11.24.20

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Massive Collective Action Begins at the European Patent Office Today, Demanding Change and Forewarning the Management (Litigation)

Posted in Europe, Finance, Patents at 9:57 am by Dr. Roy Schestowitz

Financial Stock

Chasing The MarketsSummary: The financial "hoax" at the EPO (taking away money from staff to feed a gambling addiction of managers) needs to stop; staff has begun mass-mailing the management, threatening legal action

THE EPO is trying to distract the public from a crisis long brewing at the Office. António Campinos has lower trust/approval rates than CEIPI‘s Benoît Battistelli (Campinos also came from CEIPI) and there are legal actions on the way (EPO staff against the EPO). Several weeks ago we learned that some European publishers had been studying EPO affairs; knowing and seeing some letters, however, we know that the Mafia which runs the EPO will resort to blackmail and bribes to prevent negative publicity. Will that succeed?

“The European citizens definitely deserve to know what’s being done in their name.”Regardless of whether or not mainstream media writes about EPO corruption, we have enough material that we can publish here to show the public some internal EPO affairs. The European citizens definitely deserve to know what’s being done in their name. Sometimes with their money, too…

This morning SUEPO circulated among staff a Central Staff Committee publication bearing the following message (“TH/MN” means The Hague/Munich, where well over 90% of staff is based):

General assemblies of staff TH/MN: E-mailing your feelings to the President

Dear colleagues,

We thank you very much you for the high participation of the general assemblies held in Munich and The Hague on Thursday. We feel a momentum among staff, the feeling of enough is enough. We have suffered from many reforms that have had a cumulative detrimental effect, without any credible justification, the most recent of which being the implementation of the new salary adjustment procedure (SAP).

In both assemblies, we call on you to make your views known by sending an email to the President and VP4, preferably adding in cc your local staff committee to keep your staff reps updated. A number of colleagues have already done so, and the depth of feeling portrayed in those emails has left a strong impression on us, hopefully also on the President, and we sincerely thank you for your actions. We received requests during the general assemblies to draft a template for the email.

In this publication, we provide an example of an email as well as a short list of questions as inspiration to put your thoughts into writing.

We appreciate that colleagues have varying views on the best action to take to express our discontent, but we hope that a significant proportion of you are on-board to help demonstrate the frustration felt with a flood of emails. We further want to express that this collective action, to evidence that we are not at all happy with the outcome of the SAP, is just the beginning.

Sincerely yours,

The Central Staff Committee – CSC

The corresponding letter is dated yesterday and it says this: “We have suffered from many reforms that have had a cumulative detrimental effect, without any credible justification, the most recent of which being the implementation of the new salary adjustment procedure (SAP).”

Here’s the full text:

Munich,23.11.2020
sc20174cp

E-mailing your feelings to the President

Dear colleagues,

We thank you very much you for the high participation of the general assemblies held in Munich and The Hague on Thursday. We feel a momentum among staff, the feeling of enough is enough. We have suffered from many reforms that have had a cumulative detrimental effect, without any credible justification, the most recent of which being the implementation of the new salary adjustment procedure (SAP). The outcome of the latter can be found in this CSC publication.

During both assemblies, we informed you that in the meeting of the CSC with the President on Wednesday, the President stated that he did not believe that staff were furious about the outcome of the SAP, and therefore he did not have any incentive to change it. So now we call on you to make your views known by sending an email to president@epo.org and vp4office@epo.org, preferably adding in cc DHSTCOM@epo.org / MNSTCOM@epo.org / berlinstcomm@epo.org / pvwien@epo.org to keep your staff reps updated. A number of colleagues have already done so, and the depth of feeling portrayed in those emails has left a strong impression on us, hopefully also on the President, and we sincerely thank you for your actions.

We received requests during the general assemblies to draft a template for the email. Here we provide an example:

Dear Mr Campinos, dear Ms Simon,

I was informed during the General Assembly held by our Staff Representation of the first impact that our new SAP will have on my salary progression. I would like hereby to express my discontent and disappointment regarding the new SAP, which to my knowledge is shared by many colleagues.

Such a salary adjustment does not meet my legitimate expectations that my remuneration, at the very least, keeps up with the living costs at my place of employment and maintains equality of treatment. This measure comes on top of past measures that have also breached my legitimate expectations. I can only hope that you will take staff’s concerns into consideration.

Unfortunately, if the SAP is applied as is currently foreseen, I see no other option than to seek legal remedy, beginning with a Request for Review.

Finally, I urge you to discuss reasonable remedies for the SAP with the Staff Representation.

With kind regards,

However, we feel that the impact of writing to the President is significantly stronger if colleagues put their views into their own words. Therefore, in order to assist you with drafting your personal emails, or with adding extra information to the template above, we provide a short list of questions as inspiration to put your thoughts into writing.

• How do you feel about this year’s salary adjustment being lower than local inflation (–1.2% in NL, –0.3% in DE, –0.7% in AT)? Particularly when considering that despite the pandemic, the Office surplus for 2020 is estimated to be €310m and the number of filings as of Q3 have not reduced with respect to last year.
• The effect of the new SAP this year is equivalent to losing approximately 1 step, and if a similar result were to materialise in the next two rounds, it would amount to a loss of around 10% of your salary in only three years, when compared to the old SAP. Does that influence your work mentality?
• Are you concerned about the influence of the SAP on the amount of our monthly pensions, which is particularly pertinent for those at the beginning of their careers and those in the NPS who already have a very limited maximum monthly amount?
• Have the other recent reforms, proposals, and changes influenced your view of the EPO as an employer? (e.g. the new career system, restructuring of the formalities teams, automatisation of your tasks, constant changes in your working tools, the education and childcare reform proposal, introduction of fixed-term contracts for all newcomers, changes to the SSP contributions and the 16:1 distribution of SSP cash injections, ever-increasing targets/workload)
• How do you perceive the social dialogue between staff representation and the administration? Do you feel your elected staff committees are being listen to by management?

We appreciate that colleagues have varying views on the best action to take to express our discontent, but we hope that a significant proportion of you are on-board to help demonstrate the frustration felt with a flood of emails. We further want to express that this collective action, to evidence that we are not at all happy with the outcome of the SAP, is just the beginning.

Sincerely yours,

The Central Staff Committee

Notice how they put it at the end: “We appreciate that colleagues have varying views on the best action to take to express our discontent, but we hope that a significant proportion of you are on-board to help demonstrate the frustration felt with a flood of emails. We further want to express that this collective action, to evidence that we are not at all happy with the outcome of the SAP, is just the beginning.”

A lot of readers of ours might not be familiar with the basis for these grievances (there are several angles/aspects to these, not purely financial). Earlier this month two publications were disseminated to explain what the Office was doing with SAP (not the company), in effect lying to staff and to member states in order to pillage and plunder at the cost of — or expense to Europeans to the tune of — billions of euros. As a bonus, there’s a link to the far right (Mercer family, boosters of racist sites and Donald Trump propaganda outlets).

Exactly one week ago the following open letter (open for staff to see) was sent to Campinos regarding the “Salary “Adjustment” Procedure” (they put scare quotes around the misleading euphemism) for 2020. “Three proposals for repairing the EPO new salary “adjustment” procedure” were put forth, saying they were “looking forward to a positive sign from the President (and his Administration) regarding our proposals.”

Of course nothing has happened since.

“In this open letter to the President,” they said, “we propose three concrete measures.”

“The new SAP is currently a disaster in terms of equality of purchasing power and parallelism with the evolution of the salaries of national civil servants.”

Going back to the first letter, the representatives “feel a momentum among staff, the feeling of enough is enough.”

This is the reason for the escalation. The latest letter to Campinos reads as follows:

Reference: sc20172cl
Date: 17.11.2020

Mr António Campinos
President of the EPO

ISAR – R.1081

OPEN LETTER

Proposals for repairing the EPO new salary “adjustment” procedure

Dear Mr President,

The new salary adjustment procedure is cutting EPO staff salaries and pensions massively. Instead of an adjustment of about 3.8 % in July 2020, the newly introduced “sustainability clause” will cap it at 0.5% in January (in The Netherlands and in Germany). Such savings go way beyond the forecasts and are hitting staff unnecessarily.

Regarding the forecasts, the draft budget for 2021 (CA/50/20)1 mentions an adjustment of 2.2% from the year 2021 onwards delivering EUR 2bn savings until 2038. The Advisory Group on Remuneration has argued (GCC/DOC 17/20)2 that by the end of 2025 already EUR 1bn will have been saved. This assessment seems to be very conservative. The adjustment in 2021 of 0.5% instead of 3.8% will already contribute EUR 0.95 bn to the savings that will be made until the end of 2025.

Moreover, the operating surplus of the EPO is predicted to reach EUR 310m by the end of 2020. EPO staff should have been thanked for their efforts during the on-going pandemic, since they were the ones who maintained business continuity and who even made possible that +6% European patents were published compared to the plan. Unfortunately, the administration already anticipates that there will be no adjustment at all for next year due to the application of the exception clause.

The situation is unsustainable for EPO staff (and pensioners). The new salary adjustment procedure must now be repaired together with proper transitional measures. This adds on top with the proper settlement of the previous procedure to reduce litigations.

_____
1 See pages 4, 9, 67 and 168.
2 See paragraph 58.


We propose the following measures:

1. Winding up the previous salary adjustment procedure: Settlement of the moderation clause effect

The moderation clause introduced by your predecessor in the previous salary adjustment procedure has resulted in delayed adjustments negatively affecting a number of countries. A measure is foreseen in Article 1(2) of CA/D 4/20 but its implementation is still pending and is in our view incomplete. Simply paying out lump sums cannot solve litigation.

We suggest:
• To adjust the scales of all countries affected by the moderation clause during the period 2014-2019 (e.g. The Netherlands, Sweden etc) and update all scales from 1 July 2019;
• To pay the respective contributions into the pension schemes of active staff.

The positive effects would be as follows:
• Such contributions into the New Pension Scheme and the SSP would be for instance of particular benefit for staff in the lower grades.
• Updating all scales with effect from 1 July 2019 would allow solving the problem of the Luxemburg scale which will otherwise be hit hard by the recently introduced sustainability clause in the new method.

2. Transitional measures: Adapting the scales as a compensation for postponing the adjustment from July to January

Article 9(2) of CA/D 4/20 effects a six-month transition from the previous salary adjustment procedure to the new one. However, it remains unclear which procedure will be applied over this period and how it will be implemented. Merely paying out lump sums might trigger further litigation.

We suggest:
• To apply the result of the new salary adjustment procedure (i.e. 0.50% in The Netherlands and Germany) on the salary scales as from 1 July 2020.
• To pay out a lump sum of the remainder of the same period (e.g. 3.28% for Germany and 3.3% for The Netherlands).


The positive effect would be that the adjusted scales would lag less behind the real economic evolution. Please note that adjusting the scales to compensate for the six-month delay in adjustments is the solution which was implemented by the Co-ordinated organisations when they introduced the same change in the past. At the EPO the cumulative adjustments on 1 July 2020 and 1 January 2021 would then amount to 1% which would remain far below the real result of the procedure (3.8%). It would require a specific proposal to the Administrative Council. In budgetary terms the normal adjustment of the scales would still be cut by 70% instead of being cut by 85%.

3. Amendments to the new salary adjustment procedure

The results of the new salary adjustment procedure for the year 2020 have now been confirmed: salaries will be adjusted on 1 January 2021 less than inflation meaning that staff (and pensioners) will lose purchasing power. This contradict the Office’s promise made in your Communiqué of 9 April 2020. The most obvious pitfalls must be corrected.

We suggest:

• To propose to the Administrative Council the necessary amendments to Article 18 of CA/D 4/20 to implement the measures as described in points 1 and 2 above;
• To amend as well the implementation of the carry-forward mechanism of Article 10 of the Implementing Rule for Article 64 ServRegs in such a way that any positive adjustment remaining from Article 9 (“sustainability clause”) accumulated every year shall be used to adjust the salary and pension scales accordingly after 3 years (mid-term review of the SAP).

The positive effect would be that the scales are at least adjusted to the real economic evolution in the middle of the application period of the salary adjustment procedure. In view of the fact that the exception clause will be triggered next year, there is no risk that the EPO would lose control over the evolution of the salary mass in that period.

Whilst still allowing huge savings for the Organisation this further proposal would re-establish purchasing power equality after three years and also be more in line with what is in force in the EU institutions, for which the negative GDP evolution this year is triggering only a postponement of the 2.5% part of the adjustment corresponding to the specific indicator and their scales will be fully updated when the GDP has recovered.


4. Application of the exception clause – amendment to GCC/DOC 7/2020 (interpretation of the interaction between Articles 9 and 11 of the new procedure)

The application of the “sustainability clause” (Article 9) for the year 2020 causes an excess adjustment which is not applied in January 2021 (GCC/DOC 7/2020, paragraph 24: +3.3% for Germany, +3.3% for the Netherlands, +2.4% for Austria and +1.6 % for Belgium).

However, document GCC/DOC 7/2020 (paragraph 27) states:

“According to the latest real GDP 2020 forecast available as of 31 October 2020, it is probable that the exception clause may (Article 11) be triggered next year, for the threshold below -3%. If so, no salary adjustment would apply for 2021. (emphasis added)

In our view, this statement does not reflect correctly Article 11(1) which
provides that:

“The delayed adjustment shall not be taken into account for the purpose of Article 9 above.”

Our interpretation is that whichever adjustment foreseen for next year will be delayed (Article 11) except for the part that would have been integrated next year in application of Article 9. In legal terms, the provisions of the sustainability clause shall not be cancelled by the application of the exception clause.

We therefore suggest that the document is amended as follows:

“According to the latest real GDP 2020 forecast available as of 31 October 2020, it is probable that the exception clause may be triggered next year, for the threshold below -3%. If so, the only adjustment of the salaries taking place from 1 January 2022 will be due to the application of Article 9(4) up to the ceiling provided in Article 9(2). Any adjustment resulting from Article 2 to 4 in the reference period from 1 July 2020 to 30 June 2021 will be postponed in accordance with Article 11.


Conclusion

The new salary adjustment procedure is currently a disaster in terms of equality of purchasing power and parallelism with the evolution of the salaries of national civil servants. Furthermore, the results of the SAP are producing savings well in excess of the EUR 2bn envisaged.

As a duty of care of the Organisation not to harm staff if this is not financially justified, we are looking forward to a positive sign from your administration regarding our proposals.

Yours sincerely,

Alain Dumont
Chairman of the Central Staff Committee

Several days earlier a fact sheet was passed around to explain the SAP scam, accompanied by this message:

Salary “adjustment” procedure for 2020: Loss of purchasing power for all staff (and pensioners)

Instead of an adjustment of about 3.8% in July 2020, we get 0.5% in January 2021 (in NL and DE). This is equivalent to a pay cut of about one step.

Each year the salaries at International Organisations (IOs) are adjusted according to a salary adjustment procedure (SAP). The same applied so far at the EPO with a procedure respecting two fundamental principles: equality of purchasing power among the places of employment and parallelism with the evolution of the salaries of civil servants in member states.

Based on the flawed Financial Study of 2019 by Oliver Wyman & Mercer, Mr Campinos has decided to push a “sustainability clause” – in form of a capping mechanism – on the SAP at the EPO and to ignore the warnings of the Staff Representation that this capping mechanism would abolish both principles and apply arbitrarily.

The results for the year 2020 are disastrous: salaries will be adjusted on 1 January 2021 less than inflation meaning that staff (and pensioners) will lose purchasing power.

In conclusion, EPO staff (and pensioners) no longer have a salary adjustment procedure worth the name, but rather an arbitrary mechanism for cutting their purchasing power. This is unheard-of in other International Organisations. Massive appeals will have to be lodged against this year’s adjustment and again next year.

The sheet had some tables in it. We’ve converted these to HTML but left out colour:

Munich 12.11.2020
sc20171cp – 0.2.1- 4.2.2

Salary “adjustment” procedure for 2020 Loss of purchasing power for all staff:

Instead of an adjustment of about 3.8% in July 2020, we get 0.5% in January 2021 (in NL and DE). This is equivalent to a pay cut of about one step.

Each year the salaries at International Organisations (IOs) are adjusted according to a salary adjustment procedure (SAP). The same applied so far at the EPO with a procedure respecting two fundamental principles: equality of purchasing power among the places of employment and parallelism with the evolution of the salaries of civil servants in member states. Based on the flawed Financial Study of 2019 by Oliver Wyman & Mercer1, Mr Campinos has decided to push a “sustainability clause” – in form of a capping mechanism – on the SAP at the EPO, and to ignore the warnings of the Staff Representation that this capping mechanism would abolish both principles and apply arbitrarily. The results for the year 2020 are disastrous: salaries will be adjusted on 1 January 2021 less than inflation meaning that staff (and pensioners) will lose purchasing power.

Mr Campinos’ promise…
In his communiqué of 09-04-2020, Mr Campinos stated that (emphasis added):

“There is no desire to cut staff purchasing power or impose unnecessary savings. There is a desire, however, to make sure that we have a stable and predictable method that generates savings, ensures salaries continue to grow, even above eurozone inflation and even in times of financial crisis, and, above all, make sure we can do so for many years into the future.“

… vs. the facts
The results of the new method before capping and after capping reveal an impressive reduction of the salary “adjustment” as of 01-07-2020.

Country Calculated adjustment Capped adjustment Difference
AT 2,73% 0,36% -2,37%
BE 1,80% 0,24% -1,56%
DE 3,78% 0,50% -3,28%
NL 3,81% 0,50% -3,30%

______
1 See the selected analysis by Ernst & Young of the 2019 Financial Study and its background.


Overall, our salary adjustments are reduced by -86% because of the capping mechanism. Contrary to the President’s words “not to cut staff purchasing power” and “to ensure salaries continuing to grow”, the results also show clearly a huge loss of purchasing power in The Hague, Vienna, Berlin and Munich.

Country Inflation (HICP2) Capped adjustment Difference
AT 1,10% 0,36% -0,74%
BE 0,20% 0,24% +0,04%
DE 0,80% 0,50% -0,30%
NL 1,70% 0,50% -1,20%

Whichever reference one takes (cost of living evolution measured by parities or by reference to national inflation) the results in the above tables show the arbitrariness of the method introduced under the governance of Mr Campinos.

Losses are higher where the evolution of the cost of living is higher, which is contrary to what a salary adjustment method should result in. One could illustrate it even better with reference to some pensioner scales, like the Turkish scale which should have been adapted by 14,86% but will be adapted by 1,97%. This means a loss of purchasing power of 12,89% in one year, due to arbitrariness. The same applies for Luxemburg (-15,67% this year), which scale should have been corrected as in the Coordinated Organisations but will not be. One can expect lots of unhappy staff and pensioners every year as this arbitrariness will hit randomly year after year.

The operating surplus of the EPO is predicted to reach €310million by the end of 2020. This achievement was made possible thanks to the dedication of staff who worked hard despite the on-going pandemic.

EPO staff should have been thanked for their efforts, since business continuity could be maintained and even +6% published European patents than planned have been produced. Staff certainly does not deserve a massive cut in purchasing power. The benchmark with other IOs for 2020 shows that EPO staff will have the worst salary “adjustment” in 2020. The administration has tried to argue away any criticism of the capping method by claiming that the carry-over mechanism is a fix-all solution. However, as will be laid-out in a future publication, the cash pay-out associated with the carry-over is just a cheap attempt to pacify our discontent, and we will not be fooled by such a transparent effort to throw sand in our eyes.

For 2021, the administration already anticipates that there will be no adjustment at all due to the application of the exception clause, another limiting mechanism in the salary adjustment procedure of the EPO which is very likely to kick in next year due to the drop in Gross Domestic Product this year.

EPO staff (and pensioners) no longer have a salary adjustment procedure worth the name, but rather an arbitrary mechanism for cutting their purchasing power. This is unheard-of in other International Organisations. Massive appeals will have to be lodged against this year’s adjustment and again next year.

______
2 HICP = Harmonised Index of Consumer Prices

We look forward to the next steps, seeing that there’s a boiling point being reached. The representatives say “the feeling of enough is enough” is consistent (across workers). We’re back to 2015. Will representatives be subjected to more threats? Will union-busting activities resume (in their previous levels)? A dysfunctional patent office is a real threat to the economy; the examiners want to rectify things and avoid collapse.

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