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European Edition
4th May 2023
 
THE HOT STORY
UK unions challenge employment law changes in High Court
More than 10 UK trade unions, including Aslef, Unite and Usdaw, have launched legal action against the government’s recent changes to employment law. The legal challenge is centered around the 2022 Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations, which the unions argue allow staffing agencies to supply workers during strikes. Union leaders are hoping to quash the legislation and have asked Mr Justice Linden to declare it unlawful. The case is being heard in the Royal Courts of Justice complex in London and is set to run through this week. The TUC has said that this hearing is a demonstration of unions’ determination to fight back against government attacks on the right to strike, including through the courts.
LEGAL
Banker switches sides to help prosecutors
Former Merrill Lynch banker Osman Semerci says he flipped sides to help dividend tax scheme prosecutors in Germany after being “dazzled” by potential gains from the cum-ex tax scheme that has implicated some of Wall Street’s biggest banks. Cum-ex was a strategy that took advantage of how Germany collected dividend tax; multiple parties claimed refunds on a tax that was paid only once. Semerci, who joined London-based asset manager Duet Group from Merrill Lynch, said “we didn’t ask” when in 2009 the profits from Duet's novel business idea were much higher than what was described in the business plan. Cum-Ex was first introduced to Duet in 2008. “It was a red flag, and I failed on that,” he said. ”Maybe I was dazzled too much by the profits. I turned a blind eye.”
STRATEGY
UniCredit to use €300m charges for voluntary staff exits
Reuters reports that Milan-headquartered UniCredit is to use €300m restructuring charges it is set to book this year to fund voluntary exits after receiving some 1,900 requests from employees of which it met less than half, according to sources who said the bank late last year invited staff to come forward who wanted to retire early and were within five years from qualifying for a pension. UniCredit had forecast cutting around 800 jobs, a figure which it then raised to 925, but it was unable to meet another 1,000 requests from employees ready to leave, one source said.
Volvo Cars cuts 1,300 jobs
Volvo Cars is to axe around 1,300 office-based employees in Sweden. Chief Executive Jim Rowan explained that while the automaker's efficiency drive had begun to show results, more was necessary.  "Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time," Rowan said. About 1,100 jobs will be cut at the company’s main global operating unit, Volvo Personvagnar.
Morgan Stanley plans to cut another 3,000 jobs
In its second round of job cuts in six months, Morgan Stanley plans to eliminate about 3,000 roles in the second quarter, according to a source with knowledge of the situation. Slow dealmaking and a tough economic environment are prompting the investment bank to look at its headcount, the source said. The banking and trading group is expected to shoulder many of the reductions, one person said.
WORKFORCE
Digitisation and slow growth ‘will destroy 14m jobs by 2027’
Research by the World Economic Forum (WEF) warns that 14m jobs around the world could be lost due to poor economic growth, the green transition and technological developments by 2027. Some 83m jobs will be eliminated while just 69m new roles will be created, leaving a deficit of 14m. Saadia Zahidi, WEF managing director, said: “Governments and businesses must invest in supporting the shift to the jobs of the future through the education, reskilling and social support structures that can ensure individuals are at the heart of the future of work.”
NHS staff in England to receive a 5% pay rise
Health unions in England have backed a deal that will give more than a million NHS staff in England a 5% pay rise. Staff including ambulance workers, nurses, physios and porters will also get a one-off sum of at least £1,655. Despite some of the unions rejecting the offer, the deal was agreed after a majority backed it. The Royal College of Nursing (RCN), one of the unions that rejected the offer, has warned it will continue to pursue strike action.
HIRING
UK ministers urged to change post-Brexit visa rules amid labour shortages
A report by the House of Lords European Affairs Committee argues that the UK government needs to change visa rules in order to tackle labour shortages. It says the complexity of post-Brexit visa regulations has proved a “significant barrier to mobility,” and warned that ministers need to do more to address “well-documented” labour shortages. The report, The Future UK-EU Relationship, identified hospitality, catering, tourism, transport, logistics and storage, as well as production and manufacturing, as the sectors “most severely impacted.” Committee chair Lord Kinnoull pointed to the “significant” impact of post-Brexit barriers to workers’ mobility, adding that the government must “intensify engagement” with the EU to ensure issues are properly discussed and resolved. Manufacturing lobby group Make UK agreed with the report’s findings, saying the post-Brexit immigration system has contributed to labour shortages, with fewer than one in four manufacturers able to fill all of their vacancies.
Germany looks to immigration reform to arrest worsening skills shortage
Germany will create one of “Europe’s most modern immigration regimes” to address a worsening skills shortage that risks becoming a “real brake on economic growth,” the nation’s labour minister Hubertus Heil has said.
TECHNOLOGY
Samsung restricts generative AI after employee misuse
South Korean technology giant Samsung is restricting employees’ use of generative artificial intelligence tools such as ChatGPT after the company discovered such services were being misused. Samsung told employees to take precautions when using ChatGPT and other products outside of work and advised workers not to enter any personal or company related information into the services. Bloomberg has reported that some staff had uploaded sensitive code to ChatGPT. a company-wide survey conducted by Samsung last month found that 65% of those who responded said there was concern about security risks when using generative AI services.
AI ‘frees humans for bigger tasks’
The chief executive of market-making firm Citadel Securities says automation and artificial intelligence will free workers for innovative pursuits rather than replace people in the workplace. Speaking at the Milken Institute Global Conference in Beverly Hills, California, Peng Zhao said: “I am personally very optimistic with the current AI revolution that we’re facing . . . liberated from the repetitive, mental labouring aspect of what we have to do as humans, that allows humans to focus upon the highest-value portion of planning.”
CORPORATE
World Bank launches more robust business climate rankings
The World Bank has announced a new methodology for assessing the business climate in up to 180 countries. Embarrassing reports of data irregularities and favoritism toward China forced the bank to cancel the 'Doing Business' rankings two years ago. "Business Ready improves upon and replaces the World Bank Group's earlier Doing Business project. It reflects a more balanced and transparent approach toward evaluating a country's business and investment climate," the World Bank said in a statement. "The main thing that went wrong was the data integrity of Doing Business was compromised," Norman Loayza, director of the World Bank's Indicators Group, which leads the project, told Reuters. "The main point for us is that we need to ensure data integrity and we have a very comprehensive approach to do that." World Bank Chief Economist Indermit Gill said the new approach enabled "a fuller and sharper measure of the investment climate of countries — something that is badly needed in a global economy in the midst of a generalized slowdown.”
MANAGEMENT
Watches of Switzerland CFO to step down
Watches of Switzerland has announced that Bill Floydd will stand down as chief financial officer on May 12th and will be succeeded by Anders Romberg, who previously served in the role for the group from 2014 to 2021. 
ECONOMY
France's finance minister to discuss food inflation with retailers
Bruno Le Maire, France's Finance Minister, has announced meetings with retailers and suppliers next week to discuss ways of addressing the food price inflation "spiral" by autumn. French food retailers and their suppliers agreed a 10% average increase in prices in annual negotiations in March, which both sides said was necessary to cover higher production costs. Le Maire has since repeatedly called on both sides to reopen negotiations to ensure that a recent fall in global wholesale food prices is passed on to consumers. France's headline inflation rate rose to 5.9% in April from 5.7% in March. The French inflation level stood at 6.9%, as measured by a European Union-harmonised consumer price index.
ECB to raise interest rates for a seventh time
The European Central Bank will today raise interest rates for the seventh meeting in a row. A 25 basis point move, a slowdown after three straight 50 basis point hikes, appears the most likely outcome, as the central bank battles to get inflation down. Markets see an 80% chance of a 25 basis point move while the vast majority of economists polled by Reuters were also betting on the smaller hike.
INTERNATIONAL
Iran uses security cameras to deter unveiled women
Iran’s rulers are adopting less obtrusive tactics to punish women who refuse to wear the obligatory Islamic hijab. The new methods, which include the use of security cameras and denial of state services to violators, were introduced following nationwide anti-government protests last year, and replace the morality police whose actions precipitated months of unrest. But Reuters notes that the measures have yet to make much headway against opposition to the hijab. "We are not scared of the regime's threats. We want freedom . . . This path will continue until we regain our country from the clerics," said Maryam, a high school girl in Iran's western Kermanshah city, adding "What is the worst case scenario if I walk in the street without hijab? Arrest? I don't care."
US to end COVID-19 vaccination requirements for international travelers and federal workers
The United States is to end its COVID-19 vaccination requirements for international travelers and federal workers on May 11, one of the few remaining pandemic travel restrictions still in place. The Homeland Security Department also said that starting May 12 it will no longer require non-US travelers entering the United States via land ports of entry and ferries to be vaccinated against COVID-19 and provide proof of vaccination upon request.
Japan pledges to have more women in boardroom roles
Japanese prime minister Fumio Kishida says he wants almost a third of executive positions at the country’s top companies to be occupied by women by the end of the decade. Mr Kishida said: “We seek to have the ratio of women among executives at 30% or more by 2030 in companies that are listed on the Tokyo stock exchange’s prime market.”
OTHER
Lidl trials electric labels
Lidl is trialling electronic shelf labels nationwide in the UK in a bid to reduce the need for employees to manually change prices in stores. The electronic shelf labels have been introduced in around 30 of the budget supermarket's branches. Lidl says this will improve efficiency by allowing staff to focus on other tasks, with the electronic shelf labels also being more environmentally friendly as they save paper. Aldi has also been trialling electronic shelf labels in a number of stores since 2021. 
 


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