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Welcome to this fourth edition of our quarterly Global Employment and Labor Law Update for 2022.

Throughout 2022, we have reported on a number of global themes that continue to shape the working landscape, including developments around equality and fairness, working arrangements and conditions, the implementation of the EU Directives on whistleblowing, transparent and predictable working conditions, and work-life balance, as well as developments aimed at protecting the health and safety of workforces. In this edition, we highlight some of the key developments that have featured globally during the last quarter, including new laws around flexible and remote working, pay transparency, and the protection against workplace harassment. Also featured are some significant court decisions around working arrangements, and developments around status.

Keeping appraised of new legal developments and maintaining visibility of those on the horizon continues to be critical for those planning and managing people strategies. Drawing on the significant experience and expertise of our teams of lawyers around the world assisting clients with all aspects of employment law, this latest Update provides a summary of the key changes. Please do not hesitate to contact us if you wish to find out more about any of the developments.


Equality and fairness – In our last edition, we reported on some significant new laws focused on enhancing equality requirements and protections. Further developments have been seen this quarter, including around the prevention of workplace harassment and the protection of and regulation regarding long-term sick and disabled workers. Further developments have also been seen around pay transparency, with a new law being passed in California which will require certain US employers to report information regarding the pay of employees by race, ethnicity and gender.

In Belgium, the Code on Wellbeing at Work has been amended to seek to increase the prospects of successfully reintegrating into the workplace employees on long-term sick leave. A proposed new law in Kenya seeks to support the employment of disabled persons, including through additional employment protection and reporting and quota requirements. And in Romania, further regulation is proposed around the right of disabled employees working reduced hours to receive full salary.

In the UK, legislation continues to be proposed to impose new duties on employers to prevent sexual harassment in the workplace. Other countries are also pursuing reforms in this area, including a new requirement now in force in Lithuania that requires employers to implement and publish a violence and harassment prevention policy, and amended legislation applying from the New Year in Denmark, which will increase the amount of compensation that can be awarded for workplace sexual harassment.

Employment status – We have previously reported on the ongoing wave of court decisions on the misclassification of employees, as well as highlighting the new guidance published by the UK Government aimed at making it easier to determine the correct employment status of individuals. New developments have continued to be seen on this topic during the last quarter, including in the US, where it is proposed to revise the analysis used for determining the appropriate classification of a worker. That amendment seeks to provide further clarity and to create consistency with judicial precedent and legislation.

Working arrangements – Some significant court decisions have been seen around working arrangements and conditions this quarter, including around obligations on employers to record working time (Germany), entitlement to bonus payments (Hong Kong), entitlement to compensation arising out of a transfer of undertaking (Netherlands), the liability for wages during on-call arrangements (Switzerland), retrenchment payment obligations (Singapore), and the forfeiture of claims for annual leave (Germany).

In addition, new developments continue to reflect the more flexible working environment. The developments seen in this respect have included proposed new conditions for remote working in the Czech Republic, and the Polish Government’s adoption of legislation that will now permanently enact the previously temporary provisions on remote working. In Belgium, a new right for workers to request a flexible work arrangement has been introduced.


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

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Liberia

Retirement benefits (case law)

A group of retirees sued their former employer, claiming that they were entitled to receive two unpaid employment benefits – (1) a payment under the former Labor practices Law of Liberia (1961), repealed by the Decent Work Act 2015; and (2) a social security/ welfare payment under the NASSCORP Act of 1980. The 13th Judiciary Circuit Court in Margibi County had previously ordered the company’s management to pay these benefits to the claimants retrospectively. Reversing that decision, the appeal court found there was conflicting legal provision but that, under the principle of recency, where two legislative acts contradict each other, “the latter is the governing law and supersedes and impliedly repeals the former act, although containing no repealing clause”. Under the more recent provision, therefore, the payments were not due and the company’s appeal was allowed.

Impact Date

5 September 2022

Employer Implications/Action Needed

N/A

Employer Risk

Employers may be held liable in contract for gratuity arrangements concluded with employees.

Link

  • N/A

Contact:

J. Awia Vankan
Partner
+231-886-529-089
avankan@hpaliberia.com

South Africa

Code of Good Practice: Protest Action to Promote or Defend Socio-Economic Interests of Workers

The National Economic Development and Labour Council (“NEDLAC”) issued a new Code of Good Practice: Protect Action to Promote or Defence Scio-Economic Interests of Workers (“Code”), pursuant to section 203(1) of the Labour Relations Act 66 of 1995 (“LRA”). In accordance with section 77 of the LRA, every employee who is not engaged in an essential service or a maintenance service has the right to take part in protest action.

The purpose of the Code is to provide practical guidance to facilitate that right, including:

  • to strengthen and promote the consideration of matters concerning the socio-economic interest of workers
  • to recognize the importance of dialogue and worker participation in the consideration of those matters
  • to provide mechanises to promote this dialogue and the consideration of those matters and
  • to provide guidelines to NEDLAC, facilitators and other appropriate forums to which such matters are referred, for the proper and effective consideration of those matters.

Impact Date

2 September 2022

Employer Implications/Action Needed

The Code includes the provision of practical guidance to those who engage in discussions concerning the promotion or defence of the socio-economic interests of workers and the resolution of such matters. Therefore, the Code is a useful practical guide for employers when considering whether certain conduct constitutes ‘protest action’. In addition, it provides guidance on the procedure which must be followed to ensure the protest action is protected, the protections afforded to those who engage in protected protest action and what happens in the event of disputes.

Employer Risk

The Code brings about more stringent guidelines which employers engaging with employee organizations need to consider. Should an employer fall foul of the Code, they may find themselves in breach. The protest action engaged by employees cannot be prohibited or stopped by the employer and, as such, the employer may potentially incur financial disrepute.

Link

Employment equity plans

The Employment Equity Amendment Bill, which seeks to eliminate current employment equity plans and impose sector-specific employment equity goals, was passed by the Parliament’s National Assembly in November 2021. The Bill seeks to ensure stricter regulation of employment equity plans.

Impact Date

November 2022 (expected date of the President's signature of the Bill).

Employer Implications/Action Needed

Employers will no longer be able to rely on their existing employment equity plans and will need to ensure that new employment equity plans meet specified sectoral numerical targets.

Employer Risk

Employers who fail to comply with the Employment Equity Act (EEA), including any failure to prepare an employment equity plan that meets the required sectoral numerical targets, risk a fine. Fines are determined on a case-by-case basis, although the EEA specifies that for first-time non-compliance, an employer will be subject to a fine to the greater of R1.5 million or 2% of the employer’s annual turnover. Fines will be increased / determined depending on the repetition of the non-compliance.

Link

Draft National Migration Policy and Employment Services Amendment Bill

The Minister of Employment and Labour has published a Draft Bill. The aim of the Draft Bill is to provide the legal framework which regulates the employment of foreign nationals while simultaneously providing for their protection.

The Draft Bill would allow the Minister of Labour to:

  • specify maximum quotas for the employment of foreign nationals. Such quotas may apply to (i) one or more sectors (ii) one or more occupational categories (iii) nationally or (iv) one or more regions. The quota may be avoided if (i) a foreign national has critical skills; or (b) the Minister has granted an exemption
  • implement requirements on employers of foreign nationals to ascertain that they are entitled to work in South Africa and to perform work for which they are employed
  • protect foreign nationals from terms and conditions of employment that are not inferior
  • require the employers of foreign nationals to satisfy themselves that no other South African has the requisite skills and
  • recognize digital labour platforms as employers. A digital labour platform is defined as “an electronic entity that enables the provision of work or services to any other person in the Republic”.

Impact Date

Awaited. Comment on the Draft Bill closed on 28 May 2022. The Draft Bill is currently pending being assented and signed into law by the President.

Employer Implications/Action Needed

Employers who employ foreign nationals should monitor the progress of the Draft Bill.

Employer Risk

The Draft Bill provides that any person who employs or engages an employee or worker in contravention of the Act may be liable to pay a fine. In addition, an employee or worker is entitled to enforce any claim against the employer or any person who is otherwise liable in terms of any statute, collective agreement or the agreement entered into between the parties. The claim may also be enforced on behalf of an employee or worker by a labour inspector or bargaining council agent.

Link

Contact:

Sandro Milo
Partner
+27 83 44 40 320
sandromilo@eversheds-sutherland.co.za

Kenya

Tax/social security (case law)

The Employment and Labour Relations Court has declared the National Social Security Fund Act No. 45 of 2013 null and void. The Act introduced obligatory employee contributions to the Fund to provide basic compensation in the event of permanent disability, care obligations or upon retirement. However, the enactment of this law was found to have breached the Constitution, including a failure by the National Assembly to table the draft Bill before the Senate prior to enactment. The Court also found that the NSSF Act was inconsistent with the provisions of the Constitution and the Competition Act.

Impact Date

19 September 2022

Employer Implications/Action Needed

Employers should note that the terms of the NSSF Act No. 45 of 2013 are no longer applicable to employers and other employees who have adequate alternative pension or social security schemes, unless they opt in. Where still applicable, the monthly contributions under the old NSSF Act shall continue to apply until further notice and the rates will remain KES. 200 for the employer and KES. 200 for the employee.

Employer Risk

The client risks committing an offence should they continue to require contributions to the National Social Security Fund under the terms of the now repealed National Social Security Fund Act No. 45 of 2013.

Link

Right to disconnect

The Senate has introduced an Employment (Amendment) Bill, 2021. If it passes the final stages, the Bill will amend the Employment Act to provide employees with a right to disconnect from work and to have their personal time and privacy respected.

The main features of the Bill are:

  • an employee that exercises their right to disconnect shall not be punished or subjected to disciplinary action
  • an employer shall be required to develop a right to disconnect policy and
  • an employer shall be required to specify the nature of compensation for employees who work during out of work hours.

Impact Date

The impact date is unknown. However, the Bill was passed unanimously at the second reading and was presented for a third reading. The Bill will be in force once it is passed by Parliament and gazetted.

Employer Implications/Action Needed

Once in force, employers should ensure that their HR policies are compliant with the requirements of the Bill.

Employer Risk

Employers that breach the provisions of the Act, once introduced, are liable to a fine not exceeding 500,000 shillings or imprisonment for a term not exceeding one year or to both.

Link

Protection of disabled applicants/employees

A Persons with Disabilities Bill, 2021 has been introduced into the National Assembly. If passed (gazetted), the Bill will amend existing provision in line with the provisions of the Constitution of Kenya.

There are some provisions that are relevant to employers within the Bill such as:

  • an employer shall not discriminate against a qualified person with a disability in relation to the formulation and implementation of a job, application, hiring, promotion and other terms of employment
  • an employer shall reserve at least 5% direct employment opportunities for persons with disabilities to secure employment
  • an employer shall formulate policies and programmes to promote basic human rights, improve working conditions and enhance employment opportunities for persons with disability
  • an employer shall, in the process of recruitment, not discriminate solely on account of the disability of a person
  • an employer shall not conduct any test or examination to establish whether an applicant is a person with a disability or as to the nature or severity of the person’s disability
  • an employer shall be required to carry out appropriate modifications in their work premises to accommodate the employment of persons with disability and
  • employers will be required to submit annual reports to the National Council of Persons with Disabilities on the status of Persons with disabilities within their organization.

Impact Date

The impact date is unknown. However, the Bill was passed unanimously at the second reading and was presented for a third reading. The Bill will be in force once it is passed by Parliament and gazetted.

Employer Implications/Action Needed

Employers need to be aware of the proposed changes and prepare to comply with them once the Bill is gazetted.

Employer Risk

Employers risk employees instituting claims on the grounds of discrimination should they fail to make the accommodations introduced under the Bill.

Link

Contact:

Rodgers Muyodi
Associate
T: +254 20 259 69 94
RMuyodi@mmankenya.onmicrosoft.com

Mauritius

Amendments to the Workers’ Rights Act 2019

The Finance (Miscellaneous Provisions) Act 2022 amended several pieces of Mauritian legislation relating to measures announced in the annual budget 2022-2023, including the Workers’ Rights Act 2019.

The changes include:

  • the definition of “worker” has been extended to include a person, other than a consultant, who is classified by an employer as a service provider but who performs personally the same or similar work to that of a comparable worker employed in the same enterprise or industry
  • clarification that when a cyclone warning class III or IV is in force an allowance equal to three times the basic hourly rate is payable to a worker who is required to work, irrespective of whether work is carried out from home or at the workplace
  • employers must provide an adequate free meal or pay a meal allowance of MUR 85/day where an employee is required to perform a normal day’s work of at least 10 hours
  • removal of the 90 day ceiling upon accumulating sick leave for workers earning a monthly basic salary equal to or less than MUR 50,000 i.e. sick leave may now be accumulated without limit
  • leave to care for a sick child has been introduced. A worker earning a monthly basic salary equal to or less than MUR 50,000 is allowed to take up to 10 days’ paid leave during every period of 12 consecutive months, to be calculated (at the worker’s choice) against the worker’s annual, sick or vacation leave, subject to the worker complying with certain procedural requirements
  • transport entitlements of workers have been amended to include an option for an employer to reimburse the bus or rail fare instead of providing the worker with free transport. Further, where a worker has been previously granted a petrol allowance, the rate of allowance must now be at least 10% higher (subject to a cap upon the monthly increase of MUR 2,000)
  • updated termination of employment provisions meaning it is now prohibited to terminate employment on the basis of a worker’s poor performance if the performance is affected by an injury sustained in the course of work. In addition, where misconduct, misconduct subject to criminal proceedings or poor performance is alleged, a worker’s response is no longer confined to the disciplinary hearing but can be offered in writing, verbally at a hearing, or in a hearing following the submission of written explanation
  • employers are no longer exempt from contributing to the Portable Retirement Gratuity Fund because they contribute to a retirement plan with a private pension scheme unless the actuary of the private pension scheme certifies that the employer’s contribution to the private pension scheme is not less than 4.5% of the employee’s monthly remuneration. The actuarial certificate must be submitted to the Ministry of Labour. For pension schemes which, as of 1 July 2022, did not satisfy the minimum 4.5% contribution, they have until 31 December 2022 to submit an actuarial certificate to the Financial Services Commission.

Impact Date

1 July 2022

Employer Implications/Action Needed

Employers may need to make adjustments to policies and procedures, including sick leave and pension policies and termination procedures to take account of the changes. Employers should also review their arrangements with individuals currently engaged by a business on a non-employed basis, to identify whether such individuals may now come within the definition of a worker.

Employer Risk

Failure to take account of the amendments to the legislation can result in penalties. For example, failure to submit an appropriate actuarial certificate to the Ministry of Labour regarding the employer’s contribution to the private pension scheme can result in a liability on conviction to a fine ranging from MUR 50,000 to MUR 150,000 and to imprisonment for a term not exceeding 12 months.

Link

Amendments to the Employment Relations Act 2008

The Finance (Miscellaneous Provisions) Act 2022 also amended the Employment Relations Act 2008. For example, workers can seek reinstatement following the unlawful termination of employment regardless of the circumstances (re-instatement only previously being available in specific circumstances involving discrimination, certain instances of sickness, trade union membership or activities and whistleblowing). Now, where employment is terminated by the employer for any reason, other than reasons related to redundancy or closure, the employee has the option of claiming reinstatement instead of a severance allowance.

Impact Date

1 July 2022

Employer Implications/Action Needed

Employers should review their termination procedures to ensure that they are appropriate for all circumstances of termination.

Employer Risk

Employers should note the expansion of the circumstances where reinstatement can be ordered and the risk to the business in having to reintegrate a dismissed employee, where a termination of employment is found to be unlawful.

Link

Amendments to the Social Contribution and Social Benefits Act 2021

The Contribution Sociale Généralisée (“CSG”) is an uncapped contribution that aims to aid low earning individuals, including the self-employed, and Small and Medium Enterprises (SMEs). Every participant and every employer of a participant is liable to pay CSG to the Mauritius Revenue Authority at prescribed rates. The latest changes now mean that the meaning of a “participant” has been extended to include non-citizens who hold a premium visa and the process for making Annual Returns has been updated, allowing Returns to be submitted electronically in some circumstances and allowing Returns on an annual basis (instead of a monthly basis) for domestic workers.

Impact Date

1 July 2022

Employer Implications/Action Needed

Employers should note the expanded definition of a participant and adjust social contributions accordingly.

Employer Risk

Employers that fail to pay the correct social contributions risk a penalty of 10% and an interest of 1% per month or part of a month.

Link

Amendments to the Human Resource Development Act 2003

The training levy is paid by every employer into a state scheme for the purpose of developing skills for workers. Subject to the applicable rules and the amount of annual levy they pay, employers can recover up to 75% of fees they spend on approved training programmes. Charitable institutions which were previously excluded from the training levy may now opt to contribute the training levy.

Impact Date

2 August 2022

Employer Implications/Action Needed

Employers who operate as charitable institutions should note that they may now opt to contribute the training levy.

Employer Risk

Employers can benefit from the levy scheme by recovering some of their spending on approved training programmes. However, charitable organizations should note that, if they opt to contribute to the levy, that decision is irrevocable and once a charitable institution opts to pay the training levy, it is bound to continue to pay same in respect of all its employees.

Link

Amendments to the National Savings Fund 1995

The National Savings Fund provides for payment of a lump sum at retirement age. Every employer has a legal obligation to contribute to the fund in respect of each employee aged between 18 and retirement age. As a result of amendments to this obligation, non-citizen employees who are not resident for tax purposes or who hold a premium visa will no longer need to be included in the employer’s contribution.

Impact Date

2 August 2022

Employer Implications/Action Needed

Employers should review the calculation of their contributions to the National Savings Fund and exclude from it non-citizen employees who are not resident for tax purposes or who hold a premium visa.

Employer Risk

Employers who fail to take account of the changes risk contributing incorrect sums to the National Savings Fund.

Link

Contact:

Yannick Fok
Partner
T: +230 211 0550
M: +230 5258 8398
yannickfok@eversheds-sutherland.mu

Mozambique

Hiring of foreign citizens

Decree no. 43/2022 amends articles 5, 10 and 18 of the Regulation on the Mechanisms and Procedures for Hiring Foreign Citizens. The amendments adapt the visa regime, including the short-term work regime and the formalities and requirements.

Impact Date

19 August 2022

Employer Implications/Action Needed

Employers must be aware of these changes when applying for visas of foreign employees.

Employer Risk

N/A

Link

COVID-19 - Public Health Emergency

The Mozambican government has maintained the declaration of “Public Health Emergency”. A Public Health Emergency is deemed a state of exceptional management of the health system, as well as of the society, public and private institutions, and citizens’ lives, in order to eliminate or substantially reduce the risks for the public health. A new decree establishes the measures to contain the spread of COVID-19.

Impact Date

2 September 2022

Employer Implications/Action Needed

Employers should be aware of the required preventive measures and ensure compliance.

Employer Risk

Failure to comply with the required preventive measures may result in coercive measures applied by the state, as well as other general liabilities and sanctions.

Link

Contact:

Inês Albuquerque e Castro
Sócia / Partner
Tel: +351 213 587 500
iacastro@eversheds-sutherland.net

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China

Upward adjustments of key employee pay and other thresholds

In early July 2022, the local government in many localities announced the annual upward adjustments of :

  • the average monthly salary of employees in the relevant city (“Local AMS”) for the preceding year (i.e. 2021) and
  • the local threshold & cap for contribution basis of mandatory social insurance and housing funds (collectively, “Social Security”) going forward (i.e., July 2022 -June 2023).

Impact Date

The new figure of Local AMS became effective on the date of announcement, whereas the new figures of local threshold & cap for contribution basis of Social Security will be applicable from July/August 2022 to June/July 2023.

Employer Implications/Action Needed

Under PRC law, statutory severance pay shall be calculated based on an employee’s average monthly salary in the 12 months prior to the termination date (“Employee’s AMS”). The Employee’s AMS shall be capped at three times the Local AMS for the preceding year. On this basis, an increase in the Local AMS will lead to an increase in the local cap for statutory severance pay. Specifically in Shanghai, it is provided in the local regulations that where the monthly sick leave pay payable to an employee is higher than the Local AMS for the preceding year, the employer may pay the employee the latter as a cap. On this basis, the increased Local AMS may also lead to extra payment of sick leave pay. Further, the upward adjustment of the local threshold and cap for contribution basis of Social Security will increase the employer’s costs of Social Security contributions for certain employees.

Employer Risk

Employers in the relevant localities shall use the adjusted figures for the relevant calculations/contributions; failing which, the employees may bring a claim against the employer before the local court/tribunal or report the situation to the local labor bureau.

Link

  • N/A
COVID-19 - Crackdown on employment discrimination

The Ministry of Human Resources and Social Security and the National Health Commission have jointly issued the Emergency Notice on Resolute Crackdown on Employment Discrimination against People who have Recovered from COVID-19 (关于坚决打击对新冠肺炎康复者就业歧视的紧急通知, the “Notice”).

According to the Notice, among others, employers are strictly prohibited from:

  • releasing any recruitment information that contains discriminatory content in relation to an individual’s past COVID-19 testing results
  • refusing to employ a candidate due to the candidate’s recovery from COVID-19
  • during the onboarding process and the employment term, discriminating against an employee who has recovered from COVID-19, or illegally dismissing any employee who has recovered from COVID-19.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers must avoid taking any discriminatory actions against any candidates/employees who have recovered from COVID-19.

Employer Risk

Employers that fail to comply with the requirements under the Notice risk administrative penalties.

Link

Regulation of Human Resources Services Organizations

The Ministry of Human Resources and Social Security issued the Regulations on Administration of Human Resource Service Organizations (Draft for Comment) (人力资源服务机构管理规定(征求意见稿), “Regulations”) for public comment until 28 October 2022. The Regulations were drafted based on and in line with the Interim Regulations for the Human Resources Market (人力资源市场暂行条例, “HRM Regulations”) and other related regulations and rules. Further to some general principles/provisions stipulated under the HRM Regulations, the Regulations set out detailed provisions on, among others:

  • the eligibility, procedures, required documents and timeline for (a) the application for the HR Service License, and (b) filing for the HR services that are not subject to the license and
  • code of conduct that HR services organizations must comply with in the course of their business operations (e.g. handling personal information when rendering HR services).

Impact Date

29 September 2022

Employer Implications/Action Needed

HR services organizations should monitor the progress of the Regulations and, on official release of the finalized version, comply with the requirements.

Employer Risk

Employers risk administrative penalties for failure to comply with the Regulations.

Link

Further rules on parental leave in Shanghai

The Several Provisions of Shanghai Municipality on Award and Subsidization for Family Planning (上海市计划生育奖励与补助若干规定) has been revised by the local government (“Revised Provisions”) in accordance with the latest version of the Regulations of Shanghai Municipality on Population and Family Planning. The Revised Provisions specifically set out further rules in relation to parental leave, which includes:

  • parents (i.e. both female and male employees) who give birth in accordance with the national family planning policy are respectively entitled to 5 working days’ paid parental leave per “year” before their child reaches the age of 3
  • The “year” above shall be calculated from the birthdate of the child
  • The number of days of parental leave can be superimposed based on the number of the children below the age of 3
  • employees are entitled to the salary payable for normal attendance during the parental leave and
  • the amount of parental leave per “year” shall generally be taken within the “year”, either continuously or separately.

Impact Date

1 November 2022

Employer Implications/Action Needed

Employers in Shanghai shall comply with the relevant provisions under the Revised Provisions. Employers may wish to include the specific application procedures and documentation requirements for such leave in their internal rules and policies for leave management purposes.

Employer Risk

N/A

Link

  • N/A
Parent Care Leave granted in Jiangsu Province

The Regulations on Elderly Care Services of Jiangsu Province (江苏省养老服务条例) has been revised by the local government (“Revised Regulations”). One of the key highlights of the Revised Regulations is the grant of paid leave for the “only child” of the family to take care of their parent(s). More specifically, if an employee is the only child in their family, where their parent(s) (who have reached the age of 60) are hospitalized for illness, the employee is entitled to no less than 5 working days of paid parent care leave per year.

Impact Date

1 December 2022

Employer Implications/Action Needed

Employers in Jiangsu Province are obliged to grant paid parent care leave to their eligible employees in accordance with the Revised Regulations. Employers may wish to include the specific amount, application procedures and documentation requirements of such leave in their internal rules and policies for leave management purposes.

Employer Risk

N/A

Link

  • N/A

Contact:

Jack Cai
Partner
+86 21 61 37 10 07
jackcai@eversheds-sutherland.com

Singapore

Progressive Wage changes

Full-time lower wage workers in Singapore can now benefit from new Progressive Wage changes. This includes a new Local Qualifying Salary (“LQS”) requirement and the introduction of the Progressive Wage Model (“PWM”) for workers in the cleaning, security, landscape, lift and escalator and retail sectors. Firms that employ foreign workers must pay all their full-time workers at least the LQS of S$1,400. Under the same LQS requirements, part-time local workers will need to be paid at least S$9 in gross wages per hour.

Impact Date

1 September 2022

Employer Implications/Action Needed

Employers should ensure that they comply with the LQS requirements.

Employer Risk

Firms in the relevant sectors have until February 2023 to meet these progressive wage requirements before they face penalties for non-compliance, including having their work pass privileges suspended.

Link

Changes for Employment Pass Applications

Changes have been made to the procedure for all Employment Pass (“EP”) applications, to enable companies to be more responsive to business needs. The Fair Consideration Framework (“FCF”) advertising duration has been restored to 14 days (this was increased to 28 days in October 2020) and the processing time for all EP applications has been improved, so that EP applications will be processed (or an update provided) within 10 business days of submission.

Impact Date

1 September 2022

Employer Implications/Action Needed

Employers should comply with the updated FCF job advertising requirement.

Employer Risk

Non-compliance by an employer with the FCF job advertising requirement may result in such employer’s work pass privileges being curtailed.

Link

New Code of Practice for workplace health and safety

The Ministry of Manpower has announced the launch of a new Code of Practice (“COP”) that stipulates the duties of Chief Executive Officers and company directors with respect to workplace health and safety. The COP aims to distil the management principles and practices into actionable steps for companies to adopt and adapt to their circumstances.

Impact Date

October 2022

Employer Implications/Action Needed

The COP will apply to all companies in all industries, even those that have no manual work and little risk of physical injury. Companies should apply the COP principles to protect both physical safety and mental well-being of their workers.

Employer Risk

In the event of a Workplace Safety and Health Act 2006 offence by a company, adhering to the COP’s principles can be a mitigating factor.

Link

Retrenchment payments (case law)

In a recent High Court case, it was reinforced that the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (the “Advisory”) does not provide mandatory guidelines. The Advisory provides that if there is no provision as to the retrenchment benefit, the quantum is to be negotiated between the employer and the employees. It was ruled that the practice of “2 weeks to one month salary per year of service” stated in the Advisory is a prevailing norm and it is not binding on employers.

Impact Date

18 October 2022

Employer Implications/Action Needed

Employers should note that, when agreeing quantum in the absence of a specified retrenchment benefit, they are not bound by the prevailing norm set out in the Advisory.

Employer Risk

N/A

Link

Overseas Networks & Expertise Pass

With the aim of attracting top talent and experienced tech professionals in areas of skills shortages, the Ministry of Manpower will introduce a new Overseas Networks & Expertise Pass, aimed at the top talent across all sectors. The Overseas Networks & Expertise Pass will be a personalised, 5-year work pass that allows holders to concurrently start, operate, and work for multiple companies in Singapore at any one time. Additionally, the spouses of such Pass holders will be eligible to work based on a Letter of Consent. Such Pass holders will not be subject to the Fair Consideration Framework (“FCF”) job advertising requirements and the upcoming COMPASS.

Applicants for the Overseas Networks & Expertise Pass will need to earn a fixed monthly salary of S$30,000 and above, comparable to the top 5% of Employment Pass holders. Alternatively, individuals with outstanding achievements in arts and culture, sports, science and technology, and research and academia, can also qualify, even if they do not meet the salary criterion.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should note the requirements of the Overseas Networks & Expertise Pass.

Employer Risk

N/A

Link

COMPASS Evaluative Framework

The Ministry of Manpower will introduce an evaluative framework for Employment Pass (“EP”) applicants – the Complementarity Assessment Framework (“COMPASS”). COMPASS will enable employers to select high-qualifying foreign professionals while improving workforce diversity. COMPASS is a points-based rubric that assesses both individual and employment related attributes in EP applications. EP applicants must satisfy the following in order to qualify for an EP: meet the increased qualifying salary of S$5,000 per month (S$5,500 per month for employers in the financial services sector); and score a minimum of 40 points under COMPASS.

Impact Date

1 September 2023 (new applications); 1 September 2024 (renewals).

Employer Implications/Action Needed

Employers should note the new COMPASS evaluative framework for future EP applications and renewals.

Employer Risk

N/A

Link

Benchmark for top 10% of Employment Pass Holders

The Ministry of Manpower will introduce a new benchmark pegged to the top 10% of Employment Pass (“EP”) holders. EP applicants of this quality will continue to be exempted from Fair Consideration Framework (“FCF”) job advertising requirements and the upcoming COMPASS. Such holders will also continue to be eligible for the Personalised Employment Pass (“PEP”). To align to this single benchmark, the exemption bar for the FCF job advertising requirement and COMPASS will be raised from S$20,000 to S$22,500. The salary criterion for the PEP will also be raised to S$22,500.

Impact Date

1 September 2023

Employer Implications/Action Needed

Employers should note the new benchmark for future EP applications.

Employer Risk

N/A

Link

5-Year Employment Pass option

The Ministry of Manpower will offer the option of a 5-year Employment Pass (“EP”) to experienced professions in specific tech occupations on the COMPASS Shortage Occupation List (“SOL”). This extended EP option allows for greater certainty to experienced tech professionals as well to businesses in their workforce planning.

Eligible candidates must meet the following criteria:

  • fill specific tech occupations on the COMPASS SOL
  • earned a fixed monthly salary of at least S$10,500 (for candidates aged 36 and above, the salary required increases with age, up to a maximum of S$13,500 at age 45 and beyond) and
  • pass COMPASS and score at least 10 points on Criterion 3 (diversity).

Impact Date

1 September 2023

Employer Implications/Action Needed

Employers should note the possibility of this new future EP route.

Employer Risk

N/A

Link

Contact:

Sze-hui Goh
Partner
+65 6637 8883
sze-huigoh@gtlaw-llc.com

Hong Kong

Can a director, who is also an employee, vote in favor of a resolution to pay a bonus to themself? (case law)

It is common for the articles of a company to prohibit a director from voting in a resolution where the director has a material interest (“Material Interest Clause”). Even in the absence of such express prohibition, a director still owes fiduciary duties to act in the best interest of the company and must avoid any situation where the director’s interest is in conflict with the company’s.

In Li Jian Chao v. Tc Orient Lighting Holdings Ltd, in the absence of a Material Interest Clause, the Court held that the director who was also an employee of the company (a “director employee”), had acted in breach of his fiduciary duties by voting in favor of a series of board resolutions approving payment of bonuses to himself. The Court considered the fact that the company was in a poor financial condition at the relevant time, that the resolutions were passed within a very short space of time, and that the bonus payments were significant relative to the director’s monthly salary. The director was unable to justify that the bonus payments were in the best interest of the company. The relevant resolutions were declared to be invalid.

Impact Date

3 August 2022

Employer Implications/Action Needed

Although the Court did not establish a hard and fast rule that a director employee would always be in breach of their fiduciary duties simply by voting in favor of a resolution paying bonuses or other benefits to themselves, employers must ensure that the director employee’s participation in such a resolution is justifiable in the interest of the company having taken into account all the circumstances at the relevant time.

Employer Risk

Board resolutions may be at risk of being declared invalid if the director employee’s involvement in the voting is held to be in breach of their fiduciary duties.

Link

Advisory bulletin on joint negotiation with employee bodies

A new advisory bulletin issued by the Hong Kong Competition Commission addresses the situation where a group of employers jointly negotiate with employee bodies e.g. labour unions on employment conditions such as salary and benefits. The Competition Commission is concerned that employers may share competitively sensitive information regarding employment conditions with another during the negotiation. This may give rise to an agreement or concerted practice among the employers in aligning their employment offers, an act which may have an object or effect to limit their competition for talent and therefore be in violation of the Competition Ordinance (Cap. 619).

Whilst the Competition Commission has no current intention to pursue an investigation or enforcement action in respect of conduct by employers in the context of joint negotiations, the need for relevant employers to negotiate jointly with employee bodies must be justified given the industry characteristics and (1) the conduct is, both in nature and purpose, aimed at improving relevant employment conditions; and (2) an employee body is a genuine participant in the joint negotiation process.

Impact Date

29 August 2022

Employer Implications/Action Needed

Employers are advised to actively review their approach to joint negotiations in accordance with the guidance provided in this advisory bulletin to ensure compliance with the Competition Ordnance.

Employer Risk

Anti-competitive behaviour by employers in the context of joint negotiations may give rise to investigation or enforcement action by the Competition Commission.

Link

Criminal liability of the senior officers of an employer company for non-payment of wages (case law)

Under section 63C of the Employment Ordinance (Cap. 57), an employer is criminally liable for failing to pay wages within 7 days of the wage period or the date of termination of employment. Section 64B(1) further extends this liability to senior officers of the employer company, including “any director, manager, secretary or other similar officer”.

In a recent case before the High Court, a director of an employer company which had failed to pay wages in time, attempted to escape liability by arguing that he was not the ultimate decision maker in the operation of the company and he had only worked as a “consultant” to the directors. The High Court was not satisfied with that defence and dismissed his appeal against the conviction.

Impact Date

14 October 2022

Employer Implications/Action Needed

This decision serves as a timely reminder that criminal liability for non-payment of wages could potentially extend to senior officers including directors of the employer company.

Employer Risk

During financial difficulties, the employer and its senior officers may risk criminal prosecution if they prioritize maintaining business operations over fulfilling their obligation to pay wages in time.

Link

Abolition of the pension offsetting arrangement

The Hong Kong government has passed new legislation which will abolish the use of accrued benefits of employers’ mandatory pension contributions to offset statutory severance and long service payments.

Impact Date

2025

Employer Implications/Action Needed

The abolition of the pension offsetting arrangement will affect only employees who are currently covered by the Mandatory Providence Fund legislation. This means that it will not affect workers such as domestic helpers or those who are under other statutory retirement schemes. If the legislation is enacted, employers will need to keep wage and employment records of their employees for the 12 months (or a shorter period if the employee has worked less than 12 months) immediately prior to the transition date.

Employer Risk

It is anticipated that more labor disputes between employees and employers over statutory severance/long service payment claims will arise after the abolition of the offsetting arrangement takes effect. We advise employers to revisit the situation in late 2024 when the regulatory expectations will be more clearly communicated.

Link

Proposed Top Talent Pass Scheme

The Hong Kong Government recently proposed in its 2022 Policy Address a Top Talent Pass Scheme. Under the quota-free scheme, a 2-year pass will be issued to eligible talents to explore opportunities in Hong Kong without the need for a prior job offer. The scheme applies to (1) individuals whose annual salary reached HK$2.5 million or above in the past year and (2) individuals who graduated from the world’s top 100 universities with at least 3 years of work experience over the past 5 years (those who failed to fulfil the work experience requirement would be subject to an annual quota of 10,000). Furthermore, the annual quota of 4000 under the Quality Migrant Admission Scheme is proposed to be suspended.

Impact Date

To be announced.

Employer Implications/Action Needed

Employers may watch out for high-calibre overseas talent and adjust their recruitment process and policy to take advantage of the scheme.

Employer Risk

N/A

Link

Contact:

Joe Kamho Choy
Of Counsel
+852 2186 3257
JoeChoy@eversheds-sutherland.com

Europe Global Update Banner

Austria

Special care leave

Due to the ongoing impact of the COVID-19 pandemic, special care leave (Sonderbetreuungszeit) has again been extended (now in phase 7). This includes for the care of:

  • children under the age of 11 if they have tested positive and therefore cannot go to school
  • disabled persons or children under the age of 14 in the event of a closure of facilities (e.g. lockdown of the school) and
  • disabled persons who cannot wear a FFP2 mask due to their disability.

The maximum entitlement per employee is 3 weeks and is in addition to caregiver leave (Pflegefreistellung).

Impact Date

5 September to 31 December 2022.

Employer Implications/Action Needed

To qualify for special care leave, care of a child or a person with disabilities is required. Care by the employee must be necessary if there is no other suitable care option. Any employee wishing to take such leave must inform the employer without delay and do everything reasonable to ensure that the agreed work performance takes place.

Employer Risk

N/A

Link

  • N/A
Additional requirements for admission to Red-White-Red Card and Blue Card EU

Recent amendments include a requirement for the application for a residence title Red-White-Red Card (“Rot-Weiß-Rot Karte”) or EU Blue Card (“Blaue Karte EU”) to be accompanied by an employer's declaration pursuant to the Foreigners Employment Act. For the registration of skilled workers without studies (Fachkräfte ohne Studium), a reference letter and a confirmation of employment must be attached (BGBl II 2022/327).

Impact Date

1 October 2022

Employer Implications/Action Needed

Employers must attach an employer declaration when applying for a Red-White-Red Card or a Blue Card EU (see link below).

Employer Risk

Failure to comply with the amended requirements risk the approval not being granted.

Link

Amendment of the Vacation Act (case law)

The Austrian Vacation Act (Urlaubsgesetz) previously provided that an employee is not entitled to payment for any accrued but unused vacation (Urlaubsersatzleistung) if the employee terminates the employment relationship in circumstances that are unjustified and without giving notice (unberechtigter vorzeitiger Austritt).

Following a ruling by the European Court of Justice (ECJ 25.11.2022, C 233/20), this provision in the Austrian Vacation Act has been amended. Where an employee terminates their employment in circumstances where it is unjustified for them to do so and without notice, the employee will be entitled to a payment for any accrued but unused vacation, but only in relation to the four-week per year (EU Working Time Directive) minimum vacation period part of the entitlement. No vacation payment shall be due for the period in excess of that minimum vacation period (i.e. the fifth and sixth weeks of the vacation entitlement). For accrued but unused vacation from previous vacation years, the employee will be entitled to a payment for the full extent of the outstanding entitlement, provided the vacation entitlement has not yet become time-barred.

Impact Date

November 2022. Previous vacation years are also potentially covered, as long as they are not yet time-barred.

Employer Implications/Action Needed

Employers should ensure that they monitor and keep a record of their employees' existing vacation entitlements and ensure that payments are correctly made for accrued but untaken entitlement on the termination of employment. Employees should be regularly advised to use up their accrued vacation.

Employer Risk

The amendment to the Austrian Vacation Act means that employers will now be at higher risk of having to make payments to employees on termination of employment in respect of accrued but untaken vacation entitlement.

Link

Implementation of the Whistleblowing Directive approaching

Austria has not yet implemented the EU Whistleblowing Directive, but draft legislation has been published. Based on that draft legislation, Austria is expected to go beyond the minimum requirements in implementing the Directive. The implementation will be applicable to legal entities with more than 250 employees first and then to all legal entities with more than 50 employees.

Impact Date

Expected early 2023.

Employer Implications/Action Needed

Employers should act now to conduct a gap analysis of existing policies against the draft legislation, including reviewing whether a whistleblowing system is required and ensuring that issues such as privacy considerations are not overlooked.

Employer Risk

The impending implementation of the Directive makes it more important than ever for in-scope employers to have set up effective, well-organized and trusted whistleblowing procedures, to have conducted a gap analysis of existing policies against the draft legislation and to have trained their staff.

Links

Wage and income tax

Wage and income tax was reduced from 1 July 2022 (2nd tax level from 35% to 30%) and is to be further reduced from 43% to 40% (3rd tax level).

Impact Date

1 July 2023

Employer Implications/Action Needed

Employers should review their payroll arrangements to ensure that the new rates are reflected once they come into force.

Employer Risk

If the employer has paid too little wage tax, it will be ordered by the tax office to pay the wage tax in arrears. If too much wage tax has been paid, the employee may request a refund.

Link

No warning for late submission of wage documents (case law)

The Austrian Administrative Court decided, in the case of a Hungarian employer who posted employees to Austria, that the provisions of the LSD-BG (“Lohn- und Sozialdumpingbekämpfungsgesetz”) were applicable. During an inspection by Austrian authorities, the employer did not have the wage documents available and did not present them within the time limit set by the Austrian authority, which amounted to a violation of the LSD-BG. In such circumstances, the authority did not have the option to warn the Hungarian employer. Instead, it was obliged to impose a penalty as the violation was not a minor fault because the public interest in monitoring compliance with the minimum wage was not insignificantly violated.

Impact Date

N/A

Employer Implications/Action Needed

Under the LSD-BG, wage records must be kept available during the performance of work. Late submission is not likely to prevent penalties.

Employer Risk

Non-compliance with the provisions of the LSD-BG leads to severe penalties.

Link

Implementation of the Work-Life-Balance Directive

Austria has not yet implemented the EU Work-Life Balance Directive. The Directive regulates minimum standards for parental, paternity and caregiver leave, as well as flexible working time arrangements. Austria has an existing high standard of employee-friendly parental regulations, but additional rights will need to be enacted. The Directive provides for rights including:

  • Right to paternity leave and pay (10 working days): Austria already has in place the right to paternity leave, so-called “Papa-Monat”. During the Papa-Monat the father earns a family time bonus from the health insurance fund amounting to €22.60 (approx. €700 per month)
  • Parental leave until the child's 8th birthday (4 months per parent, 2 months of which are non-transferable): Austria currently allows parents to take parental leave until the child reaches the age of 2, but not up to a maximum age of 8 as required under the Directive
  • Right to time off for carers or persons in the same household (5 days per year): No need for adaption in Austria
  • Possibility of flexible working time arrangements up to the child's 8th birthday: Currently in Austria, parental leave can be taken until the child's 7th birthday.

Impact Date

Awaited (no draft legislation yet).

Employer Implications/Action Needed

Employers should monitor the progress of implementation of the Directive in Austria. Once draft legislation is available, employers should start to plan updates to paternity, parental, carer and flexible working policies to ensure compliance once enacted.

Employer Risk

N/A

Link

Implementation of the Working Conditions Directive

Austria has not yet implemented the Directive, which introduces a wide range of rules on the information that employers must provide to employees. Austria has an existing high standard of employee-friendly regulations, but additional rights will need to be enacted.

Impact Date

Awaited (no draft legislation yet).

Employer Implications/Action Needed

Employers should monitor the progress of implementation of the Directive in Austria. Once draft legislation is available, employers may need to:

  • provide information to employees on the termination procedure. This is neither recommended nor carried out in practice in Austria at present
  • amend employment contracts to ensure compliance with the minimum standards, including maximum probationary periods of six months (currently one month in Austria)
  • allow ‘work-on-demand’ under certain conditions. In Austria, ‘work-on-demand’ is currently considered illegal.

Employer Risk

Employers should monitor the progress of implementation of the Directive in Austria. Once draft legislation is available, employers should start to plan updates to contracts and procedures to ensure compliance once enacted.

Link

Contact:

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

Belgium

Flexible working requests

A new right for workers to request a flexible work arrangement has been introduced. The right applies for the purpose of caring for a child or to provide personal care or support to a specified family member due to their serious medical condition. Eligible workers may request more telework, decreased working time or a change to the work schedule.

Impact Date

1 October 2022

Employer Implications/Action Needed

Employers should note the requirements of the new law, including the procedural requirements and the protection against dismissal based on the new right. Employers must reply to requests in writing. Eligible employees can make a flexible work request once within any 12 month period and have the right to request to terminate the flexible working arrangement.

Employer Risk

Employers failing to observe the new requirements and dismissal protection risk liability. Dismissal protection applies from the date the flexible work request is made.

Links

Medical incapacity - changes to return to work procedures and time limits

The Code on Well-being at Work, concerning the reintegration process for employees (the so-called reintegration 2.0), has been amended. The amendments include:

1. Contact with the incapacitated employee by the prevention advisor-occupational doctor (hereinafter PA-OD) to take place after 4 weeks of absence, with the aim of fostering a return to work.

2. Changes to the time limits in the reintegration process:

  • time limits-are now expressed in calendar days instead of working days
  • some time-limits are increased (e.g. employees now have more time to appeal the decision of the PA-OD / agree the reintegration plan)
  • some time-limits are decreased (e.g. employers can now start the reintegration process sooner (after 3 months incapacity instead of 4 months), and there is now less time to prepare a reintegration plan for an employee who is definitely unfit for the agreed work).

3. The potential decisions taken by the PA-OD at the start of a reintegration process are narrowed down from 5 to 3 (A,B & C).

4. A special procedure is applied in cases of termination of employment due to medical force majeure. Once in force, medical force majeure will be decoupled from the reintegration process as a separate procedure and termination of employment will be possible for such employees who have been continuously ill for at least 9 months.

Impact Date

1 October 2022*

*To be confirmed for the medical force majeure special procedure.

Employer Implications/Action Needed

Employers should review and update their medical incapacity practices and procedures to ensure that their reintegration procedures comply with the new requirements. Employers should also continue to monitor the progress of the future change to the law on the termination of employment due to medical force majeure.

Employer Risk

Breaches of the law on medical incapacity can be recorded and punished in accordance with the Social Criminal Code. A particular risk area is missing deadlines: employers must strictly adhere to the new time-limits when a reintegration process is ongoing or started.

Link

Triggering social elections

The 2024 social elections are already having impact as the reference period used to calculate the number of employees within a company started to run on 1 October 2022. This calculation is critical to determining whether a company must hold social elections to establish a Committee for Prevention and Protection at Work and/or establish or renew their Works Council.

Impact Date

1 October 2022 – 30 September 2023.

Employer Implications/Action Needed

Employers should keep a close eye on headcount figures in the coming months, as new hires, terminations of employment and transfers of undertakings can all have an impact on the average headcount during the reference period.

Employer Risk

N/A

Link

  • N/A
Labor deal - measures to reform the labor market

To support the socio-economic recovery, the government has drawn up a restart transition plan. The first axis of that plan includes a series of measures to reform the labor market. With the unprecedented crisis we are experiencing, the aim is to give workers and companies breathing space and offer new opportunities.

Impact Date

Q3 or Q4 of 2022.

Employer Implications/Action Needed

This will depend on whether action is taken by the employees themselves (e.g. four day working week, variable working week). In addition, employers will, depending on their particular situation, be obliged to provide a right to disconnect (e.g. no need to answer e-mails outside working hours), to training (an individual plan is sometimes required and in general three days must be provided in 2022, four days in 2023 and from 2024 onwards five days) and a change in the notice period required for employees working flexible working hours.

Employer Risk

Sanctions specific to employers active in the platform economy.

Link

Implementation of the EU Directive on transparent and predictable working conditions

The EU Directive on transparent and predictable working conditions will be implemented by an Act and national CLA. The Act imposes an obligation to provide the employee with specific information, either at an individual or a collective level. It also prohibits employers from preventing employees from taking up parallel employment with another employer or subjecting employees to unfavorable treatment for that reason, subject to limited exceptions. Further, it imposes an obligation on employers to set up training for employees and introduces the possibility of employees requesting more predictable and certain working conditions. The National CLA implements and provides further details around the possibility of such requests by employees.

Impact Date

Awaited.

Employer Implications/Action Needed

Employers should ensure that their employment contract templates are compliant with the requirements of the Act and that they review their current processes for providing information to employees. In addition, employers should consider any training needs to ensure that staff understand the new requirements, including the provisions around dismissal protection.

Employer Risk

Employers should note that there are multiple new sanctions introduced in the Social Penal Code for breach of the requirements, ranging from fines to imprisonment. Employers should also note that employees will be protected against dismissal from the point of any request for more predictable and certain working conditions, or from the point that the employee invokes any of the provisions of the Act.

Links

Contact:

Stefan Corbanie
Partner
+32 2 73 79 35 1
stefancorbanie@eversheds-sutherland.be

Céline Wauters
Partner
+32 2 737 93 44
celinewauters@eversheds-sutherland.be

Bulgaria

Amendments to the Labour Code to implement EU Directives

The Bulgarian Labour Code has been amended to implement the EU Directives on transparent and predictable working conditions and on work-life balance for parents and careers. The amendments are intended to increase the security and predictability of employment and improve the reconciliation of work and family responsibilities.

The amendments include:

  • a limit on the duration of probationary periods of up to 1 month for fixed term contracts concluded for less than 1 year
  • changes to the rules regarding the prohibition on working for another employer
  • a requirement for employers to inform employees about: (i) termination terms and conditions (ii) training (iii) amendments to the terms of employment (which must be notified no later than the effective date of the relevant amendments)
  • a new parental leave entitlement in favor of the father (including adoptive parent) of 2 months for raising a child up to the age of 8, with a guaranteed right to financial compensation from the state social insurance.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should review their existing standard terms of employment (including the provision of training, the use of exclusivity and probationary terms) and update parental leave policies to ensure compliance.

Employer Risk

Failure to implement the new rules risks a fine ranging from BGN 1 500 to BGN 15 000.

Link

Amendments to the Ordinance of Working Time, Breaks and Holidays

The Ordinance has been amended to provide more detailed regulation of working time, work on shifts and on-call time. The amended Ordinance also covers the length of service requirement for initial annual paid leave eligibility and paid leave for fathers (including adoptive parent) of a child under the age of 8.

The effect of the amendments include:

  • employer internal rules must provide for notification of working schedules
  • after consultation with unions/employees’ representatives, employers may define by order positions for which work on shifts applies
  • on-call work shall be agreed in the individual/ collective employment agreement
  • orders approving working schedules or on-call time must be retained for at least 3 years
  • orders verifying work during on-call time must be issued within 3 days
  • employees are eligible for paid annual leave after 4 months of service (previously 8 months)
  • a new regime regulating use of paid leave by a father (adoptive parent) of a child under the age of 8.

Impact Date

30 September 2022

Employer Implications/Action Needed

Employers should review their existing working time arrangements and update annual leave and parental leave policies to ensure compliance.

Employer Risk

Failure to implement the new rules risks a fine ranging from BGN 1 500 up to BGN 15 000.

Link

Startup visas

A newly adopted Ordinance lays down rules for issuing, extending and revoking Startup visas to entrepreneurs from outside of the European Union who wish to establish their businesses in Bulgaria. Startup Visas are issued by the Minister of Innovation and Growth and can form one of the grounds for obtaining a long-term residence permit in Bulgaria. The visa provides an opportunity for non-EU citizens to start and develop projects involving high-tech and/or innovative activities in Bulgaria. The application process is online. The visa is issued for a period of 1 year and it can be extended for 2 additional years.

Impact Date

18 October 2022

Employer Implications/Action Needed

This measure is expected to create an incentive for business founders to invest in Bulgaria and take advantage of its human capital, access to funding, and free movement of capital within the European Union. Eligible employers should note the possibility of this additional visa route.

Employer Risk

N/A

Link

Contact:

Irina Tsvetkova
Managing Partner
T: +359 2 439 0707
Irina.Tsvetkova@eversheds-sutherland.bg

Czech Republic

Leave agreement without wage compensation (case law)

The Supreme Court has ruled that if there is an obstacle on the employer’s side preventing the assignment of work to its employees (e.g. supply chain issues), the employer may not agree with the employees to grant them unpaid leave instead of payment. This means that the employer is always obliged to provide the employee with average wage compensation even when it is unable to assign them work.

Impact Date

23 August 2022

Employer Implications/Action Needed

N/A

Employer Risk

In the event of non-compliance with provision of appropriate wage compensation, employers risk a fine of up to CZK 200,000 (approx. EUR 8,000) may be imposed.

Link

Lowered minimum temperature limits in the workplace

To help companies save energy costs, the government has passed a Regulation that lowers the minimum temperature limit in the workplace for some job types. For example, the amended minimum temperatures of 18 °C for some office workers and 16 °C for light manual handwork. Temperatures in sanitary rooms may also be decreased.

Impact Date

12 October 2022

Employer Implications/Action Needed

Employers should note the amended minimum temperature limits.

Employer Risk

In the event of non-compliance with the minimum or maximum temperature limits in workplaces, employers risk fines of up to CZK 1,000,000 (approx. €40,000).

Link

Minimum wage

For 2023, the basic monthly minimum wage should be increased based in the current Government’s proposal by CZK 1,100 to CZK 17,300 (approx. €692). and the basic hourly minimum wage rate to CZK 103.80 (approx. €4.2).

Impact Date

Expected 1 January 2023.

Employer Implications/Action Needed

Employers must ensure that all employees receive at least the minimum wage.

Employer Risk

In the event of non-compliance with the minimum wage, employers risk a fine of up to CZK 2,000,000 (approx. €80,000).

Link

Amount of compensation for an accident at work

It is expected that compensation for work accidents will be substantially increased. Such compensation will be calculated based on average salary, instead of the current fixed amounts.

Impact Date

Expected 1 January 2023.

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Meal allowances and fuel expense compensation

Meal allowances due to employees for business trips has been increased to:

  • CZK 127 (approx. €5.1) , if the business trip lasts 5 to 12 hours
  • CZK 181 (approx. €7.2), if the business trip lasts 12 hours to 18 hours
  • CZK 284 (approx. €11.4), if the business trip lasts more than 18 hours.

The amount of average fuel expense compensation to which employees will be entitled when using a private vehicle for business trips without the submission of receipts has also been increased to:

  • CZK 41.50 per 1 litre of 95 octane petrol
  • CZK 45.20 per 1 litre of 98 octane petrol
  • CZK 45.70 per 1 litre of diesel fuel and
  • CZK 6 for 1 kilowatt-hour.

Impact Date

Expected 1 January 2023.

Employer Implications/Action Needed

Employers should review their expense procedures to ensure that allowances and expenses are being paid at the correct amount.

Employer Risk

In case of underpayment, employers risk fines of up to CZK 2,000000 (approx. € 8,000).

Link

Discount on the compulsory insurance premium for part-timers

A new law has been passed which aims to encourage employers to allow part-time working by introducing a discount on the compulsory insurance premium paid by the employer. The insurance premium can be reduced by 5% if (a) the weekly working hours of an employee is between 8 to 30 hours per week; and (b) the employee is a person over 55 years of age, the parent of a child under 10 years of age, a person caring for a close person, studying at a high school / university or a person with a disability. Similar discounts are being introduced to social security contributions from 1 February 2023.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should review their policies on part-time working and consider whether they could benefit from the proposed new concession.

Employer Risk

N/A

Link

Medical examinations in employment

Currently, there is a general obligation for all employees to undergo initial and regular medical examinations. A new draft decree has been issued which would require only employees whose work is in a special risk category to undergo such examinations, with the intervals of the examinations extended.

Impact Date

1 January 2023 (expected).

Employer Implications/Action Needed

Employers should monitor the progress of the draft decree. Once passed, employers should update their procedures for medical examinations.

Employer Risk

N/A

Link

New average wage

The Ministry of Labour and Social Affairs has set the average wage for 2023 at CZK 40,324 (aprox. EUR 1,730). The change to the average wage must be taken into account when calculating the advance payment of tax on the income of a natural person from dependent business activity (4 times the average wage) and when determining the tax itself (48 times the average wage). The limit of the decisive amount for employees' participation in sickness insurance has also changed to CZK 4,000 (aprox. EUR 160).

Impact Date

1 January 2023

Employer Implications/Action Needed

Due to the change in the limit for participation in sickness insurance, some employees may no longer be eligible to participate.

Employer Risk

N/A

Link

Regulation of remote work

A new draft amendment to the Labour Code sets out new conditions for remote work, including:

  • remote work will only be permissible if confirmed in a written agreement
  • employers will be entitled to order employees to work remotely under specific circumstances (e.g. pandemic)
  • employees will be entitled to be reimbursed for remote work expenses at a flat rate of (at least) CZK 2.80 (approx. EUR 0,1) per hour
  • employees with children under the age of 15 will be entitled to remote work under specific circumstances.

Impact Date

Expected Q1 2023.

Employer Implications/Action Needed

Employers should consider whether their existing arrangements may need to be updated to comply with the new rules around remote work.

Employer Risk

Fines of up to CZK 1,000,000 (approx. EUR 400,000) may be imposed in the event of non-compliance with remote work obligations.

Link

Transparent and predictable working conditions

New draft amendments to the Labour Code propose to require employers to:

  • ensure better protection for employees working under certain types of working agreements (Agreement to Perform Work and Agreement to Complete a Job), requiring employers to schedule working hours, provide paid annual leave, and provide wage compensation for obstacles at work
  • extend the scope of information provided to employees after the start of employment or after relevant changes and
  • confirm terms and conditions of employment within 7 days of the commencement of employment and within 30 days of any changes.

Impact Date

Expected Q1 2023.

Employer Implications/Action Needed

Employers should ensure that their employment contracts will be compliant with the requirements of the proposed amendments to the Labour Code and that they review their current processes for providing information to employees.

Employer Risk

In case of non-compliance with the relevant provisions, a fine of up to CZK 2,000,000 (approx. EUR 800,000) may be imposed, depending on the area of specific non-compliance.

Links

Signing and delivery of employment documents

A new draft amendment to the Labour Code introduces new rules for electronic signing and delivery of employment-related documents. A simple electronic signature and delivery to the employee’s email address will be legally effective to conclude an employment contract, amendment or termination agreement.

Impact Date

Expected Q1 2023.

Employer Implications/Action Needed

Employers should monitor the progress of this proposed amendment. Once in force, employers should update processes to incorporate the possibility of the electronic signing of employment documents.

Employer Risk

N/A

Link

Whistleblowing

The Czech government has recently submitted a new draft of the whistleblowing legislation implementing the EU Whistleblowing Directive. In summary, this new draft mainly removes certain “gold-plating” (local extension going beyond the requirements of EU law) of the original draft, including the scope of protected notifications and the minimum number of employees for mandatory introduction of internal notification systems.

Impact Date

1 July 2023

Employer Implications/Action Needed

Employers should monitor the progress of the draft law. Employers with an existing protected disclosures policy should examine and, where necessary amend, their procedures to ensure compliance with the anticipated changes.

Employer Risk

In the event of non-compliance, employers risk a fine of up to CZK 1,000,000 (approx. € 40,000) may be imposed.

Links

Contact:

Radek Matouš
Managing Attorney
+420 255 706 500
radek.matous@eversheds-sutherland.cz

Denmark

Absence from work for special family reasons

An amendment to the Act on Employees’ Entitlement to Absence from Work for Special Family Reasons provides that employees are entitled to five days of absence each calendar year to provide care or support to a family member or a person in the household who is in need of substantial care or support due to a health condition. It also provides that employees with children under the age of nine years can ask the employer to adjust their working hours or the working pattern for a specified period of time. The employer must consider and reply to the employee’s request within a reasonable time. If the employer turns down the employee’s request, the employer must provide the employee with a reason.

Impact Date

2 August 2022

Employer Implications/Action Needed

Employers should review existing absence policies to ensure compliance with the new scheme.

Employer Risk

N/A

Link

  • N/A
Equalizing leave for parents in connection with childbirth

New legislation provides for a more equal distribution of leave following the birth of a child between parents by earmarking a term of leave with benefits for each parent. The new Act introduces a 24/24 model which means that each parent is entitled to 24 weeks of leave after the birth. Of these 24 weeks, 11 weeks are earmarked for each parent and 13 weeks may be transferred to the other parent. Single parents are given the opportunity to transfer part of their leave to a close family member (social parents). Single fathers are equated with single mothers, so both can take up to 46 weeks of leave. LGBT+ families are given the opportunity to divide the leave between up to four parents.

Impact Date

The new scheme took effect on 2 August 2022. However, single parents’ transfer of leave to a family member and new provisions on LGBT+ families take effect on 1 January 2024.

Employer Implications/Action Needed

Employers should review existing family leave policies to ensure compliance with the new scheme.

Employer Risk

N/A

Link

  • N/A
Extra leave for multiple births of three or more children

The Danish parliament has passed a Bill in which parents giving birth to three or more children at the same birth are entitled to a total of 26 weeks extra leave with benefits under the Danish Act on Leave and Benefits on Grounds of Pregnancy and Childbirth. The absence must be taken within 18 months of the birth.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should review existing policies and employment contracts to ensure compliance with the new scheme once it becomes effective.

Employer Risk

It is expected that the penalty for non-compliance will be compensation in the same range as exists currently (for an employer discriminating in connection with absence on grounds of pregnancy and childbirth). Existing compensation for termination of employment on the grounds of such absence is typically 9 months’ salary and for non-recruitment of a candidate is typically DKK 25,000.

Link

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Workplace sexual harassment

A new social agreement on Danish initiatives to prevent sexual harassment in the workplace has resulted in the drafting of certain legislative amendment Bills. The material changes proposed in the draft Bills include:

  • an employee who has been subjected to sexual harassment can claim compensation for injury from the harasser. The general right to claim such compensation already exists, but the new draft Bill introduces a specific provision to ensure awareness of this possibility and
  • the amount of compensation for sexual harassment is increased by a third.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should review their sexual harassment policies and procedures to ensure they effectively address sexual harassment in the workplace.

Employer Risk

N/A

Link

  • N/A
Transparent and predictable working conditions

Legislation is being introduced to implement the EU Directive on transparent and predictable working conditions for employees. The Directive adjusts the concept of employee, expands the scope of covered employees, changes the timescale for providing written information to the employee, lists more working conditions that must be disclosed as a minimum and sets new minimum requirements for several working conditions (for further information, read our EU update).

Impact Date

The Danish implementation Act has been postponed. It is expected to enter into force on 1 July 2023.

Employer Implications/Action Needed

N/A

Employer Risk

It is expected that the penalty for non-compliance will be compensation, at a rate reflecting current case law. The compensation in the Danish draft Bill corresponds to the compensation in the current Danish Contracts Act (i.e., normally up 13 weeks salary and up to 20 weeks salary in case of aggravating circumstances. If the breach is excusable and in all other respects has been of no specific importance, the compensation cannot exceed DKK 1,000). The range of the compensation amounts in the current case law is typically between DKK 5,000 and DKK 10,000.

Links

Contact:

Anne Marie Abrahamson
Partner
+45 35 25 28 58
AMA@Lundgrens.dk

Estonia

Transparent and predictable working conditions

Legislation has been enacted to implement the EU Directive on Transparent and Predictable Working Conditions, which sets out minimum requirements for employees’ working conditions. Employers have additional obligations to notify the employee of changes to their terms of employment. An employer may not treat an employee unfavorably because the employee relies on their rights, draws attention to an employer’s violation of their obligations or supports another employee in the protection of that employee’s rights. The employer must respond to an employee’s request to change their working conditions within 14 days of the request. If the same employee submits more than one request during a period four months, then the employer is not obliged to answer any of the requests submitted after the first.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should note the updated legal provisions.

Employer Risk

If the employer does not fulfil the obligations, a fine may be imposed.

Link

Posted workers

A new law brings Estonian law into line with the EU Posted Workers Directive, including by supplementing The Law on the Working Conditions of Posted Workers by a provision protecting posted workers who have applied to a court or administrative body to defend their rights. In addition, construction workers may demand wages not only from their employer, but also from the person who ordered the subcontracting from the employer.

Impact Date

15 October 2022.

Employer Implications/Action Needed

Employers using posted workers should note the updated legal provisions.

Employer Risk

N/A

Link

Short term employment contracts (draft legislation)

Draft legislation has been issued to enable employers to conclude consecutive short-term employment contracts with people who are officially registered as unemployed. Currently, the law allows employers to either conclude at most two consecutive contracts or extend a contract once. The change would allow employers to conclude an unlimited number of employment contracts of up to 8 days’ duration with the same employee in any six-month period.

Impact Date

Currently unknown.

Employer Implications/Action Needed

Employers should monitor the progress of the draft legislation.

Employer Risk

N/A

Link

Occupational health improvements in the organization (draft legislation)

Draft legislation has been issued to improve the safety of the working environment of workers by requiring employers to improve the occupational health of the workforce as a whole, including employees who are working remotely. Additionally, the administrative burden of employers in cases of work accidents is lessened.

Impact Date

Currently unknown.

Employer Implications/Action Needed

Employers should monitor the progress of the draft legislation. Once in force, employers must arrange additional occupational health analysis.

Employer Risk

N/A

Link

Additional paid leave for parents (draft legislation)

Draft legislation has been issued for the purpose of improving the work life and family life of employees by giving employees, whose child is studying in a comprehensive or vocational school, the right to paid leave on the first day of the schoolyear, if the day is a working day.

Impact Date

Currently unknown.

Employer Implications/Action Needed

Employers should monitor the progress of the draft legislation. Once in force, employers must grant the paid leave to the employee.

Employer Risk

N/A

Link

Contact:

Tambet Toomela
Partner
T: + 372 622 9990
tambet.toomela@eversheds-sutherland.ee

EU

Time-limiting the accrual of paid holiday entitlement (case law)

The European Court of Justice has decided two cases on the accrual of paid holiday entitlement.

In the first, it confirmed that, under a Member State’s national law, a worker may lose accrued paid holiday entitlement if they have had the opportunity to exercise that right in good time. Reflecting previous case law in this area, the Court recognized the need to balance both the protection of workers and of employers. Otherwise, employers may be faced with the risk that a worker may accumulate excessive periods of absence which are difficult to accommodate in practice. The decision concerned a German law which made the right to paid annual leave subject to a three-year time limit. However, in the circumstances of the case, the employer lost as it had failed to put the worker in a position to exercise her right to paid annual leave.

In the second, the employer argued that under relevant national law a worker who, on health grounds, has been unable to take their annual leave for a long period of time loses their entitlement 15 months after the end of the leave year, irrespective of whether the employer has fulfilled its obligations to enable that worker to take such leave. The Court disagreed, deciding that, in relation to the paid annual leave entitlement acquired during the leave year in the course of which a worker actually worked before becoming totally incapacitated for work (note this limited scope), national law could not provide for the entitlement being forfeited without examining whether the employer has, in good time, enabled the worker to exercise that entitlement.

Impact Date

22 September 2022

Employer Implications/Action Needed

Where national laws across the Member States permit the loss of accrued paid holiday after a certain period of time, these cases serve as a reminder that employers seeking to rely on such time limits must inform employees of their untaken holiday, the consequences of failing to exercise their right to paid leave and permit employees to take the holiday in good time. Keeping evidence that the employee has been put in a position to exercise their right, and informed of their accrued balance and the risk of forfeiture after a period of time, is also important.

Employer Risk

A risk that paid holiday entitlements do not become time-limited.

Links

Update on various EU Employment Directives

A number of workplace-related EU Directives have passed their implementing deadline (by Member States) over the last year or are currently progressing through the EU legislative process. These include finalised Directives on a national minimum wage, transparent and predictable working conditions, work-life balance and whistleblowing, together with draft Directives on gender diversity in the boardroom, corporate sustainability due diligence, pay transparency and platform workers. Our briefing (see link) provides a summary of each Directive and practical implications.

Impact Date

Ongoing.

Employer Implications/Action Needed

All employers operating in the EU should expect to make some changes to their current arrangements to take account of the requirements of the Directives as each is transposed into national law.

Employer Risk

A risk of financial and other sanctions, and reputational harm, if employers do not comply with amended workplace legislation.

Link

Contact:

Constanze Moorhouse
Partner
+44 12 23 44 38 03
constanzemoorhouse@eversheds-sutherland.com

Finland

Family leave reform

Family leave is being reformed to grant both parents an equal quota of parental leave and to provide that parents can take leave over several periods before their child reaches the age of two. The amount of periods in which the leave may be taken has been increased. Parents may also transfer some of their own leave days to the other parent, custodian, their spouse or the spouse of the other parent. The Finnish Social Insurance Institution pays benefits for the periods of leave. The reform also includes a new unpaid carers leave of up to five days per year. Carers leave supports care for a close relative, such as the employee’s child, spouse or parent. It will accrue annual holiday.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should review the new legislation to ensure compliance with the new family leave provisions.

Employer Risk

Breaches of family leave rights could under certain circumstances lead to liability to pay compensation under the Act on Equality between Women and Men or even criminal liability for work discrimination.

Link

Strengthening the rights of variable hours employees

Several labor laws have been reformed to strengthen the position of employees working on variable working hours. On the basis of the reform, an employer will have a more active role in assessing whether the variable working hours match the employer’s actual need for workers. It will require the employer to at least every 12 months assess how the variable working hours agreed in the employment contract have materialized. If it is shown that the minimum working hours agreed could be increased, the employer must offer the employee an agreement to amend the contract provision regarding working hours.

The employer’s obligation to request the employee’s permission for shifts will also be extended and, if the employer cancels a shift in accordance with law or the applicable Collective Bargaining Agreement, the employer must in certain cases pay compensation for the cancelation. In addition, other changes have been introduced to comply with the EU Directive 2019/1152, including requiring the employer to better inform the employee of the terms of employment.

Impact Date

1 August 2022

Employer Implications/Action Needed

Reforms are particularly relevant for employers employing personnel with variable working hours who should assess how the possible amendments would affect their employment relationships.

Employer Risk

Employers employing staff with variable working hours may be required to amend the contract terms regarding working hours if the actual need for workers can be deemed to exceed the minimum working hours agreed, which in turn will lead to an obligation for the employer to offer more work. While this obligation already exists under the current law, the new legislation further strengthens it.

Links

Changes to promote employment of those aged 55 and over

The Finnish Parliament has approved legislative amendments which are intended to promote employment of persons aged 55 and over, and to improve their ability to work.

Under the legislative amendments, the possibility of obtaining additional days of unemployment allowance (the unemployment pathway to retirement) will be eliminated for those born in 1965 and thereafter. At the beginning of 2023, the changes will also affect those that have been born in 1963 and 1964 (the minimum age requirement will be raised to 63 and 64 years respectively). Employers will no longer have to pay the so-called liability component for employees born in or after 1965 under certain conditions when they have made the employee redundant.

In addition, to expedite the re-employment of older redundant workers, for employees aged 55 years and over who have been made redundant on financial and production related grounds (conditions apply) there is a new allowance and training. The allowance is financed through the Employment Fund by collecting a restructuring protection fee from employers.

The entitlement to statutory employment leave will be extended for employees who have turned 55 years and who have worked for the same employer for at least five years and will be 5, 15 or 25 days depending on the duration of notice period. The right of over 55-year-olds who have worked for the same employer for at least three years to reduced working hours in certain circumstances will be strengthened.

Impact Date

1 January 2023

Employer Implications/Action Needed

Reforms are particularly relevant for employers who are going to terminate employment of employees of 55 years or more on financial and production related grounds on or after 1 January 2023.

Employer Risk

An employer who terminates employment of an employee who is 55 years or more on financial and production related grounds may need to pay the restructuring protection fee under certain conditions (i.e. if its payroll on which the unemployment insurance contribution is based exceeds a specific minimum level in the year preceding the date of dismissal).

Links

Contact:

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

France

Tax and compensation measures

A number of tax and compensation changes have been made, including for example:

  • effective retroactively from 1 July 2022 until 31 December 2023, the new value-sharing bonus (prime de partage de la valeur - PPV) replaces the special purchasing power bonus (so-called “Macron Bonus”). This annual bonus is not mandatory; it may be paid by any employer wishing to do so, up to €3,000 without conditions, and up to €6,000 if the employer has implemented a profit sharing scheme. This bonus is not subject to any tax or social security contributions
  • there have been some increases in social benefits. Among them: basic retirement pension, RSA, activity allowance (prime d'activité), family allowances, or disabled adults allowance. The individual housing subsidies (aides personnalisées au logement - APL) increased by 3.5%. These increases are retroactive as of 1st July 2022
  • a decrease in employer contributions for extra hours applies from 1 October 2022 for companies with 20 to 249 employees. A décret will be issued to determine the amount of this flat-rate decrease
  • the elected MPs voted to raise the tax exemption cap on extra hours from €5,000 to €7,500 from 1 January 2022 to 31 December 2025
  • companies may now buy back from employees RTT rest days. The bought back RTT are thus exempted from taxes and contributions until 31 December 2025
  • until 31 December, it will be possible for any employee who wishes to do so to release his/her profit-sharing or incentive scheme without being taxed, provided that the total amount does not exceed €10,000.

Impact Date

1 July 2022 to 31 December 2022.

Employer Implications/Action Needed

Review compensation policy to benefit from certain tax exemptions.

Employer Risk

N/A

Link

  • N/A
Additional minimum wage increases

Effective 1 August 2022, the minimum wage rates (SMIC) will increase for the third time this year, by 2,01% as follows:

  • hourly SMIC: €11.06
  • monthly SMIC: €1,677.42.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should check that all employees are being paid at least the updated minimum wage rates.

Employer Risk

N/A

Link

  • N/A
Whistleblowing – implementing the EU Directive

A law has been adopted to implement the EU Whistleblowing Directive.

It makes the following changes:

  • clarifies the definition of a whistleblower, the scope of information considered as a report and updates the list of applicable secrets
  • previously, a whistleblower had to act "in a disinterested manner" and this ambiguous notion has been replaced by the absence of financial compensation. The aim is to make the admissibility of whistleblowing more flexible
  • previously, the whistleblower had to have "personal" knowledge of the facts they were reporting. This condition is removed in the professional sphere. In this context, a whistleblower may report facts that have been reported to them
  • extends some of the protections offered to whistleblowers, including protection against retaliation to people and not-for-profit legal bodies (trade unions and associations) who are in contact with the whistleblower and facilitators who help with the reporting or disclosure (colleagues, relatives, etc.)
  • removes the hierarchy of warning levels introduced by the loi Sapin II. The whistleblower will now be able to choose between internal and external reporting to the competent authority, the Human Rights Defender, the courts or a European body. Public disclosure will still only be possible in certain situations.

Impact Date

1 September 2022

Employer Implications/Action Needed

Employers should monitor the progress of the law. Employers with an existing protected disclosures policy should examine their procedures to ensure compliance with the anticipated changes.

Employer Risk

N/A

Links

Consultation on strategic orientations (case law)

OGEC, an organization that manages Catholic schools, undertook a project to close a high school. A consultation on the strategic orientations was halted by reason of the COVID-19 pandemic. The trial court suspended the consultation on the project until the information and consultation on the strategic orientations had been carried out. The Cour de cassation determined that the specific consultation on a change in the economic or legal organization of a company or in case of restructuring and downsizing, is not subordinate to the employer having first met the obligation to consult the social and economic committee (comité social et économique) on the strategic orientations of the company.

Impact Date

21 September 2022

Employer Implications/Action Needed

Employers proposing to change the economic or legal organization of a company or restructure, should ensure that the full extent of any information and consultation obligations are adhered to.

Employer Risk

N/A

Link

  • N/A

Contact:

Deborah Attali
Partner
+33 15 57 34 217
deborahattali@eversheds-sutherland.com

Germany

German Confirmation Act updated – providing employees with written conditions

Employers must inform their employees in writing about the essential terms and conditions of the employment. The list of essential terms and conditions that must be notified to employees has been expanded. In particular, the following information must be (additionally) provided in writing to the employee:

  • the end date in the case of fixed-term employment relationships
  • the possibility for employees to freely choose their respective place of work, if agreed
  • the duration of the probationary period, if agreed
  • the remuneration for overtime
  • the due date for payment of wages and the form in which wages are paid
  • the agreed rest breaks and rest periods and, if shift work has been agreed, the shift system, shift pattern and conditions for shift changes
  • details of on-call work, if agreed
  • the possibility of ordering overtime and its conditions
  • any entitlement to training provided by the employer
  • the name and address of the pension provider of the company pension scheme, if such a pension is granted
  • the procedure to be followed by the employer and the employee when terminating the employment relationship, at least the written form requirement and the deadlines for terminating the employment relationship as well as the deadline for bringing an action for protection against dismissal
  • a reference to the applicable collective bargaining agreements, works or service agreements.

For new hires (employed from 1 August 2022), all essential terms and conditions must be submitted in writing. Existing employees may request written notification and must be informed about any change of their essential terms and conditions.

Impact Date

1 August 2022

Employer Implications/Action Needed

We would recommend including all essential terms and conditions pursuant to the updated German Confirmation Act in the employment contract and hand a wet-ink-signed version to the employee.

Employer Risk

Failure to comply can lead to penalty fees of up to EUR 2,000.00 gross per employee.

Link

Amendments to the Verification Act (‘Nachweisgesetz’)

The implementation of the EU Directive on Transparent and Predictable Working Conditions has taken place. German lawmakers have in particular - but not exclusively - adopted amendments to the Verification Act ("NachwG"). The amendments to the law will affect both new and existing employment relationships.

Impact Date

1 August 2022

Employer Implications/Action Needed

Amendments to be implemented in new employment contracts starting 1 August 2022.

Employer Risk

Failure to comply can lead to penalty fees of up to EUR 2,000.00 gross per employee.

Link

Post-contractual non-competition clause (case law)

The German Federal Labour Court (Bundesarbeitsgericht) has determined that restricted stock units (RSUs; restricted stock acquisition rights) should be taken into account when calculating the compensation payment for post contractual restrictive covenants.

According to German law, a post contractual non-competition clause is (among other mandatory requirements) only binding if the employer undertakes to pay, for the period of prohibition, a compensation that for each year of the prohibition amounts to at least half of the most recent contractual remuneration received by the employee. Based on this latest German Federal Labor Court decision, RSUs are taken into account when determining the amount of the most recent contractual remuneration. However, this requires that RSUs are issued directly by the employer, i.e. the German entity as the employer. Consequently, this does not apply if RSUs are granted by the parent company, which is usually located outside the country.

Impact Date

25 August 2022

Employer Implications/Action Needed

Employers should ensure that the calculation of compensation payments for post contractual restrictive covenants is accurate, including the appropriate treatment of RSUs.

Employer Risk

N/A

Link

No right of initiative of the works council on time recording and duty of employers to record working time (case law)

The German Federal Labor Court has determined that there is a legal obligation on employers to record working time. The grounds of the ruling are awaited. Pending those grounds, the impact and the scope of the obligation currently remains unconfirmed. In addition, the court has ruled that the works council cannot request the implementation of a working time recording system. Such a right excluded, as such an obligation already exists by law.

Impact Date

13 September 2022

Employer Implications/Action Needed

Although the German Federal Labor Court has clarified that the employer does not have to comply with the works council's request to introduce time recording, it should be noted that if the employer wishes to introduce a time recording system, the works council retains the right to participate in the time recording system itself.

Employer Risk

The implications of the judgement, including any employer risk, can only be conclusively assessed once the reasons for the decision are available.

Link

Forfeiture of claims for annual leave (case law)

The European Court of Justice has confirmed that claims for annual leave will generally forfeit after three years, i.e. within the regular statutory forfeiture periods. The three year forfeiture period only starts at the earliest at the time when the employer has notified the employee about the fact that the remaining annual leave needs to be taken or it will be forfeited. In addition, the employer must allow the employee the possibility of actually taking annual leave. If such information is not provided by the employer, the entitlement shall continue to exist beyond the three years.

Impact Date

22 September 2022

Employer Implications/Action Needed

Employers should record the annual leave of their employees. Where, towards the end of the calendar year, there remains accrued but untaken annual leave, the respective employees should be informed either in writing or via email that there is still untaken annual leave which needs to be taken by the end of the calendar year (in some cases a carry forward until March of the following calendar year is possible) as the annual leave will otherwise forfeit. Employers should keep a copy of the letter/email receipt confirmation on the employee’s personal file.

Employer Risk

N/A

Link

Occupational safety and health

A new COVID-19 Occupational Health and Safety Ordinance requires companies to draw up hygiene concepts based on a risk assessment and to implement the corresponding COVID-19 protection measures. Within the risk assessment, employers must, among other things, consider offering employees the opportunity to perform suitable activities in their homes if there are no operational reasons to the contrary.

Impact Date

October 2022

Employer Implications/Action Needed

If necessary, measures for occupational infection control must be implemented and observed by the employer.

Employer Risk

N/A

Link

Granting of additional leave in the event of a quarantine order without symptoms (case law)

Pursuant to Section 9 of the Federal Vacation Act (Bundesurlaubsgesetz, BUrlG), employees who fall ill during their vacation are granted their vacation days again if they can prove their inability to work by means of a medical certificate. However, it has not yet been clarified whether this regulation also applies if an employee receives an official quarantine order during the vacation. The Federal Labor Court (BAG) has now referred such a case to the European Court of Justice (ECJ). The outcome is awaited.

Impact Date

Currently awaited.

Employer Implications/Action Needed

No action needed.

Employer Risk

No risks.

Link

The provisions of the Federal Leave Act do not apply in part during parental leave (case law)

Under the German Federal Leave Act, employees in Germany have a statutory minimum leave entitlement per calendar year, which generally expires at the end of the respective year. Only in special cases due to operational reasons or the employee's personal circumstances may a carryover to the next calendar year be justified as an exception, in which case the vacation days carried over should be taken in the first three months.

However, these deadlines for taking leave and carrying over remaining leave from the previous year do not apply during parental leave. Instead, the special provisions of the Federal Parental Allowance and Parental Leave Act take precedence. Accordingly, the employer may reduce the leave entitlement by one-twelfth in writing for each full calendar month of parental leave.

As a further exception, the employer must grant residual leave that was not taken or not taken in full at the beginning of the parental leave after the parental leave in the current or next leave year. Therefore, if the corresponding vacation days were not (effectively) reduced, the employee can take them in the following year, regardless of any exclusion clauses in the employment contract. This has now also been confirmed by the Federal Labour Court in a recent ruling.

Impact Date

N/A

Employer Implications/Action Needed

N/A

Employer Risk

The employer must grant residual leave that was not taken or not taken in full at the beginning of the parental leave after the parental leave in the current or next leave year if the corresponding vacation days were not (effectively) reduced.

Link

Contact:

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

Ireland

Right to Request Remote Working Bill 2022

The Irish Government has announced that it plans to integrate the Work Life Balance and Miscellaneous Provisions Bill 2022 with the Right to Request Remote Working Bill 2022.

The 13 specific reasons (for refusing a request for remote working, as outlined in the Right to Request Remote Working Bill 2022) will be replaced with an obligation on the employer to assess their needs and the needs of the employee when considering a request. The right to request any other type of flexible working, such as reduced working hours or adjusted working patterns, will remain limited to parents and carers, as defined in the Work Life Balance and Miscellaneous Bill 2022.

Impact Date

The integrated Bill is expected to be published by the end of 2022.

Employer Implications/Action Needed

Employers should consider updating or introducing a remote working policy. It is anticipated that a Code of Practice will be published which will provide further guidance to employers.

Employer Risk

Employers risk a complaint being brought to the WRC if they do not comply with the Code of Practice and/or the provisions of the proposed legislation, once enacted. Under the Bill, the WRC can award up to four weeks’ remuneration.

Link

Protection of tips and gratuities

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 came into force on 1 December 2022 and:

  • Prevents businesses from using tips and gratuities to make up the basic pay of their staff
  • Provides a legal entitlement for workers to receive tips and gratuities paid in electronic form (for example by card or Apple Pay) – and these tips and gratuities should be paid to workers in a “fair and transparent manner”
  • Prevents employers from keeping any tips or gratuities received electronically (with a few exceptions, for example if the employer regularly performs the same work as some of the workers)
  • Requires businesses to provide to workers a statement showing the amount of tips obtained and the portion paid to the individual worker in a specific period and
  • Requires businesses to display prominently their policy on how tips, gratuities and mandatory service charges are distributed.

Employers must display a policy which contains information on whether tips or gratuities are distributed to and amongst employees; where tips or gratuities are distributed to and amongst employees, the way they are distributed and the amounts so distributed; and whether mandatory service charges, or any portion of them, are distributed to and amongst employees – and if so, the way they are distributed and the amounts so distributed.

Impact Date

1 December 2022

Employer Implications/Action Needed

All businesses where tips and/or gratuities are received from customers must now display their policy on how tips, gratuities and mandatory service charges are distributed – this policy must be easily accessible by both customers and workers.

Employer Risk

Any employer who contravenes the display obligations under the Act shall be guilty of an offence and liable on summary conviction to a fine of up to €2,500.

Link

Whistleblowing changes

The Protected Disclosures (Amendment) Act 2022 (the “Act”), which transposes the EU Whistleblowing Directive into Irish law, has now been signed into law by the President.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers with an existing protected disclosures policy should examine and amend their procedures to ensure compliance with the proposed changes. The Act requires all public sector organizations and all private sector organizations with 50 or more employees to establish formal channels and procedures for their employees to make protected disclosures (a derogation from this requirement applies to undertakings that employ between 50-249 employees until 17 December 2023). Those employers falling into these categories without existing channels and procedures should therefore take steps to establish such processes, taking account of the requirements of the Act.

Employer Risk

In terms of additional and new redress, the Act allows the Workplace Relations Commission or Labor Court to award compensation of up to €15,000 for individuals not directly employed or in receipt of remuneration, including, for example, job applicants and volunteers. The Act provides that interim relief can be obtained before the Circuit Court in all cases where a worker alleges penalisation, not just in circumstances where the worker has been dismissed. Criminal sanctions may be imposed on those who hinder a person from making a report or penalise a reporting person. In addition, employers who commit an offence under the Act may be liable for fines not exceeding €250,000 or to imprisonment of up to two years, or both.

Links

Enhanced statutory sick pay

Under the Sick Leave Act 2022 (the “Act”), all employees now have an entitlement to statutory sick leave.

The Act provides for statutory sick leave payment for all employees with at least 13 weeks’ continuous service with their employer, but will not apply where the employers’ sick leave scheme/policy is more favourable to their employees.

Employees will be entitled to paid sick leave for up to 3 days per year. This will increase to 5 days in 2024, 7 days in 2025 and 10 days in 2026. A rate of payment for statutory sick leave of 70% of normal wages to be paid by employers (up to a maximum of €110 per day).

Impact Date

The Act is due to commence on 1 January 2023.

Employer Implications/Action Needed

Employers should introduce a sick pay policy which complies with the Act. Employers with an existing sick pay policy should review their employee handbooks and contracts to ensure that they align with the Act. Employers must also retain records of statutory sick leave absences, for a period of four years. They must include the dates of each period of sick leave in respect of each employee and the rate of pay in relation to the employee.

Employer Risk

Failure by employers to keep records of statutory sick leave absences may result in fines of up to a maximum of €2,500. An employee who believes that their employer has failed to comply with the provisions of the Act may make a complaint to the Workplace Relations Commission. An Adjudication Officer may award compensation up to 4 weeks’ remuneration.

Link

The Protected Disclosures (Amendment) Act 2022

The Protected Disclosures (Amendment) Act 2022 (the “Act”) introduces significant changes to the Protected Disclosure Act 2014, including:

  • The protection of a wider group of workers and stakeholders (including non-executive directors and shareholders, as well as employees, interns, volunteers, contractors and agency workers) from retaliation in connection with making a protected disclosure;
  • The widening of the scope of “breaches” which can fit the definition of a protected disclosure, to include breaches related to applicable laws governing data and personal privacy, prevention of money laundering and terrorist financing, and corporate tax rules including those governing anti-avoidance;
  • The requirement for employers with 250+ employees to have and maintain internal reporting channels and investigation procedures which comply with the Act as soon as it comes into force. A derogation from this requirement applies to undertakings that employ between 50-249 employees until 17 December 2023.

Impact Date

The Act is due to commence on 1 January 2023.

Employer Implications/Action Needed

Employers (other than private-sector employers with less than 50 employees) should put in place formal reporting channels and procedures. Employers who already have protected disclosures procedures in place should review these to ensure compliance with the Act.

Employer Risk

The Act creates new offences, including:

  • Failing to establish, maintain and operate internal reporting channels and procedures
  • The hindering of, or attempting to hinder, a worker in making a report
  • Penalising, or threatening penalisation or causing or permitting any other person to penalise or threaten penalisation
  • Breaching the duty of confidentiality regarding the reporting person’s identity
  • Bringing vexatious proceedings and
  • Make a report containing any information that the reporting person knows to be false.

Employers who commit any of these offences are at risk of fines ranging between €75,000 and €250,000, and/or imprisonment of up to 2 years. Employers should be aware that the burden of proof now falls on them to disprove that an alleged act of penalisation occurred because an individual made a protected disclosure. In terms of additional and new redress, the Bill allows the WRC or Labour Court to award compensation of up to €13,000 for individuals not directly employed or in receipt of remuneration, including for example, job applicants and volunteers.

Link

Right to request flexible working

The purpose of the Right to Flexible Work Bill 2022 (the “Bill”) is to:

  • provide employees with a right to make a request for flexible work
  • require employers to deal with requests for flexible work within a four week period
  • provide that an employer may refuse a request only on grounds of reasonable practicability
  • require employers to maintain a policy on flexible work which can be inspected by employees and the Workplace Relations Commission and
  • provide a right of appeal in certain circumstances against a refusal of flexible work.

The Workplace Relations Commission will publish a Code of Practice on the general principles applicable to the statutory right to request flexible working.

Impact Date

Q4 2022/Q1 2023

Employer Implications/Action Needed

Employers must ensure that they have in place a written policy on flexible working which is available to employees and complies with the legislation once enacted. This policy should set out the process for requests being made and considered, including an appeals process for employees who have their requests refused. Employers should be prepared to consult with employees regarding any proposed change to an existing policy or when implementing a new policy. The policy must be brought to the attention of employees upon commencement of employment and at least annually, or when amended, thereafter.

Employer Risk

Employers that fail to implement and apply the new requirements risk employees bringing complaints to the Workplace Relations Commission. They may also be liable on summary conviction to a Class C fine not exceeding €2,500. It will, however, be a defence for the employer to prove that it exercised due diligence and took reasonable precautions to ensure that the legislation was complied with.

Link

National minimum wage - Interns

The purpose of the National Minimum Wage (Payment of Interns) Bill 2022 (the “Bill”) is to provide for the payment of the national minimum wage to certain persons doing work as interns or on work experience. The Bill proposes to amend the National Minimum Wage Act 2000 to ensure that an employee who does more than 30 hours of work within any period of four weeks for another person is paid.

Impact Date

Awaited.

Employer Implications/Action Needed

Employers should be aware that should this Bill be passed in the future, this will apply to employees who: have not entered into/do not have a contract of an employment; are referred to as described as a trainee, an intern or a person on work experience.

Employer Risk

Employers should monitor the status of the Bill.

Link

Proposals for a national living wage

The Government has announced proposals for the introduction of a living wage for all employees by 2026, alongside the phasing out of the National Minimum Wage over a four-year period. The proposals follow the EU Directive on Adequate Minimum Wages. The living wage rate will be calculated as a percentage of a benchmark figure. The proposal is to set the fixed threshold at 60% of the median wage, with the median wage being calculated as the median hourly wage of all employees (public and private sector).

Impact Date

Awaited.

Employer Implications/Action Needed

Once fully implemented, the living wage will be mandatory for all employers. Employers should be aware that when these proposals come in to effect they will apply to employees currently on the National Minimum Wage, therefore contracts of employment with such employees will need to be updated to reflect the new wage threshold.

Employer Risk

In line with the Directive employees will have the right to redress and remuneration where their right to a living wage has been infringed. It is expected that the provisions which currently govern the enforcement of payment of the National Minimum Wage will transfer to the living wage, such that any employer who refuses or fails to remunerate an employee at a rate in line with the living wage rate shall be guilty of an offence, and any employee subjected to such an offence may seek redress before the Workplace Relations Commission.

Links

Extending work-life balance rights

Proposed legislation will transpose elements of the EU Directive on work-life balance for parents and carers. It will apply to parents and carers whose rights will be extended through a right to request flexible working; the introduction of five days unpaid leave per calendar year for serious medical care; and the extension of the existing entitlement to breastfeeding breaks from six months to two years.

Impact Date

Awaited.

Employer Implications/Action Needed

Employers should review their policies and contracts to ensure that they reflect these new entitlements.

Employer Risk

An employee who is dismissed for exercising or proposing to exercise their right of leave for medical care purposes or to request flexible working arrangements for caring purposes, shall be entitled to bring an unfair dismissal complaint to the Workplace Relations Commission.

Links

Further pay transparency proposal

The Employment Equality (Pay Transparency) Bill 2022 (the “Bill”). The Bill aims to ensure pay transparency for roles advertised by business and public sector organizations.

Impact Date

The Bill is a private members’ Bill put forward by members of Sinn Fein. However, we expect a Government sponsored Bill in the future to implement the European Commission’s proposal for a Directive on pay transparency once a transposition date has been set.

Employer Implications/Action Needed

Employers must ensure that they do not publish or display an advertisement which discriminates or signals an intention to discriminate. Moreover, if this Bill is passed, employers will have an obligation to publish an approximate remuneration owed to a worker for taking up a contract of employment. As such, employers should move to display the approximate remuneration on their job descriptions and advertisements.

Employer Risk

Employers should monitor the status of the Bill.

Links

Contact:

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

Italy

EU Directive on transparent and predictable working conditions

Legislative Decree no. 104/2022 which transposes the Regulations implementing the EU Directive on transparent and predicable working conditions includes a requirement to include in the employment agreement – or, in any case, to communicate to the employee within 7 days from the beginning of the working activity the following information:

  • the identity of the parties
  • the workplace and the employer's registered office
  • the ranking of the employee
  • the start date and the type of employment relationship
  • the duration of the probationary period
  • the amount of the salary as of the start date, the period and the method of payment
  • the working time and any conditions relating to overtime and its payment, as well as any conditions for shift changes.

The employer must also include in the employment agreement, or in any case communicate to the employee within one month from the beginning of the working activity the following additional information:

  • the right to training, if any
  • length of holiday leave, and others paid leave
  • the procedure, the form and the terms of the notice in case of termination or resignation
  • the national collective bargaining agreement applied by the employer, with the name of the Unions who have signed the relevant NCBA
  • authorities that receive the payment of social security contributions, and any other treatments granted by the employer regarding the payment of social security contributions.

For existing employment agreements in place on 1 August 2022, the above-mentioned information need only be provided by the employer on written request from the employee within 60 days after the relevant request.

Impact Date

13 August 2022

Employer Implications/Action Needed

Employers should review template employment agreements for any new hires to ensure compliance with the new requirements. For employment agreements already in place, employers will need to prepare to respond to requests from workers for the additional information but may choose to add specific addendums to the employment contracts. The new Decree also imposes specific information obligations upon employers regarding the use of systems that monitor an employee’s working activity. This may require that the organization’s privacy policy is updated.

Employer Risk

In case of non-compliance with the abovementioned obligations, employers may be subject to an administrative fine ranging from EUR 250.00 to 1,500.00 for each relevant employee.

Link

EU Directive on work-life balance for parents and carers

Legislative Decree no. 105/2022 provides:

- the extension of parental leave from 10 months to 11 months for single parents

- compulsory paternity leave for a period of 10 days that can be used from 2 months prior to the presumed date of birth and within the following 5 months

- an increase from 6 to 12 years in the age of a child for which parents can take parental leave with an indemnity equal to 30% of their salary;

- in addition to parental leave for a period of 6 months, a further period of 3 months to be taken by one of the parents, with the right to the payment of an indemnity equal to 30% of their salary

- to give priority to requests to work from home received from:

  • employees with children up to 12 years of age
  • employees with disabled children, regardless of their age
  • employees with disabilities of established severity
  • employees caring for a spouse or family member who, due to illness or disability, is not self-sufficient and is therefore in need of comprehensive and continuous care (so-called caregivers).

Impact Date

13 August 2022

Employer Implications/Action Needed

Employers should note the changes and incorporate them into policies and practices.

Employer Risk

A failure to accommodate the various leave and pay entitlements could lead to allegations of discrimination and to reputational damage. Such impacts may preclude the employer from achieving gender equality certification. Moreover, if the employer refuses the application for paternity leave and/or is obstructive to the exercising of this right, an administrative fine may apply, ranging from a minimum of EUR 516.00 to a maximum of EUR 2,582.00.

Link

Work from home (“smart working”)

Law no. 142/2022 is extended until 31 December 2022 permitting employers to implement working from home using the simplified procedure (i.e. without the written agreement of the employee).

Furthermore, employees continue to have a right to work from home where they:

  • have children up to 14 years old (not applicable if the other parent is unemployed or furloughed (i.e. Cassa Integrazione) or equivalent to unemployed)
  • are most exposed to risk of COVID-19 infection (so-called “lavoratori maggiormente esposti a rischio di contagio da Covid-19”)
  • classified as “vulnerable workers” (so-called “lavoratori fragili”).

Impact Date

21 September 2022

Employer Implications/Action Needed

Employers should note the extended smart-working provisions and should continue to adapt remote working policies and procedures accordingly.

Employer Risk

N/A

Link

Dismissal for companies with at least 250 employees

Law Decree no. 144/2022 requires that employers who employed at least 250 employees (on average) during 2021 give notice to the Trade Union in the event of a shutdown of a company site, business branch, etc. which is likely to involve the dismissal of more than 50 employees. The relevant notice must be sent 90 days prior the commencement of the redundancy procedure and followed by further details of the proposal.

Impact Date

24 September 2022

Employer Implications/Action Needed

Within 60 days from the information notice, the employer must submit a plan setting out: i) actions to be taken in order to guarantee adequate employment levels ii) any transfer of a going concern which can ensure the continuation of the business activity iii) any plans to restructure a business site iv) timeline and modalities necessary in order to implement the above actions. Within 120 days after its submission such plan has to be discussed with the Trade Union in order to reach an agreement.

Employer Risk

A breach of the information notice obligation risks the relevant dismissals being considered null and void. Such breach can occur when the plan is not submitted to the Trade Union or does not meet the specified legal requirements. The employer also risks having to pay the so-called redundancy ticket (“ticket licenziamento”) twice. Furthermore, employers will be required to pay the redundancy ticket increased at 500% if the Trade Union agreement is not signed.

Link

COVID-19 - Mandatory vaccination

The requirement for employees to be vaccinated remains in place for those working in the healthcare sector.

Impact Date

Until 31 December 2022.

Employer Implications/Action Needed

Employers need to keep apprised of developments to ensure they comply with the latest legal requirements and guidance.

Employer Risk

N/A

Link

Contact:

Marcello Floris
Executive Partner
+39 02 89 28 71
marcellofloris@eversheds-sutherland.it

Valentina Pomares
Executive Partner
+39 02 89 28 71
valentinapomares@eversheds-sutherland.it

Latvia

Implementation of EU Directives on predictable working conditions and work-life balance

Amendments to the Labour Law to implement the EU Directives on predictable working conditions and work-life balance have been adopted.

The amendments include:

  • the extension of maximum probationary period by collective labour agreements (it is possible to specify a probationary period of up to 6 months)
  • the introduction of flexible working if the work pattern is not fully (or mostly) predictable
  • a right of certain categories of employees to require an employer to make adjustments to working time
  • provision for information that must be provided to an employee in the case of official travel and work travel
  • a right to unpaid carers’ leave
  • a right of specific carers’ leave of 10 working days after the birth of a child.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should review and, where necessary update, relevant employment documents and internal policies and processes to comply with the new requirements.

Employer Risk

N/A

Link

Paternity leave and benefit

Amendments to the Law “On Maternity and Sickness Insurance” have been adopted in order to implement the EU Directive on work-life balance for parents and carers. The relevant changes also provide for updated paternity leave entitlements, as well as the payment of paternity allowance for 10 working days.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should review and, where necessary update, internal paternity policies and processes to comply with the new requirements.

Employer Risk

N/A

Link

Parental benefit

Amendments to the Law “On Maternity and Sickness Insurance” have also been adopted in order to implement the EU Directive on work-life balance for parents and carers as regards parental benefits.

The amendments include:

- a right of each child’s parent to a parental benefit period of at least two calendar months, which cannot be used by the other parent (“the non-transferable part”)

- a right to choose the total period for receiving a parental benefit for a child’s care, i.e., with the possibility to choose one of the following benefit periods:

  • 19 months, of which 15 months from the day of a child’s birth can be used until the day when a child reaches the age of one and a half, while the non-transferable part can be used by each parent until the day when a child reaches the age of eight
  • 13 months, of which 9 months from the day of a child’s birth can be used until the day when the child reaches the age of one, while the non-transferable part can be used by each parent until the day when a child reaches the age of eight

- if one of the parents has been granted a maternity benefit due to the birth of a child, the period of parental benefit (19 or 13 months) includes the period of maternity benefit payment.

In addition, for recipients of parental benefit who are employed and not on a childcare leave or earn income as a self-employed person, the benefit shall be paid at 50% (currently 30%) of the parental benefit amount granted to a benefit claimant who is on the childcare leave.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should review and, where necessary update, internal parental benefits policies to comply with the new requirements once in force.

Employer Risk

N/A

Link

Minimum wage

Amendments to the Transitional Provisions of the Labour Law regarding the minimum wage have been adopted. The changes provide for that, from 1 January 2023, a minimum wage for normal working hours will be EUR 620. From 1 January 2024, it will be EUR 700.

Impact Date

1 January 2023 (expected).

Employer Implications/Action Needed

No immediate actions required. When changes come into force, employers should ensure compliance with the new rates.

Employer Risk

N/A

Link

Contact:

Elīna Muciņa
Partner
+371 67 280 102
elina.mucina@eversheds-sutherland.lv

Lithuania

Additional leave for employees raising children

The Labor Code has been amended to extend current entitlements and provide for additional paid leave for employees with children. The duration of leave depends on the number of children and their age and health status. An employee with one child under 12 (who is not disabled) may take one additional day of paid leave per 3 months or have their working time shortened by 8 hours every 3 months. An employee with 3 or more children under 12 (who are not disabled) may take 2 additional paid days of leave per month or have their weekly working time shortened by 4 hours. An employee raising 2 children under 12, if at least one of the children is disabled, may take 2 additional paid leave days per month. Alternatively, such employee’s working hours may be shortened by 4 hours per week.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers will need to plan to accommodate employees' entitlement to additional leave.

Employer Risk

The employer's refusal to grant additional paid leave risks labor disputes. In addition, non-compliance may lead to an administrative penalty in the amount of 300 EUR to 1450 EUR according to the Code of Administrative Offences. A repeated breach carries a penalty between 1400 EUR and 3000 EUR. A deliberate breach carries a penalty between 2700 EUR and 6000 EUR.

Link

Violence and harassment prevention policy

An employer with an average number of employees of more than 50 must approve the violence and harassment prevention policy and publish and implement it in the usual way in the workplace.

Impact Date

1 November 2022

Employer Implications/Action Needed

To introduce the violence and harassment prevention policy, information and consultation must be completed in accordance with the procedures established by the Labor Code of the Republic of Lithuania. After the policy has been approved, employees must be familiarized with and sign acknowledgement of it.

Employer Risk

Non-compliance may lead to an administrative penalty in the amount of EUR 300 to EUR 1450 according to the Code of Administrative Offences. A repeated breach carries a penalty between EUR 1400 and EUR 3000. A deliberate breach carries a penalty between EUR 2700 and EUR 6000.

Link

Reduced working time standard for some employees in the public sector

A shorter working week is to be introduced next year for employees of various state and municipal institutions or establishments who are parents of very young children. Instead of a 40 hour working week, a reduced working week of 32 hours (i.e. a reduction of one day per week) will apply to these workers who are raising children younger than 3 years. Eligible employees will be paid their normal salary despite the reduction in hours. Only one parent may benefit from this change.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers will need to plan for employees working reduced hours and accommodate their entitlement to do so.

Employer Risk

From 1 January 2023, a public-sector employer's refusal to allow parental time off of one day per week risks labor disputes. In addition, non-compliance may lead to an administrative penalty of between EUR 300 and EUR 1450 according to the Code of Administrative Offences. A repeated breach carries a penalty between EUR 1400 and EUR 3000. A deliberate breach carries a penalty between EUR 2700 and EUR 6000.

Link

Contact:

Jonas Saladžius
Partner
T: +370 5 239 2391
jonas.saladzius@eversheds.lt

Netherlands

EU Transparent and Predictable Working Conditions Directive

Legislation implementing the Transparent and Predictable Working Conditions Directive came into force on 1 August 2022.

The most relevant changes include (but are not limited to):

  • employers are no longer be permitted to recover the costs of compulsory education or training from employees and any time spent on such education or training is considered working time
  • any contractual clause which purports to prohibit or restrict employees from performing work for other companies outside their working hours is null and void, unless there is objective justification
  • employers are obliged to provide information to employees (in writing) about an extended list of key terms and conditions of employment
  • prior to any posting of employees from the Netherlands to another EU-country, employers must provide information on the wages, allowances and any arrangements for reimbursements of travel, accommodation and/or meals
  • after 26 weeks of employment, employees will be entitled to make a request (in writing) for their employer to provide more predictable and secure working conditions, insofar as these already apply to other employees within the company. Failure to respond in a timely manner will respond in the request having been considered granted by the employer.

Impact Date

1 August 2022

Employer Implications/Action Needed

Employers should ensure their template employment agreements and other relevant documents reflect these changes, along with their employment practices. for example, by reviewing which education is ‘compulsory’, when and how to respond to request for more predictable and secure working conditions or a request to perform side activities, etc.

Employer Risk

Failure to comply with these new requirements may lead to challenge and/or claims from employees, depending on the specific rule that has been breached. Further, the new legislation provides protection against detriment or dismissal for employees invoking their rights.

Link

Parental leave rights

The Paid Parental Leave Act (“the Act”) has increased parental benefit payments during parental leave to at least 70% of statutory maximum salary (instead of the previous 50%), as administered by the Employee Insurance Agency. Employees are entitled to this benefit for a period of up to 9 times their weekly working hours, which must be taken before the child reaches the age of 1.

Impact Date

2 August 2022

Employer Implications/Action Needed

Employers should ensure they have been applying the amended benefit percentage. In addition, employers should ensure their internal policies for parental leave reflect the new legislation. HR departments should note that requests for parental leave benefit may need to be submitted to the Employee Insurance Agency by employers, after at least one week of leave has been taken.

Employer Risk

Failure by employers to grant parental leave and/or request paid parental leave benefits on behalf of and at the request of employees risks legal claims from employees as well as reputational damage.

Link

Obligation to pay fixed compensation in case of TUPE (case law)

An employee resigned, having refused to transfer to the acquiring company on the transfer of undertaking (TUPE) on the basis that doing so entailed a substantial, detrimental change to their employment terms (a change of place of work to Germany).

The Court of Appeal ruled that the employee was entitled to compensation because the employer (transferor) wrongfully failed to observe a notice period in the context of TUPE. The Court considered that, in the event an employee is faced with such adverse consequences of transfer resulting in them terminating their employment, the employee is entitled to the statutory severance payment under Dutch law but also to additional compensation related to the termination of their employment contract. This may include the fixed compensation where an employer terminates the employment contract without observing the notice period applicable to the employee.

Impact Date

15 September 2022

Employer Implications/Action Needed

When conducting a business transfer likely to entail substantial, detrimental changes to the employment conditions of affected employees, employers should be aware that failing to apply the applicable notice period may lead to fixed compensation. Employers may want to consider applying a notional notice period when determining the timeline of a TUPE, to mitigate the possibility of liability for such additional compensation.

Employer Risk

Failing to consider the notice period in the context of a TUPE transfer involving substantial changes in employment terms which lead to employee resignation may result in an obligation to pay a fixed compensation equal to the salary over the applicable notice period.

Link

Implementation EU Whistleblowing Directive (“WBD”)

Legislation is expected shortly which will implement the WBD.

Once in force it will provide:

  • protection for all persons in a work-related relationship
  • a requirement for employers to have internal whistleblowers procedures
  • additional requirements for internal and external reporting channels and procedures, including timeframes
  • more robust confidentiality requirements
  • there will be no requirement to first report a suspicion of a wrongdoing internally before reporting it externally
  • a reversal of the burden of proof for demonstrating detriment as a result of the disclosure.

Impact Date

Expected by the end of 2022.

Employer Implications/Action Needed

Once the legislative proposal is adopted, employers should (i) amend their whistleblower procedure and related practices, taking into account the new legislation and (ii) appoint an independent officer to whom the (suspicions of) wrongdoing or infringements of EU law can be reported.

Employer Risk

Employers that breach the obligation to keep the identity of employees who raise a concern confidential risk criminal prosecution and fines of up to EUR 21,750. In addition, if an employer deliberately provides false information about an employee and publishes the information, it also risks criminal prosecution and fines of up to EUR 21,750.

Link

Dutch Pension Act (“Wet Toekomst Pensioenen”)

The Future Pensions Act (in Dutch: Wet Toekomst Pensioenen, “Wtp”) will amend current pension provision over several years, impacting current employer agreements and pension schemes. In particular, the Wtp will ban defined benefit agreements, making defined contribution agreements the standard pension provision.

Impact Date

Between 1 January 2023 - 1 January 2027.

Employer Implications/Action Needed

Employers should review their pension schemes and bring them into line with future pension legislation, allowing time for due consideration of potential complexities and the discharge of consultation obligations, if any.

Employer Risk

Current pension schemes may be rendered unlawful. Pension administrators may terminate administration agreements if the deadline of 1 January 2027 is not met but, furthermore, if the pension scheme does not comply with tax law from 1 January 2027, a penalty clause will come into effect.

Link

Increase statutory minimum wage

As part of the Dutch governments’ Budget Plan for 2023, it was announced that the Government intends to increase the statutory minimum wage by 10.15% as of 1 January 2023 (the regular six-monthly indexation plus a special increase of 8.05%). As a result of this increase, the statutory minimum wage will be EUR 1,934.40 per month. The Government has confirmed that the increase of the statutory minimum wage will lead to an increase of all benefits linked to the minimum wage, such as state pension (AOW).

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should (i) ensure that their employees receive at least the statutory minimum wage and (ii) check whether salary levels required for certain exceptions (e.g. including holiday allowance in salary if salary equals 3x minimum wage) are still being met.

Employer Risk

Failing to pay the statutory minimum wage may result in wage claims (including the statutory increase of 50%) from employees and fines from the Netherlands Labour Authority of between EUR 500 and EUR 10,000 per employee. Additionally, this may have a negative effect on an employer’s reputation.

Links

Increased minimum wage/maximum daily wage rates and statutory severance

The minimum wage for employees aged 21 and over will be increased from €1,725.00 to €1,934.40 gross per month, excluding the 8% statutory holiday allowance, based on fulltime employment. The maximum daily wage will be increased from €232.90 to €256.54. The cap on the statutory severance payment will be increased from €86,000 gross to €89,000 gross. The exception which entitles employees to one annual salary if this amount exceeds €89,000 gross will remain applicable.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers shall (i) ensure that its employees receive at least the statutory minimum wage and (ii) check whether salary levels required for certain exceptions (e.g. including holiday allowance in salary if salary equals 3x minimum wage) are still being met, (iii) observe the maximum daily wage (e.g. re sick pay) and (iv) observe the maximum severance payment in case of termination.

Employer Risk

Failing to pay the statutory minimum wage may result in wage claims (including the statutory increase of 50%) from employees and fines from the Inspectorate SZW between €500 and €10,000 per employee. Additionally, this may have a negative effect on an employer’s public image.

Link

  • N/A
Increase tax free travel allowance

The Government has announced that it intends to increase the tax free allowance that employers can provide to employees to cover travel expenses from the current amount of EUR 0.19 per kilometre to EUR 0.21 per kilometre as of 1 January 2023 and EUR 0.22 as of 1 January 2024.

Provided the Dutch government proceeds with this proposal were an employer to pay travel expenses at a rate which is higher than EUR 0.21 per kilometre, the excess amount will be considered as remuneration and will therefore be taxed.

Impact Date

1 January 2023 and 1 January 2024.

Employer Implications/Action Needed

Employers should review whether their (template) employment agreements contain a reference to the statutory maximum tax-free allowance. If so, or if an applicable collective labour agreement states so, the maximum tax-free travel allowance must be increased to EUR 0.21 per kilometre.

Employer Risk

Failing to offer the higher travel allowance, if required to do so, could result in salary claims from employees.

Link

  • N/A
Proposed legislation on hybrid working

The Dutch House of Representatives has adopted a revised version of the so-called ‘Work where you want’ Act on hybrid working. The most recent version of the legislative proposal would revise the Flexible Working Act, which provides a right of request only for employees to request a flexible working arrangement. The proposal would place an obligation upon the employer to consider a request for remote working from a home address within the European Union, or from another office/premises of the employing entity, based on reasonableness and fairness, as determined by the specific circumstances. It is still unclear if and when this legislation will come into force, as the legislative proposal must first be adopted by the Senate.

Impact Date

Unknown at this time.

Employer Implications/Action Needed

Should the revised legislation be implemented, employers will need to ensure that their reasons for refusing a hybrid working request from an employee are in accordance with the new legislation. Should employers consider implementing a form of hybrid working within their organization, then it is advised to do so on the basis of a hybrid working policy (which may require works council consent, if applicable).

Employer Risk

Employers must ensure that they adhere to current requirements by responding within one month of receiving the request in order to prevent that the request is deemed granted by the employer.

Link

Contact:

Wijnand Blom
Partner
+31 20 56 00 608
wijnandblom@eversheds-sutherland.com

Marieke Koster
Partner
+31 10 24 88 057
mariekekoster@eversheds-sutherland.com

Anique Bitterlich-Straver
Partner
+31 10 24 88 049
aniquebitterlich@eversheds-sutherland.com

Norway

Proposal on Norwegian wages and working conditions in Norwegian waters and on the Norwegian shelf

The Ministry proposes to introduce a law that ships in Norwegian waters and ships that provide maritime services on the Norwegian shelf and in the Norwegian economic zone, shall be subject to Norwegian wages and working conditions. The purpose of the proposal is to protect employees, prevent social dumping and counteract low-wage competition.

Impact Date

Not yet known (deadline for comments closed on 31 August 2022).

Employer Implications/Action Needed

If implemented, employers will be obliged to offer minimum Norwegian wages and working conditions.

Employer Risk

Potentially increased costs for employers.

Link

Proposal on stricter requirements regarding the content of employment agreements etc.

The Ministry proposes to implement the EU Directive on transparent and predictable working conditions. This means that employment agreements, in addition to the requirements of sections 14-6 and 14-7 of the Norwegian Working Environment Act (WEA), must state the:

  • identity of the hiring business
  • right to skills development
  • extent of paid absence
  • procedure for termination of employment
  • applicable social security schemes.

The Ministry also proposes to shorten the deadline by which the employer must provide an employee with an employment agreement from one month to seven days from commencement of employment.

Other proposals include:

  • A right to request a type of employment with more predictable and safe working conditions for employees who have been employed temporarily or part-time for more than six months and who have completed any period of probation. In such cases, the employer must give the employee a written and reasoned answer within one month of the request.
  • A rule of presumption and burden of proof. In case the employer has not stated that the employment relationship is temporary, it will be assumed that the employee is permanently employed.

Impact Date

Not yet known (deadline for comments closed on 20 October 2022).

Employer Implications/Action Needed

Employers will have to update their existing employment contracts to reflect these changes.

Employer Risk

If not communicated clearly, employers may find that an employment relationship they considered to be temporary may be deemed permanent.

Link

  • N/A
Proposal on exceptions to the hiring rules

The Ministry proposes a relaxation of recruitment requirements for temporary hires in the health and care services sector where this is justified by need (to ensure proper operation of the services) and the work is of a temporary nature). The Ministry also proposes an exception for hiring advisers and consultants with special expertise in cases of a clearly defined project. For both the exceptions, the Ministry proposes that at the request of an employee representative, employers are obliged to document the basis for hiring.

Impact Date

Not yet known (deadline for comments closes on 22 November 2022).

Employer Implications/Action Needed

The introduction of the condition," to ensure proper operation" of the services imposes stricter requirements on employers to properly appraise their hiring needs. Also, a requirement for "special expertise" will significantly reduce the potential for hiring advisers and consultants. Hiring can only take place on the basis of the nature of the work and not to remedy work peaks that are within the company's ordinary operations, even if the need is temporary.

Employer Risk

N/A

Link

Contacts:

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

Martin Haukland
Senior Lawyer
T: +47 414 61 776
m.haukland@haavind.no

Poland

Transparent and predictable working conditions and work-life balance for parents and carers

The Government has proposed draft legislation which would amend the Labor Code to implement the EU Transparent and predictable working conditions Directive and Work-life balance for parents and carers Directive.

The draft provisions include:

  • An extension of the scope of required information regarding the terms of employment, including information on training provided by the employer and the paid leave to which an employee is entitled
  • An obligation to state the reason for the termination of fixed-term employment contracts
  • Additional conditions for employment contracts with a trial period
  • For employees working for at least 6 months, the right to apply for more predictable work or safer working conditions and to receive a written reply to this application, with reasons, within one month of receipt
  • The right to free training necessary for the performance of a specific job
  • An extension of parental leave
  • Additional unpaid carer's leave
  • Extended use of flexible work.

Impact Date

Expected in Q4 2022.

Employer Implications/Action Needed

Employers should monitor the progress of the draft legislation as contractual and policy changes will be needed once the provisions are implemented.

Employer Risk

N/A

Links

Whistleblowing

The Government has published a draft Bill which aims to implement the EU Whistleblowing Directive. The Bill sets out obligations for employers to establish internal procedures for reporting breaches as well as providing protection from retaliation.

Impact Date

Expected in Q4 2022.

Employer Implications/Action Needed

The Bill may change further during the legislative process, but employers should assess their current reporting processes, based on the draft, to understand potential shortcomings and remedial action that may be needed pending final legislation.

Employer Risk

At this stage pending the final version of the legislation, the risks associated with any breach of the new law are uncertain. However, based on the draft Bill, it is currently expected that criminal sanctions will apply in the event of any failure to establish internal reporting channels.

Links

Adoption of the provisions on the remote work into the Labor Code

The lower chamber of Polish parliament has passed an Act amending the Labor Code which introduces permanent provisions for remote working. These provisions aim to replace the telework provisions.

According to the current version of the Bill, permanent or hybrid remote working will be possible by agreement between the employer and employee (in some limited cases, employers will be allowed to unilaterally require employees to work remotely). The Bill also provides exceptions when the employer will be obliged to accept an employee’s request for remote work (e.g. in case of pregnancy or childcare). The costs relating to remote work must be borne by the employer.

The Act was passed to the Senate and will enter into force after two months from its publications.

Impact Date

Expected in Q1 2023.

Employer Implications/Action Needed

Once in force, employers will be required to conclude agreements with any employees who perform work remotely, provide the necessary working tools (or an equivalent) as well as develop appropriate procedures for remote work and reimbursement of the related costs.

Employer Risk

N/A

Link

Sobriety checks by employers

The lower chamber of Polish parliament has passed an Act amending the Labor Code which introduces provisions to allow employers to check employees and civil law contractors for the presence of alcohol or intoxicating substances. Such checks must be conducted in a non-invasive manner and will be possible only for the purpose of ensuring the protection of the life and health of employees and other persons or the protection of property.

The Act was passed to the Senate and will enter into force after 14 days from its publications.

Impact Date

Expected in Q1 2023.

Employer Implications/Action Needed

If the law is passed and employers wish to consider using sobriety checks, employers should first establish whether conducting checks is required to ensure the protection of the life and health of employees and other persons or the protection of property. If it is, the adoption of relevant procedures and policies is recommended.

Employer Risk

N/A

Link

Collective labor disputes

The Government has published objectives of a new draft Bill on collective labor disputes. Current legal provision has remained unchanged for over 30 years. The planned regulations aim to limit the rights of the trade unions.

The objectives address the issues such as:

  • extending the scope of the dispute to all matters relating to employment
  • introducing joint union representation and the obligation to form a coalition in the event of a dispute
  • limiting the duration of a collective dispute to 9 months, with the possibility of a 3-month extension
  • the possibility of initiating mediation before the start of negotiations
  • introducing judicial review of the legality of the strike referendum.

Impact Date

The Bill is planned to be introduced by the end of 2022.

Employer Implications/Action Needed

Employers should monitor the progress of the draft legislation.

Employer Risk

N/A

Link

Planned amendments to the regulations on employing foreign citizens

The Government plans to implement a new legislation regarding the employment of foreign workers. Its provisions will largely reflect current legislation, but proposed changes include:

  • the removal of the labor market test duty and
  • scrapping the paperwork permit process and shifting to an online work permit process only.

The Bill slightly modifies the criteria for issuing work permits and enhances and improves co-operation between national institutions responsible for immigration, employment and social insurance to effectively control the legality of foreigners’ residence and work.

Impact Date

Not available as the Bill is in early legislative stage.

Employer Implications/Action Needed

Employers should follow the progress of any new regulations concerning the employment of foreign employees so that they are prepared for future changes to the work permit process and requirements and verification of the right to stay in Poland.

Employer Risk

The Bill in principle retains the current sanctions for the illegal employment of foreign employees – breach of the requirements risks a fine up to PLN 30,000 (approx. EUR 6,200).

Link

Contact:

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

Portugal

Legal regime for the entry, permanence, exit and departure of foreigners from the national territory.

The legal regime for entry, permanent stay, exit and departure of foreign citizens from the national territory has been amended.

Impact Date

26 August 2022 and 30 October 2022.

Employer Implications/Action Needed

Employers who employ foreign citizens should note the changes to the legal regime.

Employer Risk

N/A

Links

Exceptional measures to support families

The Portuguese government has established exceptional measures to support families in order to mitigate the effects of inflation (Decree-Law no. 57-C/2022). Such measures include support for income and social benefit holders to compensate the prices increase, in the amount of EUR 125 (Ordinance no. 244 - A/2022).

Impact Date

7 September 2022 (Decree-Law no. 57-C/2022) and 27 September 2022 (Ordinance no. 244-A/2022).

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Links

Digital + Employment 2025

The Portuguese Government has created the second phase of the "Employment + Digital 2025" Program – a professional training program in the digital arena. The strategic objective of the Program is training and re-qualification in digital skills for employees, managers and directors of companies and social economy entities. The aim is to respond to the challenges and opportunities for various business sectors strongly impacted by digital advances so they may promote their digital transformation, improve productivity and competitiveness and the country's economy, as well as improve individual skills and qualifications, including the training of trainers.

Impact Date

28 September 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

End of the Pandemic alert situation for COVID-19

The Pandemic alert situation has ended in Portugal. The Portuguese Government has decided to:

  • revoke the legislation published in response to COVID-19 (Decree-Law no. 66-A/2022)
  • revoke the resolutions of the Council of Ministers resolutions regarding COVID-19 (Council of Ministers' resolution no. 96/2022).

Impact Date

1 October 2022 (Decree-Law no. 66-A/2022); 25 October 2022 (Council of Ministers' resolution no. 96/2022).

Employer Implications/Action Needed

Employers should review and update any existing leave policies and procedures to ensure compliance with the changes.

Employer Risk

N/A

Links

Meal allowances forCivil Servants and Public Administration employees

The daily amount of the meal allowance for civil servants and Public Administration employees has been increased to €5,20.

Impact Date

1 October 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Technological Specialization Courses

A new Ordinance has established the conditions for the operation of technological specialization courses, as well as the model and conditions for issuing the respective certificates and diploma.

Impact Date

18 October 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Contact:

Inês Albuquerque e Castro
Sócia / Partner
T: + 351 213 587 587
IACastro@eversheds-sutherland.net

Romania

Paternity leave entitlement

Paternity leave entitlement has been extended to 10 working days (previously 5 days). Fathers under military service are also granted the same 10 working days entitlement.

In cases where the father follows a childcare course, the duration of the leave will be extended by 5 additional days (previously 10 days). Such extension will be applicable to every new-born child.

Employers are prohibited from terminating employment during a father’s paternity leave.

Impact Date

29 August 2022

Employer Implications/Action Needed

Employers should review paternity leave policies to identify where changes may need to be made. Employers are required to inform employees of the current paternity leave entitlement.

Employer Risk

Potential exposure to fines for the non-observance of the paternity leave obligations. For example, for non-observance of the obligations to grant paternity leave and to inform employees of their entitlement, the employer may be subject to fines amounting to between RON 4,000 and RON 8,000 (approx. EUR 821 – EUR 1,644).

Link

  • N/A
Internal regulation exemption for micro enterprises

Micro enterprises (i.e. legal entities with up to 9 employees) were previously exempted from the obligation to have an internal regulation, or to have job descriptions in place for their employees. This exemption has now been withdrawn.

Impact Date

3 October 2022

Employer Implications/Action Needed

Micro enterprises should put in place an internal regulation and job descriptions for all employees.

Employer Risk

Failure to comply may be sanctioned with administrative fines.

Link

  • N/A
Amendments to the labor law

Amendments have been made to the Romanian Labor Code, which implement EU Directives and aim to increase the protection of certain categories of employees and improve employees’ visibility regarding information related to their employment.

The changes include:

  • Scope of applicability of Romanian Labor Code: extended to also include any employed individuals who are based outside of Romania, but who perform activity for an employer based in Romania
  • Anti-harassment legislation: extended definition of victimization to also include any adverse treatment in response to a complaint submitted to the competent bodies or a court claim regarding the breach of legal rights (in addition to any breach of the principle of equal treatment or non-discrimination)
  • Pre-contractual information obligation: updated list of essential elements which future employees must be informed about prior to signing of an employment agreement, including: for employees performing activities in different working places, information on whether the travel between the different working places is covered/reimbursed by the employer; the individual elements that form the salary and the method of payment; the conditions under which overtime will be performed and compensated/paid and, if relevant, the manner in which shifts will be organized; the conditions applicable to the probation period, if applicable; the right to and conditions of professional training provided by the employer; as applicable, the payment of private medical insurance, additional contributions by the employer to the voluntary pension or occupational pension of the employee, as well as the granting of any other discretionary benefits be the employer and any conditions
  • Probation period: an employee may not be subjected to a new probationary period if, within a period of 12 months, a new individual employment agreement is concluded for the same function and with the same attributions. An employee who has completed a probation period and has a seniority the employer of at least 6 months may request to be moved to a vacant position that provides for more favorable conditions. The employer must reply, with reasons, in writing within 30 days of receiving the request
  • Multiple employment: employees may work for the same employer or for different employers under different individual labor agreements subject to the working schedules not overlapping
  • Protection against dismissal: the new law extends the circumstances in which dismissal is prohibited
  • Working time: new rules around working schedules include an obligation on employers to respond in writing, with reasons, to any request for an individualized working program within 5 working days of the request
  • New types of leave: carers leave (up to 5 working days per calendar year for employees who are a caregiver to family members or individuals cohabitating with the employee and which need significant assistance following a severe medical problem); special absence from work (up to 10 working days per calendar year /year for family emergencies (due to accident or disease)), subject to conditions
  • Internal Regulation: additional content requirements to include the notice period and the general policy regarding professional training. The Internal Regulation must be communicated on the first day of work.

Impact Date

22 October 2022

Employer Implications/Action Needed

Employers should review and, where applicable, amend individual labor agreements, the Internal Regulation and leave policies and procedures to ensure that they are compliant with the amended law.

Employer Risk

The employer may be subject to fines for breach of the law.

Link

  • N/A
Retention periods for tax and social contributions documentation

A change to the retention period of tax and social contributions documentation will come into force from January 2023. As a result, payroll information upon which the employer relies for withholding tax and per income beneficiaries or for declaring its compliance with social contributions, income tax and recording of insured persons to the relevant fiscal authorities, will need to be retained for 5 years. This is a legal exception to the rule which provides that payroll statements must be retained for 50 years.

Impact Date

1 January 2023

Employer Implications/Action Needed

N/A

Employer Risk

Exposure to fines amounting to between RON 300 – RON 4,000 (approx. EUR 60 – EUR 810).

Link

  • N/A
General Registry of Employees

The Government has approved the procedure through which active employees and former employees can access the data available in the general registry of employees. Employees will be able to contact the labour authorities in order to be provided with a username and corresponding password for accessing the online registry.

Impact Date

31 December 2024 (deadline for the online system being operational).

Employer Implications/Action Needed

No action needed.

Employer Risk

N/A

Link

  • N/A
EU Directive on Whistleblowing

A draft law has been published to implement the Whistleblowing Directive into Romanian law. Public authorities and institutions, as well legal private entities with at least 50 employees, will be required to identify or establish internal reporting channels for whistleblowing, set up internal reporting procedures and carry out appropriate follow-up actions. Private legal entities with 50 to 249 employees may use and/or share common resources for receiving reports.

The draft law includes the following requirements:

  • internal reporting channels must be made available for employees (including job applicants, current or former employees), but also for independent contractors and employees of suppliers who, in the performance of their duties, obtain information regarding breaches
  • companies must keep records of any reports received for 5 years
  • employees (except for those knowingly reporting false breaches) will be protected against retaliation
  • the rights under the law cannot be waived.

All companies with 250 employees or more will be required to immediately comply once the law comes into force, although companies with 50 to 249 employees are granted a transition period to 17 December 2023.

Impact Date

Implementation is awaited, pending Presidential approval.

Employer Implications/Action Needed

Employers should monitor the progress of the draft law. Employers with an existing protected disclosures policy should examine their procedures to ensure compliance with the anticipated changes.

Employer Risk

Non-compliance of the provisions of the law will risk civil, disciplinary, misdemeanour or criminal liability.

Links

New types of individual employment agreement

A draft law has proposed two new types of individual employment agreement:

  • “At request” agreements: where, for specific types of work, the employee provides their services at the employer’s request, on the days and basis determined by the employer. The employee would need to be paid salary corresponding to at least 32 working hours per month. This type of individual employment agreement would only be available to those working in: agriculture, hunting (and related areas), the organizing of exhibitions, fairs and congresses, publicity and other leisure activities
  • Individual employment agreements with several employers: this type of agreement would only be available to employers within the same group of companies. The employee would be able to perform work for several employers, carrying out the same type of activity and duties.

Impact Date

Awaited, pending procedure.

Employer Implications/Action Needed

No action needed.

Employer Risk

N/A

Link

Parental leave and childcare leave procedure

Certain amendments are proposed to the process for taking parental and childcare leave, including:

  • the parental leave period for the parent who did not request the parental leave is prolonged to two months (the current legislation provides one month)
  • employees must give notice to the employer within 30 days prior to the end of the maternity leave period of any intention to exercise the right of parental leave, by notifying the employer in writing by letter and setting out the period of the parental leave
  • the period of the parental leave is established by reference to the letter sent by the employee to the employer which includes the above notice provisions.

Impact Date

Awaited, pending procedure.

Employer Implications/Action Needed

Employers should review and where necessary update their parental leave internal policies to take account of the changes once in force.

Employer Risk

The employer may be sanctioned for failing to provide the employees with their legal rights.

Link

New regulations for workers with disabilities

A law project has been proposed by the Romanian Ministry of Labour and Social Protection with respect to the working schedule of people with disabilities.

Currently, the law includes provision for the possibility of workers with disabilities to work reduced hours (less than 8 hours per day) without a reduction of salary rights. The draft law seeks to regulate the right of disabled employees to receive full salary, including a requirement for proof of disability and a medical recommendation to work reduced hours. Working hours may be reduced by a maximum of 4 hours in case of severe disability or by a maximum of 2 hours in case of pronounced disability.

Impact Date

Awaited, pending procedure.

Employer Implications/Action Needed

Employers should monitor the progress of the proposed law project. Policies and processes may need to be updated to allow for proof of disability and a doctor’s recommendation to be provided.

Employer Risk

N/A

Link

Contact:

Camelia Meirosu
Associate
T: +40 21 311 2561
CameliaMeirosu@eversheds.ro

Slovakia

Employment of Ukrainian nationals

Ukrainian nationals may apply for temporary protection which, if granted, permits them to work in Slovakia under simplified conditions. The temporary protection for the period from 1 March 2022 to 4 March 2023 applies to citizens of Ukraine and their family members (spouse of a Ukrainian citizen/minor child of the Ukrainian citizen or spouse of the Ukrainian citizen/parent of the minor child who is a Ukrainian citizen/another close relative who is dependent on and has lived with the Ukrainian citizen) if the family was residing in Ukraine before 24 February 2022. Temporary protection also applies to foreigners who are not citizens of Ukraine (and their family members) who had international protection or equivalent national protection granted in the territory of Ukraine before 24 February 2022.

Where temporary protection is granted, the individual is issued with a document confirming the temporary protection in the territory of the Slovak Republic.

Impact Date

1 March 2022 – 4 March 2023.

Employer Implications/Action Needed

No action is needed. However, employers should note the possibility of employing Ukrainian nationals under simplified conditions.

Employer Risk

N/A

Link

Electronic medical confirmation regarding incapacity for work

Doctors are now allowed to confirm the temporary incapacity of employees in electronic form, replacing the currently used 5-part form. The National Centre for Health Information will ensure the transfer of data from the doctor to the information system of the Social Insurance Agency, which will be automatically sent to the employer.

To facilitate the transitional period, a dual system of temporary incapacity for work will be in place: a paper and electronic form of temporary incapacity certificate will apply at the same time until 31 March 2023.

Impact Date


  • 1 June 2022 – 31 March 2023 (transition period - both electronic and paper form possible); 1 April 2023 (only electronic form).

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Labour Code amendment

EU directives have been transposed, namely the Directive on transparent and predictable working conditions and the Directive on work-life balance for parents and carers. The amendments include:

• Start and progress of the employment relationship:

  • modification of the essential elements of the employment contract
  • obligation to notify to the terms and conditions of employment (certain terms must be notified within 7 days of the commencement of the employment relationship, others must be notified within 4 weeks of commencement)
  • certain information can be provided electronically, subject to conditions and
  • a right for parents to apply for homeworking/teleworking/home office, with a requirement for any refusal to be justified.

• Agreements for work performed outside the employment relationship:

  • obligation to notify the days and times when the work may be required and the notice prior to its commencement, as well as any change to this information
  • if the employer cancels the work within a period of less than 24 hours, the employee is entitled to a payment of at least 30% of the remuneration the employee would have received if the work had been carried out.

• Other:

  • introduction of paternity leave and the equation of this with maternity leave in certain respects, including termination of employment and return to work
  • deduction of relevant amounts for meal allowances (meal voucher) or for the settlement of a financial allowance for meals on the basis of a statutory provision
  • further regulation of the method of informing employees about the activities of trade unions.

Impact Date

1 November 2022

Employer Implications/Action Needed

Employers must comply with the new information obligations, as well as adhering to the new rights of employees.

Employer Risk

The Labour Inspectorate may impose a fine of up to EUR 100,000 on employers who breach the obligations arising from labour law regulations.

Link

Employer contribution to state-supported housing

Employers may provide a voluntary financial contribution of up to €4 per m² (up to a maximum of €360 per calendar month) to employees who are tenants of state-assisted housing. The contribution amount is pro-rated for part-time employees and for employees who have entered into an employment relationship part-way through a calendar month. If an employee is consecutively employed by more than one employer, the employee may apply to only one of the employers for the financial contribution each calendar month.

Impact Date

1 January 2023

Employer Implications/Action Needed

No action is needed. However, employers should note the possibility of the provision of a contribution to a state-assisted housing for their employees.

Employer Risk

N/A

Link

Agreement on work activity for the performance of seasonal work

An amendment to the Labor Code will provide an exception that allows for the performance of seasonal work, if the type of work is defined in Annex 1b of the Labor Code (for example, work in agriculture in the growing, harvesting, grading and storage of selected agricultural products, as well as work in the food industry in the processing of these agricultural products; selected work in tourism; and selected work in forestry). An agreement for the performance of seasonal work is subject to a maximum period of 8 months, during which employees may carry out work activities for a maximum of 520 hours per year. Multiple employment agreements for the performance of seasonal work with the same employer count towards the maximum hours limit.

Impact Date

1 January 2023

Employer Implications/Action Needed

No action is needed. However, employers should note the possibility of entering into arrangements for the performance of seasonal work.

Employer Risk

N/A

Link

Minimum wage increase

From 1 January 2023, the monthly minimum wage will increase from EUR 646 to EUR 700. The basic hourly minimum wage will increase from EUR 3.713 to EUR 4.023 for a 40-hour week.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers must ensure that employees are paid at least the minimum wage.

Employer Risk

The Labour Inspectorate may impose a fine of up to EUR 100,000 on employers who breach the obligations arising from labour law regulations.

Link

  • N/A

Contact:

Jana Sapáková
Attorney
T: 421 2 3278 6411
jana.sapakova@eversheds-sutherland.sk

Spain

Equal Treatment and Non-discrimination

A new law establishes new unlawful discrimination grounds. In particular, it includes illness or health conditions, serological status and/or genetic predisposition to suffer from pathologies and disorders.

Impact Date

14 July 2022

Employer Implications/Action Needed

Any provision or act that “constitute or cause discrimination” will be considered null and void.

Employer Risk

Where discrimination is found, the employer will have to pay compensation for moral damage and restore the victim to the situation prior to the discriminatory incident, where possible.

Link

Trainee Statute

A new Trainee Statute will regulate aspects of the appointment of trainees, including:

  • the remuneration of trainees;
  • the appointment of a mentor;
  • the limitation of the number of trainees; and
  • other employment rights (holidays, breaks, unemployment benefit).

Impact Date

Awaited

Employer Implications/Action Needed

Employers should monitor the progress of the legislation. An announcement of the implementation dates for the reform is currently awaited. Once the final text is approved before the parliamentary process, employers that appoint trainees may need to update polices, procedures and terms to ensure compliance.

Employer Risk

N/A

Link

  • N/A
Publication of the Spanish draft Whistleblowing Bill

A Draft Bill, transposing the EU Whistleblowing Directive into Spanish law, has been published in the Bulletin of the Congress of Deputies (Boletín del Congreso de los Diputados).

Impact Date

September 2022 (Publication); implementation expected by 1 December 2023.

Employer Implications/Action Needed

The Draft Bill may be subject to multiple modifications until it is passed as a Law. Employers should therefore monitor the progress of the Draft Bill.

Employer Risk

The implementation of the Directive into Spanish law will make it more important than ever for in-scope employers to have set up effective, well-organized and trusted whistleblowing procedures, to have conducted a gap analysis of existing policies against the draft legislation and to have trained their staff.

Links

Contact:

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

Sweden

New rules for work permits in Sweden

The new rules for work permits in Sweden are part of several upcoming proposals for changes to the regulations that cover labour immigration. Among other things, the rules that came into force on 1 June 2022 mean that:

  • An employment contract is required to obtain a work permit (previously, an offer of employment was sufficient). However, some exceptions apply to, for example, researchers, seasonal workers and au pairs.
  • A support requirement has been introduced for those workers who want to bring their family to Sweden. An employee must be able to support any family members who want to come to Sweden. This means that the individual’s income must be sufficient to cover the entire household’s housing and living expenses. The requirement applies as from the first time family members apply for a residence permit, not in the event of an extension.
  • A new residence permit has been introduced for highly qualified people who want to come to Sweden to look for work or explore the conditions for starting their own business here. Such residence permit may be granted for a minimum of three months and a maximum of nine months. To be granted the permit, the individual needs to have enough money to support themself while in Sweden and to pay for their trip home, as well as holding a comprehensive health insurance.
  • It is now possible to apply for an extended work permit multiple times, for two years at a time. Previously, the limit for work permits was four years.
  • An obligation has been introduced requiring employers to report changed conditions for the employee, along with a penalty for breaching this reporting obligation. If the working conditions for a job change to the worse, the employer now has an obligation to report this to the Swedish Migration Agency. An employer who does not report changes in working conditions may be subject to a fine. The Swedish Migration Agency will also carry out more follow-up checks than in the past, to ensure that the agreed working conditions are met.
  • Workers will no longer be deported due to minor mistakes or deviations during their period of employment. A permit also will not be revoked if it can be regarded as unreasonable to do so.
  • A new entry visa known as a D-visa has been introduced. The entry visa makes it possible for a person who has applied for an extension to their residence permit to go on a business trip outside Sweden during the processing time. A D-visa can only be issued for a business trip, not for travel for other reasons. Family members cannot apply for a D-visa to accompany the employee on a business trip.

Impact Date

1 June 2022

Employer Implications/Action Needed

Unless exceptions apply, employers must ensure that an employment contract is prepared for an employee that needs to obtain a work permit in Sweden.

Employer Risk

An employer who does not report changes in working conditions for an employee with a work permit in Sweden may be subject to a fine by the Swedish Migration Agency.

Link

Implementation of the Work-Life Balance Directive

The EU Directive on work-life balance for parents and carers has been implemented. The implementation of the Directive into Swedish law has primarily been made through changes in the Swedish Parental Leave Act (Sw: Föräldraledighetslagen). The changes include a right for employees with children under the age of eight to request flexible working arrangements for the purpose of providing childcare. Flexible working arrangements are defined as changes to the original work pattern, such as remote working, flexible or a reduction in working hours, or part-time work. The changes also include protection against work-related retaliations and other forms of discrimination by employers due to employees requesting flexible working arrangements.

Employers must, within a reasonable period of time, reply to a request for flexible working arrangements if the individual has been employed for at least six months at the time of the request. An employer must be able to justify a decision to reject or postpone a request.

Impact Date

2 August 2022

Employer Implications/Action Needed

A decision to reject or postpone a request for flexible working arrangements should be documented in writing. It should be noted however that employers are under no legal obligation to grant a request.

Employer Risk

Retaliation or other forms of discrimination against employees who have requested flexible working arrangements can result in damages.

Link

Changes in the Employment Protection Act

Changes to the Employment Protection Act (EPA) include important clarifications on what constitute objective grounds for dismissal. The two legal grounds are still either redundancy or personal reasons, but there are clarifications around what circumstances should be taken into account. In addition, employees will no longer have a right to remain in employment during court proceedings regarding invalidation of a dismissal (the previous rule being that employees have a right to remain in employment, except in cases of summary dismissal).

All employers, irrespective of the number of employees, will now be able to exempt three employees from the last-in first-out list in redundancy situations (previously, employers with up to 10 employees could exempt two employees from the last-in first-out list). In addition, if an employer reorganizes the business so that employees with the same work duties are given shorter working hours (e.g. in cases where the employer wants to avoid a redundancy situation), the employer will need to adhere to the last-in first-out principle in the same way as for a redundancy situation. Employees must also be given an adjustment period before their shorter working hours are implemented, the length of that adjustment period corresponding to their contractual notice period (but no longer than three months).

Fixed-term employments will automatically convert to an indefinite-term employment after 12 months’ employment in a five-year period (the previous rule was that fixed-term employments convert to an indefinite-term employment after two years’ employment in a five-year period). Further, it is now required to explicitly state to the employee in writing that the employment is a fixed-term employment. Otherwise, there will be an assumption that the employment is on an indefinite term.

Employers are legally obliged to offer indefinite-term employment to temporary agency workers who have worked for the employer at the same operational unit for more than 24 months during the last 36-month period or pay compensation (in the amount of twice the worker’s monthly salary) to the temporary worker instead. Offers for indefinite-term employment must be given within one month of the temporary agency worker qualifying for the offer.

There are also wider possibilities to deviate from the EPA through collective bargaining agreements.

Impact Date

1 October 2022

Employer Implications/Action Needed

Employers should review, and where necessary update, employment handbooks, temporary agency worker procedures, and employment contract templates to take account of the changes to the law. Employers should also ensure that they have in place robust processes to keep track of how long their temporary agency workers have worked at each operational unit during the last 36 months and, where applicable, either offer indefinite-term employment or pay compensation.

Employer Risk

Employees will no longer have a right to remain in employment during court proceedings regarding an invalidation of a dismissal. This is a significant change, since employers will no longer have to pay employees their salary and other employment benefits during the court proceedings. However, if the employee wins the case (i.e., the court declares the termination to be invalid) the employer must pay salary retroactively.

Link

  • N/A

Contact:

Per Westman
Partner
+46 8 54 53 22 88
perwestman@eversheds-sutherland.se

Switzerland

Payment of salary (case law)

The Federal Court has confirmed that it is the duty of the employer to establish, to a degree of certainty, that the remuneration due to an employee has actually been paid.

An employee claimed that salary had not been paid to them despite having carried out the work. Although the proof of the actual payment of the employee’s salary was not established by receipts imitating the employee's signature, the Court found that it was sufficiently established on the basis of all the other elements, including the absence of any complaint in the letter of resignation or from other employees, social security contributions paid, etc.

Impact Date

2 August 2022

Employer Implications/Action Needed

Employers should ensure that they have robust systems in place to evidence that salary has actually been paid to employees when due.

Employer Risk

N/A

Link

Incapacity for work (case law)

The Federal Court has confirmed that once the period of protection against a dismissal has expired, it is permissible for an employer to dismiss an employee due to an illness that impairs the employee’s performance.

In this case, the employee believed that the employer intended to terminate her employment because of job postings on the internet for positions similar to hers. She was dismissed after returning from a period of incapacity to work. The employee had failed to show that the reason given by the employer was artificial, that the dismissal was linked to other reasons, or that it was given in such a way that it should be qualified as unlawful.

Impact Date

4 August 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Bonus payment (case law)

In accordance with the Swiss Code of Obligations, where an employer pays a bonus over and above the salary on particular occasions, such as at Christmas or the end of the financial year, the employee is entitled to such bonus where it is contractually stipulated. If the employment relationship ends prior to the occasion on which the bonus is paid, the employee is entitled to a pro rata bonus where the contract so provides.

The Federal Court found that, in the absence of a contractual clause conferring a right to a pro rata bonus, the bonus could not be considered as determined or objectively determinable. It could not therefore be considered as an element of the (variable) salary that the employer would be obliged to pay the employee.

Impact Date

8 August 2022

Employer Implications/Action Needed

To avoid having to pay variable portions to employees that could be considered part of their salary, employers should ensure that the contract specifically states that any bonus is discretionary only.

Employer Risk

N/A

Link

Duty of confidentiality of civil servants (case law)

The Federal Court found that abusive, hateful, racist and discriminatory comments, even in a private setting on social networks, contravene the cantonal provisions on the duty of confidentiality of civil servants. Further, that they constitute serious breaches that may be grounds for termination of employment for just cause. This decision recalls that civil servants are bound by a duty of confidentiality that goes beyond the time frame of the performance of their duties.

Impact Date

16 August 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

On-call employment (case law)

In accordance with the Swiss Code of Obligations, where an employer is at fault in preventing performance of the work or fails to accept its performance for other reasons, the employer remains obliged to pay the salary and the employee is not obliged to make up the time lost.

The Federal Court has determined that on-call work, "arranged in the sole interest of the employer" where the employer could unilaterally determine, according to its own needs, the duration of the work and the remuneration of the employee, is prohibited. Therefore, the employer could not suddenly refuse the services of the worker and deprive the worker of all remuneration. The employer remained liable for the wages when it no longer provided the worker, who was ready and willing to work, with sufficient work. The reason for the refusal - economic or otherwise - was irrelevant.

Impact Date

16 August 2022

Employer Implications/Action Needed

N/A

Employer Risk

Employers operating on-call employment arrangements should note the risk of unilaterally refusing the services of workers.

Link

Protection of personality (case law)

The Federal Court has determined, in the particular circumstances of the case, that the employer did not incur any contractual liability in respect of the duty of the protection of personality. This was despite the employee working in conditions potentially harmful to the employee’s economic reputation and professional future. The employer’s duty of protection is linked to the subordinate position of the worker. In the present case, the employee was a well-trained, experienced and highly paid senior executive.

Impact Date

30 August 2022

Employer Implications/Action Needed

N/A

Employer Risk

N/A

Link

Wrongful/unlawful dismissal (case law)

The Swiss Federal Court has confirmed that the dismissal of a Credit Suisse executive was not wrongful/unlawful.

The executive had been involved in operations aimed at retaining and increasing U.S. clients, with increasingly strict rules implemented by the U.S. to combat tax evasion. The executive was indicted in February 2011 by a U.S. court for conspiracy to harm the U.S. As a result, the bank terminated the executive’s employment agreement. The Court found that the employee had violated U.S. laws and the bank’s internal directives on numerous occasions. Further, the Court considered that the executive had not demonstrated that the two hierarchical levels above him were aware of the evasion of the rules of US tax authorities. In the circumstances, the dismissal was not wrongful/unlawful.

Impact Date

30 August 2022

Employer Implications/Action Needed

Even though this decision went in the employer's favor, employers should ensure that proper controls over employee activities are in place.

Employer Risk

N/A

Link

Adoption leave

New statutory adoption leave for adopting parents will enter into force in Switzerland. Working parents who adopt a child under the age of four will be entitled to two weeks' paid leave.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should monitor the progress of this statutory amendment. Employers should start to take planning actions to adjust leave policies and payroll arrangements, and notify employees once the new leave becomes law.

Employer Risk

N/A

Link

Extension of the COVID-19 Swiss law

The Swiss government has extended the COVID-19 Swiss law and may take measures at any time, such as imposing COVID-19 certificates.

Impact Date

Extended to 2024.

Employer Implications/Action Needed

This development does not require any actions by employers from a labor law perspective. Where an employee contracts COVID-19, salary may however be impacted.

Employer Risk

N/A

Link

Contact:

Michael Lepper
Senior Associate
+41 58 255 57 00
michael.lepper@eversheds-sutherland.ch

UK

Scotland - New Practice Direction and Presidential Guidance on the use of witness statements

To date in Scotland, unlike the practice in the rest of the UK, witness evidence has generally been given orally, instead of through the primary use of witness statements. A Practice Direction and Presidential Guidance has been published setting out the circumstances in which statements may now be ordered in Scotland and the information that they should contain.

Impact Date

1 October 2022

Employer Implications/Action Needed

Although witness statements will likely remain the exception in Scotland, where they are used, there are some prescriptive requirements on how they should be prepared and how they should look. Employers involved in litigation in Scotland may therefore see some changes.

Employer Risk

N/A

Link

Changes ahead for some EU-derived employment law

The Government has published the Retained EU Law (Revocation and Reform) Bill, which proposes significant changes to the current status and operation of certain retained EU law, including proposing its automatic revocation at the end of 2023 (which can be extended to June 2026) unless regulations provide for its preservation. The status and potential interpretation of EU case law will also change.

Impact Date

Awaited.

Employer Implications/Action Needed

TUPE, working time and part-time/agency/fixed-term workers’ rights are potentially affected, along with other workplace rights. Considerable uncertainty remains as to the practical impact of the Bill. For now, employers should be aware of the potential for change under this legislation.

Employer Risk

N/A

Links

Ban on exclusivity clauses

New regulations:

  • extend the ban on exclusivity clauses, making them unenforceable where the guaranteed weekly income is below or equivalent to the Lower Earnings Limit (currently £123 pw) a week
  • extend the right not to be unfairly dismissed/subject to a detriment for failing to comply with an exclusivity clause.

Impact Date

5 December 2022

Employer Implications/Action Needed

If exclusivity clauses are invalidated for lower earners, employers relying on such clauses will need to review their reasons for use and potential impact.

Employer Risk

N/A

Link

Guidance awaited on ethnicity pay reporting

Having confirmed that it will not introduce mandatory ethnicity pay reporting, the Government is expected to publish guidance on ethnicity pay reporting.

Impact Date

Awaited.

Employer Implications/Action Needed

The guidance is expected to assist employers in understanding and tackling pay gaps within their organizations and in building trust with employees. What information employers are encouraged to collect and disclose will be an essential starting point.

Employer Risk

N/A

Link

“Fire & re-hire” tactics

So-called “fire and re-hire” (involving dismissal and re-engagement on new terms, when contract changes cannot be agreed) has come under adverse scrutiny. A Private Member’s Bill, seeking to discourage such practices, was blocked by the Government. Instead, Acas published new guidance for employers at its request. However, the Government has committed to introducing a new statutory Code of Practice, setting out a fair process and attracting a potential 25% tribunal award uplift for non-compliance.

Impact Date

Awaited.

Employer Implications/Action Needed

The Acas guidance states that employers should thoroughly explore all other options before deciding to dismiss and re-engage employees, and such strategy should only be considered as a last resort given that it is an “extreme step”. Employers should carefully consider the use of such strategies and, where adopted, should ensure that the process is carefully planned, including meaningful consultation.

Employer Risk

Increasingly, “fire and re-hire” strategies risk reputational, employee relations and legal challenges. Once the statutory Code of Practice is effective, Employment Tribunals will be able to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code where it applies. It should be noted that Northern Ireland has a statutory dismissal procedure (set out in the Labour Relations Agency’s Code of Practice on disciplinary and grievances procedures). In cases of non-compliance, a dismissal will be deemed automatically unfair, and any compensatory award can be subject to an uplift of up to 50% by the Tribunal.

Links

Neonatal leave/pay and tips in the hospitality sector

The Government has announced that it is backing two Private Members Bills which will fulfil commitments of its own relating to neonatal care leave/pay and hospitality tips. The first will introduce a statutory right to neonatal leave and allow parents to take up to 12 weeks of paid leave if their babies are admitted into hospital up to the age of 28 days and have a continuous stay in hospital of 7 full days or more. The second will make it unlawful not to pass on all tips to staff. It also makes provision for a Code of Practice to promote fairness and transparency in relation to the distribution of tips.

Impact Date

Awaited.

Employer Implications/Action Needed

If and when the legislation is passed, all employers will need to update their neonatal policies. Businesses that currently use discretionary service charges to offset expenses, or make deductions from tips, will face increased costs.

Employer Risk

N/A

Links

Industrial action - minimum service levels in transport services

Further to a 2019 manifesto commitment, the Transport Strikes (Minimum Service Levels – “MSLs”) Bill will, if implemented, enable the implementation of MSLs in specified transport services during periods of strike action. The Bill would amend existing legislation to: impose obligations on affected employers and trade unions to comply with a process for the setting of MSLs; enable employers to issue work notices to require the levels set out in the minimum service specifications to be delivered for individual strikes; expose the unions to potential damages if a strike is not undertaken in accordance with the MSL rules.

Impact Date

Awaited.

Employer Implications/Action Needed

If the Bill secures Royal Assent, it appears unlikely that MSLs would be in force for some time, given the requirement for associated regulations to be made, employers to seek agreement and other steps in the MSL process. If enacted, trade union litigation is expected, challenging their compliance with the right to strike.

Employer Risk

N/A

Link

Redundancy protection during family-leave, carers leave and flexible working requests

The Government has recently confirmed its support for three Bills. The first, if implemented, provides for extending the period covered by existing redundancy protection for employees taking maternity, adoption and shared parental leave. The exact details of the new protected period would follow in regulations but may include a period after the leave has ended and the period from when a woman tells her employer she is pregnant. The second would introduce one week’s unpaid leave, per year, for employees to provide or arrange care for a dependant with a long-term care need, as a day one right. The third would make changes to the right to request flexible working process and the Government is also expected to introduce separate regulations making it a day one right.

Impact Date

Awaited.

Employer Implications/Action Needed

Employers should monitor the progress of the Bills. However, as the Bills require further regulations to be introduced, the new rights will not be implemented until 2023 at the earliest.

Employer Risk

N/A

Links

Preventing harassment by co-workers and third parties

The Government is supporting another Private Members’ Bill which would introduce employer liability if an employee is harassed in the course of their employment by third parties (such as customers or clients) and the employer fails “to take all reasonable steps to prevent the third party from doing so”. The Bill would also introduce a new duty on employers to “take all reasonable steps to prevent sexual harassment” of their employees in the course of their employment. A new Code of Practice and guidance on preventing sexual harassment will be published.

Impact Date

Awaited.

Employer Implications/Action Needed

Employers should monitor the progress of the Bill. Employers will be concerned to see some clarity over what “reasonable steps” will support their defence in the event of a claim.

Employer Risk

N/A

Link

Contact:

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

Middle East Global Update Banner

UAE

New Labor Law

Pursuant to this law, all employees (other than those in DIFC and ADGM) must, by 1 February 2023, be transitioned onto a fixed term employment contract which complies in full with the new labor law.

All employers must take the necessary steps to transition their existing workforce onto a new fixed term employment template and to use such template for new employees. Furthermore, the new labor law has introduced a range of changes which necessitate an employment handbook policy review/update.

Impact Date

Immediate. Policies should now be updated. The new employment contract template, if not already created, should be prepared and used for new joiners. Existing employees should then be transitioned onto the new template as soon as possible and certainly by no later than 1 February 2023.

Employer Implications/Action Needed

 

  • Templates to be updated
  • Practices to be assessed (for example changes in the Wages Protection System means there are some new options for payroll)
  • New employment contract template to be prepared and used with new joiners
  • Existing employees to be transitioned onto new template together with any registered templates prescribed by the authorities
  • Ensure consistency between policies, new employment contract template and registered template (particularly alignment between contract term, fixed term commencement date and expiry date).

Employer Risk

Any disputes regarding policies and employment contracts that are out of date will be determined in the favor of the employee. This means the employee can cherry-pick between contractual and legal provisions to create the most beneficial position for themselves. This potentially increases financial exposure for employers and impacts the good management of employment matters. It also increases the risk of disputes.

Link

Contacts:

Geraldine Ahern
Partner
M: +97 150 220 5983
T: +97 12 494 3632
geraldineahern@eversheds-sutherland.com

Lisa Bryson
Partner
M: 00971 56 6816410
lisabryson@eversheds-sutherland.com

Saudi Arabia

Work environment for the security guards sector

A Ministerial Resolution has been issued, providing some new requirements related to the working environment of security guards.

Impact Date

19 October 2022 (date decision issued).

Employer Implications/Action Needed

The Resolution applies to all economic entities that have private security guard services. Applicable employers should note the requirements of the Resolution and adjust their security’s environment accordingly.

Employer Risk

Failure to comply with the requirements of the Resolution risks financial penalties. In addition, companies may be prevented from renewing work licences.

Link

New procedural guide for termination of employment in the event of absence

The Ministry of Human Resources and Social Development has updated the regulations and procedures relating to non-Saudi employees’ absence from work. Under the new system, after the employer submits a request to terminate the contractual relationship due to the employee’s un-reported absence from work, the employee’s status will appear as “discontinued from work” in the Ministry’s systems. In this case, the employer will not bear any responsibility towards the employee. The employee may then choose, within a 60-day period, to either transfer to another employer or issue a final exit from the Kingdom. If the employee has not taken one of these options within the 60-day period, the status of the worker will be changed to “absent from work” in the Ministry’s records as well as the records kept by other government authorities.

Individuals with “absent from work” status may potentially still transfer to a new employer. The new employer will however be liable for late work-permit fees upon the Ministry’s approval and the transfer must be completed within 15 days of that approval.

Impact Date

23 October 2022

Employer Implications/Action Needed

The Resolution applies to all private sectors. Employers should note the regulations and adjust their practices accordingly.

Employer Risk

N/A

Link

Saudization of new professions and activities

A Ministerial Resolution has been issued, localizing 6 additional professions and activities.

The applicable professions and activities are: license pilot, customer service, profession of optometry, localizing retail outlets for certain activities, periodic inspection, and postal and parcel transportation services.

Impact Date

Various between 12 December 2022 and 18 March 2023.

Employer Implications/Action Needed

The Resolution applies to all economic entities in the applicable professions and activities. Applicable employers should note the requirements of the Resolution and adjust their employment practices accordingly.

Employer Risk

Failure to comply with the requirements of the Resolution risks financial penalties of SAR 5000,10000 or 20000 per-violation (depending on the entity’s category). In addition, companies may be prevented from renewing work licences and subjected to an automated discontinuation of all electronic transactions (issuance of visas, transfer of service, change of profession).

Link

Saudization of counselling professions and activities

A Ministerial Resolution has been issued, localizing consultancy professions and activities. The first phase requires Saudization of 30% and the second phase requires Saudization of 40%.

Impact Date

15 April 2023 (first phase) / 25 March 2024 (second phase).

Employer Implications/Action Needed

The Resolution applies to all economic entities in the consultancy professions and activities. Applicable employers should note the requirements of the Resolution and adjust their employment practices accordingly.

Employer Risk

Failure to comply with the requirements of the Resolution risks financial penalties. In addition, companies may be prevented from renewing work licences.

Link

Contact:

Anam Saleem
Principal Associate
T: +966 11 277 9836
AnumSaleem@aldhabaan-es.com

Nourah Al Sayyari
Trainee Lawyer
T: +966 11 277 9800
NourahAlsayari@aldhabaan-es.com

North America Global Update Banner

USA

Illinois – Equal pay registration certificate

Employers with 100 or more employees in Illinois must apply for an Equal Pay Registration Certificate in order to comply with the new reporting requirements.

Impact Date

24 March 2022 – 23 March 2024.

Employer Implications/Action Needed

Employers of 100 or more employees should comply and report the required employee information. Employers should also consider conducting pay audits.

Employer Risk

N/A

Link

Federal - Joint employer status

The National Labor Relations Board (NLRB) released a notice of proposed rulemaking, addressing the standard for joint-employer status . The proposed changes are intended to explicitly ground the joint-employer standard in established common-law agency principles.

Impact Date

6 September 2022 (release of notice), 2023 (expected issue of NLRB’s final rule).

Employer Implications/Action Needed

Comments on this proposed rule must be received by the NLRB on or before 7 November 2022. Comments replying to comments submitted during the initial comment period must be received by the Board on or before 21 November 2022.

Employer Risk

If an employer is found to be a joint employer, it may have to bargain with a union representing jointly employed workers, or it may be subject to joint and several liability for unfair labor practices committed by the other employer.

Link

Federal — Union dues

The National Labor Relations Board (NLRB) has determined that an employer must continue to deduct union dues from employees’ wages after expiration of a collective bargaining agreement while the union and employer are negotiating a new agreement.

Impact Date

3 October 2022 (date of ruling, although the NLRB applied the ruling retroactively to all cases where dues checkoff were in issue).

Employer Implications/Action Needed

The ruling removes an economic tool previously available to employers during negotiations with unions regarding new collective bargaining agreements. Employers should continue to deduct dues during contract negotiations.

Employer Risk

Failure to properly deduct dues can lead to an unfair labor charge.

Link

  • N/A
Federal – Updated EEOC anti-discrimination poster

Employers with 15 or more employees are required to post certain notices in the workplace regarding employee’s rights with respect to employment discrimination and retaliation. The EEOC recently updated and replaced the required notice that needs to be posted. The new notice is more user-friendly in explaining employee’s rights, it clarifies that sex discrimination includes discrimination based on pregnancy, sexual orientation, or gender identity, and adds a QR code so that employees can access information about filing a charge of discrimination.

Impact Date

20 October 2022

Employer Implications/Action Needed

Employer should post the updated poster in a conspicuous place, including making it accessible for applicants and employees with disabilities.

Employer Risk

A willful failure to post the EEOC poster may result in a fine of up to $612 per separate offense. Additionally, failure to post the notice can limit an employer’s defense in any discrimination lawsuit.

Link

Federal - Status

The U. S. Department of Labor, Wage and Hour Division (DOL) released its Notice of Proposed Rulemaking (NPRM) pertaining to independent contractor status. The proposed rule is intended to revise the analysis used for determining the appropriate classification of a worker as an employee or independent contractor, and create consistency with judicial precedent and the Fair Labor Standard Act’s (FLSA) text and purpose.

Impact Date

13 December 2022 (published 13 October 2022; deadline for comments extended to 13 December 2022).

Employer Implications/Action Needed

Employers wishing to submit comments regarding the proposed rule should do so by 13 December 2022. The full text of the NPRM, as well as information on the procedures for submitting comments, can be found at Federalregister.gov.

Employer Risk

Failure to properly classify a worker as either an independent contractor or an employee can raise tax issues and liability issues under the Fair Labor Standards Act.

Link

Colorado – Paid Family Leave Insurance (“FAMLI”)

Colorado has passed a new law requiring paid family leave for most employees. It is funded through a payroll tax by both employers and employees. Contributions begin on 1 January 2023 and benefits will be available beginning 1 January 2024. Employees may be eligible to take up to 12 weeks off for certain medical conditions for themselves and their family members. This is protected leave, so employers must return employees to their prior position or an equivalent position with the same pay, benefits, and seniority. This leave may run concurrently with Family and Medical Leave Act (FMLA) leave, if applicable.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers will need to begin making contributions to the program on 1 January 2023, so that funds will be available for the benefit by 1 January 2024.

Employer Risk

There is a three-year statute of limitations. Employees may bring a claim in court for interference with the right to take leave and may be awarded damages and equitable relief. The employer may also be fined up to $500 per violation.

Link

California – Bereavement leave

California has passed a new law that creates protected bereavement leave under the California Family Rights Act. The new law will make it illegal for employers with 5 or more employees to deny an eligible employee 5 days of leave in connection with the death of a family member.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers should review their current leave policies and make sure that they are in compliance with the new California law.

Employer Risk

Failure to provide leave to an eligible employee will be considered an unlawful employment practice and could subject the employer to liability.

Link

California – Pay disclosure law

California has passed a new law which will require employers with 15 or more employees to include a pay scale in job postings. Moreover, employers with 100 or more employees must report information to the state regarding the pay of employees by race, ethnicity, and gender.

Impact Date

1 January 2023

Employer Implications/Action Needed

Employers within the scope of the new law should include pay information in job postings and provide pay scale information to current employees upon their request.

Employer Risk

Employers face civil penalties if they fail to provide the required pay scale information.

Link

Minnesota – Paid sick and safe leave

The Bloomington, MN City Council followed the lead of other MN cities – Minneapolis, St. Paul, and Duluth – to enact an ordinance requiring employers to provide paid sick and safe leave for employees. The ordinance applies to any employer with 5 or more employees who perform at least 80 hours of work per year within the geographical confines of Bloomington. This includes employers that are not themselves located in Bloomington but who have 5 or more employees who work remotely from Bloomington. The ordinance requires 1 hour of paid sick and safe leave for every 30 hours worked, up to 48 hours a year.

Impact Date

1 July 2023

Employer Implications/Action Needed

Affected employers should review and, where necessary, update their policies to provide the applicable sick and safe leave. The policy must allow employees to carry unused sick and safe time over to successive years up to at least 80 hours.

Employer Risk

Employers who fail to pay the required leave risk being required to pay the dollar value of the sick and safe time withheld, multiplied by two.

Link

Washington D.C. – Cannabis law

Washington D.C.’s mayor signed into law a prohibition on employer adverse action against employees on the basis of the employees’: use of cannabis; status as a medicinal cannabis user; or failed marijuana drug test without additional evidence of impairment.

Impact Date

The law is currently unfunded and will go into effect either on 13 July 2023 or once included in an approved budget plan.

Employer Implications/Action Needed

Washington D.C. employers should review their drug-testing and marijuana use policies to ensure compliance once the law is in effect.

Employer Risk

Violating employers risk being subject to a private right of action for discriminating against medicinal marijuana use. For discrimination against recreational marijuana use, claimants must first exhaust administrative remedies with the Office of Human Rights before gaining a private right of action.

The Office of Human Rights may order employers:

  • to pay double the civil penalty if the employer violated the law more than once in the previous year
  • to pay the complainant’s lost wages
  • to pay reasonable attorneys’ fees
  • to undergo training
  • to reinstate an employee
  • or to provide other relief necessary to undo any adverse employment action.

Link

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Maryland – Paid family and medical leave law

Maryland enacted a new paid family and medical leave law that requires employers to provide eligible private sector employees with up to 12 weeks per year of paid time off for purposes related to caring for oneself or a family member. Eligible employees include employees who worked at least 680 hours in the prior 12 months.

Impact Date

1 January 2025

Employer Implications/Action Needed

Employers that must provide the leave are those that employ 1 employee in the state, although only employers with at least 15 employees, with limited exception, must contribute to the Program. Employers must provide notice to employees to benefits under the law beginning in 2023.

Employer Risk

Possible penalties for failure to comply.

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Contact:

Michael Woodson
Partner
T: +1 713 470 6121
michaelwoodson@eversheds-sutherland.com