By Judith Beckhard-Cardoso, Partner, Noémie Birnbaum, Associate, and Alexina Chalachin, Associate and member of the New-York Bar, Fasken Martineau
It can no longer be assumed that all emails are work-related. A private email, even if received in the employee professional inbox, cannot be used to sanction that employee. This was the ruling handed down this summer by the labor chamber of the French Supreme Court (Cour de cassation) some 10 years after its ruling in the Nikon case.
On July 5, 2011, the labor chamber of the Cour de cassation added a new cornerstone to its pre-existing case law on the right to privacy in the workplace by holding that "although an employer may consult files not identified as personal by an employee, it may not use them to sanction the employee should the content of those files reveal that they concern his or her private life".
As the exchange of intimate emails and the keeping of erotic photos is a private matter for an employee, it may not regarded as reprehensible behavior as long as doing so does not objectively create a problem for the company.
As the employer could not validly rely on such evidence, the employee obtained damages for dismissal without real and serious cause.
Facts
A senior management employee exchanged various intimate emails with another employee in his firm. He also kept erotic emails in his work-related email messaging system. The employer discovered the emails after an unannounced visit was conducted in the employee's absence, and subsequently dismissed the employee. The case is of interest as the messages in question did not have a subject heading or designation to indicate that they were personal.
Analysis and Scope of the Decision
Given the development of information and communication technologies ("ICT"), the Cour de cassation had to state that an employee's private life did not cease to exist at the threshold to the workplace. In the wake of the landmark "Nikon" case[1], the Court has regularly defined the employer's power of surveillance by delineating the right to privacy at work. It is restating this notion by imposing an obligation on the employer to interpret the content of emails received on a business messaging system if the employee has not identified them as personal.
(1) From the recognition of privacy in the workplace …
The right to privacy is guaranteed by various legislative provisions: article 9 of the Civil Code, article 8 of the European Convention on Human Rights and Fundamental Freedoms, and article 226-15 of the Penal Code. The Labor Code is not however a source of this right.
Article 9 of the Civil Code was the basis for the Cour de cassation's formulation in 1997[2] of the related notion of personal life. It covers any act, unrelated to a work-related obligation, committed by an employee in the workplace during or after working hours.
The Nikon case became the jurisprudential cornerstone of that legal construct: as every French employee knows, he or she is entitled "while in the workplace, during working hours, to the right to privacy. This specifically implies the secrecy of correspondence. Thus, an employer may not, without infringing this fundamental freedom, read any personal messages sent or received by the employee using a computer tool made available to the employee for his work, even when the employer has prohibited such non work-related use of the computer".
The development of what was previously called "new" ICTs has rendered the traditional boundary between professional and private life somewhat difficult to grasp.[3] In the space of a few years, emails have gradually replaced phone calls, smart phones have become the norm for managers, employees and the self-employed, and social media networks have become a preferred recruitment and marketing tool for companies. This change also has a direct impact on employees who are finding it increasingly difficult to disengage from work, even when at home.
Such technologies have also made it difficult for employers to control how their employees spend their time. How can an employer determine if an employee sitting in front of a computer is exchanging business or personal emails during working hours? Is the employee working or taking a break?
The Cour de cassation labor division case law has attempted to achieve a balance between both considerations.
(2) … to an informed oversight of practices
The Nikon case left several issues in abeyance: the assessment of the nature of the correspondence exchanged, the necessity of the employee’s presence when his or her files are opened, and the characterization of the files created with the computer tool made available to the employee.
In its 2004 report on cyber-surveillance in the workplace,[4] the Commission nationale de l'informatique et des libertés [National Commission on Information Technology and Liberties] (CNIL), reminded employers that the "the use of electronic messaging to send or receive a reasonable number of personal messages is generally and socially acceptable."
The Cour de cassation has gradually adopted a more nuanced solution, mindful of the need to balance an employee's right to privacy against the employer's legitimate interests.
Thus, in 2005, the Labor division formulated a new solution regarding personal computer files[5] drawing back from the Nikon case and stating that "except in the case of a specific risk or event, an employer may not open any files designated by an employee as personal that are stored on the hard drive of the computer made available to the employee unless the employee is present or has been duly summoned".
The Court hereby held, on the one hand, that it is incumbent on the employee to determine the nature and content of correspondence exchanged and on the other hand that there is an obligation on the employer to ensure that the employee is present when his or her personal files are opened, except in the case of a specific risk or event. The Court thus paved the way for the May 23, 2007 decision reconciling the right to privacy of employees with the right of the employer to conduct in futurum expertise contemplated in article 145 of the New Code of Civil Procedure.[6]
This shift in case law was heralded in 2006 when the Court stated that files and records created by an employee on a computer provided by the employer for work-related purposes are presumed to be work-related, unless designated by the employee as personal.[7] Therefore, the employer may access them in the employee's absence.
The presumption that computer stored data is work-related was extended, in 2008, to Internet connections.[8]
Until the July 2011 decision discussed above, the following rules were thus laid down by case law:
(a) Electronic files or documents in any other media are presumed to be work-related. In the case of express indication of their private or personal nature, the employer may nevertheless search them in the employee's presence, or provided that the employee was warned beforehand;[9]
(b) Emails, hard-copy correspondence or faxes received and sent from the workplace during working hours are presumed to be work-related. In the case of express designation that they are private,[10] the employer may nevertheless search such correspondence if it obtains an order to that effect from the Motions Judge pursuant to article 145 of the Civil Code[11].
On July 5, 2011, the Cour de cassation altered this delicate balance by stating that even if an email is not designated as private, if, on reading it, the employer becomes aware that the content is private, it may not use it as evidence against the employee.
Clearly, this is a common-sense decision, but it should be examined solely in the context in which it was rendered.
The July 5, 2011 decision was rendered on evidentiary grounds as opposed to the right to privacy. What can be deduced from that? A new interpretation key on the issue of the employer's respect for the confidentiality of private information:
(a) if the employee states that the content of an email is private, the employer may not access it without a judge's permission;
(b) if the employee does not state that the content of an email is private, the employer may access it;
(c) if on reading an email the employer notes that its content is strictly work-related, it may read it and make use of it;
(d) if on reading an email the employer notes that its content is strictly private, it may read it, but it may not make use of the content.
It must be borne in mind that statements denigrating the management hierarchy are always regarded as work-related and are therefore sanctionable[12] as is the misuse of the business messaging system solely or primarily for private purposes.[13]
What if an employer, on reading an email, is not sure of its nature? And what if the content of the email is private as well as work-related?
These problems in interpretation arise especially in connection with internal surveillance and monitoring procedures that have had to be implemented in France for the purpose of foreign provisions intended generally to improve corporate governance. Consider internal investigations and other wistleblowing alerts generated by the U.S. Foreign Corrupt Practices Act,[14] Sarbanes-Oxley legislation[15] or its Japanese counterpart,[16] and more recently Dodd-Frank legislation.[17] Such legislation applies to any French company listed in the U.S. (or in Japan) and to any French subsidiary of a listed American (or Japanese) company.
In case of contravention of any of the aforementioned legislation, the government authorities responsible for implementing the provisions of those statutes and for conducting investigations may impose heavy sanctions including the suspension of access by the companies concerned to governmental procurement contracts. This explains why companies sometimes proactively have an internal investigation conducted by their own counsel and auditors when they suspect the occurrence of potentially illegal practices within the company.
This type of investigation requires the examination of thousands of emails. In practice, software automatically analyze the emails, identifying only those that contain certain key words. Thus, a company can readily decide to automatically exclude emails marked "private" or "personal".
However, what can a company do if it detects suspicious emails that have no specific designation as to their nature?
Let's take the example of an examination of emails conducted on the basis of the key words "payment ", "suitcase" and "benefit". A senior executive is the author of a suspect email containing those words. After analysis, the company dismisses him for proven corrupt practices. According to the July 2011 decision, and despite all precautions taken by the company, will the employee be able to challenge his dismissal? He may be able to argue that the email was in fact personal, the sole purpose of which was to arrange his leave and that the evidence can therefore be challenged…
[1] Cass. soc., October 2, 2001, Sté Nikon v. France, No. 99-17.855;
[2] Cass. soc., May 14, 1997 : Bull. civ. 1997, V, No. 175;
[3] Cf. J.-E. Ray, La Guerre des Temps. Le Net ? Never Enough Time, Droit Social No. January 1st 2006;
[4] Cnil, La cyber-surveillance sur les lieux de travail, March 2004, p. 13 : http://www.cnil.fr;
[5] Cass. soc., May 17, 2005, No. 03-40.017, Klajer v. Sté Cathnet-Science;
[6] Cass. soc., May 23, 2007, No. 05-17.818, SA Datacep v. H;
[7] Cass . soc., October 18, 2006, No. 04-48.025;
[8] Cass. soc., July 9, 2008, No. 06-45.800;
[9] Cass. soc., May 17, 2005, op.cit.;
[10] Cass. soc., December 15, 2010, No. 08-42.486;
[11] Cass. soc., May 23, 2007, No. 05-17.818, op. cit.;
[12] Cass.soc., February 2, 2011, No. s09-72.313 et 09-72.449;
[13] Cass. soc., June 2, 2004, No. 03-45.269;
[14] Foreign Corrupt Practices Act, 1977, § 15 U.S.C. 78, et seq
[15] Pub. L. No. 107-204, 116 Stat. 745, enacted July 31, 2002
[16] Standards published on February 15, 2007 by the Japanese "Financial Services Agency" and codified in the "Financial Instruments and Exchange Act" of June 7, 2006.
[17] Dodd–Frank Wall Street Reform and Consumer Protection Act enacted July 20, 2010 (Pub.L. 111-203, H.R. 4173)
Friday, September 23, 2011
France: Employee Privacy 1 - Employer Surveillance 0
France: Summer Developments in French Labor Law
France is well-known for its 35-hour a week working time limit.
However, fewer know that managerial employees (“cadre”) and, under certain conditions (notably the autonomous nature of the employees duties) some non-managerial employees (“non cadre”) may work on the basis of a number of days per year (i.e usually 218 days worked/year) instead of a set number of hours per week.
The only limit expressly placed was the compulsory daily rest (11 hours) and weekly rest (35 hours).
Under French law, employees under the “day-a-year” system are entitled to some additional days off which may range from 0 to 10 days.
However, this system never placed any other maximum number of hours worked.
As a result, this French System was challenged before both the French courts and the European court on the grounds that it violated the European Social Charter as employees could be required to work as many as 45 hours per week.
A long-awaited decision on the validity of such mechanism was rendered on June 29, 2011 by the French Supreme Court.
In this case, an employee was hired in 2001 as a managerial employee to the days per year system (i.e. 217 days/year) pursuant to the applicable Collective Bargaining Agreement (CBA) of the Metallurgical Industry.
Following his resignation in 2006, the employee challenged his working time before the French Labor Court claiming notably for overtime payments given the failure of the employer to limit the number of days worked or control his workload.
Unlike what many commentators contemplated, the French Supreme Court did not throw out the validity of working time system based on a number of days per year.
However, according to the French Supreme Court such system, to be valid, must be subject to certain conditions which will ensure respect for the general principles relating to protection of health and safety of employees.
The French Supreme Court recalled notably that such system must be collectively bargained so as to guarantee respect of the maximum working time duration and the mandatory provision on daily and weekly rest.
As a consequence of this decision, employers should verify that the “day-per-year” system in place complies with the French Supreme Court ruling. Companies must not only ensure that the CBA provisions allow them to have employees working on the basis of a number of days per year, but also that such conditions are properly respected from a practical standpoint. Employment contracts should also be reviewed.
Otherwise, concerned employees will be in a position to challenge the working time duration and seek overtime payment.
This decision may therefore increase company’s exposure and collective bargaining is anticipated at an industry-wide or a company-wide level in order to mitigate this risk.
Increased dividend payments may trigger mandatory employee’s bonus payment
A new law dated July 28, 2011 requires the payment of bonuses to employees in certain cases when the employer decides a dividend distribution.
The new rules apply to employers (i) with 50 employees or more on a mandatory basis, (ii) those under 50 employees on a voluntary basis, and (iii) those whose share capital is owned at least at 50% by the State or its French public establishments.
The bonus has to be paid to all the employees when the dividend per share distributed to the shareholders is higher than the average of the dividends per share distributed in the two previous fiscal years.
Nevertheless, when a company belongs to a group, the amount of dividends which triggers the bonus payment will be the one distributed by the controlling company.
The new rules apply to distributions decided by the ordinary general meeting of shareholders (the agreement is subject to the modalities applicable to the signing of a profit-sharing agreement) or that the employer will grant on its own (in case of failure of the agreement negotiations).
An anti-abuse rule would apply: the bonus cannot replace remuneration increases or bonuses either agreed or paid on a voluntary basis or mandatory basis.
Up to EUR 1,200 per employee and per year, the bonus is exempted from social security contributions (except the general supplementary social contribution (CSG), the French contribution to the reimbursement of the social security debt (CRDS) and the flat social contribution "forfait social").
The payment of this bonus must be negotiated through collective bargaining between employer and union representatives at the company or group level.
Such collective bargaining agreement must be concluded within 3 months as from the dividend distribution and before October 31, 2011 for dividend distribution made prior to the publication of the law (ie. July 29, 2011).
If the parties cannot agree on the bonus modality or amount, the employer may take an unilateral decision subject to prior information and consultation of the works council.
Failure to start the negotiations would expose employers to criminal sanctions although the law provides for exemptions.
New French Law further restricts the possibility of “lending” of employees even if not for profit (“prêt de main d’oeuvre à titre gratuit”)
In France, the “lending” of employees to another company with the intention or result of having made a profit on these services is prohibited except in very limited cases (temporary work agency, etc.).
However, the “lending” of employees with no profit has been accepted by French case law.
Indeed, the “lending” of employees (with no-profit purpose) is a common and frequent practice especially within companies of the same group.
A recent decision of the French Supreme Court of May 18, 2011 unexpectedly modified this long-standing practice significantly restricting it.
A new law of 28 July 2011 clarified the situation: it provides expressly for the first time that “lending” of employees has no-profit purpose when the “loaning” company only charged the “borrowing” company the paid salary, the relating social security contributions and business expenses relating thereto.
However, this new law also adds new requirements for the validity of the “lending” of employees with no-profit purpose, notably:
- Prior written consent of the employee concerned and amendment to his/her employment contract (mentioning the place of work, the working time and the job position); the employee must also be reinstated within the loaning company with the same functions and remuneration at the end of the loan;
- A written agreement between the loaning and the borrowing companies with specific details of the arrangement;
- Information and consultation of employee’s representatives (works council or staff delegates and health and safety committee) of both companies concerned prior to the implementation of the loan system;
- A probationary period may be contemplated and is mandatory if the “lending” results in a significant modification of the employee’s terms and conditions of employment.
Even though this new legislation secures the common practice of the “lending” of employees for no-profit purpose, companies must comply with the new restrictive conditions to avoid any risk/criminal sanctions with respect notably to works council information and consultation process.
Greater flexibility yet reinforcement and reconfirmation that in France, French is the official language
In March 2011, the French Supreme Court introduced a significant slice of flexibility when it comes to variable remuneration based on objectives to be reached by employee.
Indeed, it adopted a quite favorable decision for employers considering that, under certain conditions, an employer may unilaterally modify the objectives determining an employee’s variable remuneration. Earlier case law required the employees’ written consent for any changes (even more favorable) to the remuneration of the employees.
In a recent decision of June 2011, the French Supreme Court has decided that any document providing for the objectives to be reached by an employee must be in French; otherwise it is not binding on the employee concerned.
In that case, an employee’s remuneration included a fixed part and a variable part subject to individual objectives determined annually.
Following his termination, the employee filed a claim before French Labor Court and notably claimed that the documents fixing his individual objectives were not binding on him given that they were written in English.
The French Supreme Court recalled that, pursuant French Labor code, “any document including obligations for the employee or provisions knowledge of which is necessary for the performance of his/her work must be written in French”.
As a consequence, it decided that the documents were not enforceable against the employee.
It is quite common for multinationals to communicate by e-mail or on the intranet with their employee in English either for basic information but also to provide for policies enforceable within the company or bonus plan.
Employers should review employee documentation drafted in English to avoid the risk of non-enforceability.
Germany: Costs of Works Councils - Does the Employer Really Have to Pay For All and Everything?
By Bernd Weller, Partner, Heuking Kuhn Luer Wojtek, Frankfurt am Main
In many companies, there is a continuous dispute between works council and employer with regard to the costs incurred by the works councils. The works council usually orders office equipment, instructs lawyers, books external training and accommodation and asks for the payment of overtime work – due to long hours in a works council meeting. In this context, many companies are unaware of the stipulations of the works council constitution act (“Betriebsverfassungsgesetz, BetrVG”). During recent months and years, the Federal German Labour Court (“Bundesarbeitsgericht, BAG”) had to deal with such questions quite often and, hence, has clarified many disputes.
With regard to the costs of the works council, typically the following aspects have to be considered: 1. office equipment, office space and personnel, 2. training and external accommodation, 3. expenses of works council members, 4. release and continued pay for works council work, 5. instruction of lawyers, and 6. works council overtime.
1. office equipment, office space and personnel
Section 40 of the BetrVG reads as follows:
Ҥ 40 expenses of works council and material facilities
(1) Any expenses arising out of the activities of the works council shall be borne by the employer.
(2) The employer shall provide, to the necessary extent, the rooms, material facilities, means of information and communication and office staff required for the meetings, consultations and the day-to-day operation of the works council."
As one can see, the law itself makes a difference between (i) expenses, and (2) means that are to be provided by the employer. There is a significant difference between the two categories:
Everything that falls into the scope of Para. (2) is to be provided by the employer. The works council can bring a claim for certain goods and materials in court. The works council, however, cannot buy and organise such material and goods on its own. The following procedure must be observed:
(1) In the first step, the works council decides that it needs certain material.
(2) It then goes to the employer and asks the employer to provide it with the desired goods.
(3) The employer then has to evaluate whether or not – in his opinion – the goods are necessary for the works council’s work.
(4) If the materials are necessary, he should provide the works council with the goods. Otherwise the works council can sue the employer at the Local Labour Court.
During the pending court proceeding, however, there is no obligation for the employer to provide the works council with the desired goods – unless ordered otherwise in a preliminary injunction. Proceedings at the Labour Court between works council and employer (involving the Local, Regional and the Federal Labour Courts) may last for between three and four years. Hence, it can be a tactical instrument for the employer to force the works council to bring a claim through the Labour Court to be provided with certain goods.
But what has been considered “necessary” by the German Labour Courts? Without a doubt, a works council can claim a reasonable works council room, works council computers, fax (separated from the employer’s one), access to a copy station, access to meeting rooms, works council telephone line, internet and email access (for each individual work council member), in particular circumstances a mobile phone for the works council, the collection of legal texts, legal reviews, paper, pens and a homepage in the company’s intranet (if the company has and uses an intranet) and a personal assistant (‘PA’) for the works council.
Usually, disputes between works council and employer concern the works council’s room (size and location), IT and PAs.
It must be noted that consent of the employer is not required. Quite the contrary: the works council can, with the Court’s help, force the employer to provide it with certain goods and means. As regards the works council’s room, there is no absolute minimum according to German Labour Courts. The particular situation of the company and the premises concerned will be relevant. In addition, the number of works council members and those fully released from the working duties (see below) are important to decide what size is actually necessary for the works council. Typically, works councils demand an office that is big enough for all of the works council members to meet at the same time – each with a separate computer. That, however, is not necessary under German law. Typically, only smaller groups of the works council meet in the works council office. If the works council assembles all works council members, they can – like the employer’s representatives do – book a normal conference room and have the meeting there.
Another typical dispute concerns the intranet. Wherever the company has its own intranet, works councils often demand the option to publish their messages to staff on the intranet. Most of the German Labour Courts will grant such an entitlement to the works councils. That, however, does not give the works council’s the right to be its own administrator. The administration of the works council’s intranet site remains with the employer. Of course, the employer must refrain from censoring the works council’s messages. Only where the works council clearly commits criminal offences (for example defamation), can the employer censor the works council’s messages.
Last but not least, the works council’s demand to be provided with its own PA often shocks the employer. Although the works council’s individual members may – wherever necessary – leave their normal jobs and do work council work (see below), that does not prevent a works council from demanding its own PA. Again, whether or not and to which extent (part time, full time) the works council can successfully claim its own PA depends very much on the circumstances of the case. In bigger companies, such a claim is more likely to be granted than in small companies. The selection of the PA is, however, the employer’s task, not the works council’s. The works council can only in particular circumstances reject the employer’s selection. It is not necessarily a bad idea to give the works council a PA selected by the employer.
Para. (1) of section 40 covers most other expenses and costs of the works council, which are described in detail below.
2. Training and external accommodation
According to the BetrVG, both the works council as a representative body and its members individually are entitled to be trained externally to the extent necessary. There is a widespread, and incorrect, belief that each works council member can claim (only) three weeks of training during the four year term of the membership. At any point in time, the works council can meet and jointly decide that the training of an appointed member of the works council in a specific topic is considered necessary. That can exceed the three weeks cap. Again, the works council can book external training and accommodation without the employer’s consent. However, the procedure to be observed is the following:
· 1. The works council decides in one of its meetings to send one or more works council members to a specific external training at a specific point in time.
· 2. That decision is made known to the employer.
· 3. The employer then has three options: (i) consent, (ii) object to this specific date – for example making reference to an important meeting or important workflow that requires the presence of the appointed works council member on his/her workplace, and/or (iii) highlight the fact that the same training is offered at a different point in time and a different location that causes fewer costs and a smaller impact on the internal workflow.
· 4. The works council then can decide to stick with its original plan or to follow the employer’s concerns.
· 5. If the works council does not follow the employer’s concerns, the employer must consider whether to enter into a dispute with the works council regarding the costs of the training.
Generally, wherever the training is necessary for the works council’s work, the employer must bear the costs of the training, accommodation, travelling and the continued pay of the works council member during his/her absence. If an agreement between the employer and works council regarding the specific training cannot be achieved, the employer can deny payment of the above and force the works council member to sue the employer at the Local Labour Court.
3. Expenses of works council members
One of the strongest principles of the BetrVG is that the office of works council member is an honorary post. As a consequence, no remuneration or advantage shall be granted to the works council member due to his/her office as works council member. On the other hand, the works council members shall have no disadvantage from their post. As a consequence, the employer is obligated to bear the necessary costs that are caused by the works council membership.
Whenever the works council member commutes to the work place for works council work, such commuting expenses must be borne by the employer. In general, there are few disputes about such expenses. However a recent decision of the Federal Labour Court highlighted the potential financial exposure of employers in this regard. A female works council member, mother of two children, travelled overnight due to works council assemblies. During that time, the works council member hired a babysitter and claimed the expenses from the employer. To the surprise of many, the Federal Labour Court ordered the employer to bear the expenses for the babysitter.
The important question with regard to expenses is twofold: was the expense caused solely by the works council membership and were the expenses necessary? If both questions are answered “yes” the employer must bear the costs.
4. Release and continued pay for works council work
Works council members – as honorary members – in general have to perform both their normal job and perform the work council duties in addition to this. It is obvious that duties as employee on the one hand and works council duties on the other hand may be contradictory. The BetrVG provides two different solutions to this challenge. First, depending on the size of the company and the number of works councils members, the law allows individual works council members to be released full time from their normal job duties (with continued pay). Second, the law entitles each and every works council member to a temporary release from his/her normal job in order to perform works council tasks, provided that such release is “necessary”. However, necessity is not monitored based on objective criteria. German Labour Courts only check whether or not the individual works council member could legitimately be convinced that a specific task was necessary at a specific point in time. In a nutshell, this limits the monitoring to cases of (evident) abuse.
5. Instruction of lawyers
Lawyers can be instructed by works councils for various purposes – as advisors in the day-to-day business, as representatives in court disputes, as experts for legal questions, as trainers, as participant in arbitrary committees (“Einigungsstelle”) or as speakers in town hall meetings.
If employer and works council call in an arbitrary committee, the remuneration of each external member of such committee is stipulated by law: the (neutral) chairperson freely negotiates his or her remuneration with the employer and the external additional members, i.e. in particular the works council’s lawyer, receive 7/10 of the chairperson’s remuneration.
In court disputes, the representation of the works council is in almost all cases considered necessary. Therefore, the employer must bear the costs of the works council’s legal representation. The fees of the works council’s lawyer are determined according to a statutory lawyers’ remuneration scheme under German law.
Where a lawyer is being instruct as trainer, the above (cf. 2.) applies mutatis mutandis.
In the remaining scenarios, that is where the lawyer is instructed as legal expert or as legal advisor in the day to day business, this is often because of a dispute between employers and works councils. Works councils often (wrongly) believe that they are entitled to be continuously advised by an external lawyer. According to section 80 Para. 3 of the BetrVG,
“The works council can call an external lawyer as expert in after having concluded a respective agreement with the employer and in so far as the call in is necessary for the due full filament of the works council’s tasks.”
According to the law, the works council’s must observe the following procedure:
· 1. First of all, the works council must make a formal resolution (“Beschluss”) according to which the employer’s permission shall be asked to instruct an external lawyer in relation to a specified question and with specified costs.
· 2. Then it is the employer’s decision to grant the instruction of an external lawyer or not.
· 3. Should the employer not grant the instruction of an external lawyer, the works council cannot instruct an external lawyer before a final and binding decision by the German Labour Courts has been made. Such decision may take some years of court proceedings.
As a consequence, works councils have no entitlement to be legally advised on a day to day basis. According to the Federal German Labour Court, such entitlement does not exist and is not needed. According to the BetrVG, the works council is entitled to significant external training so that the works council is able to perform its tasks alone without day to day legal advice.
Nevertheless, many employers pay for the external lawyer of the works council basically for two reasons. First, correct legal advice sometimes facilitates negotiations with the works council – negotiations become more professional. Second, there is often a deep and loyal relationship between works councils and their lawyer. In scenarios where the works council’s lawyer do not earn “enough” such lawyers can use their influence on the works councils to have them take a stronger stand vis-à-vis the employer and file more lawsuits.
6. Overtime payments
Works council members sometimes use a lot of their working time for works council duties. They then often demand the payment of “overtime work” caused by their works council duties. With regard to such overtime, the following must be noted:
· First of all, works council members are generally required to perform their works council duties during normal working time. Works council work outside of normal working time should only occur in exceptional cases. Unfortunately, again the courts monitor only the existence of (evident) abuse.
· If a works council accumulates overtime due to the works council work, section 37 Para. 3 of the BetrVG stipulates that such overtime shall be compensated for by a release from normal working duties. Such release from normal working duties shall be made within one month after the “overtime”.
· The works council member is entitled to overtime pay only where such release is not possible for operational reasons.
7. Summary
As one can see, the BetrVG has much confidence in the works council members and allows them many opportunities to incur costs. Of course, few employers are happy with this. However, in practice he success of German companies on the world markets should be proof that the management of German operations can be successful notwithstanding the existing duties according to the BetrVG.
Guatemala: USTR Issues First Letter of Arbitration in Labor-Related Case Under US Free Trade Agreement
The claim had its genesis on April 12, 2008 when the AFL-CIO and five Guatemalan unions filed a public communication with the Office of Trade and Labor Assistance (OTLA) in the U.S. Department of Labor alleging that the Government of Guatemala had failed to comply with its obligation under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) to effectively enforce national labor laws.
The CAFTA-DR went into effect in Guatemala on July 1, 2006. Like the labor side agreement to the NAFTA (the North American Agreement on Labor Cooperation - NAALC), Chapter 16 of the CAFTA-DR obligates signatories to effectively enforce their own national labor laws. Unlike those of the NAFTA, the labor provisions of the CAFTA-DR are an integral part of the FTA and the seven signatories to the CAFTA-DR - including the United States - obligated themselves in Article 16.1 to strive to ensure that the workplace protections set forth in the 1998 ILO Declaration on Fundamental Principles and Rights at Work are recognized and protected by law. The workplace protections covered by the 1998 ILO Declaration include freedom of association and the effective recognition of the right to collective bargaining, elimination of all forms of forced or compulsory labor, effective abolition of child labor and elimination of discrimination in respect of employment and occupation. Failing to comply with the labor provisions in Chapter 16 of the CAFTA-DR - as well as Chapter 17 environmental provisions and Chapter 7 technical barriers to trade - is subject to the government-to-government arbitration process set forth in Chapter 20 of the CAFTA-DR. It should be noted that under CAFTA-DR Article 16.6.7, only the Article 16.2.1(a) obligation to effectively enforce labor laws - and not the Article 16.1.1 obligation to strive to recognize and protect fundamental workplace protections - is subject to the Chapter 20 government-to-government arbitration provisions.
The petition submitted to the OTLA outlines Guatemala’s failure to effectively enforce labor laws in the process of privatization of Guatemala’s ports as well as in the banana production, fruit and vegetable processing and garment manufacturing sectors. Each of the five cases discussed in the public communication implicates either the transportation or production of goods for export to the United States by five companies including Bandegua (the Guatemala subsidiary of Del Monte Fresh Produce, the world’s third largest banana producer in the world), INPROCSA (a fruit and vegetable processor that exports to SYSCO, Heinz, Superior Foods International and Safeway Select), Avandia S.A. (a manufacturer that produced garments for Jones Apparel Group and participated briefly in a pilot project to improve compliance with JAG’s corporate code of conduct), Fribo S.A. (a Korean-based manufacturer that produced garments for Kohl's and Dress Barn) and Empresa Portuaria Quetzal (a parastatal company that manages Guatemala’s primary port on the Pacific coast).
The OTLA accepted the petition for review on June 12, 2008, completed its investigation six months later on December 12, 2008 and issued its report on January 16, 2009, four days before the inauguration of President Barack Obama. Based on reviews of documentary evidence and in-person interviews with workers, unions, employers, government officials in Guatemala in July and October, 2008, the OTLA confirmed most of the allegations made in the petition both as to the violations of Guatemalan labor law and the weaknesses of Guatemala’s labor rights enforcement regime. Regarding allegations that the Government of Guatemala failed to provide adequate protection to trade unionists from threats, violence and murder, the OTLA noted that the government offered protection to the entire STEPQ Executive Board, but only provided a single bullet proof vest and required STEPQ to pay for the lodging and expenses for guards although the Ministry of Public Security is legally obligated to pay these expenses. Although it afforded the Government of Guatemala wide latitude and benefit of the doubt regarding investigators’ conclusion that Pedro Zamora’s murder did not have a trade-union related motive, the OTLA did pointedly find, “[W]hen a union leader is violently attacked with total impunity, the crime’s impact can reach beyond the individual and cast a shadow of fear upon others, weakening the right of association and collective bargaining” (OTLA Guatemala Report, p. 8).
Resources:
USTR Letter of Arbitration: http://www.ustr.gov/webfm_send/3042
USTR Web Page about the Guatemala petition: http://www.ustr.gov/about-us/press-office/press-releases/2010/july/united-states-trade-representative-kirk-announces-lab
OTLA Report on the Guatemala petition: http://www.dol.gov/ilab/media/reports/otla/20090116Guatemala.pdfAFL-CIO and Guatemalan Unions petition on Guatemala’s failure to effective enforce labor laws: http://www.aflcio.org/issues/jobseconomy/globaleconomy/upload/guatemala_petition.pdf
Italy: Recent Developments and Trends in Italian Labor Relations
1. Two different collective agreements applicable in the same industry?
The need for an urgent reform of union representation became dramatically evident in 2009, when the major union federations at national level split up and the biggest and most representative one (CGIL) refused to sign the industry national collective agreement, in both the metalworking sector (which covers business strongholds such as telecoms, engineering and information technology), and the tertiary and commercial sector (which includes retail and service companies).
In April 2011, the Turin Labor Court (home of FIAT) upheld a petition by CGIL-FIOM (the metalworkers’ union affiliated to CGIL) and issued several much debated injunctions to force defendant companies to restrict application of the 2009 collective agreement for the metalworking sector to only non-CGIL-FIOM affiliates, while requiring CGIL-FIOM affiliates to remain subject to the previous collective regulation signed also by CGIL-FIOM in 2008 and due to expire at the end of 2011[1]. The Modena Labor Court issued a similar decision in a case where FIOM had sued seven different employers (including Maserati, Ferrari and New Holland)[2]
In fact, for the first time, these judicial precedents have dramatically disrupted the principle that all employees in one company or business unit should remain subject to one single national collective agreement at a time. The principle of law asserted by this ruling was that companies implementing the metalworking collective agreement should simultaneously apply two different collective agreements: the one signed on October 15, 2009, which is binding to all members of the unions which signed it and the previous one of January 20, 2008, which is binding to affiliates of CGIL-FIOM and to those employees who are not affiliates of any union or have not agreed to be bound by the 2009 collective agreement.
The situation called for an urgent intervention of the collective parties or eventually of the law to fix a clear framework about union representation and enforcement of collective agreements. A few other precedents from the same Court of Torino and other cities have ruled the exact opposite of the above, making the legal framework unreliable and guidelines for employers even more impossible to fathom[3].
Also the tertiary (commercial and distribution) sector did not seem immune from the risk of a potentially disruptive clash with CGIL and their relevant branch for the commercial sector, Filcams.
As a matter of fact, CGIL-Filcams (the branch of CGIL for the commercial and tertiary sector) also refused to sign the new national collective agreement which was executed on February 26, 2011 and which is nonetheless universally applied to all employees in the relevant business sector. As a result, CGIL-Filcams has started circulating threatening “cease-and desist” letters to hundreds of companies, claiming application of the previous collective agreement of 2008 to all their members. The matter is not academic or idle: among other provisions, the 2011 collective agreement has introduced a widely innovative regulation on sick-leave, aimed at repressing possible abuses by penalizing employees who tend to report sick too often. Also paid time off has been materially reduced for new hirings with seniority below 4 years and everyone expected that sooner or later employees affiliated to CGIL-Filcams would challenge the new regulation as not enforceable against them.
2. The FIAT case: the fight for a new set of industrial relations
Between the end of 2010 and beginning of 2011 an unprecedented tug-of-war between FIAT – the major national car maker - and CGIL-FIOM garnered the spotlight of national and international media, the outcome of which may break the ground of a completely new system of industrial relations in Italy.
A full analysis of the complex case at hand exceeds the scope of this article, but suffice to say that FIAT promised relevant investments in a new company set up to run new lines of business at the Mirafiori and Pomigliano d'Arco plants in exchange for a new corporate collective agreement which, according to CGIL-FIOM, violates the law and heavily penalizes employees. As a result of months of intense negotiations and fierce union actions with broad national resonance, FIAT signed a shop collective agreement (replacing the national one) with all national unions except CGIL-FIOM, in spite of the fact that the same agreement was also approved by a large – yet not overwhelming - majority in a referendum held among all affected employees in the plants. To ensure that the new rules are individually binding on each employee hired by the new company, the agreement provided that each one of them has to explicitly accept the new rules.
Moreover, in what CGIL-FIOM perceived was a true sleight-of-hand, FIAT has barred CGIL-FIOM from entering the new company, appealing to a 1970 article of law which admits union representation in a company only by those unions which signed a collective agreement applicable to the same company. As a result, CGIL-FIOM filed a claim in court for anti-union behavior against FIAT, aimed at making the new collective agreement null and void on grounds that the entire scheme pursued by FIAT is in sheer violation of TUPE/ARD principles of law.
The Court’s decision was finally released on July 16, 2011[4]. The judge seemed to adopt a compromise position between the two opposing arguments: he declared that the shop agreement departing from the national one is valid and enforceable. At the same time, he ascertained an anti-union behavior in barring CGIL-FIOM from exercising and organizing union activities at the Mirafiori and Pomigliano plants. Therefore, FIAT was ordered to grant CGIL-FIOM all union rights under the Labor Statute (e.g. appointment of union representatives, paid union leaves, call of workers’ meetings to discuss work-related matters, etc.). An appeal has already been filed by FIAT and a final decision is expected later this year.
3. The (controversial) response from unions and the Government
All major union federations (including CGIL) and the Employers’ Association (Confindustria) quickly realized that that the application of different collective regulations to different parts of the same workforce for reasons of their accidental union affiliation is simply unsustainable and too cumbersome to be managed by companies.
The absurd situation of the last months made clear how urgent was the intervention of either the legislator or the unions to fix clear and widely acceptable rules on union representation and the enforceability of collective agreements.
On June 28, 2011 the three major unions and Confindustria signed a general protocol pursuant to which shop collective agreements are enforceable on all employees, if signed by the majority of works council members. At the same time, shop agreements are allowed to derogate from national ones if the latter explicitly consent to the exception or in the context of a substantial economic crisis or significant investments by the Company to increase productivity. Such general protocol has been hailed by all commentators as a first important step towards a much needed and urgent reform of union relations and representation.
A further step, reaching out well beyond the intentions expressed in the June 28 protocol, was made by the government during the month of August 2011, when an urgent budget law-decree was enacted in order to face the impact of the financial crisis on the national economy.
In particular, article 8 of the “mid-Summer” law-decree provides that shop agreements may contain specific understandings aimed at increasing occupation and productivity.
These “specific understandings” are nothing other than provisions included in local or shop agreements signed between employers and most representative unions or works councils, which are allowed to derogate from statutory provisions of law and the regulation set forth by national collective bargaining agreements on wide-ranging subjects from classification and duties of employees, part-time, fixed-term and other flexible forms of work to temporary work and service contracts, working time, monitoring of working activities and, most notably, the consequences of dismissal (with the exception of cases of discrimination and maternity).
The same article 8 has also confirmed full enforceability of all shop collective agreements signed before the June 28 protocol and which have been approved by a majority vote of the affected employees. Nobody failed to notice – and some to loudly criticize – that the latter provision was obviously referring to the FIAT shop agreements in Mirafiori and Pomigliano, thus securing their enforceability against the risk that the appeal proceeding in Turin may overrule the decision taken in the first degree.
Article 8 of the budget law has been strongly criticized by many parts, particularly in relation to allowing the specific understandings to derogate from the law and the collective agreements. Some commentators have highlighted the risk of dismantling the Italian employment system and its protections, by allowing each company or even their local business units to enter into separate agreements with their works councils and establish their own peculiar rules, different from any other applicable locally or at national level. According to these commentators, this would be all the more dangerous in small and mid-size companies, where the internal works councils may be exposed to pressure by the employer or even blackmail by the employer of mass redundancies or relocation of activities abroad.
Particular concern has been raised in relation to the possibility of derogating from the legal protection against unfair dismissal afforded under the Labor Statute of 1970, a real stronghold of the unions for several decades.
In particular, article 18 of the Italian Labor Statute affords protection against unlawful or unfair dismissal to permanent employees working in a business unit employing more than 15 employees or a company employing more than 60 employees nation-wide. Employees unlawfully or unfairly dismissed can actually seek forced reinstatement into their previous job position and payment of damages, usually assessed in the number of monthly salaries missed from the date of dismissal up to the date of reinstatement, with a legal minimum of 5 months and deducting other income the employee may have derived in the interim from other working activities. In case of a favorable verdict, an employee can, however, use an option to reject reinstatement without need to state a reason: he or she will be entitled to payment of an indemnity in-lieu of reinstatement equal to 15 months, on top of the damages referenced above. Amending Article 18 of the Labor Statute, which came into force in 1970, has been a real taboo for the past several years, catalyzing strong union action and popular support any time that an attempt was made to reform it in a more employer-friendly way.
In the future, and for the first time in the history of modern employment and labor law in Italy, a shop agreement will be able to derogate from the provisions of Article 18, and rule for instance that in certain cases employees shall no longer be eligible to forced reinstatement but only to monetary damages, whose assessment may also be capped or increased.
A widespread debate arose among the media and legal commentators about the consistency of such regulations with several constitutional principles and the same tradition of employment law in Italy, which is centered on the primacy of statute law and the national collective agreements.
Lately, a national strike was called by CGIL (the largest Italian union) on September 6, 2011 against the budget law and its article 8. Since law-decrees have to be ratified by the Parliament within 60 days, or risk becoming void, the debate is still under way and we cannot predict what the outcome will be, also taken into consideration that, if confirmed, the new rules shall most likely be brought by CGIL in front of the Constitutional Court.
4. Conclusions
In the middle of one of the widest economic crisis in the modern history, strong forces are now pushing for radical reforms of the Italian employment and labor system, with the major Italian union federation, CGIL, standing alone to defend the fort of employment rights. Whatever the outcome of this major clash, a new trend is clearly dawning in the Italian labor system, gradually moving from a nationwide set of basic and strict rules indiscriminately applicable to all employees in a certain industry sector to more flexible and localized shop agreements, better suited to adapt to local and contingent needs.
On the other side, the August law-decree triggered a heated debate on the remedies against unfair dismissal. In other EU countries, by and large, reinstatement is the ultimate remedy for most serious cases and not the default sanction applicable to any case of unfair dismissal and regardless of the actual ability for the company to take the employee back. In Italy the discussion about any reform project on this subject is still highly ideological and any amendment to article 18 of the Labor Statute a real taboo, even though the economic crisis is apparently forcing all players to take a more pragmatic approach.
[1] FIOM CGIL v. Bulloneria Barge, April 18, 2011, Turin Labor Court; FIOM CGIL v. Tyco Electronics Amp Italia, April 26, 2011, Turin Labor Court.
[2] FIOM CGIL v. Emmegi spa and others, April 13, 2011, Modena Labor Court.
[3] FIOM CGIL v. Prima Industrie, May 2, 2011, Turin Labor Court; FIOM CGIL v. DM Elektron, May 17,2011, Tolmezzo Labor Court.
[4] FIOM CGIL v. Fiat, July 16, 2011, Turin Labor Court.
Netherlands: Pension Reform Plans and Dismissal of Older Employees
Pension reform plans
The Dutch pension system may be characterised in terms of three pillars, namely:
• private savings for retirement.
The AOW provides for basic state pensions for people who have reached the age of 65 and over, which is as the same time as the start date of the second pillar corporate pension schemes.
It goes without saying that due to the economic crisis pension costs are increasing continuously and pension plans have become less resistant against financial shocks. In June 2010, the Dutch employers’ federations and the trade union federations (Federatie FNV, CNV and De Unite), both forming the Labor Foundation (Stitching van de Rabid), set out the adjustments they deem necessary for pension schemes in the so called Pension Accord ('pensioenakkoord'). Union and corporate support for the pension reform plans is seen as essential to ensure it can become law without too much outside protest.
The most important agreements in the Pension Accord regarding the corporate pensions were:
(i) a future-proof system that can better withstand changes in life expectancy and developments on the financial markets, but which also has an improved indexation quality;
(ii) more extensive automatic cost increases (for both employees and employers) must be avoided;
(iii) pension contracts must be made resistant to shocks from the financial markets (interest, inflation, returns);
(iv) pension contracts must be as complete and transparent as possible.
It was also agreed to raise the AOW-age. The first raise from 65 to 66 will enter into effect in 2020 and shall be raised to 67 by 2025, depending on life expectancy projections. Flexibility can involve penalties or rewards; the pension of those opting for early retirement is offset by a 6.5% reduction per year, while that of those who work after reaching the retirement age is offset by a 6.5% increase per year. Additionally, the AOW level will be increased by a 0.6% inflation rate.
The Pension Accord also includes proposals to increase the labour market participation of older employees through incentives that make it attractive for both employers and employees to continue their working relationship.
In the meantime the Minster of Social Affairs and Employability Mr. Kamp lodged a draft bill to parliament to raise the retirement age to 66 in 2020 and 67 in 2025. Additionally, the Minister has announced measures to increase the flexibility of dismissal laws with respect to employees at the age of 65 years or older, to introduce a softer regime with respect to salary payment during an older employee’s sickness (which is currently 104 weeks), and the possibility for an employer to enter into more than three definite term employment contracts in a row with older employees without the risk of this being held to be an indefinite term employment contract.
The Pension Accord looked like a done deal but all of a sudden the largest union within the Federatie FNV, named FNV Bondgenoten, voted against it. This resulted in an internal crisis in the Federatie FNV. Social affairs minister Henk Kamp made a passionate plea to parliament last Thursday to vote through the pension deal and Last Friday the minister made some extra concessions to help people on low incomes who will be hit hardest by financial penalties if they still want to retire at the age of 65. Last Monday the Federatie FNV gave its green light to the reform plans.
Dismissal of employees at the age of 65 and older
The main question is how to deal with the dismissal regime of employees at the age of 65 and older from a legal perspective. Under Dutch law an employment contract for an indefinite period can be terminated in the following ways:
a. by giving notice after receipt of a dismissal permit from the labour authorities (called UWV Werkbedrijf);
b. by mutual consent;
c. with immediate effect in case of an urgent cause;
d. termination for serious cause through the sub district court.
Dutch law does not provide for the possibility to deviate from the above. However, most Dutch employment contracts and/or (industry wide) collective labour agreements stipulate that the employment contract terminates by operation of law when the pensionable age of 65 is reached, thus without the need to give notice. Such provision is called a "pension-triggered termination clause".
The main question is whether this provision violates the prohibition against age discrimination in employment. The Dutch Equal Employment Opportunities (Age Discrimination) Act (Wet gelijke behandeling op grond van leeftijd bij de arbeid, the "Equal Employment Opportunities Act") (based on the EU Directive 2000/78) in effect since 2004, prohibits discrimination on the grounds of age. However, a distinction based on age is objectively justified (and therefore not prohibited) if it involves the termination of an employment contract based upon the employee reaching the pensionable age under the AOW.
One could even take the position that the justification to send 65 old Dutch employees home is accepted by the European Court of Justice (ECJ) in the Age Concern case of July 2006. The ECJ held that derogation from the principle of age discrimination was permitted under the Directive if it furthered “legitimate social policy objectives, such as those related to employment policy, the labour market or vocational training”. Such objectives were, by “their public interest nature... distinguishable from purely individual reasons particular to the employer’s situation, such as cost reduction or improving competitiveness”.
It needs to be stressed that a dismissal on the basis of age is only specifically allowed by Dutch public law when the employee turns 65. If the age-based dismissal affects a 62 or 63 year old employee this has to be based on an objective justification and thus comply with the requirements of legitimacy, efficiency and proportionality. The objective justification is being applied very strictly and there are very few examples in which an earlier pension-age is allowed. For example, circulation of personnel and decrease of motivation when getting older do not count as objective justification.
From a civil law perspective it is still not 100% clear whether the pension-triggered termination clause in an indefinite term employment contract will stand in court. A few years ago the Amsterdam sub district Court had to rule on this issue and held that an employment contract must be either for a definite period – in which case it terminates by operation of law at the end of the period – or for an indefinite period – in which case it by definition does not terminate by operation of law. According to the court, this standpoint is incompatible with the view that an employment contract for an indefinite period can terminate automatically pursuant to a pension-triggered termination clause agreed in an individual employment contract or collective labor agreement.
However, this judgment has not been followed by other courts. Several sub district courts held that an employment contract for an indefinite period can end by operation of law pursuant to a pension-triggered termination clause in an individual employment contract or collective labor agreement with. They used the argument that the employee would fall back on the AOW at the age of 65.
Problems for the employer cannot be ruled out if the employment contract does not provide for a pension triggered termination clause. In 2009 the Delft sub district court ruled in a case initiated by a dismissed 65 year old employee whose employment contract did not provide for a pension triggered termination clause. Nor was the employment contract subject to a collective labor agreement. The employer argued that the employment contract terminated automatically based solely on the fact that employee had reached the pensionable age. The court concluded that the fact that the employee was entitled to a pension upon reaching the age of 65 did not mean that his employment contract terminated automatically at that age. This conclusion does not follow from a specific statutory provision. The sub district court also held that even if in the past it had been customary for employment contracts to terminate automatically when the employee reached the pensionable age, this was no longer true. The court's conclusion was based in part on the fact that at the time there were already discussions regarding the increase of the pensionable age under the AOW to 67 years.
In light of the above employers are well advised to check whether its employees have in the past signed an employment contract containing a pension-triggered termination clause and the employer should – when the employee is approaching the pensionable age – check whether he/she still intends to stop working at 65. If this is still the employee’s intention it is advisable to document that in a timely manner. If the employee indicates that he does not plan to stop working at the age of 65, the employer can, no later than on the employee's 65th birthday, request a dismissal permit with Dutch labour authorities to make sure that the employment contract ends anyhow. Alternatively the employer could request the sub district court to rescind the employment contract.
In the current situation, an extra advantage of having a dismissal permit or a court resolution in place is that if the employer and employee decide to continue the employment relationship beyond the employee's 65th birthday, a new employment contract for a definite period can be concluded that will terminate by operation of law after the agreed period.
Further governmental measures
With the above mentioned announcement of Minister Kamp to increase the flexibility of dismissal laws for AOW-entitled employees to keep them on the labour market, it is expected that pension triggered clauses will be incorporated in the Dutch Civil Code and that contracts containing a pension trigged clause will automatically end at the AOW age.
Minister Kamp has also announced easier ways for the employer and the AOW-aged employee to continue their relationship for a definite period of time or a certain project after the AOW age without the need to have a dismissal permit or court resolution. In addition thereto the Minister Kamp is considering introducing a bonus system for employers who facilitate employees continuing to work after the age of 65.
On top of that the Minister has announced measures to decrease the cost for the employer who deals with a sick employee at the age of 65 or above. Currently, under the Dutch Civil Code, employers must continue to pay the salaries of sick employees - at least 70% of salary - for the first two years of sick leave. Most employers top up wage payments from 70% (legally required) to 100% on the basis of collective agreements; so a supplement of 30% is customary in the first 52 weeks. A costly thing.
Furthermore it is expected that employers employing employees at the age of 65 and above shall no longer be obliged to pay the minimum wage rates stipulated in the Minimum Wage and Minimum Holiday Allowance Act (wet minimumloon en minimumvakantiebijslag). Currently the minimum monthly salary of 23 years and older employees is around EUR 1,500 gross.
The text of the proposed law is currently prepared and will be submitted to the Dutch parliament early 2012.
Evidently, in the near future Dutch employees shall have to work longer against almost the same old age pension income but this was about time…..