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Global Employment Law and Labor Update - July 2019

Welcome to the next edition of our quarterly Global Employment Law and Labor 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

Asia Global Update Banner

South Africa

Subject Matter/Name of Development Resignations in the face of disciplinary action (case law)
Summary The Labour Court recently held that, whilst a resignation which fails to comply with the contractually agreed notice period constitutes breach of contract, it is nonetheless effective in bringing employment to an end. In such circumstances, the employer’s option is to seek injunctive relief in the form of an order of specific performance to enforce the contractual terms and compel the employee to serve their notice period. Furthermore, it is only if an order of specific performance is granted by the court that the employer may proceed with the disciplinary hearing.
Impact Date Third quarter of 2019
Employer Implications/Action Needed Employers cannot proceed with disciplinary hearings after employees have resigned with immediate effect.
Employer Risk Should employers proceed with disciplinary hearings and dismiss employees after they have resigned with immediate effect, such dismissals may be deemed invalid or unfair.
Subject Matter/Name of Development Fair dismissal of employees who refused new terms of employment under a restructuring (case law)
Summary The employees were dismissed due to their refusal to accept new terms on a restructuring, which would have amounted to a change to their job grade and duties. The Labour Appeal Court held that the dismissals were fair, in that the changes were genuinely necessary for operational requirements of the employer.
Impact Date Third quarter 2019
Employer Implications/Action Needed Employers have the right to dismiss employees for genuine operational reasons in circumstances where an employee has refused an alternative to dismissal.
Employer Risk Employers must ensure that dismissals for operational reasons are genuine. If a dismissal is found to be unfair, the employer may be ordered to pay up to 24 months’ compensation.

Contact:

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

Africa Global Update Banner

China

Subject Matter/Name of Development Restrictions on the cross-border transfer of personal information, such as employee data
Summary The Cyberspace Administration of China recently published draft measures (“Measures”) setting out the procedures required when a network operator intends to transfer personal data outside of China. The Measures provide that the network operator must submit to the relevant provincial Cyberspace Administration a personal information cross-border security appraisal (“Appraisal”). Where a foreign entity collects personal information via the internet, it has a duty to submit an Appraisal through its Chinese legal representative or entity. Under the Measures, records of all cross-border data transfers of personal data must be kept for at least five years. Any violation of any of the above would give rise to sanctions under various data protection laws and regulations.
Impact Date Unknown at this time
Employer Implications/Action Needed Employers should be aware of the various data protection requirements and procedures, should they intend to transfer employee personal data outside of China. Employers should therefore monitor the latest developments in this area as the Measures are in draft form during the government’s public consultation process. Their content may change based on public feedback.
Employer Risk The Measures, if promulgated in the current draft form, will place unprecedented restrictions on cross-border transfers of personal data (including employee personal data) from China and may lead to profound implications for data-related operations. The lengthy assessment procedures, the continuous reporting obligations and resulting uncertainties should be taken into account in addition to the feasibility of the transfer.

Contact:

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

Hong Kong

Subject Matter/Name of Development A new "Extreme Conditions" announcement has been introduced by the Government for typhoons and extreme weather
Summary

A new adverse weather warning, the "Extreme Conditions" announcement, may be issued in the aftermath of a super typhoon resulting in serious disruption to public transport and/or power, extensive flooding, major landslides or other similar conditions in Hong Kong. Employees, other than "essential employees", will be advised to stay in a safe place instead of going to work when the "Extreme Conditions" announcement is in force.

Read more here

Impact Date Summer 2019
Employer Implications/Action Needed Employers should review their adverse weather policy and inform employees of the procedure in the event of an “Extreme Conditions” announcement. An "Extreme Conditions" announcement indicates that it is not safe for employees to attend work due to serious disruptions to the infrastructure of Hong Kong. It will not apply to "essential employees" who are responsible for maintaining essential services during typhoons, or for the recovery of services after a typhoon. It is not advisable to require other employees to attend work when an "Extreme Conditions" announcement is in force.
Employer Risk Employee wages, allowances and any good attendance bonuses should not be affected if employees are required to go to, or remain in, a safe place as a result of an “Extreme Conditions” announcement and any shortfall is a criminal offence.
Subject Matter/Name of Development Statements made in an employee appraisal form do not attract liability for defamation
Summary

The District Court has confirmed that any statements of facts, comments or opinion regarding an employee's work performance is covered by the defence of qualified privilege and thus would not attract legal liability for defamation unless malice is shown.

Read more here

Impact Date 16 April 2019
Employer Implications/Action Needed Honest and candid statements made in an appraisal form do not attract liability for defamation.
Employer Risk No.

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

Europe Global Update Banner

Austria

Subject Matter/Name of Development New paternity leave to be introduced ("Papa-Monat")
Summary Employers must soon grant fathers one month’s paternity leave to be taken in the period between the birth of the child and the end of the mother's protection period (which is from eight weeks before the expected date of birth to eight weeks after the birth). At least three months before the expected date of birth, an eligible employee must notify his employer of the expected date for commencing the leave, together with the baby’s due date. The employee must inform their employer immediately of the birth of his child, or at the latest within one week.
Impact Date 1 September 2019
Employer Implications/Action Needed Employers must review and amend parental leave policies to reflect a father’s right to take one month of paternity leave. The employer is not obliged to pay the father’s salary during this period of leave
Employer Risk Employees will have special protection against detriment and dismissal during the paternity leave and until four weeks after the end of the leave. In summary, this means that even an ordinary dismissal must be based on just cause, the labour court must usually approve the dismissal before it is implemented and summary or immediate dismissal will only be sanctioned in very limited circumstances. This protection commences with the advance notice (or a later agreement) and at the earliest four months before the expected date of birth. In the absence of advance notice due to a premature birth, it begins with notification of the date of commencement of the paternity leave.
Subject matter/Name of Development Amendments to the Maternity Act – maternity leave and length of service entitlements
Summary Due to recent changes in the Maternity Leave Act, the whole period of maternity leave (24 months) will be included when calculating all employment entitlements dependent on length of service (e.g. notice periods, sick pay and holiday entitlements). A full credit of 24 months will apply to each child. Until this change, crediting periods of maternity leave was very limited unless a collective bargaining agreement stated otherwise. Now, every period of maternity leave will be included in calculating an employee’s length of service.
Impact Date 1 August 2019.
Employer Implications/Action Needed According to Austrian Employment Law, an employee is entitled to 25 days of holiday entitlement per year (five weeks of holidays). After 25 years of service this increases to 30 days. If two years of maternity leave are credited, the sixth holiday week, for which an employee must have worked in a company for 25 years, will be less difficult to reach.
Employer Risk Employers must ensure that the correct maternity leave times are being credited to the employee. Failure to do so may result in high penalties.
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.No action needed so far.
Employer Risk Employers must ensure that the correct maternity leave times are being credited to the employee. Failure to do so may result in high penalties.

Contact:

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

Belgium

Subject Matter/Name of Development Electronic submission of work regulations
Summary Employers are no longer required to submit draft work regulations in writing and may submit them online. In Belgium, employers are required to draft work regulations upon hiring their first employee. These draft regulations, and any later amendments, must be submitted to a government department within 8 working days of their entry into force.

 

The new online system uses the same employee identification system as other online services such as tax, i.e. via the electronic identity card (eId) or via Itsme. It is only available in Dutch, French and German.

In addition to uploading documents and generating electronic receipts, the online platform offers a reconciliation procedure with the Labour Inspectorate, if there is a difference of opinion on the new or amended work regulations.

Impact Date From 15 May 2019
Employer Implications/Action Needed Work regulations can be submitted online, saving employers time.
Employer Risk Not applicable.

Contact:

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

Czech Republic

Subject matter/Name of Development Implementation of GDPR.
Summary Czech legislation has been introduced which brings into effect the GDPR and also clarifies or amends those areas of permitted derogation which have been taken up in the Czech Republic. The new Data Processing Act: sets a minimum age of 15 for children to give consent to their online data being processed (which is one year lower than is required by the GDPR); removes the need for an impact assessment in the context of many HR-related processes; and significantly decreases the GDPR sanctions which can be imposed on public entities (incl. full exemption of public authorities). The new Act replaces preceding data protection legislation.
Impact Date 24 April 2019.
Employer Implications/Action Needed Employment documentation should be amended and internal processes updated to ensure compliance with the new Act and removal of any references to obsolete legislation.
Employer Risk Fines of up to CZK 10,000,000 (approx. EUR 400,000) may be imposed where an employer breaches the Act.
Subject Matter/Name of Development Increased quotas for workers from Ukraine.
Summary The Czech government recently decided to increase the quotas for qualified workers from the Ukraine, from 20,000 workers per year to 40,000 workers per year.
Impact Date Implementation from September – November 2019, fully applicable in year 2020.
Employer Implications/Action Needed Employers may well have opportunity to apply for more workers from Ukraine in some areas.
Employer Risk Employers wishing to hire qualified Ukrainian workers must pay at least 1.2 times the minimum wage to these workers.
Subject Matter/Name of Development Sanctions from non-competition clause enforceable for minor breaches (case law)
Summary The Czech Constitutional Court recently held that an employee’s minor breach of a non-competition clause (in the particular case employment with a direct competitor for only 4 days) could result in the employee being liable to pay the whole contractual penalty, reflecting the compensation payment the employee will have received from the employer in lieu of the temporary restriction on him/ her working for a competitor (at least 50% of the employee’s average monthly salary).
Impact Date Second quarter 2019
Employer Implications/Action Needed It may be possible for employers to enforce fully non-compete clauses, even for minor breaches by the employee.
Employer Risk None.

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 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.

Read more here

Impact Date 2021-23.
Employer Implications/Action Needed Currently, less than half of EU countries (such as 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 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.
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
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.

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 New regulation of profit sharing, saving plans and pensions
Summary
On 22 May 2019, the law called "Pacte" ("loi Pacte") was enacted. It changes many technical provisions of the current regulations concerning the operation of profit sharing and saving plans . It also reorganises current pensions scheme provision, creating a new (replacement) defined contribution scheme vehicle ("Plan d'épargne retraite") and new defined benefit schemes regulation. Further regulations are to follow in the next few months (the Government has published some drafts of these bills). They will provide for the enforcement of these reforms.
Impact Date First quarter 2020
Employer Implications/Action Needed Employers must update their profit sharing and saving plans and follow the new pensions scheme regulations as they will have a strong impact on defined benefit schemes.
Employer Risk Employers may lose some social contributions exemptions on the sums they pay their employees, if they fail to comply with these new measures. Employers may also miss the opportunity to be exempted from paying profit shares to employees.
Subject matter/name of development Secondments in France
Summary A new 2019 Ordonnance 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. 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 for French law to apply. The Labor Administration may also issue financial penalties and even criminal sanctions in the case of a serious breach.
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 No holiday entitlement accrual during mutually agreed special leave (case law)
Summary

Previously, it had been understood that holiday entitlement accrued during times of special leave, for example, during sabbaticals. However, the Federal Labor Court has decided that an employee is not entitled to accrue holiday during periods when he/she is on unpaid special leave, provided that the parties have mutually agreed the special leave.

Consequently, when calculating holiday leave entitlement, periods during which both parties to the employment contract have temporarily suspended their main obligations by agreeing special leave should be taken into account, with the duration of holiday leave shortened accordingly

Impact Date 19 March 2019
Employer Implications/Action Needed A written agreement is advisable when granting unpaid special leave. According to the Federal Labor Court, it is crucial that the special leave must have been agreed between the parties to the contract and that the main work performance obligations are therefore mutually suspended.
Employer Risk N/A

Contact:

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

Hungary

Subject Matter/Name of Development Summer tax changes – reduction in social contribution
Summary

The Summer Tax Package was adopted by the Hungarian Parliament on 12 July 2019. Although draft legislation is awaited changes have already taken place as a result of previous regulations.

The most important change affects the rate of Social Contribution Tax payable by employers. The rate has decreased from 19.5% to 17.5 % and it is applicable to incomes and employee benefits.

Impact Date 1 July 2019
Employer Implications/Action Needed Employers tax burdens are reduced as of 1 July, 2019. As a result employers will pay 2 % less social contribution.
Employer Risk No risk.

Contact:

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

Ireland

Subject Matter/Name of Development New Sectoral Employment Order in the electrical contracting sector
Summary A new Sectoral Employment Order has been introduced for the electrical contracting industry. It applies to workers employed as qualified electricians and registered apprentice electricians working in the sector. It outlines: minimum rates of pay for relevant employees; normal working hours of 39 hours per week; the overtime payable in respect of unsocial hours; and provisions with regard to pension, sick pay and dispute resolution.
Impact Date 1 September 2019
Employer Implications/Action Needed Employers working in the electrical contracting industry will need to ensure that employees receive the Order’s minimum requirements. Standard terms and conditions of employment should be updated to reflect its terms.
Employer Risk Sectoral Employment Orders are legally binding and if an employer fails to provide the relevant terms of employment, the Workplace Relations Commission (the body responsible for the hearing of employment disputes) can enforce the Order.
Subject Matter/Name of Development New construction industry Sectoral Employment Order
Summary

A new Sectoral Employment Order has been introduced for the construction industry. It introduces a 2.7% pay increase (from 1 October 2019 and from 1 October 2020) and provides for: an overtime payment for unsocial hours; terms for pension, sick pay schemes and dispute resolution procedures; and 39 hours per week as normal working hours. The Order applies to craftspeople, construction operatives and apprentices employed in the construction sector.

Read more here

Impact Date The previous Order will be revoked and the new Order will apply with effect from 1 October 2019.
Employer Implications/Action Needed Employers in the construction industry will need to ensure that, once the Order comes into effect, relevant employees receive the minimum entitlements under the Order and that standard terms and conditions meet its terms.
Employer Risk Sectoral Employment Orders are legally binding. If an employer fails to adhere to the Order, its terms can be enforced by the Workplace Relations Commission (the body responsible for the hearing of employment disputes).
Subject Matter/Name of Development Stricter rules on staff tipping proposed
Summary

A Bill, which aims to ensure that workers in the service industry are legally entitled to retain any tips, gratuities or service charges received from customers, has cleared the early stages of the legislative process. However, it is opposed by the Government and may not be signed into law.

Read more here

Impact Date Not available
Employer Implications/Action Needed Employers in the service industry may need to adapt their policies and procedures on tipping, should the Bill be passed.
Employer Risk If enacted, employers could be required to pay compensation to employees. In addition, they may be fined up to €2,500 and/or risk imprisonment of a term not exceeding six months.
Subject Matter/Name of Development Parental leave changes finalised
Summary

Legislation is extending parental leave entitlement from 18 weeks to 22 weeks, with effect from 1 September 2019, and to 26 weeks, with effect from 1 September 2020. It also increases the age of the child up to which parental leave can be taken from eight years to 12 years.

Read more here

Impact Date 1 September 2019 and 1 September 2020
Employer Implications/Action Needed Employers will need to manage parental leave requests to ensure its business needs are met. Parental leave policies may need to be revised to reflect the new entitlements.
Employer Risk Employers must ensure that parental leave requests are managed correctly to mitigate the risk of a complaint under parental leave legislation and any employment equality complaints.
Subject Matter/Name of Development New gender pay gap reporting duty expected to apply from 2020
Summary

The Gender Pay Gap Information Bill 2019 is making its way through the legislative stages. The most salient elements of the Bill, which applies in both the public and private sectors, include: regulations requiring publication of gender pay gaps 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 will apply to employers from 2020.
Employer Implications/Action Needed Employers should use this time to prepare 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 reputational damage if they have a wide and unexplained pay gap.
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 for 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).

Contact:

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

Italy

Subject Matter/Name of Development Monitoring employees
Summary

Audio-visual (CCTV) and similar equipment that allows employers to remotely monitor employees can be installed, in certain circumstances, where there is a signed agreement with the employee’s union representative or with the express authorisation of the competent Territorial Labor Inspectorate. The Ministry of Labour and Social Politics has recently clarified that the Inspectorate must give specific and clear feedback to an employer’s request for permission to install and use video-surveillance systems. The lack of express written authorisation cannot be treated as “silent approval”.

Impact Date From 1 July 2019
Employer Implications/Action Needed Only expenses incurred by the company for hiring an Innovation Manager will be financed by this subsidy.
Employer Risk N/A.
Subject Matter/Name of Development New financial incentives for employers to hire an “Innovation Manager”.
Summary A Ministerial Decree has introduced a new public subsidy to help small and medium-size employers improve their organisations, through technological and digital transformation, by hiring an Innovation Manager. The subsidy is available to companies established in Italy or to foreign companies with local units in Italy, with the exception of companies in the agriculture, fisheries and aquaculture sectors. Small employers may benefit from 50% of the cost incurred (maximum of EUR 40,000) in hiring an Innovation Manager and medium-sized employers up to 30% of the cost (maximum of EUR 25,000).
Impact Date From 1 July 2019
Employer Implications/Action Needed Only expenses incurred by the company for hiring an Innovation Manager will be financed by this subsidy.
Employer Risk N/A.
Subject Matter/Name of Development Changes to voluntary early retirement for female employees.
Summary A Decree has introduced a new voluntary retirement scheme which entitles female employees to retire if, starting from 31 December 2018, they are at least 58 years old and have accrued at least 35 years of social security contributions. Twelve months after meeting these conditions, female employees are entitled to their retirement benefit.
Impact Date From April 2019
Employer Implications/Action Needed Further details are expected to be issued by INPS (the Italian National Social Security Institution) in the next few months.
Employer Risk Employers should anticipate that female employees reaching these conditions may decide to retire from work earlier than anticipated.
Subject Matter/Name of Development New retirement pension scheme – “Quota 100”
Summary A Decree has introduced a new retirement scheme. Called “Quota 100”, employees may retire if the sum of their age plus their years of social security contributions is equal to 100, for example, if they are at least 62 and have accrued a minimum of 38 years of social security contributions. The scheme allows such employees to retire and access the state pension earlier than previously permitted. The requirements are slightly lower for employees who performed “heavy work”. Employees in this category must be at least 61 years and 7 months old and have at least 35 years of social security contribution. The retirement benefit cannot be cumulated with any other income, with the exception of occasional work (maximum EUR 5,000 per year). Employees are entitled to their retirement benefit three months after qualifying.
Impact Date A period of experimental application is ongoing between April 2019 and December 2019.
Employer Implications/Action Needed Further details are expected to be issued by INPS (the Italian National Social Security Institution) in the upcoming months.
Employer Risk Employers should anticipate that some employees who reach the new retirement requirements may decide to retire from work earlier than anticipated.

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

Irregularity allowance (case law)

Summary A lower court has ruled that on days/hours where holidays exceed statutory minimum holiday entitlement, employees are entitled to receive irregularity allowance (“ORT”). This also applies to situations where the holiday excess arises as a result of a reduction in the employee’s working hours (e.g. short-time working). The court has also ruled that any contrary agreement between employers and trade unions seeking to avoid payment of irregularity allowance in these circumstances is invalid.
Impact Date 17 June 2019
Employer Implications/Action Needed Employers should ensure they are paying irregularity allowance appropriately during holiday entitlement above the statutory minimum.
Employer Risk Employers may incur an increase in costs upon payment of the irregularity allowance.
Subject Matter/Name of Development Underperformance (case law)
Summary The Dutch Supreme Court has clarified the factors that employers should consider when seeking to support improvement in an employee’s performance. These include: the nature, duties and level of the employee’s position; the employee’s level of education and experience; how and to what extent the employee is struggling in his/her position; the duration of the employee’s underperformance; length of employment; what measures have already been taken to improve the employee’s performance; the extent to which the employee is receptive to criticism and is prepared to improve his/her performance; and the nature and size of the employer’s business.
Impact Date

14 June 2019

Employer Implications/Action Needed It is expected that, for employers to demonstrate they have done enough to support an improvement in employee performance before contemplating dismissal, courts will take the above factors into account.
Employer Risk On a dismissal for reasons of employee underperformance, a court may reject termination of the employment contract if an employer has not applied the above factors (as appropriate) as part of an employee’s (personal) improvement plan.
Subject Matter/Name of Development Minimum rate of pay for independent contractors
Summary From 2020, all independent contractors will be entitled to minimum pay of EUR 16 per hour. This rate will apply automatically and is not subject to any qualifying criteria, such as the duration of assignment. It also applies to all hours an independent contractor spends on an assignment but does not include any direct costs incurred by him or her, such as the cost of materials, which will be payable on top of the EUR 16 minimum rate. In addition, independent contractors who earn more than EUR 75 per hour will be able to work under an independent contractor's certificate, confirming work will be carried out on a self-employed basis and avoiding the possibility of retrospective tax levies.
Impact Date Expected 1 January 2020
Employer Implications/Action Needed

Employers must ensure that independent contractors are reimbursed at the correct (above-minimum) rate.

Employer Risk Failure to pay the correct rate risks fines imposed by the Dutch Inspectorate SZW and/or retrospective levies imposed by the Dutch Tax Authority.
Subject Matter/Name of Development Postponement of pension age increase
Summary As a result of the agreement between Social Partners and the Dutch government, the pension system will be reformed. As a result, the pensionable age for state pension purposes (‘AOW’) will be frozen at age 66 and 4 months, instead of increasing to age 67, as previously intended. In 2020, the age will be increased again, but will not be directly linked to the increase in life expectancy.
Impact Date

1 January 2020 and 1 January 2022

Employer Implications/Action Needed Employers should be aware that employees can choose between either the state pensionable age or the pensionable age of the tax legislation, which is currently 68.
Employer Risk Employees may choose to retire earlier than the employer had expected. Also, if the retirement age is not properly agreed in the employment agreement or pension agreement, it could be unclear when an employee is entitled to retire.
Subject matter/Name of Development Potential liability of hirers for agency workers’ wages (case law)
Summary The Sub-district Court ruled that a Dutch postal service was liable for a shortfall in wages of agency workers it engaged as parcel sorters. According to the Dutch Placement of Personnel by Intermediaries Act (Waadi), agency workers are entitled to the same pay as direct employees of the hirer. In this case, the Postal Service and the agency purported to enter into a contract for the assignment of agency workers. The Court ruled that the actual situation did not reflect a true assignment contract for agency work because the Postal Service was in a position to monitor and control the agency workers. The Court accordingly found that the agency workers were entitled to the same remuneration as employees of the Postal Service.
Impact Date 7 May 2019
Employer Implications/Action Needed

When considering engagement of agency labour, employers should review how this is managed and take into account the risk associated with controlling the work of agency workers as if they were direct recruits.

Employer Risk Misuse of assignment contracts or over-zealous management, risks increased costs and other liabilities.
Subject matter/Name of Development Delay to pension rights for payroll workers
Summary

The Balanced Labour Market Act (“Act”) will introduce new rules for zero-hour and ‘on-call’ contracts, for so called ‘payroll employees’, statutory severance payments and changes to grounds of dismissal. Despite the planned 2020 implementation, the proposal for ‘payroll employees’ to participate in an adequate pension scheme (which need not be the same pension scheme available to the hirer’s employees) has been delayed until 1 January 2021.

Read more here

Impact Date 1 January 2020 (almost all changes) and 1 January 2021 (adequate pension scheme).
Employer Implications/Action Needed

Employers should review the way they use on-call contracts and should also review payroll contracts to ensure compliance ahead of the commencement of the new law in 2020 and 2021.

Employer Risk Employers should prepare for likely increased costs in 2021 as a result of the increased rights for payroll workers.

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 Amendments to the Labour Code on discrimination, maternity leave entitlements and work certificates
Summary

Amendments to the Labour Code have made the following changes:

(i) the non-exhaustive list of potential discrimination grounds will be no longer divided into "personal" (such as sexual orientation) and "work-related" (such as type of contract);

(ii) maternity and parental leave entitlements (and protection against dismissal) currently accessible to parents of the child will be extended to immediate family members taking care of the child;

(iii) the period within which a request to correct a work certificate must be submitted will be extended from 7 to 14 days after termination of employment; the employees will also be entitled to submit a claim to a labour court against their employer for not following the correct rules when issuing the work certificate.

Impact Date 7 September 2019
Employer Implications/Action Needed Employers must update their policies to comply with the amended provisions.
Employer Risk Non-compliance in due course could lead to potential claims.
Subject Matter/Name of Development New rules for calculating the number of trade union members
Summary For the purposes of determining whether a trade union is representative of a workforce (based on reaching a certain threshold of employee members) only those who have been members of a trade union for at least 6 months will be taken into account. The trade unions will be obliged to inform the employer of the number of members and their period of membership.
Impact Date 23 August 2019
Employer Implications/Action Needed No action required by employer.
Employer Risk No risk.
Subject Matter/Name of Development Amended rules on processing the personal data of employees and candidates
Summary Recent amendments to the Labour Code have revised the scope of personal data which the employer may request from job candidates and employees. They also addressed the processing of both ordinary and sensitive personal data for candidates and employees on the basis of their consent. The amendments contain several limitations including excluding CCTV monitoring of trade unions’ premises. CCTV monitoring of sanitary facilities will additionally require the consent of trade union or employees' representatives.
Impact Date 4 May 2019
Employer Implications/Action Needed Employers should process the personal data of candidates and employees in line with the amended provisions and ensure compliance with the current provisions on CCTV monitoring.
Employer Risk Processing of personal data contrary to the provisions of the law may result in the employer's liability for GDPR violations.
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 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 New employer obligations to prevent harassment at work
Summary Comprehensive amendments have been added to legislation preventing harassment and discrimination at work. Among other amendments, employers are now obliged to implement an internal policy aimed at eliminating harassment at work.
Impact Date 2 May 2019
Employer Implications/Action Needed Employers should implement or update existing internal policies to ensure they have adequate measures in place which comply with the legislative amendments.
Employer Risk Non-compliance with this obligation may trigger administrative fines from the labour authorities.
Subject Matter/Name of Development Further regulation concerning female retirement age
Summary Following a decision of the Romanian Constitutional Court, female employees are able to elect to remain in employment until the age of 65 providing they meet the age requirements and minimum retirement contributions. Female employees who wish to continue working until 65 must submit a request to their employer and obtain its approval.
Impact Date 08 May 2019
Employer Implications/Action Needed Subject to the employer’s approval, a female employee may remain in her current post for a maximum of three years, with the possibility of an annual renewal of the individual employment agreement.
Employer Risk The retention of older, skilled workers will need to be balanced against the need for succession planning and allowing younger workers access to job opportunities and progression.
Subject Matter/Name of Development Additional leave days for employees who undergo IVF procedure
Summary Employees who undergo IVF procedure now benefit from an additional 3 days’ paid leave.
Impact Date 19 April 2019
Employer Implications/Action Needed Employees requesting the additional leave will need to provide a medical certificate.
Employer Risk Non-compliance with this obligation may trigger administrative fines from the labour authorities.

Contact:

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

Russia

Subject Matter/Name of Development

Obligation to collect employee work history in electronic form

Summary

The Russian Government has approved a set of draft laws requiring employers to collect an employee’s work history in electronic format, removing the various access and other problems related to “paper” records. From January 1, 2021, an employer will not be required to complete the standard "paper" employment record book unless an employee requests this in writing. However, the employer will be required to provide information about the employees' work experience to the Russian Pension Fund in electronic form. This will involve completion of a new section, "Information about labor activity", by the employer's HR department with information about an individual’s employment, dismissals, specialisations, profession, qualifications, etc.

Impact Date 1 January 2021
Employer Implications/Action Needed Whilst both paper and electronic record-keeping remain permissible, employers will need to be prepared to send the required "Information about labor activity" to the Russian Pension Fund in electronic format.
Employer Risk Administrative responsibility will be introduced for employers and may lead to enforcement action where employers have repeatedly failed to provide information, or provide inaccurate, incomplete information about the work activities of their employees to the Russian Pension Fund.

Contact:

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

Slovakia

Subject Matter/Name of Development Increases to the minimum meal allowance
Summary
Each employee is entitled to one hot meal per working shift, if it is longer than 4.5 hours. Employers must pay a meal allowance to each employee if they do not have an onsite canteen. The meal allowance has been increased by 5.8 % as follows: (i) from EUR 4.80 to 5.10 for a 5-12 hours shift; (ii) from EUR 7.10 to 7.80 for a 12-18 hours shift; and (iii) from EUR 10.90 to 11.60 for a 18+ hours shift.

The minimum amount of a meal voucher (meal vouchers being one way of providing a meal allowance) has also been increased accordingly , from EUR 3.60 to EUR 3.83. The maximum tax-deductible value has also been adjusted from EUR 4.80 to 5.10.

Impact Date 1 July 2019
Employer Implications/Action Needed Employers should act to increase their meal allowances and meal vouchers. Employers providing paper meal vouchers may choose to offer either a meal voucher swap or issue an additional meal voucher to cover the increase. Electronic cards with a set monthly meal allowance must also be increased accordingly.
Employer Risk If minimum meal allowances are not increased to reflect the new rates, employers may face a penalty from the Labour Inspectorate.
Subject Matter/Name of Development Minimum wage and retirement age changes
Summary The Slovak Constitution has been amended to state that an employee cannot be paid below the minimum wage (which is amended annually on 1 January and currently amounts to EUR 520). A second amendment sets 64 years as the earliest retirement age (previously, no specific retirement age was set – instead, the retirement age was calculated according to average life expectancy). Women may be entitled to retire up to 6-18 months earlier depending on how many children they have raised.
Impact Date 1 July 2019
Employer Implications/Action Needed Employers must ensure that all employees are being paid at least the minimum wage. Older employees may also be eligible for earlier retirement than anticipated by their employer.
Employer Risk Employers may face penalties if they do not comply with minimum wage legislation and staffing difficulties if employees retire earlier than expected.

Contact

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

Spain

Subject Matter/Name of Development Deductions in pay for lateness and unauthorised absences (case law)
Summary

The National Court recently held that employers are entitled to make salary deductions (in addition to potential disciplinary measures) when employees have poor punctuality and/or unauthorised absences from work.

In this case, the claimant trade union argued that the deductions must be considered economic penalties (which are prohibited under Spanish law). However, the Court rejected this argument on the basis that economic penalties are only prohibited from payments related to work that has been completed.

Impact Date 20 June 2019, date of the court ruling
Employer Implications/Action Needed Employers may consider making deductions from pay when faced with poor employee punctuality and unauthorised absence but should be cautious in doing so as this court decision may be appealed and, potentially, reversed.
Employer Risk Deductions from pay must demonstrably relate to hours that have not been worked by an employee due to an unauthorised absence and/or poor punctuality. Employers risk court claims and reduced staff morale unless this approach is applied accurately and consistently.

Contact:

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

Sweden

Subject Matter/Name of Development Immediate dismissal (case law)
Summary The Employment Court has clarified that for a lawful immediate dismissal to take place after employee theft has been confirmed, the items must not have an insignificant value and there must not be any personal or mitigating circumstances.
Impact Date 19 June 2019
Employer Implications/Action Needed Employers should note the circumstances required for theft to constitute lawful grounds for immediate dismissal.
Employer Risk An immediate dismissal without lawful grounds could be declared invalid by a court and potentially result in liability for damages.
Subject Matter/Name of Development Industrial relations: labour-stability obligations
Summary Legislation has been passed which entails an extended labour-stability obligation during workplace disputes involving employees who are covered by a collective bargaining agreement, as well as for employers and employees during legal disputes.
Impact Date 1 August 2019
Employer Implications/Action Needed Employees’ and employers’ rights to initiate and participate in industrial action are subject to certain new limitations, in addition to the general rule of labour-stability for employers and employees covered by a collective bargaining agreement.
Employer Risk Breaching labour-stability obligations could result in liability for damages.

Contact:

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

Switzerland

Subject Matter/Name of Development Draft law on whistleblowing rejected by the National Council
Summary In September 2018, the Federal Council submitted, for the second time, revised draft legislation which would amend the Swiss Code of Obligations on lawful workplace whistleblowing, including mitigating employees’ risk of dismissal. However, the National Council rejected the revised draft in June and the Council of States will now have to decide on the way forward.
Impact Date N/A.
Employer Implications/Action Needed In the absence of statutory regulation, it is recommended that employers establish clear contractual rules for whistleblowing.
Employer Risk Employers may be at risk of reputational damage caused by unlawful whistleblowing.
Subject Matter/Name of Development Discrimination based on sexual orientation (case law)
Summary

The Federal Court has considered whether discrimination on the basis of sexual orientation can constitute direct discrimination under the Equal Treatment Act (“ETA”). The claimant alleged that he was refused employment because he is gay.

The ETA offers legal protection against discrimination on the grounds of gender. Since both men and women can be gay, direct discrimination based on sexual orientation generally lacks the necessary gender requirement. This was the finding of the Court.

According to the Court, direct discrimination under the ETA is only applicable if it is based on gender or on a criterion which can only be fulfilled by one of the two genders and it cannot be objectively justified. This was not the case where a job applicant was rejected due to his or her sexual orientation. He did not claim indirect discrimination.

Impact Date Upon publication of the judgment.
Employer Implications/Action Needed Employers should take care not to discriminate against job applicants based on gender or sexual orientation grounds.
Employer Risk Possible discrimination claims brought by rejected job applicants which may cause financial and reputational damage.
Subject Matter/Name of Development Working from home (case law)
Summary

The Federal Court has assessed the validity of a post-termination non-compete clause. The Court held that such a clause is invalid if the employee offers a service to the customer with a strong personal component that makes the identity of the employer almost disappear.

In the case of a bank asset manager, the Court considered the basis of trust in the relationship between an asset manager and a customer to be of comparable importance to the relationship between a doctor and patient or a lawyer and client.

Impact Date Upon publication of the judgment.
Employer Implications/Action Needed Employers should review contractual non-compete clauses against local legal requirements and case law (as applicable).
Employer Risk Employers may find that post-contractual non-compete clauses are unenforceable.
Subject Matter/Name of Development Working from home (case law)
Summary A recent decision held that if an employee is required to work from home, the employer must reimburse him/her for the necessary expenses incurred from using their home as an office. This applies even if there is no provision for reimbursement in the employment contract.
Impact Date Upon publication of the judgment.
Employer Implications/Action Needed It is recommended that employers establish clear provisions on payment for costs associated with working from home in employment contracts.
Employer Risk Possible employee claims for reimbursement and/or disputes over amounts to be reimbursed.

Contact:

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

UK

Subject Matter/Name of Development Brexit
Summary

A new British Prime Minister heralds a change in approach to the UK leaving the EU on the 31 October 2019.

Impact Date 31 October 2019
Employer Implications/Action Needed We are gradually receiving more clarity over Brexit workplace implications, particularly in respect of immigration law at the point we leave the EU. However, huge uncertainty continues.
Employer Risk A no deal Brexit remains possible.
Subject Matter/Name of Development New tax rules to apply to engagements via personal service companies
Summary

A scheme already applicable to many public sector employers (known as “IR35”) is being refined and extended to the private sector next year. Where it applies, organisations engaging services through a personal services company (a PSC) will need to assess a worker’s employment status so that he or she can be taxed accordingly.

Impact Date 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. Increased tax liabilities could result, raising overall costs. Employers must collate sufficient information about workers to assess IR35 status and share that determination with others, along with 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 itself carries potential penalty.
Subject Matter/Name of Development

Next phase of workplace reforms: ‘Good Work Plan’

Summary

Reforms aimed at increasing transparency over employment status and rights include: a written statement of terms for all workers; removal of the Swedish Derogation for agency workers; reduction of the threshold for information and consultation rights (from 10% to 2%) and extending the reference period for calculating statutory holiday to 52 weeks.

Impact Date April 2020
Employer Implications/Action Needed Removal of the ability to offer pay between assignment contracts to agency workers is significant for affected agencies/ business sectors. All employers will need to ensure their administration of contracts is compliant for all workers and that holiday pay calculations are even more carefully scrutinised.
Employer Risk A failure to provide written terms allows a workers to raise a complaint in the employment tribunal but may also expose the employer to queries over status. Underpayment of holiday pay is still a significant issue and, if incorrect, can involve large compensation claims.
Subject Matter/Name of Development

Improving gender equality

Summary A Government “Road Map for Change” identifies various areas for improving gender equality issues in employment, including pay. More imminently, a series of consultation papers may lead to greater sexual harassment protection at work (including limiting the use of non-disclosure provisions, “NDAs”) and new employment rights for carers.
Impact Date Not known but not expected before 2020
Employer Implications/Action Needed Whilst the precise outcome of Government Consultations is awaited, in due course employers can expect much greater responsibility to prevent harassment, including by third parties. Limiting use of NDA’s, particularly affecting severance deals, is also pending. Employers should review current practices and procedures carefully and train staff appropriately. A Code of Practice will help guide behaviours.
Employer Risk Failure to comply with more stringent legal requirements to address harassment, as they are clarified, will expose employers to litigation but also adversely affect reputation. Moreover, once restricted use of NDA’s is introduced, non-compliant terms may be void.
Subject Matter/Name of Development Pay gap transparency: ethnicity pay
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.
Impact Date Not known but not anticipated before 2020/21
Employer Implications/Action Needed Reporting ethnicity pay will require significant effort and buy-in from employers. Those who already collate ethnicity pay data may need to revise their approach. For the remainder, a raft of policies and procedures will need to precede pay reporting, from what ethnicity data is collected, how, and the steps taken to reassure and encourage staff.
Employer Risk The framework for reporting ethnicity pay gaps is expected to mirror the existing UK provision for gender pay gap reporting. Direct financial penalty is unlikely but there will be enforcement action and public naming of defaulters

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

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Saudi Arabia

Subject Matter/Name of Development Possible amendment to Saudi labour law
Summary

In its 7 May 2019 session, the Shura Council reinforced its desire for greater protections for Saudi employees under the Labour and Workmen’s Law (the Labour Law). The Shura Council endorsed an amendment to the compensation for Saudi nationals who are employed on indefinite contracts. The amendment stipulates that, if an indefinite employment contract does not provide for a specific amount of compensation for unjust termination, the employee is entitled to receive one month's wages for each year of employment.

Impact Date Unknown at this time.
Employer Implications/Action Needed

Employers need to obtain legal advice on how to protect their position once the proposed amendment comes into force.

Employer Risk The amendment is aimed at curbing alleged abuse of the Labour Law by employers who have been able to dismiss Saudi employees more easily than colleagues from other countries. The proposed amendment should provide increased financial protection to Saudi employees.
Subject Matter/Name of Development Electronic authentication of employment contracts
Summary

The Minister of Labour has issued a ministerial decision obliging employers to authenticate contracts electronically. The requirement to authenticate contracts electronically is immediate for all new hires. For current employees, the resolution allows for the authentication process to be completed in phases.

Impact Date 23 April 2019
Employer Implications/Action Needed

Employers must comply with the decision and authenticate all new hires with immediate effect. For hires before April 2019, the resolution has set a timetable to comply with the authentication requirements.

Employer Risk Employees whose contracts have not been authenticated will be able to change employers without the consent of the current employer.
Subject Matter/Name of Development New residency permit provisions (the Distinguished Iqama (residency permit) Law)
Summary

The Shura Council has approved the Distinguished Iqama (residency permit) Law providing qualifying foreigner workers with a number of privileges.Foreign workers granted the Iqama will benefit from many privileges which include (but are not limited to): obtaining a visit visa for family and relatives, the ability to recruit domestic workers, owning properties and owning transport. Executive Regulations of this Law will shortly be issued. In addition to this, a centre called the Centre of Distinguished Iqama, will be established to implement the new law.

Impact Date Executive Regulations expected summer 2019 (within 3 months of publication of the new law in May 2019).
Employer Implications/Action Needed

Employers may wish to explore wider recruitment options as workers who obtain the Distinguished Iqama may no longer require a sponsor to work in Saudi Arabia.

Employer Risk Employees who are granted the Distinguished Iqama may be able to move freely to another job without the need to transfer their sponsorship to a new employer.

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 DIFC Employment Law No. 2 of 2019 (“New DIFC Employment Law”) – commencement date confirmed.
Summary

Five key areas are important for employers:-

(i) Paternity and maternity leave (including adoption):

Introduction of 5 working days’ paternity leave for fathers or adopters and a right to take time off to attend medical appointments or adoption appointments (subject to notification requirements).

(ii) Discrimination and extension of protected characteristics:

Age, pregnancy and maternity have expressly been included as grounds upon which an employer should not discriminate. Discrimination definitions have been refined.

Employees may now also be awarded up to one year’s wages as compensation.

(iii) Gratuity payable even for summary (cause) terminations:

All employees (unless in receipt of qualifying pension payments) shall be entitled to end of service gratuity regardless of whether their employment is terminated with notice, without notice or if they resign.

(iv) Sick leave and sick pay:

Entitlement to sick pay has been significantly reduced and shall be paid at the rate of 10 days’ full pay, 20 days’ at half pay and no pay for the remaining 30 days.

(v) Part-time and secondment workers:

Part-time employment is now defined as less than 8 hours a day or less than 5 days a week. Furthermore, part-time employees will now be entitled to the same entitlements as full-time employees, but on a pro-rata basis.

Employers can also now engage secondees for a period not exceeding 12 months.

Read more here

Impact Date 28 August 2019.
Employer Implications/Action Needed

Recommended actions for employers:

(i) Ensure the handbook and employment contracts reflect these changes.

(ii) Communicate the new entitlements to HR teams, legal teams and relevant managers.

(iii) Ensure employment documentation and worker behaviour recognise the additional non-discrimination grounds and consider training for staff (especially as employers may be vicariously liable for actions of its staff).

(iv) Make sure that employees and those responsible for managing sickness absence and pay are aware that entitlement to pay has been significantly reduced.

(v) Ensure that any part-time employees and secondees are issued with employment documentation which clearly sets out what parts of the New DIFC Employment Law applies to them and which parts do not.

Employer Risk Given the express provision for compensation claims, 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

National Labor Relations Board decision on withdrawing from union recognition (case law)

Summary The National Labor Relations Board (“NLRB”) has examined the situation where employers have objective evidence that a majority of their employees no longer support their union. If an employer has this evidence, it can withdraw from union recognition upon the expiry of the collective bargaining agreement (“CBA”) and refuse to bargain (called “anticipatory withdrawal”). Under the NLRB’s old precedent, an anticipatory withdrawal was a risk because the union could subsequently show that it had reacquired support before the actual withdrawal. This meant that the employer could properly withdraw recognition but still violate the NLRA. In this latest decision, an employer can provide notice of an anticipatory withdrawal within 90 days before a CBA expires. Within 45 days after the employer gives notice, the union can file a petition for an election to re-establish if it has a majority.
Impact Date 3 July 2019
Employer Implications/Action Needed The decision makes it easier for employers who have received objective evidence of lost support to declare an anticipatory withdrawal. Moreover, it reduces the risk surrounding an anticipatory withdrawal; employers will not face an unfair labor charge, but instead an election.
Employer Risk An employer must have objective evidence showing lack of union support. This evidence must be free of any improper influence from the employer.
Subject Matter/Name of Development National Labor Relations Board limits access to employers’ public spaces (case law)
Summary The National Labor Relations Board (“NLRB”) has held that employers do not have to provide non-employees with access to their public spaces for promotional activities. This decision reversed previous NLRB precedent regarding the use of employers’ public spaces.
Impact Date 14 June 2019
Employer Implications/Action Needed

As a result of the NLRB’s decision, employers will now have greater control of their public spaces. Specifically, employers can restrict union organisers from using the employers’ public space for soliciting or other organising activities.

Employer Risk If employers prohibit union organisers from using public spaces, they must maintain a neutral non-solicitation policy - meaning that an employer cannot allow some business solicitation but, at the same time, prohibit unions. Therefore, employers should maintain a neutral non-solicitation policy and ensure it is enforced consistently.
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 also increases 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 nondiscretionary bonuses and incentive payments to satisfy up to 10% of the standard salary level.
Impact Date Unknown at this time.
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, and legal fees.

Contact

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

Previous updates

April 2019
January 2019