Overview
In October the European Council meeting was overshadowed by the horrific act of terrorism in the USA on 11 September. Discussions took place on the new Action Plan against terrorism adopted by the EU in the wake of this tragedy.
In October 2001, a record 31 years after first being presented as a formal proposal, the EU Employment and Social Policy council adopted a Regulation for a European Company Statute, together with a supplementary Directive on employee involvement. The effect of this is that, in return for tax benefits for companies registering at the European level, they would have to introduce procedures for employee involvement.
The European Commission has adopted a Communication on how to strengthen the local dimension of the European Employment Strategy. This examines ways of developing employment at local level and offers ideas on exchanging experience and enhancing the transfer of best practice across the European Union.
In October too, the European Parliament adopted a Resolution, endorsing the European Commission’s employment policy guidelines for 2002, published last September. Parliament welcomed the emphasis on a cross-section of measures aimed at increasing the employment rate in the EU, and also voted to designate 2003 ‘European Year of People with Disabilities’.
The European Council has formally launched preparations for the next intergovernmental conference (to be held in 2004) on reforming the Treaties of the EU ahead of enlargement.
In December the European Commission adopted a Communication in which it undertakes to reduce the volume of EU law by as much as 25 per cent by January 2005. This will form the basis of an action plan to be launched in June 2002.
The High-Level Task Force on Skills and Mobility has published its first report on European labour markets. This focuses on occupational mobility and skills development, geographic mobility and information and transparency as three key areas of action for achieving the goal of making European labour markets open and accessible to all by 2005.
In January, the European Parliament elected Irish Liberal Pat Cox as its President for the remaining two and a half years of its current term. Mr Cox defeated British Socialist David Martin after three ballots, finally winning by 298 votes to 237.
Also in January Euro notes and coins were introduced in the Euro zone countries. The process seemed to go smoothly, but it is obviously too soon to say what the longer term implications will be on issues such as convergence of prices and wages.
EU Heads of State and Government met in Barcelona in March for the annual spring European Council. These Councils were established to review progress on the Lisbon strategy for making the EU the world’s most dynamic knowledge-based economy.
The Commission welcomed the report on the future of industrial relations from the High-Level Group on Industrial Relations. This was set up following the adoption of the Social Policy Agenda outlining the Commission’s work programme in the employment and social areas between now and 2005. The report contains some very challenging comments on a new agenda for industrial relations which “should build on new practices such as innovation agreements, collective wage funds, employability agreements, time saving accounts for training and portability of social rights”. It recommends the development of national and sectoral collective bargaining within the applicant countries of Eastern Europe and the building of employer and trade union structures to reflect existing EU structures.
In March, the Commission announced the adoption of a new four-year strategy on health and safety at work. This will cover the 2002–06 period, and is aimed at modernising existing rules, adopting a global approach to well-being at work (including enhancing the quality of life), tackling violence and bullying and consolidating the culture of risk prevention at work. It is clear that the new focus within health and safety is towards employment and people-related issues.
The Conciliation Committee, composed of representatives of the Council, the European Parliament and Commission, has reached agreement on the proposed general framework Directive for informing and consulting employees in EU companies. Member states have until 17 March 2005 to incorporate it into domestic law.
Following protracted and unsuccessful negotiations in 2001 between the European trades unions and employers organisations ETUC and UNICE, the Commission published a draft directive on terms and conditions of employment for agency workers. As expected and predicted, this imposes strict conditions on the use of agency workers and obligations on user employers and agencies alike that will reduce the likelihood of agency work increasing across Europe. There are concerns that this is contrary to the EU commitment to employment creation, as temporary work agencies do just this by providing flexibility, encouraging the development of jobs and assisting the unemployed and returners back into the labour market.
According to figures published by Eurostat (the EU Statistical Office), the annual rate of inflation in the EU fell to 2.4 per cent in February 2002. The Euro-zone inflation rate also fell, from 2.7 per cent in January to 2.4 per cent in February. Compared to the same time last year, this represents a rise of 0.2 and 0.1 percentage points in the EU and Euro-zone respectively. Eurostat also released figures showing that the EU recorded a trade deficit of Euro 7.5bn in January 2002. This represents a significant improvement on the trade deficit of Euro 13.9bn recorded for the same month last year. However, it also represents a significant deterioration from the previous month, which saw the EU record a Euro 2.0bn surplus.
The Commission has initiated debate on what is potentially the most controversial issue in the enlargement process by estimating the cost to the EU of taking in 10 new member states in 2004. Figures suggest that the additional cost, including agricultural support, regional policy aid and a number of other expenditure items, would be around Euro 5,638bn.
Country news
Belgium
Every two years (with some exceptions), a nationwide labour agreement is concluded between the ‘Social Partners’. This establishes a salary norm which needs to be maintained if Belgium is to keep its competitive position compared to eg Germany, France and the Netherlands (where 80 per cent of Belgium’s products are exported to). It includes automatic cost of living expenses and other increases, which could vary from one sector to another, according to individual competitive situations. The agreement expires at the end of this year and it appears that many sectors’ increases have gone beyond the salary norm of 6.4 per cent. Since Belgium’s three neighbouring countries have not had increases of this magnitude in recent years, Belgium’s competitiveness might still have deteriorated. From a practical point of view, individual companies debate about whether or not, for example, performance pay should be included in the 6.4 per cent. Another difficulty lies in the uncertainty of when the increases take place.
Belgium held the EU Presidency during the second half of 2001 and it had been expected that its Labour Ministry would attempt to reinforce the role of the European Works Councils. The events of 11 September obviously refocused attention elsewhere and prevented this from happening.
Czech Republic
Main developments in the association:
- Preparation of education programme for HR professionals, one year course
- New and a larger format of national HR magazine
- HR Excellence Award
- ‘Labyrint’, a training fair for HR professionals and graduates
Hungary
Key activities:
- Annual National Conference 11th-13th June 2002, Balatonszéplak - 400 participants expected
- A third class will finish three-semester HR Academy on 18th April, and receive Certificates at the National Conference
- About to conduct a survey about changes in organisations and HR departments’ role, with results to be published early summer
Netherlands
A downward adjustment of wage demands, which was general practice during the l990s, is no longer the case. We also see a decrease in levels of tolerance generally.
Unemployment is around 2 per cent, which causes labour market tensions. No change expected in this trend. Increase in employer and employee social security responsibilities (sick leave, long term disability, pensions, work/life balance), as government involvement decreases. Trend towards tailor-made compensation and benefit packages over collective agreements. E-HRM: E-recruitment, E-learning etc.
Slovak Republic
Main significant HR events of year:
- National HR Conference for Management and Development of Human Resources with international participation (October 2-3, 2002 in Bratislava)
- Experience Exchange Conference with Slovak Republic company directors and international participation (end of September 2003 – in High Tatras)
- International Exchange conferences with Hungarian, Czech and German associations. Presentations at conferences in the Central Europe countries
- Annual HR Excellence Award for Management and Development of Human Resources - two categories: Best personnel project of the year and Best personnel manager of the year; awarded during National Conference
- In each second year: year–long training for personnel managers (projects with certification of the Ministry of Education)
- Quarterly magazine MANAGER
United Kingdom
The UK has been focusing on the gender pay gap. As women’s participation in the labour market has increased, so the issue of equal pay has become a critical priority for the Government, with women’s pay currently standing at 82 per cent of male earnings. Recommendations from a commissioned review of women’s pay and employment include encouraging companies to conduct voluntary equal pay reviews before 2003, with specific information on women’s pay and employment in company annual reports, and giving individuals the right to pay information to make it easier to establish whether an employer has an equal pay problem. The UK has one of the worst records for this amongst EU member states. However, it is still an EU-wide problem and the European Commission has launched an EU-wide campaign, including calls for a revision of the 1975 equal pay directive.
The EU draft directive on Agency Workers, which will give temporary workers the right to the same remuneration and benefits as permanent staff, is causing concern for UK employers. It could lead to temporary workers being entitled to equal pensions and holiday provisions and other benefits such as health insurance and share schemes. The CIPD is concerned that the directive would undermine the flexibility of the UK’s labour market as, currently, agency workers allow employers to respond rapidly to changes in business demands and staffing.
EAPM news
Applications have been received from people management associations in Denmark, the Danish Personnel Managers’ Association, and Malta, the Foundation for Human Resources Development. The chief executives of these organisations will be making presentations at the EAPM Delegates’ Assembly in June as the final part of the application process.
Unfortunately, the NUDSP in Bulgaria has been withdrawn from membership of EAPM due to non-payment of fees and non-participation in EAPM activities. Two other organisations in Bulgaria have expressed an interest in joining EAPM, as has an association in Russia; none of these is yet able to demonstrate eligibility.
The Swiss association (SGP) has submitted its final report from the 20th EAPM Congress, held in Geneva in June 2001. The Congress was a success both professionally and financially. The financial success was due largely to the high level of sponsorship and to the exhibition. SGP has prepared a paper for EAPM looking at ways of increasing the success of the EAPM Congress by strengthening the relationship between host countries, the EAPM Executive Committee and member countries and by developing the EAPM brand.
Preparations are well under way for the 21st EAPM Congress, which will be held in June 2003 in Rome. The theme for the Congress, ‘The Tech-Net Age’ is intended to be thought-provoking and provide an opportunity for delegates to think about the future, both professionally and personally. Details are available on the EAPM website (www.eapm.org) and an interactive web platform will be operational six months prior to the Congress. Two high potential young people per association will be invited to the Congress free of charge and will be actively involved, eg by participating in a plenary panel session. Member associations outside the EAPM are requested to provide hotlinks to the EAPM Congress site and encourage attendance at the Congress in any way they can.
The EAPM is currently looking at opportunities for future projects. Ideas under consideration include a more interactive website, a European research centre, a service centre for general HR or specific legal and social security issues, a
European post-graduate HR qualification and a European benchmarking centre for people management issues.
The EAPM will be celebrating its 40th anniversary in June. One of the three founding organisations, the French ANDCP, has generously offered to host an event in Paris to mark this event. This will be a day’s symposium, looking at people issues in Europe.
