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Global employment and labor law update - April 2019

Welcome to the April edition of our global quarterly employment law update. Drawing on our international team's experience, our aim is to inform you of workplace developments on the horizon as well as recent changes of significance. We hope you find the practical information and succinct format useful in managing your global employment challenges. Please do not hesitate to contact us if you wish to find out more.

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

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South Africa

Subject matter/name of development Dismissal for consumption of drugs in the workplace
Summary Although the Constitutional Court recently held that legislation criminalising the private use of cannabis is inconsistent with the Constitution, employers are still permitted to have a zero-tolerance policy for the consumption of cannabis in the workplace and towards intoxication at work. If intoxication could impair an individual’s ability to work to the standard required by the employer, especially in workplaces requiring a high degree of safety, the employer is entitled to discipline an employee if he is intoxicated while on duty.
Impact Date First quarter 2019.
Employer Implications/Action Needed While the private use of cannabis has been decriminalised, employers are still bound by health and safety requirements in the workplace. Employers should have rules in place and maintain zero-tolerance policies prohibiting the consumption of cannabis (and other substances) at work, as well as reporting to work while under the influence of such substances.
Employer Risk Where an employer can show that banning the consumption of certain substances in the workplace is reasonable in the circumstances, that ban and consequent dismissal of employees for breaching rules will be legal. The question is whether it is reasonable to require employees not to work under the influence because of the inherent dangers in the workplace.
Subject matter/name of development Redundancies and retrenchment: interpreting the Labour Relations Act
Summary There must be consultation between an employer and affected employees once an employer contemplates dismissal for operational reasons (redundancies / retrenchments). This is in order to, amongst other things, discuss whether there are alternatives to retrenchments. In a recent case, a company board formally resolved to initiate a consultation process as there was a likelihood of retrenchments. The trade union representing the impacted employees argued that the subsequent consultation process was a sham given that the company had already resolved that there would be retrenchments, despite the outcome of the consultation process. The Labour Appeal Court dismissed the union’s application.
Impact Date First quarter 2019.
Employer Implications/Action Needed An employer is entitled to form a prima facie view of the need to retrench, provided it demonstrates that it keeps an open mind in the subsequent consultation process.
Employer Risk If there is a genuine consultation process following a resolution to retrench, any subsequent dismissals for operational requirements will be legal. It must be remembered that consultation must precede a final decision on retrenchment.
Subject matter/name of development Suspension of employees pending investigation
Summary An employee had been suspended pending the outcome of an investigation into his alleged misconduct. The Labour Court held that where a suspension is precautionary, there is no requirement that an employee be given an opportunity to make representations provided the suspension is linked to a pending investigation and serves to protect the integrity of that ongoing process. This was confirmed by the Constitutional Court.
Impact Date 19 February 2019.
Employer Implications/Action Needed The action taken by employers in such cases must be a precautionary measure, not a disciplinary one. Where the suspension is precautionary and not punitive, there is no requirement to provide employees with an opportunity to make representations. It should be made clear to employees that it is a precautionary measure, rather than a punitive one.
Employer Risk The fairness of the suspension must be weighed against the prejudice to the employee. Considerations of prejudice can be ameliorated by a salary being paid during the period of suspension; i.e. generally where the suspension is on full pay.
Subject matter/name of development The employment status of temporary agency labour: interpreting the Labour Broker legislation
Summary

The applicants, who were temporary agency workers, claimed they should be deemed indefinite employees of the respondent (a baggage handling service) and should receive the same benefits as the respondent’s employees doing the same or similar work. There was insufficient evidence to support a finding that the positions the agency workers filled were the same or sufficiently similar to direct employees. However, the Commissioner found that a 2018 Constitutional Court judgment meant the applicants did not need to be formally added to the books of the employer to be acknowledged as employees. The applicants were, in fact, the responsibility of the employer due to the ‘deeming’ provision in legislation. The applicants were therefore deemed to be indefinitely employed by the respondent.

Impact Date 22 March 2019.
Employer Implications/Action Needed There are certain situations in which a worker providing temporary services for a client may be deemed to be its employee for the purposes of employment legislation. Employers should be wary of the risks associated with temporary labour services and the resulting implications.
Employer Risk There does not need to be a formal employment contract for organisations to be deemed responsible or liable for some employees as legislation deems the employer responsible in certain aspects of the employment relationship.

Contact:

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

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China

Subject matter/name of development Further measures against female discrimination in recruitment
Summary

Nine ministries including the Ministry of Human Resources, Social Security and the Ministry of Education recently issued a Circular in a drive to prevent discrimination against females in recruitment.

The Circular states that both employers and recruitment agencies are prohibited from discriminating against a candidate, based on gender, when proposing recruitment plans, publishing recruitment information and during any stage of the recruitment process. This covers:
(i) rejecting or de-prioritising candidates based on gender;
(ii) requesting information on a female candidate’s marriage and parental status;
(iii) requiring a pregnancy test as part of  the employment on-boarding health assessment;
(iv) making employment conditional on accepting restrictions as to childbirth; and
(v) imposing a higher standard for female candidates.

Impact Date Immediate effect.
Employer Implications/Action Needed Employers should review their current recruitment policies and procedures to prevent discriminatory practices and ensure that, when engaging recruitment agencies, candidates have not been discriminated against, based on gender.
Employer Risk Employers and human resource agencies found to be in breach of the Circular will be required to rectify any breaches, failing which a fine of RMB10,000 to 50,000 will be imposed. Severe breaches may be recorded on the credit record of the infringing employers and recruitment agencies.
Subject matter/name of development Merger of maternity insurance and medical insurance funds
Summary On 6 March 2019, the State Council issued its opinion on the merger of maternity insurance and medical insurance, applicable to all employers. As part of the merger, both maternity and medical insurance payable by employers separately into different funds will now only be required to be paid into one fund.
Impact Date Local governments are required to set out how they will implement this opinion by the end of 2019.
Employer Implications/Action Needed The stated goal of the merger is to unify the procedures and to  efficiently manage the funds. It is expected that this change will alleviate much of the administrative burden on employers.
Employer Risk Employers should await further instructions from local government and ensure that they follow the correct procedures for implementing the merger of maternity and medical insurance.
Subject matter/name of development Reduction to pension contributions
Summary On 1 April 2019, the State Council approved a reduction in social insurance contribution rates in respect of pension contributions. Employer pension contributions will now be reduced to 16% with effect from 1 May 2019. This reduction is part of a broader trend to reduce social contribution burdens for employers.
Impact Date 1 May 2019.
Employer Implications/Action Needed Further changes which reduce the financial burden on employers  are expected in the future. Employers should monitor developments.
Employer Risk N/A.

Contact:

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

Hong Kong

Subject matter/name of development Discrimination laws to be revised
Summary Draft legislation (the “Bill”) is likely to be brought into force soon and will significantly extend Hong Kong’s anti-discrimination legislation. Key amendments include an express prohibition against direct and indirect discrimination on the grounds of breastfeeding; widening the scope of application of the Racial Discrimination Ordinance; expanding the scope of protection from sexual, disability and racial harassment between persons working in a common workplace; and removing the need to prove intention on the respondent to treat the claimant unfavourably to establish an act of unlawful indirect discrimination.
Impact Date The Bill may come into effect in 2019.
Employer Implications/Action Needed Employers need to review workplace discrimination policies in light of these developments to reduce the risk of  potential new discrimination claims. Employees should be given  training on the effects of these changes.
Employer Risk Successful discrimination claims against employers can attract significant civil liabilities in the form of damages, including for injury to feelings, as well as result in serious reputational damage to the employer and difficulties in retaining and attracting top talent.
Subject matter/name of development Proposal to extend statutory maternity leave (“SML”) to 14 weeks
Summary The government is proposing to extend SML from the current 10 weeks to 14 weeks. To help employers implement this new arrangement, the government proposes to fully subsidise employers for the additional 4 weeks of SML payment. The definition of “miscarriage” in the Employment Ordinance will also be updated, such that an employee who suffers a miscarriage at or after 24 weeks of pregnancy may also be entitled to SML.
Impact Date It is expected that the enabling legislation will be passed before July 2020.
Employer Implications/Action Needed Employers should be aware of female employees’ new entitlements under the proposed arrangement.
Employer Risk Employers should review the operational impact of the increased SML entitlement. An employer who fails to grant SML or SML pay to an eligible pregnant employee commits an offence, and is liable upon conviction to a fine of HK$50,000.
Subject matter/name of development Statutory Minimum Wage increased to HK$37.5 per hour
Summary The Statutory Minimum Wage rate will increase from the current level of HK$34.5 per hour to HK$37.5 per hour (an 8.7% increase).
Impact Date 01 May 2019.
Employer Implications/Action Needed Employers should ensure wage calculations are made in compliance with the new rates of SMW, bearing in mind the complex rules concerning its calculation.
Employer Risk Failure to meet the SMW requirement is a criminal offence, and an employer is liable upon conviction to a fine of HK$350,000, and to imprisonment for 3 years.

Contact:

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

Singapore

Subject matter/name of development Significant changes to the Singapore Employment Act
Summary
New legislation has recently introduced the following key changes:
(i) the salary threshold of S$4,500/month for managerial and executive employees has been  removed, thereby extending coverage of the Employment Act (EA) to all employees;
(ii) the working time protections under the EA are extended to more non-workmen;
(iii) statutory protection against unfair dismissal has been extended; and
(iv) enhanced flexibility has been introduced for employers (i.e. extending the option of time off for working on public holiday to more employees, adopting a less prescriptive approach for authorised deductions).
Impact Date 1 April 2019
Employer Implications/Action Needed In light of the extensive amendments to the EA, employers must ensure that their employment contracts, handbooks and practices have been updated appropriately and are compliant. In particular, many employment contracts for professionals, managers and executives (PMEs) drawing more than S$4,500 per month will need to have been reviewed/revised to ensure that their contractual terms comply with the requirements under the EA following the removal of the S$4,500/month salary cap.
Employer Risk Under the EA, any term of a contract of service which is less favourable to an employee than that prescribed by the EA is illegal, null and void to the extent that it is so less favourable. Any employer who enters into a contract of service which provides a condition less favourable to an employee than prescribed by the EA will be guilty of an offence and liable on conviction to a fine not exceeding S$5,000 or to imprisonment for a term not exceeding 6 months or to both, and for a subsequent offence to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or both. An employer may also be subject to other penalties if it contravenes certain specific provisions under the EA.

Contact:

Sze-Hui Goh
Partner
+65 6361 9828
sze-huigoh@eversheds-harryelias.com

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Austria

Subject matter/name of development Legislative changes anticipating a possible "hard Brexit”
Summary The Government has published a draft bill to ensure that UK citizens who currently live and work in Austria can continue to do so for at least six months following a possible "hard Brexit". In addition, a new provision in the Aliens Employment Act will grant affected individuals easier access to the "Rot-Weiß-Rot Card", which allows third-country nationals to live and work in Austria for a limited period of time (the permission can be extended upon request).
Impact Date The legislation will only come into force in the event that the UK leaves the EU without a binding withdrawal agreement.
Employer Implications/Action Needed No action needed so far.
Employer Risk After Brexit, UK citizens are no longer EU citizens and thus can no longer claim residence in an EU or an EEA member state. As a result, they would be subject to rules and conditions similar to those required for third-country citizens in Austria.
Subject matter/name of development Employee confidentiality – new "business secrets" definition implemented
Summary The EU Trade Secrets Directive has been implemented in Austria by an amendment to the Federal Act against Unfair Competition. For the first time the Act defines  the term “business secret”. Previously, business secrets were not defined legally, even though they were often the subject of court proceedings.
Impact Date 1 Feburary 2019.
Employer Implications/Action Needed Claims involving the infringement of business secrets are subject to a limitation period of three years from the date of knowledge of the infringement and the alleged infringer. In any case, such claims are statute-barred six years after the infringement occurred.
Employer Risk The new business secrets definition makes it harder to take legal action against employees who disclose sensitive information that they became aware of during their employment.
Subject matter/name of development Good Friday becomes a "personal holiday" - Act on Rest Periods
Summary On 27 February 2019, the Labour Rest Act was amended in response to an adverse European Court of Justice (CJEU) ruling. Austria was wrong, on equality grounds, to make Good Friday a public holiday only for members of certain Christian Churches, the CJEU ruled. The amendment extends the right to take Good Friday as a “personal holiday” to all.
Impact Date 22 March 2019.
Employer Implications/Action Needed The personal holiday is not a public holiday in the usual sense as it is deducted from each person’s holiday entitlement. However, if an employee has given three months’ notice of their personal holiday and their employer requires them to work, they are entitled to compensation as if it was a public holiday.
Employer Risk This change creates a legal entitlement for employees to determine the use of a day's leave. It does not provide an employer's right of refusal or to provide reasons that could prevent an employee taking a personal holiday. In principal, this means that the employee is able to enforce his/her wish for any day off. A personal holiday that falls before the end of the transitional period (22 June 2019) must be requested no later than two weeks before the desired date. After the transitional period, the employee must request the personal holiday at the latest three months before the desired date.

Contact:

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

Belgium

Subject matter/name of development Introduction of a “mobility allowance”
Summary Since 1 March 2019,  employers have been able to offer  a mobility allowance as an alternative to a company car. A mobility allowance is intended to accommodate “greener” transport choices for employees and a more sustainable alternative, without increasing the employer's cost. There are three options available to every eligible employee, which may be combined. The options are:
(i) An environmentally friendly company car – at least as environmentally friendly as the car being exchanged;
(ii) Other more sustainable means of transport including: public transport, bicycles, car-pool or car-sharing services; and
(iii) A cash balance, payable to the employee at the end of the year.
Impact Date 1 March 2019.
Employer Implications/Action Needed Employers can unilaterally decide to introduce the mobility allowance but in doing so may attach conditions. The employer must inform the employee in advance of the method of calculation and the amount of the mobility allowance on offer.
Employer Risk N/A.
Subject matter/name of development Protection against dismissal permissible under the new Belgian Companies Code
Summary The new Belgian Companies Code reduces the current “ad nutum” principle  by which company directors can be dismissed at any time without notice or indemnity from a mandatory requirement to an optional step. This change enables companies to offer their directors protection against dismissal (such as providing a notice period and/or compensation) via the articles of association or individual service agreements.  However, the new Code  allows the summary dismissal  of a director by general meeting where there is "legitimate cause".
Impact Date From 1 May 2019.
Employer Implications/Action Needed Consider an amendment to the company articles of association and/ or director contracts, if dismissal protection for directors is to be accommodated (following necessary approvals and processes).
Employer Risk Loss of competitive edge/attractiveness as an employer if other organisations are introducing dismissal protection for directors and your organisation does not.
Subject matter/name of development Salary rise of 1.1% this year
Summary As part of a series of tax changes, the Government has set a net salary increase for 2019-2020 at 1.1% (the 1.1% being exempt from mandatory indexation). This percentage “norm” increase will form the basis of  pay negotiations with Joint Labour Committees, where it will also be decided how the increase of 1.1% will be implemented in practice. Joint Labour Committees must conclude a collective bargaining agreement effecting this change before 15 May 2019. If any subsequent changes then have to be  made at a company level, these must be concluded by collective bargaining agreement  before 30 June 2019.
Impact Date 2019-2020.
Employer Implications/Action Needed

The following actions should be taken by employers:

(i) Initiate negotiations with the competent Joint Labour Committee(s);
(ii) Conclude collective bargaining agreements, as appropriate; and
(iii) Implement agreed salary changes.

Employer Risk

Non-compliance may expose employers to the following risks:

(i)Claims from employees when measures imposed by the Joint Labour Committee(s) are not implemented in the correct manner; and
(ii)Criminal sanctions as a result of violating the salary norm if increases are granted on top of the measures which are imposed by the Joint Labour Committee(s).

Contact:

Stefan Corbanie
Partner
+32 27 37 93 51
stefancorbanie@eversheds-sutherland.com

Czech Republic

Subject matter/name of development Retail and wholesale opening hours.
Summary The Czech Constitutional Court has ruled that the restriction of opening hours on selected public holidays is in accordance with the constitution. In connection with this, there is also a pending proposed amendment (currently in the legislative process), which intends to exclude wholesalers from the scope of the restriction. It is very likely that this amendment will enter into force this year.
Impact Date Second quarter 2019.
Employer Implications/Action Needed Large retail and wholesale shops may not open on selected holidays (7.5 days of the year). The prohibition applies to shops with a sales area bigger than 200 sqm.
Employer Risk Breach of this prohibition may result in fines of up to CZK 5 million.
Subject matter/name of development Mandatory introduction of e-sick notes
Summary In connection with the removal of the sick pay waiting period, the Government has decided to introduce a mandatory electronic form of sick note, which the doctor will send to both social security and the employer when reporting on an employee’s illness.
Impact Date Still in legislative process. Partial implementation expected from 1 July 2019; full implementation by 1 January 2020.
Employer Implications/Action Needed Employers may have to adapt their IT systems to securely hold  e-sick notes.
Employer Risk None. This measure should simplify the process of verifying employee sickness.
Subject matter/name of development Removal of sick pay waiting period – first three days of sickness
Summary Employees will now receive sick pay from the first day of their illness.
Impact Date From 1 July 2019.
Employer Implications/Action Needed Employees will receive up to 60% of the adjusted average salary in the first three days of sickness; this will be paid by employers. As compensation, the employer’s contribution to the sickness insurance will be reduced by 0.2%.
Employer Risk It is expected that there will be an increase in employee absences. It is unlikely that the reduction of the employer’s contribution for sickness insurance will cover the increased costs related to sickness pay for first three days.

Contact:

Radek Matouš
Managing Attorney
radek.matous@dhplegal.com

EU

Subject matter/name of development Whistleblowing directive
Summary

A new directive provides EU-wide standards to protect workplace whistle-blowers who reveal breaches of EU law in a wide range of areas. 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. As a general principle, the directive prioritises  internal reporting by whistleblowers, permitting external reporting to competent authorities where, for example, the person considers there is a risk of retaliation. Reporting publicly is only permitted if, for example, he/she reasonably believes there is an imminent danger to the public interest or a risk of retaliation. Whistleblowers are protected against retaliation, dismissal and liablity if they had reasonable grounds to believe that the information was true and they reported in accordance with the conditions set down in the directive.

Read more here

Impact Date 2021-23.
Employer Implications/Action Needed Currently, less than half of EU countries (including France, Hungary, Ireland, Italy, Netherlands, Sweden and UK) 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, while some sector regulation will not be affected, and should review their whistleblowing policies and procedures.
Employer Risk 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. Whatever they are, the greater risk for many employers will be the reputational damage that could follow if a whistleblower goes to the press because the organisation itself does not have the required reporting channels in place or they feel the organisation has failed to take timely and appropriate action in response to their concerns.
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.

Read more here

Impact Date 2022.
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 rights are expected to increase employer administration, costs and reduce flexibility. Whatever the legal consequences, there will also be reputational risks for defaulters.
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.

Read more here

Impact Date 2022 onwards - there is a 3 year implementation period, with some aspects (state payments) delayed for 5 years.
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. 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.

Contact

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

Finland

Subject matter/name of development Changes to annual holiday and working hours legislation
Summary To conform with EU case law, legislation has been amended to guarantee employees four weeks’ paid annual leave even if they have been absent from work due to sickness or medical rehabilitation. This applies to any leave accrued from 1 April 2019 onwards. Parliament has also approved a new draft Working Hours Act which will enter into force on 1 January 2020, replacing the current legislation which dates from 1996 (further information will be provided on this Act in forthcoming updates).
Impact Date 1 April 2019 and 1 January 2020.
Employer Implications/Action Needed Employees will be entitled to additional holiday to supplement their entitlement if they have accrued less than 24 days due to absence from work due to sickness or medical rehabilitation. Where such absence continues for longer than 12 months, this additional holiday ceases to accrue. Additional holiday will not accrue; nor will remuneration for additional holiday entitle employees to a holiday bonus based on a collective agreement, unless provided for in the collective agreement itself. Employees taking this additional holiday are entitled to remuneration corresponding to their regular or average wage. The changes also extend the time period during which the employee may take any annual holiday that has been postponed due to his/her incapacity.
Employer Risk These holiday changes are likely to increase the administrative burden on employers given the need to record additional holiday in annual leave records.

Contact:

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

France

Subject matter/name of development Secondments in France
Summary
A new 2019 Ordinance implements EU Directive n° 2018/957 regarding secondments and the posting of workers. The key principles remain the same for secondments to France: French law only applies to certain terms in employment contracts such as minimum remuneration, working time and safety measures. However, after 12 months, employees posted in France will benefit from all of the most favourable measures of French law. Transport employers and employment agencies must comply with this new requirement. 
Impact Date 30 July 2020.
Employer Implications/Action Needed Employers must review their procedures for sending employees on secondment to France. Employers posting employees on secondment for longer than 12 months must ensure that these employees benefit from all elements of French employment law.
Employer Risk In the event of a breach of the new regulations, employees are entitled to request that French law is applied. The Labor Administration may also issue financial penalties and even criminal sanctions in the case of a serious breach.
Subject matter/name of development Biometric data regulation
Summary
The CNIL (the French data protection authority) has issued a new biometric data regulation. Biometric data may only be collected by employers to limit access to  clearly identified premises and to internal IT systems. The new regulation precisely defines the biometric data to be used and the procedure that employers must follow to implement the regulations (in accordance with the GPDR regulations).
 
 
Impact Date 29 March, 2019.
Employer Implications/Action Needed Employers must check whether their current practices comply with the new regulation.
Employer Risk Breach of the regulation will be considered a breach of GPDR regulations. The same penalties will apply.
Subject matter/name of development British citizens working in France after Brexit.
Summary
A new 2019 Ordinance provides the conditions to be met by UK workers in France after Brexit in the event of no deal between the UK and the EU. British citizens working in France at the Brexit date will not need further authorisation to remain during a 3 - 12 month period (to be decided further by Decree). After this period, they must apply for a resident permit to be authorised to work in France. British citizens on secondment in France will be subject to the non-EU company regulation.
Impact Date Unknown: when and if the UK leaves the EU with no deal.
Employer Implications/Action Needed When the UK departs from the EU, employers will have to inform their British citizens working in France of their immediate right to continue working and the procedure for obtaining longer-term authorisation. Employers wishing to send UK citizens on secondment to France will have to follow a separate procedure and gain authorisation from the French administration.
Employer Risk Employers and employees failing to comply may be at risk of forced expulsion or financial penalties. However, this is unlikely to be enforced in the period immediately after Brexit.

Contact:

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

Germany

Subject matter/name of development Stricter limits on using certain fixed-term employment contracts
Summary A fixed-term contract without an objective justification (i.e. a material reason) is not permitted if an employment relationship previously existed with the same employer. It had been understood that this meant any employment relationship within the last three years. However, the Federal Labour Court has decided that the gap between the previous employment and the new fixed-term contract must be eight years or more.
Impact Date 23 January 2019.
Employer Implications/Action Needed Employers should review their current fixed-term contracts and how they engage new fixed-term workers where there is no objective justification. Where there has been a previous employment relationship within the past eight years, such contracts are invalid and they will not end at the agreed date but will continue indefinitely.
Employer Risk Non-compliant fixed-term contracts will become indefinite employment contracts.

Contact:

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

Hungary

Subject matter/name of development Implementation of GDPR
Summary The Hungarian Parliament has passed a bill that modifies various existing laws to comply with the GDPR. The law was published in the National Gazette on 12 April 2019 and enters into force on 27 April 2019. The changes modify and complement the data protection elements of the Labour Code.
Impact Date From May 2019.
Employer Implications/Action Needed The new legislation:
(i) makes it clear that a written privacy notice must be made available to all employees before data processing can begin;
(ii) explicitly permits employers to require employees not just to provide data but also to produce documents (such as an identity card) where necessary for the establishment, performance and termination of their employment;
(iii) sets out the limited circumstances in which biometric data can be required;
(iv) regulates the use by employers of criminal records data; and
(v) emphasises that employees can only use the employer’s IT equipment for work purposes and that an employer is permitted to examine computer data to determine whether the equipment has been used for private purposes.
Employer Risk The data protection authority can fine employers who do not comply with data protection obligations.

Contact:

Agnes Szent-Ivany
Partner
+36 13 94 31 21
szent-ivany@eversheds-sutherland.hu

Ireland

Subject matter/name of development Paid parental leave to be introduced.
Summary Parental leave in Ireland is currently unpaid. However, in October 2018, the government announced plans to introduce paid parental leave for a period of two weeks in the first year of a child's life. Once introduced, employees will receive state benefit during the statutory parental leave period and there will be no requirement on an employer to pay an employee during this two week period.
Impact Date Fourth quarter 2019 (November).
Employer Implications/Action Needed An increased number of employees may take parental leave and employers should consult with employees to put arrangements in place to cover business needs, as necessary. The new state benefit does not preclude employers from enhancing the statutory pay or voluntarily paying employees during other family leave.
Employer Risk Employers must ensure that employees are treated equally with regard to the provision of parental leave, and in particular with regard to any payment in respect of such leave, to mitigate the risk of an employment equality complaint to the Workplace Relations Commission (the body that deals with employment disputes in Ireland).
Subject matter/name of development Legislation has been passed regarding low-hour and zero-hour employees.
Summary

New legislation taking effect on 1 March:

  • prohibits zero-hours contracts, except in cases of genuine casual employment or in certain limited exceptions;
  • permits employees to ask to be moved to a contract with an appropriate band of hours if their contract does not reflect the hours they are regularly required to work;
  • provides for a minimum payment for 15 hours/25% of the hours for which an employee is required to be available to work where those hours are not actually worked;
  • requires employers to provide a written statement of basic terms and conditions within 5 days of employment starting.
Read more here
Impact Date 1 March 2019.
Employer Implications/Action Needed A review should be carried out of all casual workers to determine what obligations arise. The use of zero-hour contracts, should end, except in cases of genuine casual employment. Working time records should be maintained so that employers are in a position to assess a request by an employee to be moved to a higher band of hours under the legislation. Employers must ensure that employees are provided with a written statement of terms.
Employer Risk Employees can make a complaint to the Workplace Relations Commission in respect of non-compliance. If successful, compensation or an order to comply may be granted. A failure to provide the written statement of terms and conditions is an offence under the legislation, which could potentially lead to a fine or imprisonment of up to 12 months.
Subject matter/name of development Gender pay gap bill published
Summary

The government has published the Gender Pay Gap Information Bill 2019. The most salient elements of the Bill, which applies in both the public and private sectors, include: regulations requiring publication of gender pay gap in firms, initially applying to companies with 250+ employees (subject to change); and data published must include differences in hourly pay, bonus pay and part time pay.

Read more here

Impact Date The Government has indicated that the legislation will come into effect later in 2019 and would apply to employers from 2020 or 2021 onwards.
Employer Implications/Action Needed Employers should use this time to prepare for possible legislation by assessing if there are disparities in the salaries of male and female employees. If disparities do exist, employers should assess why and consider ways in which to address this before legislation comes into effect.
Employer Risk There are no financial penalties for non-compliance but the Workplace Relations Commission and Circuit Court can order employers to comply. Designated Officers can also investigate whether the information published is correct. The most significant risk for many companies may be the negative publicity if they have a wide and unexplained pay gap.
Subject matter/name of development Employment permits – removal of permit requirement in respect of spouses and de facto partners of Critical Skills Employment Permit holders
Summary

The Government announced, on 6 March 2019, the immediate removal of the permit requirement in respect of spouses and de facto partners of Critical Skills Employment Permit (CSEP) holders. Now, spouses/partners will simply need to register with the Irish Naturalisation and Immigration Service (INIS) to obtain a stamp permission to work in Ireland. This will significantly simplify the process.

Read more here

Impact Date 6 March 2019.
Employer Implications/Action Needed Employers should take note of this new development. This significantly simplifies the process for spouses and de facto partners of Critical Skills Employment Permit (CSEP) holders.
Employer Risk N/A
Subject matter/name of development Employment permits updates – addition of certain roles to the Critical Skills Occupations List and Interim arrangements regarding re-entry visas for adults
Summary

From 22 April 2019, people occupying the following roles will be eligible for a Critical Skills Employment Permit:

(i) Civil Engineers
(ii) Quantity Surveyors
(iii) Construction Project Managers
(iv) Mechanical and Electrical Engineers with BIM expertise
(v) High Performance Directors and Coaches for high-level sports organisations

From 13 May 2019, an individual will no longer require a visa to leave and return to Ireland if they are from a visa required country and have a valid Irish Residence Permit card or Garda National Immigration Bureau card.

Read more here

Impact Date 22 April 2019 and 13 May 2019 respectively.
Employer Implications/Action Needed Employers should note the additional categories of roles which will now be eligible for a Critical Skills Employment Permit and the changes regarding visa requirements for those leaving and returning to Ireland and for those holding a valid IRP card or GNIB card.
Employer Risk N/A

Contact:

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

Netherlands

Subject matter/name of development

Supreme Court to rule on termination of employment of those on long term sick leave.

Summary

The Supreme Court has been asked to rule on whether an employer can  be compelled to terminate the employment contract of a long-term sick employee and pay a statutory severance payment.

From July 2015, many employers have chosen not to terminate the employment contracts of employees who have been sick for over 2 years and are no longer entitled to a salary, in order to avoid payment of the statutory severance payment. Lower courts have given conflicting rulings on the question of whether employers can be forced to terminate such ‘sleeping employment contracts’.

Impact Date Unknown at this time.
Employer Implications/Action Needed No action is needed until the Supreme Court gives its ruling. A decision in favour of employees will mean employers will have to review how they deal with those on long-term sick leave.
Employer Risk The risk of having to pay severance pay is tempered by new legislation providing that, from 1 April 2020, employers will be able to ask the Labour Office to refund the statutory severance payments paid to long term sick employees after 1 July 2015.
Subject matter/name of development Introduction of a new ground for dismissal.
Summary The Balanced Labour Market Act is to introduce a ninth ground on which an employer may validly dismiss an employee: the combination ground. The amendment will enable employers to dismiss employees for a combination of circumstances of two or more grounds for dismissal other than redundancy or long-term sickness. Employers relying on this new ground for dismissal may be held liable to pay the employee an extra amount (on top of the statutory severance payment) of up to half the statutory severance payment.
Impact Date

1 January 2020.

Employer Implications/Action Needed It is expected that this change will make it somewhat easier for employers to terminate an employment contract. No immediate action is required as employers cannot rely on this ground for dismissal until January 2020.
Employer Risk N/A
Subject matter/name of development Changes to statutory severance payments.
Summary From next year, the right to receive a statutory severance payment will apply from the first day of employment, rather than after two years’ service. However, statutory severance payments for those with long service will be reduced. Payments will amount to one third of the employee’s gross monthly salary for each year of service, including service after 10 years of employment (as opposed to a third of a month’s salary for the first 10 years’ service and half a month’s salary for any additional years’ service).
Impact Date 1 January 2020.
Employer Implications/Action Needed

Employers should be prepared to pay a severance payment to employees with less than two years’ service after January 2020. Budgets may have to be revisited where future liabilities have been calculated based on the existing regime.   

Employer Risk N/A
Subject matter/name of development

Consecutive fixed-term employment contracts to be permitted for an extended duration.

Summary The period after which consecutive fixed-term employment contracts convert into an indefinite term employment contract is to be increased from two to three years. When the Balanced Labour Market Act takes effect next year, employers will be able to engage employees on a series of up to 3 consecutive fixed-term employment contracts lasting, in total, no more than 3 years, with any interruptions of 6 months or more breaking the chain of employment contracts (this period can be decreased to 3 months in a collective labour agreement).
Impact Date

1 January 2020.

Employer Implications/Action Needed The change will increase the scope for using fixed-term employment contracts. However, the Act will also incentivise the use of indefinite term contracts by providing for lower unemployment social security premiums for some employees working on such contracts compared to employees on fixed-term contracts.
Employer Risk N/A
Subject matter/name of development

New rules for zero-hour and other ‘on-call’ contracts

Summary The Balanced Labour Market Act is introducing new rules that will benefit those on so called ‘on-call contracts’, which includes zero-hour and certain other contracts without guaranteed hours/pay. The new protections include: the right to at least four days’ notice of a shift; the right to be paid where a shift is cancelled less than 4 days before it was due to start; and the right, after a year’s service, to be offered an employment contract based on the average amount of hours worked in the preceding year.
Impact Date 1 January 2020.
Employer Implications/Action Needed

Although the new rules are some way off, employers should review the way they use on-call contracts to ensure compliance.

Employer Risk Where an employer does not offer an employment contract based on average hours to someone who qualifies, the individual will be entitled to a salary based on their average hours.
Subject matter/name of development New rights for payroll workers
Summary

From next year, so called ‘payroll employees’ will be entitled to the same primary and secondary employment conditions as those who work on an employment contract with the hirer. Payroll employees will also be entitled to participate in an adequate pension scheme (which need not be the same pension scheme available to the hirer’s employees). The changes are introduced by the Balanced Labour Market Act, which also contains a definition of a payroll contract.

Impact Date 1 January 2020.
Employer Implications/Action Needed

Employers should review payroll contracts ahead of the change.

Employer Risk Increased rights for payroll workers are likely to result in increased costs for some employers.

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 Proposed changes to whistleblower legislation
Summary The Norwegian government has proposed changes to the rules regarding whistleblowing. According to the proposal an employer must follow up a report from a whistleblower within reasonable timeframe. Employers would also be obliged to ensure a safe and proper working environment for the whistleblower and would be liable for the financial loss of a whistleblower in the event of a breach of these requirements. The scope of the existing rules would also be extended to pupils, students, patients and the military.
Impact Date Late 2019 / early 2020.
Employer Implications/Action Needed If the legislation is amended, employers will have to update company whistleblower policy to ensure compliance with the revised legislation.
Employer Risk Failing to comply with these rules may result in liability for financial loss and non-economic loss of the employee.
Subject matter/name of development Greater work opportunities for part time employees
Summary Prior to January 2019, employees in part time positions already held a right of preferential access to vacant positions, for which they were suitably qualified. However, since January, this right has been extended to include parts of vacant positions. As a result,  part time employees have an opportunity to extend their roles and employers can fill more roles with existing, rather than new, employees.
Impact Date January 2019.
Employer Implications/Action Needed Employers needs to be aware that a part time employee may have a preferential right to take up parts of a full time vacant position, leaving other aspects of the role unfilled. An exception applies if the employer can demonstrate that implementation of the right would cause a serious disadvantage to the employer.
Employer Risk Implementation of the right could be challenging for employers as they may have to split up several positions to accommodate part time employees’ preferential rights.
Subject matter/name of development Right to permanent employment after three years
Summary Since January 2019, employees who have been continuously employed in a temporary position for more than three years  will be entitled to permanent employment. Prior to this change there were varying rules for temporary employees’ right to a permanent position.
Impact Date January 2019.
Employer Implications/Action Needed Employers should offer permanent contracts to temporary workers that have been in employment for three years or more.
Employer Risk Employers should take into consideration that using temporary employees for a prolonged period of time is likely to result in permanent employment.
Subject matter/name of development Stricter rules for hiring temporary workers
Summary Previously, employers bound by collective agreements could dis-apply legal provisions concerning the engagement of temporary workers through written agreement with the employees’ representatives. Since January 2019, tighter restrictions have been introduced so that only trade unions with nomination rights can now enter into such agreements which waive rights for temporary workers.
Impact Date January 2019.
Employer Implications/Action Needed Employers who have already entered into agreements on temporary employment  with local unions will have a six month transition period commencing 1 January 2019 (i.e. impact date of 1 July 2019 for existing agreements).
Employer Risk It will no longer be possible to use local in-house collective agreements to hire additional temporary workers from employment agencies.
Subject matter/name of development Tighter controls over ‘permanent employment’.
Summary Norwegian employment law provides  that, primarily,  employment is offered on a  permanent basis. Since  January 2019, the definition of “permanent” employment has been amended as follows  "Permanent employment means that the employment is continuous and not limited in time, that the legal rules on termination of employment shall apply, and that an employee is ensured predictability over the form and scope of work". One reason for this amendment is the rise in the number of agency workers who found their salary was not  guaranteed between assignments.  The recent changes require greater clarity over pay and the nature of contracts.
Impact Date January 2019.
Employer Implications/Action Needed Employment contracts will need to specify minimum scope of work and, for agency workers, clarify guaranteed salary.
Employer Risk The use of employment contracts without guaranteed salary or scope of work could lead to fines, and the imposition of guaranteed terms.

We thank Sten Foyn and Martin Haukland from Haavind Law Firm for the Norwegian update.

Contact

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

Poland

Subject matter/name of development Draft legislation to widen employer liability and change whistleblower protections
Summary Draft legislation proposes far-reaching change to the scope of employer liability for employees and, in certain circumstances, for some third parties (such as sub-contractors). This includes introducing employer liability for a prohibited act committed by an employee without its knowledge, if the employer has benefited from that act. In addition, there are new proposals to protect employee whistleblowers against retaliation, including reinstatement and compensation. Another major change concerns a new way of securing employee claims during court proceedings: i.e. reinstatement of a dismissed employee who is subject to special protection against termination until the court proceedings are concluded.
Impact Date Unknown, but estimated to be the first half of 2019.
Employer Implications/Action Needed If the legislation is adopted in its present form, employers must introduce compliance procedures and rules of conduct to address the risk of criminal or negligent actions, e.g. procedures for employees to report abuses, anti-corruption codes etc. Employers may also have to employ dismissed employees, at least until the end of legal proceedings, if they belong to a group of employees enjoying special protection against dismissal.
Employer Risk Non-compliance may result in a fine ranging from PLN 30,000 (approx. EUR 7,000) to PLN 60,000,000 (approx. EUR 14,000,000), a ban on conducting a specific business activity or a ban on participating in public procurement processes. It will also be possible to dissolve a collective entity, such as a company, and confiscate all of its assets.
Subject matter/name of development New employee retirement savings plans – Employee Capital Plans.
Summary Legislation for a new voluntary retirement savings plans known as Employee Capital Plans (PPK) has been introduced with effect from 1 January 2019.  Employers are expected to contribute 1.5% (and may contribute up to 4%) of salary to the PPK and participants to contribute 2% (and may contribute up to 4%). The employees may decide to opt out from the plan, but they will be re-enrolled in the plan every 4 years.
Impact Date 1 January 2019.
Employer Implications/Action Needed The new regulations will be phased in gradually, depending on the size of the employer: employers with at least 250 employees - from 1 July 2019; employers with 50-249 employees – from 1 January 2020; employers with 20-49 employees – from 1 July 2020 and all other employers – from 1 January 2021.
Employer Risk Non-compliance may result in a fine, for example, up to 1.5% of the remuneration fund for a failure to sign a PPK management contract with a financial institution. Additionally, a failure to make payments on time can result in fines from PLN 1,000 to 1,000,000.

Contact:

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

Romania

Subject matter/name of development Government approves the number of non-EU workers allowed to be employed in Romania for 2019.
Summary The Romanian Government has approved a quota of 20,000 non-EU workers that can be hired in 2019.
Impact Date 31 January 2019.
Employer Implications/Action Needed Employers wishing to fill anticipated labour shortages with foreign workers should act before the 2019 quota has been reached.
Employer Risk Staffing and skills shortages are a risk because employers will be unable to obtain work permits for prospective non-EU employees once the quota is exhausted.

Contact:

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

Russia

Subject matter/name of development

The Constitutional Court has confirmed that recent retirement age reforms are not unconstitutional.

Summary

The retirement age is being increased gradually, with recent changes setting the retirement age for men at 65 and women at 60. On 2 April 2019 the Constitutional Court concluded that the Constitution permits these changes. The Constitutional Court also noted that it has no competence to assess the rationality of the retirement reform, which has been based on expert opinion and scientific research.

Read more here

Impact Date 02 April 2019.
Employer Implications/Action Needed The retirement age reforms may result in increased numbers of employees needing paid time off for medical checks, as well as additional  training costs for older employees.
Employer Risk It is likely that there will be an increase in age discrimination cases between employees or job applicants, and employers. Employers must ensure that there is sufficient evidence that a dismissal is not related to an employee’s age.

Contact:

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

Slovakia

Subject matter/name of development Job acceptance letters are not necessarily binding
Summary
An employee who is given notice of compulsory redundancy must be  offered any alternative  vacant and suitable position corresponding with his/her skills, qualifications and ability. Previously, if the employer had  already offered what would have been a suitable  position to an external candidate who had signed an acceptance letter, the employer could not withdraw the offer without being in breach of contract.  The law has recently been clarified so that, even if a suitable alternative position has been accepted by an external candidate, the employer’s legal obligation to avoid redundancy must take precedence unless or until an employment contract (or other employment law agreement pursuant to the Labour Code) with that candidate has been concluded. Accordingly, a letter of acceptance of a job offer is not by itself contractually binding.
Impact Date Immediately.
Employer Implications/Action Needed Obligations to avoid  compulsory redundancies will trump external appointments not progressed to contract signature.
Employer Risk Unfair dismissal can be claimed by the redundant employee in addition to  compensation of up to 36 times their average monthly salary.
Subject matter/name of development Increased protection for whistleblowers
Summary From 1 March 2019, a new Act will  replace previous whistleblower protection. The principal change is that matters concerning the protection of whistleblowers will no longer  fall under the authority of the Ministry of Interior Affairs but will now be dealt with by a new authority: the Office for Protection of Whistleblowers. Obligations on employers to ensure whistleblower protection remains much the same as under the previous legislation.
Impact Date 1 March 2019.
Employer Implications/Action Needed Employers should ensure they are compliant with the law and any requirements from the Office for Protection of Whistleblowers.
Employer Risk Employers should continue to remain compliant with whistleblower protections. Employer obligations from previous legislation remain much the same.

Contact

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

Spain

Subject matter/name of development Equality plans
Summary Employers with 50 or more employees are obliged  to implement an equality plan aimed at increasing gender equality across the business (previously, this was only required for those employing 250 or more employees). In addition, a new Equality Plans Registry is being developed  so that  equality plans will need to be filed with the Registry in due course.
Impact Date As of 8 March 2019, employers with between 151 and 250 employees need to set up an equality plan within the next 12 months; those employing between 101 and 150 employees within two years; those employing between 50 and 100 within three years.
Employer Implications/Action Needed Employers should  prepare and implement an equality plan following the required procedure and legal guidance.
Employer Risk An employer that does not set up an equality plan as required  may be subject to  a fine of between EUR 626 and EUR 6,250.
Subject matter/name of development Family rights and work/life balance
Summary The duration of paternity leave is to be gradually extended until it is equivalent to maternity leave, which is 16 weeks. Further changes include making the first 6 weeks of paternity leave  compulsory and allowing maternity and paternity leave to be taken in interrupted periods. In addition, to accommodate a work life balance, employees may now  request a change to their working arrangements, such as remote working or a decrease in normal working hours or days.
Impact Date Paternity leave: as of 1 April 2019, up to 8 weeks of leave; as of 1 January 2020, up to 12 weeks; as of 1 January 2021, up to 16 weeks. Employee's right to adapt their working day due to work-life balance reasons is in force as of 8 March 2019.
Employer Implications/Action Needed Employers should update company policies to reflect these changes and plan ahead in anticipation of employees taking paternity leave for an increased period of time.
Employer Risk The increase of paternity leave is a public benefit, granted by Social Security and therefore companies do not have any power to deny access to extended paternity leave. However, an employee's right to request a change in their working time due to work-life balance may be refused on  strong business grounds. Employers may still be at risk for refusing a request to change as  employees could challenge the reason for refusal in the labour court and claim damages for  breach of their fundamental rights.
Subject matter/name of development Equal pay
Summary Employers are obliged to ensure equal pay for male and female employees undertaking work of the same value. Additionally, the law now establishes an obligation on employers to report the average salaries, supplements and other non-salary benefits of its employees, all of which must be separated by gender. Employers with at least 50 employees in which the average remuneration of one gender is 25% higher than that of the opposite gender, will have to justify the reasons for these differences.
Impact Date 8 March 2019.
Employer Implications/Action Needed Companies must review employees’ salaries to ensure compliance with the principle of equal pay for equal work. Additionally, employers must disclose  a salary record which identifies   sex and relevant professional groups/ professional categories or jobs of equal value.
Employer Risk Breach of these requirements may result in fines and discrimination claims  by employees.
Subject matter/name of development Daily recording of working time
Summary All companies must ensure that the working hours of all employees are recorded. This record, which must include the specific work day schedule of each employee, must be kept and made available to employees, to the works council and to the labour and social security inspectorate for 4 years.
Impact Date 12 May 2019.
Employer Implications/Action Needed How records are organised and managed will be set out in the Collective Bargaining Agreement, by internal agreement entered into between employers and works councils or, failing this, by unilateral decision of the company after consultation with its works council.
Employer Risk A serious breach of this requirement may result in a fine of between EUR 626 and EUR 6,250. It is important for employers to follow this requirement to ensure that they can prove actual time worked by their employees when facing claims for overtime and to comply with working time requirements.

Contact:

Jacobo Martínez Pérez de Espinosa
Partner
+34 91 42 94 33 3
jmartinez@eversheds-sutherland.es

Sweden

Subject matter/name of development Reasonable notice period for managing directors
Summary The Employment Court recently concluded that six months was a reasonable implied notice period for a managing director in the absence of a contractual term or agreement governing the issue. The court reached this decision as the employment in question was for an indefinite term and the employee held a managerial position.
Impact Date 20 February 2019.
Employer Implications/Action Needed Employers should note that, in the absence of agreement, employees in managerial positions are likely to be entitled to notice periods of at least six months.
Employer Risk Not granting reasonable notice periods to employees in managerial positions could result in liability for damages.
Subject matter/name of development Potential increase to the retirement age
Summary The Government has presented a bill proposing that the general retirement age is increased from 67 years old to 68 and then eventually 69 years old. Under Swedish law, an employee is entitled to remain in their employment up until retirement age.
Impact Date 1 January 2020 and 1 January 2023.
Employer Implications/Action Needed Provided that the bill passes, employees will be entitled to remain in their employment for a longer period.
Employer Risk A court can declare a termination of employment before the retirement age invalid and hold the employer liable for damages.

Contact:

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

Switzerland

Subject matter/name of development Gender pay gap reporting
Summary The Gender Equality Act is to be amended to require employers with at least 100 employees to conduct an equal pay analysis every 4 years until they can show pay equality has been achieved. The analysis will have to be verified by an independent body (e.g. external auditors or the works council). Employers will need to inform employees (and shareholders in the case of listed companies) of the results and public sector employers will be obliged to publish the results.
Impact Date Unknown at this time – currently being determined by the Federal Council.
Employer Implications/Action Needed Employers should review payment policies and practices and, if required, develop an action plan to fix a gap. The Confederation provides a free standard analysis tool to all employers. External auditors should be engaged to  review results when the law comes into force.
Employer Risk There may be sanctions for non-compliance, although the legislation has not yet been finalised.
Subject matter/name of development Occupational pensions: increase to the entry threshold
Summary The threshold for mandatory pension insurance has been increased from an annual salary of CHF 21,150 (approximately 18,600 EUR) to CHF 21,330 (approx. 18,800 EUR).
Impact Date 1 January 2019.
Employer Implications/Action Needed Payroll should ensure that any employees with an annual salary of CHF 21,330 or more receive pension insurance.
Employer Risk N/A.

Contact:

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

UK

Subject matter/name of development Initial phase of workplace reforms: ‘Good Work Plan’
Summary

Greater transparency over employment status and information forms an important aspect of reforms aimed at improving working conditions, particularly for lower-paid and casual workers. From April 2019, employers must provide itemised pay slips to all workers (not just employees), stating the hours being paid for time-paid workers. From April 2020, all workers will be entitled to a written statement of the terms of their engagement.

Impact Date 6 April 2019 for itemised payslips for all workers and 6 April 2020 for written statements for all workers.
Employer Implications/Action Needed Ensure payslip information is clarified and provided. Requiring greater transparency over employment terms for workers and employees from day one of employment (from April 2020) will also require a change to current practices.
Employer Risk Failing to provide appropriate and timely information to workers in compliance of the new provisions may be challenged in the employment tribunal but, if a technical breach only resulting in no loss of pay to the individual, there is no financial penalty attached. However, such a breach is likely to lead to increased compensation for other contemporaneous claims brought.
Subject matter/name of development

Pay gap transparency and reporting: ethnicity, gender, CEO

Summary

The government is consulting on how to introduce mandatory ethnicity pay gap reporting as part of its aim to reduce workplace barriers  for under-represented ethnic groups. Meanwhile, legislation now requires some companies to report pay ratios between their CEOs and average employees by 2020 following concerns over disproportionately high executive pay. Finally, second annual gender pay gap report deadlines ended on 4 April this year.

Impact Date CEO pay gap reporting (where applicable): for financial years from 1 January 2019. Gender pay gap reporting: in force and second reports fell due 4 April 2019. Ethnicity pay gap reporting: date of implementation is unknown but is not anticipated before 2020/21.
Employer Implications/Action Needed Mandatory CEO reporting applies to quoted companies (UK incorporated) with more than 250 UK employees and gender pay reporting to private sector. Employers need to be considering their reporting strategy in the immediate term but also their longer term remuneration policy and diversity strategy.
Employer Risk Failing to report or reporting large pay gaps risks reputational and stakeholder relationship damage, as well as potential recruitment, retention and legal challenges.
Subject matter/name of development

Increase in the national minimum wage rates

Summary The National Living Wage, statutory minimum rate for workers aged 25 and over has increased to £8.21 per hour, with the rates for those aged 21-24 rising to £7.70 and those aged 18-20 to £6.15.
Impact Date 1 April 2019.
Employer Implications/Action Needed Employers should audit pay systems and workplace practices to ensure compliance with these increases.
Employer Risk Many employers may not appreciate how their established payroll practices make them vulnerable to inadvertent, technical breaches of the national minimum wage and they risk fines (maximum £20,000 per worker), awards of back-pay and reputational damage (from ‘naming and shaming’ campaigns by the government).
Subject matter/name of development New rules to apply to engagements via personal service companies
Summary A scheme already applicable to many public sector employers (known as “IR35”) is to be refined and extended to the private sector next year. Organisations which engage the services of a worker through a personal service company (a PSC) will need to carry out an assessment of the worker’s employment status so that he or she can be taxed accordingly.
Impact Date 1 April 2020.
Employer Implications/Action Needed Employers engaging workers through a PSC will need to plan ahead and communicate with affected parties to manage expectations. Those responsible for paying the PSC could face increased tax liabilities, raising overall costs. Employers must collate sufficient information about workers to assess IR35 status and share the status determination with others, along with their reasons.
Employer Risk There are no specific financial penalties attached to a failure to comply with IR35. However, defaulters remain liable for any underpayment of tax until such time as they comply with their obligations and failure to account for appropriate tax also carries a risk of additional penalty.

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

Saudi Arabia

Subject matter/name of development Changes to Saudi labour law and court system
Summary

Regulations have been approved which introduce the following changes:
(i) to attract and train Saudi nationals, at least 75% of all employees must be Saudi workers (so-called “saudization”), although this may be reduced temporarily if there is a of lack of qualified Saudi candidates; and
(ii) to address poor attendance, employers may issue a written warning if employees arrive up to 15 minutes late for work without an acceptable reason. On a second, third or fourth occurrence, the employer may deduct 5%, 10% or 20% respectively from the day’s pay. Similarly, a longer delay (20-30 minutes) may result in a 10%, 15%, 25% or 50% deduction for each occurrence. Persistent lateness greater than 30 minutes can ultimately lead to deduction of a full day’s pay. In addition, new Labor Courts have been established which fall under the Ministry of Justice, making them Sharia Courts.

Impact Date 18 December 2018 (for the new regulations).
Employer Implications/Action Needed

Employers need to fulfil the new saudization requirement by achieving the required percentage outlined above, or seek a temporary exception from the Minister of Labor until they are able to comply.

Employer Risk If employers do not achieve the required saudization percentage, there is a risk that the Ministry of Labor denies them access to all or some of their services.

Contact:

Muhammad Arif Saeed

Muhammad Anum Saleem

Partner Principal Associate
+966 11 484 4448 +966 11 484 4448
muhammadarifsaeed@aldhabaan-es.com anumsaleem@aldhabaan.eversheds.com

UAE

Subject matter/name of development Significant changes expected as a result of the new DIFC Employment Law No. 6 of 2018 (“New Law”)
Summary

Key changes in the draft New Law include:

(i) 5 working days’ paternity leave for fathers or adopters and a right to take time off to attend medical appointments or adoption appointments.
(ii) End of service gratuities are payable on termination regardless of the reason. Previously employees terminated for cause (i.e. without notice) were denied this payment.
(iii) Employees terminated for cause may claim up to one year’s salary if they consider their termination is unreasonable (previously, the amount of compensation was unclear).
(iv) The introduction of constructive unfair dismissal (opening up claims from employees who resign in response to the manner in which their employer treats or has treated them) and whistle-blower protection.
(v) The extension of discrimination protection to expressly include age and pregnancy. In addition, employees who consider they have been discriminated against can bring claims for compensation. 
(vi) Part-time workers are expressly granted the same rights and entitlements as full-time workers.
(vii) Sick pay is reduced from the previously generous 60 working days to 10 days’ full pay and 20 days’ half pay.
(viii) Employers are obliged to keep employee records for 6 years rather than 2 years.

In addition, the employer’s penalty payment (which may apply if it fails to pay an employee all their dues within 14 days of their employment terminating) is payable under the New Law only if the shortfall exceeds 5% of the amount due, and is payable for a period of up to six months. Previously, it was unlimited in duration.

Read more here

Impact Date The enactment notice is imminent, possibly mid-May. Once the notice is issued, there should be a grace period before the New Law comes into force.
Employer Implications/Action Needed

Employers should update contracts, policies and procedures to reflect the New Law. They should also review their document retention processes and procedures.

As employers can now be liable for their employees’ actions (vicarious liability), it is advisable for employers to educate employees on discrimination and whistleblowing.

Employer Risk Given the express provision for compensation claims in the event of termination for cause or discrimination, employers may find themselves more at risk of claims from employees.

Contact:

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

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Subject matter/name of development

New Jersey Prohibits Non-Disclosure Provisions in Employment Contracts

Summary An amendment to the New Jersey Law Against Discrimination  prevents enforcement of non-disclosure provisions in employment contracts and settlement agreements. The amendment applies to all contracts entered into, renewed, modified, or amended on or after the effective date, 18 March 2019.
Impact Date 18 March 2019.
Employer Implications/Action Needed This is the latest law change in response to the #MeToo movement. Other states including Maryland; New York; Vermont and Washington have also passed laws banning mandatory arbitration for sexual harassment claims. Several companies (especially in the tech industry) have removed mandatory arbitration clauses and NDA provisions in employment agreements.
Employer Risk Employers who have employees working in states that have laws in place  banning NDA or arbitration provisions in employment agreements run the risk of their agreements being found invalid.
Subject matter/name of development Proposed Changes to Federal Overtime Regulations
Summary On 7 March 2019, the Department of Labor (“DOL”) announced proposed rule changes to the Fair Labor Standards Act (“FLSA”). The FLSA sets a threshold below which employees must receive 1.5 hours pay for hours worked beyond 40 in a working week, regardless of their duties. The current salary threshold for an employee to be exempt from FLSA regulations is $455 per week. The proposal would increase the salary threshold to $679 per week (or $35,308 per year). The proposal would also increase the total annual compensation requirement for the “highly compensated” exemption from $100,000 to $146,414 per year. Additionally, the proposed rules would allow employers to use non-discretionary bonuses and incentive payments to satisfy up to 10% of the standard salary level.
Impact Date Not available.
Employer Implications/Action Needed

The proposed changes would make over a million more Americans eligible for overtime compensation - which, in turn, could significantly increase employers’ costs. Employers would also have the burden of ensuring salaries stay in line with any updates.

Employer Risk Employers who fail to make proper payments under the FLSA can be liable to pay employees for back pay, liquidated damages, damages, and legal fees.

Contact

Scott McLaughlin
Partner
+11 71 34 70 61 55
scottmclaughlin@eversheds-sutherland.com

Previous updates

January 2019