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Global Employment and Labor Law Update - November 2020

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

The challenges of COVID-19 continue to dominate the legal landscape. However, many governments and businesses are now looking beyond the pandemic and planning for the future. Our work across the globe and our insight into international developments allow us to identify consistent themes emerging to assist with that planning.

In this quarter, in addition to ongoing COVID-19 developments, other emerging themes include enhanced family-friendly rights 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, Labor and Pensions
dianegilhooley@eversheds-sutherland.com

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South Africa

Subject Matter/Name of Development

Resignations with immediate effect

Summary

In the case of Mthimkhulu v Standard Bank of SA, the Labour Court determined the legal position where an employee resigns with immediate effect after the conclusion of a disciplinary hearing but prior to the imposition of a sanction of dismissal.

The court held that in such situation, employees will be in breach of their notice obligation, in response to which employers may either (i) accept the repudiation, in which case the employment relationship will terminate, or (ii) reject the repudiation and hold the employee to their notice period. During this period, the employment relationship continues to exist and an employer may therefore proceed with dismissing the employee.

Impact Date

18 September 2020

Employer Implications/Action Needed

Despite the fact that a resignation is a unilateral act, employers are not required to accept resignations with immediate effect. Instead, the employer may decide whether or not to accept the resignation (which constitutes a repudiation of the employment agreement).

Employer’s need not approach the court for an order of specific performance in the event that they wish to reject the employee’s repudiation of their notice period obligation (by resigning with immediate effect).

Employer Risk

No risk to employers.

Employers should be aware that employees cannot simply resign with immediate effect. If and when employees do so, employers may decide whether to accept or reject the repudiation so that the employment ends immediately or reject the repudiation and hold the employee to their notice period.

Subject Matter/Name of Development Temporary Employment Services
Summary

Whether an entity is a Temporary Employment Services (“TES”) may be determinative of liability for employees. In the case of David Victor & 200 others v Chep South Africa (Pty) Ltd and 3 others, the Labour Appeal Court considered whether a company should be deemed a TES. Overturning the Labour Court decision, it found a tripartite TES relationship to exist and set out guidance for determining any trigger of the TES deeming provision under section 198A(3) of the LRA, namely:

  • whether the company has provided other persons to a client for a reward; and/or
  • whether the provider procured the workers for reward

Further, that the substance of the relationship is more definitive than its form and that where a client contractually controls the overall work process of persons who work at its premises, as well as their conduct and behaviour, the employees will ordinarily be deemed employed by the client and not the TES.

Impact Date

16 September 2020

Employer Implications/Action Needed

Where employers provide staff to their clients for reward or receive staff from external entities for reward, they should carefully consider the circumstances of the arrangement to determine whether the status may be determined as a TES. Considerations should include the degree of control as well as the extent of integration of employees.

Employer Risk

If the deeming provision is triggered, then either (i) the employer will become the sole employer of the employees if the employer is the client in the TES relationship or (ii) the client/s of the employer will become the sole employer of the employees if the employer is the TES in the TES relationship. The effect will be that the liability for the employees will shift to the deemed employer.

Contact:

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

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China

Subject Matter/Name of Development Shared employees
Summary

The PRC Ministry of Human Resources and Social Security have issued the Notice on Guidance and Service Regarding Employee Sharing (the “Notice”). The Notice includes, among others:

  • subject to agreement by the employer and employee, where the employer arranges for its employee to work for another company (which lacks sufficient workers), such arrangement shall not change the employment relationship between the employer and the employee (“Employee Sharing”)
  • a collaboration agreement shall be entered into among enterprises for Employee Sharing purposes (e.g. it may include the number, work location and remuneration of the shared employees and circumstances for returning them to the employer)
  • the employer shall negotiate with the employee to revise the original employment contract for the purpose of Employee Sharing (e.g. to specify the employee’s new work location and more)
  • if a shared employee suffers a work-related injury when working for the company, the shared employee’s employer bears the relevant liabilities for work-related injury insurance. The employer may agree with the company an indemnification in this regard
Impact Date

30 September 2020

Employer Implications/Action Needed

Employers should follow the Notice to ensure legal compliance in relation to Employee Sharing. Where necessary, employers should consult with their competent local authorities on the specific guidance and requirements for Employee Sharing.

Employer Risk

The Notice prescribes the channels for public complaints and tip-offs to prevent the infringement of employees’ legal rights and interests under Employee Sharing. On this basis, failure to fully comply with the Notice and the specific requirements of local authority by employers will trigger potential liabilities/ punishment.

Subject Matter/Name of Development Trade secrets
Summary

The Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Trade Secret Infringement (the “Provisions”) and the Supreme People’s Court and Supreme People’s Procuratorate’s Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (3) (the “Interpretation”) have been published.

The Provisions and the Interpretations provide guidance on the Anti-Unfair Competition Law of the PRC (2019 Amendment) in trials for civil cases and criminal cases, respectively. Among other things, they elaborate on the definition of “trade secrets”, the illicit acts prohibited by the law, the potential administrative, civil and criminal liabilities faced by infringers and the rights to apply for injunctions against disclosure of trade secrets.

Impact Date

12 September 2020 (the Provision) 14 September 2020 (the Interpretation).

Employer Implications/Action Needed

Employers should review their current measures for protecting trade secrets and ensure the appropriate measures are deployed, according to the Provisions.

They should also revisit recruitment process and internal policies to ensure that trade secrets of another party are not brought into and used by the business as this may lead to liabilities on the business and relevant personnel.

Employer Risk

Where insufficient or inappropriate measures are deployed for the protection of confidential information, the relevant information may not be considered as falling under the definition of “trade secret” and hence removed from the ambit of legal protection.

Where employees bring the trade secrets of their previous employers with them and the employer uses such information, the employer could potentially face legal liabilities.

Subject Matter/Name of Development Sexual harassment
Summary

The PRC Civil Code has codified the prohibition of sexual harassment. This includes a non-gender specific prohibition against sexual harassment and a legal obligation on employers to adopt measures against sexual harassment.

According to 1010 of the PRC Civil Code,

(i) where, against one’s wish, sexual harassment takes place by means of words, images, physical behavior, etc., the victim has the right to request the perpetrator to bear civil liability in accordance with the law; and

(ii) institutions, enterprises, schools and other organisations must adopt reasonable measures to prevent and curb the use of authority and subordinate relationships to commit sexual harassment, including prevention, acceptance of complaints, investigation and enforcement, etc.

Impact Date

1 January 2021

Employer Implications/Action Needed

Employers should review their employment handbook, policies and internal structures and ensure that measures adopted satisfy the current legal requirement in relation to prohibition of sexual harassment.

Employer Risk

Where employers do not have up-to-date internal policies against sexual harassment (either due to oversight or differing local laws), it is now under a clear obligation to adopt such measures, and may face scrutiny or even civil liability in case of failure.

Contact:

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

Hong Kong

Subject Matter/Name of Development

Guidance confirmed COVID-19 cases in the workplace

Summary

If any employee has tested positive for CoVID-19 and has worked in the workplace during the incubation or infectious period, the employer should close the workplace and advise all employees who were present in the past two weeks to stay home.

The employer should send to the Centre for Health Protection (CHP) a list of employees who attended the workplace in the past two weeks, and the CHP will usually require all close contacts of a confirmed case to go into quarantine. The employer should arrange for thorough cleaning of the workplace, which should remain closed until the CHP confirms that it can be reopened.

Impact Date 30 July 2020
Employer Implications/Action Needed

Employers should comply with current guidance, monitor the latest developments of COVID-19 and any future government guidance.

Employer Risk

Failure to observe the government’s guidance may result in the employer’s negligence and/or failure to exercise a reasonable duty of care, which may lead to civil liabilities.

Links

Coronavirus - Hong Kong Government Issues Guidance

Subject Matter/Name of Development

No right of set-off against an employee bonus (case law)

Summary

The Court of Appeal has held that section 32(1) of the Employment Ordinance (which prohibits deductions to be made by an employer from employee wages or other sums due) does not permit the employer to exercise an equitable set-off against its obligation to pay a bonus to recover money owed to it by the employee.

Impact Date

6 August 2020

Employer Implications/Action Needed

A right of set-off against sums due to an employee must generally fall within one of the permitted exceptions to deductions from wages of section 32 of the Employment Ordinance. Even where there is a strong claim against the employee (e.g. gross misconduct), the employer should consider paying the sum due to the employee first and then bringing legal proceedings for recovery of the loss.

Employer Risk

Breach of section 32 of the Employment Ordinance may give rise to criminal liability.

Links

Hong Kong Court of Appeal upholds bonus payment and restricts employers’ right to make deductions

Subject Matter/Name of Development

Parent companies as joint employers (case law)

Summary

A recent High Court case has found that that a Hong Kong listed company and its wholly-owned subsidiary were joint employers of an employee, who signed an employment contract with the subsidiary but mainly served as the company secretary of the listed parent company. The listed parent company, as the joint employer, was held jointly liable for unpaid wages and other employee benefits owed to the employee by the subsidiary.

Impact Date

17 August 2020

Employer Implications/Action Needed

Entities that share the services of an employee within the same group may be regarded as joint employers of that employee even though the contractual arrangements may suggest otherwise.

In the event that the employer is a listed company, and its company secretary is not its employee, the listed company should make a clear disclosure of the reasons for such arrangement.

Employer Risk

A joint employer may be liable for the employee’s wages and other employee benefits of employees of an insolvent joint employer.

Links

Parent Company Held Liable as Joint Employer of Subsidiaries

Subject Matter/Name of Development Increase to maternity leave
Summary

The Hong Kong Legislative Council has passed the Employment Amendment Ordinance 2020, which increases statutory maternity leave from 10 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 be reimbursed by the government.

Impact Date

11 December 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 10 weeks after the birth of the child.

Employer Risk

Failure to comply with the amendment ordinancewhen it is in force is a criminal offence.

Links

Changes to Hong Kong maternity rights coming in December

Contact:

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

Singapore

Subject Matter/Name of Development

Jobs Growth Incentive Scheme (JGI)

Summary

Eligible employers increasing their overall local workforce between September 2020 to February 2021 will receive wage support. To be eligible for the JGI, there must be both an increase in overall local workforce size and of those within the local workforce earning is greater than or equal to S$1,400/month, when compared to August 2020. The JGI is 25% (or 50% for mature local hires aged 40 and above and all persons with disabilities) of the first S$5,000 of gross monthly wages, for 12 months from the recruitment date, if employers continue to meet the eligibility criteria.

Impact Date

Eligible employers are those established on or after 17 August 2020. New local hires must be recruited from September 2020 to February 2021.

Employer Implications/Action Needed

The Inland Revenue Authority of Singapore will notify eligible employers by post of the amount of JGI payable to them. An eligible employer must meet the eligibility criteria for the entire 12-month period in order to receive the JGI throughout.

Employer Risk

Employers should guard against inadvertent abuse of the JGI scheme, which will be viewed seriously by the Singapore Government. Offenders may have their JGI grants denied and can be charged under Section 420 of the Penal Code (see above). As with the JSS, JGI grants are calculated based on Central Provident Fund contributions, so employers should ensure the accuracy of their contributions.

Subject Matter/Name of Development

Extension of the Jobs Support Scheme (JSS) (COVID-19)

Summary

The JSS (where the Singapore Government pays a percentage of local employees’ wages up to a cap) was extended on 17 August 2020. The government will continue to subsidise the payment of wages of local employees (at reduced percentages) for wages between September 2020 and March 2021, subject to certain exclusions.

Impact Date

September 2020 to March 2021

Employer Implications/Action Needed

The Inland Revenue Authority of Singapore will notify eligible employers of the tier and amount of grant support. The JSS grant for wages from September to December 2020 will be paid in March 2021 and for January to March 2021 wages, will be paid in June 2021. It is possible for employers to submit an appeal to be considered for a higher tier pay out if they are part of the relevant sectors.

Employer Risk

Employers should beware of inadvertently abusing the JSS. The Inland Revenue Authority of Singapore takes such abuse seriously and offenders may have their JSS grants denied and can also be prosecuted under Section 420 of the Penal Code, punishable with up to 10 years’ imprisonment and a fine. JSS grants are calculated based on Central Provident Fund contributions and employers should ensure the contributions are accurate.

Subject Matter/Name of Development

Updated guidelines on safe management measures for businesses (COVID-19)

Summary

Previous safe management measures prescribed that working from home should be the default mode of working for employees able to do so. The Singapore Ministry of Manpower has since updated the guidelines. While working from home remains the default, employees may return to the workplace to better support business operations for no more than half their working time, and with no more than half of such employees in the workplace at any point in time.

Impact Date

28 September 2020 onwards

Employer Implications/Action Needed

For employees who can work from home, employers can request they return to the workplace, subject to the specified conditions e.g. split-team arrangements.

Employer Risk

Employers must ensure that if they ask their employees to return to the workplace, safe management measures are implemented. These include: ensuring a safe distance of at least 1m between work stations; ensuring employees wear their masks as required; using Safe Entry to log the entry and exit of their employees and putting in place regular temperature checks.

Contact:

Sze-Hui Goh
Partner

+65 8382 8702
sze-huigoh@gtlaw-llc.com

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Austria

Subject Matter/Name of Development Proposed amendment of the Law on Residences (Niederlassungs- und Aufenthaltsgesetz)
Summary

If agreed, the Law on Residences will change to make it easier for applicants to get a Rot-Weiß-Rot card as they will not need a residence in line with local customs (ortsübliche Unterkunft) while undergoing the application process. There is also a simplified process for relatives.

Impact Date Not known – this is a draft law under review.
Employer Implications/Action Needed

No action needed as yet as the change has not been confirmed.

Employer Risk

Unknown at this time.

Subject Matter/Name of Development Extension of special care for children or disabled family members
Summary

If the employee does not have leave entitlement and national education institutions are closed, the employer may grant the employee special care time (up to three weeks) for children under the age of 14 as well as for disabled family members providing the employee is not critical to the business

Impact Date

1 October 2020

Employer Implications/Action Needed

If the employer wishes to grant special care time, 50% of the employer’s costs are funded by the Austrian government. Within six weeks of the end of special care time, the employer must submit its claim to the state.

Employer Risk

The employer may not recover 50% of its loss as the subsidy is capped.

Subject Matter/Name of Development Phase III of short-time work (Kurzarbeit)
Summary

Short-time work is the reduction of working hours for a certain period of time in order to secure jobs and is supported by the Austrian government. Short-time work can be extended up to six months within phase III, until 31 March 2021. There are some new requirements, such as a new threshold of 30%-80% of regular working time (it was 10%-90%). There is also an economic justification condition (why a business needs short-time work). Businesses with more than five employees must be examined by an accountant, tax consultant or an auditor. Employees must engage with further training if asked by the employer.

Impact Date Phase III started on 1 October 2020
Employer Implications/Action Needed

Employers must file an application to qualify for the state subsidy and justify their need for using short-time work within their businesses.

Employer Risk

Employers must comply with the short-time working regulations or risk repaying the state subsidy.

Subject Matter/Name of Development COVID-19 rules (COVID-19 Maßnahmenverordnung)
Summary

Provisions have been introduced on: hygiene; the requirement to wear facial coverings within certain establishments (e.g. restaurants or businesses where there is client engagement); and a safe distance of one meter between people, unless there is another suitable protective device for spatial separation between people which guarantees the same level of protection. However, in work establishments, such as office premises, where there is no direct customer contact, facial coverings must be mutually agreed.

Impact Date

These changes came into effect on 26 September 2020

Employer Implications/Action Needed

Employers must ensure that employees and customers are wearing mouth and nose protection when there is customer contact. A safe distance of one meter must be obeyed and, if this is not possible, other safety measures must be taken.

In office premises, if the minimum distance of one meter cannot be maintained due to the nature of the work, the risk of infection must be minimized by taking suitable protective measures. It is important to note that it must be due to the nature of the profession or work being undertaken that the minimum distance is not possible. If the minimum distance cannot be maintained due to the available space, other spatial measures must be taken to ensure that the minimum distance can be maintained, or the number of employees in the room/area must be reduced to such an extent that the minimum distance of one meter can be maintained.

Employer Risk

There are fines for people not wearing facial coverings (25 €) or not keeping a safe distance of one meter (50€).

Contact:

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

Czech Republic

Subject matter/Name of Development Important amendment of the Labor Code
Summary

The main changes of the Labor Code are:

(i) new ways of delivering important documents to employees

(ii) new rules on the recall (removal) of managers

(iii) an updated TUPE definition (iv) a new way to calculate vacation

(v) the introduction of a so-called “shared work place” (a form of job-sharing)

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.
Subject Matter/Name of Development Significant court ruling on differential regional pay - (case law)
Summary

The Supreme Court has ruled that employees of the same employer, performing the same or comparable work in different regions of the Czech Republic, are entitled to the same amount of wages. Socio-economic conditions and the corresponding level of living expenses in the place where the employee performs work for the employer are irrelevant for the assessment of whether the work in question is the same work or work of equal value.

Impact Date 20 July 2020
Employer Implications/Action Needed

If an employer has more than one site in the Czech Republic, there is an obligation to provide employees performing the same type of work with the same salary.

Employer Risk Employers risks a penalty up to CZK 500,000 (approx. EUR 19,300) and potential employee compensation claims for payment of unjustified regional differences in remuneration for the last three years.
Subject Matter/Name of Development Closed schools drives changes to employee care benefits
Summary Draft legislation proposes amendments to the care benefit entitlement rules. Currently, care benefit is paid for up to 9 days or 16 days in specific cases. The bill should, among other changes, extend the duration of support due to the COVID-19 closure of Czech schools from 14 October 2020. Some employees (with specific work agreements other than employment contracts) will also be entitled to the benefit under particular conditions.
Impact Date Expected to be approved in 4th quarter of 2020
Employer Implications/Action Needed Employers must permit those employees entitled to the care benefit not to attend work. This period will be extended. The benefit is paid by the Government.
Employer Risk More employees will not be available to work because of the benefit, and for a longer period. Employers will need to consider replacements, as appropriate.
Subject Matter/Name of Development “Kurzarbeit” – Government support for reduced working hours
Summary The Government is working on a special support scheme for periods when employers cannot assign 100% work to employees. This will be a permanent support scheme and will replace the COVID-19 Programme. The aim of the “Kurzarbeit” is to help employers to retain employees when there is insufficient work.
Impact Date Expected to be approved in fourth quarter of 2020
Employer Implications/Action Needed Employees unable to work due to specific reasons will be able to receive 70% of their average net hourly earnings.
Employer Risk N/A
Subject Matter/Name of Development Extension of the COVID-19 job retention programme
Summary Part A of the programme (originally applicable until 31 October 2020) has been extended and, where premises close, the rules changed in favour of employers (100% compensation will be provided instead of 80% and the total cap per employee has been increased from CZK 39,000 to CZK 50,000 per employee per month). Extension of Parts B and C will be discussed by the Government.
Impact Date 1 October 2020
Employer Implications/Action Needed If a company has been affected by Government measures regarding COVID-19 and work could not be assigned to employees, it may apply for the subsidy. However, a time limit applies.
Employer Risk In case of a late application, the subsidy will not be granted.

Contact:

Radek Matouš
Managing Attorney
radek.matous@dhplegal.com

Denmark

Subject Matter/Name of Development New reduced hours scheme (COVID-19)
Summary

The temporary salary reimbursement scheme expired on 29 August 2020. On 31 August 2020, the Government, the unions and employers’ organizations reached agreement on a new temporary scheme. This allows all private companies to establish a division of work scheme for all groups of employees. It means that private companies can reduce employees’ working hours and salaries for a temporary period of up to four months, provided that certain requirements are met.

Impact Date 14 September 2020
Employer Implications/Action Needed

Division of work can be established for a period of up to four months, provided that the scheme is established no later than 31 December 2020.

The reduced hours must constitute at least 20% and, as a maximum, 50% of average working hours measured over a four week period, with the opportunity to change the given percentage for each four week cycle.

Employer Risk N/A
Subject Matter/Name of Development Upcoming changes for posted employees
Summary

Draft legislation will amend the Danish Posting of Employees Act. The amendments are based on changes to the EU Posting of Workers Directive, which entered into force on 30 July 2020, and include: where employees are posted to Denmark for more than 12 months, they will become subject to certain mandatory Danish employment terms in excess of the choice of law applicable to the employment.

Impact Date 1 January 2021
Employer Implications/Action Needed

The changes mean that after 12 months’ posting employers must ensure that posted employees obtain the same working and employment conditions that are applicable according to mandatory law in Denmark. The 12 month period may be prolonged to 18 months. Excluded from the regulation is, however, legislation concerning the procedure, formalities and conditions in connection with entering into and termination of employment contracts, including non-competition clauses and payments to occupational supplementary pensions.

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

Read more

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 EU Commission has expressed support for ensuring that ‘gig’/platform workers have the same rights, including collective bargaining, as other workers and will launch a public consultation later in 2020 to ensure that such workers can participate in collective bargaining without the fear of breaking EU competition rules.

Link

Read more here

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

Court ruling that an employee’s pay claim was statute-barred (case law)

Summary

The Supreme Court has ruled that an employee’s pay claim had become statute-barred and that the exception to the two year limitation period granted in the Employment Contracts Act did not apply. The employee’s salary had been based on a CBA concluded by a trade union that was not qualified to conclude CBAs and the employee demanded that a higher salary based on another CBA should have been paid. A longer limitation period of five years (normally two years after the employment has ended) only applies if the provisions of the CBA on which the employee’s claims are based are manifestly ambiguous and the exception did not apply in the case.

Impact Date

5 October 2020

Employer Implications/Action Needed

The ruling consolidates the period of limitation applicable to employees’ pay claims.

Employer Risk

The ruling poses no apparent employer risks.

Subject matter/Name of Development

Court ruling on the obligation to consider alternative employment before terminating employment (case law)

Summary

The Supreme Court has ruled in a case involving an employee, a financial secretary, who had been sentenced to probation for aggravated embezzlement and whose employment was terminated. The Court confirmed that the employer did not need to explore alternative employment before giving notice, despite the crime having been committed in the employee’s free time - it was such a grave breach that the employer could not reasonably be expected to continue the employment.

Impact Date

30 September 2020

Employer Implications/Action Needed

The ruling clarifies the circumstances in which the employer may terminate employment on personal grounds without having to consider placing the employee in other work.

Employer Risk

Incorrectly assessing whether the obligation to explore alternative employment applies may result in employers being liable to pay damages for unlawful termination of employment.

Subject matter/Name of Development

Court ruling on conducting lawful, simultaneous co-operation negotiations when employer is downsizing (case law)

Summary

The Supreme Court has ruled that an employer reducing its workforce may organize co-operation negotiations regarding different measures separately, without the need to combine the negotiations even if the final decision will not include different measures. In the case in question, the employer had negotiated separately with two different employee groups and announced its decisions after completing both negotiations. According to the ruling, the employer did fulfil its duty to inform employees and the separate negotiations did not constitute a breach of co-operation legislation.

Impact Date

13 August 2020

Employer Implications/Action Needed

The ruling may grant some added flexibility to employers as it confirms that they may not need to combine co-operation negotiations (assuming that this does not in practice breach the employer’s duties as set out in the Act on Co-operation within Undertakings).

Employer Risk

Failure to comply with the correct negotiation procedure may lead to liability to pay compensation. Therefore, it is important to review each case separately and ensure that the steps of the cooperation negotiations are taken correctly.

Contact:

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

France

Subject matter/Name of Development

Long term Partial Activity (long term furlough)

Summary

In addition to the existing partial activity system, open to all companies forced to reduce their activity, the legislator has created a specific scheme for long-term partial activity.

This scheme is set up by collective agreement. It allows partial activity for 24 months over a period of 36 months (compared to 12 months for the normal scheme). In return, the extent of the reduction in working hours is limited to 40% and the employer must make a commitment to maintain employment. For unworked hours, employees are to receive 70% of the salary (the employer is reimbursed up to 60% of the salary).

Impact Date 29 July 2020
Employer Implications/Action Needed

Companies whose activity is unlikely to resume at a normal pace in the coming months and which will face difficulties in renewing the normal partial activity scheme should consider setting up long-term partial activity.

Employer Risk

N/A.

Web link

Activité partielle de longue durée (APLD)

Contact:

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

Germany

Subject matter/Name of Development

New figures for social security contributions and an increase to the minimum wage.

Summary

The income threshold in the statutory health insurance increases from 1 January, 2021 to €58,050 per year (€4,837.50 per month). The compulsory insurance ceiling will then be €64,350 per year (€5,362.50 per month).

The statutory minimum wage will initially be raised to €9.50 gross per hour from 1 January 2021, and will then increase in further steps to €9.60 gross on 1 July 2021, €9.82 gross on 1 January 2022, and €10.45 gross on 1 July 2022.

Impact Date 1 January 2021
Employer Implications/Action Needed

Employers must ensure that they comply with the new figures for social security contributions and in particular, the increase to minimum wage.

Employer Risk

Violations of the minimum wage can result in fines and penalties.

Web link

https://www.bmas.de/DE/Themen/Arbeitsrecht/Mindestlohn/mindestlohn.html 

https://www.bundesregierung.de/breg-de/aktuelles/beitragsbemessungsgrenzen-2021-1796480

Contact:

Frank Achilles
Partner
+49 89 54 56 52 75
frankachilles@eversheds-sutherland.com

Ireland

Subject Matter/Name of Development Increase to parental leave
Summary

Parental leave has increased from 22 weeks to 26 weeks. Parental leave entitles employees to take unpaid leave to look after their children. The leave must be taken before the child’s 12th birthday.

Impact Date 1 September 2020
Employer Implications/Action Needed

Employers should consider updating their parental leave policy to take into account the increase in leave since 1 September 2020.

Employer Risk

A failure to grant an employee their full parental leave entitlement can result in a claim to the WRC.

Subject Matter/Name of Development

Negotiating a settlement agreement (case law)

Summary

In a recent decision the Labour Court has found that a settlement agreement, purporting to waive claims under the Unfair Dismissals Act, was unenforceable on the basis the Court could not establish that (a) the agreement emerged from meaningful negotiations, (b) the employee was advised to seek legal advice and (c) the waiver was supported by adequate compensation or other consideration and (d) the employee was capable of giving informed consent.

Impact Date 5 August 2020
Employer Implications/Action Needed

When seeking a waiver of claims, employers should ensure that:

(i)the employee is encouraged to seek independent legal or professional advice;

(ii)the employee is asked, prior to signing, whether they have obtained prior legal or professional advice;

(iii)if the employee has obtained advice this should be specifically referred to in the settlement agreement; and

(iv) if the employee does not wish to take independent advice, the employer should ask the employee to confirm that they have read and understand the agreement.

Employer Risk For a settlement agreement to be relied upon, employers must ensure that the key requirements of informed consent are met. In the absence of informed consent, a settlement agreement will be considered invalid and an employee can pursue the employer for various claims.
Link

Read more

Subject Matter/Name of Development Increase in minimum wage
Summary

The Government has approved an increase in the national minimum wage by 10 cent per hour, from €10.10 to €10.20.

Impact Date 1 January 2021
Employer Implications/Action Needed

Employees will need to ensure that all employees are in receipt of the updated minimum wage of €10.20.

Employer Risk Failure to pay the minimum wage can lead to investigation and/or enforcement action via the WRC. In addition, if an employee is dismissed for seeking the national minimum wage, the employee may bring a claim for unfair dismissal.
Link

Read more

Subject Matter/Name of Development Increase to parent’s leave
Summary

Statutory parent’s leave provides leave to new parents during the first year of a child’s life (or within the first year of adoption) From April 2021, the period of leave will increase from 2 to 5 weeks for each parent and may be taken during the first 2 years of the child’s life/adoption.

Impact Date 1 April 2021
Employer Implications/Action Needed

From April 2021 eligible employees can take leave as one continuous period of 5 weeks or in single weekly blocks.

Employers should consider updating their parent’s leave policy to take into account the increase in leave from 1 April 2021.

Employer Risk

A failure to grant the new parent’s leave entitlement could result in a claim to the Workplace Relations Commission (WRC).

Contact:

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

Italy

Subject Matter/Name of Development Extending fixed-term employment contracts
Summary

By derogation of the ordinary rules, Law Decree n. 104/2020 provides that, until 31 December 2020, a single extension of a fixed-term employment contract will be permissible for a maximum period of 12 months (the maximum duration of the fixed term being 24 months) without the need to specify one of the mandatory reasons provided by Legislative Decree n. 81/2015.

Impact Date Until 31 December 2020.
Employer Implications/Action Needed

After 31 December 2020, extensions/renewals of fixed-term employment contracts will be subject to ordinary rules.

Employer Risk A failure to comply with the requirements for fixed-term contracts may lead to the contract being deemed permanent.
Subject Matter/Name of Development Remote working for vulnerable employees and parents of disabled children
Summary

Law n. 126/2020, provides that:

  • parents with disabled children are entitled to work from home until 30 June 2021, if (i) it is compatible with their role and (ii) the other parent is not unemployed. In this scenario, by derogation of ordinary rules, there is no need for individual agreement with the employee;
  • vulnerable workers are entitled to work from home until 31 December 2020, including undertaking different tasks (in the same category or area of classification) or specific professional training activities.
Impact Date 14 October 2020.
Employer Implications/Action Needed

Parents with disabled children can work from home without the need for an individual agreement (provided the employer complies with its health and safety obligations). However, after 30 June 2021, remote working in such circumstances will be subject to ordinary rules.

Employer Risk An employee who is refused access to these rights may bring a claim against the employer.
Subject Matter/Name of Development Working remotely and special leave for parents
Summary

Law Decree n. 111/2020 provides that, where a child under the age of 14 is

subject to a period of quarantine due to COVID-19, until 31 December 2020:

  • one parent may either work from home or take a period of leave for certain days of the quarantine period;
  • (only one parent at a time may exercise the right to take leave/work from home);
  • during such leave, pay will be 50% of normal salary.

These provisions are confirmed by Law n. 126/2020.

Impact Date 9 September to 31 December 2020
Employer Implications/Action Needed

The employer is required to accommodate these rights through individual agreement with affected employees in accordance with the regulations on working remotely (i.e. Legislative Decree n. 81/2017).

Employer Risk An employee who is refused access to these rights may bring a claim against the employer.
Subject Matter/Name of Development Transnational posting of employees.
Summary

Legislative Decree n. 122/2020 has modified Italian legislation regarding employees posted in Italy by foreign companies by implementing EU Directive n. 2018/957 as follows:

  • extending current legislation to staff-leasing agencies, end-user companies and third companies/branches, based in different Member States;
  • applying Italian NCBAs to posted employees, where the provisions are more favourable;
  • reducing the maximum duration of the posting from 24 to 12 months, which can be extended to 18 months.

At the end of the posting, the employment relationship will be regulated by Italian employment law, excluding provisions on dismissals, non-competition agreements and the social security contributions provided for each sector.

Impact Date 30 September 2020.
Employer Implications/Action Needed

The Italian end-user company must inform the staff-leasing agency of (i) the working and employment conditions to be applied, and (ii) the place of work of the employee concerned.

Employer Risk

Failure by the company to inform relevant parties of these changes may attract an administrative fine of between Euro 180 to 600, for each employee concerned.

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

Combined grounds for dismissal

Summary

Case statistics suggest that, where more than one reason for termination was relied upon by employers (combination grounds), the employer was unsuccessful in 21 out of 24 published judgments. The primary reason was that employers failed to substantiate, in combination, that the various grounds were sufficient to render a continuation of the employment contract impossible. In 3 cases the court granted full additional compensation (an extra 50% on top of the statutory severance payment). Frequently, combination grounds arise on a breakdown in the employment relationship but where this is not caused by serious culpable actions of the employee, additional compensation is likely to be awarded.

Impact Date N/A
Employer Implications/Action Needed

Employers should be aware that reliance upon the combination ground does not make it easier to terminate an employment contract.

Employer Risk

Additional compensation amounting to 50% the statutory severance payment (on top of the statutory severance payment) is a real risk if the court allows a request for termination based on the combination ground.

Subject Matter/Name of Development Coronavirus case-law
Summary

The first published COVID-19 case-law reveals the following trends: (i) employees in quarantine are entitled to 100% of their salary; (ii) sickness rules only apply if employees are actually sick; (iii) employers are not required to agree to an employee’s request to amend a holiday which has already been set; (iv) the employer cannot unilaterally lower the employee’s salary due to a lack of work, or unilaterally amend other benefits solely due to the pandemic; (v) the government’s advice to work from home as much as possible does not equate to a right to do so.

Impact Date

N/A

Employer Implications/Action Needed

Employers need to take into account emerging case decisions concerning the impact of the virus upon employment.

Employer Risk

Failing to take into account the recent case-law may result in wage claims (including the statutory increase of 50%) as well as an increase in other claims from employees. Additionally, reputational damage could result.

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

Norway

Subject Matter/Name of Development

New temporary layoff rules in connection with COVID-19

Summary

The employer’s duty to pay wages has been increased from the first 2 to 10 days after layoff. The period of layoff during which an employer is exempt from meeting its salary obligations will be increased from 26 to 49 weeks (the latter being within an 18-month period). A new “employer period II” of five days will be introduced for employees laid off for more than 30 weeks within an 18-month period. During the said period, the employer must pay the employee’s salary.

Impact Date

The increase to the employer’s obligation to pay wages during layoff took effect on 1 September. The changes to an employer’s exemption period are effective as from 31 October 2020. Employer period II will apply from 1 January 2021.

Employer Implications/Action Needed

Employer’s should notify NAV (the Department for Work and Welfare) and discuss the layoff situation with employee representatives.

Employer Risk Ensure the new conditions for layoff are met.

Contact:

Sten Foyn

Partner
+47 928 35 278”278
s.foyn@haavind.no

Poland

Subject Matter/Name of Development

Unlawful employment of individuals with maintenance payment arrears

Summary

The Labour Code has been amended to provide that where an employer fails to provide a written employment contract prior to commencement of employment, and the employee is in arrears with their maintenance payments, the employer can be fined. A fine can also be imposed where the employer pays such an employee higher remuneration than is due under the employment contract.

Impact Date 1 December 2020
Employer Implications/Action Needed

The employer must take these regulations into account when recruiting new staff, diligently perform payroll obligations by making required maintenance deductions and ensure that all employment contracts are confirmed in writing.

Employer Risk

Non-compliance with these new provisions risks exposing an employer to a fine ranging from PLN 1,500 to 45,000 (approx. EUR 330 to EUR 10,000).

Subject Matter/Name of Development Minimum pay for work
Summary

The Council of Ministers has regulated the minimum wage and minimal hourly rates for 2021 as follows :

  • the minimum wage: PLN 2,800 (approx. EUR 624; in 2020 – PLN 2,600, approx. EUR 580)
  • minimum hourly rate for civil law contractors: PLN 18.30 (approx. EUR 4; in 2020 – PLN 17, approx. EUR 3,8).
Impact Date 1 January 2021
Employer Implications/Action Needed

Employers must adjust employment agreements and civil contracts to the new minimum pay requirements set for 2021.

Employer Risk

Payment of remuneration below the minimum wage is subject to a fine from PLN 1,000 to PLN 30,000 (approx. EUR 220 to EUR 6,700).

Subject Matter/Name of Development Implementation of the updated Posted Workers Directive
Summary

Poland has implemented the updated Posted Workers Directive (EU Directive 2018/957, as revised by amending Directive 96/71/EC). Employees from other EU member states who are posted to Poland are now entitled to remuneration and other benefits in line with the Directive, instead of a right to minimum wage only. The guaranteed working conditions for posted workers will apply for 12 months, unless they are extended to 18 months by the employer notifying the Labor Inspectorate. The Labor Inspectorate has also been granted additional rights of access to information regarding working conditions.

Impact Date 4 September 2020
Employer Implications/Action Needed

Employers posting workers to Poland must comply with the new provisions and guarantee work conditions accordingly. Employers should verify carefully existing postings and provide required pay and work conditions.

Employer Risk

Non-compliance with provisions on posting employees to Poland may result in a fine ranging from PLN 1,000 to PLN 30,000 (approx. EUR 220 to EUR 6,700).

Contact:

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

Romania

Subject Matter/Name of Development Draft Law for completing Law no. 53/2003
Summary

Draft law regulating more flexible working structures, such as:

  • working hours banks: an employer and employee may agree to a total number of working hours per month with the actual working patterns to be determined on a weekly/monthly basis
  • compressed working hours On-call work
  • work as permanent shifts: employees who are “confined” to the place of work for longer periods of time (2-3 weeks); would be entitled to additional salary allowances
  • split work

The draft law also brings additional clarity regarding unpaid leave.

Impact Date

Pending procedure in the first chamber of the Parliament

Employer Implications/Action Needed

Potential future need to update internal policies.

Employer Risk To be confirmed.
Subject Matter/Name of Development Draft Law for completing art. 164 of Law no. 53/2003
Summary

The ratio between the minimum gross base salary at national level and the average gross salary per economy will increase in equal annual tranches starting with January 1, 2021, so that on December 31, 2024 the minimum gross base salary at national level will represent 60% of the average gross wage per economy.

Impact Date
The law is still in draft

1 January 2021, pending approval by the second chamber of the Parliament

Employer Implications/Action Needed

Changes, if approved, will need to be reflected in staff salaries.

Employer Risk

To be confirmed.

Subject Matter/Name of Development Order of the Ministry of Labor no.1376/2020
Summary

Regulation of the procedure for claiming RON 2,500 (approx. EUR 512) benefit for teleworkers’ equipment and technology. Employers must submit a request for the benefit to the National Workforce Occupational Agency and are required to provide supporting evidence (e.g. invoices) within 30 days of receipt of funds.

Impact Date 13 September 2020
Employer Implications/Action Needed

Employers wishing to access the teleworkers’ benefit should ensure they comply with the new procedure.

Employer Risk

If the relevant documentation is not provided, the employer will have to reimburse funds received.

Subject Matter/Name of Development Amendments to the Government Emergency Ordinance no. 137/2000 on the prevention of all forms of iscrimination - Law no. 167/2020 -
Summary

The new legislation includes a more extensive definition of harassment at work, as well as a series of obligations for employers to implement adequate measures to minimize the risk of  employees being subject to workplace harassment. The fines associated with the new regime are substantial, aiming to increase employers’ commitment and responsibility to ensure a safe, harassment free, working environment.

No employee may be dismissed or subjected to detriment relating to their complaint of workplace harassment. Employers must take all measures necessary to prevent and respond to any complaints of harassment at work.

Impact Date 11 August 2020
Employer Implications/Action Needed

Potential need to update internal policies to reflect the extended legal obligations and any measures taken to mitigate the risk of harassment at work.

Employer Risk Risk of fines for non-compliance.
Subject Matter/Name of Development Amendments to the Labor Code - Law 213/2020
Summary

When negotiating, concluding or amending an individual employment contract, or during the conciliation of an individual labour dispute, each party may be assisted by an external labour law consultant or by a trade union representative Employers must organize their HR & Payroll activities by either: (a) assuming direct responsibility (b) delegation to one or more employees; or (c) by contracting specialist external HR & Payroll services, coordinated by an employment law expert.

  • employers and employees encouraged to resolve all disputes in an amicable manner via a regulated pre-contentious/dispute phase.
  • employers are expressly permitted to appoint an external employment law specialist to carry out disciplinary investigations.
Impact Date 3 October 2020
Employer Implications/Action Needed Employers should review and may need to update internal policies.
Employer Risk None identified.

Contact:

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

Russia

Subject Matter/Name of Development

Extensions of time to claim “moral damage” compensation

Summary

Proposed amendments to the Labor Code of the Russian Federation are aimed at avoiding the situation where an employee wins their case, but then finds themselves out of time for claiming compensation for moral damage. (The need to address this issue was recently highlighted by the Constitutional Court of Russia).

It is proposed that an employee will be able to claim for moral damage compensation:

– either at the same time as their claim for restoration of rights or within 3 months from the date of the court order, fully or partially restoring those rights

Impact Date

The Bill is currently undergoing public consultation.

Employer Implications/Action Needed

No actions are currently required, but employers should monitor developments.

Employer Risk Not yet known.
Subject Matter/Name of Development

Individual labor disputes on labor remuneration

Summary

A draft Bill proposes that only courts shall have jurisdiction to hear cases concerning individual pay disputes. (At present, labor dispute committees may also deal with such matters). These changes are designed to prevent abuse by unscrupulous debtors and claimants.

Impact Date

The Bill is undergoing public consultation.

Employer Implications/Action Needed

No actions are currently required, but employers should monitor developments.

Employer Risk Not yet known.
Link

https://regulation.gov.ru/p/107513

Subject Matter/Name of Development Remote working
Summary

The State Duma of the Russian Federation has approved a Bill, which proposes that a temporary remote working arrangement may be made available when entering into a new employment contract or as a variation to an existing contract. The Bill also provides that the employment contract of a “remote” employee may only be terminated by the employer on the grounds set out in the Russian Labor Code.

Impact Date

The implementation date has not yet been confirmed.

Employer Implications/Action Needed

No actions are currently required but employers should monitor developments.

Employer Risk Not yet known.
Link

https://sozd.duma.gov.ru/bill/973264-7

Contact:

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

Slovakia

Subject Matter/Name of Development Working time records
Summary

Employers should ensure that the time-keeping obligations highlighted in the decision of the Supreme Court of Slovak Republic in October 2018 (case number 3Asan/3/2018) continue to be met with new working arrangements, including the significant increase of employees working from home as a result of the pandemic. It is generally the employer’s obligation to ensure adequate working time records are kept and, whilst an employee must provide any assistance necessary for the observance of such obligations, that obligation cannot be fully transferred to the employee.

Impact Date Already applicable.
Employer Implications/Action Needed

Time-keeping obligations cannot be fully transferred to employees. Therefore, employers often use various time-tracking tools to fulfil their statutory time-keeping obligations. Employees must comply with the use of such tools, the obligation to do so falling under the requirement of necessary assistance.

Employer Risk

Time-keeping records are crucial in the assessment of working time limits and therefore one of the key areas considered by the Labour Inspectorate when carrying out inspections. In the event of irregularities or violations, financial penalties may follow.

Subject Matter/Name of Development Pension reform
Summary

The Social Insurance Act introduced the 13th pension payment in Slovakia, providing additional old-age pension benefit to pensioners. This pension benefit is currently calculated based on the average monthly pension received. It is proposed to reform this calculation method to take account of the amount of pension already received. Therefore, the lower the average pension received, the higher the 13th pension payment and vice-versa. The proposed legislative reform is currently making its way through the legislative procedure in the National Council of the Slovak Republic, although since it is a government initiative, it is expected to be approved.

Impact Date 31 October 2020
Employer Implications/Action Needed

No actions needed, as pensions are paid by the state Social Insurance.

Employer Risk No risk for the employer.
Subject Matter/Name of Development Minimum wage
Summary

Amendments to the minimum wage legislation are currently making their way through the legislative procedure in the National Council of the Slovak Republic, although since the changes are government-driven, they are expected to be approved. The amendments include amending the automatic wage determining mechanism to ensure a higher minimum wage than would otherwise apply.

Impact Date

1 January 2021 (although the amended legislation is effective from 31 October).

Employer Implications/Action Needed

Employers who pay the minimum wage should monitor developments and ensure that the correct rates are applied from the impact date, which is expected to be January 2021.

Employer Risk

Failure to pay at least the statutory minimum wage rate can result in financial and criminal sanctions.


Contact

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

Spain

Subject Matter/Name of Development

Equal Pay

Summary

New legislation (Royal Decree 902/2020) guarantees and develops the equal pay between women and men principle. The obligations include a requirement to have a remuneration register. That register has to include the average values of salaries, salary supplements and extra-salaries of the workforce, disaggregated by sex.

Impact Date

14 April 2021 (although the obligation to establish a salary registry is already in force)

Employer Implications/Action Needed

The new legislation applies to all employers, regardless of size and number of employees, and applies to all job roles including management positions and senior positions. Employers should therefore ensure that steps are taken to establish a process to gather and report the required remuneration data (see also entry below regarding equality plan requirements).

Employer Risk

As above, fines can apply in the event of any decision, including a decision on remuneration, that may imply discrimination.

Subject Matter/Name of Development

Equality Plans

Summary

New legislation (Royal Decree 901/2020, of 13 October) regulates equality plans and their registration and develops the obligations established in March 2019.

Impact Date

Depending on employee numbers, required implementation of measures by between March 2020 and March 2022

Employer Implications/Action Needed

Employers should note the requirements for equality plans, including procedural requirements, how they have to be negotiated and minimum standards for their content. The legislation also develops the regulation of the Equality Plans Registry (where the equality plans have to be recorded).

Employers should also note that companies that are obliged to have an equality plan are also obliged to include in that plan a remuneration audit. For such audit, companies will have to analyse the current remuneration practices and prepare an action plan to address inequalities.

Employer Risk

Breach of the requirement to establish an equality plan in accordance with the statutory requirements could result in fines ranging from €6,251 to €187,515.

Additionally, employees could request an additional amount depending on the specific circumstances, claiming damages for breach of fundamental rights.

Subject Matter/Name of Development

COVID-19 - ERTEs (temporary contract suspension/reduction of working time)

Summary

New legislation (Royal Decree-Law 30/2020 of 29 September). extends some of the exceptional labour measures due to COVID-19, as follows:

  • Force majeure ERTEs will be automatically extended to 31 January 2021;
  • ETOP ERTEs (i.e. ERTEs on financial, technical, organizational and/or production-related grounds) can be extended after they have expired if a new agreement is approved during the consultation period;
  • companies who are prevented from performing their activity due to impediment or limitation caused by COVID-19 restrictions after 1 October 2020 will be able to process new force majeure ERTEs.
Impact Date 29 September 2020
Employer Implications/Action Needed

Employers seeking to carry out ERTEs or extend existing ETREs should ensure that the statutory limitations and requirements are understood. It should also be noted that some of the provisions in this new legislation apply retrospectively (i.e. to ETREs carried out before the new legislation became effective).

Employer Risk

ERTEs carried out without following the statutory requirements risk being deemed invalid. As a result, the company would not be entitled to implement the measures and sanctions could be applied.

Subject Matter/Name of Development

COVID-19 - MECUIDA Plan

Summary

The right to remote working and the alteration of working hours (known as the MECUIDA Plan, after its initials in Spanish) has been extended for employees where they are affected by exceptional circumstances related to actions necessary to prevent the transmission of COVID-19 (Royal Decree-law 28/2020, of September 22). Employees may request to alter their working arrangements in a number of ways (remote work, flexible working, modification of hours, reduction of 100% of the working time, etc.) to assist their family obligations. This would include, for example, where government authorities close schools for COVID-19-related reasons.

Impact Date

22 September 2020 to 31 January 2021

Employer Implications/Action Needed

Employers should note that employees have the right to adapt their labour conditions in a wide manner to assist their family obligations when exceptional circumstances occur.

Employer Risk

Companies not complying with the extended provisions could be subject to a sanction amounting from €626 (minimum range) to €6,250 (maximum range) per employee.

Subject Matter/Name of Development

Remote working – general regulation

Summary

This new law regulates remote working and establishes rights and guarantees for employees working remotely (Royal Decree-law 28/2020, of 22 September). Among other obligations, companies will be obliged to provide the means, equipment, tools and consumables required for distance work to be carried out, as well as the necessary maintenance of equipment.

It should be noted that this new law does not apply if the remote working arrangement has been compelled by the exceptional circumstances of the COVID-19 pandemic.

Impact Date 13 October 2020
Employer Implications/Action Needed

There are a number of protections provided for employees that should be noted by employers, as follows:

  • the remote work agreement must be in writing
  • employees will have the right to be provided with all means, equipment, and tools necessary to complete the remote activity
  • employees will have the right to full compensation of (direct and indirect) expenses
  • the employer can adopt appropriate measures for vigilance and control to ensure the remote worker is fully undertaking their obligations and duties at work, subject to observing data protection requirements

It is recommended that employers review and amend remote worker policies and procedures to take account of the new requirements.

Employer Risk

If the remote working rights and guarantees are not adhered to, the employing company may be fined up to €6.250 per employee.

Contact:

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

Sweden

Subject Matter/Name of Development Parental leave and probation periods
Summary

The Swedish Labor Court (Arbetsdomstolen) recently held that an employer had acted unlawfully when it terminated the employment of an employee without converting the employment to indefinite term employment. The employee had been absent on parental leave during the majority of a six month probationary period. The court found that the company’s actions were in breach of the Swedish Parent Leave Act, as the employer should instead have offered to extend the probationary period. Not doing so was deemed to amount to unfavourable treatment of an employee linked to their parental leave which was not a necessary consequence of the leave.

Impact Date

Announced on 30 September 2020.

Employer Implications/Action Needed

If an employee is absent during the majority of their probationary period due to parental leave and the employer does not want the employment to be converted to indefinite term employment, it must assess the risks of a breach of the Parental Leave Act. Depending on that assessment, it may be that the employer should offer to extend the probationary period, however it should be noted that this is only possible in exceptional cases and agreeing to extend the probationary period may otherwise lead to the employment being automatically converted to indefinite term employment.

Employer Risk

Damages for breach of the Parental Leave Act plus damages for any economic loss suffered by the employee.

Subject Matter/Name of Development

New guidance on short-time work allowance

Summary

The Swedish Agency for Economic and Regional Growth (Tillväxtverket) has issued new guidance stating that companies that have received any short-time work allowance in 2020 may not generally distribute dividends or make intragroup transfers based on any profits connected to the financial year during which the company received the allowance. Under the Agency’s previous guidance, this restriction only applied to payments made during the same financial year that the company received the aid. Clarification is awaited from the Agency, although this new guidance may mean that during 2021 and possibly beyond, companies in receipt of the allowance in 2020 will be unable to distribute dividends or make intra-group transfers based on any profits made in 2020.

Impact Date

Not yet clarified, at least during 2021.

Employer Implications/Action Needed

Companies must be able to show temporary and serious financial difficulties in coping with the challenges resulting from COVID-19 to be eligible to receive state aid. Any employer that has received any short-time work allowance must be very cautious when distributing dividends or making intra-group contributions during 2021 and possibly thereafter. Further guidance from the Agency should be monitored.

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

Dividends distributed or intra-group transfers made on the basis of profits made in 2020 risks the company being ordered to pay back the short-term work allowance if done so in breach of the Agency’s guidance.


Contact:

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

Switzerland

Subject Matter/Name of Development Paternity leave
Summary

On 27 September 2020, the Swiss electorate approved an initiative to introduce an entitlement to 10-days’ paternity leave.

Until now, there has been no legal entitlement to paternity leave in Switzerland, although most companies grant the father 1 day off for the birth.

Impact Date To be defined.
Employer Implications/Action Needed

To comply with the legal requirements, take necessary planning actions.

Employer Risk

Additional (and possibly unplanned) absenteeism with related financial impacts.

Subject Matter/Name of Development

Minimum Salary in the Canton of Geneva

Summary

On 27 September 2020, the electorate in the Canton of Geneva adopted an initiative to introduce a minimum wage of CHF 23 [approx. EUR 21] per hour in all sectors and industries.

Only few cantons have a general minimum salary. Normally, minimum salaries apply only for specific sectors in Switzerland.

Impact Date

The minimum salary in the Canton of Geneva entered into force as of 1 November 2020.

Employer Implications/Action Needed

To comply with the legal requirements.

Employer Risk

Financial risk of additional salary payments based on claims of employees.

Contact:

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

UK

Subject Matter/Name of Development

COVID-19 – government support

Summary

The government support for employers struggling due to the pandemic has continued to evolve. The Coronavirus Job Retention Scheme (“CJRS”) was unexpectedly extended on 31 October 2020 until 31 March 2021, with the government paying 80% of employees’ usual salary for hours not worked, up to a maximum of £2,500 per month. The Government plans to review the policy in January 2021. Businesses have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, with the employer paying National Insurance and employer pension contributions only. The Job Support Scheme (“JSS”), which was scheduled to come in on 1 November, has been postponed until the CJRS scheme ends.

Impact Date

1 November 2020

Employer Implications/Action Needed

Given the late change in the CJRS, employers need to ensure that employment documentation is in place so that they can claim.

Employer Risk

Failure to comply with the rules of the CJRS could result in claims being rejected. Failure to take account of employment law obligations, including relating to changes to working arrangements, could result in grievances and potential litigation.

Links

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced

Further extension of the Coronavirus Job Retention Scheme – The Chancellor’s Statement

Subject Matter/Name of Development Brexit and immigration
Summary

As a result of the UK leaving the EU, free movement of people is ending on 31 December 2020. From that date, having a sponsor licence will become essential for organisations who recruit both from outside of the EU and from within it.

Impact Date

31 December 2020 onwards

Employer Implications/Action Needed

A review of contingency/recruitment arrangements will help to minimise disruption. Employers should use the EU Settlement Scheme, where possible, and review the need for a sponsor licence (if they do not have one) before the end of the transition period.

Employer Risk

Uncertainty and potential issues with recruiting and retaining workers.

Links

The new immigration system briefing

Brexit Hub

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; flexible working as a default unless employers have good reasons not to allow it; 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 (although indications are that neonatal leave will be April 2023)

Employer Implications/Action Needed

The introduction of a single-enforcement body could prove significant in relation to future claims.

Employers reliant on casual workers should anticipate a new right to request a more predicable contract. All employers should assess the potential impact of the new leave provisions and changes that will make flexible working the default position.

Employer Risk

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

Subject Matter/Name of Development

 Modern slavery

Summary

A number of recent allegations involving potential worker exploitation in domestic supply chains have brought the issue of modern slavery into the spotlight. The Government has confirmed that it will strengthen modern slavery reporting requirements, to increase transparency and compliance.

Impact Date

Currently unknown

Employer Implications/Action Needed

Employers should ensure that they review current modern slavery procedures and ensure they are robust and remain fit for purpose. Such review should include consideration of processes to assess risk, ensuring adequate annual reporting (applicable to larger employers) and mechanisms to enable concerns to be raised.

Employer Risk

Failure to ensure robust processes are in place and/or to comply with legal requirements risks adverse publicity and investor withdrawal as well as legal, financial and operational risk.

Links

Modern slavery webinar

Anti-slavery training

Subject Matter/Name of Development

 Ethnicity pay reporting

Summary

The UK government committed to introducing ethnicity pay reporting. A consultation in relation to the proposal closed in January 2019, with the outcome yet to be released. With the increased awareness of racial inequality in society, ethnicity pay reporting remains a hot topic. The Commission on Race and Ethnic Disparities is due to report before the end of 2020, which may include proposals on ethnicity pay reporting.

Impact Date

Currently unknown

Employer Implications/Action Needed

Employers should review the effectiveness of diversity and inclusion initiatives. Further, prepare for ethnicity pay gap reporting through auditing current arrangements and considering voluntary ethnicity pay gap reporting.

Employer Risk

Failure to ensure effective diversity and inclusion within a workplace could result in grievances and potential litigation.

Links

Bridge the gap guide

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

Dubai one-year virtual working programme

Summary

This programme allows an individual to reside in Dubai (along with their family) and work remotely, while remaining employed in the individual’s home country. The virtual working programme is valid for 1 year. It costs US$287 plus medical insurance with valid UAE coverage and processing fee per person. Individuals on the programme can access all required services, including telecoms, utilities and schooling options.

Impact Date

14 October 2020

Employer Implications/Action Needed

Further guidance is awaited on the programme, however applicants will require the following:

  • passport with minimum 6 months validity
  • health insurance with UAE coverage validity
  • proof of employment from current employer with a one-year contract validity, a minimum of US$5,000 per month salary, last month's payslip and 3 preceding months’ bank statements
  • or, if a company owner, then proof of ownership of that company for one year or more, with an average monthly income of US$5,000 per month and 3 preceding months’ bank statements
Employer Risk

Employers should review the implications of the scheme once the final details are known. Since it is likely that the employer would be outside the UAE, the practicalities and efficiency of remote working from an overseas location should be considered.

Global workforce reorganization – part 2: working across jurisdictions

Subject Matter/Name of Development Equal pay amendments
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. 

The law has been amended in relation to equal pay provisions for female employees (Decree Law No. (6) of 2020 amends Article (32) of the UAE Labour Law (Federal Law No. (8) of 1980)). Previously, Article 32 required an employer to pay a female worker the same wage as a male worker for undertaking the “same work”. The Article has now been amended to include equal pay for work of “equal value” for female employees. It also requests that the Ministry Of Human Resources and Emiratisation develops systems to support that evaluation. This is a progressive step toward greater pay equality in the UAE.

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

Effective 26 September 2020 (law was issued 25 August 2020)

Employer Implications/Action Needed

Employers should identify and evaluate any pay differences between female and male employees performing the same or similar roles.

Employer Risk

Failing to comply with the equal pay requirements could result in litigation risk. To mitigate that risk, employers should therefore proactively review current pay practices and address any inequalities.

Subject Matter/Name of Development

Paternity leave for private sector employees

Summary

A new Article has been introduced to the UAE Labour Law providing an entitlement of five working days paid parental leave to care for a child (Decree Law No. (6) of 2020). The leave period can be taken anytime from the date of the child’s birth until the child is six months of age.

Impact Date

Effective 26 September 2020 (law was issued 25 August 2020)

Employer Implications/Action Needed

Employers are required to allow employees their statutory entitlements, including the new paternity leave entitlement. Practical steps to incorporate the change may include notifying the employees of the entitlement and updating workplace policies, handbook or the employment agreement.

Employer Risk

Failing to allow employees their entitlement to paternity leave may result in litigation risk.

Contact:

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

North America Global Update Banner

USA

Subject Matter/Name of Development

Pay Reporting (California)

Summary

Recent California legislation requires that private California employers with 100 or more employees must annually report to the state detailed pay data categorized by gender, race, and ethnicity. The report must be filed on March 31, 2021 and every March 31 thereafter. Employers with more than one establishment must submit a report for each establishment.

Impact Date

March 31, 2021 and every March 31 thereafter.

Employer Implications/Action Needed

Employers must review their systems to ensure that such a report can be created with some degree of efficiency. Additionally, given that the goal of the report is to uncover any wage disparities, we recommend a review of internal audit systems to ensure that there are no hidden disparities that cannot be defended by legitimate business rationale. Any such analysis should be under the aegis of attorneyclient privilege to avoid discovery in the event of litigation. Further, while the current law only impacts California employers, employers should look out for similar laws in other states.

Employer Risk

If the employer fails to file the report, the Department of Fair Employment and Housing (DFEH) may recover costs associated with seeking the compliance. Further, the employer may be subject to investigations to ensure that the failure to file is not intended to cloak any unlawful pay practices.

Subject Matter/Name of Development Independent contractor classification
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. 

The Department of Labor (DOL) has proposed a new employer-friendly rule to address independent contractor classification. The new proposed rule looks to the “economic reality” of each workplace relationship by evaluating five factors to determine whether the worker is economically dependent on the “employer”. Importantly, the rule places focus on two “core factors”: 1) the extent of control exercised over key aspects of the work; 2) and the opportunity for profit or loss.

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

Currently under a 30-day comment period.

Employer Implications/Action Needed

No immediate action is required. The proposed rule was delivered with some urgency, but is likely to be challenged following the election, because a change in administration may choose to pursue a more stringent test.

Employer Risk

While the test doesn’t pose additional burdens on the employer, misclassification can generally result in significant penalties and back-pays.

Subject Matter/Name of Development

COVID-19 – reporting obligations

Summary

The U.S. Occupational Safety and Health Administration (OSHA) has released updated FAQs addressing when an employer must report employee hospitalizations in light of COVID-19, seeking to address recent confusion on the issue. OSHA clarified its position in a September 30 update, stating that employers are only required to report in-patient hospitalizations to OSHA if the hospitalization “occurs within 24 hours of the work-related incident.”

Impact Date

Ongoing.

Employer Implications/Action Needed

An employer has to report employee hospitalization due to COVID-19 within 24 hours of the hospitalization, but only if (1) there is an in-patient hospitalization, and (2) the employer knows that the employee contracted the COVID-19 at work. Employers must also check with state and local health and safety agencies for compliance directives.

Employer Risk

Failure to report can result in penalties.

Contact:

Scott McLaughlin
Partner
+1.713.470.6155
scottmclaughlin@eversheds-sutherland.com