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European Edition
6th September 2024
 
THE HOT STORY
VW says less time for turnaround amid clash with workers over cuts
Volkswagen's finance chief, Arno Antlitz, has warned that the core VW brand has "one, maybe two" years to implement significant cost reductions, including potential plant closures in Germany, if the brand is to survive the shift to electric cars. During a meeting with 16,000 workers, he highlighted a shortfall of about 500,000 cars, equivalent to two plants, due to a shrinking market post-pandemic. Works Council chief Daniela Cavallo expressed that management had "massively damaged trust" and urged CEO Oliver Blume to prioritise job security over costly software partnerships. Amidst rising economic challenges in Germany, Labour Minister Hubertus Heil emphasised the need for the company to secure employment while the government considers tax reductions to stimulate demand for electric vehicles. Volkswagen aims for a 6.5% profit margin by 2026, up from 2.3% in the first half of this year, but faces pressure from unions to address plant closure threats before wage negotiations in October.
WORKFORCE
Companies battle attitude and expectation issues with Gen Z
Research findings by HR platform HiBob indicate that 70% of managers believe companies struggle to manage young employees, particularly Gen Z (18-24 years old). Key challenges cited include demands for work-life balance (62%), salary (58%), and benefits (44%). When they were asked who should deal with issues originating with younger colleagues, 40% of managers said HR. An analysis of FTSE 100 companies found that of the 80 which published their leadership team on their corporate website, less than half (40%) had a HR director at all, and just 31% had a Chief People Officer or equivalent. Half (48%) of the respondents thought that a lack of HR representation at C-level is due to a commonly held belief that HR is a support rather than a strategy function. Toby Hough, Director of People and Culture at HiBob, said: “The role of HR leaders in organisations has been undervalued for a long time, as the C-Suite focused on business-critical issues that didn't used to involve employee wellbeing or demographic societal shifts. Today's research clearly identifies Gen Z as one of leadership teams' biggest challenges. That said, each generation brings their own unique set of challenges and opportunities to the workplace and the HR function is critical to getting the best out of all generations. To maximise their potential in today's intergenerational workplace, UK businesses must appoint HR leaders to the C-suite.” Meanwhile, almost all (95%) respondents think it’s important for companies to have HR representation on the executive team. And almost three-quarters (73%) believe HR should have a strong influence on company strategy.
Workers see dramatic fall in share of global income
The International Labour Organisation (ILO) has reported a significant decline in the global labour income share, which has fallen by 1.6% since 2004. This decrease translates to an annual shortfall of $2.4 trn in 2024 compared to what workers would have earned if the share had remained stable. Celeste Drake, the ILO's deputy director-general, said: "Countries must take action to counter the risk of declining labour income share," and emphasised the need for equitable economic policies. The ILO's report highlights that technological advances, particularly automation and the rise of artificial intelligence, are key factors contributing to the decline. Currently, workers earn only 52.3% of global income, while capital income continues to concentrate among the wealthiest. The ILO also noted the persistent issue of youth unemployment, with a NEET (not in employment, education, or training) rate of 20.4%, and a significant gender gap in this statistic.
LEGAL
Work from the office request was not harassment, UK tribunal rules
A UK employment tribunal has ruled that a firm which asked its remote-working legal secretary if she could come into the office did not constitute harassment. Employment Judge O Segal KC said that RBG Legal acted reasonably in exploring the possibility of Yolanda Pemberton working two days a week from the office, despite her rheumatoid arthritis. The tribunal noted that Pemberton had been supported with a bespoke chair, light-touch keyboard, and adjusted working hours. It was found that Pemberton was never required to return to the office and that her complaints regarding the firm's support were "clearly wrong." The judge concluded that the firm had made significant efforts to accommodate Pemberton's needs over three years, saying, "without hesitation," that it had tried to support her as best it could.
HEALTH & WELLBEING
'Eavesdropping' workplace helpline has accreditation suspended
The UK’s biggest provider of workplace mental health services has had its counselling service accreditation suspended by an industry body following a BBC investigation. The British Association for Counselling and Psychotherapy (BACP) confirmed it was investigating Health Assured after the BBC shared information that “suggested potential serious breaches” of its ethical framework. In July, the BBC revealed Health Assured allowed strangers to "eavesdrop" on confidential calls by listening in to the helpline without the knowledge or permission of callers. Health Assured told the BBC it welcomed the BACP investigation and looked forward to demonstrating its “compliance with all industry standards.” Employee Assistance Programme services (EAPs) are intended to help employees deal with personal problems that might impact their wellbeing and performance at work. Health Assured provides EAP services - including a helpline and short-term counselling - to 13 million workers across the UK and Ireland.
WORKPLACE
The show that exposes the world’s worst workplaces
The Guardian's Polly Toynbee reports on The Hard Graft: Work, Health and Rights exhibition at the Wellcome Collection in London. Curated by Cindy Sissokho, various artworks address themes of oppression, resistance, and the undervaluation of workers, with a focus on women and domestic labour. Toynbee writes: "There is no better time [for this exhibition] than now, as the new [UK] government’s plans for working rights come under attack from the right for abolishing worst practices – zero hours, fire and rehire – and giving unions new powers to recruit and organise. Most contentious is the “right to disconnect”, to turn off employers’ constant demands outside working hours. That carries a deep significance, of freedom from an overseer’s expectation of perma-available, all-hours servitude. Send any recalcitrant bosses here to contemplate how they use their great power over their workers’ lives."  Hard Graft: Work, Health and Rights is at the Wellcome Centre, London, 19 September to 27 April; admission free.
TAX
Shakira says she was 'publicly burned at the stake' over taxes
Shakira has accused the Spanish Treasury of “publicly burning her at the stake” in a fierce response to her tax fraud case. The Colombian singer confessed to six tax fraud crimes last November, resulting in a suspended three-year prison sentence and a €7.3m fine. In a letter to El Mundo, she claimed the Spanish Tax Agency's actions were a sexist intimidation campaign, stating: “Things are not solved by burning a public figure every year at the stake.” Shakira argued that her financial struggles during her time in Spain were misrepresented, asserting: “I paid much more than I should have.” The prosecution had sought an eight-year jail term and a €23.7m fine, alleging she was a tax resident in Spain from 2012 to 2014.
Swedish government promises tax cuts for workers and pensioners next year
Sweden's government has unveiled plans to reduce income tax next year, alongside cuts to taxes on pensions and investment savings accounts (ISK). Finance Minister Elisabeth Svantesson announced the changes during a press conference. The initiative is expected to stimulate economic growth and enhance the financial well-being of the population.
RETENTION
KLM wants part-time pilots to fly more as shortage threatens to ground part of fleet
KLM is facing a significant pilot shortage that could ground part of its fleet by 2027, according to Eimerd Bult, head of KLM's flight service. Despite having more pilots than ever, the airline is struggling due to increased sick leave and part-time work, losing around 50 full-time jobs annually. Bult said: “We are not fully utilising the capacity of our long-distance flights while we earn the most from them.” The situation is exacerbated by detours around Russia, necessitating more pilots per flight. KLM is negotiating with the pilots' union VNV to encourage pilots to take on more long-distance flights, but VNV chairman Camiel Verhagen emphasised that while they agree on the need for more pilots, “getting well-trained pilots in the right place takes time.” The airline's new €10bn Airbus fleet is also at risk if the pilot shortage is not addressed.
INTERNATIONAL
Molson Coors joins Lowe's, Ford in DEI retreat
Molson Coors is cutting back some of its corporate diversity efforts, joining a corporate retreat that includes Lowe's and Ford, and hastened by an anti-DEI social media campaign driven by conservative activist Robby Starbuck. The brewer said it would no longer participate in a scoring system by the Human Rights Campaign, an advocacy group that gives scores to companies based on LGBTQ+ inclusion in their workplaces.  In addition, Molson Coors said it would no longer have supplier-diversity goals, which typically aim to buy supplies from companies owned by minorities or women. Molson Coors’s human resources team has been working on changing its culture since March to evolve from “our work focused on DEI to a broader view in which all our employees know they are welcome,” the company said in an email to staff. It added: “The driving force behind this shift was the understanding that when all our people know they are welcome, they are more engaged, motivated and committed to our company’s collective success."
New foundation will support families of workers killed in industrial accidents
HD Hyundai has established the HD Hyundai HeeMang Foundation, the first of its kind in Korea, to support families of workers killed in industrial accidents at shipyards. Proposed by Chairman Kwon Oh-gap, the foundation aims to fulfil the conglomerate's social responsibilities. Approved by the Ministry of Employment and Labor, the foundation's inaugural chairman is Lee Ki-kwon, a former labour minister. Kwon donated 100m won ($74,687) and serves as honorary chairman. The foundation will initially provide scholarships for victims' children and plans to expand support to cover living expenses, medical, and legal costs. “We will make every effort and provide full support to help alleviate even a small portion of the grief experienced by the families of the deceased,” Lee stated. The initiative follows HD Hyundai's establishment of the HD Hyundai 1% Nanum Foundation in 2011, which supports various charitable causes.
OTHER
Sweden to abolish a net zero tax on flying
Sweden is to scrap aviation tax from July 2025 in a bid to reduce the cost of travel and stimulate business activity. The decision to axe the flight tax is part of Stockholm’s 2025 budget bill. Energy and business minister Ebba Busch said: “It is very important for large parts of Swedish enterprise to keep domestic airports, and a minority of European Union countries have aviation taxes, which makes it a competitive disadvantage.”
 


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