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A bill on wealth/purchasing power

Published on : 04/07/2022 04 July Jul 07 2022
Newsletter / Looking Foward

During these times of inflation, many companies are keen to find ways to safeguard their employees’ wealth/purchasing power whilst simultaneously maintaining their business endeavours’ development rate.

A legislative proposal containing emergency measures for the preservation of wealth/purchasing power may fulfil some of these expectations. 

The proposal was presented during a ministers’ council meeting on the 7th of July 2022, and is set to be discussed in Parliament from the 18th of July on.

Arguably, the most important measure is that which aims to allow employers to pay employees bonuses of up to 3000 Euros, or 6000 Euros where a company has under 50 employees or has implemented an employee incentive scheme, social contribution free and even income tax free where the recipient workers earn no more than three times minimum wage. This change could come into force as early as the 1st of August 2022.

Other notable measures include:

- the rationalisation of rules surrounding the implementation of profit-sharing and employee savings schemes, 

- the bestowing of powers upon the Ministry of Labour to force a merger between professional branches meant as an incentive for said branches to open negotiations regarding low wages, 

- an increase in pensions and welfare benefits.

The Government has expressed a desire to see the bill become law before the end of summer. Whether or not this will be the case, and the extent of the amendments which will be made to the proposal as it currently stands remains to be seen. 

The Radtke report

Mr Dennis Radtke, a European People’s Party (Christian Democrats) Member of the European Parliament has, in an eponymous report, proposed changes to the 2009 European Works Council Directive. In order for these prospective changes to become enforceable, the draft would have to go through the legislative procedure.

European Work Councils are bodies that facilitate the information and consultation of employees in European companies and European groups of companies. They offer non-binding opinions. 

The Radtke report suggests that the definition of what qualifies as transnational be amended so as to include more managerial decisions within its scope. Pursuant to the report, the burden of proof would be placed upon management to demonstrate that informing and consulting the European Work Council was not necessary as the matter was not “transnational”. 

The report’s recommendations also include a change in the definition of “consultation”. European Work Councils’ opinion would have to be given prior to management finalising a proposed transnational decision.

In order to ensure compliance with the new rules, the Radtke report suggests implementing a requirement for Member States to establish procedures to enable the temporary suspension of management decisions where European Work Councils allege that their rights have been infringed. 

It is also proposed that management bear the direct costs incurred in carrying out the procedures, including the costs of legal representation, and that Member States lay down rules on penalties applicable to infringements – both intentional and unintentional – of the information and consultation requirements. 
 
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