Employment Trends Europe - March 2017


Upcoming events

Calls and seminars in the upcoming months which might be of interest include:

Other events which may be of interest:

Details of breakfast briefings, conferences and telephone conference calls covering developments in employment law are available here.

England & Wales

Working Relations - our quarterly newsletter reviews the most important cases and developments affecting employers in England & Wales.

Recent changes

An overview of changes in employment law in England & Wales over the last 12 months is available here.


In-person meeting with employee during the period of incapacity for work

In cases of long term sickness, employers often invite employees to an in-person meeting to learn when the employee will return to work, whether the employee would accept another position etc.

The Federal Labour Court has ruled that employees are not obliged to attend unless there is urgent operational reasons. Such urgent operational reasons could be:

  • missing information about operational processes, or
  • the need to inform the employee about other suitable vacancies.

An in-person meeting on the premises of the employer is only reasonable if:

  1. the meeting cannot wait until the employee has recovered, and
  2. the employee has to physically attend and cannot join online, via phone, etc.
Obligation to grant leave

An employee has to apply for holiday before leave can be granted. Holidays, which have not been applied for and subsequently granted before the end of the year, lapse.

Some regional courts have taken the stance that an employer has to unilaterally grant holiday before the holidays lapses if the employee did not submit a holiday application. Failing to do so could result in a damage claim if the employee leaves the company and is therefore not able to take holiday anymore. Some regional courts have already awarded damages to employees whose holidays lapsed.

The Federal Labour Court has also presented this question to the ECJ; whether requirement of a prior application before holiday can be granted complies with European law. Regardless of the decision of the ECJ, employers are well advised to either unilaterally grant holiday to employees or to send employees on irrevocable garden leave, thereby offsetting any future holiday claims.


Economic dismissals: scope of redeployment obligation

Currently, there is a distinction between redundancy treatment depending on the number of employees a company has: more than 15 and the employee protection is higher, fewer than 15 and the awards payable are significantly lower. In a recent case, a redundant employee claimed that the former company should have applied the treatment for employers with more than 15 because the calculation of the headcount should have included four companies that were part of the same group.

There has been dispute in the past on whether group companies should be included or not in the calculation of headcount and a deciding factor has been whether the group companies operated in unison in pursuance of the same business object.

Recently, a judge sought input from several witnesses as part of a court assessment of whether four companies effectively operated as if they were one business. The assessment focussed on three main factors:

  1. whether the companies shared the same organisation and used the same production resources
  2. if each business of the four companies was actually aligned to serve a "common interest", and
  3. whether some departments were shared by all four companies in the group.

In this case the judge ruled that although there were four separate companies, they did effectively operate as if they were a “single business”. The Court therefore ruled unfair dismissal on the basis that the dismissing company had not properly fulfilled its redeployment obligation as it should have investigated the possible employment in one of the other group companies.

The decision emphasises the importance of a proper evaluation of whether redeployment is possible and not to limit that assessment solely to the dismissing company.


Qualifying for temporary employment agreement terms and conditions

A temporary employment agreement is an agreement between the “supplier” (employer) and “temporary agency worker” (employee) under which an employee is assigned by the employer to a third party, to work for a third party under the management and supervision of the third party. If a relationship qualifies as assigning employees, the Collective Labour Agreement for Temporary Agency Workers (the “ABU CLA”) (including the mandatory pension scheme (StiPP)), which has been declared universally binding to the entire temporary agency branch in the Netherlands, will automatically apply. Therefore, employees are entitled to certain terms and conditions of employment, in principle, higher than the statutory minimum.

When determining whether an employer qualifies as a temporary employment agency, the following conditions need to be determined:

  • whether the employee works under the supervision of the third party, and
  • for the applicability of the ABU CLA, whether the sum of the salaries paid to these employees represents at least 50% of the company’s total annual wage sum.

Previously, whether an employment relationship constituted, in practice, a temporary employment agreement was also dependent upon whether employers could actually be seen as matching demand and supply on the labour market. This was referred to as the so-called “allocation function”. Employers who did not perform the “allocation function” argued that they would therefore not fall under the scope of the ABU CLA nor the mandatory pension scheme. This is in particular relevant in case of payrolling companies. Payrolling companies can be distinguished from temporary employment agencies on the basis that they do not perform a real “allocation function”, since they do not actively select and recruit their employees, but only place employees that have been selected and recruited by their clients on their payroll, whereas temporary employment agencies select and recruit their own personnel.

However, the Supreme Court recently held that the allocation function is not necessary in order for third party relationships to constitute as a temporary employment agreement. As a result, the ABU CLA (and in particular the mandatory pension scheme StiPP) now applies not only to temporary employment agencies, but to any three-way employment relationships, provided that the two above mentioned conditions have been met.


Long term sickness regarded as disability

Until now, court rulings on terminations of employees on sick leave were generally found to be unfair rather than null and void (ie with payment of compensation but no reinstatement). Employees found it difficult to link the grounds for termination to their sickness, and therefore, proving the existence of a clear discrimination situation. Moreover, the Supreme Court rulings determined that dismissals in cases where the employer claimed “lack of profitability in the maintenance of the job position”, qualified to be unfair and not to be null and void.

However, there has been a recent ruling, where the dismissal of an employee under sick leave was deemed null and void. This was based on the Daouidi recommendation from the ECJ which indicated that in cases where there is a long-term sickness, such sickness could ultimately be regarded as a “disability”. Therefore, dismissal would qualify to be null and void, provided that dismissal of an employee with a “disability” is discriminatory.

Although this will not impact all sick leave cases, employers must observe the evolution of this interpretation by the Courts.

Decisions of the European Court of Justice

Upper age limit of 35 years for applicants to a police force was lawful

Gorka Salaberria Sorondo v Academia Vasca de Policía y Emergencias - European Court of Justice

Under the Equal Treatment Framework Directive, it was appropriate to the objective of ensuring the operational capacity and proper functioning of the police service concerned and did not go beyond what was necessary for the attainment of that objective.

Headscarves and high heels

Achbita and anor v G4S Secure Solutions NV (Case C-157/15) (a press summary is available here). 
Bougnaoui & ADDH v Micropole SA (Case C-188/15).

The European Court of Justice has ruled that employers are entitled to ban workers from the "visible wearing of any political, philosophical or religious sign" including headscarves.

Other elexica articles of interest

Gender pay transparency - Bill of Income Transparency Act proposed in Germany - 15 March
ECJ: Headscarves and high heels - 14 March
Brexit: Dutch Central Bank confirms safe harbour under the Dutch bonus cap - 13 March
Employment law changes in April 2017 - 13 March
Gender pay gap reporting - final regulations published - 08 March
Commitments of the Signatories to the Women in Finance Charter - 06 March
Regulatory references - new rules in force - 02 March
Holiday pay: commission and overtime - 01 March
Race in the workplace: The McGregor-Smith Review published - 28 February
Regulatory references - consultation on minor amendments - 16 February
Keeping your employment documents up to date - 02 February
Blog - What can we expect in 2017 on parental workplace rights? - 31 January
Should your head of legal be included within the Senior Managers Regime? - 17 January
Template whistleblowing policy for SMCR firms - 17 January
Diversity “most institutions not compliant” with CRD - 16 January
What is the new French “right to disconnect”? - 11 January
Gender pay reporting: the Government's response - 05 January

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.