Global Compliance Desk – European Union

EU Directive 2019/1152 on Transparent and Predictable Working Conditions (‘DTPWC’)

The Act implementing the EU Directive 2019/1152 (“ Directive”) on transparent and predictable working conditions became law on June 20, 2019. The EU Member States have until August 1, 2022, to implement the Directive. 

The purpose of this Directive is to improve the working conditions of employees by promoting more transparent and predictable employment while ensuring labor market adaptability within the Member States.

Status of the Directive

On December 17, 2017, the European Parliament, the European Council, and the European Commission solemnly proclaimed that employees had the right to be informed in writing at the start of employment about their rights and obligations resulting from the employment relationship, including on probation period. 

This paved way for the adoption of a new Directive, which, on the one hand, would eliminate all the shortcomings of the existing Directive 91/533/EEC – on the employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship( Old Directive) and also comply with the European Pillar of Social Rights. 

Hence on June 20, 2019, the European Parliament and the Council adopted the Directive on transparent and predictable working conditions in the European Union. The Directive aims to repeal the Old Directive but until its adoption and entry into force, the Old Directive shall remain applicable.

Applicability 

According to Article 1(2), the Directive is applicable to ‘every employee in the Union who has an employment contract or employment relationship as defined by the law, collective agreements or employment practice in force in each Member State.

Member States may decide not to apply the obligations in the Directive to an employee who has an employment relationship in which their predetermined and actual working time is equal to or less than an average of 3 hours per week in a reference period of 4 consecutive weeks. Time worked with all employers forming or belonging to the same enterprise, group or entity shall count towards that 3-hour average.

Member States may determine which persons are responsible for the execution of the obligations for employers laid down by this Directive as long as all those obligations are fulfilled. They may also decide that all or part of those obligations are to be assigned to a natural or legal person who is not a party to the employment relationship.

Definitions under the Directive

• Work Schedule means the schedule determining the hours and days on which performance of work starts and ends. 
• Reference Hours and Days means time slots in specified days during which work can take place at the request of the employer. 
• Work Pattern means the form of organization of the working time and its distribution according to a certain pattern determined by the employer. 
• Zero Hour Contract – A Zero hour contract is a type of work contract that does not guarantee employees any minimum number of hours. This means that employees have no guarantee of work (or thus of payment) from their employers.

Requirements

The Member States shall ensure that employers are required to inform employees of the essential aspects of the employment relationship. The information shall include at least the following:

• The identities of the parties to the employment relationship.
• The location of the place of employment.
• Either the title, grade, nature, or category of work for which the employee is employed or a brief specification or description of the work.
• The date of commencement of the employment relationship; and in the case of a fixed-term employment relationship, the end date or the expected duration thereof.
• The duration and conditions of the probationary period, if any.
• The training entitlement provided by the employer, if any.
• The amount of paid leave to which the employee is entitled or, where this cannot be indicated when the information is given, the procedures for allocating and determining such leave.
• Notice Period requirement when employment is terminated.
• The remuneration, including the initial basic amount, any other component elements, if applicable, and the frequency and method of payment of the remuneration to which the employee is entitled.
• If the work pattern is entirely or mostly predictable, the length of the employee’s standard working day or week and any arrangements for overtime and its remuneration and, where applicable, any arrangements for shift changes.
• If the work pattern is entirely or mostly unpredictable, the employer shall inform the employee of:
  • the principle that the work schedule is variable, the number of guaranteed paid hours and the remuneration for work performed in addition to those guaranteed hours.
  • the reference hours and days within which the employee may be required to work.
  • the minimum notice period to which the employee is entitled before the start of a work assignment.
• Any collective agreements governing the employee’s conditions of work.
• Where it is the responsibility of the employer, the identity of the social security institutions receiving the social contributions attached to the employment relationship, and any protection relating to social security provided by the employer.

Furthermore, the Directive has introduced supplementary measures to protect zero-hour employees. When no guaranteed amount of paid work is scheduled, the Member States that allow such contracts should make sure that there are effective measures in place to prevent the misuse. Such measures could take the form of restrictions on the use and duration of such contracts, employment relationship with a guaranteed amount of paid hours based on hours worked in a preceding reference period, or other equal measures that ensure the effective prevention of abusive practices.

Where employers are required by Union or law or collective agreements to give training to employees to carry out the work for which they are employed, it is important to make sure that such training is given equally to all employees, including those who are contractual, part-time or casual employees. The expenses of such training should not be borne by the employee or withheld or deducted from the employee’s compensation. Such training should count as working time and, where possible, should be carried out during working hours.

Minimum Predictability of Work

The Member States shall ensure that where an employee’s work pattern is entirely or mostly unpredictable, in such cases, the employee shall not be required to work unless the work takes place within the predetermined reference hours and days and that the employee is informed by the employer of a work assignment within a reasonable notice period established in accordance with law or collective agreement. In case these conditions are not fulfilled, the employee shall have the right to refuse work.

Request for a more Predictable Work Pattern

After 26 weeks of employment, employees may submit a request to their employers asking for more predictable, and therefore more secure, working conditions. The employer will not be obliged to agree to the request, and the request must be feasible. Employers with more than 10 employees will have to send a reasoned written reply within 1 month; employers with fewer than 10 employees will have to do so within 3 months. If an employer does not respond in the prescribed time frame, the work will be adjusted in accordance with the employee’s request. Employees may file a predictable work schedule request once a year and may not be disadvantaged for filing such requests.

Implementing the Directive in the Member States

Based on the historical significance of employees’ work scheduling requirements, it is pertinent to study whether the current labor legislation of the Member States complies with the Directive for each of the 28 EU member states.

Currently, Member states mostly follow the Old Directive wherein the Member States may exclude from their scope of applicability those categories of employees who have a contract or employment relationship, wherein the total duration of contract does not exceed 1 month and/or the working week is no more than 8 hours. For example, Denmark and Cyprus currently have labor provisions that favor the above-average working hour requirements under the Old Directive.

On the other hand, the new Directive shall contain a higher level of guarantees for employees, and as such the Directive may not apply to only those employees whose working hours are equal to or less than an average of 3 hours per week for 4 weeks.

Read on as we cover details on how the Directive will be implemented in some of the other EU Member States.

Finland

In Finland, the Directive shall be implemented by amending various provisions under multiple labor laws and regulations. The amendments are expected to be implemented by August 1, 2022. Finland will be adapting the requirements of the Directive such as conditions of employment contract, providing employees with a list of shift work in advance, stabilizing the working hours under variable hours schedule, planning and predictability of the work and leisure time for employees, etc.

Germany

A corresponding Draft Bill was proposed to make changes to existing laws to bring them in line with the Directive. The draft bill of the German government (BT-Drs. 20/1636) has not yet been passed by the Bundestag. The changes to German legislation are effective as of August 1, 2022. The employers’ obligation to provide documented working conditions is extended considerably and the deadlines to provide information are tightened significantly. Additional documentation obligations include among others:

• The duration of an agreed probationary period;
• The method of payment of wages;
• The agreed possibility of imposing overtime and its conditions;
• The procedure to be followed by the employer and the employee when terminating the employment relationship, at least the written form requirement and the deadlines for terminating the employment relationship, as well as the deadline for filing an action for protection against dismissal;
• Further obligations to provide documentation in the case of foreign assignments of employees.

Unfortunately, it is still not possible to provide this information digitally rather a wet-ink signature by the employer is required. This is despite the fact that the directive would have allowed otherwise. The German legislature is thus missing an opportunity to adapt the law to practical reality and to advance digitalization in Germany. The only good news is that employment contracts that are not concluded in writing are still effective – however, regulations that need to be in writing such as a post-contractual non-compete or a
limitation in time is void and the non-compliance with the new law constitutes an administrative offense.

In addition, the legislature has now provided for severe penalties if the employer does not provide the employee with the terms and conditions of the contract, or does not provide them correctly, completely, in the prescribed manner or in a timely manner, in violation of the law. The violation is an administrative offense that can be punished with a fine of up to EUR 2,000 per employment contract.

Poland

Following the entry into force of the Directive, amendments to the Labour Code will be called for, primarily with regards to informing employees on their terms and conditions of employment. The amendment will consist of introducing changes in the area of ​​concluding employment contracts for a trial period, as well as changes consisting in extending employees’ rights to have more complete and updated information on employment conditions and introducing new minimum rights for all employees which will consist of providing an employee who has been working for at least 6 months (including during a trial period) the right to apply (once a calendar year) for a “more stable” form of employment with more predictable or safer working conditions, and employers to provide a written answer within 1 month.

France

The French Government tried to get Parliamentary Approval to issue an ordinance for adaptation of the Directive, through an amendment to a bill in July 2021, but the said bill was rejected due to procedural reasons. Currently, there is no development under the same.

Sweden 

The Swedish Parliament has recently passed a bill that implements the Directive. The implementation of the Directive into Swedish law has primarily been made through changes in the Swedish Employment Protection Act (Sw: Lag om anställningsskydd) which entered into force on June 29, 2022. 

Prior to the amendment, there were regulations in the Swedish Employment Protection Act regarding which terms and conditions of employment the employer must provide to the employees in writing. But now, employers in Sweden must, in addition to the above,  provide the employees with the following information in writing, the workplace, the particular terms and conditions for any probationary period, the length of the employee’s regular workday or workweek, a minimum number of hours must be provided, meaning that zero-hour contracts are not allowed, way the salary will be paid out, whether separate compensation will be paid for overtime work or additional work (for part-time employees) and if such compensation is paid, the rates of the compensation, the minimum notice period which the employer must apply when informing the employee of scheduling of working hours and on-call work. 

The above information must be provided in writing within 1 week from commencement of the employment, as opposed to the previous rule which states 1 month. Any changes in the terms and conditions of employment must also be notified in writing no later than the day on which they are implemented, as opposed to the current rule which states within a month.

Italy

Decree No.104 of 2022 (‘the Decree’) on the Implementation of the Directive on transparent and predictable working conditions in the European Union (Directive (EU) 2019/1152) was published in the Official Gazette on 27 June 2022 and shall come into force on 13 August 2022. In particular, Article 1 of the Decree states that its aim is to regulate the right to information in connection to essential elements of the employment relationship.

In addition to the information already existing in an employment contract as per the existing laws, according to the Directive, employers shall now be required to provide employees with training rights, holiday leave duration, the procedure for notice in the case of termination, details of employee’s salary, working time schedule including overtime pay, variability of work schedule, automated decision making on monitoring systems, etc. 

Employers are required to provide the above information to the employees either at the time of hiring or within 7 days from the beginning of the employment relationship (with some exceptions which can be provided within one month from the beginning of the employment relationship). The decree also provides that in case of temporary detachment (for example, due to military service), employers are obliged to provide the employees with additional information before they leave e.g. the country, the duration, salary and the currency, any additional benefits, etc.

According to the new decree, if employers fail to comply with the new obligations, employees may raise it with the Labour Authorities and they could face sanctions ranging from 250 EUR to 1,500 EUR for each concerned employee.

Ireland

The Directive is due to be transposed into Irish law on August 2, 2022. Currently, Irish legislation, most notably the Terms of Employment Information Act 1994 and the Employment (Miscellaneous) Provisions Act 2018 has already implemented many aspects of the Directive, but other changes are required to be implemented. The key changes relate to the timing of the requirements to notify employees of their written terms of employment, probationary periods, and exclusive service arrangements. Also, there shall be a limit on probationary periods to 6 months other than on an exceptional basis.

Estonia

On August 1, 2022, amendments to the Estonian Employment Contracts Act will enter into force, with which Estonia shall implement the Directive in the European Union into Estonian law. In addition to the amendment of the Employment Contracts Act, this shall also lead to amendments to the Civil Service Act, the Working Conditions of Employees Posted to Estonia Act, and the Occupational Health and Safety Act.

The main amendment involves an increase in the amount of data of which employers must inform employees in writing upon the latter commencing work. Employers will be obligated to inform employees of training offered by the employer, compensated holidays, the duration of the probationary period, the procedure for the performance and compensation of overtime work, the format of cancellation of employment contracts, and the obligation to justify cancellation, tax requirements, etc. 

Furthermore, in accordance with the Directive, employees shall have the right to demand suitable working conditions from employers and if the employer cannot provide such conditions, the employer must inform the employee of that in writing. 

Netherland

The new Directive applies to all workers who, according to national law and EU case law qualify, or should qualify, as employees. This means that under certain circumstances some categories of self-employed persons (in case of bogus self-employment) may derive rights from the new Directive under national law. The changes to Dutch legislation are effective as of August 1, 2022. The enhanced information obligation being implemented in accordance with the Directive are as follows – 

• Conditions of probationary period (if applicable)
• Amount of wages and other emoluments and method of payment
• Working time (or reference periods) and shift work
• If no fixed place of work: notice that the employee is free to determine this
• The possibility of imposing overtime and its conditions
• Entitlement to education
• In case of temporary work/posting: the identity of the user company
• Information about notice periods and termination
• Entitlement to additional paid leave (parental leave, carer’s leave, etc.)
• The employer’s contributions to social security (insofar as the employer is responsible).

Portugal

The implementation was already (on algorithmic decision-making processes, AI, digital platforms, controlling of employees’  activity, etc) approved in Parliament and is expected to be enacted in Portugal on January 1, 2023. There would be no major changes to Portuguese labor law are envisaged since most of the existing regulations are in line with the provisions of the Directive.

 

Based on the above analysis, most Member States are yet to induce labor law amendments in line with the Directive.

Employers Takeaway

Going forward, employers may see to it that new employment contracts should be reviewed and adjusted accordingly after the law is passed. In addition to amending contracts, employers may be required to hand out an information sheet to the employee so that the duty to inform is fulfilled with regards to a probationary period, working schedule patterns, notice period requirements, leave entitlements, etc.  In addition, organizations should prepare themselves for the fact that there may be requests that need to be processed quickly after the changes come into force and have the appropriate processes in place to do so. 

Furthermore, it is sensible to require employers to inform employees working for them, on the terms of an urgent labor contract about the presence of a vacant position, which provides the end of a contract for an indefinite period. Also, when ending an employment contract, employees should be informed about the method of fixing their arrival at work or their absence from work.

Secondly, in pursuance of the European Pillar of Social Rights, employers must be required, when forming the terms of an employment contract, to observe the principle of equal pay and other working conditions applicable to all employees, irrespective of their status.

Conclusion

One of the pioneer countries that have implemented predictive scheduling laws is the United States of America. Several states and cities in the United States have legislations laid down with regards to predictive scheduling requirements, but unlike the Directive, scheduling laws in the US are restricted to certain types of industries such as Hospitality, Restaurants, Lodging, etc. Even though the requirements of the scheduling laws across the US are quite similar, they vary significantly in terms of which employers are covered, how far in advance employees must receive their schedules and the penalties for making last-minute schedule changes.

The Directive ensures the awareness of the rights of employees to receive written information about their labor rights before starting work. The labour laws of all 28 EU member states are in accordance with the Old Directive (a directive on the employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship). However, it was not replicated completely. Each country in its own way determined the categories of employees, provided the obligation of the employer to inform their employees of the most important conditions of the employment contract, resolute the form and the terms during which the employer is obliged to inform the employees about the conditions of their work, as well as the time of notifying them about variations in working conditions. 

With the implementation of this Directive, it delivers a higher level of assurances for the exercise of the right of employees to receive information on their working conditions and covers a wider range of people than Directive 91/533/EEC and the national labour legislation of most EU member states.