European Union Directives & Regulations – what’s being implemented and what’s on the horizon?

The general trend of these regulations shows an increased interest by the European Union over employment rights and the impact of recent trends over EU employees, especially regarding digitalization challenges. At the same time, the solutions proposed by the EU regulators, while leaving an important margin of manoeuvre to Member States, aim to increase transparency as well as workers’ agency over their employment conditions, both individually and through their representatives and collective bargaining.

This increased interest in employment issues has been corroborated by the European Court of Justice, whose case law has an important impact in European and domestic employment regulations and their application.

Directive 2019/1152 on transparent and predictable working conditions

Status:

• Required to be implemented by Member States by August 2022.
• See Bird & Bird’s December 2022 implementation guide here.

Summary:

• Requires Member States to implement rules giving workers the following rights and protections:
  • More complete information on their work.
  • Limits to the length of probationary periods to six months.
  • More freedom to take up another job with another employer.
  • Right to request a form of employment with more predictable and secure working conditions where available.
  • The right to be informed within a reasonable period in advance when work will have to be done.
  • The right to receive a written reply to a request for transfer to another more secure job.
  • The right to cost-free mandatory training related to the job where the employer has a duty to provide this.
• The Directive ensures that these rights cover workers in all forms of work, including workers performing zero-hour contracts, casual work, domestic work, voucher-based work or platform work. It also provides targeted provisions on enforcement of these rights.

Directive 2019/1158 on work-life balance for parents and carers

Status:

• Required to be implemented by Member States by August 2022.

Summary:

• Requires Member States to implement rules giving workers the following rights:
  • At least 10 working days of paternity leave for fathers (or equivalent second parents), compensated at least at the level of sick pay.
  • Strengthening of the existing right to 4 months of parental leave, by making 2 out of the 4 months non-transferable from a parent to another, and compensated at a level to be set by Member States. Parents will also have the right to request to take the leave in a flexible way (e.g. part-time or in a piecemeal way).
  • 5 days’ carers’ leave for workers providing personal care or support to a relative or household member.
  • Extension of the existing right to request flexible working (reduced working hours, flexible working hours and flexibility in place of work) to all working parents of children up to at least 8 years old, and all carers.

Directive 2019/1937 on the protection of persons who report breaches of Union law – the “Whistleblowing Directive”

Status:

• Required to be implemented by 17 December 2021, except for requirements on internal complaint channels for companies with 50-249 employees which must be implemented by 17 December 2023.
• See Bird & Bird’s guidance and implementation tracker here.

Summary:

• Member States must implement legislation requiring all companies with 50 or more workers to:
  • put in place appropriate reporting channels to enable those workers to report breaches of EU law; and
  • ensure that those making whistleblowing reports are legally protected against retaliation for having done so.

Directive 2022/2041 on adequate minimum wages

Status:

• Approved in October 2022.
• Required to be implemented by Member States by 15 November 2024.

Summary:

• The aim of the Directive is to improve the living and working conditions of workers in the EU, with a view to contributing to upward social convergence and reducing wage inequality and the gender pay gap.
• The Directive does not require Member States to implement a minimum wage and does not impose a specific minimum wage that they should achieve.
• However, it establishes the necessary procedures and clear guiding criteria to set and update statutory minimum wages in the Member States in which they already exist:
  • Minimum wages must be updated at least every two years (or four years in case of automatic indexation mechanisms).
  • Member States are required to adopt measures such as control by labour inspectorates, penalties, easily accessible information on minimum wage, and access to effective dispute resolution mechanisms.
  • Member States must take measures to involve social partners in the setting and updating of statutory minimum wages.
• The Directive also aims to increase the number of workers covered by collective bargaining, requesting that Member States with a collective bargaining coverage below 80% establish an action plan, with a clear timeline and measures to increase such coverage.

Directive 2023/970 on the principle of equal pay and pay transparency

Status:

• Approved in May 2023.
• Required to be implemented by Member States by 7 June 2026.

Summary:

• The aim of the Directive is to strengthen the application of the principle of equal pay for equal work or equal value between men and women through pay transparency and enforcement mechanisms.
• Under this Directive:
  • EU companies with more than 250 employees would be required to report annually on the gender pay gap to national authorities, whereas companies with over 150 employees will be required to report every three years.
  • If the report reveals a pay gap of more than 5% that cannot be justified by objective criteria, the companies would be obliged to carry out a joint pay assessment in cooperation with workers’ representatives, with the purpose of correcting the gap.
  • Employers would be required to inform job seekers about the starting salary or pay range of advertised positions, whether in the vacancy notice or ahead of the interview.
  • Employers would be prohibited from asking candidates about their pay history.
  • Employees will be entitled to ask their employers for the criteria used to determine pay and career progression, as well as information about average pay levels, broken down by sex and categories of employees doing the same work or work of equal value.
• Additionally, the Proposal establishes the obligation to set up compensation frameworks for employees who have suffered gender pay discrimination, as well as penalties and fines, and reverts the burden of proof in pay discrimination cases, which will now fall on the employer.

Proposal for a Directive on gig economy or platform work

Status:

• Proposed in 2021 and currently under discussion.

Summary:

• The aim of the Directive to support the sustainable growth of digital labour platforms in the European Union, ensuring that people working through digital labour platforms can enjoy labour rights and social benefits. The Proposal also aims to establish additional protection in relation to the use of algorithmic management of work.
• The Proposal includes the following measures regarding the employment status of people working through digital labour platforms:
  • It establishes a list of control criteria to determine whether the platform is an “employer”, such as:
    • Setting the level of remuneration.Establishing binding rules on appearance or conduct.
    • supervising work performance.
    • Restricting the freedom to organize one’s work, including through sanctions.
    • Restricting the possibility to build a client base or work for third parties.
  • If the platform meets at least two of the criteria, it would be presumed to be an employer – with the possibility to rebut this presumption.
  • Additionally, in these cases, the individuals would enjoy the labour rights and social benefits linked to “worker” status (minimum wage, working time and health protection, paid leave, unemployment and sickness benefits, etc.).

• The Proposal also increases transparency in the use of algorithms by digital labour platforms, in particular:
  • It requires human monitoring on the respect of working conditions.
  • It requires measures that guarantee the right of employees or self-employed persons to contest automated decisions.
  • It asks platforms to make key information about their activities available to national authorities, to increase transparency in their operations.

Proposal for a Regulation on artificial intelligence (Artificial Intelligence Act)

Status:

• Proposed in 2021 and currently under discussion.

Summary:

• The aim of the proposed Regulation is to lay down harmonized rules on artificial intelligence, in the context of the risks linked to the use of AI systems in the recruitment and selection of persons, decision-making on promotion, termination and task allocation, and monitoring or evaluation of persons in employment relationships.
• The proposed Regulation includes the following measures:
  
  • A classification system that determines the level of risk an AI technology could pose to fundamental rights, establishing different levels of regulation for each level of risk.
  • Within this system, employment-related risks are classified as “high risk”, so AI developers and users must adhere to strict regulations when developing and implementing AI systems.
  • These regulations include rigorous testing, proper documentation of data quality, and an accountability framework, including the following:
    • AI systems used in employment matters shall be accompanied by instructions for use including concise and clear information that is relevant and comprehensible to employees.
    • These AI systems shall be designed and developed in such a way that they guarantee human oversight to prevent or minimize the risks to health, safety, or fundamental rights.

Consultation regarding the potential revision of the European Works Councils’ Directive

Status:

• Consultation launched in April 2023 regarding a possible revision of the Directive 2009/38/EC on the establishment of a European Works Council (EWC).
• Second step of consultation expected in September 2023.

Summary:

• In its 2018 evaluation of the Directive, the Commission found that EWCs remain relevant for ensuring and organizing transnational social dialogue in multinational companies, but it also found shortcomings regarding EWC consultation processes and the means for representatives to enforce their rights.
• Based on this evaluation, the European Parliament has called to prevent possible gaps in several areas, for instance:
  • A more precise and comprehensive definition of “transnational issues” subject to consultation by EWCs, as well as a clarification of the concept of the “transnational character of a matter”.
  • The promotion and strengthening of information and consultation rights, and meaningful consultation processes, by enabling EWCs to obtain a reasoned response on its opinion before the company comes to a decision.
  • A clarification of confidentiality rules, to prevent the abuse of them to limit access to information and effective participation of the EWCs.
• Finally, the European Parliament stresses the need to improve dispute resolution in case of disagreement during the consultation procedure and asks for the introduction of improved penalties for non-compliance with EWC regulations and/or the specific EWC agreement.

Proposals regarding health and safety

Status:

• The European Commission has identified the need to update the European Framework Directive on Safety and Health at Work (Directive 89/391 EEC), also called OSH Framework Directive, to align it with technological and scientific developments.

Summary:

• The EU has identified as key challenges the changing needs in workers’ protection brought by the digital and green transitions, the new forms of work, and the COVID-19 pandemic, in addition to more traditional ones as accidents at work or exposure to hazardous chemicals.
• In particular, the EU strategic framework on health and safety at work 2021-2027 foresees legal action in different areas, such as:
  • Review the Workplaces Directive and the Display Screen Equipment Directive.
  • Proposal of new protective limits on asbestos and lead.
  • Preparation of an EU-level initiative related to mental health at work.
  • Appropriate follow-up to the European Parliament’s resolution on the right to disconnect.