business people

International labour law

Crowe HR advisory

Stuart Buglass, HR Director, Global Business Solutions
business people
October 2019: the latest developments 

Outlined below are the latest rights and duties for employees and employers.

 ‣  EU    ‣  France
 ‣  Poland    ‣  Spain
 ‣  UK    ‣  Switzerland
 ‣  Australia
   ‣  Canada



Work Life Balance Directive

The Work Life Balance Directive aims to create better flexible working and parental leave rights for EU workers. It came into force on 1 August 2019.

Each Member State now has three years to ensure that their domestic legislation is updated to meet the standards of the Directive.

The main enhanced rights created by the Directive are:

  • at least 10 days paternity leave for new fathers
  • at least five days carer’s leave for employees to provide care to a relative
  • working parents / carers will have an extended right to request flexible working up to a child’s eighth birthday.

The pitfalls of employee data processing under GDPR: a timely reminder on the use of consent

Under the terms of the General Data Protection Regulation (GDPR), a data processor must have a ‘lawful basis’ for processing EU personal data. The GDPR lists the ‘lawful basis’ that can be relied on and these include the data subject’s consent. Consent has historically been used by employers when processing employee personal data, however the GDPR in its recitals limits the use of consent to relationships where there is not an imbalance of power. As a result employers must use another lawful basis for their processing of staff personal data, such as the performance of a contract, or to fulfil a legal duty etc. Where employment contracts contain consent clauses they should be removed and instead employees should be provided with detailed privacy statements that explain the lawful basis being relied upon for each separate type of data being processed in addition to all of the other items required to be included by virtue of Article 13 GDPR.

In recent weeks, the Greek division of PwC has been hit with a €150,000 fine for continuing to present consent as the basis of their employee personal data processing, whereas in reality the legal basis was the performance of the employment contract itself.

It can be a very important distinction - when consent is used as the legal basis for processing it is open to the data subject to withdraw their consent at any time, whereas when another legal basis is used the withdrawal of consent will not actually work to stop the processing of data.

The Hellenic Data Protection Authority (HDPA) held that PwC were misleading their employees into thinking the processing of their data could be stopped simply by withdrawing their consent and as a result were found in breach of Article 5(1) GDPR ( the data was not therefore processed lawfully) and also the duty of accountability under Article 5(2).

The case highlights the importance of clear privacy notices in the field of employment

The GDPR ‘right to be forgotten’ limited to the EU

The extraterritorial reach of the GDPR may not be as extensive as first thought.

The CNIL (the French data protection authorities), imposed a €100,000 penalty on Google for its failure to abide by the GDPR ‘right to be forgotten’ by removing an EU individual’s personal data from their search engine. Google’s approach was to simply ‘geo- block’ thereby limiting the de-referencing of the individual to the relevant national version of Google which ultimately meant a search in other countries would be capable of displaying the individual’s personal details.

Google appealed to the European Court of Justice (ECJ) and its judgement was given on the 24 September.

The ECJ found in favour of Google and clarified that the right to be forgotten is applicable only within the EU and that there must be a balance between personal rights and the public’s right to information. However it also stated that search engine operators should put in place mechanisms whereby users are limited or as a minimum discouraged from accessing the search engine results from the EU.


Workplace accident: a rather broad definition!

A recent case presided over by the Paris Court of Appeal has raised a few eyebrows.

The case involved a businessman who died of a heart attack while having sex during a business trip. However somewhat surprisingly it was actually the court’s decision that grabbed all of the headlines by determining that the death was in fact an “accident du travail”, a workplace accident!

Under French law the legal definition of an ‘accident du travail’ is “any physical injury or psychological damage resulting from an event occurring on a certain date and by or in connection with work” and there is a presumption that an accident occurring during working time is an accident du travail. For business trips this covers both ‘professional acts’ and also normal ‘everyday acts’ such as dining – both are considered connected to work.

In order to defend their position an employer would need to rebut this presumption by asserting that the employee had interrupted the trip for personal reasons.

If the death is as a result of an accident du travail then the employer can be liable to make payments to the employee’s dependents equivalent to 80% of salary until the normal retirement age.

In this particular case the Court of Appeal considered that the employee was engaged in an ‘everyday act’ rather than an ‘interruption for personal reasons’ and as result was an accident du travail.

The case is likely to be appealed but it does highlight that the French courts have a rather wide definition of a workplace accident. As far as possible employers should list what personal activities are capable of interrupting the business trip and clearly state that accidents resulting from these activities will not be considered a workplace accident.


New pension requirements for employers

Since 1 July employers with 250 or more employees have been required to adopt a new pension program referred to as PPK. The same obligations will apply to employers with at least 50 employees from 1 January 2020, those with at least 20 employees from 1 July 2020 and to all other companies from 1 January 2021.

The regulations will require employers to implement a pension scheme and make an employer’s contribution equivalent to 1.5% of the individual’s salary. Employees will be required to contribute 2% and the Polish government will make an additional annual payment into each employee scheme of PLN 240 (a one-off welcome payment of PLN 250 will also be paid into the plan on its set-up).

A failure to comply with the new rules will result in fines of up to PLN 100,000.

The system will operate on a similar basis to the UK’s auto-enrolment pension model so that employees are automatically enrolled into the scheme and have the option to opt-out.


Flexible working rights extended to all workers

Previously employees could request flexible working arrangements to better balance personal, family and working life under Art 34.8 of the Workers’ Statute, but only if this was subject to collective bargaining or an individual agreement with the employer. Following a recent amendment to Art 34.8 this has become an autonomous right allowing all workers to request the adaptation of the duration and distribution of their working day in addition to adapting the form of work – such as requesting to telework.

However the right is not completely unfettered - the alterations must be reasonable and proportionate and balance the needs of the business as well as the worker.

In order to exercise the right there is a formal process that should be followed. Following a formal request from the worker the employer has 30 days to discuss and negotiate and at the end of this period the employer can:

  • reject the request (with objective reasons for doing so)
  • accept it
  • propose an alternative.

In the event of a refusal the employee can file a claim against the employer – this has to be submitted within 20 days.

Whether or not an employer’s reasons for refusal are objective and reasonable will undoubtedly be tested through the courts in the years to come and in the absence of any statutory guidance on this such case law will provide employers with much needed clarity on what is and what isn’t considered reasonable, although the size and resources of the employer will undoubtedly be a persuasive factor.


Brexit and immigration

The UK government has held a confused position on immigration post Brexit changing its position on a number of occasions over the last few months.

However we feel the latest announcement may well be the one that sticks. The latest guidance can be summarised as follows:

  • EU citizens arriving in the UK for the first time following a no-deal exit can apply for a temporary immigration status known as European Temporary Leave to Remain. If successful an individual will have a period of 36 months’ leave to remain (during which time they can stay in the UK and take up employment). Following this initial period they can make an application under a new points-based immigration system.
  • EU citizens already in the UK as at the date of Brexit (31 October 2019) will be allowed to apply under the Settled Status scheme to stay in the UK indefinitely. The application must be made before the end of December 2020.

Of interest to non-EU nationals, the UK Government has issued new guidance on the Tier 2 work visa scheme which expands the list of shortage occupations to include jobs in the digital technology sector in addition to many other professions previously omitted from the list such as biological scientists.

The main benefit to being listed as a shortage occupation is that it negates the need to perform a Resident Labour Market Test (RLMT) and therefore removes the need to undergo local job advertising prior to making the visa application.


Home-worker expenses

Currently Switzerland does not have any legislation stipulating whether or not homeworkers should be compensated for operating out of their homes.

The issue was addressed by the Federal Supreme Court in April where it held that an employer must pay the rental costs of rooms in which an employee works if telework is required by the employer or simply the employer does not provide the employee with a workplace to work from. The court held that this requirement was irrespective as to whether the room had a shared purpose such as where the room was part of the employee’s private residence and also used for private purposes - in such a case the costs should be divided proportionally. The court also advised that going forward employment contracts would be required to clearly state what payment was agreed for the use of the room.


Superannuation amnesty

The Australian Senate approved a Bill on 18 September which will introduce an amnesty period to enable non-compliant businesses to put right their superannuation shortfalls. Once it receives Royal Assent it will run for six months and will cover liabilities for the March 2018 quarter and any prior quarters.

A failure to take advantage of the amnesty will result in penalties of up to 200%.

For most businesses this will not seem relevant. However not all superannuation obligations are clear cut – such as the requirements for contractors that are classified as ‘deemed employees’.

Under the superannuation regulations certain contractors are granted ‘deemed employee’ status and as a result are entitled to superannuation contributions from the business that engages their services.

Any contractor who works under a contract that is ‘wholly or principally for their labour’ fall into the ‘deemed employee’ category, which as you can appreciate is capable of covering a huge number of consulting relationships where the service is provided personally and is remunerated based on time spent rather than payment on results.

Business are advised to take a look at their contracting arrangements to assess whether or not they fall into ‘deemed employee’ status. If they do they need to ensure that their superannuation obligations are satisfied moving forward - in particular any that may fall within the amnesty period.


Latest on employee notice periods

Employees in Canada are entitled to a notice period when their employment is terminated, the length of which depends on whether the contact expressly details the notice period or not. If it does, provided it is at least as long as the statutory minimum, this will be the period that is applied. Where the contract is silent on the matter it is open to the courts to determine what ‘reasonable’ length of notice should be applied.

A recent case in Ontario has provided us with more insight into this issue. In Dawe v. Equitable Life Insurance Company, the court of first instance determined that Mr Dawes who was the Senior Vice President of The Equitable Life Insurance Company of Canada should be awarded a notice period of 30 months and commented that there was willingness to extend this to 36 months given the service!

This was rather surprising given that most legal commentators had previously viewed 24 months as the ceiling on notice periods other than in cases of ‘exceptional circumstances’

Equitable Life appealed against the decision and won , the Ontario Court of Appeal reducing the notice period to 24 months commenting that the case did not present any ‘exceptional circumstances’ to warrant a higher figure.

The appeal decision has reaffirmed an understanding in the legal fraternity that 24 months can once again be considered the upper limit for notice periods. The case also serves as a timely reminder that notice provisions in employment contracts are an absolute must.

Confirmation that consent is not required for cross-border data transfers

Following the high profile Equifax data breach, The Office of the Privacy Commissioner of Canada (OPC) opened an inquiry. In its report issued in April OPC concluded that international transfers of Canadian personal data to non-Canadian data processors should be supported by the data subjects consent. The findings were met with protest from various business sectors claiming that they were in conflict with the OPC’s own guidelines which do not require consent for transfers to international data processors. In reaction to the tension the OPC agreed to open a period of consultation to gather the comments and views of businesses to the matter. On September 23 the OPC announced that the consultation period was closed and given that most of the comments they received opposed the need for consent their decision was to keep the current guidelines unchanged on the issue – as a result consent is not required.

If you would like to discuss how these changes could affect you or your business please contact Stuart Buglass.

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Richard Austin
Richard Austin
Partner, Head of Global Business Solutions