West Thames HR Exchange ClubJanuary 8th 2003

Royal Holloway University of London

Agenda

• Welcome, membership update, minutes of last meeting• Salary Update – Andrew Strathdee, CHRP• Round Robin – general discussion of current ‘hot

topics’• Coffee Break• “What’s New in Europe” – Andrew Strathdee, CHRP• Life/Work Balance – Simon Phillips, SwiftWork• Any Other Business and Items for the Next Meeting• Lunch

Salary Movements Survey

• Results to date – but still many companies undecided as yet:

• UK Current Last Meeting– LQ 2.5%, (0%)– Median 4%, (3%)– UQ 5%, (5%)

Salary Movements in EU

• Austria 3%• Belgium 3%• Denmark 4%• Finland 3.5%• France 3.2%• Germany 3.7% ***• Ireland 5%***• Italy 3.5%

• Netherlands 4%• (Norway 4%)• Portugal 3.5%• Spain 3.5%• Sweden 3.7%• (Switzerland 3.0%)

Round Robin

Coffee

What’s New in Europe?

Quick review of what’s happening in EU countries

EU

• 10 new Member States from 1 May 2004. • Potential new members

• Poland• Hungary• Czech Republic• Slovak Republic• Slovenia• Latvia• Lithuania• Estonia• Malta• Cyprus.

EU

• 2 further new Member States from 2007. • Potential new members

• Bulgaria• Romania

• Turkey will be reconsidered in 2004• All these countries will participate in EU

programmes on gender equality, anti-discrimination and social exclusion from 2003

EU

• New Directive on Workplace Gender Equality– Implemented by October 2005– Key elements

• Two new forms of sex discrimination – “harassment” and “Sexual harassment” – employers will be responsible for preventing

• Right of return after parental or maternity leave to same or equivalent job, with no loss of benefits and entitlement to any improvements, plus protection against dismissal

• States must have legal processes for complaints with real and effective reparation with no upper limit on compensation awards

• Must establish Gender equality agencies

EU

• Consultation on Further Data Protection legislation:– Particular topics:

• medical records • drugs and genetic testing • individual consent to the processing of sensitive data • employee use of e-mail and the Internet and the employer

right to monitor.

– Initial consultation shows wide gap between employers and unions on need for and type of action

Austria

• Report on Pension produced in December• Full state pension only for those aged 65 or with 45 years'

contributions• Deductions of 3% to 4% per year for earlier retirement

– E.g. 25% off for retirement at age 61

• pensions should be calculated on the basis of earnings during the whole of the worker's active life or the 40 best years rather than the fifteen best years at present

• invalidity pensions should be reformed so as to reduce the number of workers claiming a full pension on grounds of invalidity: this may take the form of reducing benefits according to the severity of invalidity. Currently 36.4% of pensions are paid out on grounds of invalidity.

Belgium

• Draft Biennial Social Accord agreed in draft– Wage cost ceiling set at 5.4% for 2003/4

• Increases in base pay “not likely” until 2004• Ceiling includes direct pay, employee benefits, holiday, sick pay

and benefits such as life insurance; does not include profit-related pay, pension contributions or training costs.

– Chèque-repas• increase in the maximum tax- and social charge- exempt

employer contribution to the employee luncheon voucher scheme from € 4.46 to € 4.91 per voucher

– Sick Pay• introduction of payment for the first days' sickness absence for

blue-collar (ouvriers)

Denmark

• Not much to report

• Survey by Dansk Industri predicts that cafeteria Benefits systems will increase by 2005, but will still only affect minority of enployees, mostly executives and single contributors, which stacks up with findings here – more talked about than actioned!

Finland

• New National Income Agreement signed• Takes effect from March 2003 for two years

• Mixture of pay and benefits improvements and tax cuts

• 2003 pay increase 1.8%. plus 0.8 % for local negotiations and 0.3% as an equality and low pay supplement - total maximum increase 2.9%.

• March 2004 increase 1.7% with a possible local addition of 0.5% - total maximum of 2.2%.

• Use of foreign labour to be “closely monitored by Government”

France

• Redundancy Law shake-up cancelled – went to National Assembly in December– Effectively returns to 1986 criteria– Reinstates skills as selection criterion– Limits works committee’s objections– Technical changes

• Overtime returned to 180 hours• Other 35 hour week issues under discussion

Germany

• Labour Market reforms mentioned last time passed by Bundestag, effective 1st January

• Federal labour court has made ruling which raises issue of what provision should be made by employers to cover accrued benefits, especially in cases of liquidation

• Symbolic decision made to lift restrictions on shop opening times can now open from 06.00 to 20.00 on “working days”, effectively extending Saturday hours – still closed on Sundays!

Greece

• The Greek Supreme Court has ruled that trade unions have the right to intervene in all court cases involving labour issues.

Ireland

• Budget– Higher taxes for high- and middle-income earners - Tax

credits will not rise in line with inflation despite workers paying the higher rate of income tax on annual incomes over € 28,000. In addition, the ceiling on social security contributions (PRSI) rises to an annual € 40,420

– Effect is expected to increase inflation to 5 – 6% and affect national wage negotiations

Italy

• Pensions Proposals delayed due to political controversy over:– Disincentives aimed at discouraging early retirement

– Type of compensation to be awarded to employers for diverting termination indemnity funds (which appear on a company's balance sheet and provide a source of cheap finance) into supplementary pension funds

– Finalising the mechanism whereby employers will pay less social security contributions on behalf of newly recruited personnel

Netherlands

• Sunday Working• From January 2003, employers must take employees' personal

circumstances into account when fixing Sunday Working rotas. • Individuals can refuse to work on a Sunday even if an

agreement allowing this already exists with the works council. • Refusal to work on Sundays will no longer be sufficient

grounds for dismissal: a refusal will only be overruled in cases where employers can demonstrate that this would lead to `serious operational difficulties'.

• The expectation is that sectors such as hospitality, transport and media will largely remain unaffected by the law.

• Note – Sunday working is only allowed by agreement on 13 Sundays per year

Netherlands

• Sick Pay for “Atypical Workers”• From January 2003, employers may take out

insurance to cover “atypical” employee’s sickness

• “atypical” includes freelancers and temps

• Employers have had to have such insurance for Permanents since 1996

Netherlands

• Multi Year Tripartite deal falls through• Government pulled out due to WAO reforms disagreement

• Current deals running 3.8% ahead of inflation, so need to moderate

• New one year only agreement:– pay rises in line with forecast inflation of 2.5%

– cuts in employee and employer social security contributions to unemployment system totalling € 500m

– jobs created via the Melkert scheme to be converted into permanent employment

– company savings schemes to stay but with maximum savings cut from € 722 a year to € 488.

Norway

• Nothing new to report

Portugal

• Pensions Law amended• Whilst calculation remains same, contributions

limited to 10 times minimum wage into state scheme• Below 6 time MW must go into state scheme• 6 – 10 times optional state or private• Over 10 time, private only

• Draft Labour Code out on consultation, but still many disagreements

• Plan to peg wage inflation to eurozone rates

Spain

• Annual Pay round negotiations in difficulty• Proposal to peg pay to inflation (i.e.2%)

• Unions may reject which will mean 4%

PLVS ARLV T

Sweden

• Labour Law Reform Committee reports– Main recommendations

• Illegal to dismiss those on parental leave until they return to work;

• Current complicated system of legally-specified fixed-term contracts be simplified

• Restrictive covenants, currently regulated by collective agreement, be the subject of legislation.

• Union report says gender pay difference unchanged in 30 years at 81%

Switzerland

• Federal Council reduces minimum funding rate for pensions funds from 4% to 3.25% from January 1st

• To be reviewed 2003 and every two years thereafter

• Insurance companies requested since stock markets were making 4% difficult to achieve.

Life/Work Balance

Simon Phillips, SwiftWork

Any Other Business?

Lunch