by management board • Shareholders can sue individual managers if they feel deliberate misleading or negligent data published • Corporate advisers can be fined up to €4m for provision of incorrect advice.

21. Germany • Dismissal for drunkenness in workplace • In a recent case the Court ruled that dismissal without notice is fair provided that the drunken condition endangers the employee and others • Call for change in co-determination law by employers • Calls for companies to choose most appropriate method • Rejected by Unions

22. Greece • “Wave of early retirement schemes” hits Greek employment • Companies trying to reduce payroll costs by redundancy via early retirement and voluntary exit schemes • Union response mixed • But 20 – 23% of population below poverty line…. • Row over Jobs Gameshow • Greek TV ran gameshow with 2 unemployed competing for prize of a job……

23. Hungary • New laws on Teleworking following EU 2002 Social Partners Agreement (May 2004) • Lawyers propose review of Labour Code • Hungary operates unified Labour code • Provisions are state established, not negotiated • Needs updating to cope with changes in labour market, especially employment contracts and collective agreements • Only at discussion stage so far and unions sceptical

24. Ireland • Information and Consultation Directive • Irish Government very slow in bringing forward, passed 2002, 3 years to implement • Enactment due March 2005, and procedure for companies with 150+ must be in place by this date • Draft Bill to transpose to local law not even complete so compliance unlikely • 3 extra years for up to 150 employees

25. Italy • New Industrial Dirigenti (Executives)Agreement • Major new agreement • Elimination of minimum wage • Improvement in training • Improvement in unemployment benefits • Improvement in social security provisions • Death in Service and Permanent Disability improved in July 2005 and July 2007 • Contributions to Health Fund increase Jan 2005 and Jan 2006 • Contributions to Previndai Fund will improve and additional contributions permitted

26. Italy • Private Sector Loans • New facility for employees to borrow 20% of salary guaranteed at privileged rates to mirror civil service scheme

27. Latvia • Fragmentation of Pay claims in Latvia • Current groups taking action for higher pay and/or benefits • Police, Museum staff, Medical Staff, Anaesthetists,Teachers • Police have had some success in bringing individual legal actions • Problems with implementation of Minimum wage • Target to reach 50% of NAW by 2010 • Currently (2004) at 41.7% • Due to reach 45% in 2005, (€133) but Government back-pedalling due to increases in benefits

28. Lithuania • Works Councils Law adopted • All organisation employing over 20 people without current TU reps obliged to establish Works Council on request from one fifth of employees • Below 20 employees, employees can elect representative • Amendments to Labour Code proposed • Only settled in 2003 but already needs changes • No agreement - early termination of fixed-term employment contracts, guarantees to the trade union officials, calculation of length of service, or additional annual leave. • Agreement - employee information and consultation, procedure for dismissing employees on prolonged sick leave, severance pay for employees dismissed due to liquidation of the employer, and maximum length of overtime • Parliament to decide

29. Netherlands • New 'social agreement' agreed November 2004 despite wide-scale trade union protests. • Agreement provides socio-economic agenda for future • Early retirement and 'life-span leave' arrangements • Occupational disability insurance • Unemployment insurance • Controversy surrounding wage moderation has also been clarified by the agreement.

30. Netherlands • Dutch Childcare Act effective 01/01/05 • Financial responsibility for childcare provision to be shared between Government, employers and parents • Despite implementation date reached Collective Agreement negotiations for specific childcare funding agreements are stalled or not yet started

31. Netherlands • New Rules for Pension Funds 2006 • Supervisory role will be transferred to Dutch Central Bank and financial assessment of funds underway • Complex series of changes introduced, mostly technical, but contribution reductions, holidays or refunds are prohibited unless liabilities can be met

32. Norway • Govt Committee rejects right to longer hours for part-timers • 1 in 4 work part time • 75% of these are women and 42% of women in employment are part time • No agreement as yet over alternative solution • Representation of women on company boards • Must achieve 40% by end of 2005 voluntarily or legal obligation will be introduced

33. Poland • Problem with introducing Works Councils • TU Membership has collapsed to 14% • Employers therefore consult with workplace reps, so structure proposed by EU difficult • Tripartite talks collapse in October and Government has withdrawn, despite deadline early in 2005 • Negotiations continue between employers and unions

34. Portugal • 2005 Budget impacts employee benefits • Reimbursement of travel expenses using own vehicles subject to special 5% tax • Employee contributions to occupational pension funds no longer tax deductible • Employer contributions remain tax deductible • Contributions for foreign employees working in Portugal to outside pension funds will become tax deductible, also for domestic employees contributing to outside plans

35. Russia • Inflation rate increases • Estimate was 10% , but now projected to be 11.5%

36. Slovakia • Minimum Wage increased by 6.9% - employers happy, unions not! • SKK 37.40 per hour hourly paid • SKK 6,500 per month monthly paid • Effective Oct 1st • New Labour Market policies to deal with unemployment being implemented • Mostly structural - job creation, improved state facilities etc.

37. Slovenia • Inflation falling from 3.6 to 3.2% • Strategic Goals of Labour market development and employment up to 2006 proceeding – next issue for meeting Jan 2005, employment of young people. • Slovenia will be taking over EU presidency in 2008!

38. Spain • Dismissal for drug use held to be invalid • Spanish Constitution has clause related to rights to personal privacy • Employee found to have used cannabis during voluntary medical exam and dismissed • Court ruled that this was invalid as no warning was given that the drugs test would be given

39. Spain • EU Commission acts against tax discrimination against foreign pension funds and warns Government • Spanish government preparing legislation to rectify

40. Spain • Annual Consumer price index rose by 3.6% to October • Collective agreements covering around 80% of workers have automatic wage increase if inflation exceeds 2% in 2004 which will now trigger…..

41. Sweden • EU acts against pension fund discrimination • Sweden disallows tax deductibility on employer contributions to non-Swedish pension funds • Imposes higher yield tax (27%) on foreign funds compared to domestic (15%) • Operates more onerous regulation • EU says this is obstacle to freedom of services and capital under EC Treaty and will formally request change in the law

42. South Africa • First Prosecutions for Employment Equity Act failures • Section 20 of the Act requires employers to prepare employment equity plans • Section 21 compels them to submit annual reports about employment equity • 8 companies in KwaZulu-Natal face prosecution and R500,000 fine for failing to do either.

43. South Africa • South Africa to introduce legislation to register Human Resource professionals • South African Board for Personnel Practice • Five levels, Master, Chartered, Practitioner, Associate and Technician • Must register to practice • Date of implementation not yet fixed

44. South Africa • New Sanitary Facilities Regulations published • Detailed requirements for the workplace (similar to UK OSRP and Factories Acts) • Draft Codes published • Human Resources Code of Good Practice (Current) • Sexual Harassment (Sept 04) • Employment of Children in advertising, artistic and cultural activities (Aug 04)

45. Switzerland • Young Workers Restrictions proposals • New bill will lift restrictions on age 18+ employees from working nights and Sundays • Swiss Unions merge to create more effective influencing body • Initial Objectives • early retirement at age 62 • Referendum on freedom of movement for workers from new EU states

46. ‘Information and Consultation – What is involved and what does HR need to do’ Joy Hankins, Laytons Solicitors

47. Coffee

48. Round Robin

49. ‘Why Age is an Issue Now’ Ian Brown, Employers Forum on Age

50. CHRP Website New HRXF Section