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Global Employment and Labor Law Update - July 2020

Welcome to this third edition of our quarterly Global Employment and Labor Law Update for 2020.

While the challenges of COVID-19 have dominated the global employment and labor law landscape for a number of months and continue to do so in many jurisdictions, businesses are starting to look beyond the pandemic and plan for the future. Our work across the globe and our insight into international developments allows us to identify consistent themes emerging to assist with that planning.

This quarter, in addition to ongoing COVID-19 developments, other emerging themes include enhanced legal protections for workers and developments in the area of equality.

We hope you find the practical information useful in managing your global employment challenges. Please do not hesitate to contact us if you wish to find out more.

Diane Gilhooley Diane Gilhooley
Global Head of Employment and Pensions
dianegilhooley@eversheds-sutherland.com

Asia Global Update Banner

South Africa

Subject Matter/Name of Development

The national minimum wage 

Summary The national minimum wage rates have been increased.
Impact Date

1 March 2020 onwards

Employer Implications/Action Needed

Employers are obliged to comply with the new national minimum wage rates and pay their employees accordingly, unless they qualify for an exemption. The new rates are as follows:

  • i. ordinary employees: R20.76 for each ordinary hour worked
  • ii. farm workers: R18.68 per hour
  • iii. domestic workers: R15.57 per hour
  • iv. workers employed on an expanded public work programe: R11.42 per hour
  • v. workers who have concluded learnership agreements under the Skills Development Act: entitled to allowances contained in schedule 2 of the Act.
Employer Risk

The names of employers who fail to comply with the national minimum wage rates will be published on the Department of Labor’s website, with consequent risk to reputation. Labor Inspectors can also obtain written undertakings from employers to pay the minimum wage or issue compliance orders, with the potential for arbitration awards.

Subject Matter/Name of Development Data privacy
Summary

The Protection of Personal Information Act (POPIA) was initially enacted in 2013 to give effect to the constitutional right to privacy. The sections of the POPIA in force have been limited until recently. The majority of the remainder of the POPIA came into force on 1 July 2020, regulating the processing of personal information, with a one-year grace period for compliance. Two remaining sections of the POPIA will come into force on 30 June 2021.

Impact Date

1 July 2020 onwards

Employer Implications/Action Needed

The POPIA imposes a number of conditions on employers to ensure the lawful processing of personal information, which includes information relating to identifiable, living natural people as well as applicable information relating to identifiable, existing juristic entities (e.g. companies). The POPIA includes a requirement for employers to ensure appropriate procedures for the collection, processing and distribution of personal information. Since employers can be held liable for the actions of employees that contravene the requirements, employers should ensure that the review of existing processes identifies any training needs to ensure employees understand the new requirements. A grace period for compliance of 12 months will apply.

Employer Risk

Failure to comply with the provisions of the POPIA could result in administrative fines of up to R10 million, imprisonment or civil liability.

Subject Matter/Name of Development

COVID-19 regulations

Summary

South Africa has implemented five levels of restrictions in relation to the COVID-19 pandemic. To this end, a large number of regulations and directions have been published, affecting all areas and industries, including social distancing and sanitary equipment measures.

Impact Date Ongoing
Employer Implications/Action Needed

All companies must take measures to maintain the health and safety of customers and employees within business premises, including certain social distancing measures and the provision of hand sanitizers. Further, employers must provide employees with a cloth face mask if they may come into direct contact with members of the public and adopt measures to promote the physical distancing of employees within the workplace, including enabling employees to work from home or minimizing the need for employees to be physically present at the workplace. In addition, employers must take special measures for vulnerable employees, such as those with known or disclosed health issues or comorbidities and employees above the age of 60 who are at a higher risk of complications or death if they are infected with COVID-19.

Employer Risk

Any person who fails to comply with or contravenes the regulations commits an offense and is, on conviction, liable to a fine and/or imprisonment. Liability can also be incurred by employers under health and safety legislation where an employer does or omits to do something which causes someone to be injured at the place of employment, including liability for culpable homicide in the event of the death of an employee.

Contact:

Sandro Milo
Partner
+27 834 4403 20
sandromilo@eversheds-sutherland.co.za

Africa Global Update Banner

China

Subject Matter/Name of Development COVID-19 and social security
Summary

A previous national notice, dated 20 February 2020, which temporarily exempted or reduced employer contributions to pension insurance, unemployment insurance and work-related injury insurance, has been extended in order to lighten the burden on enterprises and to support business reopening after the outbreak of COVID-19.

Impact Date 22 June 2020
Employer Implications/Action Needed

Subject to local requirements, eligible enterprises may continue to apply to the relevant social insurance bureau for an exemption or reduction in contributions to these three types of social insurance.

Employer Risk N/A
Subject Matter/Name of Development COVID-19 and labor disputes
Summary

The Higher Peoples’ Courts in Beijing, Shanghai and Guangdong have issued opinions on the proper handling of labor disputes arising out of COVID-19. These opinions set out the basic principles that local courts should adhere to in the litigation of pandemic-related labor disputes and also contain guidelines on how employers should deal with such disputes. For example, whether job adjustments, pay cuts or deferred salary payments made by employers due to the pandemic constitute material changes to the employment contract.

Impact Date April 2020
Employer Implications/Action Needed

These local court opinions provide constructive guidelines on how to deal with certain labor issues arising out of the pandemic. Employers should ensure that they are understood and strictly applied.

Employer Risk

Failure to comply with these local court opinions could result in unnecessary labor disputes.

Subject Matter/Name of Development COVID-19
Summary

The PRC Supreme People’s Court has issued COVID-19 Guidance. Article 4 of the Guidance states that:

  • i. during the pandemic, employers are encouraged to adopt flexible working methods in accordance with relevant laws and regulations
  • ii. PRC Labor and Employment Contract Laws on unilateral termination for incompetency, illness or an objective change in circumstances should be properly applied. If an employer claims to terminate an employee’s employment contract because the employee is a confirmed, suspected or asymptomatic COVID-19 case, is subject to mandatory quarantine, or comes from an area with a relatively serious outbreak, such a claim shall not be upheld by the courts
  • iii. the relevant national and local policies on the proper handling of the employment relationship during the pandemic must be understood and applied
Impact Date 16 April 2020
Employer Implications/Action Needed

Employers should strictly follow the guidance and other relevant national and local policies.

 

Employer Risk

Where employers rely on incompetency, illness or a change in objective circumstances to proceed with a unilateral termination, the legitimacy of the termination may be subject to more stringent scrutiny by the local court and there is a risk of it being deemed unfair.

Contact:

Jack Cai
Partner
+862161371007
jackcai@eversheds-sutherland.com

Hong Kong

Subject Matter/Name of Development New health and safety disclosures
Summary

Companies listed on the Hong Kong Stock Exchange are now required to identify and disclose the following health and safety key performance indicators in their Environmental, Social and Governance Reports:

  • i. number and rate of work-related fatalities in the past three years
  • ii. days lost due to work-related injury
  • iii. description of occupational health and safety measures adopted and how they are implemented and monitored
Impact Date 1 July 2020
Employer Implications/Action Needed The new disclosure requirements must be complied with or an explanation offered for a failure to comply.
Employer Risk

Potential regulatory action from the Hong Kong Stock Exchange as a failure to comply is a breach of the Listing Rules.

Links

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Subject Matter/Name of Development

More Stringent Requirements for Hong Kong Occupational Retirement Schemes

Summary

The Occupational Retirement Schemes Ordinance (“ORSO”) provides a registration system for Occupational Retirement Schemes set up voluntarily by employers, to ensure such schemes are properly regulated. Overseas schemes could be registered as exempt. Recent amendments now limit the scope of such schemes and were introduced as a response to suspected abuses, where investment products were offered via ORSO schemes to non-employees for general investment purposes (thereby circumventing regulations for collective investment schemes in Hong Kong).

Impact Date 26 June 2020
Employer Implications/Action Needed The principal change is a restriction on membership for ORSO schemes to those who are employees, ex-employees and their beneficiaries or independent contractors who have performed services for the employer for not less than four continuous years. Schemes which do not fulfil this requirement are no longer subject to the ORSO and instead will be subject to the regulatory regime for collective investment schemes, including the Securities and Futures Ordinance.
Employer Risk

Criminal sanctions will apply for a failure to comply with the new requirements. 

Subject Matter/Name of Development Hong Kong antidiscrimination laws now applies more broadly
Summary

Hong Kong has four anti-discrimination ordinances, namely the Sex Discrimination Ordinance; the Disability Discrimination Ordinance; the Family Status Discrimination Ordinance and the Race Discrimination Ordinance, which respectively provide discrimination protection on the grounds of sex, pregnancy, marital status, race, disability and family status. On 11 June 2020, the Legislative Council passed the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2020, which introduced a number of amendments to these anti-discrimination ordinances.

Impact Date 18 June 2021
Employer Implications/Action Needed

The government has stated that the introduction of protection for breastfeeding women does not impose a positive duty to provide reasonable accommodation for breastfeeding. However, an employer may be held liable for indirect discrimination against a breastfeeding employee if (a) the employee cannot comply with a requirement or condition that applies to all staff and she suffers a detriment as a result and (b) the employer cannot justify the requirement or condition.

Additional protection is introduced for people working in a common workplace by the imposition of a new duty upon employers. This is designed to ensure employers take reasonably practicable steps to prevent their employees from committing unlawful discrimination.

Employer Risk

Employers may be investigated by the Equal Opportunities Commission if they fail to comply with the statutory provisions, which may lead to civil liabilities.

Links

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Subject Matter/Name of Development Hong Kong passes bill to increase maternity leave from 10 weeks to 14 weeks
Summary

The Hong Kong Legislative Council has on 9 July 2020 passed the Employment Amendment Ordinance 2020, which increases statutory maternity leave from ten weeks to 14 weeks. Maternity pay during the extra four weeks of leave will be capped at HK$80,000, which will be paid by the employer and subsequently be reimbursed by the government.

Impact Date Fourth Quarter 2020
Employer Implications/Action Needed

Employers should review their maternity leave and paternity leave policies to align with the amendment ordinance. A relatively obscure point which employers should be aware of is a corresponding amendment which allows a male employee to take his five days of statutory paternity leave up to 14 weeks after the birth of his child, while currently the paternity leave has to be taken within ten weeks after the birth of the child.

Employer Risk

Failure to comply with the amendment ordinance when it goes live is a criminal offense.

Links

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Contact:

Jennifer Van Dale
Partner
+852 2186 4945
jennifervandale@eversheds-sutherland.com

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Austria

Subject Matter/Name of Development COVID-19 
Summary

As the government eases the lockdown, it is encouraging a safe return to work and rules have been introduced to ensure social distancing in the workplace. The government has also published return to work guidelines. Employers cannot unilaterally require the wearing of facemasks by staff (exceptions apply) and must instead reach an agreement with employees.

Impact Date 15 June 2020
Employer Implications/Action Needed

Employers must assess how and when their staffing and business needs can be accommodated, while working safely and in line with government requirements. Whether the employer can require employees to wear a protective mask depends on the place of work (wearing a protective mask is required only in certain areas, such as hospitals and pharmacies).

Employer Risk

The regulation easing lockdown does not provide for administrative penalties. At worst, employees could seek an injunction if the employer insists on the wearing of facemasks without consent. However, we consider this to be relatively unlikely in practice.

Contact:

Silva Palzer
Partner
+43 15 16 20 12 5
silva.palzer@eversheds-sutherland.at

Belgium

Subject Matter/Name of Development Workplace health and safety measures in the context of COVID-19
Summary

Telework remains recommended for all employees whose functions lend themselves to it.

Where telework is not applied, non-essential employers should take appropriate preventative measures to apply social distancing of 1.5m (or, if this is not possible, to provide at least an equivalent level of protection). Essential employers should apply this as far possible.

The “Generic Guide to prevent the spread of COVID-19 at work” contains health and safety requirements of a material, technical and/or organizational nature and is on the website of the Federal Public Service Employment, Labor and Social Dialogue, as supplemented by guidelines at industry-wide and/or company level and/or other appropriate measures offering at least an equivalent level of protection.

Impact Date 1 July 2020
Employer Implications/Action Needed

As more employers are preparing for their office employees to (partially) return to the office, employers should ensure that appropriate preventative measures are taken (or as far as possible if it is an essential business).

Employer Risk

Employers must ensure a safe and healthy workplace. Therefore they have to take the appropriate preventative measures (or, where applicable, as far as possible).

Subject Matter/Name of Development Travel restrictions and quarantine obligations in the context of COVID-19
Summary

As from 1 July 2020, non-essential travel from and to Belgium is in principle only allowed to countries of the EU, the Schengen area, the UK and other countries as listed on the website of the Federal Public Service of foreign affairs.

The government has come to an agreement on enforcing test and quarantine measures for people returning from a high risk area where a new outbreak has taken place (“code-red areas”), as well as prohibiting travel to these areas. This will be published on the same website.

Impact Date 1 July 2020 onwards
Employer Implications/Action Needed

Employers should closely monitor the situation on travel restrictions and quarantine obligations in Belgium, since it will have an impact on employees returning from holidays in areas that are considered high risk where a COVID-19 outbreak has taken place.

Employer Risk

The risk is that employees returning from holidays spent in high risk areas are required to quarantine.

Subject Matter/Name of Development The simplified procedure for obtaining COVID-19 temporary unemployment support has been extended
Summary

For the days of temporary unemployment, the employee receives an allowance of up to 70% of his salary capped at €2,754.76 gross per month for a full month of temporary unemployment (from which will be deducted 26,75% tax) as well as an amount of 5,63 EUR net per day of temporary unemployment.

Impact Date

Extension until 31 August 2020

Employer Implications/Action Needed

The simplified formalities remain unchanged. Employers should submit, as soon as possible, an electronic declaration for the affected employees. This can be done through a payroll agency. The employee also submits a form.

Employer Risk

Employers should ensure they submit the simplified formalities as soon as possible.

Subject Matter/Name of Development

Suspension of notice periods in the eent of COVID-19 force majeure

Summary

New legislation on the suspension of the notice period for dismissals, before or during a period of temporary suspension of employment due to force majeure as a result of COVID-19, has been adopted.

Impact Date

22 June 2020

Employer Implications/Action Needed

In the event of dismissal by the employer before or during the period of temporary suspension of the employment agreement due to force majeure-COVID-19: the notice period is suspended during the days of COVID-19 temporary unemployment (with the exception of dismissals that were already underway before 1 March 2020 - these notice periods keep running and there is no retroactive effect).

In the event of termination by the employee before or during the period of temporary suspension of the employment agreement due to force majeure-COVID-19: there is no impact and the notice period keeps running.

Employer Risk

Employers who are planning on dismissing employees who are put on temporary unemployment as a result of COVID-19 should take into account that this legislation will have an impact if they wish to terminate with a notice period to be performed.

Contact:

Stefan Corbanie
Partner
+32 486 453 149
stefancorbanie@eversheds-sutherland.be

Czech Republic

Subject matter/Name of Development Antivirus employment retention programe
Summary

Employers with up to 50 employees may decide not to pay social security payments for their employees for June, July and August.

Impact Date 30 June 2020
Employer Implications/Action Needed Employers who wish to benefit from the programe should send the Social Security Administration their reduced assessment calculation and pay the reduced insurance (this is a reduction of 24.8% of the employees’ total income). 
Employer Risk None.
Subject Matter/Name of Development New controls on maximum employee salary deductions
Summary

The amount which cannot be deducted from the salary of an employee debtor has been increased from the original two-thirds to three-quarters of the sum of: the amount of the subsistence minimum for an individual, and the amount of normal housing costs for one person.

Impact Date 1 July 2020
Employer Implications/Action Needed

Before carrying out employee salary deductions, the employer should check the correct amounts are being taken.

Employer Risk If incorrect amounts are deducted, the employer may be subject to penalties and possible employee disputes.
Subject Matter/Name of Development Important amendment to the Labor Code
Summary

The main developments are:

  • new possibilities and ways of delivering important documents to employees
  • new rules on the recall of managers
  • an updated TUPE definition
  • new way to calculate vacation
  • the introduction of a so called “shared work place”
Impact Date Partially 30 July 2020 and partially 1 January 2021 (vacation and shared workplace)
Employer Implications/Action Needed Employers should adapt their internal policies and other documentation to reflect the new rules.
Employer Risk If documents are not adapted or the new rules are not complied with, the employer may be subject to penalties and possible employee disputes.

Contact:

Radek Matouš
Managing Attorney
radek.matous@dhplegal.com

Denmark

Subject Matter/Name of Development New Holiday Act - transition period
Summary

As the new Holiday Act takes effect on 1 September 2020, whereby concurrent holiday is introduced, Denmark is currently five months into the transition period (which ensures employers are not obliged to provide more than five weeks’ paid holiday to any employee). During the transition period, holiday accrued under the current Holiday Act from 1 September 2019 to 31 August 2020 will be “frozen”, meaning that the accrued holiday cannot be taken nor paid out. The accrued and frozen holiday will be administrated by a special Danish Fund and paid out to the employee when the employee leaves the Danish labour market, e.g. due to retirement or by moving abroad.

 

Impact Date 1 September 2019 to 31 August 2020
Employer Implications/Action Needed Employers should use the transition period to review holiday wording in employment agreements and company policies etc. Employers should also consider how to handle contractual holidays both during the so-called “short holiday year” from 1 May 2020 to 31 August 2020 and from the effective date of the new Holiday Act from 1 September 2020.
Employer Risk Failure to update the wording for contractual holidays in policies and contracts etc., will result in the employer granting employees the same amount of contractual holidays in the “short holiday year” as a full holiday year.
Subject Matter/Name of Development COVID-19, state aid and employee holidays 
Summary

The government has provided several financial initiatives to support businesses affected by the coronavirus, including a scheme for temporary salary reimbursement. The scheme has been extended until 29 August 2020, covering a period when many employees take their holiday. However, the scheme is not intended to provide state aid during the normal holiday period and, therefore, employees covered by the scheme must take up to three weeks’ holiday during which no compensation can be obtained. An employer may notify the employee of the holiday period with shortened notice. 

Impact Date 5 June 2020
Employer Implications/Action Needed

Companies which have already applied for salary reimbursement under the scheme will have to apply for an extension from 9 July 2020 to 29 August 2020.

Employer Risk N/A
Subject Matter/Name of Development COVID-19, return to work and high risk groups 
Summary

As the government eases the lockdown, it is aware that some employees or their relatives may not be able to return to work due to the risk of an infection with COVID-19 causing serious illness. Therefore, it has been agreed that those qualifying for the “high risk group” in relation to COVID-19 and their relatives may stay at home during the reopening of Denmark, if it is too risky to attend work. They will receive salary or sickness benefits until 1 September 2020. The employer will be reimbursed sickness benefits paid during the entire period.

Impact Date 20 May 2020
Employer Implications/Action Needed

Employers must submit a declaration to the employee stating that the workplace cannot be organized, or the work tasks cannot be changed, in a way that will meet the recommendations from the health authorities for those qualifying for the “high risk group.” The employer must also declare that the employee is released from the duty to perform services.

Employer Risk N/A

Contact:

Anne Marie Abrahamson
Partner
+45 35252858
AMA@Lundgrens.dk

EU

Subject Matter/Name of Development Brexit and immigration arrangements
Summary

Following the UK’s withdrawal from the EU on 31 January 2020, the rules on free movement of Labor continue to apply as if the UK were still a member of the EU until 31 December 2020. Thereafter, immigration arrangements will change fundamentally for EEA citizens in the UK and British citizens in Europe. From 1 January 2021, EEA citizens arriving in the UK for the first time will be subject to a new immigration system and, similarly, requirements will be introduced for British citizens seeking to live and work in the EEA. There will be new provisions for those who cross affected borders regularly to work.

Impact Date 31 December 2020.
Employer Implications/Action Needed

Employers should conduct a recruitment and retention review to identify how they may be affected by more restrictive immigration policies. Right-towork processes will need to be updated to reflect new requirements. Employers should also review the potential risks for cross-border workers and business travellers to minimize disruption.

Employer Risk

Uncertainty, potential issues with recruiting and retaining workers and changes relating to business and cross-border travel between the UK and EEA.

Subject Matter/Name of Development Whistleblowing directive
Summary

A new directive provides EU-wide standards to protect workplace whistleblowers who reveal breaches of EU law in a wide range of areas. Whistleblowers are defined widely, including the self-employed, shareholders and those working for contractors and suppliers. Certain organisations, including private companies with 50 or more employees, will need to provide an internal confidential reporting channel and respond to reports within a defined time frame. The directive encourages internal reporting by whistleblowers while also permitting external reporting to competent authorities where, for example, the person considers there is a risk of retaliation. Reporting publicly is more limited. Qualifying whistleblowers, together with some third parties such as colleagues, are protected against work-related retaliation and dismissal. Whistleblowers are also immune from liability in certain circumstances.   A new directive provides EU-wide standards to protect workplace whistleblowers who reveal breaches of EU law in a wide range of areas. Whistleblowers are defined broadly, including the self-employed, shareholders and those working for contractors and suppliers. Certain organisations, including private companies with 50 or more employees, will need to provide an internal confidential reporting channel and respond to reports within a defined time frame. The directive encourages internal reporting by whistleblowers while also permitting external reporting to competent authorities where, for example, the person considers there is a risk of retaliation. Reporting publicly is more limited. Qualifying whistleblowers, together with some third parties such as colleagues, are protected against work-related retaliation and dismissal. Whistleblowers are also immune from liability in certain circumstances.

Impact Date Member states have until 17 December 2021 to transpose the directive into national law (there is a phased implementation for private sector employers with 50-249 workers to establish internal channels).
Employer Implications/Action Needed Less than half of EU countries (such as France, Hungary, Ireland, Italy, Netherlands and Sweden) provide comprehensive legal protection for whistleblowers. In other EU countries, protection is limited or applies to specific sectors or categories of employee. In addition, some EU legislation already regulates whistleblowing, such as in the financial services sector, and those rules will continue to apply. As a result, employers should anticipate significant change in some member states and should review their whistleblowing policies and procedures.
Employer Risk Once the directive is implemented, it will be more important than ever for employers to have confidential, responsive and trusted internal whistleblowing procedures which are managed by a named individual or department. If not, employers risk penalties and reputational damage, for example, where whistleblowers bypass internal channels to report their concerns externally. It will be for each individual member state to decide how the directive should be enforced and what the legal sanctions should be for non-compliance.
Link

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Subject Matter/Name of Development Transparent and predictable working conditions directive
Summary

The directive updates and extends existing EU legislation on written statements for employees. It requires employers to expand the categories of workers who must be provided with a written statement, provide it earlier on in the employment relationship (key content must be provided within 7 days of commencing work) and increase the information contained in the statement. It also establishes new minimum rights for workers in an employment relationship (including zero hour contracts and contracts to work more than 3 hours on average per week), including: a right to reasonable advance notice of work for those working unpredictable patterns as well as compensation for any work cancelled with late notice; a right to request ‘more predictable and secure working conditions’; a 6 month limit on probationary periods (unless otherwise justified); limits on employers unjustifiably restricting employees from working for another employer; a right for compulsory training to be provided free of cost and to count as working time; and, protection from dismissal and retaliation for exercising these new rights.

Impact Date Member states have until 1 August 2022 to transpose the directive into national law.
Employer Implications/Action Needed All employers should expect to change their current practices relating to the provision of written statements to employees upon commencing work, as well as ensuring that those working abroad are provided with minimum additional information. In addition, those employers who are heavily reliant on casual and ‘gig’ workers should monitor how the new minimum rights are implemented locally in member states, given that the directive provides some flexibility as to how certain measures are transposed.
Employer Risk

It will be for each individual member state to decide how it should be enforced and what the legal sanctions should be for non-compliance. The new provisions are expected to increase workers’ rights, as well as employer administration, costs and reduce flexibility. Whatever the legal consequences, there will also be reputational risks for defaulters. Employers should also be aware that the new EU Commission has expressed support for ensuring that ‘gig’/ platform workers have the same rights, including collective bargaining, as other workers.

Link

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Subject Matter/Name of Development Work-life balance directive
Summary

A new directive has been agreed which covers paternity, parental and carers' leave as well as flexible working including: 10 working days' paternity leave (paid at least at the level of state sick pay), 4 months' parental leave (2 months are non-transferable and paid at a rate set by member states), 5 days' unpaid carers' leave per year and a right to request flexible working.  A new directive has been agreed which covers paternity, parental and carers’ leave as well as flexible working including: 10 working days’ paternity leave (paid at least at the level of state sick pay), 4 months’ parental leave (2 months are non-transferable and paid at a rate set by member states), 5 days’ unpaid carers’ leave per year and a right to request flexible working.

Impact Date Member states have until 2 August 2022 to transpose the directive into national law.
Employer Implications/Action Needed Employers should review any gaps between their existing work life balance policies and the new rights offered by the directive and consider how they will address any differences. Given the need to overlay the directive on top of existing provision in some member states, it will also be necessary for employers to understand how the directive will be implemented locally before finalising their response.
Employer Risk

Many EU states already offer family leave rights and the directive sets a new floor of minimum rights which can be enhanced and also allows for some flexibility on implementation (including certain details over the scope and conditions of the new leave rights). It will be for each individual member state to decide how it should be enforced and what the legal sanctions should be for non-compliance. Whatever the legal consequences, there will also be reputational risks for defaulters.

Employer Risk

Read more here

Contact

Constanze Moorhouse
Partner
+44 122 344 3803
constanzemoorhouse@eversheds-sutherland.com

Finland

Subject matter/Name of Development Amendments to the Posted Workers Act
Summary

Draft legislation has been published which proposes amendments to the Posted Workers Act, to implement the amended EU Posted Worker Directive. For example, the amendments include more detailed guidelines on pay for posted workers, restrictions on the employer’s right to set off receivables against an employee’s salary and the extension of applicable collective bargaining agreements in transfers within a subcontracting or corporate group. It would also introduce a protective measure concerning travel and accommodation costs arising from the worker’s posting to Finland. 

Impact Date A proposed date of 30 July 2020 (amendments concerning prior notification of posting would enter into force on 1 October 2021). A 12 month transition period is also proposed.
Employer Implications/Action Needed

Employers should review and amend their policies to ensure compliance, where necessary. In particular, check posted workers’ salary, collective bargaining agreements, travel, accommodation and meal expenses as well as compliance with the advance notification duty.

Employer Risk

Non-compliance can lead to a negligence fee of €1,000 to €10,000, a claim for damages or criminal penalties.

Subject matter/Name of Development Temporary changes to the co-operation procedure, lay-offs and terminations during trial periods
Summary

The minimum negotiation times regulated by the Act on Co-operation within Undertakings have been shortened, from the previous 14 days or six weeks, to five days in the event of lay-offs. In the private sector, the 14 days’ notice period for lay-offs regulated in the Employment Contracts Act is shortened to five days and the right to lay-off is extended to fixed-term contracts. In addition, the termination of a trial period due to financial or production-related reasons is permitted.

Impact Date The temporary changes run from 1 April 2020 to 31 December 2020 (the period was extended in June)
Employer Implications/Action Needed

The amendments allow more flexible solutions for co-operation negotiations and lay-offs due to COVID-19. However, it is important to note that there might be differing provisions in collective bargaining agreements, which should be checked.

Employer Risk

The shortened negotiation periods only apply to lay-offs, not terminations, and the five day negotiation cannot be relied upon if a need to terminate employment contracts arises. Failure to comply with the correct negotiation or notice periods may lead to liability to pay compensation.

Contact:

Timo Jarmas
Partner
+35 81 06 84 15 14
timo.jarmas@eversheds.fi

France

Subject matter/Name of Development COVID-19: financial support for employers
Summary

During the COVID-19 crisis, the French government has issued several bills reforming the Partial Activity Scheme. The scheme allows employers to reduce working time in the company and to claim financial support from the government. Employees placed on partial activity (i.e. those who are laid off) must be paid at least 60% of their normal gross remuneration, for which the employer is entitled to be fully reimbursed by the government (capped at 60% of EUR 6,925.50). The employer can pay more out of its own pocket. Note that more favorable measures can apply to the most exposed businesses (hotel, restaurant, etc.).

Companies wanting to participate in the Partial Activity Scheme must send the request to the labor administration. A response is given within 48-hours.

Impact Date Year 2020
Employer Implications/Action Needed

Companies can benefit from this scheme if their activity has decreased or will decrease due to the COVID-19 crisis.

Employer Risk

The scheme precludes employees who are placed on partial activity from working. It is a criminal offense for an employer to ask an employee to work during a period of partial activity for which reimbursement is claimed under the scheme (two years of jail and a fine of €30,000). An administrative fine (reimbursement of all partial activity benefits and exclusion of the partial activity scheme for five years) may also be applied.

Web link

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Contact:

Deborah Attali
Partner
+33 1 55 73 42 17
deborahattali@eversheds-sutherland.com

Germany

Subject matter/Name of Development Recruitment procedure clarification
Summary

The Labor Court (5 Ca 83/20) has confirmed that there is no general right for a prospective employer to ask whether a job candidate has previous convictions or proceedings pending in the context of a recruitment exercise.

Impact Date May 2020
Employer Implications/Action Needed

In principle, an employer is entitled to request information about a job candidate’s criminal record. However, this is only possible if the information is relevant to the position being applied for. Questions regarding general court convictions and pending proceedings, which are asked out of curiosity but are not strictly relevant, are not permitted. Consequently, the candidate would not be obliged to answer truthfully.

Employer Risk

High. Employers cannot rely upon an employee’s failure to disclose irrelevant criminal convictions during recruitment as a lawful basis for subsequent dismissal.

Subject matter/Name of Development Recording daily working time
Summary

The Labor Court has determined that, even before new legislation is introduced, employers are already obliged to set up a system enabling the duration of daily working time to be measured following the European Court of Justice’s ruling last year (in the case of Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE (C-55/18). It had previously been thought that employers needed to take no action until corresponding legislation had been passed.

Impact Date February 2020
Employer Implications/Action Needed

Whether and to what extent Labor courts will follow this decision remains unclear since, currently, there is no statutory obligation to introduce working time recording systems. Nevertheless, employers who are not doing so would be well advised to record the working hours of employees as reliably as possible.

Employer Risk

Should claims for compensation regarding alleged breaches of working time restrictions be brought against employers, their ability to defend such claims may be adversely affected in the absence of evidence of recorded hours.

Subject matter/Name of Development

Staff or works council resolutions permissible via video conferencing

Summary

Staff council (“Personalrat”) and works council (“Betriebsrat”) resolutions have only been lawful, previously, when passed in face-to-face meetings. Due to the suspension of such meetings during the COVID-19 pandemic, new regulations allow such resolutions to be passed via video and telephone conferences. The regulations apply to works councils until 31st December 2020 and to staff councils until 31st March 2021.

Impact Date 28 May 2020
Employer Implications/Action Needed

No action required. The new regulations are also advantageous for the employer as they facilitate the giving of consent to personnel and other measures.

Employer Risk There is no apparent risk for employers.
EUR 5,000.00

Contact:

Frank Achilles
Partner
+4948 54 56 52 7
frankachilles@eversheds-sutherland.de

Hungary

Subject Matter/Name of Development COVID-19: financial support via wage subsidies
Summary Due to the COVID-19 pandemic, the government has introduced two state wage subsidies: support for employers of research and development employees (R&D) and for employees and employers who agree to reduced working hours (short-time allowance) as defined in the applicable government decree. The subsidies have been available since 16 April 2020 (having been improved and simplified from 29 April) and can be applied for until 31 August 2020.
Impact Date From 16 April 2020 to 31 August 2020
Employer Implications/Action Needed

The wage subsidies can be applied for electronically for a maximum period of three months until 31 August. The objective of the subsidies is to mitigate the impact of the pandemic and/or help maintain the employers’ workforce.

Employer Risk

None for legitimate, qualifying claims.

Link
the employer being fined.

Read more

Subject Matter/Name of Development COVID-19: returning to the workplace
Summary

The state of emergency was terminated on 18 June 2020, allowing employees to return to the workplace. During the state of emergency and the transitional period, employers could require employees to work from home but the ability to do so has now been lifted, meaning working from home cannot be imposed unilaterally.

Impact Date 1 July 2020
Employer Implications/Action Needed

Employers must assess how and when their staffing and business needs can be accommodated in safe working conditions. If working from home is possible, the employer and employee should agree terms and provision may be set out in the employer’s internal policy.

Employer Risk
the employer being fined.

Failure to take account of health and safety requirements could result in grievances and potential litigation or potential fines by the Labor authority.

Link
the employer being fined.

Read more

 Contact:

Katalin Varga
Partner
+36 (1) 394 31 21
varga@eversheds-sutherland.hu

Ireland

Subject Matter/Name of Development Extensions to immigration permission
Summary

On the closure of immigration offices on 20 March 2020, the former Minister for Justice and Equality announced that foreign nationals with a permission expiring between 20 March and 20 May would have their permission automatically extended by a period of two months. A further two-month extension was subsequently announced for permissions due to expire between 20 May and 20 July 2020. The extension applies to people in Ireland on short stay visas and those whose permissions were automatically extended on 20 March 2020. Automatic renewal is on the same basis as the existing permission and subject to the same conditions.

Impact Date 20 March 2020
Employer Implications/Action Needed

Employers should be aware currently that, although an employee may not have up to date documentation evidencing their continuing right to remain in Ireland, that individual’s previous immigration permission will provide sufficient evidence of their ongoing permission to remain in the state.

Employer Risk

Employers should proactively diarize the new date of expiry of an employee’s permission. The new date of expiry will be two months after the existing date of expiry of the permission.

Link

Read more

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Subject Matter/Name of Development Continuous service
Summary

The Irish Labor Court has found that a payment in lieu of notice brings the contract to an immediate end and the date of that payment is the date of dismissal, not the date on which contractual notice would have expired had the employee not been paid in lieu. This affects accrual of continuous service as the court found that, while statutory notice will count towards accrual of service for the purpose of the Unfair Dismissal Acts 1977-2015, paid contractual notice will not.

Impact Date 24 March 2020
Employer Implications/Action Needed

A qualifying period of 12 months’ continuous service applies to protection under the Unfair Dismissals Acts 1977-2015. In light of this decision, employers could terminate employment up to the 51st week and, by paying employees in lieu of their contractual notice period, would deny the individual unfair dismissal protection.

Employer Risk

Some previous court decisions conflict with this Labor Court decision and, on this basis, employers should be mindful that terminating an employee who is approaching 12 months’ service, with a view to paying in lieu for the remainder of the notice period, is not without risk.

Link

Read more

Subject Matter/Name of Development COVID-19: Return to Work Protocol
Summary

The Department of Business, Enterprise and Innovation and Department of Health jointly published the Return to Work Safely Protocol (the “Protocol”) on 9 May 2020. The Protocol is designed to support employers and workers in putting measures in place that would prevent the spread of COVID-19 in the workplace on a return to work following temporary closure due COVID-19.

Impact Date 9 May 2020
Employer Implications/Action Needed

Employers whose employees have not yet returned to the workplace must carefully review and put in place the various measures required by the Protocol. Those workplaces that have reopened or remained open over the last number of months are also required to continue to carefully consider the Protocol and ensure that the procedures they currently have in place are compliant.

Employer Risk

While the Protocol has not been issued under a statutory instrument, employers should be aware that compliance has been described by the Minister for Business, Enterprise and Innovation (the “Minister”) as mandatory. The Protocol does not directly address enforcement measures and is drafted in a way that is focussed on assisting employers in returning to work. The Minister has, however, cautioned that the Health and Safety Authority will be monitoring compliance and will shut down workplaces in cases of serious or persistent noncompliance.

Link

Read more

Subject Matter/Name of Development COVID-19: Wage Subsidy Scheme
Summary

The Temporary Wage Subsidy Scheme (“TWSS”) was introduced on 26 March 2020 by the Health (Preservation and Protection and other Emergency Measures in the Public Interest) Act 2020 (the “Act”). TWSS provides a subsidy to employers whose businesses are experiencing significant negative economic disruption due to the COVID-19 crisis to the extent that the employer is unable to pay its employees their normal salary. It provides a subsidy to employers through the form of a refund by the Office of Revenue Commissioners.

The Department of Finance and Office of the Revenue Commissioners announced on 5 June 2020 that TWSS will remain in place until the end of August.

Impact Date 26 March 2020
Employer Implications/Action Needed

In order to be eligible for the TWSS, an employer must have incurred a loss of over 25% in either i) the turnover of the business; or ii) customer orders received. Employers who believe they may be eligible for TWSS should seek advice from their tax advisors.

Employer Risk

The Office of Revenue Commissioners can require a refund of amounts received under TWSS where the employer has not paid the subsidy amount to the specified employee or was not entitled to receive the subsidy (e.g. it did not meet the qualifying criteria).

Additionally, a person could be found guilty of a criminal offense if they knowingly or wilfully i) deliver any incorrect return or statement; or ii) provide any incorrect information in connection with TWSS, or knowingly aid or abet another person to do so.

Link

Read more

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Subject Matter/Name of Development COVID-19: Lay-off/redundancy
Summary

With effect from 13 March 2020, the Health (Preservation and Protection and other Emergency Measures in the Public Interest) Act 2020 (the “Act”) suspended the right to seek a redundancy payment following a period of lay-off or short time exceeding four consecutive weeks or six weeks in any 13 week period. New section 12A, inserted into the Redundancy Act 1967, will remain in force until 10 August 2020, following a further extension of this provision in May 2020.

Impact Date 13 March 2020
Employer Implications/Action Needed

Employers can place employees on short-time or lay-off without running the risk of an employee seeking a redundancy payment after four consecutive weeks or six weeks in a 13-week period.

Employer Risk

Employers should be mindful that the suspension of the redundancy provisions will be effective until 10 August 2020 and there has been no indication to date that there will be any further extension.

Link

Read more

Read more

Contact:

Joanne Hyde
Partner
+35 31 66 44 25 2
joannehyde@eversheds-sutherland.ie

Italy

Subject Matter/Name of Development COVID-19
Summary

The pandemic has led to several legal interventions over the first half of 2020. A supplementary salary scheme has been introduced to support the wage costs of most employers for up to 18 weeks and additional parental leave has been provided for parents of children under the age of 12 years. On April 24, 2020 trade unions and the Italian Government issued a Protocol to address the impact of COVID-19 in the workplace. Remote working is strongly encouraged, where possible. A prohibition on economic dismissals has also been extended until 17 August 2020.

Impact Date Second quarter 2020
Employer Implications/Action Needed

Employers must accommodate these changes but, most notably as business operations return, employers must comply with the Joint Government and TU Protocol for workplaces.

Employer Risk Failure to comply with the Protocol may result in the suspension of business activities until the necessary safe-working conditions are in place.
Subject Matter/Name of Development Review of compensation for breach of redundancy procedure
Summary

The Constitutional Court issued a press release on June 25, 2020 declaring that Article 4 of Legislative Decree no. 23/2015 is unconstitutional. This Article 4 provides for compensation equal to one month’s salary for each year of service where redundancy procedure is not adhered to. Although the court has not yet published its full reasons the decision renders the automatic determination of compensation in accordance with the article, regardless of the nature or impact of the procedural error, to be unlawful.

Impact Date June 25, 2020
Employer Implications/Action Needed None.
Employer Risk Compensation entitlement (if any) flowing from purely procedural errors is now unclear (whereas, previously, the formula specified the calculation of compensation).

Contact:

Marcello Floris
Partner
+39 02 892 871
marcellofloris@eversheds-sutherland.it

Valentina Pomares
Partner
+39 02 892 871
valentinapomares@eversheds-sutherland.it

Netherlands

Subject Matter/Name of Development

Additional paternity leave

Summary

With effect from 1 July 2020, partners of women who have given birth are entitled to five weeks’ additional paternity leave to be taken within the first six months after the baby’s birth. Partners can apply for a benefit from the Employee Insurance Agency (“UVW”) amounting to 70% of their wages, capped at 70% of the statutory maximum monthly wage of EUR 4,769.34 gross. This additional paternity leave is in addition to the existing paid paternity leave of one week.

Impact Date 1 July 2020
Employer Implications/Action Needed Employers need to be aware of this new entitlement.
Employer Risk Failure to give employees the opportunity to enjoy additional paternity leave, may lead to claims from employees.
Subject Matter/Name of Development Independent contractor status
Summary

It is expected that in Autumn 2020 the pilot version of a web module will be introduced, enabling employers and individuals to check whether a particular assignment may be carried out by an independent contractor, thus falling outside the employment relationship. If that is the case, a so-called ‘instruction statement’ (opdrachtgeversverklaring) will be issued. The final version of the web module is expected to go live six months later. Measures previously anticipated to be implemented (a minimum fee for lower earning independent contractors and an independence statement, ‘zelfstandigenverklaring’ for higher earning independent contractors) will no longer be introduced, because of the expected administrative burden.

Impact Date

Autumn 2020 for pilot web module (final version expected 1 April 2021)

Employer Implications/Action Needed

Employers can use the pilot version of the web module to review the employment status of any working relationships with independent contractors.

Employer Risk No risk at this time, but the pilot web module can be used to assess any future risks regarding potential assignments with independent contractors.
Subject Matter/Name of Development Severance payment compensation scheme
Summary

On 1 April 2020, the Compensatory Scheme Regulations came into effect. As of that date, employers can file an application to the UWV (the Dutch Employee Insurance Agency) for compensation in relating to statutory severance payments paid to employees unable to work because of long-term illness. The scheme has retrospective effect, applying to statutory severance payments paid on or after 1 July 2015.

Impact Date

1 April 2020

Employer Implications/Action Needed

The employer should review whether it is eligible for compensation and, if so, prepare and submit its application within six months of the date the severance was paid. However, for severance payments paid between 1 July 2015 and 1 April 2020, the compensation application must be submitted prior to 1 October 2020.

Employer Risk

Failure to review whether the employer is eligible for compensation may result in the employer not being reimbursed.

Subject Matter/Name of Development Implementation of the Revised Posting of Workers Directive
Summary

A legislative proposal to implement the new EU Revised Posting of Workers Directive has been adopted by the Dutch parliament. The changes to Dutch law will include provisions on accommodation and supplementary allowances for posted workers, with additional provisions applying if a posted worker has worked in the Netherlands for more than 12 months (which can be extended to 18 months under certain conditions).

Impact Date

30 July 2020 (anticipated)

Employer Implications/Action Needed

Employers should be aware of the expected upcoming changes regarding cross-border posted employees.

Employer Risk

Failure to comply may result in fines imposed by the Inspectorate SZW of (currently) EUR 21,750 gross, which may be increased by 100-200% for each repeated breach and/or depending on the seriousness of the breach.

Contact:

Ingrid van Berkel

Wijnand Blom

Partner Partner
+31 10 24 88 04 6 +31 20 5600 608
ingridvanberkel@eversheds-sutherland.com wijnandblom@eversheds-sutherland.nl

Poland

Subject Matter/Name of Development

Implementation of the updated Posted Workers Directive

Summary

Poland is obliged to implement the updated Posted Workers Directive (EU Directive 2018/957, as revised by amending Directive 96/71/EC), by 30 July 2020. Draft legislation for doing so is currently before parliament.

Under the draft provisions, employees from other EU member states who are posted to Poland would be entitled to remuneration and other elements of pay in line with the directive, instead of a right to minimum wage only. In addition, the costs of business travel between places of work will be reimbursed.

The guaranteed working conditions for posted workers will apply for 12 months unless they are extended by the employer to 18 months by notification to the Labor Inspectorate. The Polish Labor Inspectorate will be afforded additional rights of access to information regarding working conditions and to facilitate close co-operation with applicable authorities in other member states.

Impact Date By or on 30 July 2020
Employer Implications/Action Needed Employers posting workers to Poland must comply with the new provisions and guarantee work conditions accordingly.
Employer Risk Non-compliance with provisions on posting employees to Poland may result in fine ranging from PLN 1,000 to PLN 30,000 (approx. EUR 220 to EUR 6,700).
Subject Matter/Name of Development New employee retirement savings plan - Employee Capital Plans
Summary Legislation for a new voluntary retirement savings plan known as Employee Capital Plans (PPK) is being rolled out. Employers are expected to contribute 1.5% (and may contribute up to 4%) of salary to the PPK and participants to contribute 2% (and may contribute up to 4%). Employees may decide to opt out from the plan, but they will be re-enrolled in the plan every four years.
Impact Date Phased introduction is ongoing (from 1 July 2019 - 1 January 2021)
Employer Implications/Action Needed

The new regulations are being phased in according the size of the employer e.g. employers with at least 250 employees have needed to comply since 1 July 2019. Due to COVID-19, the previously applicable date of 1 January 2020 for companies employing from 50 to 249 persons, has been extended to 1 July 2020.

Employer Risk Non-compliance may result in a fine, for example, up to 1.5% of the remuneration fund for a failure to sign a PPK management contract with a financial institution. Additionally, a failure to make payments on time can result in fines from PLN 1,000 to 1,000,000.

Contact:

Ewa Lachowska-Brol
Partner
+48 22 50 50 79 7
ewa.lachowska-brol@eversheds-sutherland.pl

Romania

Subject Matter/Name of Development COVID-19 – extension of state of alert
Summary

The state of alert was extended by 30 days and includes measures to reduce the impact of COVID-19.

Impact Date 16 June 2020
Employer Implications/Action Needed Employers should familiarize themselves with any obligations imposed during the state of alert.
Employer Risk Administrative fines and/or criminal penalties may be imposed for non-compliance by employers.
Subject Matter/Name of Development COVID-19 – workplace measures
Summary

During the state of alert the employer may, with the employee’s consent, implement a telework regime, working from home, or make other changes to the employee’s workplace or role.

The validity of collective Labor agreements is extended during the state of alert, and for a period of 90 days from its termination.

Impact Date
The law is still in draft
15 May 2020
Employer Implications/Action Needed Employers should continue to review working practices during the COVID-19 pandemic.
Employer Risk

Administrative fines and/or criminal penalties may be imposed for non-compliance.

Subject Matter/Name of Development Penalties for non-compliance with overtime payments
Summary Failure to comply with new legal provisions regarding overtime compensation will lead to an employer being fined from RON 1,500 (approx. EUR 310) to RON 3,000 (approx. EUR 620) per affected employee.
Impact Date 18 June 2020
Employer Implications/Action Needed The employer should ensure it fully complies with any obligation to pay overtime to its employees.
Employer Risk Non-payment of any employee overtime which is due will result in the employer being fined.
Subject Matter/Name of Development COVID-19 – wage support measures
Summary Subject to meeting certain conditions, employers may claim state aid for a three-month period, equivalent to 41.5% of an employee’s gross basic salary, capped at 41.5% of the average national gross salary. If the relevant employee’s contract is terminated before 31 December 2020, however, the employer will be required to reimburse payment.
Impact Date 29 May 2020
Employer Implications/Action Needed Employers who wish to claim for employee wages will need to ensure they continue employment contracts for the designated period.
Employer Risk An employer may be required to reimburse any wage payments previously received.
Subject Matter/Name of Development Paid parental leave
Summary A new right has been introduced enabling a parent to request paid parental leave, for childcare reasons, while schools remain closed because of COVID-19 and the parent is unable to work from home. The right will continue until the end of the current school year.
Impact Date 3 April 2020
Employer Implications/Action Needed Employers should ensure they are aware of the conditions applicable to this new parental leave right.
Employer Risk An employer may be fined for non-compliance.

Contact:

Mihai Guia
Partner
+40 21 31 12 56 1
mihaiguia@eversheds.ro

Russia

Subject Matter/Name of Development Notification regarding e-labor books
Summary

By 30 June 2020, employers must notify each employee in writing of a legislative change concerning their employment history records. Employees will have the right to choose between continuing to maintain their employment history record in hard copy or changing to an electronic version i.e. an e-labor book. 

Impact Date 30 June 2020
Employer Implications/Action Needed Employers must notify employees regarding e-labor books by 30 June 2020.
Employer Risk Employers can be held liable under the Code of Administrative Offenses for violations of these regulations.
Subject Matter/Name of Development Extension to the validity periods of working conditions inspections (“Special Assessment”)
Summary

Employers in Russia are required to have regular inspections of their working conditions carried out by accredited external inspectors, known as a Special Assessment.

Where the validity period of any such Special Assessment was meant to expire between April to September 2020 (the specified period), this has now been automatically extended to 1 October 2020. 

Impact Date 16 June 2020
Employer Implications/Action Needed Employers will not, until 1 October, need to take steps to renew any Special Assessment which was due to expire within the specified period.
Employer Risk Employers will not be in violation of Russian legislation if their Special Assessment reports have expired within the specified period, without having been renewed, before 1 October.
Link Read more
Subject Matter/Name of Development New non-working days
Summary

The following days were defined as additional “non-working days:” 6-8 May 2020 and 24 June 2020. These days are not treated as regular holidays, so employees must receive their salary as if they were working that day, though resting. There are some exemptions applying to specific cases and industries, but if an employee is required to work on these days based on these exemptions, they will not receive double payment as if they were working on a day of holiday.

Also, 1 July 2020 was declared a public holiday in Russia (this is for 2020 only). Therefore, if employees worked on that day, double payment will be due as is the case for other public holidays. As an alternative, upon the employee’s request, an additional day of leave may be provided by the employer in lieu of the double payment. 

Impact Date Not applicable
Employer Implications/Action Needed An employer must provide employees with the additional holiday and non-working days, unless one of the exemptions applies.
Employer Risk Employers can be held liable under the Code of Administrative Offenses for violations of these regulations, and employees are also given the ability to pursue their rights in court.
Subject Matter/Name of Development A procedure was approved enabling a trial of electronic work-related documents.
Summary

Russia will enable the use of electronic work-related documents, on a trial basis, until 31 March 2021. The Ministry of Labor and Social Protection of the Russian Federation has defined and approved the process for conducting this trial, with certain employers given the ability to organize employee’s work documents in an electronic format. 

Impact Date 28 June 2020
Employer Implications/Action Needed If the trial is successful, Russian labor legislation may be amended to provide all employers with the possibility of using electronic work-related documents, instead of hard copies.
Employer Risk Not applicable
Link Read more

Contact:

Victoria Goldman
Partner
+78 12 36 33 37 7
victoria.goldman@eversheds-sutherland.ru

Slovakia

Subject Matter/Name of Development COVID-19: Borders and quarantine
Summary The latest rules applicable to people entering the Slovak Republic were published in a Measure by the Public Health Authority, including a current list of “safe countries.” If a person entering the country has visited another not listed as “safe,” they must self-isolate at home until a negative COVID test. The test may be performed on the fifth day of home isolation at the earliest.
Impact Date 6 July 2020
Employer Implications/Action Needed Employers should check any foreign travel by employees and implement measures to comply with the latest regulation. This is especially important during the summer holiday season, as the list of “safe countries” may be amended without any prior notice.
Employer Risk Employers may have fewer employees available in the workplace, if they must self-isolate, and they may not be able to work from home. Non-compliance with the Measure may result in a fine (up to EUR 1659). The non-compliant person may also be fined by the police (up to EUR 1000).
Subject Matter/Name of Development COVID-19: State aid to employers
Summary Although the lockdown is being eased, various employer state aid mechanisms were extended for June and July 2020 (a possible extension for August 2020 is being discussed). In particular, wage compensation is available if employers are unable to assign work to their employees or are suffering a loss of sales.
Impact Date 21 May 2020
Employer Implications/Action Needed The rules for applying for compensation are unchanged.
Employer Risk No risk for the employer as state compensation is optional.
Subject Matter/Name of Development Increase in minimum subsistence
Summary The monthly minimum subsistence figure has increased as follows: first adult person EUR 214,83, second jointly assessed adult person EUR 149,87 and child EUR 98,08 per month.
Impact Date 1 July 2020
Employer Implications/Action Needed This figure is used to calculate various public benefits and can impact some HR calculations.
Employer Risk Minimum subsistence itself is provided by state institutions.
Subject Matter/Name of Development Changes to the posting of workers
Summary The Labor Code is being amended to comply with the latest EU Directive on the posting of workers. In general, the changes increase employer obligations.
Impact Date 30 July 2020
Employer Implications/Action Needed Employers with posted workers should revise existing contracts to ensure compliance with the new legislation.
Employer Risk Risks differ from one EU member state to another. However, non-compliance risks local fines.
Subject Matter/Name of Development One-time extension to fixed-term contracts
Summary A change to the Labor Code enables employers to extend, for another one-year term at most, a fixed-term employment contract that: (i) would otherwise expire during the pandemic emergency (as defined); (ii) the extension of which would be otherwise be prohibited under the Labor Code.
Impact Date 17 June 2020
Employer Implications/Action Needed The extension is only allowed in certain states of emergency and two months thereafter. Although the serious state of emergency was cancelled as of midnight 13 June 2020, the declaration of the emergency state is still in force. If employers have fixed-term contracts that will expire, we advise using this option to extend existing contracts, should the conditions be met. Employers must consult with the employees’ representatives about an extension, however their consent is not required.
Employer Risk Should the employer decide not to extend existing fixed-term contracts, or no such contracts are present, or the conditions are not met, no risk comes into question. If an extension is sought and there is no consultation, the contract is deemed to be agreed for an indefinite period.

Contact

Helga Maďarová
Senior Associate
helga.madarova@eversheds-sutherland.sk

Spain

Subject Matter/Name of Development COVID-19 - Temporary contract suspension / working time reduction
Summary The procedure to effect a temporary contract suspension / working time reduction due to COVID-19 (expediente de regulación temporal de empleo or “ERTEs”) became more flexible during March 2020. In June 2020, the measures were extended.
Impact Date 26 June until 30 September 2020.
Employer Implications/Action Needed The validity of existing ERTEs by force majeure (e.g. an event that is out of the control of the employer due to the state of alarm) is extended until 30 September 2020, meaning that companies may extend the ERTE until that date. In addition, ERTEs for economic, technical, productive, and organizational reasons due to COVID-19 can continue to be carried out until 30 September 2020. It should be noted that during the period of the ERTE, employees are not entitled to perform overtime and any outsourcing of the activity or new hiring is prohibited.
Employer Risk Failure to comply with the ERTE requirements could result in claims and sanctions.
Subject Matter/Name of Development COVID-19 - Prohibition of dismissal
Summary Until 30 September 2020, dismissals must not be based on the same reasons that justify an ERTE (collective suspension of employment or temporary reduction of work time due to COVID-19). The termination of contracts or dismissals for such reasons will not be justified.
Impact Date 26 June until 30 September 2020.
Employer Implications/Action Needed Employers should ensure that they do not carry out any COVID-19-related dismissals prior to 30 September 2020.
Employer Risk Dismissals for COVID-19-related reasons risk being contested, with consequent risk for employers of awards of reinstatement or compensation.
Subject Matter/Name of Development COVID-19 - Health and Safety requirements
Summary The Spanish Government continues to enact a number of exceptional health and safety measure requirements due to COVID-19.
Impact Date Ongoing
Employer Implications/Action Needed Employers should ensure that appropriate measures are in place to protect against COVID-19 risk, including social distancing within the workplace. This includes the requirement to organize and adapt working conditions so that a minimum social distance of 1.5m between employees can be maintained.
Employer Risk Companies not complying with legal health and safety requirements could be subject to financial sanctions.

Contact:

Jacobo Martinez
Partner
+34 91 42 94 33 3
jmartinez@eversheds-sutherland.es

Sweden

Subject Matter/Name of Development Additional protection for posted workers
Summary

The Posting of Workers Act will be amended to give posted workers employment rights and protections that are more aligned to other workers in Sweden. For example, the possibility of regulating employment conditions through collective bargaining agreements will be extended (e.g. relating to wages) and there will be further requirements for companies to report and provide documentation relating to posted workers. Employees posted for more than 12 months will be entitled to almost all of the working conditions and terms of employment applying to Swedish employees. Further, in certain circumstances, the posting of hired workers may be equated with posted workers.

Impact Date 30 July 2020
Employer Implications/Action Needed

Posted workers may be entitled to additional employment-related rights and protections. Where employers post workers to Sweden or receive services performed by posted workers, the new requirements should be reviewed and adhered to, including reporting and documentation requirements.

Employer Risk

Breach of the Posting of Workers Act may result in damages payable to trade unions or posted workers, or a fine of SEK 20,000.

Subject Matter/Name of Development Short-time work allowance
Summary

Employers facing financial difficulties due to COVID-19 can apply to reduce their employees’ working hours and receive state aid to compensate them for a significant part of the costs of retaining employees. Aid can be received for a six-month period plus a three-month extension period. Between May and July 2020 employers may reduce working hours by 80% under this scheme (in addition to the existing standard 20, 40 or 60% reductions).

Impact Date 1 June 2020 (when the 80% level takes effect)
Employer Implications/Action Needed

Employers wishing to utilize the scheme should ensure that the rules and timing requirements of the scheme are understood and adhered to. For example, employers that have applied for aid must make a reconciliation (i.e. provide information to the responsible authority to show compliance with the rules) in time, namely three months after approval of the aid. Employers wanting to apply for an extension of aid must do so during the reconciliation.

Employer Risk
A court can declare a termination of
employment before the retirement age
invalid and hold the employer liable for
damages.

Failure to comply with the timescales under the scheme could result in aid being denied. Further, employers who fail to make a reconciliation in time will be obliged to pay back the aid.


Contact:

Per Westman
Partner
+46 85 45 32 28 8
perwestman@eversheds-sutherland.se

Switzerland

Subject Matter/Name of Development COVID-19
Summary

With effect from 22 June 2020, the Federal Council has lifted the declaration of an extraordinary situation, with resulting easing of more stringent measures. Simultaneously, special regulations made to protect the health of vulnerable employees during the pandemic have been lifted. On the same date, the Swiss government enacted a new Ordinance, which requires that establishments that are accessible to the public or that offer personal services and organizers of events with more than 30 participants, must ensure that precautionary measures are in place to protect their employees and customers/event participants.

Impact Date 22 June 2020
Employer Implications/Action Needed

Employers should ensure that the updated legal requirements are understood and effective mechanisms are in place to ensure compliance.

Employer Risk

Sanctions in the case of non-compliance and potential liability towards employees and third parties.

Subject Matter/Name of Development Equal Pay
Summary

The obligation to conduct an internal salary equality analysis enters into force. This applies to companies with at least 100 employees at the beginning of the respective calendar year, regardless of whether the employees are full-time or part-time. The Federal Government provides a standard analysis tool meeting the necessary requirements, “Logib”, free of charge. The amendment to the law represents a renewed effort to close the gender pay gap, reflecting the constitutional principle of wage equality.

Impact Date 1 July 2020
Employer Implications/Action Needed

Companies employing at least 100 employees at the beginning of the respective calendar year are required to carry out a salary equality analysis. Such analysis must be carried out in accordance with a scientifically-recognized and legally-compliant method. The results have to be verified by a qualified external audit company or the employee representative body.

The company is required to inform the employees about the results of the analysis. Listed companies must publish the results in the annex to their annual financial statement. If salary inequalities are found, the analysis must be repeated every four years.

Employer Risk

The law does not provide for sanctions in the event that an unequal salary system is established. However, such information can have a negative impact on the company’s reputation and may also negatively impact staff turnover. Further, the information of any salary inequality within the company could be used as evidence to support employee claims of salary discrimination due to gender.

Contact:

Peter Haas
Partner
+41313287530
peter.haas@eversheds-sutherland.ch

UK

Subject Matter/Name of Development COVID-19
Summary

As the government eases the lockdown, it is encouraging a safe return to work, including flexibility to bring furloughed employees back part-time. A tapering of government funding will apply for furlough from August 2020. The furlough scheme closed to new entrants on 10 June 2020 and will close permanently on 31 October 2020.

Impact Date 1 July 2020 (flexible furlough)
Employer Implications/Action Needed

Employers must assess how and when their staffing and business needs can be accommodated in safe working conditions and in line with government requirements. The rules of the furlough scheme should be understood and applied in order to ensure employment costs can be re-claimed. This includes agreeing any furloughing arrangement with any furloughed employee and confirming that agreement in writing.

Employer Risk

Failure to comply with the rules of the furlough scheme could result in claims being rejected. Failure to take account of health and safety requirements and employment law obligations relating to changes to working arrangements could result in grievances and potential litigation.

Links

New guidance on “flexible furlough” arrangements briefing

Beyond Lockdown - checklist issues

Subject Matter/Name of Development Brexit and immigration
Summary

The UK left the EU on 31 January 2020, entering an 11-month transition period (any extension to the transition period must be requested by 30 June 2020). Brexit talks continue between the UK and EU regarding a future relationship once the transition period ends. An important issue related to Brexit is future UK immigration policy, with a new UK Immigration Bill currently progressing through parliament.

Impact Date 31 December 2020 onwards
Employer Implications/Action Needed

If passed, the Immigration Bill will end free movement and pave the way for a new points-based immigration system in the UK. Upfront planning and a review of contingency / recruitment arrangements will help to minimize disruption.

Employer Risk Uncertainty and potential issues with recruiting and retaining workers.
Links

Brexit update – the shape of the United Kingdom’s exit

Employment law after Brexit

New nationality guidance complicates post-Brexit applications

Brexit bulletin

Subject Matter/Name of Development

Employment Bill

Summary

The awaited Employment Bill is expected to provide the right to: request a more predictable contract; one week’s unpaid carers’ leave; extended maternity protection on redundancy; protection of workers’ tips; neonatal leave and pay; and to pave the way for the creation of a single enforcement body.

Impact Date Implementation dates are currently unknown
Employer Implications/Action Needed

The introduction of a single-enforcement body could prove significant in relation to future claims. Employers should be alert to further details on the bill. In the meantime, review current policies.

Employer Risk Failure to take account of the changes once implemented could result in grievances and potential litigation.

NB: This update covers England, Wales and Scotland. It does not cover developments that apply only in Northern Ireland

Contact:

Diane Gilhooley
Partner
+44 161 831 8151
dianegilhooley@eversheds-sutherland.com

Middle East Global Update Banner

UAE

Subject Matter/Name of Development COVID-19 – National Sterilization Programe and ongoing measures
Summary

On 24 June 2020, the completion of the National Sterilization Programe was announced. That program had been in place since 26 March 2020 in order to protect the public from COVID-19, with sterilization being carried out at certain times of the day (mostly overnight but also around the clock for 24 hours at times). Although the National Sterilization Programe is complete, the UAE Government has issued various directives setting out ongoing measures and precautions that employers and employees must comply with.

Impact Date 24 June 2020
Employer Implications/Action Needed

Employers should ensure that they comply with the various directives issued by the UAE Government. The measures and precautions in the directives vary from Emirate to Emirate but include, by way of example, the mandatory wearing of masks, implementation of two-meter social distancing, daily sterilization of the workplace and installing temperature checkpoints on entry into the office. Employers must also give priority to vulnerable workers to allow them to continue to work from home, including pregnant women, people over 55 years, people of determination (i.e. with a disability), those suffering from respiratory and chronic illnesses and female employees with children in grade nine or below.

Employer Risk

The penalties for non-compliance with government directives can include fines ranging from AED500- AED50,000.

Subject Matter/Name of Development COVID-19 - easing of restrictions on workplace attendance
Summary

 

On 14 January 2020, the DIFC announced that the legislation has been ratified which will implement its proposal to replace ESG with an obligation on employers to enrol DIFC employees into a workplace scheme and make mandatory minimum contributions. 

From 1 February 2020, employees will cease to accrue ESG and will instead be entitled to receive payments into a Qualifying Scheme (i.e. a monetary purchase scheme which complies with the legislation). Employers have until 31 March 2020 to enrol employees and must make the first payments into the scheme by 21 April 2020. These payments will include any back payments to 1 February 2020. 

In order to combat the spread of COVID-19, the UAE Government announced various percentage restrictions on the number of employees who could attend the workplace, with the exception of those working in vital sectors. During the period that the number of positive COVID-19 cases was at peak levels, most companies were limited to having no more than 30% of the workforce attending the workplace. In June and July those restrictions were eased.

Employees’ accrued ESG up to 1 February 2020 will be preserved and employees who have less than a year’s service will have their entitlement calculated on a pro-rata basis. Accrued ESG can either be calculated and paid out on termination of the employee’s employment (applying their salary as at the termination date) or it can be paid into the Qualifying Scheme either with or without employee consent. If the ESG is paid into the Qualifying Scheme with the employee’s consent then the employer’s obligations in respect of such accrued ESG will have been satisfied. However, if the employer transfers accrued ESG into the Qualifying Scheme without the employee’s consent, the employer will be obliged to make up any difference on termination of employment between the amount transferred and the amount the employee would have been entitled to (i.e. the investment risk remains with the employer). 

There are some categories of employees who will be exempt (for example, employees who are enrolled in the UAE/GCC state pension scheme, employees on secondment and employees serving notice)

 

Impact Date June / July 2020
Employer Implications/Action Needed

In Dubai, with effect from 6 June 2020, 100% of employees in the private sector were able to return to work and government sector employees could return from 14 June 2020. In Abu Dhabi, with effect from 5 July 2020, public sector workers were able to return to work at 100% capacity. Although the restrictions on employee numbers attending the workplace have been lifted, employers should continue to implement and follow the precautionary measures specified by the UAE Government or relevant authority, including in respect of social distancing.

Employer Risk

The penalties for non-compliance with government directives can include fines ranging from AED500- AED50,000.

Subject Matter/Name of Development DIFC Presidential Directive No. 4 of 2020 - Emergency measures for employers
Summary

On 26 April 2020, the DIFC issued a directive that allows employers to take certain emergency measures during the COVID-19 “emergency period,” which is currently specified to be the period up to and including 31 July 2020. The measures can be imposed without employee consent, however five days’ written notice must be given. The measures include:

  • i. imposing vacation leave (although this right already existed)
  • ii. imposing reduced working hours
  • iii. imposing reduced remuneration on a temporary basis
  • iv. imposing unpaid leave
  • v. restricting workplace access; and/or
  • vi. imposing remote working conditions and requirements, including imposing means of measuring an employee’s engagement and productivity during remote working
Impact Date April to 31 July 2020
Employer Implications/Action Needed

DIFC employers impacted by COVID-19 can rely on the directive to enable temporary flexibility during the ongoing COVID-19 emergency period. However, they should ensure that the required written notice is given to impose measures and that the terms of the directive are adhered to.

Employer Risk

While the directive does not set any limits on the extent of the measures, including any cap on reducing working hours and/or remuneration, employers should exercise the rights under the directive reasonably in order to avoid wider employee relations risks.

Contact:

Geraldine Ahern
Partner
+9712 494 3632
geraldineahern@eversheds-sutherland.com