Employment Law

The EU Treaty itself contains several provisions directly relating to the employment relationship and its consequences, such as Article 130 (member country coordination of employment and labour market practices), Article 136 (working conditions), Article 137 (health and safety, equal treatment, consultation with employees), Article 141 (equal pay) and Article 142 (equivalent paid holiday programs). However, much of the meaning of these provisions has had to be worked out by the judicial system, ad hoc.

A substantial number of EU landmark cases are within the employment law field and there are numerous ECJ cases establishing or confirming direct effect in such matters as free movement of persons (such as to take up employment where they choose) and discrimination on the basis of national origin or gender. Please see case summaries, below.

EU Treaty Provisions and EU Directives Regarding Employment Law.

In addition to Articles 130, 136-137 and 141-142, mentioned above, Article 3 of the EU Treaty contains somewhat more general provisions (and additional protocol language) of direct relevance to employment law in the EU member countries. Specifically, Article 3(1) (i) requires that the activities of the EU shall include:

"(i) the promotion of coordination between employment policies of the Member States with a view to enhancing their effectiveness by developing a coordinated strategy for employment".

In the context of Primacy of EU law and the context of Direct Effect of EU law (please see definitions in the Chapter on "European Legal Terms"), within an overall environment of freedom of movement of labour, this means a steady evolution towards general uniformity in the employment law arena throughout the EU. The laws in Norway and Switzerland are similar.

These are among the most significant EU Directives in the field of employment. With minor local modifications, these have mainly been adopted in member countries. (Please also see the comparative Chart on pages 16-17.) Directive 75/117/EEC (relating to the application of the principle of equal pay for men and women); Directive 76/207/EEC (implementation of the principle of equal treatment of men and women as regards access to employment, vocational training, promotion and working conditions); Directive 77/187/EEC (on safeguarding employee rights in the event of transfers of undertakings, businesses or parts of businesses) (often referred to as the "Acquired Rights Directive"); Directive 79/7/EEC (on the progressive implementation of the principle of equal treatment for men and women in matters of social security); Directive 91/533/EEC (requirement that certain employment terms be in a writing provided to the employee); Directive 97/80/EC (on shifting the burden of proof in cases of discrimination based on sex) (respondent has burden to prove absence of forbidden discrimination).

Also to be noted: Directive 80/987/EEC (protecting workers in the event of the employer's insolvency); Directive 89/391/EEC (health and safety in the workplace); Directive 94/45/EEC (establishment of European works council mechanisms); Directive 95/46/EEC (data protection for individuals).

EU Employment Law Court Decisions.

Here is a brief overview of representative employment law cases in which the ECJ and national courts have "directly" applied EU law, including EU Directives, whether or not they had yet been adopted into national legislation. These cases build upon prior ECJ decisions, such as Van Gend en Loos as cited on page 7.

1974. European Commission v. Republic of France (Case 167/73, decided 4 April 1974) [1974] ECR 359 (the so-called "French Seamen" case). Member country discrimination regarding employment, based upon national origin, is prohibited, even if based upon valid reasons of secondary importance. A French law required a certain number of sailors on French ships to be French. The ECJ held that this law contravened Regulation 1612/68 (relating to free movement of workers within the EU) and even though there were valid reasons for the law, based upon safety at sea considerations.

1974. Walrave v. Association Union Cycliste Internationale (Case 36/74,

decided 24 October 1974) [1974] ECR 1405. Walrave challenged the rules

of a Dutch-Spanish sporting association to which he belonged, claiming

that they discriminated on the basis of his national origin. The ECJ

found that discriminatory rules were prohibited which affected gainful

employment and the provision of services. In this case, the court

distinguished between sport as a non-economic activity (some permissible

discrimination in the composition of national sports teams) and as an

economic activity (as here, where Walrave sought paid employment as a

pace-maker in certain motorcycle races). Similarly, in Union Royale Beige

Football Association v. Bosnian (Case 415/93, decided 15 December 1995)

[1995] ECR 4921, the Court held that professional sporting transfers

affecting "national" teams cannot be subject to nationality restrictions

between EU member countries or be subject to fees which have the effect

of impairing such transfers.

1975. Rutili v. Ministre de Vlnterieur [French Minister of the Interior]

(Case 36/75, decided 28 October 1975) [1975] ECR 1220. A member

country cannot restrict residence in its territory as to a citizen from another

member country, on grounds of "public policy", except upon the same

terms as it applies to its own citizens. Rutili was an Italian citizen residing in France and was deemed undesirable on the grounds of public policy. France sought to deny renewal of his French residence permit.

1976. Defrenne v. Sabena (No. 2) (Case 43/75, decided 8 April 1976) [1976] ECR 455. Defrenne was an air stewardess, suing on the basis that the Belgian airline Sabena discriminated regarding equal pay for men and women. The ECJ ruled that such discrimination was unlawful, as was such discrimination in "agreements which are intended to regulate paid labour collectively, as well as [in] contracts between individuals". When referred back to the local Belgian court (Case 149/77, 15 June 1978), local implementation was based squarely upon Article 141 of the EU Treaty (equal pay for men and women) and thereby confirming that the Treaty itself confers "horizontal rights" and asserts that all employment differentiation based upon gender (not just pay) is prohibited and that equal treatment is the applicable EU standard.

1984. Von Colson & Kamann v. Land Nordrhein-Westfalen [German state

of North Rhine Westphalia] (Case 14/83, decided 10 April 1984) [1984]

ECR 1892. When two jobs became vacant in a German prison (i.e., a

government employer), two women and two men applied and only the men

were hired. In this case, in which the women sought relief under an equal

treatment Directive which had been inadequately adopted into German law,

the ECJ deviated from the "direct effect" approach and instead adopted

an analysis based upon "indirect effect and a duty of member countries to adopt and interpret EU law into their national law, harmoniously". In this case, the ECJ ruled that the Directive was not sufficiently precise to guarantee the plaintiffs a specific job but that every member country has a general duty to interpret its own law in light of EU Directives and other EU law. While those plaintiffs did not benefit from the ruling, subsequent ones suing private employers have benefitted because the Von Colson principle has been applied as meaning that national courts must apply the spirit of EU law, even when specific Directives have been unimplemented, or only partially implemented or even mis-implemented. In general, this benefit has been conferred by "estoppel" (the member country being precluded from denying the effect of a Directive which it has failed to implement and apply properly).

1985. Gravier v. Ville de Liege, Belgium (Case 293/83, decided 16 January

1985) [1985) ECR 593. Discrimination regarding vocational training is

not permissible as between citizens of member countries. Plaintiff was a

French citizen who sought exemption from an enrollment fee at a Belgian

university, arguing that it was not required of Belgian citizens for the same

course of study.

1986. Lawrie-Blum v. Land Baden-Wiirttemberg [German state of

Baden-WurttembergJ (Case 66/85, decided 3 July 1986) [1986] ECR 2121.

The term "worker" for purposes of EU protection must be given a wide

meaning (and here was extended to include a trainee teacher who had not

yet been specifically employed but was remunerated during her course of

study and provided services in the form of teaching lessons).

1987. Gimenez Zaera v. Instituto Nacional de la Seguridad Social [Spanish

Social Security Institute] (Case 126/86, decided 29 September 1987) [1987]

ECR 3697. Fernando Gimenez Zaera was a Spanish employee suing in a

Spanish labour court regarding an issue relating to his pension plan and

social security entitlements (which had been curtailed due to changes in

Spanish tax law). The Spanish court in Saragossa rejected his claim and

the matter was referred to the ECJ, which decided that, under the facts

presented, there had been no violation of Articles 136 and 137 of the EU Treaty (making only general provision for employee social welfare).

1987. Unectefv. Hey lens (Case 222/86, decided 15 October 1987) [1987] ECR 4097. Heylens, a Belgian football trainer, was offered a position with a professional football (soccer) team in France. The French authorities sought to block him on the grounds that his Belgian training did not match that required in France and they failed to give him specific reasons for deciding against him and failed to give him an avenue for appeal. The ECJ, referring to the European Convention on Human Rights, found that by denying Heylens his right to a fair hearing and to an effective legal remedy (i.e., there had been a denial of "due process") he had been deprived of his basic rights under EU law.

1991. Francovich v. Italy (Cases 6/90 and 9/90, decided 19 November 1991) [1991] ECR 5357. Italy had failed to implement a specific Directive (80/987/EEC), requiring member countries to adopt legislation to protect workers for their wages, in the event of their employer's insolvency. The ECJ decided that the Directive did not have "direct effect", because its wording was too imprecise. However, the Court concluded that, nevertheless, a member country has a duty to give effect to EU law and found that Italy had failed in this duty and was therefore liable to indemnify the employees affected. Stated another way, a member country may be bound by a Directive if it fails to adopt or implement it correctly and even if (as in Francovich) the Directive itself was deemed to have no "direct effect". This reasoning is sometimes referred to, in general, as the Francovich principle.

1994. Roks (De Weerd) v. Bestuur van Bedrijftvereniging voor de Gezondheid [Dutch health administration association] (Case 343/92, decided 24 February 1994) [1994] ECR 571. Confirming the application of Directive 79/7/EEC (equal treatment in respect of social security payments), with the Directive being held "directly applicable".

1995. Kalanke v. Freie Hansestadt Bremen [City of Bremen, Germany] (Case 450/93, decided 17 October 1995) [1995] ECR 3051. Kalanke was a male candidate for a job at a public park in Bremen, Germany, but a female candidate was given automatic priority under German national law. This type of "affirmative action" was discriminatory in light of Directive 76/207/EEC and therefore prohibited. However, the law in this area is still evolving and subsequent cases have expressed a more relaxed attitude when priorities were applied ad hoc in order to adjust a pre-existing imbalance in male-female job proportions. In re Badeck (Case 158/97, decided 28 March 2000) [2000] ECR 1-1875.

1997. Ayse Siizen v. Zehnacker Gebdudereinigung GmbH (Case 13/95,

decided 11 March 1997) [1997] ECR 1259. This was a case invoking

Directive 77/187/EEC, but in the context of protecting workers where

a business had transferred the overall contract whereunder plaintiff had

been employed. Stizen was an employee of a janitorial service in Bonn,

Germany, who claimed that notice to her of losing her job had been

inadequate and ineffective and violated her "acquired rights". Her employer

had not been sold or gone out of business but had transferred the relevant

cleaning contract to another provider, when the one under which plaintiff

was employed was terminated. The Directive was held not to apply under

these specific facts.

1998. Coote v.. Granada Hospitality Ltd. (Case 185/97, decided 22

September 1998) [1998] ECR 5199. An ex-employer may not deny

an ex-employee a favourable reference solely on the basis that while

employed the employee had brought charges against the employer for

alleged sex discrimination (not proved in court). The Court reasoned

that employee protection regarding freedom of movement did not cease

with the termination of the employment relationship. The Court's ruling,

however, was based upon Directive 76/207/EEC (sex discrimination and

equal access to employment).

1999. Melle Seillier v. Commissariat a VEnergie Atomique [French Atomic

Energy Commission] (Case 4290, decided 23 November 1999). French

appellate court applies Directive 97/80/EC (on shifting the burden of proof

in cases of discrimination based on sex). The Directive was adopted into

specific national legislation only two years later (in November 2001).

2002. Lawrence v. Regent Office Care Ltd. (Case 320/00, decided 17 September 2002) [2002] ECR No. 23/2, pages 18-21. The North Yorkshire County Council employed women and men for cleaning tasks at different rates of pay. The women sued under the British Equal Pay Act and were successful, when compared to men in similar jobs (the work of both was held to be of equal value and hence merited equal pay). Meanwhile, the County Council (as required by UK law) tendered for the cleaning services to be performed by various commercial contractors, some of whom employed the plaintiff women referred to above and some of whom did not. The plaintiff womens' pay was raised to equal that of the men, whereas the pay of the non-plaintiff women was not. This resulted in additional litigation, which made its way to the ECJ. The ECJ, while reasserting its ruling in Defrenne (equal pay for equal work), held that under these facts Article 141 (1) of the EU Treaty (equal pay for equal work) did not apply because the new inequalities did not result from "a single source" (since there were now multiple employers) and therefore a comparison could not be made for purposes of finding actionable pay discrimination.

Common Characteristics of National Employment Laws.

All countries in Europe have national laws that relate to employment and the rights and obligations, in general, of employers and employees. Whatever the national sources of employment law may be, the same general characteristics are found in all European countries.

National Sources of Employment Law. There is no specific pan-EU labour code or specific pan-EU employment code. Each country in Europe, whether a member of the EU or not, has its own laws on this topic, which must conform with EU norms and requirements. Usually, these national laws are contained in a logically arranged labour code. For example, in France it is the "Labour Code", in Italy the "Workers' Statute (300/70)" and in Finland the "Employment Contracts Act of 2001".

In the Czech Republic, the principal enactment is the 1991 "Employment Act" ("Zakon o zamestnanosti"), with various amendments, through 1 January 2003. This enactment is arranged in logical, comprehensive articles, such as Article 1 (right to employment), Article 3 (state employment policies), Articles 10-11 (retraining), Articles 12-18 (unemployment benefits), Articles 19-20 (employment procedures for employers), Articles 21-24 (disabled employees). The law is written with EU accession specifically in mind.

Such codes are supplemented or amended by session laws which often have titles telling precisely what they refer to, such as the UK's "Disability Discrimination Act, 1995", the Irish "National Minimum Wage Act, 2000" and the Danish "Rest Periods Regulations Order No. 324 of 23 May 2002".

In France, some such laws are commonly known by the name of a legislator or politician closely associated with them, such as the Law Aubry I and Law Aubry II, both of which relate to working hours, the Law Evin, relating to protection against smoking at the workplace, and the Law Roudy, relating to equal treatment for men and women. Some other countries (such as Italy) tend to identify their laws by number and date (such as the "Law 903 of 9 December 1977", relating to equal treatment of working men and women).

In Spain, laws enacted by the Spanish Parliament are usually implemented by Royal Decree and there is a tendency to identify laws accordingly, such as "Royal Legislative Decree 1/1994", relating to the revised Spanish Social Security Act. There is no similar tendency in Belgium, Denmark, Sweden or the UK, even though they are all constitutional monarchies. In Greece, there is a tendency to follow a numbering based upon Presidential decrees, such as Presidential Decree No. 17/1996, relating to health and safety and notification of workplace injuries, as well as numbering based on Royal Decrees in force, such as Royal Decree 750/1971 (relating to Sunday working).

The German arrangements are distributed among a variety of laws, some in the Civil Code, some in specific employment laws. For example. Social Code IX deals with disability and employment. Civil Code Section 612 III deals with equal pay. The Parental Leave Act, Maternity Protection Act and Civil Code Section 616 provide that an employee does not lose the right to pay if absent from work for a proportionately irrelevant time for specified family emergencies. The Working Time Act ensures breaks and rest periods and maximum working hours and the Federal Holiday Act ensures a paid minimum holiday. Article 3 of the Federal Constitution prohibits discrimination on a number of grounds, as do Civil Code Sections 611a, 61 lb, 612 III (all in relation to gender equality), as does the Employee Protection Act (protection against sexual harassment). The Trade Union Agreement Act, the Safety at Work Act and the Company Pension Schemes Act deal in detail with their respective subject matters.

EU Directives, when taken up into national law, are incorporated into the existing legislative framework

EU Directive Date Belgium Denmark France
Equal Pay 1975 Collective Act 983 (Equal Labour Code L.I40-2
(75/117/EEC)   Agreement Pay Act) (2001)  
Equal 1976 Collective Act 711 (Equal Labour Code L.I23-1
Treatment   Agreement Pay Act) (2002)  
(76/207/EEC)   25    
Acquired 1977 Collective Act 111 Labour Code L.I22-12 (2)
Rights   Agreement (Transfers of  
(77/187/EEC)   32-bis Undertakings)  
Working Time 1993 Employment Act 324 (Rest Labour Code (various
(93/104/EEC)   Act 16 March 1971 Periods provisions)
      Regulation) (2002)  
European 1994 Collective Co-operation Labour Code (various
Works Council   Agreement Committee Act provisions)
Directive   62; Laws of    
(94/45/EEC)   23 April 1998    
Parental Leave 1996 Collective Act 711 (Equal Labour Code L.I22-28
(96/34/EEC)   Agreement Treatment)  
    64 (2002)  
Part-time Work 1997 Law of 5 Act 815 Labour Code L.212-4-3
(97/81/EC)   March 2002 (Part-time  
      Work) (2002)  
Fixed Term 1999 Law of 5 Act 392 (1993); Labour Code L.I22-3-1
Work   June 2002 Act 691 (2002)  
Framework 2000 Law of 12 Pending Labour Code L.I22-45
Equal   December    
Treatment   2002    
Equal 2001 Law of 12 Act 411 (2002) Labour Code 140-2
Treatment   December    
(Race, Ethnic   2002    
Acquired 2001 Collective Act 710 Pending
Rights   Agreement (Transfers of  
(Amendments)   32-bis Undertakings)  
(2001/23)     (2002)  
Germany Italy Netherlands Spain United
Constitution Constitution Equal Pay Workers Equal Pay Act
Article 3; Article 37 Act Civil Statute  
Civil Code   Code 7:646 Article 28  
612 III     (modified  
      with Law  
Constitution Constitution Equal Pay Workers Sex
Article 3; Article 37 Act Civil Statute Discrimination
Civil Code   Code 7:646 Article 28 Act
611-612     (modified  
      with Law  
Civil Code Civil Code Civil Code Act Transfer of
613a 2112; Law 7:662-666 12/2001 Undertakings
  428/90     (Protection of
Working Civil Code Working Workers Working Time
Time Act; (various Hours Act Statute Regulations
Federal provisions)   Section V,  
Holiday Act     Articles  
Works Workers Works Law Transnational
Councils Act Statute; Law Council Act 10/1997 Infomation
  300/70     Consultation
        of Employees
Parental Decree Employment Law Maternity
Leave Act 151/01 Care Act 33/1999; Parental
      Royal Leave
      Decree Regulations
Part-time Decree 61/00 Adjustable Workers Part-time
Work   Work Hours Statute Workers
Fixed-term   Act Article 12; Regulations
Act     Royal  
Part-time Decree Civil Code Workers Fixed Term
Work 368/01 7:886a Statute Employees
Fixed-term     (modified Regulations
Act     with Law  
Pending Decree Equal Workers Pending
(partly 196/00 Treatment Statute  
covered by   Acts 1980 (modified  
existing   and 1994; with Law  
laws)   Civil Code 33/2002)  
Pending Constitution Constitution Pending Race Relations
(partly Article 3; Article 1 (partly Act
covered by Workers   Workers  
Social Code Statute   Statute,  
IX) Article 15   modified  
      with Law  
Civil Code Law 39/02 Civil Code Pending Pending
613a   7:662-666 (partly  
      with Law  

Provisions of relevance to the employment relation may also be found in the commercial code, tax code, patent code, health and safety code and the social security code, depending upon the jurisdiction, as well as being found in the overall corpus of EU Primary Legislation and Secondary Legislation. Occasionally, such law is contained in the national Constitution (for instance, in Germany (as above), in Italy and in France, where the "Declaration of the Rights of Man" from 1789 is still part of the current law, as set forth in that historic document).

Wherever located and however arranged, the impact of the legislation is generally very similar from place to place. ECJ cases such as the ones summarised herein tend to be at the edges of the law (at the time they are decided). The day-to-day issues in European employment law are considerably more standardised and predictable than would be suggested from reading some of the landmark ECJ cases cited as representative examples of the law on these subjects, throughout Europe.

There are similar code and legislative systems in the non-EU countries and the New EU Accession Countries. For example, in Switzerland, employment law is largely to be found in the "Code of Obligations", as well as in the Employment Act of 13 March 1964 (as amended). In Norway, such provisions are found in the Worker Protection & Working Environment Act of 4 February 1977 (as amended). The New EU Accession Countries have been actively engaged in the process of restructuring their entire labour law situation, in order to be ready for EU accession. For example: Czech Republic (Employment Act 1991, as above, and with similar provisions in Slovakia); Estonia (Law on Employment Contracts 1992); Hungary (Labour Code of 1992, as amended); Latvia (Labour Law Code); Lithuania (Law 1-2048 on Employment Contracts); Poland (Labour Code of 1974, as amended, with amendments due to take effect 1 July 2003).

General Characteristics of National Employment Law

Most European countries have special rules affecting government employees. The general remarks and comparisons here are relevant for employees of private employers and, unless stated otherwise, the remarks apply to Norway and Switzerland.

Recruitment, selection, testing (pre-hire). In some European countries, it has been the case that employment agencies were operated by the government. This practice has tended to disappear and in most countries job vacancies are advertised and filled via private agencies or directly between the company and the job applicant. The law requires that candidates be treated fairly and equally and in most countries there are some regulations about recruitment tests, interviews and the collection of personal data about the prospective employee (which must be kept confidential). In some countries (such as France), certain categories of applicants may be entitled to employment priority, if otherwise qualified (such as employees laid off during the prior 12 months, victims of workplace accidents, part-time employees wishing to work full-time).

The employment contract (oral, written, when required, terms and conditions). A written employment contract is normally not required for all employment but Directive 91/533/EEC requires that the employee be given a document setting forth the key elements of the agreement (salary, place of work, terms of probation prior to permanent employment, restrictions upon competition with the employer). Some specific contracts, such as those for fixed-term and part-time work (after the employee has fulfilled an agreed upon trial period) must be in writing. Many countries require that the agreement be in their local language. It is common for the agreement to set forth in detail the arrangements about confidentiality, ownership of inventions created during the scope of employment and arbitration of disputes. Many companies have an "Employee Manual" and in some instances it is the practice for this to be incorporated into the employment agreement.

The workplace (pay, safety, permissible absence and paid leave, stress) and changing the scope and conditions of employment. Wages and safety are specifically governed by the legal regulations. All EU countries have a minimum wage law (or laws that result in the same effect) and all have rules about the frequency and method of wage payments, withholding deductions, bonuses, holiday pay, sick pay and entitlement to leave for specific reasons, such as for child care. Unilateral changes by the employer may give rights to claim constructive dismissal, upon resignation of the employee. The employer is required to provide a workplace that is safe and free from harassment and unnecessary stress.

In most European countries, the minimum wage applies to all workers (or almost all workers), regardless of the industry in which they work, regardless of the size of the employer's business and regardless of the business sector (manufacturing, agriculture, services). In several countries, slightly lower minimum wages are provided for trainees and younger workers.

Working hours (plus part-time and flexible), in general. Each country has its own rules about the maximum number of hours that may be required by the employer and about how many hours must be worked before overtime is claimed. As a rule of thumb, 35 to 38 hours is the EU norm. Flexible hours and part-time employment schedules can be negotiated on an individual or on a group basis (collective bargaining agreement). Few countries have provisions for "zero-hour" contracts.

Employee versus "independent contractor". Most European countries allow a distinction between an "employee" and an "independent contractor", provided that the characterisation of a person as one or the other is not artificial or used to evade specific national legislation aimed to protect the rights of workers. As a general rule, the tests applied involve an analysis of the level and type of control and instructions, whether services are rendered personally, degree of supervision, set hours versus freedom to work at any time, mode of payment, etc. In some countries (France), the "link of obedience" appears to be the principal test.

In several European countries (e.g., France, Germany, Italy, Spain), corporate officers and directors are not considered as "employees" for certain purposes. They are treated as employees with respect to taxation and social security issues but are not covered by the national system of unemployment insurance (provided for employees by the employer at the employer's expense). They may be entitled to some of the protection which employees are afforded (such as a minimum notice period prior to dismissal, treatment as an employee for social security purposes) but may not be entitled to such protection for other purposes (such as rights of an employee as regards working time rules, rights of an employee in the case of alleged unfair termination).

The cyber environment (teleworking, homeworking, data protection, e-mail monitoring, etc). Legal regulation of the cyber-environment at the workplace is still evolving in Europe (as is specific legislation regarding teleworking and homeworking). There is usually no specific legislation covering all the issues which may arise but most important issues which have arisen are covered by various EU and national laws relating to the protection of privacy (please also see pages 72-73, regarding data privacy). On the other hand, in some countries (the UK), employers may monitor the e-mails of their employees, provided that they notify the employees of their intention to do so.

The Human Rights Act (various aspects). All members of the EU (or wishing to join the EU) must adhere to the European Convention for the Protection of Human Rights & Fundamental Freedoms, entitling all persons within their borders to decent working conditions, social security, health protection, medical and judicial assistance, protection of the environment and opportunities for cultural and social development). Switzerland and Norway are also signatories to the Convention.

Discrimination (pre-hire, during the job, regarding pay and advancement, regarding dismissal), whether based upon gender, race, age or disability. Under various EU Directives and national legislation, discrimination at any stage of the working relationship is prohibited. Several countries (such as France) go further than outlawing "general" discrimination and specifically prohibit it on the basis of a person's name, physical appearance, age and sexual orientation. Throughout the EU, such protection also extends to requiring equal treatment for full-time and part-time employees and covers discrimination based upon disability (even in countries such as Finland and Portugal that have little specific stand-alone legislation on the subject, whereas most EU countries do). On the other hand, some countries (such as Germany) do not currently outlaw some forms of age discrimination. In Spain, there are some rules prohibiting discrimination against employees who normally use a language other than Spanish (please see "Interesting Europe-fact" at page 73).

Managing difficult people (violence, agitators, spies, drug and alcohol abusers, bullies, persistent absentees). Behaviour along these lines which is seriously or persistently disruptive justifies dismissal for cause, except in some cases where such behaviour is directly related to disease or illness. In some countries (Belgium, France, Ireland), there is legislation which specifically addresses the duty of the employer to provide a workplace in which employees are not subject to bullying by their co-workers.

Whistleblowing (and other forms of self-help, reward-seeking and/or immunity). Whistleblowing and related issues are still in the course of development as legal issues in Europe and there is very little legislation or case law about it. Suffice it to say that it is considered consistent with good social policy for employees to advise their employers of facts which may expose the employer to liability and that it is not acceptable for such employees to be retaliated against by the employer.

Works councils, "bargaining units" and other types of "Mitbestimmung" (German "co-determination") and trade union recognition (mandatory collective bargaining) issues. Most European countries have laws which address the related issues of employee representation vis-a-vis negotiations with management and the duty of management to keep employees generally advised as to major decisions which may affect their jobs (such as plant closures). For example, in France and Belgium, if there are 50 or more employees, an election must be held every 2 years, whereby the employees elect a health and safety committee (works council) from among the workforce. It is the duty of the committee to report to and work with management regarding matters relating to working conditions and the duty of management to consult regarding major issues of company profitability, proposed collective dismissals, plant transfers or closures.

Treatment of foreigners. The overall structure of the EU specifies that workers have freedom of movement within the EU to seek and take up employment on non-discriminatory terms. Similar rules are being adopted with respect to the New EU Accession Countries, although there will be various "waiting periods" until total freedom of movement into "old" EU countries is uniform. In Switzerland, foreign workers are subject to quotas allocated between the Swiss federal state and the individual Swiss cantons, of which there are 26. Foreigners may only work in Switzerland if they have a work permit, pursuant to the Ordinance of 6 October 1986, with some preference given to EU nationals and highly qualified workers from non-EU countries. Generally similar regulations involving work permits and residency requirements exist in Norway, pursuant to the Immigration Act of 24 June 1988, as amended.

Immigration issues and the international work force in general (Schengen). As outlined in the Chapter on "European Legal Terms",

relaxed rules for travel and immigration exist for nationals of signatory countries. Non-EU nationals seeking to work in an EU country need to follow considerably more rigorous procedures, involving specific application forms and obtain permission (residence permit) to travel, well before they do so.

Dismissal (and other issues pertaining thereto), "for cause". An employer may terminate an employee for good cause but this term is narrowly construed by the courts and labour tribunals (theft, violence, fraud, prolonged absenteeism without justification). In some countries, alcoholism may be grounds for dismissal and in others it may be treated as a disease and, as such, not afford a ground for immediate dismissal (e.g., unless the employee fails or refuses a course of treatment).

Notice periods may be mandated by statute, even in "for cause" termination situations, although it may be permissible for an employee to be placed on paid leave (off the premises), while the required notice period elapses. Notice of intention to dismiss should usually be accompanied by specific procedures, including a preliminary interview or meeting to explain the facts and proposed action to the employee, followed by a carefully written notice of dismissal. Employees sometimes have an attorney present at any such interview (meeting) and may also be accompanied by a co-worker. Certain employees (often called "protected employees") can only be dismissed under special procedures (these employees are few in number and are mainly in the category of elected and currently serving works council representatives, specific trade union representatives, pregnant women). In any case, rules for dismissal based upon cause must be carefully and consistently observed and documented by the employer.

Dismissal (or layoff due to economic necessity; Francovich situations). In addition to some duties of notification and consultation with employees, employers have specified duties in situations involving mass layoffs and plant closures or transfers, including mergers, downsizing and outsourcing arrangements which have the same effect as a plant closure. In general, these duties amount to paying the employees an indemnity, computed according to statutory rules or according to specific collective agreements. If the employer follows the mandated procedures, the ability of the employees to prevent or block the proposed change (such as by injunction) is very limited.

Transfers of businesses (aka "transfers of undertakings"). In EU countries, the "Acquired Rights Directive" (77/187/EEC) sets up certain protections of employees in the context of major company actions which may affect the employees collectively and adversely (such as plant closures and transfers and other events listed above, such as mergers, downsizing and outsourcing). Some countries (France, since 1928) have had similar

legislation and case law which pre-date the EU Secondary Legislation. In essence, employees are entitled to notification and the other safeguards embodied in the relevant EU Directives or in national law (which may sometimes impose somewhat more rigorous requirements). Sometimes the national legislation may have a rather forbidding looking local designation, such as the Austrian "Arbeitsvertragsrechtsanpassungsgesetz", which is merely implementing Directive 77/187/EEC in order to "harmonise employment law" in Austria accordingly. In the Netherlands, this Directive is simply now part of the Civil Code (7:662-666). In Portugal it is reflected in Decree-Law 49408. There are similar provisions in Switzerland, although it is not part of the EU (Swiss Code of Obligations, Sections 333 and 336; Law of 17 December 1993).

D&O/E&O insurance and corporate indemnification. Insurance, at company expense, whereby corporate officers and directors (as part of their employment contract "package") are held harmless and indemnified in instances where they are sued for allegedly wrongful acts performed during the scope and course of their work for the company is a form of insurance which is available in Europe but not frequently obtained (lawsuits against corporate officers and directors being still quite infrequent in Europe). On the other hand, E&O insurance (and defalcation insurance) are becoming more common features of the European corporate governance and accountability landscape.

Tribunal practice, mediation and procedure (plus access to court). All European countries have special labour courts or tribunals, with exclusive jurisdiction over most issues arising out of the employment situation. In some countries (France), the magistrates are not professional judges but are panels of elected workers and employer representatives (please see French and German court structure charts on pages 82-83). A "right to sue" (in the normal courts) may be entirely unavailable or only available after complete exhaustion of all administrative remedies and permissible appeals or only available in lawsuits brought by employees collectively. In jurisdictions where directors are not generally classified as "employees" they may sue and be sued in court, in the first instance.

Damages/Punitives/Costs. Punitive damages are not awarded in European litigation situations. However, if an employee is wrongfully dismissed, there will likely be local laws providing for specific appropriate compensation, based, for instance, upon the length of prior service. Depending upon the circumstances, an award for improper termination may be substantial. European court rules provide that the loser in litigation pays the costs and attorneys' fees of the prevailing party.

Miscellaneous Issues:

Fellow servant rule. European countries require the employer to carry workplace accident insurance and, as a result, litigation between co-workers is rare.

Respondeat superior. The employer is normally liable for the actions of the employees during the scope and performance of their employment.

Work for hire doctrine (employee inventions). In all EU countries there is legislation in force which addresses the issue of ownership of inventions which are created by employees, whether as a stated part of their employment function or merely "while they are employed", with the rules tending to favour the employer. The German Law on Employee Inventions, for example, sets out a detailed system of rules whereby the employee must notify the employer about any claimed invention whereupon the employer has four months within which to decide whether to take over the invention (upon compensation to the employee) or to leave ownership to the employee. Where, however, seeking new applications (capable of being patented or capable of being copyrighted) is a specific part of the employee's job functions, the patent rights and/or copyright belong to the employer automatically.

Covenants not to compete. The rules in Europe generally allow terms to be included in contracts of employment whereby, for a reasonable time and within a reasonable geographic territory, the employee agrees to refrain from direct competition with the former employer. Free competition is favoured but legislators and courts have recognised the employer's legitimate interests in securing some limited protection, especially from key employees with access to vital or sensitive company information. A commonly encountered European response to these situations is to require that compensation be paid to the employee, in return for agreeing to limit future direct competition with the employer, for a specific period of time and within a specific geographic area. In some countries, such as Denmark, these arrangements are set out in a detailed statute, such as the Danish Salaried Employee's Act of 1999. In others (France) the parameters may be vaguely set forth in case law (Supreme Court, Salembier v. La Mondiale, Case N° 00-45.135, decided 28 June 2002) (dictum: two year non-compete covenant; territory limited to that of former retail employer; specific operative financial consideration not set forth in Court's judgement)).

Trade secrets (and no doctrine of "inevitable disclosure").

There is no European legal doctrine corresponding to "inevitable disclosure" but employees may be bound to some reasonable extent by a written contract which limits an employee's ability to compete directly with the prior employer or use specific confidential information that they have acquired in connection with their employment.

Employee access to personnel records. Most EU countries guarantee the right of the employee to have access to their personnel records at any reasonable time during working hours, without cost.

Employee references (pre-hire and post-employment). In most EU countries, an employee who is not discharged "for cause" has a right to at least a neutral letter of reference from the employer. In some countries (Germany), a course of conduct has developed whereby certain letters of reference will be understood to be negative, even though worded in neutral language, with letters intended to be positive being worded more favourably. In some countries (Sweden), while there is no statutory obligation to provide a reference, such an obligation may be part of a collective bargaining agreement by virtue of which such an obligation is created.

The procedures in France and Italy are probably typical of a sensible middle road on this issue, with employers tending to give the basic details of the prior employment relationship (dates, job title) and omitting negative information even if true. As a general rule, a favourable employment reference from the former employer cannot give rise to liability in favour of a future employer but a refusal to provide a favourable letter where one is required may give rise to liability to the employee. European law on such issues is still evolving.

Interesting Europe-fact: + The Official Journal of the EU already contains more than 80,000 pages of Regulations, Directives, Decisions, Recommendations, Guidelines and other documents of legal importance.


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