Globalisation does not intimidate European airlines, nor internal competition but the rules must be similar to avoid a collapse of the European airlines

NEW EMPLOYMENT MODELSAND SOCIAL DUMPING

IN AIR TRANSPORT

Emmanuel Jahan – chair of the European sectoral committee of social dialogue for civil aviation – April 2015 – emjahan@orange.fr p 01/15

> Unfair competition involves social dumping> Proofs of unfair competition exist> Is there a lack of political will to address circumvention of law and end impunity ?

AN ANARCHIC COMPETITION COULD MOVETO AN UNFAIR COMPETITION AT GLOBAL AND EUROPEAN LEVELS

19202020 ?

p 02/15

FAIR COMPETITION ?

> regular change of bases (3 months?)

> Air crew declared in Ireland for social security contributions but working from other Member States

> Intense use of self-employed

Exemple 1

European survey February 2014 :6633 respondents (out of 65000 pilots concerned) in which 15% French / 15% Dutch / 11% British

Figures for this example 1

p 03/15

A micro-enterprise for each pilot with the status of self-employed

BOGUS SELF-EMPLOYED ?

FAIR COMPETITION ?

IMPACTS ON SAFETY ?

p 04/15

Where are self-employed ?

> Air crew officially based in Bangkok but working from Gatwick

> Intense use of temporary agencies based outside Europe

FAIR COMPETITION ?

Example 2

Figures for this example 2

FLAG OF CONVENIENCE ?

p 05/15

FAIR COMPETITION ?

> Employment contracts in Singapore

A Singapore temporary agency withair crew officially based in Bangkokbut with duties that start and endfrom a European workplace

WHERE AIRLINES PAY SOCIAL CONTRIBUTIONS ?

p 06/15

FAIR COMPETITION ?

> State aids

> Same owner of theairline and of the airport

Example 3

p 07/15

Employment has not increased from 1998 to 2010 according to a study of the DG Move (European Commission) despite Low Cost air Carriers (LCC)and a growth more than 5% a year of the market.

1998 2010

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What about employmentin Europe ?

p 09/15

Unemployment, unfair competition,

agressive competition

Which future

for the European airlines ?

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> « performance of work, subordination and the remuneration of the worker » (directive 2014/67/EC)

> “person who :

- undertakes genuine and effective work- under the direction of someone else- for which he is paid.”(European Commission, 11.12.2002 COM(2002) 694 final)

> “The essential feature of an employment relationship is that a person performs services of some economic value for and under the direction of another person in return for which he receives remuneration”Judgment of the Court of 3 July 1986. - Deborah Lawrie-Blum v Land Baden-Württemberg. - Case 66/85.

Characterize the notion of “worker”

a job

a boss

money

+

+

A worker

p 11/15

> The competent jurisdiction : Convention of Brussels (1968)and its regulation 44/2001/EC (replaced by Regulation (EC) 1215/2012 from 10th January 2015). case 37/00 of 27/02/2002 Weber

> Applicable labour law :Convention of Rome I (1980)and its regulation 593/2008/EC. Principle of « home base » included in the regulation 593/2008/EC (« in which - from which ») (C-29/10 Heiko Koelzsch of 15 March 2011)

An individual employment contract shall be governed by the law chosen by the parties but such a choice of law may not deprive the employee of the protection that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable (art 8 – 593/2008/EC)

> Applicable social security law : regulation 465/2012/EC (principe of the « home base »)

> 3 laws in line with the « home base » : air transport (EU OPS and regulation FTL 83/2014/EC) – labour law (593/2008/EC) – social security (465/2012/EC)

Enforce the social security and labour laws: through the concept«in which – from which»

p 12/15

> « Letter box companies » :

« Companies which have been set up with the purpose of benefitting from legislative loopholes while not themselves providing any service to clients, but rather provide a front for services provided by their owners. Such companies are normally very small and often only operate a letter box, hence the name. » European Commission COM (2013) 122 Final

> « home base »:

This «  means the location, assigned by the operator to the crew member, from where the crew member normally starts and ends a duty period or a series of duty periods and where, under normal circumstances, the operator is not responsible for the accommodation of the crew member concerned; » (ORO.FTL.105 Definitions). The word « nominated » in the previous regulation has been changed to enforce the will to assign. (regulation 83/2014/EC)

> « establishment »

« having an infrastructure there enabling it to pursue a professional activity there on a stable and continuous basis and, from the infrastructure, to hold itself out to, amongst others, nationals of the second Member State » (European Court – case Bruno Schnitzer C215-01)

> « principal place of business »

European definition only for civil aviation (1008/2008/EC):the head office or registered office of a Community air carrier in the Member State within which the principal financial functions and operational control, including continued airworthiness management, of the Community air carrier are exercised.

US definition:the « nerve center » of the company (judgment of the Supreme Court February 2010)

Which workplace ?

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Global competition needs global fiscal and social agreements

Air transport must take into account the maritime experience to avoid the collapse of the US and European fleets (flags of convenience) but also must take into account the measures put forward  to control what are genuine abuses:

-Global agreements (maritime convention 2006 with the International Labour Organization, safety, etc.),

-fiscal measures to support European shipowners (fiscal and social security taxes),

-new regulations

p 14/15

Conclusions

This is why some European regulations must be adapted :

-868/2004/EC against subsidisation and unfair pricing practices from third countries

-1008/2008/EC to better define the principal place of business and the use of the Air Operator Certificat (AOC)

-83/2014/EC to improve the definition of the “home base”

-465/2012/EC to improve fight against circumvention of law by using bogus home bases

Bogus self-employment, flags of convenience and other undeclared work must be sentenced

European air transport needs global fiscal and social agreements but also European fiscal and social measures to avoid

unfair global competition

Revive European air transport for future !

p 15/15

European airlines must be offensive to improve their competitiveness and not merely defensive but in this competition, a level playing field has a key role