European Union HR Information

Updated on: 2025/08/05 15:25 (UTC)

Overview

The European Union (EU) is an association of states currently comprising 27 European nations. The fact that the EU is supranational makes it different from most other international organizations (e.g., the Organization for Security and Cooperation in Europe, the United Nations), because supra-nationality is understood to mean the right of an international organization to enact binding statutory rules for member states in specific, assigned areas autonomously from the decision-making process in the member states.

The 27 member states of the European Union are:

• Austria
• Belgium
• Bulgaria
• Croatia
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Finland
• France
• Germany
• Greece
• Hungary
• Ireland
• Italy
• Latvia
• Lithuania
• Luxembourg
• Malta
• Netherlands
• Poland
• Portugal
• Romania
• Slovakia
• Slovenia
• Spain
• Sweden

The results of a June 23, 2016, national referendum (referred to as “Brexit”) require the United Kingdom to give up its EU membership.

EU law has growing influence on its members’ national labor and employment statutes. The globalization of markets and the increasing frequency of cross-border company and group relationships is strengthening the EU’s efforts to set uniform minimum standards for its member states with regard to labor, employment and social welfare law. EU labor and employment law is not a closed system, however, and provides only selective labor law rules. There is no “European labor law” in the sense of a comprehensive EU labor and employment law code, and there is none on the horizon.

Priority of EU Law. When EU labor and employment law provisions are directly applicable to relationships between employers and employees—thus establishing rights and duties for the individual parties to employment agreements without having to be transposed into national law—they supersede contradicting provisions of national statutory law and therefore take precedence over such provisions.

Sources of EU Labor Law. The main sources of European labor and employment law are the founding treaties establishing the EU—particularly the Treaty on the Functioning of the European Union (TFEU)—as well as regulations and directives:

• Founding Treaty: TFEU (former EC Treaty). The European Community Treaty was replaced by the TFEU effective in December 2009. The TFEU contains objectives for the member states, rules concerning the responsibilities of the EU organizations and other institutional guidance. In addition, it includes provisions that are directly applicable to relationships between private parties and thus, for example, can establish claims of individual employees against their employers, such as the prohibitions against discrimination based on nationality (Article 45 of the TFEU) and gender (Article 157 of the TFEU).
• Regulations. EU regulations are directly applicable and can therefore also establish claims for individual employees against their employers, provided that they regulate legal relationships between private parties. Regulations do not, however, play a significant role in labor and employment law because the EU’s power to enact regulations relating to labor and employment law is very limited. Exemplary regulations include the Council Regulation on freedom of movement for workers within the Community (EEC No. 1612/68 of Oct. 15, 1968) and the Council Regulation on the harmonization of certain social legislation relating to road transport (EEC No. 3820/85 of Dec. 20, 1985).
• Directives. Directives have special significance in the area of labor and employment law. As a rule, directives contain only guidelines for member states. They are binding on each member state to which they are addressed with regard to the objective to be achieved, but leave the choice of form and means up to the national legislature. Directives are binding on member states to the extent that they establish specific objectives for them and obligate them to transpose the substance of the provision into national law within a specified length of time. Directives usually contain minimum requirements that must be met. For member states, this means that when transposing a directive into national law they may always deviate from the provisions to the advantage of the individuals or groups of individuals protected by the directive, but never to their disadvantage. Labor and employment law almost always deals with the protection of employees. Member states are allowed to make these protections significantly tougher than the EU requirements, and they often do. In cases of improper or delayed implementation of a directive, a member state can be required to compensate individuals who would have benefited from the directive had it been implemented properly. Within the relationship between private employers and their employees, however, directives have no direct legal effect. In general, therefore, employees cannot derive claims against their employers from a non-implemented directive.
• The principal EU directives relating to labor law are:

Information about conditions of employment (Directive 91/533/EEC)

Equal pay for men and women (Directive 75/117/EEC)

Gender discrimination in job access, vocational training and working conditions (Directive 76/207/EEC)

Race equality (Directive 2000/43/EC)

General framework for equal treatment (Directive 2000/78/EC)

Working time (Directive 2003/88/EC)

Fixed-term work (Directive 1999/70/EC)

Part-time work (Directive 97/81/EC)

Temporary agency work (Directive 2008/104/EC)

Safety and health of pregnant workers at work (Directive 92/85/EEC)

Maternity leave (Directive 92/85/EEC)

Parental leave (Directive 96/34/EC)

Safety and health of workers at work (Directive 89/391/EEC)

Cross-border posting of workers (Directive 96/71/EC)

Minimum standards on sanctions and measures against employers of illegally staying third-country nationals (Directive 2009/52/EC)

Transfer of undertakings (Directive 2001/23/EC)

Collective redundancy (Directive 98/59/EC)

Employees’ protection (employers’ insolvency) (Directive 80/987/EEC)

Employee representation: European works council (Directive 2009/38/EC and its predecessor Directive 94/45/EC)

European corporation (SE) (Directive 2001/86/EC)

Employee information and consultation (Directive 2002/14/EC)

Rulings of the European Court of Justice. In addition to the legal sources listed above, rulings of the European Court of Justice (ECJ) have had substantial influence on the development of labor and employment law in the EU. As the judicial branch of the EU, the ECJ has a monopoly on interpretation of EU law as a whole, as well as on overruling legislation enacted by the EU. To the extent national courts of last resort must apply EU law, they are always obligated to obtain the ECJ’s interpretation if there is any doubt as to how EU law is to be construed. The court of last resort in this context would be the court against whose decisions there is no possibility of appeal in the specific case. Lower courts, on the other hand, have a right, but no obligation, to refer to the ECJ. Many labor courts have made use of this venue to clarify the interpretation of EU law. The ECJ also decides whether a member state has failed to meet its obligation to implement directives properly. If a judgment has been passed against a member state, it must take the measures required by the ECJ. If the member state does not do this within the deadline set by the ECJ, the ECJ can, if it is referred to again, impose a penalty in the form of a lump-sum payment or an administrative fine. The ECJ also has the power to develop EU law.

Limited Legislative Authority. The EU may enact regulations and directives only within the limits of the powers conveyed to it by the TFEU. The EU has no comprehensive authority relating to labor and employment law. The most important definition of EU authority with regard to labor and employment law is in Article 153 TFEU. According to this definition, the EU is empowered to enact directives providing for minimum requirements in the following areas:

protection of workers’ safety and health,

working conditions,

social security and social protection of workers,

protection of workers within the context of termination of their contracts,

information and consultation of workers,

representation and collective defense of the interests of workers and employers,

conditions of employment for third-country nationals,

integration of persons excluded from the labor market, and

equality between men and women with regard to labor market opportunities and treatment at work.

• TFEU provides the EU no authority, however, to address pay, the right of association, the right to strike or the right to impose lockouts (Article 153). The EU thus has no legislative authority in important areas of collective bargaining law.

Hiring

Employment Contracts

According to Directive 91/533/EEC, all workers must have access to information concerning their conditions of employment.

Employers are required to inform employees at a minimum of the following:

• the identities (names and addresses) of the parties to the employment contract;
• the place of work;
• the title, grade, nature, or category of the work for which the employee is employed and a brief specification or description of the work;
• the date of commencement of the contract or employment relationship;
• in the case of a temporary contract, the expected duration;
• the amount of paid leave entitlement and the procedures for allocating and determining such leave;
• notice periods;
• basic remuneration and payment procedures;
• length of the employee’s normal working day or week, and
• relevant collective agreements.

This information must be given to the employee no later than two months after the commencement of employment. In practice, this is usually done in the form of written contracts of employment.

The directive requires that additional information be provided when an employee is required to work in another country longer than one month.

This additional information must include the following:

• the duration of the employment abroad,
• the currency to be used for the payment of remuneration,
• the benefits in cash or kind attendant on the employment abroad (e.g., additional remuneration and additional benefits in kind); and
• the conditions governing the employee’s repatriation.

Under the EU Directive on Transparent and Predictable Working Conditions, EU member states must revise their national laws governing employment contracts and employee agreements by Aug. 1, 2022. These laws must be amended as follows:

• the list of working conditions about which employees must be notified, in writing, must be expanded to include aspects such as the duration of all types of paid leave and procedures to follow when terminating employment;
• mandatory training must be considered working time and all costs associated with the training must be borne by the employer;
• employment agreements may no longer restrict employees from engaging in paid activities outside their work hours unless the employer has justified reasons for prohibiting such activities; and
• employees must be able to request a more predictable work pattern after 26 weeks of employment (employers must respond to the request, in writing, within one month, or within three months if they employ less than 10 employees).

According to rulings of the European Court of Justice, the Directive on information about Employment Conditions does not prescribe any consequences for noncompliance. Such consequences must be enacted at the national level.

Directive 97/81/EC on part-time work—and Directive 98/23/EC, which extends the scope of the part-time work directive to the U.K.—aims at eliminating discrimination against part-time workers and at promoting part-time work as a flexible form of employment.

The directive is applicable to part-time workers if they are employed on the basis of an employment contract and their normal hours of work, calculated on a weekly basis or on average over a period of employment of up to one year, are less than the normal hours of work of a comparable full-time employee.

Under the directive, the employment conditions of part-time workers may not be less favorable than those of comparable full-time employees solely because the former work part time unless different treatment is justified on objective grounds. Benefits may be granted on a pro rata basis, however.

In addition, the directive establishes an employer’s obligation to facilitate transfer from full-time work to part-time work and vice versa by taking into account the wishes of the employees. Employers must also give consideration to measures that facilitate access to part-time work on all levels of the business. Such obligations are, however, worded too generally for employees to be able to derive any concrete rights from them.

Directive 2008/104/EC on temporary agency work is intended to ensure protection of these employees and facilitate the development of flexible forms of work. The directive applies to workers with contracts of employment or employment relationships with temporary work agencies who are assigned to user undertakings to work temporarily under their supervision and direction.

Under the directive, the basic working and employment conditions of temporary agency workers must be at least those that would apply if they had been recruited directly by the client company to occupy the same job. The term “basic working and employment conditions” means the working and employment conditions laid down by legislation, regulations, administrative provisions, collective agreements and other binding general provisions in force in the client’s workplace relating to working time, overtime, breaks, rest periods, night work, holidays, public holidays and compensation.

Directive 1999/70/EC on fixed-term work is intended to protect workers employed under fixed-term contracts and prevent abuse arising from the use of successive fixed-term employment contracts.

Under the directive, fixed-term workers may not be treated in a less favorable manner than comparable permanent workers unless different treatment is justified on objective grounds, although benefits may be granted on a pro rata basis.

To prevent abuse arising from the use of successive fixed-term employment contracts, national legislative bodies are to take one or more of the following measures:

• define reasons justifying the renewal of such contracts,
• limit the maximum total permissible duration of successive fixed-term employment contracts, and/or
• limit the number of permissible renewals.

Under the directive, an employer intending to employ permanent workers is obligated to inform fixed-term workers to ensure they have an opportunity to apply for the permanent positions. Employers are not obligated, however, to prefer fixed-term employees when filling new full-time positions.

Effective July 30, 2020, EU employers that send workers to another EU country must cover their travel, board, and accommodation costs. The maximum duration of posting will be 12 months, with a possible extension of six months. Beyond that period, a worker who stays on will have to be governed by the host country’s labour rules.

Restrictions on Hiring

Member states establish their own requirements governing restrictions on hiring.

Recordkeeping

The collection of employee personal data must be for specific, explicit, and legitimate purposes.

Background Checks

Member states establish their own requirements governing employee background checks.

Noncompetition Agreements

Member states establish their own requirements governing noncompetition agreements.

Reference Citations

Hours of Work: Employment Contract Directive, 91/533/EEC, arts. 2-3; Directive on Part-Time Work, 97/81/EC; Directive on Temporary Agency Work, 2008/104/EC; Directive on Fixed-Term Work, 1999/70/EC, Clause 5; Directive on the Cross-Border Posting of Workers, 96/71/EC

Immigration and Work Permits

In General

Citizens of EU member states must have free access to the labor markets of the other member states. Free movement of workers includes the right to work anywhere in the EU and to enter and reside in the state of employment.

Immigration from non EU states is governed by national legislation.

Visas and Work Permits

Free movement of workers includes the right to work anywhere in the EU and to enter and reside in the state of employment. Different treatment of workers on the basis of nationality is prohibited in remuneration and other conditions of employment. So-called discrimination against nationals, however, meaning worse treatment of nationals of an employer’s own country than nationals of other member states, is not prohibited by the freedom of movement for workers. The rules on freedom of movement are applicable only to cross-border situations.

The rules concerning freedom of movement for workers apply generally to all citizens of member states. There are restrictions that apply only to citizens of the newest member state of Croatia (joined the union in 2013). Under the transitional provisions on freedom of movement for workers, the previous member states may continue to apply their national regulations concerning access to the Croatian labor market for a transitional period of up to seven years.

Immigration from non EU states is governed by national legislation.

Analogous to the U.S. Green Card, the EU Blue Card is a work and residence permit allowing highly qualified non-EU/EEA nationals to live and work in EU member states.

Candidates must have an employment contract or a binding job offer for at least one year and meet the following criteria:

• high professional qualifications as established by a university degree or five years’ relevant professional experience,
• status as paid employee (not contractor or self-employed),
• annual salary at least one and a half times the average national salary,
• health insurance and
• compliance with legal requirements to practice the relevant profession.

The U.K., Denmark and Ireland are the only EU member states that do not participate in the Blue Card program.

Reference Citations

Visas and Work Permits: Free Movement - EU Nationals, European Commission Online Guidance

Nondiscrimination

In General

EU directives prohibit employment discrimination on the basis of sex, religion/belief, disability, age, sexual orientation, or racial or ethnic origin.

Types of Nondiscrimination

Protecting employees against discrimination is of less importance in practice in the EU than in the U.S. While Directive 76/207/EC, combating discrimination based on gender, has been in place since 1976, for example, it was not until 2000 that two directives dealing with equal treatment of other groups were passed. These directives are based on Article 19 TFEU, which was not introduced until 1997. Pursuant to this Article, the EU may “take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.”

Anti-discrimination is still not a major component of employment law in most EU member states, largely because a reliable protection system for employees already exists. Whereas Anglo-American employment law focuses on equal treatment, national employment law in EU member states is primarily concerned with protecting employees from loss of their jobs. In many member states, employees’ rights are strengthened as well by collective bargaining agreements and works agreements. Employees are also discouraged from pursuing discrimination cases because there are no punitive damages available under the national laws of the EU member states and monetary awards are therefore relatively small.

In the area of anti-discrimination law, the following four directives are definitive:

• Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation covers discrimination on the grounds of sex in relation to access to employment including professional promotion, working conditions and remuneration.
• Directive 2004/113/EC covers discrimination on the grounds of sex in relation to access to and supply of goods and services.
• Directive 2000/78/EC prohibits discrimination on the grounds of religion/belief, disability, age (relating to both older and younger employees) and sexual orientation.
• Directive 2000/43/EC prohibits discrimination on the grounds of racial or ethnic origin.

Harassment of a person and sexual harassment are to be regarded as discrimination. Harassment is any unwanted conduct with the purpose or effect of violating the dignity of the targeted person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. Sexual harassment is any form of unwanted verbal, nonverbal or physical conduct with sexual connotations having the purpose or effect of violating the dignity of the targeted person.

Discrimination is prohibited whether direct or indirect. Direct discrimination occurs when a person is treated less favorably than another is, has been, or would be in a comparable situation. Direct discrimination may be justified if the relevant characteristic constitutes an essential and decisive professional prerequisite because of the nature of the professional activity or the framework conditions of its performance and if the purpose is lawful and the requirement reasonable. Indirect discrimination occurs when an apparently neutral measure actually puts or may put certain persons or groups at a disadvantage. Indirect discrimination may be justified if it is based on objective grounds and is in proportion to the purpose pursued.

In anti-discrimination law, the burden of proof for the alleged victim is to convincingly present facts substantiating that he or she may have been discriminated against, while the defendant is obligated to prove that the equal treatment principle has not been violated.

Pay Transparency: Employers in the EU must publicly report their gender pay gap and allow employees to obtain salary information. Effective June 12, 2023, the pay transparency directive adopted by the Council of the European Union imposes reporting obligations to combat the gender pay gap.

EU member states will have until June 7, 2026 to transpose the minimum requirements of the directive into their national laws. Employers with 250 workers or more must report their gender pay gap every year, while employers with more than 100 employees must report every three years. The first reports are due by June 7, 2027.

Under the directive, covered employers must provide information about the initial salary level or its range in the job vacancy notice or before the job interview; and ensure vacancy notices and job titles are gender neutral. Employees also have a right to request and receive salary data broken down by gender and average pay level for employees performing the same or equivalent work. The directive requires companies to conduct a salary assessment with employee representatives if the pay gap exceeds five percent.

Reference Citations

Nondiscrimination: Gender (Recast) Directive, 2006/54/EC; Gender Directive, 2004/113/EC; Directive Establishing Equal Treatment in Employment, 2000/78/EC; Directive Prohibiting Discrimination on Racial or Ethnic Origin, 2000/43/EC

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: GDPR.

Employee Monitoring and Surveillance

Under the GDPR, employers can monitor employees only if there is a lawful basis for doing so. Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures. Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.

Reference Citations

Employee Data: General Data Protection Regulation, 2016

Employee Monitoring and Surveillance: General Data Protection Regulation, 2016

Compensation

Hours of Work

Directive 2003/88/EC establishes minimum safety and health requirements for the organization of working time. It establishes the following principles relating to working hours:

• The working time for each seven-day period should not exceed 48 hours.
• Workers are entitled to a rest break after six hours of work.
• Workers are entitled to a minimum daily rest period of 11 consecutive hours per 24-hour period. Each seven-day period, workers are entitled to a minimum uninterrupted rest period of 35 hours. A minimum rest period of 24 hours can be applied if technical or work organization conditions justify this.
• The normal hours of work for night workers may not exceed an average of eight in any 24-hour period.
• Night workers suffering from health problems recognized as being connected with night work can request that their employers transfer them to day work.
• An employer intending to organize work according to a certain pattern, such as shift work, must take into account the general principle of adapting work to the worker. This means that monotonous work should be alleviated.

On May 14, 2020, the European Court of Justice ruled that EU countries must require employers to set up an “objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured”. EU countries will have to establish their own specific arrangements to implement the ruling, taking into account as necessary “the particular characteristics of each sector” and other factors such as companies’ size.

Minimum Wage

The EU Directive on Adequate Minimum Wages (2022/2041), adopted Oct. 19, 2022, requires EU member states to enact a national law establishing adequate minimum wages. Member states with existing minimum-wages standards must ensure their procedures in setting the wages met the minimum requirements of the directive by Nov. 15, 2024.

The directive does not require countries that do not have minimum wages to introduce one. Nor does the directive intend to set a standard minimum wage for all members or a consistent way of determining an adequate minimum wage, leaving that up to individual countries to use the directive as guidance.

Member states can use economic indicators or reference values to calculate the minimum wage. For example, members can use cost-of-living indicators or values such as 60 percent of the gross median wage or 50 percent of the gross average wage, if applicable.

National laws transposing the directive should include the following objectives: set adequate levels of statutory minimum wages; promote collective bargaining on wage-setting; and enhance access to minimum-wage protection. Under the directive, national laws should also require the member state to update its statutory minimum wage at least every two years if the wage is not automatically adjusted. If it is automatically adjusted, the statutory minimum wage should still be updated at least every four years.

Overtime

The EU is explicitly denied authority to regulate remuneration for the performance of work. Member states establish their own requirements.

Wage Payment

The EU is explicitly denied authority to regulate remuneration for the performance of work. Member states establish their own requirements.

Mandatory Bonuses

The EU is explicitly denied authority to regulate remuneration for the performance of work. Member states establish their own requirements.

Reference Citations

Hours of Work: Working Time Directive, 2003/88/EC, arts. 3-6, 9, 13

Benefits

Vacation

Under Directive 2003/88/EC concerning certain aspects of the organization of working time, workers in EU member states are entitled to paid annual leave of at least four weeks, for which a cash payment may not be substituted except when the employment relationship is terminated. Beyond this, member states can determine for themselves how vacation entitlement should be regulated.

Holidays

Member states establish their own requirements for employee holiday entitlement.

Maternity Leave

Directive 92/85/EEC concerning the safety and health at work of pregnant workers entitles pregnant women to a continuous period of maternity leave of at least 14 weeks. The directive does not, however, entitle the pregnant worker to decide on the allocation of the maternity leave before and after childbirth. The allocation must be in accordance with national legislation. Workers are generally entitled to payment of their remuneration during maternity leave. It is not permissible to dismiss employees because they have taken maternity leave.

Paternity Leave

Effective Aug. 1, 2022, member states must ensure that fathers (or second parents) are entitled to a minimum of 10 days of paternity leave regardless of their length of service or marital status. The leave must be paid at a rate not less than the parent would receive if they were on sick leave.

Sick Leave

Member states establish their own requirements for employee sick leave entitlement.

Other Leave

Parental leave. Council Directive 2010/18/EU on parental leave grants employed men and women an individual right to parental leave of at least four months following the birth or adoption of a child. This right should in principle be provided on a nontransferable basis, but to encourage a more equal utilization of leave by the parents, only one of the four months is in fact provided on a nontransferable basis. (Effective Aug. 1, 2022, two of the months of leave cannot be transferred to another parent.) The right to parental leave may be exercised until the child reaches age 8. It is not permissible to dismiss employees because they have taken parental leave. The directive grants workers a right to return to the same job at the end of parental leave or, should this not be possible, to be assigned an equivalent or similar job.

Pensions and Social Security

Member states establish their own requirements for employee pension entitlement and social security.

Workers’ Compensation

Member states establish their own requirements for workers’ compensation.

Carer’s Leave

EU member states must implement a new work-life balance directive by August 2, 2022. The Directive gives employees the right to up to five days’ leave each year to care for someone at home with a serious medical condition in need of care or support. Member states can decide if this is paid. It also requires EU member states to extend the right to request flexible working arrangements to working carers and parents of young children (up to eight years old). A six-month service qualification can be imposed by member states.

Reference Citations

Vacation: Working Time Directive, 2003/88/EC, art. 7

Maternity Leave: Pregnant Workers Directive, 92/85/EEC, art. 8

Paternity Leave: Parental Leave Directive, 2010/18/EU, art. 2

Labor Relations

In General

EU member states must adopt regulations providing for employees’ rights to information and consultation, including:

• the recent and probable development of the undertaking’s or the establishment’s activities and economic situation;
• the situation, structure and probable development of employment within the undertaking or establishment—in particular, where there is a threat to employment; and
• decisions likely to lead to substantial changes in work organization or in contractual relations.

A successor employer is required to provide continuing employees with the same rights enjoyed under the predecessor employer.

Right to Organize

Trade unions are generally structured on an industry or industry sector basis. The main focus of collective bargaining in mainland Europe remains at the industry level where designated unions have the right to be recognized and to negotiate with employers. Many member states (including France, Germany, the Netherlands and Belgium) maintain a dual system of employee representation, under which works councils are used as the channel for informing and consulting with employees and trade unions for negotiations.

Works Councils

Works councils are by far the most common form of employee participation in the EU. In most member states, there are mandatory systems requiring works councils to be established in companies with minimum numbers of employees. In others, works councils may be created pursuant to collective agreements. Works councils, which can be established at the level of the company or at the level of the group, are composed either of workers alone (for example, in Germany and the Netherlands) or of workers and management (e.g., in Belgium and France).

The powers and rights of works councils vary widely between countries, but the most significant are rights to information on economic, financial and social matters; rights to be consulted; negotiating powers; and rights of co-decision (i.e., to take part in the decisionmaking process on a particular matter).

The history of worker participation in the U.K. and Ireland differs from that of the other EU member states in that there is no equivalent to works councils. Prior to adoption of Directive 94/45/EC on the establishment of a European works council and Directive 2002/14/EC establishing a general framework for informing and consulting employees and the transposition of the directives into British and Irish law, there were no statutory regulations on the participation (co-determination) of employees on the level of the undertaking or the establishment in either of the countries. The directives serve mainly to increase the protection of British and Irish employees to a certain minimum level by involving the employees in the business processes and the employer’s decisions concerning them.

Directive 2009/38/EC provides for the formation of transnational works councils, provides greater transparency of business decisions on the European Community level and guarantees that employees will be informed of decisions made outside the country in which they work that could affect their employment.

The European Works Council Directive applies to companies that employ at least 1,000 workers throughout the EU and a minimum of 150 in each of at least two member states. The directive’s requirements may be satisfied by the establishment of a European works council or by means of an alternative employee information and consultation procedure agreed to by the central management of a Community-scale undertaking and a special employee negotiating body. A European works council (or alternative information and consultation device) has no right of co-determination; it merely has a right to be informed and consulted on any transnational company matters. The directive does not supersede information and consultation rights employees have under the existing laws of member states.

European works councils are now a common feature of industrial relations in many multinational companies operating in Europe. Over 700 European works councils are thought to be in existence, although only one-third of eligible companies have established them.

Directive 2002/14/EC does not establish employee representative institutions, but only requires that member states adopt regulations providing for employees’ rights to information and consultation. It is left to the member states to decide whether the directive is to apply to undertakings employing at least 50 employees or to establishments employing at least 20 employees and to determine the practical arrangements for exercising the right to information and consultation. In all cases, however, the duty of information and consultation must cover:

• the recent and probable development of the undertaking’s or the establishment’s activities and economic situation;
• the situation, structure and probable development of employment within the undertaking or establishment—in particular, where there is a threat to employment; and
• decisions likely to lead to substantial changes in work organization or in contractual relations.

Member states must provide for appropriate measures in the event of noncompliance with the duty of information and consultation on the part of the employer or the employee representatives. In particular, member states must ensure that there are appropriate administrative and judicial procedures to enforce compliance with the directive and provide for appropriate sanctions in the event of noncompliance.

Successorship Clauses

The main purpose of Directive 2001/23/EC is to safeguard the rights of employees during and after mergers or acquisitions. The directive applies to transfers of undertakings, businesses or parts of undertakings or businesses to other employers as a result of legal transfers or mergers. The European Court of Justice considers the continuation of the economic entity, which retains its identity despite the transfer, to be a central criterion.

The ECJ has established seven criteria national courts can apply to determine whether there has been a transfer of an economic entity in any specific case:

• the type of company or business concerned;
• whether material property (e.g., buildings, machines, raw materials) is transferred;
• the value of immaterial property (e.g., expertise and intellectual property rights) transferred;
• whether core employees are retained by the new owner;
• whether customers are retained;
• the degree of similarity between the activity carried out before and after the transfer of ownership and
• whether and for how long operations are discontinued or disrupted.

To the extent there is a transfer of undertaking from one owner (the predecessor employer) to another (the successor employer), the directive provides for the following legal consequences:

• transfer of the predecessor’s employment rights and obligations to the successor;
• continued observance of the working conditions agreed to in any collective agreement until the date of termination or expiration of the agreement or the entry into force or application of another agreement;
• prohibition of dismissals on the grounds of transfer of the undertaking (dismissals on other grounds are still possible);
• provision of information to and consultation with employee representatives (or the employees themselves if there are no employee representatives) “in good time before the transfer is carried out,” including:

the date or proposed date of the transfer;

the reasons for the transfer;

the legal, economic and social implications of the transfer for the employees and

any measures under consideration that would affect employees.

Reference Citations

Works Councils: Directive on an Employer’s Obligation to Inform Employees of the Conditions Applicable to the Contract or Employment Relationship, Council Directive 91/533/EEC; Directive on the Formation of Transnational Works Councils, 2009/38/EC, art. 2; Directive Establishing a General Framework for Informing and Consulting Employees in the European Community, 2002/14/EC, art. 4

Successorship Clauses: Directive Safeguarding Employee Rights Before and After Mergers, 2001/23/EC, art. 4

Safety, Health and Security

In General

Employers must implement health and safety measures aimed at evaluating and avoiding risks and develop a coherent overall prevention policy which covers technology, organization of work, working conditions, social relationships, and the influence of factors related to the working environment.

Workplace Safety and Health

Under Directive 89/391/EEC, employers must implement health and safety measures aimed at:

• avoiding risks;
• evaluating any risks that cannot be avoided;
• combating the sources of risk;
• adapting the work to the individual, especially as regards the design of work places, the choice of work equipment and the choice of working and production methods, with a view in particular to alleviating monotonous work and work at a predetermined work-rate and to reducing their effect on an employee’s health;
• adapting to technical progress;
• replacing the dangerous with the non-dangerous or less dangerous;
• developing a coherent overall prevention policy which covers technology, organization of work, working conditions, social relationships and the influence of factors related to the working environment;
• giving collective protective measures priority over individual protective measures and
• giving appropriate instructions to workers.

Reference Citations

Workplace Safety and Health: Directive 89/391/EEC on the Introduction of Measures to Encourage Improvements in the Safety and Health of Workers at Work, art. 6

Termination

Termination by Employer

While Article 153 TFEU empowers the EU to adopt directives concerning protection against unfair termination, no efforts have yet been made to harmonize national laws regarding individual dismissals, perhaps because all member states already have comprehensive systems protecting employees from arbitrary loss of their jobs.

The employment-at-will doctrine does not apply within the EU. Instead, the sometimes different legal systems of the member states are based on the common doctrine that the employer must provide at least one objective reason for the dismissal of an employee.

In addition, the dismissal process is usually subject to certain procedural requirements (e.g., providing information to and consulting with employee representatives, providing notice in writing at least a week prior to actual termination and making severance payments), and employees are usually free to take legal action in the event of unjustified dismissal.

Under the EU Directive on Whistleblowing (2019/1937), adopted Oct. 23, 2019, EU member states must enact a national law requiring covered employers to implement whistleblower policies and reporting mechanisms for suspected wrongdoings within their company. The law also must protect employees and others who report suspected misconduct and potential wrongdoings of EU laws.

Plant Closings and Mass Layoffs

Directive 98/59/EC, which seeks to harmonize the statutory laws of member states concerning mass layoffs (collective redundancies), was adopted in order to prevent multinational companies from reducing personnel in the course of a restructuring in the member state in which dismissals are the simplest and cheapest. This directive applies only where an employer is making a certain number of employees redundant within a specific period of time. In this regard, the directive gives member states two options for defining a collective redundancy.

A collective dismissal occurs if over a period of 30 days an employer terminates:

• at least 10 employees out of a workforce of 20 to 100,
• at least 10 percent of employees out of a workforce of 101 to 300 employees, or
• at least 30 employees out of a workforce of over 300.

Alternatively, a collective redundancy may be deemed to occur if 20 dismissals are carried out in an establishment of any size within a 90-day period.

For the purposes of the directive, the term “dismissal” covers all forms of employment termination initiated by the employer and not based on reasons relating to individual employees.

If an employer intends to initiate a collective redundancy, it must hold consultations with employee representatives in good time covering ways of avoiding layoffs or of mitigating their consequences if they cannot be avoided. Employers must notify the competent national authority in writing of any projected collective redundancies at least 30 days prior to the planned action.

According to the European Court of Justice, it is the employer’s notice rather than the actual termination of employment that is considered “dismissal” within the meaning of the directive. Consequently, the employer must not issue notices of dismissal until consultation with the employee representatives has been completed and the projected collective redundancies reported to the competent authority.

Payment on Termination

Member states establish their own requirements governing payment on termination.

Unemployment Insurance

Member states establish their own requirements governing unemployment insurance.

Reference Citations

Plant Closings and Mass Layoffs: Directive 98/59/EC on Collective Redundancies, arts. 1-2

Personal Taxes

Residency Requirements

Member states establish their own definitions of tax residency.

Taxable Income

Member states establish their own definitions of taxable income.

Tax Rates

Member states establish their own requirements for income taxation.

Reference Citations

Tax Rates: Summaries of EU Legislation

Web References

Law and Regulation

Directive on Collective Redundancies, 98/59/EC

Directive on Cross-Border Posting of Workers, 96/71/EC

Directive on Data Privacy, 95/46/EC

Directive on Fixed-Term Work, 1999/70/EC

Directive on the Formation of Transnational Works Councils, 2009/38/EC

Directive on the Introduction of Measures to Encourage Improvements in the Safety and Health of Workers at Work, 89/391/EEC

Directive on Part-Time Work, 97/81/EC

Directive on Safeguarding Employee Rights Before and After Mergers, 2001/23/EC

Directive on Temporary Agency Work, 2008/104/EC

Employment Contract Directive, 91/533/EEC

Parental Leave Directive, 2010/18/EU

Pregnant Workers Directive, 92/85/EEC

Working Time Directive, 2003/88/EC