In our latest international employment alert we look at recent legal changes as well as changes on the horizon in the employment law field. Click below to see the legal updates in the following jurisdictions:
UK: Three legal changes on the horizon
1. Sexual harassment consultation
The Government has published its response to the consultation on sexual harassment in the workplace. The key responses are:.
-New duty on employers proactively to prevent harassment The Government intends to introduce a new duty on employers proactively to take steps to prevent harassment. It anticipates the duty will require employers to take ‘all reasonable steps’ to prevent harassment, and for an incident to have taken place before an individual can make a claim. The Government intends to bring forward legislation “as soon as parliamentary time allows”.
-Third party harassment The Government will introduce workplace protections against third-party harassment “when parliamentary time allows” and will continue to work with stakeholders to help shape the protection, particularly on whether it should only apply in situations in which an incident of harassment has already occurred.
-Volunteers and interns The consultation addressed whether the Equality Act protects volunteers and interns. The Government believes that most of those classified as interns should already be protected under that Act. It will not extend protection to "pure" volunteers, since this may have undesirable consequences (for example organisations finding they have to deal with unnecessary red tape).
-Tribunal time limits for Equality Act cases The Government believes an extension to time limits for Equality Act 2010 cases should be introduced and proposes an extension from the current 3 months to a new time limit of 6 months.
What does this mean for employers?
The timing on implementing the changes is noticeably vague. However, since changes are on the horizon employers may want to start collating information and getting an overview of their current policies and procedures.
2. Flexible working consultation
The Government launched a consultation on reforms to the existing flexible working legislation including making the right to request flexible working a “day one” right (as opposed to the current requirement of 26 weeks’ continuous service).
What does this mean for employers?
In short, nothing is changing for now - this is only a consultation on proposed reforms. However, it does signal that changes are on the way and employers should keep these in mind when thinking about future hybrid working or other working arrangements.
It’s important to note that despite the title of the consultation “making flexible working the default” – the proposals are about making the right to request flexible working a day one right. It is the right to request which is the default, not the actual flexible working arrangements.
3. Fire and rehire
Fire and rehire practices are commonly used by employers to change employees’ terms and conditions to introduce less favourable terms. Where employers fail to obtain employee agreement to the changes they can fire and offer to rehire immediately on the new terms (or dismiss and re-engage as it is known more formally).
Such practices have received negative press attention and a Private Members’ Bill on changes to the practices has recently been blocked by the Government.
What does this mean for employers?
Employers can still use the fire and rehire practices but should be aware that this may cause adverse publicity and have reputational consequences as well as exposing them to legal risks such as unfair dismissal claims. For more information please click here and here to see our recent articles on this topic.
Controlling workload for executives
A current “hot topic” in France concerns controlling workloads for executives. Legal working time in France is 35 hours per week and any time worked over 35 hours is considered as overtime. However, generally for executives, working time is computed in days worked over the year (“Forfait-jours”) rather than hours. The number of days the employee commits to work each year (often 218) is agreed after deductions of annual leave and bank holidays and additional days off. Recent case law requires the employer to maintain strict control of the employee’s workload with potential consequence of the Forfait Jours convention being deemed null and void and the employer facing high financial penalties.
Entering into a “Forfait-jours” convention is subject to the following conditions:
- Real autonomy in the organisation of the employee’s schedule (Art. L.3121-58 Labor Code);
- Possibility of concluding a “Forfait jours” by a collective agreement (CBA or company wide collective agreement); and
- Written agreement with the employee (Art. L.3121-55 Labor Code).
Case law has set additional obligations to ensure control of workload. An employer must:
- Ensure the monitoring of the employee’s workload;
- Guarantee the employee's right to disconnect (i.e not to respond to emails out of working hours) (Art. L.3121-64 Labor Code); and
- Organise an interview on the balance between the employee's personal and professional life (Art. L.3121-60 Labor Code).
Case law is becoming very restrictive on control of the workload. In its decision on 13 October 2021 (n°19-20.561), the French Supreme Court noted the obligation for employers to have effective and regular workload monitoring to be able to take measures. Especially, an employer must ensure that daily (11 hours) and weekly (35 consecutive hours) rests are respected.
Employers have to keep evidence of such control of the employee's workload or risk that the “Forfait-jours” convention will be deemed null and void.
Consequences can be huge for the employer. In case of litigation (generally after termination of the employment contract) sanctions can be as follows:
- Payment of overtime (i.e over time over 35 hours weekly) over the last 3 years;
- Damages for breach of the right to time off;
- Indemnity for concealed work pursuant to article L. 8223-1 of Labor Code (6 month’s salary); and/or
- criminal offence (fines of 700 to 1,500 € for judicial person).
Recent case law provides that in case of cancellation of the "Forfait-jours", the employer can request reimbursement of the additional days off granted to the employee (Cass. Soc., 6 January 2021 n°17-28234).
Working time computed in days over the year can result in employees being entitled to additional days off which is generally appreciated by employees and works well with executive ways of working. However, case law has stressed that there needs to be strict control of workloads and a failure to do so may result in “mass” litigation. There is an increasing amount of litigation surrounding lack of control of the workload by the employer.
ALL CHANGE! Further amends made to DIFC Employment Law
The Dubai International Financial Centre ("DIFC") freezone is quite unique as, in contrast to the Federal (civil) system that applies across the vast majority of the United Arab Emirates ("UAE"), the freezone has its own common law and legal regulatory framework. Specifically, it has its own, standalone employment law, DIFC Law No. 4/2019, as amended ("Employment Law"), which is supplemented by the DIFC Employment Regulations (Qualifying Scheme requirements under Article 66) ("Employment Regulations").
Much like the DIFC itself, the Employment Law has evolved significantly since its inception in 2005. The latest amendments to both the Employment Law and the Employment Regulations came into effect on 21 September 2021 and include the following:
- Secondments: Employees working in/from the DIFC on a qualifying Secondment are now protected from discrimination, harassment and victimisation; and subject to statutory duties (similar to English law implied duties), including serving faithfully; complying with reasonable/lawful instructions; confidentiality; and not disrupting the Employer's business. However, any period of Secondment that immediately precedes the individual becoming an Employee under an Employment Contract with the same Employer no longer counts towards their period of continuous service for the purpose of calculating entitlements to end of service gratuity ("Gratuity") or contributions into an employee workplace savings scheme ("Core Benefits").
- Fixed-term contracts ("FTCs"): Multiple FTCs will be aggregated to determine periods of continuous service for the purpose of calculating Gratuity and Core Benefits, provided that they are successive, or the offer of a new FTC was made prior to the expiry of the existing FTC. Where FTCs are for 6 months or less, the maximum probationary period cannot exceed half the length of the fixed-term.
- Unlawful deductions from Wages: New provisions have been introduced which largely mirror the position under English law. Employees must claim within 6 months of the deduction/non-payment or last in the series of deductions/non-payments; and (subject to certain limited exceptions, including Maternity/Sick Pay, Gratuity and Core Benefits) can only claim in respect of deductions/non-payments that fall within the 2-year period immediately preceding the date the claim is presented to Court.
- Remote-working: Certain Employer obligations regarding health and safety 'in the workplace' are now disapplied where an Employee is required/permitted to work from home. For example, there will be no duty to provide and maintain adequate and safe access to and from the home-workplace, nor to ensure that there is adequate ventilation, lighting or workstations.
- Employee workplace savings scheme: The most substantial amendments relate to the employee workplace savings regime, which replaced the traditional Gratuity regime with effect from 1 February 2020. In particular:
a) Fees: A new fee of US$500 is now payable when applying for a Certificate of Compliance ("CoC") or Exemption Certificate ("EC").
b) CoCs will now only be given to Qualifying Schemes that are established as DFSA-approved Employee Money Purchase Schemes, are in the form of a DIFC Trust; and have their Operator and Administrator based in the DIFC and regulated by the DFSA.
c) ECs will only be issued where:
- the Employer is under a clear statutory duty in another country to make pension, retirement, saving, gratuity or substantially similar contributions into a Scheme in such other country for specific Employees; or
- the Employer is making payments to a Group Scheme on behalf of its Employees where the value of those payments (excluding Employer/Group payments/contributions to the costs of operating the Group Scheme) exceeds the minimum statutory Core Benefits and where that Group Scheme is available in at least four countries, exclusively to Group employees, and is regulated and supervised by a financial services regulator.
How will two new pieces of legislation greatly benefit Hong Kong's employees?
Mandatory Provident Fund ("MPF") offsetting
Currently in Hong Kong employers can offset amounts of severance and long service payments paid to employees under the Employment Ordinance ("EO") from the accrued benefits derived from the employers' contributions made into the MPF schemes.
MPF savings are supposed to be used for an employees' retirement but the above arrangements are contrary to that objective depleting the funds when the employee retires or they are made redundant.
In her recent Policy Address Hong Kong's Chief Executive, Carrie Lam, stated that next year the Government will submit a bill to the Legislative Council which will cancel all offsetting arrangements in 2025. In summary, the bill will:
- Abolish all offsetting of severance and long service payments with effect from the law's commencement date (i.e. 2025). Prior to that date offsetting may continue;
- Provide for a governmental two-tiered subsidy scheme assisting employers' to meet expenses of paying severance and long service payments in full. The first-tier of the subsidy would last for twelve years and the second-tier would be extended to twenty-five years with the entire subsidy being estimated to be worth HK$29.3 billion; and
- Oblige employers to set up savings accounts to ensure that they have sufficient savings to pay future severance and long service expenses. This is important, after all when redundancies are happening an employer may be unable at that time to afford the cost of these payments.
More statutory holidays
Starting in 2022 and after a decade of negotiation moves will be taken to allow over a million workers more days off in Hong Kong. This is an important change.
Irrespective of their length of service, all employees are entitled to twelve statutory holidays per annum pursuant to the EO's regime which provides that full-time employees with over three months of service will also be paid on the statutory holiday.
The regime is backed by criminal offences for any failure to grant the holiday and/or to pay an employee.
General Holidays Ordinance ("GHO")
The GHO provides that there are seventeen general holidays in Hong Kong (twelve of which overlap with the EO's statutory holidays).
The GHO also provides that save for banks, schools, public and government offices, these general holidays do not need to be observed, although many employers do grant their employees a leave day more than a million workers go without and have to work on those general holidays which are not also statutory holidays.
In order to improve conditions, between 2022 and 2030 and once every two years the following five general holidays will become statutory holidays: (i) Buddha’s Birthday (in 2022); (ii) the first weekday after Christmas Day (2024); (iii) Easter Monday (2026) (iv) Good Friday (2028); and (v) the day following Good Friday (2030).
By 2030, all employees will have seventeen statutory holidays and improved benefits.
Employers need to be careful to ensure that they comply with their new obligations in-particular employment documentation should be reviewed and updated.
Update on proposed employment legislation in Singapore
Singapore has currently no anti-discrimination legislation or laws that employers have to comply with.
On 29 August 2021, Singapore's Prime Minister Lee Hsien Loong announced that Singapore will enshrine into law the current workplace anti-discrimination guidelines.
The current workplace anti-discrimination guidelines are guidelines on fair treatment of employees from the Tripartite Alliance for Fair & Progressive Employment Practices ("TAFEP Guidelines") which is a body established by the tripartite partners comprising the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation. Employers are expected to abide by these TAFEP Guidelines but they are not legally binding.
The TAFEP Guidelines seek to encourage employers to implement fair employment practices based on the following 5 principles1:
a) Recruit based on merit: recruit and select employees on the basis of merit (such as skills, experience or ability to perform the job) and regardless of age, race, gender, religion, marital status and family responsibilities, or disability;
b) Respect employees: treat employees fairly and with respect and implement progressive human resource management systems;
c) Provide fair opportunities: provide employees with fair opportunity to be considered for training and development based on their strengths and needs to help them achieve their full potential;
d) Reward fairly: reward employees fairly based on their ability, performance, contribution and experience; and
e) Comply with labour laws: abide by labour laws and adopt the Tripartite Guidelines on Fair Employment Practices.
While there has yet to be any proposed legislation, it is expected that the new regime for resolving disputes regarding workplace discrimination will be similar to the regime in Singapore concerning disputes over salaries or wrongful dismissal2. Such a regime will require employers and employees to seek to resolve the disputes via mediation before the matter can be heard by a tribunal. According to Singapore's Prime Minister Lee Hsien Loong, a tribunal will be created to deal with workplace discrimination3.
In the meantime, employers should start preparing themselves for the proposed legislation and look at their workplace discrimination policies to see if what they have in place accords with the principles in the TAFEP Guidelines.