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Evolution and Diverse Dimensions of Corporate Social Responsibility

The EU law on sex discrimination in the workplace is provided in the Directive 2006/54/EC on the Implementation of the Principle of Equal Opportunities and Equal Treatment of Men and Women in Matters of Employment And Occupation also called as the ‘Recast Directive’. Article 4 of the Recast Directive provides that direct and indirect discrimination on grounds of sex with regard to all aspects and conditions of remuneration are to be eliminated and that any job classification system used for determining pay, is to be based on the same criteria for both men and women. In this situation, as Caroline comes in the NHS Pay Band D as per the classification on par for contract administrators and medical devices technicians, Article 4 is applicable where there is a disparity between contract administrators and medical devices technicians with reference to aspects and conditions of remuneration. The EU law provides that women employees should be paid equally for the work of the same value as their male employees (Macarthys Ltd v Smith (1980) ICR 672, 1980). This leads to the necessity for comparable situations or job descriptions, which will be discussed further later. Furthermore, Article 157 (1) TFEU bars both direct and indirect gender based discrimination in the work place and Article 157 (1) defines pay as including any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment.

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The justification taken by the manager is that as medical devices are more sophisticated, it was more important for medical devices technicians to keep their skills up to date than for contract administrators. However, as the medical equipment manufacturer is conducting similar courses for contract administrators, the question arises whether the manager’s justification is in accordance with the EU law. The reason may be justified if despite being in the same pay band, the two jobs are not comparable. As per the Recast Directive Para 9, whether workers are performing the same work or work of equal value, is to be determined on the basis of a range of factors including the nature of the work and training and working conditions. In other words, classification of employees in the same job category is not in itself adequate to conclude that the employees are involved in providing work of equal value to the employer (Susanna Brunnhofer v Bank der österreichischen Postsparkasse AG, 2001). In this case, as the jobs of the contract administrators and the medical devices technicians are not the same, although they are both placed in the same pay band, it can be argued by the employer that the two sets of employees are not involved in work of equal value. On the other hand, it has been held that difference between male and female employees in terms of pay parity can be established where compensation is paid for attendance of trainings and seminars (Arbeiterwohlfahrt der Stadt Berlin e.V. v Monika Bötel, 1992). In other words, disparity in compensation paid for training programmes can be considered to be sex discrimination. This would allow Caroline to make a case against the employer under the EU law. To conclude, Caroline may bring a claim against her employer on the basis of the EU law contained in the Recast Directive and Article 157 of the TFEU.

The preliminary ruling procedure is provided in Article 267 to facilitate the interaction of the national courts with the CJEU. Under Article 267, depending upon the criterion satisfied, the national court may be required to make a preliminary reference to the CJ reference. Article 267 therefore provides both mandatory and permissive jurisdiction. The doctrines of direct effect and supremacy are applied for preliminary ruling procedure. As per the permissive jurisdiction under Article 267 (2), any national court or tribunal may make the reference to the CJEU if it feels such reference is necessary to enable it to give judgment, where the case involves a question relating to the EU law relating to which there is a doubt as to the meaning or scope (Rheinmuhlen-Dusseldorf Case C-166/73; Peterbroeck, Van Campenhout & CeSCS v. Belgium, Case C-312/93). In this situation as the EAT is in some doubt related to the extent to which EU Law on sex discrimination applies to training courses, it may make use of the preliminary reference under Article 267 (2) to make the reference to the CJEU. However, this is a matter of discretion for the EAT. The EAT cannot be said to have a binding obligation to make this reference because the mandatory jurisdiction under Article 267 (3) is applicable only where a question on EU law interpretation is raised before a national court or tribunal against whose decision there is no appeal under the national law. This is not the case at present because there is a right of appeal from the EAT to the Court of Appeal. Therefore, as the EAT is not the final tribunal or court of appeal in the matter, mandatory jurisdiction under Article 267 (3) is not applicable to it while permissive jurisdiction under Article 267 (2) is applicable. Considering that the EAT has discretion to refer the question to the CJEU, it should exercise it under Article 267 (2) and make the preliminary reference. This is because the question that has come before the EAT is not irrelevant (Da Costa (1963) C-30/62) and the EAT is already in some doubt as to the EU provisions. In case of such doubt, the established good practice is to refer the matter to the CJEU (Peterbroeck, Van Campenhout & CeSCS v. Belgium). The purpose of Article 267 is to bring about uniformity and consistency of EU law, and any decisions of the national courts or tribunals that are not consistent with the EU law are liable to be taken to the CJEU. To conclude, the EAT has discretion to refer the matter to the CJEU under Article 267 of the TFEU. It can exercise this discretion to avoid conflict with EU law in its decision.

(i) Article 101 prohibits agreements or cartels between Member States that can have the effect of disrupting free competition within the internal market. Under Article 101 (1) ‘agreement’ can mean tacit collusion between companies (ICI v Commission); or concerted practices and decisions of associations. The CJEU has held that competition rules are “fundamental” rules of EU law and any agreements or decisions prohibited under Article 101 are to be automatically void (C-102/81, Nordsee Deutsche Hochseefischerei GmbH). The question is whether the agreement between McKenzie and Star to cooperate in improving the safety of high precision steel tools for the automotive industry following a number of injuries in car factories amounts to a breach of Article 101. For the purpose of the breach, it is not necessary that the parties to agreement will both be EU states; one party to the agreement may be an EU member state and the other a non-EU state (Gas Insulated Switchgear; Webb-Pomerene). Therefore, as far as the EU law is concerned, the agreement can come within the domain of Article 101 even if the other party to the agreement is an Indian company. However, as this agreement seeks to improve the safety of high precision steel tools for the automotive industry as a number of injuries in car factories have taken place, it is possible that this agreement will be excluded from the operation of Article 101 as per the exemption provided under Article 101 (3). In order to see if Article 101 is applicable to the present situation, a two part analysis is undertaken. First, whether the agreement is restrictive and will distort the market (Article 101 (1)) and second, even if so, does it come within the exemption under Article 101 (3). This exemption is applicable where the agreement is beneficial to the internal market and it improves production or distribution, or promotes technical or economic progress or allows consumers a fair share of the benefit. In this situation, the agreement is made for the purpose of improving safety in manufacturing. Therefore, the parties can claim that there is an improvement of efficiency through the agreement for which it is exempted from Article 101 (1).

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(ii) Article 101 is also applicable in case of price fixing. Article 101(2) provides that agreements that fix price would automatically be void as they would distort free competition within the internal market. Price-fixing agreements are considered to be restricting for competition. All price fixing agreements come within the domain of Article 101 (2) as held in IFTRA Rules for Producers of Glass Containers OJ. The courts in the EU have generally taken a prohibitive stance to price fixing agreements (Dresdner Bank v Commission; E.ON Ruhrgas v Commission). Agreements with respect to price fixing are generally considered to come within the definition of tacit collusion as the companies are engaged in a process whereby they decide to have shared economic interests and interdependence on price fixing that can have a distorted impact on the market. However, in this case, it is not agreement that is involved but conduct of the parties. In case of price fixing, what is also required is not just tacit collusion but also express collusion (ICI v Commission). In this situation, Star had emailed McKenzie’s marketing director that it was planning to raise its prices by 3% and McKenzie increased its prices by 3% at the same time as Star. This may not amount to express collusion. Concerted practices are not covered by Article 101 (2) so the fact that the two companies raised their prices simultaneously may not attract Article 101(2). It has been held in HFB Holding fürFernwärmetechnikBeteiligungsgesellschaft that Article 101 (2) is applicable only where a legal obligation is actually in issue. Thus, in the absence of an agreement, Article 101 (2) may not lead to the conduct of the parties being questionable. Therefore, although there appears to be some collusion between the parties, it is not adequate to attract Article 101(2) because the two parties have not entered into any agreement nor is there a legally binding obligation that applies in this case. Based on the principles studied here, there is no breach of Article 101 (2) by the two companies. In case of a breach, the European Commission can take action under Regulation 1/2003. This provides that the European Commission has the power to impose financial penalties on a company that may have breached Article 101 intentionally or negligently. The Regulation 1/2003 allows the Commission to fix a fine amount for the company in of up to 10% of its global turnover in the preceding business year under Article 23. The extent of the fine shall depend on the ‘gravity’ and the ‘duration’ of the infringement. Thus, companies with prior history of such conduct may be liable for a higher fine as compared to a company that has no prior history of such conduct. As the fines are not fixed in their upper limit, the Commission has the discretion to impose the fine after considering a range of applicable factors.


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