Employment law across the globe - what's happened and what's coming up?
20 June 2022
Our round-up of key developments in employment law since our last conference in February 2021.
The first section of this review notes the key political and global events of the last 18 months, before turning to consider what’s been happening in the world of employment law.
Political landscape
In February 2022 Russia invaded Ukraine, wreaking widespread destruction, thousands of deaths and casting a shadow over the future international order. The era in which globalisation seemed inevitable, already faltering in recent years, is now firmly over, and a future based around hostile, heavily armed blocs seems all too plausible. Although fighting remains within Ukraine the impact of the war has been felt by businesses around the world. The global economic consequences – such as the disruption of supply chains, energy supplies, food security and trade – are perhaps only starting to be felt. The war has displaced millions of Ukrainians. Many men returned to Ukraine to take up arms, while millions left to seek refuge in countries across Europe, particularly Poland and other Eastern European nations. This influx of workers, often women with children, has the potential to significantly impact the makeup of the labour market in some jurisdictions.
Many international companies have suspended or closed operations in Russia, to avoid reputational damage or because limits on international financial transactions are preventing multinational employers from paying their Russia based staff. In addition to the inevitable dismissal of many local staff, this has also resulted in requests from Russian employees to be relocated and “ex pat” workers needing repatriation. This has raised both logistical and legal challenges, with contractual, immigration and tax considerations to address. Businesses have had to consider the duty of care they owe their staff from new and troubling perspectives: to what extent might they be liable for the safety of staff who are in the path of the conflict? How can ex pat staff in Ukraine be safely repatriated?
As the spectre of the pandemic gradually recedes, its place as national source of worry – both in the UK and other countries across Europe – is being rapidly replaced by the cost of living crisis. The increasing costs of day to day life, outstripping pay rises, are resulting in a dramatic fall in disposable income for many. Energy costs are at crippling levels; a tank of petrol feels like a luxury not a necessity; and the supermarket trolley is burning an ever-larger hole in the household budget. As we go on to explore, some governments have responded to this crisis with substantial increases to the national minimum wage. In most jurisdictions, however, it is not the government taking the lead on pay increases.
The pandemic has given many people across the world time to pause and reflect on their priorities. This “great re-appraisal” has, in part, resulted in what is often termed the Great Resignation. But other longer-term drivers of change are also at play, such as changing demographics, societal shifts, and the impact of new technology. Different generations place differing value on financial security. And technology has enabled individuals to cast the net over a much wider geographical area in their search for employment. Pressure is building on companies to understand why staff are choosing to reassess their options, and to present an attractive proposition to potential talent. Employers are looking more creatively at flexible working options and benefit packages to differentiate themselves, and recruitment and retention looks set to be a key issue for employers for some time to come. “Union power” is also back in many places, with pay demands that would have seemed other worldly just 12 months ago now commonplace.
Against that background, countries are beginning to advance their domestic legislative agendas as they emerge from managing the Covid crisis. Looking at the main developments over the last 18 months, we have identified a number of key themes. The remainder of this review looks at some of the leading developments under each of those themes, concluding with a miscellaneous section at the end.
The key themes
Across the world, the closure of offices during the pandemic accelerated the expansion and popularity of remote working, making this arrangement an overnight reality for millions. As it becomes clear that working patterns and preferences have changed for good, many jurisdictions have or are putting in place legislation and guidance to manage a more permanent transition to remote or hybrid working arrangements.
During mandatory lockdowns, the decision whether to permit homeworking was largely taken out of employers’ hands. Over the past year, however, many countries have been grappling with the extent to which the employer can control flexible and remote working, and how to deal with the practicalities and costs of these arrangements.
In France, the Court of Cassation (the Supreme Court) ruled that an employee could not unilaterally decide to work offsite - the employer’s consent was required. In Greece, whether or not a remote working arrangement requires the employer’s consent depends on the type of work and arrangement in question, with the newly amended Labour Law defining different categories of remote working. Prior to the pandemic, Greece had one of the lowest levels of remote working in the EU. Now the practicalities of this working arrangement, including the employer’s obligation to subsidise associated costs, are comprehensively addressed in law.
July 2021 saw Spain pass the Remote Work Act, applicable when at least 30% of an individual’s work is done remotely. Under this legislation employers must ensure various matters are covered in a written remote working agreement, provide all necessary materials, and compensate the employee for expenses relating to remote working.
Luxembourg has introduced legislation requiring companies with 150 or more employees to secure agreement between the employer and staff delegation if a company-wide remote working agreement is to be changed. This now forms one of only 8 matters for which such an agreement is needed.
Recognising the dangers of blurring home and work, revised regulations in Norway (in force from July of this year) have strengthened the need for compliance with the terms of homeworking agreements, through the introduction of oversight by the Labor Inspection Authority. Similarly, in Poland, remote working looks set to be permanently incorporated into the Polish Labour Code from August. These changes will govern when remote working is permitted, and what associated costs will be borne by the employer.
In Ireland, flexible and remote working has been a focus for both the courts and legislature. A case heard by the Workplace Relations Commission clarified that, while there is no general right to work from home, employers will be expected to consider remote working requests thoroughly, and to have strong reasonable grounds for refusing to facilitate them. The absence of a legislative framework for handling such a request is set to change, with the publication of the Right to Request Remote Working Bill earlier this year. This will give employees with 6 months’ service the right to request remote working. This is subject to the employer’s agreement, but refusal must be based on one of the reasons listed in the legislation. The Bill has come under a lot of criticism so it’s likely to be significantly amended before it is finalised. Flexible working requests from parents or carers will soon be backed up by law as a result of a new Bill to enable those with caring responsibilities to request flexible working arrangements for a set period of time. This is to implement the EU Work-Life Balance Directive. Separate proposals to allow all employees to make flexible working requests are also in place.
The upcoming changes in Ireland echo new laws introduced earlier this year in Portugal. Now a request for a remote working arrangement made by an employee with a child up to the age of 8 cannot be refused, provided certain conditions are met; a request from someone with children up to the age of 3 cannot be refused in any circumstances. In other cases, a refusal needs to be in writing, stating the reasons. In terms of expenses, it’s again down to the employer to cover the cost of equipment and energy costs, an increasingly significant consideration for households across Europe.
Remote working requests in the Netherlands may also acquire more legal clout. Here the aptly named “Work Where You Want” Bill would amend existing flexible working legislation and require an employer to grant a request for remote working unless it can demonstrate compelling business reasons not to do so.
In the UK there are no specific legislative changes to address hybrid or remote working, and any such requests would need to be accommodated within the existing flexible working regime. Limited reforms to this legislation, including the right to make a flexible working request from day 1 of employment are under consideration. Germany also has yet to introduce any legislative changes, but the Federal Ministry of Labour is drafting a law that would provide for an entitlement to remote working.
In South America, legislation was introduced in Argentina in March 2021 to regulate remote working. Amongst other things, the parties now need a written remote working agreement, and the employer must bear the cost of equipment and expenses. In Brazil, under revised legislation, disabled employees and those with young children should be prioritised for hybrid and remote working arrangements. New legislation is also expected to be approved shortly which will result in collective agreements applicable to the company’s office applying equally to remote workers and provide confirmation that remote workers in the telecommunications industry are not exempt from working hour requirements.
A shift to remote working was a significant change to working culture in Japan. Although not legally enforceable, in March 2021 guidelines were introduced to help promote positive and effective remote working schemes, balancing appropriate management control against positive working patterns for employees.
Finally, remote working literally opens up a world of possibilities. An increasingly common, and also challenging, issue is that of employees who wish to work from “home”, either on a temporary or permanent basis, from an overseas country. One recent example of a potential host country seeking to facilitate this was the introduction of a remote working visa in the UAE in April 2021. This allows foreign nationals to live and work in the UAE, while remaining employed in their home country. Unlike Employment Residence Permits, this does not require local company sponsorship. Meanwhile in Italy, as of April 2022, non-EU nationals who carry out a “highly qualified” job remotely are able to enter the country without a work permit and obtain a residence permit for one year, provided they have adequate health insurance and comply with Italian tax and social security provisions.
Harassment
In the wake of the #MeToo movement, many jurisdictions implemented or improved harassment protections and that trend is still evident across the world. In Denmark the government and social partners have entered into a wide-ranging agreement on sexual harassment to foster change. Consisting of 17 initiatives, it is a mixture of statutory change, new codes and policies, and information gathering. Also in Denmark a significant recent High Court case held an employer liable for failing to prevent an employee’s sexual harassment of a colleague, underlining the importance of employers taking preventative measures.
The Norwegian government is consulting about implementing ILO Convention no. 190 to eliminate violence and harassment in the workplace. It also proposes a new gender equality policy, a duty for employers to have workplace harassment and sexual harassment policies and to clarify the duty on safety representatives to safeguard the working environment of employees.
Greece is also obliging employers to implement policies or provisions on dealing with harassment in the workplace and France has recently seen an extension of the definition of sexual harassment in its Labour Code, requiring companies to update their internal regulations.
Ireland has implemented a new code of practice on sexual harassment. It does not create new obligations but promotes best practice, such as recommending employers adopt and publish policies to ensure harassment-free workplaces and deal effectively with complaints. It encourages training for employees on preventing sexual harassment. It also highlights the position of vulnerable workers who may need additional measures. Ireland has also adopted a new code of practice on preventing workplace bullying. It is more onerous on employers and is more emphatic about recommending mediation to employees as a potential route to resolve issues. Failure to abide by the code is not illegal but can be used in evidence before the Workplace Relations Commission.
The UK government also committed to introducing a new proactive duty on employers to prevent sexual harassment, whilst also considering new laws which would make employers liable if third parties harass their employees and the possibility of extending the time limit in which to bring discrimination claims. No legislation, however, is being introduced to parliament at the moment.
In Texas, a new law means employers must take “immediate and appropriate corrective action” to remedy workplace sexual harassment that they know or should have known about. Employers of all sizes are affected, and individual employees can also be liable.
In September 2021, Australia updated its workplace sexual harassment laws to adopt some (but not all) of the recommendations in the Australian Human Rights Commission’s Respect@Work report. Among other things, the reforms clarify that sexual harassment is prohibited under the Sex Discrimination Act, expand coverage to ensure paid and unpaid workers are protected, extend the time limit for making a complaint from 6 to 24 months, make victimisation a potentially criminal offence and give new powers to the Fair Work Commission to make “stop sexual harassment orders”. Since then, the new Labour government elected on 21 May 2022 has promised to implement all the outstanding recommendations from the Respect@Work report. These include enacting a positive duty upon employers to take reasonable and proportionate measures to eliminate sexual harassment, sex discrimination and victimisation and providing the Australia Human Rights Commission with a broad enquiry function to enquire into systemic unlawful discrimination.
The South African code of good practice on the prevention and elimination of harassment in the workplace came into effect in March 2022, replacing a previous version. The new code is much more far-reaching, encompassing all forms of harassment in the workplace including sexual, racial, ethnic or social origin harassment. If the employer has not taken all reasonably practicable steps to ensure harassment does not occur, it may be vicariously liable for the conduct.
South Korea is expanding its protections. Under the current law, employees can file sex discrimination or sexual harassment complaints with the labour office, which can investigate, make orders and issue fines. From May 2022, employees will also be able to take complaints to the Labor Relations Commission and available remedies will include damages. In October 2021 South Korea also introduced new employer obligations and penalties for other types of workplace harassment.
A new ruling by the national labour court in Israel has stated that where a sexual harassment claim is filed against an employer and the complainant alleges the internal investigation was mismanaged, the employer could be required to disclose background material collected in the course of the investigation. Normally, an appointed investigator produces a summary of findings and recommendations and other materials, such as interview transcripts, are kept confidential to protect privacy and encourage cooperation with the investigation. Following this ruling, the employer may be required to disclose this material if the investigation is alleged to be flawed.
Gender identity
The USA’s President Biden signed an executive order in January 2021 on preventing and combatting discrimination based on gender identity and sexual orientation. This codified the Supreme Court’s decision in Bostock v Clayton County which held that discrimination “because of sex” included discrimination on the basis of gender identity and sexual orientation and it directs federal agencies to take affirmative steps to implement these rights.
Argentina implemented a new law aimed at promoting equality of opportunity at work for people who consider they have a gender identity that does not correspond to their birth sex, whether or not they had officially registered a change of sex. The law provides for a minimum hiring quota of not less than 1% of public administration personnel for “cross dressers, transsexuals and transgender people” and for benefits for private sector companies that hire people from those groups.
From 1 January 2022, Denmark introduced a ban on discrimination on the grounds of gender identity, gender expression and gender characteristics. According to this law, “gender identity” covers a person’s inner and individual experience of their gender, “gender expression” means the way they express it, such as through clothing, and “gender characteristics” includes bodily features that characterise and differentiate gender, including chromosomes and secondary sexual characteristics. The terms are also now included in the provisions about hate crime and hate speech in the criminal code. There were also court rulings related to gender identity in Germany and the UK. A German job advertisement which used the gender neutral “gender star” was held not to discriminate against polygender individuals. The star, which is supposed to indicate in a job advertisement that both sexes are welcomed, was found to be gender sensitive and an indication of diversity rather than discrimination. In the UK, the Employment Appeal Tribunal found that both a belief in “gender identity” and – the opposing – “gender critical” belief were protected philosophical beliefs for the purpose of discrimination law.
Sex and other protected characteristics
In other developments relating to sex discrimination, the Netherlands has implemented new targets for gender balance on boards. Large employers must publish appropriate and ambitious targets for the ratio of men to women on boards of directors, supervisory boards and senior management and must explain a failure to reach their targets. Supervisory boards must contain a third men and a third women and new appointments that breach this requirement will be rendered void. In addition, there is an initiative bill pending that proposes mandatory appointment of a “Trusted person” within organisations. This is to reduce and prevent discrimination and other forms of harassment in the workplace. Similarly, in Ireland, proposals are in place regarding the regulation of gender balance on the boards and governing councils of corporate bodies – the proposal is for a 40% quota for female representation on company boards. From 1 January 2022, the Hong Kong Stock Exchange has also adopted a Listing Rules amendment which states that “single gender” boards are considered unacceptable. They have stated that all existing “single gender” board issuers must appoint at least one director of a different gender by 31 December 2024
Gender balance on corporate boards has also been the focus of a recent “landmark” political agreement reached by the EU Commission after 10 years of stalemate. The Directive on improving the gender balance among non-executive directors of listed companies aims to address the underrepresentation of women in high level positions. It is now agreed that from 30 June 2026 companies listed in the EU must ensure that 40% of non-executive directors, and 33% of all directors, are the “underrepresented sex” (which will usually be women). Companies that do not achieve those objectives must apply transparent and gender neutral criteria in the appointment of directors and prioritise the underrepresented sex where two candidates of different sexes are equally qualified.
From 1 April 2022, Japan extended the Promotion of Female Participation and Career Advancement in the Workplace Act. All companies with more than 100 employees must formulate and file an action plan to improve gender equality, which contains concrete objectives and measures. Also on gender equality, in Germany, laws relating to the inclusion of women in leadership positions are being extended, a key change being that from 1 August 2022 public companies with over 2000 employees will be required to appoint one woman and one man to any management board that has more than three members. Similarly, in December 2021 France introduced an obligation for large companies (with more than 1,000 employees) to report on the representation of men and women in management committees and among top executives and to meet quota requirements relating to gender representation.
In Spain, a recent draft bill on sexual and reproductive health has garnered significant international media attention due to the proposal widely termed “menstrual leave”. If approved by Parliament, social security contributions would continue to be payable in certain cases of incapacitating menstruation.
In June 2021, Hong Kong introduced protection for breastfeeding women by making breastfeeding a protected characteristic in workplace discrimination law. In April 2021, the Equal Opportunities Commission published practical guidance for employers on providing equality for breastfeeding women in the workplace, which although non-binding is considered best practice for employers in the city.
There are fewer worldwide developments to report unrelated to harassment or gender but in other diversity and inclusion initiatives, the Creating a Respectful and Open World for Natural Hair (CROWN) Act – HR 2116 – passed the United States House on March 18. This would be the first piece of federal legislation addressing appearance discrimination as it specifically relates to a worker's protected characteristic – in this case, race. The states of Oregon and Illinois and some districts in North Carolina join other US states in making natural hairstyles a protected characteristic. By contrast Florida has passed a new law (the ‘Stop WOKE’ Act) to take effect from July 2022 restricting what employers can say in diversity training. The new act applies to employers of 15 or more people and prohibits mandatory training for employees that promotes certain controversial theories, such as critical race theory. There is a pending legal challenge to the act.
In April 2022, Belgium simplified the conditions for labour inspectors to use anonymous practical tests, also referred to as “mystery calls”, to identify discrimination in recruitment. The new bill aims to increase the use of the tests by lowering the thresholds required and extending the powers of the inspectors.
The prime minister of Singapore announced in September 2021 that some of the best practice guidelines on preventing discrimination would be put into law. Current legislation only outlaws discrimination because of pregnancy or enlistment. The new laws will allow employees to bring claims against their employers for discrimination on grounds of nationality, race, sex, age, race, religion and disabilities. Disputes will go through conciliation and mediation prior to coming before a new workplace discrimination tribunal, to be established.
In Malaysia, the Employment (Amendment) Bill will extend the Director General of Labour’s powers in relation to disputes involving employment discrimination. Failure to comply with a Director General’s order will be an offence subject to a fine. It is not clear how effective this will be, as there is no clear definition of what constitutes discrimination or which protected characteristics are covered.
There is some important case law on other protected characteristics. In Belgium the Labour Court of Antwerp ruled that employers who discriminate on multiple protected grounds may be subject to cumulative compensation awards, even if the acts are intertwined. And there are several decisions on dress codes and religious discrimination. In France, the Court of Cassation (Supreme Court) has ruled in favour of a woman who was dismissed for refusing to remove a religious headscarf, which the employer demanded to preserve their “brand image”. The employer said there was a necessary and professional requirement for the restriction, relying on its assessment of customers’ expectations but the court found these were subjective considerations and rejected the argument. And there were ECJ decisions on the same topic in the combined German cases of IX v Wabe and MH v MJ. The ECJ ruled that a neutral dress code in the workplace does not constitute discrimination on grounds of religion or belief, provided the neutrality policy meets a “genuine need”, is appropriate and proportionate.
Minimum wage
Amid huge economic uncertainty, it’s a mixed picture when it comes to national minimum wage increases. Some countries have opted for big hikes, such as Hungary (nearly 20%), Mexico (22%) and Germany (where the government has introduced a bill in parliament to raise the minimum wage to EUR 12 per hour in October 2022, an increase of 22% from the increase already implemented in January). Others have taken a more cautious approach. In some jurisdictions, minimum wages remain frozen, such as Hong Kong which froze its minimum wage in 2021 for the first time since its introduction in 2011. Countries that do not have national minimum wages may come under more pressure to introduce them. Egypt, for example, introduced a new private sector minimum wage from 1 January 2022. This is an area to watch, as pressure is put on wages by the cost of living crisis and rising energy prices. In the meantime, the EU has reached an agreement on the text of a new EU framework directive on adequate minimum wages. This will not set an EU-wide minimum wage but aims to promote better and more effective minimum wage protection in all EU member states. The draft directive also explicitly intends to strengthen and extend the coverage of collective bargaining throughout the EU.
Pay equity
Countries continue to roll out gender pay gap reporting legislation. Ireland will be the next major country in Europe to do so. From this year, employers in Ireland will be required to publish the gender pay and bonus gap for the workforce as a whole, their views on what is causing any gap and plans for closing it. Gaps must be calculated using 12 months’ data up to June, and then published by December. The new requirements will initially apply to organisations with 250 or more employees, dropping to 50 employees in 2025. Ireland also has a new code of practice on equal pay.
Italy introduced new laws in December 2021 to tackle the gender pay gap, reducing the threshold for gender pay gap reporting obligations from companies with 100 employees to those with over 50 and introducing a new “pink label” certification scheme for organisations adopting gender equality measures. Employers who obtain the pink label will pay a little less in social security contributions. France has strengthened its regime, by requiring companies to publish more details about their gap and to publish proposed corrective measures where they do not meet a minimum “score”. Spain also now requires employers to keep detailed pay registers, which include a record of their justification for pay gaps exceeding 25%, and to carry out equal pay audits.
The EU has finally got the ball rolling on a new Pay Transparency Directive. The initial draft published in March 2021 was to apply to organisations with 250 or more employees, but MEPs recently voted for this to be reduced to 50. The proposals would require employers to publish pay gaps for the workforce as a whole, and also report internally on pay gaps within categories of workers doing the same work, or work of equal value. Significant pay gaps in any category of worker will mean that the employer must carry out a detailed equal pay assessment and develop an action plan. The draft Directive includes other measures to target pay discrimination, including a ban on asking job applicants about their salary history, an obligation on employers to publish information about pay ranges on job adverts, and a right for workers to know the average pay for workers doing the same job or jobs of equal value. Negotiations on the final text continue.
Outside the EU, Israel has introduced new gender pay gap reporting requirements, requiring employers to publish information about the average wage differentials between men and women, with the first reports due to be published by 1 June 2022. Israel has also provided employees with the right to know what comparable employees are paid. In the US, New York City is introducing a law requiring job adverts to state the minimum and maximum salary offered and Washington is following suit with a similar disclosure requirement due to come into effect in January 2023. Similar laws were enacted in Maryland (disclosure upon request) and in Ohio in Cincinnati and Toledo (disclosure after conditional offer of employment). Further, in Nevada, employers must provide it to external applicants post-interview, and to current employees interviewing for new roles, if requested.
In Canada, Ontario implemented the Pay Equity Act last year to ensure men and women receive equal pay for work of equal value.
In the UK, the government has announced it will not proceed with mandatory ethnicity pay gap reporting but will provide guidance for businesses that want to do it voluntarily.
In Australia, the new Labour government has announced a number of measures to tackle “insecure work” and address gender inequity in the workplace. These include making gender pay equity an objective of the Fair Work Act, and strengthening the Act’s equal remuneration provisions by ensuring that agency workers receive the same remuneration as employees of the host employer and by limiting the number of consecutive fixed-term contracts an employer can offer for the same role.
The implementation deadline for the EU Directive on Work-Life Balance (2 August 2022) is imminent and the last year saw a number of member states introduce legislation expanding paternity leave, strengthening parental leave and introducing carer’s leave, with more countries set to follow suit. These changes facilitate a central aim of the Directive: ensuring a more equal distribution of leave between parents, to improve the representation of women in the labour market.
In France, new parents now have an increased paternity leave entitlement, up from 11 to 25 days (or 32 days in the case of multiple births). This is in addition to the existing entitlement to three days’ birth leave which remains unchanged. Spain, however, has gone even further in ensuring equality between parents. Since January 2021, Spanish paternity leave has been 16 weeks, equal to maternity leave. The first 6 weeks of this leave must be taken immediately after the child’s birth, while the remainder can be used over the first year of the child’s life.
The Italian Parliament has recently issued legislation which, if enacted by the government, will extend both paternity and parental leave and include other measures to improve work-life balance.
Reform in Switzerland in 2021 saw caregivers being granted a right to short term paid leave to care for either a family member or life partner with a health condition, and also a new right of longer term childcare leave of up to 14 weeks, to take leave to care for a seriously ill or injured child.
New rules from August 2022 will significantly change how parental leave can be distributed between parents in Denmark. An allowance of 48 weeks’ parental leave (to be taken after a 2-week period of maternity and paternity leave) is split between periods “ear-marked” for each parent and 26 weeks which can be freely divided up.
Reforms to ensure a more even distribution of leave between parents are also due to come into force in Finland in August 2022. Under the new law, both parents will be entitled to 160 days of parental leave, with 63 days transferable between the parents. Women in the final stages of pregnancy will have enhanced rights, with new pregnancy allowance days to use in the last month before their due date.
Parental leave rights are also improving in the Netherlands. From August 2022, the first 9 weeks of parental leave will be paid (albeit not in full), with the remaining 17 still unpaid. The paid leave will need to be taken in the first year after the child’s birth with the remainder available to use up to the child’s 8th birthday.
Ireland has taken steps to bring family leave and rights in line with the Directive. In April 2021, both parents became entitled to an additional 3 weeks’ paid parent’s leave, increasing by a further 2 weeks in July 2022 (to a total of 7 weeks) and changes to adoption leave saw couples able to choose which parent takes leave. More recently, the Worklife Balance Bill looks set to extend maternity leave entitlement to transgender men and significantly increase the length of time employees are entitled to paid time off or reduced hours for the purposes of breastfeeding. Ireland also proposes new rights for parents and carers to request flexible working (as covered above).
In Germany, executive board members, not previously able to suspend their duties temporarily during periods of sickness and pregnancy, are now able to take up to 3 months off. This is done through a process of revocation of appointment and reinstatement relieving them of their legal duties while absent.
Countries outside the EU have also seen some significant changes to family rights. In June 2021, Japan introduced new legislation – widely termed “male maternity leave” – which enables parents to take leave after the birth of a child, and after the child’s first birthday, in more flexible ways. Employers are now obliged to encourage employees to take childcare leave and also to inform them of their rights. In Taiwan, in July 2021, changes were made to the system of unpaid parental leave. Now, unpaid parental leave (which must be taken before the child is 3) may be for a minimum of 30 days, down significantly from the previous minimum of 6 months. Changes have also been made to parental leave allowance, increasing the financial support that may be available during this form of leave.
In Malaysia employees are set to have the right to make flexible working requests, and both maternity and paternity leave have been substantially increased. Colombia also made significant changes to its family leave system in 2021, with an extension of paternity leave, the introduction of transferable maternity leave, and new provisions relating to the extension of maternity and paternity leave through part time working. The UAE has increased maternity leave from 45 to 60 days and has also introduced 5 days parental leave. In the US, many states have extended the Family Medical Leave Act leave rights to companies with fewer than 50 employees. States like California, New Jersey, Rhode Island and New York now require employers to provide paid parental leave as well. And further on the horizon, the US state of Maryland has introduced reforms which will take effect from 2025, creating a family and medical leave fund to provide paid leave in situations including caring for a child after birth or during their first year.
More limited reform in South Korea saw women in high risk pregnancies become entitled to use some of the year of unpaid child care leave (which is an additional right to statutory maternity leave) while still pregnant, and gave them the right to request changes to their working hours.
Finally, echoing the introduction of parental bereavement leave in England and Wales in 2020, Bereavement Leave has now been introduced in Northern Ireland and significantly extended in Belgium. In Northern Ireland, the right to 10 days’ paid leave for victims of domestic abuse has also been introduced.
ESG was originally a concept used by investors to assess sustainability but has rapidly come to define the latest area of focus for companies trying to do business responsibly. Legislation is now also being targeted at this area, especially within the EU.
Whistleblowing is now considered part of the ESG agenda. All EU countries were required to implement the provisions of the new EU Whistleblower Directive into their national legal systems by 17 December 2021. The Directive provides EU-wide protection for individuals who blow the whistle about infringements of certain EU laws, including in the areas of public procurement, financial services, money laundering, product safety, environmental protection and data privacy. Key jurisdictions to have implemented their whistleblowing legislation so far include Denmark, Sweden and France. Portugal’s law comes into force on 18 June. Poland, Ireland, Spain and the Netherlands have official draft legislation in place but Germany and Belgium have fallen behind, with only unofficial drafts in place so far. In January, the EU Commission took the first step in starting enforcement proceedings against the countries that had not or had only partially implemented the Directive’s provisions. The most significant feature of the Directive for employers is the explicit requirement for companies to follow up on reports received internally through their whistleblowing channels and provide an outcome to the whistleblower. In practical terms, this means that, where it did not exist before, all companies operating within the EU need to build the capacity to conduct investigations.
Countries – and regulators – outside the EU have also been introducing or strengthening whistleblowing laws. In April 2022, the Dubai Financial Services Authority introduced a new whistleblowing regime to protect people who disclose suspicions of regulatory or financial non-compliance. The new regime applies to all DFSA-regulated organisations operating within the Dubai International Financial Centre. In January 2022, the US state of New York strengthened its whistleblowing laws to, among other things, extend whistleblower protection to former employees and independent contractors and to protect people who disclose issues which they reasonably believe to be non-compliant (rather than only disclosures of an actual legal violation, as required under the previous rules). New Zealand is also extending its whistleblowing laws with new legislation coming into force on 1 July and in Australia (which strengthened its regime in 2019), the Securities and Investments Commission recently wrote an open letter to listed and large private companies urging them to review their whistleblowing policies and ensure that they encourage employees to report issues. Finally, Japan’s new whistleblower laws started to take effect from 1 June 2022. The amendments widen the scope of reports that qualify for protection and oblige companies with over 300 employees to designate a whistleblowing officer, carry out investigations and take remedial action to address any violations discovered.
The EU plans to put wider ESG issues firmly on the radar of all companies operating in its market with two new Directives currently in progress. The proposed Corporate Sustainability Due Diligence Directive will require in-scope companies to take appropriate measures to identify actual or potential adverse human rights and environmental impacts in their own operations and in the operations of their value chain (a concept that includes established suppliers and customers). Large EU companies (with more than 500 employees and a net worldwide turnover of over EUR150 million) must also have a plan to ensure their business model and strategy are compatible with the Paris Agreement goal of limiting global warming to 1.5 degrees. The new law has been described as projecting European values on value chains, and will complement the draft Corporate Sustainability Reporting Directive which requires in-scope companies to report on the way they operate and manage a range of social and environmental challenges according to a new set of EU sustainability standards.
Within Europe, some countries are also considering or passing their own supply chain due diligence legislation. Most notably, a new Supply Chain Act in Germany comes into force on 1 January 2023 requiring companies to assess their supply chain’s compliance with human rights and environmental standards. The law will apply initially to companies with 3000 employees and a registered office or branch in Germany. From 2024 this threshold will be reduced to 1000 employees. The Netherlands is set to introduce a child labour due diligence law, requiring Dutch companies and any other company supplying goods or services to Dutch consumers to investigate whether child labour has been used in their supply chain and Norway has a new Transparency Act coming into force in July 2022 requiring due diligence on human rights and decent working conditions in the supply chain. The UK intends to strengthen its existing requirement on businesses with a turnover of £36 million or more to publish an annual modern slavery statement, by mandating the reporting areas to be covered, requiring organisations to publish their statements on a government-run registry and introducing penalties for organisations that do not comply with the requirements. In Belgium, a legislative proposal was introduced last year in the Chamber of Representatives, establishing the principle of corporate responsibility to respect human rights, labour rights and the environment as well as implementing a mandatory value chain due diligence for all companies established or active in Belgium. However, there has been no further progress with the proposal. The state of New South Wales, Australia repealed modern slavery reporting obligations for NSW businesses in November 2021. This means there will continue to be one supply chain transparency regime for Australian businesses, which notably does not impose financial penalties for non-compliance.
Outside Europe, Canada has draft legislation requiring companies to disclose the steps they have taken to eradicate forced labour or child labour in their supply chains and the US enacted the Uyghur Forced Labour Prevention Act in December 2021 requiring importers to demonstrate the absence of forced labour in the production of goods coming from the Xinjiang Uyghur Autonomous Region (XUAR). Specifically, the Act requires the U.S. government to develop a new enforcement strategy to strengthen the prohibition of the importation of goods made through forced labour into the United States. The Act creates a rebuttable presumption – coming into force on 21 June 2022 – that "any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part" in the XUAR of China, or by certain entities within the region, are produced with forced labour and therefore prohibited from importation.
The first signs of climate-related employment law are also beginning to emerge in Europe. In Italy, companies with more than 100 employees are now required to engage “mobility managers” whose responsibilities include reducing the use of private cars for commuting to work and promoting sustainable mobility. Since August 2021, employers in France have been required to inform and consult with their Social and Economic Committees on the environmental implications of business decisions affecting the workforce. This gives employee representatives a new environmental protection role.
The deadline for EU member states to implement the EU Transparent and Predictable Working Conditions Directive falls in August 2022. The Directive includes various provisions, including a right to request more predictable and secure working conditions and a right to compensation if shifts are cancelled at short notice. These new rights are aimed at all types of casual and intermittent workers, not just those working for platforms, but signify the EU’s ongoing wish for a legislative framework that keeps up with new ways of working.
The Directive, however, only applies to those who are classified as working for an employer rather than those who are correctly classified as self-employed. Whether people working through platforms in the gig economy fall on the employment or the self-employment side of the line is a question that continues to absorb court time across Europe and beyond.
The difficulty with determining status is evident from the conflicting Deliveroo decisions across Europe and beyond this year. In the UK, the Court of Appeal upheld the findings of the High Court that Deliveroo riders were not in an employment relationship for the purposes of Article 11 of the European Convention on Human Rights. The unfettered and genuine right of substitution (contained in contracts and operated in practice) which meant that the riders were not under any obligation to provide services personally was the key factor in the decision. In Belgium, a Labour Tribunal agreed that Deliveroo workers were not employees, finding that the riders had hardly any limits on their freedom to organise their own work and working time, and that the platform itself did not have sufficient control to be an employer. In France, several labour courts came to a similar decision, finding Deliveroo riders were not employees, as the rider’s relationship with Deliveroo did not evidence elements of control that would characterise an employment contract. However, in May 2022, Deliveroo appealed a decision of the Paris criminal court which found that the conditions under which the riders were working between 2015 and 2017 constituted “concealed”, or unreported, employment. The Netherlands reached a different determination. Having looked at wages and whether there was a relationship of authority between the drivers and the platform, the Amsterdam Court of Appeal found that the Deliveroo riders were employees. The Court of Appeal has also ruled that Deliveroo is subject to the collective labour agreement for professional goods transport by road.
In Australia, the new Labour government has proposed extending the powers of the Fair Work Commission to regulate gig-workers and introducing an “objective test” for determining when an employee is a casual worker. It has also announced a plan to develop portable entitlement schemes for annual, sick and long service leave. The state of Victoria has already commenced a two-year trial of a paid sick and carers’ leave scheme for casual employees in hospitality, retail, aged and disability care, cleaning and security.
Turning to other platform worker cases, Germany’s Federal Labour Court ruled that people working as “crowd workers” could be classified as employees. Crowd working is work through online platforms, offering small tasks to users which they can accept and complete. In the Netherlands, the District Court ruled that Uber drivers are (modern) employees and their services are covered by the collective labour agreement for taxi transport. The court ruled that the drivers clearly work for Uber with a personal obligation to perform the work, and crucially, found there to be a modern employer-employee relationship recognising that “in the present technological age, the criterion of ‘authority’ has been interpreted in a way that deviates from the classic model, and which is more indirect (often digitally) controlling.” In the UK, which (unusually) has the intermediate status of “worker” falling between employment and self-employment, the UK Supreme Court decided that Uber drivers fall into the “worker” category. The Supreme Court thought that businesses should not be able to use their written contracts to determine who qualifies for statutory protections and that the question must be one of “statutory interpretation, not contractual interpretation”. Using this approach, the Supreme Court were able to conclude that the drivers were workers. Overall, drivers’ services were in fact “very tightly defined and controlled by Uber”. Particular weight was placed on Uber’s practice of logging out drivers who were failing to accept bookings and keeping them temporarily logged out even if they were ready to work.
For tax purposes, the Tax Assessment Council in Denmark agreed that a courier for a digital platform should be considered an employee and not self-employed. This was on the basis that the platform had considerable general and specific powers over how the courier performed the work and that remuneration was paid periodically, similarly to piece-rate pay.
Moving away from Europe, India has seen a union file a petition before the Supreme Court, in what is known as public interest litigation, to classify gig platform workers as registered wage workers to secure better employment benefits. Meanwhile, in Canada, a certified class action, Heller v Uber Technologies, is proceeding to allow the courts to determine if Uber Eats drivers are employees or independent contractors. Should the class action be successful, they would secure benefits such as minimum wage and holiday pay.
Turning to legislative proposals, the EU Commission published a draft Directive specifically on improving working conditions for platform workers, although the definition of a “platform” is so broad it will potentially also catch many more traditional employers that would not typically be considered as such. The Directive would introduce criteria to assess if a platform exerts sufficient control to be classed as an employer; if two of the five criteria are met, there would be a rebuttable legal presumption that the platform is an employer. A version of the Directive produced by the EU Parliament goes even further and says that “any” control exercised by the platform will make someone an employee. It remains to be seen how these will be reconciled. Spain has introduced a presumption that delivery riders and drivers working for an organisation that exercises organisational and managerial control through a digital platform, are workers. This can, however, be rebutted, with the burden of proving otherwise on the platform. The federal government in Belgium has agreed to include a list of specific criteria in existing legislation to determine the status of platform workers. In Luxembourg, a new Bill sets out the criteria to determine if a job has been carried out via a platform and creates a presumption that there is an employment contract as soon as one or more of the criteria is met. The platform can overturn this presumption if it can demonstrate there is no employment contract, unless three of the criteria are met. Also, In Italy, the government has been very active (and vocal) on platform work and its regulation. For example, the Ministry of Labour has announced its intention to implement the EU project directive on platform work and it has passed legislation that employers who enter into new relationships with workers mediated by digital platforms must notify the Ministry of Labour though an online portal.
Chile, meanwhile, is introducing a new law in September 2022 entitling digital workers to pay calculated on the hours worked, which cannot be less than minimum wage for the same period. Additional protections include health & safety training, transit insurance and the right to protective equipment. Similarly, Australia has also introduced new health and safety requirements for online platforms (delivering food) to supply PPE and, in the future, provide induction training and keep records. Ontario, Canada has proposed the Digital Platform Workers’ Rights Act 2022 creating minimum rights for digital platform workers regardless of employment status. If implemented, the Act would be a marked departure from the current legal landscape for digital platform work.
Singapore’s Ministry of Manpower announced a new Advisory Committee on Platform Workers which aims to strengthen protections for those who work for online platforms.
Data protection
One of the big events of 2021 was China’s introduction of a comprehensive data protection regime, in November, called the Personal Information Protection Law. The new law regulates the processing of personal and sensitive personal information in China and it requires employers to notify employees about the data they collect and process. Unlike the situation in the UK and the EU, consent can be relied upon as the main legal justification for processing employee data (although alternative justifications are available). The new regime introduces various new obligations, including specific requirements around the transfer of employee information abroad. Fines can be imposed for breach, including fines for individual managers found to be responsible. Thailand is also introducing a data protection regime, with new laws fully enforceable from 1 June 2022. As we mentioned in last year’s Managing an International Workforce conference, Brazil introduced a new data protection law in 2020, largely inspired by the EU GDPR. It gained more teeth last year as hefty administrative sanctions for breach started to apply from 1 August 2021. Also taking inspiration from the GDPR, January 2022 saw the UAE introduce its first standalone comprehensive federal data protection law.
In Europe, data protection laws continue to evolve. In June 2021, the EU updated its standard contractual clauses – or SCCs – which are the main tool for transferring personal data to countries outside the European Economic Area that have not been given a so-called “adequacy decision”. By December 2022, all old SCCs in existing agreements will need to be replaced. As a result of the Schrems litigation, even if companies use SCCs to transfer personal data, they must still assess whether there is adequate protection for the data in the country in question. In June 2021, the European Data Protection Board updated its recommendations on how organisations are supposed to assess this. The list of countries with an “adequacy decision” (allowing for the free flow of personal data without additional safeguards) has gone up to 14, with South Korea joining the club in December 2021.
Last year saw the (post-Brexit) UK set out its own approach to adequacy, identifying the UK’s six priority countries for data partnerships (Australia, Colombia, USA, South Korea, Singapore and the Dubai International Finance Centre) and four further longer term partners (Brazil, Kenya, India and Indonesia). It will be interesting to watch how these negotiations progress, particularly in light of the preliminary EU/US Data Privacy Framework and the joint Declaration by the US, Canada, Japan, South Korea, the Philippines, Singapore and Chinese Taipei on the Asia-Pacific Economic Co-operation – Cross-Border Privacy Rules, both of which the UK government has indicated it is following closely. If these negotiations are concluded towards the end of 2022, as expected, data transfers involving these jurisdictions should be a lot more straightforward for global organisations.
For those transferring data out of the UK (“ex-UK transfers”) it is also worth noting that on 21 March 2022 the UK’s International Data Transfer Agreement ( a totally bespoke transfer mechanism for ex-UK transfers only), and the UK Addendum ( a way for UK companies to use the “new” EU SCCs for ex-UK transfers) came into force. In another marked divergence from the EU, the UK transitional provisions allow the use of the old EU SCCs until 21 September 2022 and the longstop date for switching to the new transfer mechanisms is 21 March 2024.
Data protection continues to generate litigation in Europe. In Belgium, the data protection authority fined a financial institution EUR 100,000 when one of its employees accessed financial information about his ex-wife that was stored on the institution’s systems, finding that the institution had taken insufficient measures to protect personal data from unauthorised access by its employees. In Spain, the Spanish DPA fined Amazon Road Transport Spain EUR 2,000,000 for violating the GDPR by requesting criminal record certificates in its hiring process. The German courts continue to grapple with the limits of subject access requests and whether employers must “hand over everything”, with the Federal Labour Court beginning to create case law supporting the employer’s right to resist blanket demands for access to documents. It will be interesting to see how this compares to the European Data Protection Board’s Guidelines on data subject rights’ right of access which appears to take a contrary approach.
Algorithms and artificial intelligence
More companies are turning to algorithms and artificial intelligence (AI) systems to help with HR decisions. With this comes litigation and proposals for tighter regulation. In the Netherlands, a court ruled that Uber’s de-activation of driver accounts was unlawful where an algorithm had been used to trigger automatic de-activation of drivers identified as a fraud risk. This was a judgment reached in Uber’s absence, however, and it was swiftly followed by a second case in which the court (having heard arguments from Uber) accepted that Uber had acted lawfully, because the de-activation was essentially a temporary measure pending a full investigation. Uber was, however, ordered to provide more information about the logic involved in the algorithm.
In Italy, the DPA fined the delivery platform Foodinho EUR 2.6 million for privacy violations concerning the algorithms used for the management of its employees. The DPA concluded that Foodinho: had not sufficiently explained the functioning of its automatic order management system and did not ensure the accuracy of the results of the automatic algorithm system used to evaluate workers’ performance; had failed to provide workers with ways to challenge decisions made using the algorithm in question, and to guarantee that procedures to protect the right to obtain human intervention were put in place; and did not comply with other obligations under the GDPR, including conducting data protection impact assessments, appointing a data protection officer, maintaining appropriate records of processing activities, and implementing appropriate technical and organisational security measures. In addition to the fine, the DPA required Foodinho to implement a series of corrective measures.
Empathic AI, an emerging technology that discovers links between people’s physiological reactions and their emotional state, is also raising eyebrows. The Hungarian DPA fined Budapest Bank EUR 700,000 for undertaking automated AI decision making and profiling based on empathic AI analysis of customer service calls without adequate safeguards, a proper balancing of interests or even a valid legal basis.
Another EU development of interest is the proposal for a Directive on regulating platform work, mentioned above. Chapter III contains the privacy proposals which include an obligation to provide transparency information on any automated monitoring or decision-making systems to platform workers; an obligation to monitor and review automated decision making or monitoring carried out by systems which impact platform workers; and an obligation to provide an explanation about any decisions taken as a result of automated decision making or monitoring systems. The European Parliament draft of the Directive proposes extending these rights to all workers.
The European Commission has also proposed a new Artificial Intelligence Act to govern the use of AI throughout the EU. The proposed new regulation involves the creation of a searchable public database of high-risk AI, which must comply with certain safeguards before it can be placed on the EU market. AI systems intended for use in the employment and HR space are deemed high risk, and will attract a number of obligations including the need to maintain a continuous risk management system, use high quality datasets that are relevant, representative, free of errors, and complete; and allow for human oversight. It is likely to be some time before the new Act is agreed.
Meanwhile, California is targeting the use of algorithms to manage workers in warehouse distribution centres. The new law (effective from 1 January 2022) requires employers to disclose any production quota that applies to a distribution centre worker along with their analysis of the worker’s performance. It also prohibits the use of algorithms that disrupt basic worker rights such as rest periods, bathroom breaks, or compliance with health and safety laws. The legislation ensures workers cannot be fired or retaliated against for failing to meet an unsafe quota. Employers will not be allowed to enforce quotas that impede the worker’s ability to take proper breaks. This has been described as a landmark regulation of algorithm-driven performance management systems.
Laws or codes of practice on the right to disconnect are increasing, as fears that new technology means workers are increasingly contactable are gaining greater urgency in a post-Covid world of remote working. The overall trend to reduce working time also continues, with some proposals and trials of a 4-day working week and other new caps on maximum weekly working time.
In January 2021 the European Parliament called upon the Commission to create a new EU law on the right to disconnect.
From April 2021 in Argentina, remote workers are entitled to disconnect from work outside working hours and during time off and cannot be subjected to any sanction for doing so. If contacted outside working time, employees are not obliged to reply until the next working day. The limits on maximum hours of work also apply to remote work.
From January 2022 in Colombia and subject to certain exceptions, workers have had the right not to be contacted outside their working schedule and are entitled to disconnect once their scheduled working time is over. Any clause which purports to contradict this right is ineffective and an employer’s failure to comply may constitute harassment. Colombia is also gradually reducing maximum working hours from 48 to 42 hours a week (by July 2026).
In the Philippines, concern about workers burning out whilst working from home during the pandemic and the blurring of the line between work and home, has led to a “Workers’ rest bill” being introduced in the senate. If it becomes law, it would be unlawful to require an employee to work, be on duty or travel outside work hours. Contacting the employee for work using telephone, e-mail, or other communication outside work hours would be unlawful unless it is in connection with emergency or urgent work, as would punishing an employee who does not respond to communications during rest hours.
Ireland introduced a new code of practice in April 2021 on the right to disconnect from work outside normal work hours. The code restates previous employment law provisions but also highlights the requirement for employers to create a culture where employees can feel safe to disconnect (the code recommends employers develop a Right to Disconnect Policy), while also stressing employees’ obligations to co-operate and manage their time effectively. Ireland has also started a trial of a 4-day working week with 20 companies involved – see more on this below.
Italy has passed a law on the right to disconnect but it only protects those doing “smart working” (hybrid working) and there are no sanctions for non-compliance. An employee on “smart working” alternating between working in the office and working remotely enjoys the right to disconnect, whereas a co-worker on a remote working contract permanently based at home, has no such recourse.
A bill was introduced last year to establish a right to disconnect in Luxembourg, and in November 2021, Portugal implemented new laws designed to limit contacting of employees after normal working hours. Employers will face sanctions if they text, phone or email workers while they are not working.
The Belgian federal government also agreed a series of reforms in February 2022 that increase protection for workers. Among the reforms are a new right to disconnect and the introduction of a four-day working week or a varying weekly working regime. The agreement should be transposed into law in the next few months. A right to disconnect from work for federal civil servants was also introduced from 1 February with emails or phone calls outside work hours not requiring a response.
Ontario, Canada also now requires employers with 25 or more employees to adopt a ‘disconnecting from work’ policy.
Ireland started a trial of 4-day week working arrangements in February 2022 with 20 companies participating. During the 6-month trial, employees will be paid their current salary, whilst working 20% less and attempting to maintain existing productivity. Researchers are working with the companies to objectively measure productivity and the well-being of employees, as well as the impact on the environment and gender equality.
Two assembly members in California are also trying to promote the 4-day week. They have introduced a bill which proposes to make a four-day working week the new standard in California. It provides that the rate of pay for the four-day 32-hour week would reflect the previous rate for a 40-hour week. This would enable staff to work the equivalent of four eight-hour days, rather than five.
France meanwhile is concerned with the working time of executives. Legal working time in France is 35 hours per week and any time worked over 35 hours is considered as overtime. However, generally executives’ working time is calculated in days worked over the year (“Forfait-jours”) rather than hours. Recent case law requires the employer to maintain strict control of employees’ working days and workload with the consequence that the Forfait Jours convention might be deemed invalid and the employer faces overtime claims.
In Australia, the Federal Court recently held that hours worked in excess of 38 hours per week should be paid at overtime rates despite the contract of employment providing that the ordinary work hours for a full-time week are 50 hours per week. There is a proposal to reduce maximum working hours from 48 to 45 per week in Malaysia. While Vietnam is one of the few countries to buck the trend with an increase from 1 April 2022 in the amount of overtime that can be worked with employee consent (from 40 to 60 hours a month) to facilitate post-Covid economic recovery.
The ECJ had previously found that time spent on call away from the workplace and not performing duties was not working time under the Working Time Directive unless it significantly restricts the worker’s ability to manage their free time. In two cases last year it found that only constraints imposed by national law, collective agreements or the employer are relevant, whilst constraints that are caused by “natural factors” or the employees’ own decisions are not (DJ v Radiotelevizija Slovenija C-344/19; RJ v Stadt Offenbach am Main C-580/19).
And lastly, holiday rights are increasing, with a new national holiday in Canada and increased statutory holiday in Hong Kong. In Germany there is a trend of employers adopting “trust-based leave” systems of annual leave, where instead of having a set amount of days each year, employees can decide the amount of leave they take. There has been no marked increase in the amount of leave taken, while there has been evidence of some employees taking less leave in specific years.
Vaccination has been a hot topic across the globe this last year with debate around mandatory Covid vaccination (with particular emphasis on healthcare workers) making headlines. Austria, Hungary, Saudi Arabia, Hong Kong and Latvia all favoured imposing mandatory vaccination for all sectors whilst France, Belgium, the UK, Greece and Denmark limited mandatory vaccination to healthcare workers.
Whilst continuing in Saudi Arabia, all European countries have now backtracked from any mandatory vaccination position. It is a similar story in the US where President Biden’s proposal for employers with more than 100 employees to mandate vaccines or impose weekly testing was ruled unconstitutional.
Peru continues to require mandatory vaccination for any work undertaken on-site and New Zealand now only requires vaccination for healthcare, prison, and border force workers.
Hong Kong has introduced a “vaccine pass” in three stages which requires, with effect from 31 May 2022, all citizens to be fully vaccinated (unless exempted) and to have received a booster shot to enter most premises including courts, government buildings, restaurants, shopping malls and supermarkets. Certain industries within the private sector have also been “strongly encouraged” by their regulators to implement the same arrangement in the workplace. The main legislation covering Hong Kong employment rights (the Employment Ordinance) is also expected to be amended to allow employers to legally dismiss employees for failing to comply with a legitimate vaccination request.
One of the legacies of the pandemic will be the spotlight it has shone on the adequacy of sick pay. Even as Covid measures have been withdrawn, sickness levels remain high in some countries as the virus remains in wide circulation. Ireland is introducing statutory sick pay in a phased transition over four years, beginning with 3 days this year and rising to 10 days in 2026. New Zealand doubled the entitlement to sick leave from five days to ten days per year and as of 1 January 2022, British Columbia became the first province in Canada to legislate for a minimum of five paid sick days each year. In Hong Kong, proposed changes to the Employment Ordinance have expanded the definition of “sickness day” for the purposes of paid sick leave to include where an employee is placed under quarantine or isolation due to Covid, or must comply with a compulsory testing notice or order.
Given the pandemic, health and safety measures have never been more in focus, albeit from a virus circulation perspective. Most countries had workplace Covid measures in place, with many European countries operating a 3G approach requiring vaccination, testing or recovery from prior infection to enter the workplace. Other Covid measures have seen places like New York and Belgium offer paid vaccine leave to promote vaccination.
Courts have also been busy hearing cases brought by employees regarding pandemic circumstances. In New Zealand, a border protection employee’s dismissal for failure to receive a vaccination was found to be justified given that the role was under a mandatory vaccination order. The consultation process was also found to be fair and reasonable including consideration of alternatives to dismissal. Courts in France and Australia have also rejected nearly all claims brought so far in relation to the mandatory vaccine law for employees working in particular sectors.
Cases regarding compliance with Covid protocols have also been a regular occurrence. In Chile, the courts upheld the lawfulness of dismissing an employee who attended work despite being in close contact with a suspected infectious person, in breach of company protocol. Meanwhile in the Netherlands, the District Court of Amsterdam held that an employer could request an unvaccinated employee to test themselves at least once a week. Considerable weight was given to the fact that the employer’s testing policy was found to be reasonable given the employee was in close contact with other employees.
In Germany, dismissal for refusing to wear a mask was upheld, with employers able to instruct employees to wear masks if a risk assessment showed that protection was not guaranteed by other measures. In the UK, the Employment Appeal Tribunal has recently upheld the fairness of an employee’s dismissal for refusing to attend work during the early stages of the pandemic. Based on the claimant’s conduct in not adhering to Covid restrictions in his personal life, his argument that he stayed away from work because of serious and imminent danger was rejected.
With working from home becoming the new normal for 2021, the definition of a workplace accident has come under scrutiny. In Germany, the Federal Social Court ruled that an employee who fell whilst walking from his bedroom to his home office (although the accident occurred in 2018) was protected by statutory accident insurance. The German Social Security Code was amended last year to state that there is insurance cover for accidents in the home office, to the same extent as when working in the office. Meanwhile in Italy, the Supreme Court ruled that an employee’s accident when she was on her way back to work, having taken a coffee break, was not linked to a work activity.
In terms of non-Covid related activity, in South Korea, the Serious Accident Prevention Act is now in force, applicable to employers with 50 or more employees. Employers are required to establish a health and safety management system to ensure compliance with health and safety regulations and avoid recurring accidents. Additionally, executives are now held criminally responsible for serious accidents.
In the state of Victoria, Australia new mental health regulations are due to come into force on 1 July 2022 obliging employers to identify, eliminate (or reduce) and review measures implemented to control risks associated with any psychosocial hazards. For employers with more than 50 employees, it is proposed that WorkSafe Victoria would be provided with bi-annual reports about any related complaints received during the previous 6 months. Further, the state of Western Australia passed a new Work Health and Safety Act in March 2022 to align with the national model Work Health and Safety Act. This means businesses will have similar health and safety obligations and requirements across Australia (except Victoria). The law also introduced the offence of industrial manslaughter which involves substantial penalties.
Non-compete clauses have come under increasing scrutiny in recent years, and there have been several notable legislative developments. Since 1 January 2022, employers in Finland must pay compensation for non-compete clauses at the rate of 40% of the employee’s salary for non-compete clauses lasting less than 6 months and 60% for longer non-compete clauses. From January 2023 this will also apply to non-competes agreed before the change took effect, to give employers time to review their practices. A similar proposal is under consideration in the UK.
From 25 October 2021, Ontario, Canada prohibits the use of non-compete agreements within employment contracts, although there are exceptions for business sales and for executive employees.
In the US, meanwhile, President Biden is urging the Federal Trade Commission to curb or ban the use of non-competes, but the FTC has not yet moved to do so. Despite this, many state legislatures are continuing to enact their own legislation. For example, Illinois, Nevada and Oregon have all recently joined the list of states banning non-competes for employees earning under a specified salary or for hourly-paid employees. Oregon has also capped the maximum duration of non-competes at 12 months. Other states - such as Washington – are considering a total ban.
Also in the US, with effect from September 2021, the federal Department of Labour withdrew a Trump administration rule that made it more difficult to hold companies liable as “joint employers” of contract and franchise workers. As a result, companies are now more vulnerable to claims of wage and hour violations being made against them under the US concept of joint employment. Meanwhile, the battle over California's ban on mandatory arbitration continues. The ban would prevent employers from being able to force certain disputes (including discrimination claims) into arbitration, but it has not yet been implemented due to ongoing litigation over its lawfulness.
The Swedish Parliament has just voted to make significant changes to its principal employment statute, the Employment Protection Act. The new law will come into force on 30 June and be applied from 1 October 2022, with changes covering a range of issues, including redundancy, performance dismissals and fixed term contracts. It was described by Sweden’s minister for Employment and Gender Equality as “the greatest reform of Swedish employment law in modern times”.
Those of you who regularly attend this conference will know that, for many years now, the government in Hong Kong has been grappling with whether and how to end its distinctive Mandatory Provident Fund offsetting rule. This rule (as we remind you every year!) essentially allows employers to dip into employees’ retirement funds to discharge their obligation to make statutory long service or severance payments to departing employees. A Bill was finally tabled in February 2022 setting out a plan for phasing out the MPF offsetting rule by 2025.
And finally, the United Arab Emirates has a new working week. From the beginning of this year, federal employees have moved to a four and a half day working week, from Monday to Friday lunchtime, instead of the traditional Sunday to Thursday week. Many (if not most) private sector employers have also moved to a Monday to Friday working week, although most have not adopted the shorter working week and have retained the full five days instead. This makes the UAE the first country in the Gulf to officially change its working week to align itself with the rest of the world.
With thanks to our colleagues and contributors from our international alliance, Ius Laboris.