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European Union: EU Parliament approves Directive on Transparent and Predictable Working Conditions

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July 5, 2019

The Directive would supersede the Written Statement Directive (1991) and apply more rights to a wider variety of employees and employment relationships.

Employer action code: Monitor

The Directive is intended to supersede the Written Statement Directive (1991), which mandates only that employees have the right to be notified in writing of the essential aspects of their employment relationship, with a more expansive list of rights applicable to a wider variety of employees and employment relationships. The Directive has two main objectives: to improve employees’ protections against possible infringement of their employment rights and to increase labor market transparency regarding categories or types of employment. For example, the Directive would provide support for individuals in non-standard employment arrangements (e.g., zero-hour contracts, tele-work, employee job sharing, freelance arrangements and work for temporary agencies) who wish to move to more standard employment. According to the European Commission (EC), non-standard employment represented one-quarter of all employment contracts in 2016 as well as 20% of the five million jobs created since 2014.

Key details

The Directive would establish the following minimum employment standards for all workers* in the EU:

  • It would be mandatory for employers to provide written information on the essential elements of work from the first day of employment (compared with within two months under the current Directive).
  • The employee’s probationary period would be limited to six months, unless a longer period is justified by the nature of the position (e.g., for managers) or where extension of the period is in the employee’s interest (e.g., for reasons of temporary absence from work).
  • The use of exclusivity or incompatibility clauses regarding parallel employment (i.e., working for more than one company simultaneously) would be prohibited in the absence of a legitimate need for such clauses (e.g., to protect business secrets or avoid conflicts of interest).
  • Individuals engaged in variable employment with no fixed schedule of work dictated by the employer would be entitled to reasonable advance notice of the hours and days they may be required to work. Individuals could still be engaged to work outside of the notified time frames or where the employer failed to provide reasonable notice, but they could not be required to work nor be adversely affected for refusing to work those hours. The definition of reasonable notice would be a local determination, which may vary by industry.
  • All workers in non-standard employment would have the right to request to transition to more secure and predictable employment where available, such as switching to full-time employment or more guaranteed or predictable hours of work. Employers would be required to respond in writing within one month for large enterprises, three months for smaller firms, but they would not be obliged to grant the request.
  • Any training required by labor law or collective agreement for workers to carry out their assigned tasks would have to be provided at no cost to the worker.

*Note: the Directive does not create a uniform, EU-wide definition of a “worker.” Instead workers are to be defined by the nature of the employment relationship under each member state’s laws, collective agreements and common practice with reference to the rulings by European Court of Justice on such matters.

Employer implications

Parliament approved the Directive on April 16, 2019. The Council of Ministers is expected to formally adopt the Directive in June. Member states would have three years from its adoption to transpose the Directive into local law. The Directive is not intended to curtail non-standard employment, but in the view of the EC, it is expected to “create more transparent and predictable working conditions, in particular for workers in non-standard forms of employment.” Employers hiring workers in the new gig economy should review the Directive and its potential impact on their hiring practices once it is transposed into local law.