DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT C: CITIZENS' RIGHTS AND CONSTITUTIONAL AFFAIRS PETITIONS Temporary contracts, precarious employment, employees’ fundamental rights and EU employment law STUDY Abstract This study, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the Committee on Petitions, was prepared to assess the nature and extent of employment precariousness in the framework of EU fundamental rights and employment law. The analysis focuses on two broad areas, namely atypical forms of employment and franchising. The report identifies a number of ‘protective gaps’ at various levels of regulation and puts forward policy recommendations that are informed by the need to adopt holistic and comprehensive action for addressing what emerges as a constantly moving target. PE 596.823 EN ABOUT THE PUBLICATION This research paper was requested by the European Parliament's Committee on Petitions and was commissioned, overseen and published by the Policy Department for Citizens’ Rights and Constitutional Affairs. Policy departments provide independent expertise, both in-house and externally, to support European Parliament committees and other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU external and internal policies. To contact the Policy Department for Citizens’ Rights and Constitutional Affairs or to subscribe to its newsletter please write to: Temporary contracts, precarious employment, employees’ fundamental rights and EU employment law __________________________________________________________________________________________ CONTENTS CONTENTS 3 LIST OF ABBREVIATIONS 5 LIST OF BOXES 6 LIST OF FIGURES 6 LIST OF TABLES 8 TABLE OF CASES 9 EXECUTIVE SUMMARY 13 1. INTRODUCTION 18 1.1. Defining precarious work 19 1.2. EU fundamental social rights: The constitutional foundation against precarious employment 28 1.3. Protective gaps, precarious work and EU law 33 2. THE INDIVIDUAL DIMENSION OF PRECARIOUSNESS: THE CASE OF ATYPICAL WORK 41 2.1. Developments in atypical work 41 2.1.1. Part-time work 41 2.1.2. Fixed-time work 45 2.1.3. The relationship between atypical work and health and safety 47 2.1.4. The case of Zero-Hours Contracts (ZHCs) in the UK 49 2.1.5. The case of flexi-job contracts (FJCs) in Belgium 58 2.1.6. Concluding remarks 62 2.2. The relationship between EU primary law and atypical work 62 2.2.1. Equality between atypical and standard workers as a general principle of EU law 63 2.2.2. EU primary law and inclusive labour standards 64 2.2.3. Concluding remarks 66 2.3. EU secondary law 67 2.3.1. Atypical Work Directives 67 2.3.2. Interaction with EU anti-discrimination legislation 77 2.3.3 Concluding remarks 80 3. THE COLLECTIVE DIMENSION OF PRECARIOUSNESS: THE CASE OF FRANCHISING 81 3.1. Franchising: The paradoxical business architecture 81 3.2. Franchising and (representational) precariousness: The labour architecture 83 3 Policy Department C: Citizens' Rights and Constitutional Affairs ____________________________________________________________________________________________ 3.3. Franchising and EU law: Identifying the gaps 86 3.3.1. Primary EU Law 87 3.3.2. Secondary EU Law 88 3.3.3. Collective Bargaining and Industrial Action 96 3.4 Concluding remarks 97 4. THE INTERPLAY BETWEEN DIFFERENT POLICY MEASURES 98 4.1. Introduction 99 4.2. The working time dimension of precariousness: Atypical workers and the Working Time Directive 100 4.2.1. Personal scope of application 100 4.2.2. The substantive content of the Working Time Directive 101 4.3. The informational dimension of precariousness: Atypical work and the Written Statement Directive 104 4.3.1. Scope of application 105 4.3.2. Substantive content of the Written Statement Directive 105 4.4. Franchising, atypical work and representational precariousness: The case of the fast-good sector 107 5. CONCLUSION AND POLICY RECOMMENDATIONS 111 5.1. Introduction 112 5.2. Inclusive labour standards 115 5.3. Equal treatment and the relevance of working time regulation 118 5.4. Effective labour standards 120 5.5. Conclusion 122 REFERENCES 123 4 Temporary contracts, precarious employment, employees’ fundamental rights and EU employment law __________________________________________________________________________________________ LIST OF ABBREVIATIONS ABVV/FGTB General Federation of Belgian Labour ACLVB/CGSLB General Confederation of Liberal Trade Unions of Belgium AG Advocate General CFREU Charter of Fundamental Rights of the European Union CJEU Court of Justice of the European Union CSC-ACV Confederation of Christian Trade Unions CRD Collective Redundancies’ Directive EC European Commission EP European Parliament EU European Union EWC European Works’ Council EWCD European Works’ Council Directive FCJ Flexi-Job Contract FTC Fixed-Term Contract HORECA Hotel/Restaurant/Café ICD Information and Consultation Directive NGHC No Guaranteed Hours Contract ONS Office for National Statistics SER Standard Employment Relationship TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union TUD Transfer of Undertakings’ Directive UK United Kingdom ZHCs Zero-Hours Contracts 5 Policy Department C: Citizens' Rights and Constitutional Affairs ____________________________________________________________________________________________ LIST OF BOXES BOX 1 Re-employment, job quality, health and allostatic load biomarkers 48 BOX 2 The Wippel case 73 BOX 3 Abercrombie and Fitch Italia Srl v Bordonaro 79 BOX 4 Franchising as an Economic Activity within the EU 83 BOX 5 Defining the notion of the ‘controlling undertaking’ 90 BOX 6 Definition of collective redundancies 94 BOX 7 Main entitlements and limits under the Working Time Directive 101 Box 8 Franchising and Social Dialogue in France 117 LIST OF FIGURES FIGURE 1 The relationship between organisational and employment fragmentation 27 FIGURE 2 Persons employed part-time in EU Member States – Percentage of total employment (2016) 42 FIGURE 3 Employment rate of the population aged 20-64 and percentage of part-time workers by gender in 2015 42 FIGURE 4 Underemployed part-time workers, persons aged 15-74, all countries and EU-28, annual average, 2016 (% of part-time workers) 43 FIGURE 5 Involuntary part-time employment, by age group, EU-28, 2008 and 2016 44 6 Temporary contracts, precarious employment, employees’ fundamental rights and EU employment law __________________________________________________________________________________________ FIGURE 6 Temporary employment in Italy as a percentage of the total employment, per age groups (2005-2017) 45 FIGURE 7 Involuntary temporary employees, by age group, EU-28, 2008 and 2015 46 FIGURE 8 Temporary employment in Italy as percentage of the total employment: men and women (2007-2016) 47 FIGURE 9 Number (thousands) of people in employment reporting they are on a zero hours contract (2000 to 2017) 53 FIGURE 10 Number (thousands) of people on ZHCs by length of time with current employer (2016 and 2017) 53 FIGURE 11 Percentage of businesses making some use of contracts that do not contain a minimum number of hours by size of business (May 2017) 54 FIGURE 12 Percentage of all employees on contracts that do not guarantee a minimum number of hours by industry (2017) 55 FIGURE 13 Comparison of percentages (%) of people who are in employment on a “zero-hours contract” and who are not on a “zero-hours contract” by sex, April to June 2017 55 FIGURE 14 Comparison of percentages (%) of people who are in employment on a “zero- hours contract” and who are not on a “zero-hours contract” by age, April to June 2017 56 FIGURE 15 Comparison of percentages (%) of people who are in employment on a “zero-hours contract” and who are not on a “zero-hours contract” on full-time and part-time basis, April to June 2017 56 FIGURE 16 Percentage of people on a ZHC by industry, ranked highest to lowest (2017) 57 FIGURE 17 Percentage of people in each industry in employment on a ZHC, ranked highest to lowest (2017) 57 FIGURE 18 Interplay between franchising, atypical employment and voice 107 7 Policy Department C: Citizens' Rights and Constitutional Affairs ____________________________________________________________________________________________ LIST OF TABLES TABLE 1 References to precariousness in CJEU case law in the area of social policy 23 TABLE 2 Identifying precarious work indicators/determinants – main examples 34 TABLE 3 Protective gaps shaping precarious employment 38 TABLE 4 Comparison of employment rights for employees, workers and the self-employed 52 TABLE 5 Prevalence of FJCs in the HORECA sector 60 TABLE 6 Breakdown of employers per number of flexi-job and occasional (“extra”) workers 60 TABLE 7 Evolution of employment posts in the HORECA sector (2015-2016) 61 TABLE 8 Trimestral remuneration per type of contract (worker) in the HORECA sector 61 TABLE 9 Trimestral remuneration per type of contract (employee) in the HORECA sector 61 TABLE 10 Distribution of FJCs and occasional work on the basis of age groups 61 TABLE 11 Distribution of FJCs and occasional work on the basis of organisational size 62 TABLE 12 The CFREU and the collective aspects of franchising 87 TABLE 13 Matrix of policy recommendations 114 8 Temporary contracts, precarious employment, employees’ fundamental rights and EU employment law __________________________________________________________________________________________ TABLE OF CASES European Union Case C-11/70 International Handelsgesellschaft v Einfuhr- und Vorratsstelle Getreide (1970) ECR 1125 Case C-22/71 Béguelin Import v GL Import-Export [1971] ECR 949 Case C-4/73 J. Nold, Kohlen- und Baustoffgroßhandlung v Commission of the European Communities. [1974] ECR 491 Case C-15/74 Centrafarm BV et Adriaan de Peijper v Sterling Drug Inc. [1974] ECR 1147 Case C-53/81 D.M. Levin v Staatssecretaris van Justitie [1982] ECR 1035 Case C-14/83 Sabine von Colson and Elisabeth Kamann v Land Nordrhein- Westfalen [1984] ECR 1891 Case C-105/84 Foreningen af Arbejdsledere i Danmark v A/S Danmols Inventar, in liquidation [1985] ECR 2639 Case C-161/84 Pronuptia de Paris GmbH v Pronuptia de Paris Ermgard Schillgalis [1986] ECR I-353 Case C-66/85 Deborah Lawrie-Blum v Land Baden-Württemberg [1986] ECR 2121 Case C-109/88 Handels- og Kontorfunktionærernes Forbund I Danmark v Dansk Arbejdsgiverforening, acting on behalf of Danfoss [1989] ECR 3199 Case C-41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH. [1991] ECR I-1979 Case C-449/93 Rockfon A/S v Specialarbejderforbundet i Danmark [1995] ECR I- 4291 Case C-84/94 United Kingdom of Great Britain and Northern Ireland v Council of the European Union (Working Time Directive) [1996] ECR I-5755 Joined Cases C-253 to C-258/96 Helmut Kampelmann and Others v Landschaftsverband Westfalen-Lippe, Stadtwerke Witten GmbH v Andreas Schade and Klaus Haseley v Stadtwerke Altena GmbH [1997] ECR I-6907 Case C-185/97 Belinda Jane Coote v Granada Hospitality Ltd. [1998] ECR I-5199 Case C-173/99 The Queen v Secretary of State for Trade and Industry, ex parte Broadcasting, Entertainment, Cinematographic and Theatre Union (BECTU) [2001] ECR I-4841 Case C-350/99 Wolfgang Lange v Georg Schünemann Gmbh [2001] ECR I-1061 Case C-62/99 Betriebsrat der bofrost Josef H. Boquoi Deutschland West GmbH & Co. KG v Bofrost Josef H. Boquoi Deutschland West GmbH & Co. KG. [2001] ECR I- 02579 Case C-438/99 Maria Luisa Jiménez Melgar v Ayuntamiento de Los Barrios [2001] ECR I-6915 Case C-440/00 Gesamtbetriebsrat der Kühne & Nagel AG & Co. KG v Kühne & Nagel AG & Co. KG [2004] ECR I-787 9