EU: the EU Commission seeks to modernize employment contract rules
On 21 December, the EU Commission presented a Directive proposal that would modernize Directive 91/533 requiring employers to provide employees with written communication on essential elements of employment contracts (the so-called Written Statement Directive). The scope of the text will be extended to cover more workers than is currently the case (2-3 million according to the EU Commission’s estimates) as it will include additional workers on atypical contracts. In addition it also establishes new rights by improving working conditions predictability (working time, remuneration, banning exclusive arrangements etc.) and it especially strengthens the legal arsenal to combat any violations of these provisions (banning employment dismissals, burden of proof).
Definition of worker. In concrete terms the Directive proposal would apply to all workers as defined by CJEU jurisprudence thus, ‘a natural person who for a certain period of time performs services for and under the direction of another person in return for remuneration.’ The new text will then prevent State from excluding from the scope apply to all intermittent and on-demand workers, domestic workers, web platform workers as well as those working under a voucher-like system (as in Belgium- titres-services, Italy – vouchers, and Portugal- recibos-verdes). Self-employed workers are however excluded. In response to press questions on ‘false independent workers’ the Commissioner declared ‘If they are false independent workers then that means they are ‘workers’ and thus come within that category. We are not going to regulate (Ed. note: this situation), instead we will combat this phenomenon”.
This draft legislation enables EU Member states to choose to derogate very short duration jobs (under 8 hours per month). However zero contract hours do come under the draft text’s scope, the Commissioner clarified because this derogation, does not apply to an employment relationship for which there is no pre-set guaranteed volume of paid work prior to the start of the activity.
New rules including predictability and transitions to more classical forms of employment. As with the 1991 Directive, this draft legislation ensures that employees are provided written information on their employment contracts. However the draft legislation provides for this information to be made available from day one of the contract instead of the currently possible two-month delay period following the commencement of the employment relationship. The new legislation would also include a list of provisions so as to deliver the following information including: trial periods, training arrangements, remuneration and overtime pay arrangements, working time information for employees working variable hours, and information on the social security institutions where contributions are being paid.
The text also creates some new rights and some groundbreaking legal protection. It intends for trial periods not to extend beyond six months, unless there is some objective justification. It also establishes the right to work for other employers (prohibits exclusivity clauses except when it justified) and the right to predictability for on-demand workers. In fact the text states that if the ‘work schedule is entirely or mostly variable’ then workers should be informed on the amount of guaranteed paid hours, the remuneration of work performed in addition to the guaranteed hours and, if the work schedule is entirely or mostly determined by the employeur, the reference hours and days within which the worker may be required to work and the minimum advance notice the worker shall receive before the start of a work assignment.
Employers can only require work of its employees within set working hours and days and within reasonable advance notice periods. During the press conference the Commissioner clarified that this provision combined with protection over dismissals will prohibit employers from dismissing workers when they refuse to carry out work that has not been requested within a reasonable advance notice period and/or outside of set working hours and days. In fact the draft text bans the dismissal of all workers exercising the rights as intended by this Directive. Workers who consider that they have been dismissed, or have been subject to measures with equivalent effect (for instance if an on-demand worker is no longer assigned any work), on the grounds that they have exercised the rights provided for in this Directive can go before a court or other competent authority and if it may be presumed from the facts that there has been such dismissal or its equivalent, it shall be for the employer to prove that the dismissal or its equivalent was substantiated on objective grounds. Overall the draft text’s legal arsenal has been bolstered in comparison with what currently exists in other social Directives (c.f. article 14 of the draft text below).
Finally, workers will have the right to request a transition to a more predictable and secure form of employment, and a right to mandatory training without cost, and employers will be obliged to respond to the same in writing (within one month for regular companies and 3 months for SMEs).
Both the EU Council and Parliament have to determine their respective position on the new rules, although they are expected to adopt them (and the EU Commission has put forward a two-year transposition delay period).