Proposal for a Council Directive concerning the Framework Agreement on Fixed-term Work concluded by UNICE, CEEP and the ETUC
Date: 1999-04-28
Institutions: European Commission
Subjects: arrangement of working time, employment policy, framework agreement, occupational safety, social rights

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 28.04.1999
COM(1999) 203 final

Proposal for a

COUNCIL DIRECTIVE

concerning the Framework Agreement on Fixed-term Work concluded by

UNICE, CEEP and the ETUC

(presented by the Commission)

EXPLANATORY MEMORANDUM

Introduction

1.

2.

3.

4.

5.

6.

7.

1

2

3

4

5

6

Fixed-term work has increased substantially over recent years, and the trend
continues on national employment markets.

On 29 June 1990, the Commission submitted three proposals for Council
Directives on certain employment relationships (e.g. part-time, fixed-term
and temporary work)1.

The Economic and Social Committee gave its opinion on 20.9.19902, while
the European Parliament gave its opinion on 24.10.19903. In accordance with
Article 149 of the Treaty4, the Commission submitted an amended proposal5
to the Council on 7.11.1990,
incorporating certain of the amendments
suggested by Parliament.

These proposals were subsequently discussed within the Council on various
occasions between 1990 and 1994. Of the three proposals, only Council
Directive
encourage
improvements in the safety and health at work of workers with a fixed-
duration employment relationship or a temporary employment relationship”6
was adopted.

91/383/EEC “supplementing

the measures

to

In July 1994, the Commission published its White Paper on the future of
European social policy, in which the Commission reaffirms its determination
to make progress in the social policy field and indicates, in Chapter III, that
the highest priority must be to ensure that the proposals on atypical work are
adopted by the Council.

The conclusions of the Essen European Council emphasised the need to take
steps to improve the employment situation, and called for measures aimed at
“increasing the employment-intensiveness of growth, in particular by more
flexible organisation of work in a way which fulfils both the wishes of
employees and the requirements of competition”.

As no progress had been made in the Council, the Commission decided to
initiate the procedure under Article 3 of the Agreement on social policy
annexed to the Protocol (No 14) on social policy annexed to the Treaty
establishing the European Community. On 27 September 1995, it therefore
gave its approval for consultation of the social partners under Article 3(2) of
the said Agreement.

COM(90) 228 final, 29.6.1990; OJ C 224, 8.9.1990, p. 8.
OJ C 332, 31.12.1990, p. 167.
OJ C 295, 26.11.1990, p. 112.
All references to the Treaty prior to the entry into force of the Treaty of Amsterdam refer to
the Treaty in force at the time of the action concerned.
COM(90) 533 final; OJ C 305, 5.12.1990, p. 12.
OJ L 206, 29.7.1991, p. 19.

2

8.

9.

10.

The replies from the social partners showed that there was a broad measure
of support for the fundamental guiding principle of non-discrimination of
workers affected by the new, flexible forms of work, guaranteeing them the
same treatment as for full-time workers with open-ended contracts. Although
the respondents’ views differed considerably as to the form and appropriate
level of action to be taken in this area, most of the social partners said they
were prepared to play an active part in defining the principles and putting
them into effect, more especially by way of collective bargaining at the
appropriate level.

After analysing the reactions, the Commission considered Community action
advisable and decided, on 17 April 1996, to initiate the second round of
consultation of the social partners provided for in Article 3(3) of the
Agreement on social policy. On 19 June 1996, three organisations (UNICE,
CEEP and the ETUC) announced their intention to begin negotiations. On 6
June 1997, these three organisations concluded the "European Framework
Agreement on Part-Time Work" which, following the procedure under
Article 4 of the Agreement on Social Policy, was subsequently implemented
on a proposal from the Commission in accordance with Article 4(2) of the
Agreement on social policy by Council Directive 97/81/EC of 15 December
1997. The Directive was further extended to the United Kingdom by Council
Directive 98/23/EC of 7 April 1998. In the Preamble to the "European
the contracting parties
Framework Agreement on Part-Time Work"
announced their intention to consider the need for similar agreements relating
to other forms of flexible work.

the three parties (UNICE, CEEP and the ETUC)
On 23 March 1998,
announced their intention of starting negotiations on fixed-term work. At the
end of the nine-month period, they asked the Commission for a further three
months by virtue of Article 3(4) of the Agreement on Social Policy. The
Commission extended the negotiation period to 30 March 1999. The three
organisations concluded a framework Agreement on 18 March 1999. They
forwarded the agreement to the Commission, asking for it to be implemented
by a Council decision on a proposal from the Commission in accordance
with Article 4(2) of the Agreement on social policy.

11.

The social partners requested the Commission:

– to submit the framework agreement to the Council for a decision to make
the provisions of the agreement binding in the Member States which are
party to the Agreement on social policy annexed to the Protocol (No 14)
on social policy annexed to the Treaty establishing the European
Community;

– to request Member States, in its proposal to implement the agreement, to
adopt laws, regulations and administrative provisions necessary to comply
with the Council decision within two years from its adoption or ensure
that
the social partners establish the necessary measures by way of
agreement by the end of this period; and,

3

– to make provision for Member States to have, if necessary and following
consultation with the social partners and in order to take account of
particular difficulties or implementation by collective agreement, up to a
maximum of one additional year to comply with the decision.

12.

As the first paragraph of the Preamble to the framework agreement
illustrates, the agreement also intends to make an immediate contribution to
the European Employment Strategy.

Examination of the Agreement

13.

In its Communication concerning "adapting and promoting the social
dialogue at Community level"7, the Commission stressed that “before any
legislative proposal implementing an agreement is presented to the Council,
the Commission carries out an assessment involving consideration of the
representative status of the contracting parties, their mandate and the legality
of each clause in the agreement in relation to Community law, and the
provisions regarding small and medium sized enterprises".

Representativeness of the contracting parties and their respective mandates

14.

The organisations which are signatory to the agreement are UNICE, CEEP
and the ETUC. These three organisations have, since 1985, been engaged in
an autonomous and voluntary process known as the “Val Duchesse” social
dialogue. This has
total of 13 joint opinions, 2
recommendations, 4 agreements and 5 declarations. In particular, they came
up with a significant agreement in October 1991 with a view to defining the
role and place of the social dialogue within the new Community framework.
Articles 3 and 4 of the Agreement on social policy drew very largely on this
agreement.

resulted in a

15.

The three organisations all meet the following criteria, as laid down in the
Commission’s Communication concerning the application of the Protocol on
Social Policy (point 24)8:

– they are cross-industry and are organised at European level;

– they consist of organisations which are themselves an integral and
recognised part of Member State social partner structures, have the
capacity to negotiate agreements and are representative of all Member
States;

– they have appropriate structures to ensure their effective participation in

implementing the Agreement on social policy.

16.

These three organisations are the only three general cross-industry
organisations within the meaning of Annex 2 to the Commission’s

7

8

COM(98) 322 final, 20.05.1998; see also COM(93) 600, 14.12.1993.
COM(93) 600, 14.12.1993.

4

17.

Communication. The annex is updated on a regular basis following an
ongoing study on representativeness.

The European Court of First Instance pronounced itself on the question of
representativity in its judgement of 17 June 1998 in case T-135/96 (the
European union of the craft industry and of the small and medium-sized
enterprises (UEAPME) against the Council) where UEAPME had challenged
the legality of Directive 96/34/EC concerning the framework agreement on
parental leave concluded by UNICE, CEEP and the ETUC. In its judgement
the Court of First Instance investigated the procedural steps leading up to the
adoption of the Directive and, secondly, made an assessment of the factual
representativity of the signatory parties based upon the figures submitted to
it. After having found the legislative procedure correct and the signatory
parties sufficiently representative in relation to the material scope of the
agreement,
the CFI declared the UEAPME challenge non-admissible.
UEAPME appealed this judgement but withdrew later its appeal after having
concluded a cooperation agreement with UNICE on 4 December 1998.

Employers’ organisations

18.

The employers’ federation which is most representative of all industrial
sectors and categories of enterprises is UNICE. At national
the
organisations affiliated to the UNICE are by far the most representative
cross-industry employers’ federations. The affiliated organisations at national
level are directly or
indirectly involved in collective bargaining and
participate in the International Labour Conference. CEEP provides
significant representation of public enterprises or enterprises with public
participation in the Member States.

level,

Trade union organisations

19.

By far the most representative cross-industry trade union confederation is the
ETUC. Its affiliated organisations are the most representative cross-industry
its affiliated
trade union confederations in all
organisations at national level are directly or indirectly involved in collective
bargaining and participate in the International Labour Conference.

the Member States. All

Conclusion

20.

21.

The Commission notes that the members of these three organisations at
national level have given the three a specific mandate for negotiations on
fixed-term work and have ratified the framework agreement. The three
organisations have concluded the framework agreement on behalf of their
national members.

The Commission concludes that these three organisations fulfil the condition
of representativeness, which it had undertaken to verify before forwarding its
proposal.

“Legitimacy” of the clauses concerning the role of the non-signatory social
partners and their members

5

22.

23.

24.

25.

A number of other social partners who were consulted by the Commission
expressed a desire to take part in the negotiations. The Commission has been
informed of the exchange of letters and discussions between the signatory
social partners and these others.

The Commission has forwarded the framework agreement
the
organisations which it had previously consulted or informed, and has
organised a meeting with them.

to all

Several organisations have underlined the flexible character of the provisions
of the agreement that will allow account to be taken, when transposing it into
national law, of the specific needs of certain sectors or sub-sectors.

Having verified the relevant clauses,
the
framework agreement makes reference on a number of occasions to the
"social partners" and to “national law, collective agreements or practice”, and
thus very largely preserves the role of the non-signatory social partners and
their members at national level.

the Commission feels that

Provisions regarding small and medium-sized enterprises

26.

27.

28.

Article 137(2) of the Treaty provides that legislation on social policy shall
avoid imposing administrative, financial and legal constraints in a way which
would hold back the creation and development of small and medium-sized
undertakings (or enterprises).

The specific situation of SMEs was given special attention when the text of
the framework agreement was drawn up. Specific reference is made to
SMEs, as follows:

– General

consideration 11:

into
“Whereas
consideration the need to improve social policy requirements, to enhance
the competitiveness of the Community economy and to avoid imposing
administrative, financial and legal constraints in a way which would hold
back the creation and development of
small and medium-sized
undertakings”.

agreement

takes

this

Clearly, the agreement does not provide for any explicit exception to be
made to the basic principle of non-discrimination in favour of SMEs.
However, Clause 5, which sets out the steps to be taken to prevent abuse
from the use of successive fixed-term contracts, stipulates that
these
measures shall be introduced "in a manner which takes account of the needs
of specific sectors and or categories of workers". Furthermore, Clause 5.1
provides for the introduction of "one or more" of three regulatory steps. This
flexibility regarding the implementation of the measures to prevent abuse
could obviously be used in a way which takes into account of the special
needs of employers and workers in SMEs. This point is further underlined in
General consideration 10 that states; "Whereas the agreement refers back to
Member States and social partners for the arrangements for the application of
its general principles, minimum requirements and provisions, in order to take
account of the situation in each Member State, and the circumstances of

6

29.

30.

31.

particular sectors and occupations,
nature".

including the activities of a seasonal

Furthermore, clauses (2(1), 2(2), 3(2), 4(3), 5(2), 7(2)) refer to national laws,
collective agreements or practice and/or to the social partners regarding the
arrangements for their application. Despite not explicitly mentioning SMEs,
these provisions do enable national provisions to be adopted if necessary to
take account of their special needs.

These provisions show that the social partners have intended to leave room
for manoeuvre in the implementation of the rights and obligation under the
agreement which should allow for the specific needs of both workers and
enterprises in specific sectors and categories of workers and enterprises to be
taken into account, not least SMEs (see also General considerations 5, 8 and
12).

The Commission therefore concludes
complies with the provisions
enterprises.

that
concerning small

the framework agreement
and medium-sized

“Legality” of the clauses of the agreement

32.

the clauses of

the
The Commission has carefully examined each of
framework agreement and does not
find any provisions contrary to
Community law. The fact that the agreement provides for obligations on the
Member States does not undermine its legality. On the contrary, it follows
from the second declaration annexed to the Agreement on social policy9 that
the arrangements for applying agreements between management and labour
at Community level is likely to create obligations for the Member States. The
obligations imposed on Member States do not derive directly from the
agreement between the social partners but from the arrangement for applying
the agreement. Paragraphs 33 to 37 contain the Commission’s assessment of
the content of the agreement.

Assessment of the agreement

33.

9

In the light of the conclusions of the Essen European Council and of
subsequent European Councils, the Commission considers Community level
provisions on fixed-term work to be an important factor in seeking to strike
the right balance between flexibility and security. The social partners’
contribution is positive in itself in that it guarantees that consideration is
given both to business competitiveness and to the interests of workers.

“The eleven High Contracting Parties declare that the first of the arrangements for application
of the agreements between management and labour at Community level - referred to in Article
4(2) - will consist in developing, by collective bargaining according to the rules of each
Member State, the content of the agreements, and that consequently this arrangement implies
no obligation on the Member States to apply the agreements directly or to work out rules for
their transposition, nor any obligation to amend national legislation in force to facilitate their
implementation.”

7

34.

35.

36.

37.

38.

The Commission wholeheartedly endorses the aims of the social partners’
framework agreement and sees it as an important step in three respects.

Firstly, minimum standards with regard to fixed-term work are a big step
forward in creating a minimum set of fundamental rights of workers as laid
down in the Community Charter of the Fundamental Social Rights of
Workers (see in particular paragraph 7 of the Charter).

Secondly, the agreement also contributes to implementing the conclusions of
the Essen European Council in terms of the introduction of new, flexible
ways of organising work. Such flexibility must meet the needs of enterprises
and help them to become more competitive to cope with international
competition. It must also take account of the interests of workers by
preventing abuse arising from the use of successive fixed-term employment
contracts or relationships. An agreement between the social partners on this
matter as a result of negotiations between employers and workers is the right
vehicle for reconciling the interests of the two parties.

Thirdly, the agreement illustrates the role that the social partners can play in
the European employment
the 1997 Luxembourg
extraordinary summit and the subsequent Council Resolutions, in particular
Council Resolution on the 1999 Employment Guidelines.10

strategy agreed at

The Commission considers that all the conditions are fulfilled for forwarding
a proposal designed to implement the framework agreement between the
social partners by way of a Council decision.

The Commission’s proposal

39.

40.

41.

In its Communication of 14 December 1993, the Commission stated that
“implementing an agreement concluded at Community level by means of a
Council decision on a proposal from the Commission at the joint request of
the social partners would give the Council no opportunity to amend the
agreement. For this reason, the Commission will merely propose, following
examination of the agreement between the social partners, the adoption of a
decision on the agreement as concluded”. In the present case, the proposed
instrument is a Directive. It therefore contains the standard clauses relating to
the implementation of the Directive at national level.

The Commission also took the view that “the Council decision must be
limited to making binding provisions of the agreement concluded between
the social partners, so the text of the agreement would not form part of the
decision but would be annexed thereto”.

the Commission announced that “if

in
Finally,
accordance with the procedure set out in the last subparagraph of Article
4(2), not to implement the agreement as concluded by the social partners, the
Commission will withdraw its proposal for a decision and will examine, in

the Council decides,

10

Council Resolution of 9 February 1999 on the 1999 employment guidelines.

8

the light of the work done, whether a legislation instrument in the area in
question would be appropriate”.

42.

Hence, the Commission has not incorporated the text of the agreement in its
proposal but simply annexed it thereto. Moreover, it reiterates that, if the
Council amends the agreement concluded between the social partners, it will
withdraw its proposal.

Legal basis

43.

44.

45.

Following the entry into force of the Treaty of Amsterdam, the provisions of
the Agreement on Social Policy have been incorporated into Articles 136 -
139 of the Treaty.

Article 139(2) of
the Treaty provides that “agreements concluded at
Community level shall be implemented, in matters covered by Article 137, at
the joint request of the signatory parties, by a Council decision on a proposal
from the Commission”. The agreement on fixed-term work relates to
working conditions, which come under Article 137(1) of the Treaty. This is
one of the areas where the Council may act by a qualified majority. As a
result, Article 139(2) is the proper legal basis for the Commission’s proposal.

That Article does not provide for consultation of the European Parliament on
requests addressed to the Commission by the social partners. However, in
accordance with the undertaking in its Communication, the Commission has
kept Parliament informed about the various phases of consultation of the
social partners. It is also forwarding this proposal to Parliament so that it can
deliver its opinion to the Commission and the Council if it so wishes. The
same applies to the Economic and Social Committee.

The form the instrument is to take

46.

The term “decision” within the meaning of Article 139(2) of the Treaty refers
to one of the binding legislative instruments under Article 249 of the Treaty.
It is up to the Commission to propose to the Council the most appropriate of
the three binding instruments under the said Article (regulation, directive or
decision). In this case, given the nature (framework agreement) and the
is clear that the framework
content of the social partners’ document, it
agreement is intended to be applied indirectly by means of provisions to be
transposed into national law by the Member States and/or the social partners.
Hence, in that case, the most suitable instrument for its application is a
Council Directive. Moreover, in accordance with the undertakings it has
given, the Commission considers that the text of the agreement should not be
part of the directive but should be annexed thereto.

47.

The Commission’s comments on the Articles in its proposal are given below.

– Article 1

9

– This article confines itself to making the framework agreement between
the social partners obligatory in order to enable it to be implemented by a
Council decision under Article 139(2) of the Treaty.

– Articles 2 - 5

– These Articles contain the usual provisions for transposition into the

national law of the Member States.

– More particularly, Article 2(1) says that the provisions of the Directive
prescribe only minimum requirements, giving Member States the chance
to adopt stricter measures in the relevant field.

– Article 2(2) is a “non-regression” standard clause that affects Member
States which have, at the time of adoption of the Directive, a higher level
of protection than that guaranteed by the framework agreement. What this
clause means is that there should be no lowering of the general level of
protection for workers when the Community Directive is adopted.
However, it offers Member States the possibility of adopting different
measures as required by their economic and social policies, subject to
observance of the minimum requirements prescribed by the framework
agreement. It is at any rate clear that
the Member States’ room for
manoeuvre covers only a level of protection exceeding that guaranteed by
the Directive.

– Article 3 obliges Member States to provide penalties which are effective,
commensurate with the infringement and constitute a sufficient deterrent.
In applying Community law, it is necessary, as in every legal system, on
the one hand that those bearing obligations resulting from this law are
dissuaded from infringing it and, on the other, that those who do not
respect Community law are duly penalised.

– Articles 4 and 5 contain the provisions for transposition into the national

law of the Member States.

Justification for the Directive in respect of subsidiarity

48.

49.

The proposal for a Council Directive concerning the framework agreement
on fixed-term contracts concluded by UNICE, CEEP and the ETUC
complies with the principle of subsidiarity and proportionality, as laid down
in Article 5 of the Treaty.

As regards the principle of subsidiarity, the need to undertake Community
action, is justified by the fact that the social partners, under the procedure
provided for in Article 3 of the Agreement on Social Policy (Article 138 of
the Treaty as amended by the Treaty of Amsterdam), have agreed that it is
necessary to undertake action at Community level and have requested the
implementation of their Community-level agreement
through a Council
decision based on a proposal from the Commission, pursuant to Article 4(2)
of the Agreement on social policy (Article 139(2) of the Treaty as amended
by the Treaty of Amsterdam). Moreover, this initiative is in keeping with the

10

conclusions of the Essen European Council of December 1994 and its
follow-up and,
in particular, with the Council Resolutions on the
Employment Guidelines of 1998 and 1999.11

50.

The Council Directive corresponds to the requirement of proportionality in
so far as it only defines the major objectives to be attained by Member
States, while allowing the social partners and not the Community to decide
on the content.

Conclusion

51.

The Council is requested to adopt the proposal for a Directive concerning the
framework agreement on fixed-term work concluded by UNICE, CEEP and
the ETUC.

11

Council Resolution of 15 December 1997 on the 1998 employment guidelines and Council
Resolution of 9 February 1999 on the 1999 employment guidelines.

11

Proposal for a

COUNCIL DIRECTIVE

concerning the Framework Agreement on Fixed-term Work concluded by
UNICE, CEEP and the ETUC

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 139(2) thereof;

Having regard to the proposal from the Commission12;

(1) Whereas following the entry into force of the Treaty of Amsterdam the
provisions of the Agreement on social policy annexed to the Protocol (No 14)
on social policy, annexed to the Treaty establishing the European Community
as amended by the Treaty of Maastricht have been incorporated into Articles
136 to 139 of the Treaty establishing the European Community;

(2) Whereas management and labour (the social partners) may, in accordance with
Article 139(2) of the Treaty, request jointly that agreements at Community
level be implemented by a Council decision on a proposal
from the
Commission;

(3) Whereas point 7 of the Community Charter of the Fundamental Social Rights
of Workers provides inter alia that “the completion of the internal market
must lead to an improvement in the living and working conditions of workers
in the European Community. This process must result from an approximation
of these conditions while the improvement is being maintained, as regards in
particular (...) forms of employment other than open-ended contracts, such as
fixed-term contracts, part-time working, temporary work and seasonal work”;

(4) Whereas the Council has been unable to reach a decision on the proposal for a
Directive on certain employment relationships with regard to distortions of
competition13, as amended14, nor on the proposal for a Directive on certain
employment relationships with regard to working conditions15;

(5) Whereas the conclusions of the Essen European Council stressed the need to
take measures with a view to “increasing the employment-intensiveness of

12

13

14

15

OJ C ...
OJ C 224, 8.9.1990, p. 6.
COM(90) 533 final; OJ C 305, 5.12.1990, p. 8.
OJ C 224, 8.9.1990, p. 4.

12

growth, in particular by a more flexible organisation of work in a way which
fulfils both the wishes of employees and the requirements of competition”;

(6) Whereas the Council Resolution of 9 February 1999 on the 1999 Employment
Guidelines invite the social partners at all appropriate levels to negotiate
agreements to modernise the organisation of work, including flexible working
arrangements, with the aim of making undertakings productive and
competitive and achieving the required balance between flexibility and
security;

(7) Whereas the Commission, in accordance with Article 3(2) of the Agreement
on social policy, has consulted management and labour on the possible
direction of Community action with regard to flexible working time and job
security;

(8) Whereas the Commission, considering after such consultation that Community
action was desirable, once again consulted management and labour on the
substance of the envisaged proposal in accordance with Article 3(3) of the said
Agreement;

(9) Whereas the general cross-industry organisations the Union of Industrial and
Employers’ Confederations of Europe (UNICE),
the European Centre of
Enterprises with Public Participation (CEEP) and the European Trade Union
Confederation (ETUC) informed the Commission on 23 March 1998 of their
desire to initiate the procedure provided for in Article 4 of the said Agreement;
whereas they asked the Commission, in a joint
letter for a further three
months; whereas the Commission complied with this request extending the
negotiation period to March 30 1999;

(10) Whereas the said cross-industry organisations concluded, on 18 March 1999, a
framework agreement on fixed-term work; whereas they forwarded to the
Commission their joint request to implement the framework agreement by a
Council decision on a proposal from the Commission, in accordance with
Article 4(2) of the said Agreement;

(11) Whereas the Council, in its Resolution of 6 December 1994 on “prospects for
a European Union social policy: a contribution to economic and social
convergence in the Union”16, asked management and labour to make use of the
opportunities for concluding agreements, since they are as a rule closer to
social reality and to social problems;

(12) Whereas the contracting parties, in the Preamble to the Framework Agreement
on Part-Time work concluded on 6 June 1997, announced their intention to
consider the need for similar agreements relating to other forms of flexible
work;

16

OJ C 368, 23.12.1994, p. 6.

13

(13) Whereas the social partners wished to give particular attention to fixed-term
work, while at the same time indicating that it was their intention to consider
the need for a similar agreement relating to temporary agency work;

(14) Whereas the contracting parties wished to conclude a framework agreement on
fixed-term work setting out the general principles and minimum requirements
for fixed-term employment contracts and employment relationships; whereas
they have demonstrated their desire to improve the quality of fixed-term work
by ensuring the application of the principle of non-discrimination, and to
establish a framework to prevent abuse arising from the use of successive
fixed-term employment contracts or relationships;

(15) Whereas the proper instrument for implementing the framework agreement is
a directive within the meaning of Article 249 of the Treaty; whereas it
therefore binds the Member States as to the result to be achieved, whilst
leaving them the choice of form and methods;

(16) Whereas, in accordance with the principles of subsidiarity and proportionality
as set out in Article 5 of the Treaty, the objectives of this Directive cannot be
sufficiently achieved by the Member States and can therefore be better
achieved by the Community; Whereas this Directive limits itself to the
minimum required for the attainment of those objectives and does not go
beyond what is necessary for that purpose;

(17) Whereas the Commission has drafted its proposal

in
accordance with its Communication of 14 December 199317 concerning the
application of the Agreement on social policy and its Communication of 20
May 1998 on adapting and promoting the social dialogue at Community
level18, taking into account the representative status of the contracting parties,
their mandate and the legality of each clause of the framework agreement;

for a Directive,

(18) Whereas the Commission has drafted its proposal for a Directive taking into
account compliance with Article 137(2) of the Treaty which provides that
directives in the social policy domain “shall avoid imposing administrative,
financial and legal constraints in a way which would hold back the creation
and development of small and medium-sized undertakings”;

(19) Whereas the Commission, in accordance with its Communication concerning
the application of the Agreement on social policy, informed the European
Parliament by sending it
the text of the agreement, accompanied by its
proposal for a Directive and the explanatory memorandum;

(20) Whereas the Commission also informed the Economic and Social Committee
by sending it the text of the agreement, accompanied by its proposal for a
Directive and the explanatory memorandum;

17

18

COM(93) 600, 14.12.1993.
COM(98) 322 final, 20.5.1998.

14

(21) Whereas the provisions of this Directive lay down minimum requirements,
thus giving the Member States and/or the social partners the option of
introducing more favourable provisions;

(22) Whereas the implementation of this Directive should not serve to justify any
regression in relation to the situation which already exists in each Member
State;

(23) Whereas the Member States may entrust management and labour, at their joint
request, with the implementation of this Directive, as long as the Member
States take all the necessary steps to ensure that they can at all times guarantee
the results imposed by this Directive;

(24) Whereas the implementation of the framework agreement contributes to

achieving the objectives under Article 136 of the Treaty,

HAS ADOPTED THIS DIRECTIVE:

Article 1

The purpose of the Directive is to put into effect the annexed framework agreement
on fixed-term contracts concluded on 18 March 1999 between the general cross-
industry organisations (UNICE, CEEP and the ETUC).

Article 2

1. Member States may introduce more favourable provisions than those laid down in
this Directive.

2. The implementation of this Directive shall under no circumstances constitute
sufficient grounds for justifying a reduction in the general level of protection of
workers in the fields covered by this Directive. This shall be without prejudice to the
rights of Member States and/or management and labour to lay down, in the light of
changing circumstances, different legislative, regulatory or contractual arrangements
to those prevailing at the time of adoption of this Directive, provided always that the
minimum requirements laid down in this Directive are adhered to.

Article 3

Member States shall determine the range of penalties applicable for infringements of
national provisions made in implementation of this Directive and shall take all
necessary steps to ensure that they are enforced. The penalties must be effective,
commensurate with the infringement, and must constitute a sufficient deterrent.

15

Member States shall notify these provisions to the Commission by the date mentioned
in Article 4 at the latest, and any subsequent amendment thereto in good time.

Article 4

Member States shall bring into force the laws, regulations and administrative
provisions necessary to comply with this Directive within two years of its adoption, or
shall ensure that, by that date at the latest, management and labour have introduced
the necessary measures by agreement, the Member States being required to take any
necessary measures to enable them at any time to be in a position to guarantee the
results imposed by this Directive. They shall forthwith inform the Commission
thereof.

Member States may have a maximum of one more year, if necessary, and following
consultation with the social partners,
to take account of special difficulties or
implementation by a collective agreement.

They shall inform the Commission forthwith in such circumstances.

When Member States adopt the provisions referred to in the first paragraph, these
shall contain a reference to this Directive or shall be accompanied by such reference
at the time of their official publication. The procedure for such reference shall be
adopted by the Member States.

Article 5

This Directive is addressed to the Member States.

Done at Brussels,

For the Council
ThePresident

16

ANNEX

ETUC-UNICE-CEEP

Framework Agreement on Fixed-term Work

Preamble

This framework agreement illustrates the role that the social partners can play in the
European employment strategy agreed at
the 1997 Luxembourg extra-ordinary
summit and, following the framework agreement on part-time work, represents a
further contribution towards achieving a better balance between "flexibility in
working time and security for workers".

The parties to this agreement recognise that contracts of an indefinite duration are,
the general form of employment relationship between
and will continue to be,
employers and workers. They also recognise that fixed-term employment contracts
respond, in certain circumstances, to the needs of both employers and workers.

This agreement sets out the general principles and minimum requirements relating to
fixed-term work, recognising that their detailed application needs to take account of
the realities of specific national, sectoral and seasonal situations. It illustrates the
willingness of the Social Partners to establish a general framework for ensuring equal
treatment for fixed-term workers by protecting them against discrimination and for
using fixed-term employment contracts on a basis acceptable to employers and
workers.

This agreement applies to fixed-term workers with the exception of those placed by a
temporary work agency at the disposition of a user enterprise. It is the intention of the
parties to consider the need for a similar agreement relating to temporary agency
work.

relates to the employment conditions of

This agreement
fixed-term workers,
recognising that matters relating to statutory social security are for decision by the
Member States. In this respect the Social Partners note the Employment Declaration
of the Dublin European Council in 1996 which emphasised inter alia the need to
develop more employment-friendly social security systems by "developing social
protection systems capable of adapting to new patterns of work and providing
appropriate protection to those engaged in such work". The parties to this agreement
reiterate the view expressed in the 1997 part-time agreement that Member States
should give effect to this Declaration without delay.

In addition, it is also recognised that innovations in occupational social protection
systems are necessary in order to adapt them to current conditions, and in particular to
provide for the transferability of rights.

The ETUC, UNICE and CEEP request the Commission to submit this framework
agreement to the Council for a decision making these requirements binding in the
Member States which are party to the Agreement on social policy annexed to the
Protocol (No 14) on social policy annexed to the Treaty establishing the European
Community.

17

The parties to this agreement ask the Commission, in its proposal to implement the
agreement, to request Member States to adopt the laws, regulations and administrative
provisions necessary to comply with the Council decision within two years from its
adoption or ensure19 that the social partners establish the necessary measures by way
if necessary and
of agreement by the end of this period. Member States may,
following consultation with the social partners, and in order to take account of
particular difficulties or implementation by collective agreement have up to a
maximum of one additional year to comply with this provision.

The parties to this agreement request that the social partners are consulted prior to any
legislative, regulatory or administrative initiative taken by a Member State to conform
to the present agreement.

Without prejudice to the role of national courts and the Court of Justice, the parties to
this agreement request that any matter relating to the interpretation of this agreement
at European level, should in the first instance, be referred by the Commission to them
for an opinion.

General considerations

1

2.

3.

4.

5.

Having regard to the Agreement on social policy annexed to the Protocol (No
14) on social policy annexed to the Treaty establishing the European
Community, and in particular Article 3.4 and 4.2 thereof;

Whereas Article 4.2 of the Agreement on social policy provides that
agreements concluded at Community level may be implemented, at the joint
request of the signatory parties, by a Council decision on a proposal from the
Commission;

Whereas, in its second consultation document on flexibility in working time
and security for workers, the Commission announced its intention to propose a
legally-binding Community measure;

Whereas in its opinion on the proposal for a directive on part-time work, the
European Parliament invited the Commission to submit immediately proposals
for directives on other forms of flexible work, such as fixed-term work and
temporary agency work;

Whereas in the conclusions of the extra-ordinary summit on employment
adopted in Luxembourg, the European Council invited the social partners to
negotiate agreements to “modernise the organisation of work,
including
flexible working arrangements, with the aim of making undertakings
productive and competitive and achieving the required balance between
flexibility and security”;

19 Within the meaning of Article 2.4 of the Agreement on social policy annexed to the Protocol (No 14)

on social policy annexed to the Treaty establishing the European Community.

18

6.

7.

8.

9.

Whereas employment contracts of an indefinite duration are the general form
of employment relationships and contribute to quality of life of the workers
concerned and improve performance;

Whereas the use of fixed-term employment contracts based on objective
reasons is a way to prevent abuse;

Whereas fixed-term employment contracts are a feature of employment in
certain sectors, occupations and activities which can suit both employers and
workers;

Whereas more than half of fixed-term workers in the European Union are
women and this agreement can therefore contribute to improving equality of
opportunities between women and men;

10. Whereas this agreement refers back to Member States and social partners for
the arrangements for the application of its general principles, minimum
requirements and provisions, in order to take account of the situation in each
Member State, and the circumstances of particular sectors and occupations,
including the activities of a seasonal nature;

11. Whereas this agreement takes into consideration the need to improve social
to enhance the competitiveness of the Community
policy requirements,
economy and to avoid imposing administrative, financial and legal constraints
in a way which would hold back the creation and development of small and
medium-sized undertakings;

12. Whereas the social partners are best placed to find solutions that correspond to
the needs of both employers and workers and shall therefore be conferred a
special role in the implementation and application of this agreement.

19

THE SIGNATORY PARTIES HAVE AGREED THE FOLLOWING

The purpose of this framework agreement is to:

Purpose (clause 1)

(1)

(2)

(1)

(2)

(1)

(2)

improve the quality of fixed-term work by ensuring the application of the
principle of non-discrimination;

establish a framework to prevent abuse arising from the use of successive
fixed term employment contracts or relationships.

Scope (clause 2)

This agreement applies to fixed-term workers who have an employment
contract or employment relationship as defined in law, collective agreements
or practice in each Member State.

Member States after consultation with the social partners and/or the social
partners may provide that this agreement does not apply to:

a)

initial vocational training relationships and apprenticeship schemes;

b) employment contracts and relationships which have been concluded within the
framework of a specific public or publicly-supported training, integration and
vocational retraining programme.

Definitions (clause 3)

For the purpose of this agreement the term “fixed-term worker” means a
person having an employment contract or relationship entered into directly
between an employer and a worker where the end of the employment contract
or relationship is determined by objective conditions such as reaching a
specific date, completing a specific task, or the occurrence of a specific event.

For the purpose of this agreement, the term “comparable permanent worker”
means a worker with an employment contract or relationship of an indefinite
duration,
in the same establishment, engaged in the same or similar
work/occupation, due regard being given to qualifications/skills.

Where there is no comparable permanent worker in the same establishment,
the comparison shall be made by reference to the applicable collective
agreement, or where there is no applicable collective agreement, in accordance
with national law, collective agreements or practice.

20

Principle of non-discrimination (clause 4)

(1)

In respect of employment conditions, fixed-term workers shall not be treated
in a less favourable manner than comparable permanent workers solely
because they have a fixed-term contract or relation unless justified on
objective grounds.

(2) Where appropriate, the principle of pro rata temporis shall apply.

(3)

(4)

(1)

The arrangements for the application of this clause shall be defined by the
Member States after consultation with the social partners and/or the social
partners, having regard to Community law, national law, collective agreements
and practice.

Period of service qualifications relating to particular conditions of employment
shall be the same for fixed-term workers as for permanent workers except
where different
length of service qualifications are justified on objective
grounds.

Measures to prevent abuse (clause 5)

To prevent abuse arising from the use of successive fixed-term employment
contracts or relationships, Member States, after consultation with social
partners in accordance with national law, collective agreements or practice,
and/or the social partners, shall, where there are no equivalent legal measures
to prevent abuse, introduce in a manner which takes account of the needs of
specific sectors and/or categories of workers, one or more of the following
measures:

(a)

(b)

objective reasons
relationships;

justifying the renewal of

such contracts or

the maximum total duration of successive fixed-term employment
contracts or relationships;

(c)

the number of renewals of such contracts or relationships.

(2)

Member States after consultation with the social partners and/or the social
partners, shall, where appropriate, determine under what conditions fixed-term
employment contracts or relationships:

(a)

(b)

shall be regarded as “successive”;

shall be deemed to be contracts or relationships of an indefinite
duration.

21

(1)

(2)

(1)

(2)

(3)

(1)

(2)

(3)

(4)

Information and employment opportunities (clause 6)

Employers shall inform fixed-term workers about vacancies which become
available in the undertaking or establishment to ensure that they have the same
opportunity to secure permanent positions as other workers. Such information
may be provided by way of a general announcement at a suitable place in the
undertaking or establishment.

As far as possible, employers should facilitate access by fixed-term workers to
appropriate training opportunities to enhance their skills, career development
and occupational mobility.

Information and consultation (clause 7)

Fixed-term workers shall be taken into consideration in calculating the
threshold above which workers' representative bodies provided for in national
and Community law may be constituted in the undertaking as required by
national provisions.

The arrangements for the application of clause 7.1 shall be defined by Member
States after consultation with the social partners and/or the social partners in
accordance with national law, collective agreements or practice and having
regard to clause 4.1.

As far as possible, employers should give consideration to the provision of
appropriate information to existing workers' representative bodies about fixed-
term work in the undertaking.

Provisions on implementation (clause 8)

Member States and/or the social partners can maintain or introduce more
favourable provisions for workers than set out in this agreement.

This agreement shall be without prejudice to any more specific Community
provisions, and in particular Community provisions concerning equal
treatment or opportunities for men and women.

Implementation of this agreement shall not constitute valid grounds for
reducing the general level of protection afforded to workers in the field of the
agreement.

The present agreement does not prejudice the right of the social partners to
conclude at
including European level, agreements
adapting and/or complementing the provisions of this agreement in a manner
which will take account of the specific needs of the social partners concerned.

the appropriate level,

22

(5)

(6)

The prevention and settlement of disputes and grievances arising from the
application of this agreement shall be dealt with in accordance with national
law, collective agreements and practice.

The signatory parties shall review the application of this agreement five years
after the date of the Council decision if requested by one of the parties to this
agreement.

FRITZ VERZETNITSCH

GEORGES JACOBS

ANTONIO CASTELLANO AUYANET

President of the ETUC

President of UNICE

President of CEEP

EMILIO GABAGLIO

DIRK F. HUDIG

JYTTE FREDENSBORG

General Secretary

Secretary General

Secretary General

of the ETUC

of UNICE

of CEEP

March 18, 1999

23

ANNEX

IMPACT ASSESSMENT FORM

THE IMPACT OF THE PROPOSAL ON BUSINESS

with special reference to small and medium-sized enterprises (SMEs)

Title of proposal:

Proposal for a Council Directive concerning the framework agreement on fixed-term
work concluded by UNICE, CEEP and the ETUC.

Document reference number: 99005

The proposal:

1. Taking account of the principle of subsidiarity, why is Community legislation
necessary in this area and what are its main aims?

The aim of this Directive is to implement the framework agreement on fixed-term
work under Article 139(2) of the Treaty. This Article provides for implementing
agreements concluded by the social partners by way of a Council decision on a
proposal from the Commission. The signatories have jointly asked the Commission to
in accordance with its
present a proposal
Communication20 on the application of the Agreement on social policy, undertook a
threefold analysis of the agreement. The Commission considers that all the conditions
have been met (representative status of the signatories, legality of the clauses of the
agreement and compliance with special provisions on SMEs) and that its proposal for
a Council Directive should be adopted.

to the Council. The Commission,

The impact on business:

2. Who will be affected by the proposal?

All enterprises and all workers may be affected by the framework agreement,
irrespective of the sector or size of the enterprise concerned.

3. What will business have to do to comply with the proposal?

As indicated in clause 1 of the framework agreement, enterprises will have to ensure
that any discrimination vis-à-vis workers with a fixed-term employment contract or
employment relationship is done away with.

While the framework agreement will allow employers full recourse to fixed-term
contracts in a manner which takes into account specific national and sectoral

20

COM(93) 600 final.

24

requirements (see clause 5 of the agreement), it aims at preventing the abuse of fixed-
term contracts and relationships.

A number of clauses refer to legislation, collective agreements or national practices,
and/or to the social partners at the appropriate level, leaving plenty of room for
manoeuvre for individual enterprises. Therefore, the exact requirements placed on
businesses will to a large extent be determined at national, sectoral or company level.

4. What economic effects is the proposal likely to have?

Implementation of the framework agreement on fixed-term work will contribute to the
second priority laid down by the Essen European Council, viz. the introduction of
new, flexible forms of work organisation. In the conclusions of the extra-ordinary
summit on employment adopted in Luxembourg, the European Council invited the
social partners to negotiate agreements to “modernise the organisation of work,
including flexible working arrangements, with the aim of making undertakings
productive and competitive and achieving the required balance between flexibility and
security”. An agreement between the social partners on this point is the outcome of
negotiations between the two sides and would seem to be the most appropriate
instrument for reconciling the two sides’ interests.

As this is a framework agreement, providing for considerable variation in its
application, the precise economic effects can not be determined at EU-level or in
advance of its implementation. These economic effects will depend on how the
directive is implemented and applied at national, sectoral and company level taking
into account particularly the flexibility provided under clause 5 of the agreement.

However, from the statistical point of view it can be mentioned that the proportion of
employees in temporary jobs or working under a fixed-term contract in the EU was 11
% for men and 13 % for women in 1997. As the agreement does not cover workers
placed by a temporary work agency at the disposition of a user enterprise, the
proportion of workers who work under a fixed-term employment contract or
employment relationship is under 10 % of the total EU labour force although the
proportion has been increasing steadily.21 The agreement provides a balanced and
flexible framework for the growing tendency to use fixed-term contracts while
preventing the abuse of such contracts.

In this context it should also be mentioned that in the second paragraph of the
Preamble to the agreement, the two sides of industry recognise that fixed-term
employment contracts respond,
to the needs of both
employers and workers.

in certain circumstances,

5. Does the proposal contain measures to take account of the specific situation of
small and medium-sized firms (reduced or different requirements, etc.)?

The specific situation of SMEs was given special attention when the text of the
framework agreement was drawn up. Specific reference is made to SMEs, as follows:

21

Employment in Europe 1998 –report.

25

– General

consideration 11:

into
“Whereas
consideration the need to improve social policy requirements, to enhance
the competitiveness of the Community economy and to avoid imposing
administrative, financial and legal constraints in a way which would hold
small and medium-sized
back the creation and development of
undertakings”.

agreement

takes

this

Clearly, the agreement does not provide for any explicit exception to be made to the
basic principle of non-discrimination in favour of SMEs. However, Clause 5, which
sets out the steps to be taken to prevent abuse from the use of successive fixed-term
contracts, stipulates that these measures shall be introduced "in a manner which takes
account of the needs of specific sectors and or categories of workers". Furthermore,
Clause 5.1 provides for the introduction of "one or more" of three regulatory steps.
This flexibility regarding the implementation of the measures to prevent abuse could
obviously be used in a way which takes into account of the special needs of
is further underlined in General
employers and workers in SMEs. This point
consideration 10 that states; "Whereas the agreement refers back to Member States
and social partners for the arrangements for the application of its general principles,
minimum requirements and provisions, in order to take account of the situation in
each Member State, and the circumstances of particular sectors and occupations,
including the activities of a seasonal nature".

laws,
Furthermore, clauses (2(1), 2(2), 3(2), 4(3), 5(2), 7(2)) refer to national
collective agreements or practice and/or
to the social partners regarding the
arrangements for their application. Despite not explicitly mentioning SMEs, these
provisions do enable national provisions to be adopted if necessary to take account of
their special needs.

These provisions show that the social partners have intended to leave room for
manoeuvre in the implementation of the rights and obligation under the agreement
which should allow for the specific needs of both workers and enterprises in specific
sectors and categories of workers and enterprises to be taken into account, not least
SMEs (see also General considerations 5, 8 and 12).

Consultation

6. List the organisations which have been consulted about the proposal and outline
their main views.

All the representative organisations22 were given an opportunity to air their views
during the first phase of consultation. They were also invited by the Commission to a
consultation meeting on the framework agreement. As regards their positions, see
paragraphs 22 to 25 of the explanatory memorandum.

22

In conformity with the Communication concerning the application of the Agreement on social

policy: COM(93) 600, 14.12.1993.

26