Annexes to COM(1999)565 - General framework for equal treatment in employment and occupation - Main contents
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| dossier | COM(1999)565 - General framework for equal treatment in employment and occupation. |
|---|---|
| document | COM(1999)565  |
| date | November 27, 2000 |
IMPACT ASSESSMENT FORM
IMPACT OF THE PROPOSAL ON COMPANIES AND IN PARTICULAR ON SMALL AND MEDIUM SIZED ENTERPRISES (SMEs)
Title of the proposal:
Proposal for a Council Directive establishing a general framework for equal treatment in employment and occupation
Reference: 99012
Proposal
1. Taking account of the principle of subsidiarity, why is Community legislation necessary in this field and what are its principal objectives-
The European Union is founded on the principles of human rights and fundamental freedoms. Its commitment in this field has been reinforced by the Treaty of Amsterdam, in particular through amendments to Articles 6, 7 of the TEU and the introduction of Article 13 of the TEC. The latter provides a specific power to take action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.
As noted in the Explanatory Memorandum, most Member States have included provisions governing the rights to equality and non-discrimination in their constitutional and/or legal order. However, the scope and the enforceability of such provisions - and the ease of access to redress - vary greatly from one Member State to another. European legislation is required to ensure a common minimum level of legal protection, including rights to redress, for the fundamental right not to be discriminated against in the field of employment and occupation on any of the grounds mentioned in Article 13.
European legislation must, of course, respect the limits of the powers conferred on the Community by the Treaty. The proposed Directive therefore lays down general principles, providing a common minimum level of protection within the limits of Community competence, while allowing Member States to maintain a higher standard of protection in accordance with their particular national social and legal context.
The choice of a Directive strikes a balance between the need for European intervention and the need to respect the differences between the existing Constitutions, laws and legal procedures of the Member States. It sets common goals to be achieved while allowing the flexibility needed by the different Member States to achieve them. The legislative intervention is therefore limited to a number of general principles that do not go beyond a minimum level of protection.
The aim of the proposal is the establishment of a general framework for the respect of the principle of equal treatment between persons irrespective of race or ethnic origin, religion or belief, disability, age or sexual orientation within the European Union. The areas covered by the proposal, are access to employment and occupation, promotion, vocational training and employment and working conditions and membership of workers' and employers' organisations and professional bodies.
Impact on enterprises
2. Who will be affected by the proposal-
All enterprises will be subject to the national legislation required by the Directive.
3. What steps will enterprises have to take to comply with the proposal-
Enterprises will need to ensure that decisions on recruitment, promotion, access to training, working conditions including dismissals and pay and membership of workers' and employers' organisations and professional bodies are taken in conformity with the principle of equal treatment on the grounds mentioned in point 1. In principle, this is already the case in all Member States. The Directive will therefore reinforce existing requirements rather than introduce entirely new provisions.
Member States must ensure that reasonable accommodation is provided where needed to enable disabled people to have access to, participate in, or advance in employment. Therefore, public and private employers will be primarily responsible for providing reasonable accommodation.
Reasonable accommodation involves the carrying out of modifications or adjustments to the employment process and to the workplace environment, unless doing so would impose an 'undue hardship' on employers. The concept of undue hardship provides for a fair balance between the legitimate demands of people with disabilities for a meaningful equal treatment and the costs to society and business which this could imply. Reasonable accommodation also includes many adaptations which are frequently available to any worker to address special needs and to enhance productivity (such as a computer with voice control).
4. What economic effects is the proposal likely to have-
In the field of employment, legislation protecting individuals from discrimination on arbitrary grounds has three main effects. First, it contributes to securing social participation and avoiding social exclusion by ensuring that people have the opportunity to fulfil their potential in economic terms, thus being able to provide for themselves and their dependants to best effect and to reduce their dependence on the state. Second, it ensures that enterprises have at their disposal the best qualified employees, thus contributing to the competitiveness and the strength of the firm and of the economy more widely. Third, it requires employers to justify their decisions about matters such as recruitment, promotion, access to training and other working conditions.
This proposal, by limiting discrimination in employment and occupation, will lead to greater economic and social participation and a reduction in social exclusion. This will have direct benefits for economic growth by reducing public expenditure on social security and assistance, by improving the purchasing power of individual households and by promoting the competitiveness of companies by ensuring that they make the best use of all the resources available in the labour market.
(a) What will be the impact
- on employment-
The Directive will contribute to a labour market open to all, as required by the European Employment Strategy. As a result, it will contribute to the improvement of the quality of employment and, in the medium term, may be expected to lead to increased levels of employment resulting from the improved competitiveness of European companies.
- on investment and the creation of new businesses-
The Directive will ease the conditions for access to employment and occupation, salaried employment, self-employment and liberal professions.
- on the competitive position of companies-
The Directive is important for competition purposes to ensure that all operators are placed on an equal footing. As noted above, the Directive will strengthen the competitiveness of European companies by ensuring that they have at their disposal a wider pool of skills and resources than at present and that use is made of those skills without distinction.
(b) Do any new administrative procedures have to be put in place-
Companies will need to be able to justify decisions on subjects such as recruitment, promotion, access to training and other working conditions, to show that they have not been made on a discriminatory basis. This is already the case in about half of the Member States. It will be in the interest of companies to keep limited records on these decisions where this is not currently existing practice.
(c) Costs and benefits in quantitative and/or qualitative terms-
Some limited short-term costs will fall on companies, both in terms of the training required for decision-makers within the company on the implementation of the principle of equal treatment where this is not already done, and in terms of contesting complaints about discrimination. Adaptation to the new requirements in those Member States where equivalent provisions to combat different forms of discrimination do not yet exist will be eased by the familiarity of companies with the Community framework for equal opportunities between women and men, which has been in existence for over twenty years.
In the medium term, companies will benefit from the increased commitment of employees and from increased competitiveness flowing from an improved use of resources (see above).
The evaluation of the economic impact of existing requirements to accommodate people with disabilities highlights several positive effects, including substantial reductions in absenteeism and concomitant savings to employers who invested in work environment improvements. An important effect of the requirement to accommodate is the increased awareness of the importance of the work environment for the company and a realisation that it is economically profitable to invest in better work environments and better work organisation.
(d) What costs will flow from the Directive-
The Directive fixes a flexible, general framework for the implementation of the principle of equal treatment and it will be for the Member States and the social partners to fix the precise means of putting this into practice. The costs however will be limited (see above).
US 1995 data, based upon ongoing surveys with employers highlights that employers who have made accommodations says that 18 percent of these involved no costs to them, with an additional 50 percent between USD 1 and 500. Just 5 percent were greater than USD 5 000. The mean cost of accommodation was USD 992 while the median cost was USD 200. The same employers also estimated the money their companies saved averaged 27 times the costs of what they spent in providing accommodations. The savings include in particular being able to hire or retain a qualified employee, elimination of the cost of training of a new employee, savings in insurance costs, increase in the worker's productivity.
(e) What will companies be required to do in terms of monitoring and evaluation-
The Directive does not directly require companies to monitor and evaluate their compliance with the Directive. However, it would be in the interest of companies to keep records of decisions about recruitment, promotion, access to training and other working conditions to show that they were taken without discrimination. Larger companies may wish to carry out more structured monitoring to ensure that the principle of equal treatment is applied at all levels.
5. Does the proposal contain measures to take account of the specific situation of small and medium sized enterprises (reduced or different requirements etc.)-
The proposal makes no distinction based on company size, given that discrimination exists across all companies, regardless of the number of employees. However, the Directive lays down only minimum standards based on a flexible framework of principles. It is therefore open to the Member States and the social partners to vary the requirements on firms of different sizes, while respecting the requirements of the Directive.
Small and medium enterprises appear to be less well equipped to respond to the job accommodation needs of workers with disabilities. Consequently, many of the existing legal measures which require reasonable accommodation do not apply to firms with fewer than a set number of employees.
This is why the proposal states that Member States will be entitled to provide for exemptions from this requirement if there is a reasonable and objective justification, including circumstances where reasonable accommodation would give rise to an undue hardship. To this regard, the effect of the accommodation on the business should be examined in the context of the firm's financial resources, its workforce, the expenses involved and the availability of extra funding for the costs of compliance.
Consultation
6. List of the organisations which have been consulted and presentation of the principal elements of their position
The Commission has consulted the representative organisations of the European level social partners [24] and the European Platform of social non-governmental organisations.
[24] In conformity with the Commission Communications on the implementation of the Social Protocol (COM(93) 600 of 14 December 1993) and on adapting and promoting the Social Dialogue (COM(1998) 322 final, of 20 May 1998).
All the organisations consulted recognised the importance of the issue and the need for a legislative approach. However, there were different points of view on some elements of the proposal.
The NGO and trade union representatives welcomed the proposal, but Platform members regretted the limitation of the scope of the Directive to employment and occupation. They insisted on the maintenance of the provisions on the burden of proof and on representative actions, believing these to be essential to the defence of the rights of the victims of discrimination.
Representatives of the employer organisations expressed doubts, however, about the shifting of the burden of proof, believing that this would create difficulties for employers by encouraging frivolous claims. The Commission notes that the proposed provision is based on that already adopted at Community level, and already implemented by many Member States, with regard to discrimination on grounds of sex (Council Directive 97/80/EC on the Burden of Proof in Sex Discrimination Cases) and that identical rules have already been applied without apparent difficulty to cases of race discrimination in some Member States. The Commission believes, therefore, that the employers concerns on this point are not founded.