International labour law – Summer 2023 update

Enhanced redundancy rights proposed for pregnant employees 

In a redundancy situation, under current UK law, suitable alternative positions must be offered first to employees that are on maternity, adoption or shared parental leave. 

A bill is currently progressing through parliament which if approved would mean this right would apply from the day an employee informs their employer they are pregnant to a maximum of 18 months after the birth. In the event that the employee is not offered a suitable alternative position, where one exists, a redundancy would be automatically unfair and the employee may also have grounds for an unlawful discrimination claim.

New employment rights proposed for vulnerable workers

The UK government has announced its support for a bill that should provide greater workplace security for millions of employees. Under the Workers (Predictable Terms and Conditions) Bill employees and agency workers who are employed on terms which lack predictability can apply for a change to their terms so that they have more predictable work conditions.   

The bill is mainly focussed on casual workers who do not have fixed hours of work, however the bill does not contain a definition of ‘predictable’ and therefore could potentially extend to a range of other employee types whose work has a variable aspect to it, additionally it also fails to set out what qualifying service is required to make a request (although it is expected to be 26 months).

The employer is not obliged to agree to an employee’s request, however they do have a duty to deal with the application in a reasonable manner and respond within one month. An employer may only reject an application for specific reasons – the reasons mirror those set out in the existing flexible work request regime.

As employee will be permitted to make two requests in a 12-month period and the bill also provides the employee with protection against dismissal where the reason for the termination is a reaction to the employee’s application for more predictable working conditions. There will be no requirement for the usual 104 weeks qualifying service to bring a claim.

The new rights are likely to become law in early 2024.

Future plans for retained EU law and non-compete clauses

The UK government is currently consulting on proposed changes to retained EU employment laws. The consultation period is open until 7 July 2023. Included in its proposal is confirmation that most EU derived employment law will remain unchanged and a list of areas that are potentially open to change. With regards to the latter these include a proposal to remove the requirement for employers to record the start and end times of each working day, to allow ‘rolled-up’ holiday pay (paid when the employee works rather than when the holiday is taken) and to simplify how holiday pay is calculated.

At the same time the government has responded on its earlier consultation to reform post-termination non-compete clauses. In its response the government has confirmed that it will not be introducing an outright ban or mandatory compensation for the period of the restriction, instead it intends to limit the duration to only three months.

This is a significant change to the current position where employer’s will typically apply a duration of either six or 12 months. The three month limit will not be applied to non-solicitation or non-dealing clauses. It is unclear when the government will introduce new legislation to introduce the change and its also unclear how existing non-compete clauses of a longer duration will be impacted. For employers wishing to restrict their leavers beyond three months it is suggested that longer notice periods with enforced garden leave may be the way forward.  

A more pragmatic approach to A1 certificates.

When an EU citizen visits another member state on business they are required to prove where they pay their social security contributions. An A1 certificate issued by the employee’s home country is used to verify this. The regulations don’t actually set a threshold for when an A1 is required, and the guidelines issued previously by the EU have stated ‘the obligation covers any economic activity, even if only of short duration”. As a result there is nothing to stop a member state from asking business visitors for the certificate when they enter for just a short trip.  

Finland had previously advised that an A1 certificate would be required from the first day of an outbound or inbound trip, but has since updated its guidance advising that a certificate is not required for short trips unless the destination country requires it, despite the guidelines not detailing a specific time period it is thought a two-week period should be viewed as a likely threshold.

New pay-slip disclosure rules 

Effective 1 July 2023 payslips issued to French employees must clearly show the ‘social net’ amount of pay following social security deductions. It is hoped that the move will help low income employees determine their eligibility for state benefits. Under current law payslips are only required to show the gross salary, the amount of withholding tax and the amount paid to the employee. The employer with also need to declare the ‘social net’ amount on the monthly declaration to the social security authorities (the DSN).

New work life balance law

The Work Life Balance and Miscellaneous Provisions Act 2023 was signed into law on 4 April and as a result employees will have five new statutory rights.

1. The right to request remote working: employees with six months’ service can request to work remotely. The employee must submit a request at least eight weeks’ prior to the proposed commencement date and the employer has four weeks after receiving the request to respond. A refusal by the employer must be justified and consider the needs of both parties.
2. Right to request flexible working to provide care: an employee can request changes to the working schedule to care for their children, spouse or civil partner, cohabitant, parent, grandparent, sibling and any person with whom the employee lives in the same household. The application criteria are the same as that for remote working applications. 
3. Leave for medical care: an employee will be entitled to five days of unpaid leave in any 12 month period for medical care purposes (either for themselves or for the same people listed under the flexible work category above). The individual requiring the care must need it for a ‘serious medical reason’ (which is not defined in the Act).
4. Domestic violence leave: an employee will be entitled to five days of paid leave in a 12 month period to assist them with domestic violence, such as seeking medical attention, assistance from professional services, counselling, legal assistance etc.
5. Extension of breast-feeding facilitation period: the period will be extended from 26 weeks to 104 weeks following the birth of the child during which the employee may reduce her working hours or receive paid time off for breast-feeding purposes.

The Act is likely to come into force later this year.

Restrictions on temporary staffing agencies 

Effective 1 April 2023 Norwegian businesses are no longer permitted to hire employees from temporary staffing agencies where the only reason for hiring is that the work is of a temporary nature. There will be exceptions for employees who operate as advisors or consultants with specialist expertise, those in the agricultural sector and health sector, and where the employer is covered by a major collective agreement that provides for exemptions. For existing contracts that were entered into before 1 April 2023 the new rules will be effective from 1 July 2023.  

Introduction of the right to disconnect

A right for employees in Belgium to disconnect came into force on 1 April 2023. The measures only apply to employers with 20 or more employees and require the employer to take positive action to communicate to employees that they have the right to disconnect after normal working hours. The regulations require the employer to have a set of guidelines on the use of digital tools and the effect of excessive use on an individual’s wellbeing and to implement workplace training on the issue. It is open to the employer to decide on what strategies they implement to ensure access is restricted. It should be noted that employees in a management position or a position of trust are excluded from the rules on working time and therefore also the new rules on the right to disconnect.

Making it easier for foreign nationals to take up employment

Amendments to the Aliens Act 2012 make it easier for non-EU/EEA nationals to work in Denmark. Effective 1 April 2023 the wage requirements have been reduced from DKK465,000 to DKK375,000. Additionally, the fast track scheme is now open to employers with 10 or more employees (previously it was 20). The change most likely to have the biggest impact is the new job-seeking right for students to remain in Denmark for three years following the end of their studies.

Updates to the labour code 

Poland has upgraded its labour code to keep pace with developments on other countries and also to satisfy the requirements of the EU directive on work-life balance for parents and carers. 

Effective 26 April 2023 employees will have access to the following additional entitlements.

• Parental leave
  Employees are entitled to up to 41 weeks of parental leave for a child’s birth (up from 32). This rises to 43 weeks in the case of multiple births (up from 34). Both parents can now take leave at the same time.
• Carer’s leave
  Employees can take up to five workdays per year to care for a family member (son, daughter, mother, father or spouse) or a household member who requires care or support for serious medical reasons. The employee must provide at least one day’s advance notice. The leave is unpaid but does count towards the employee’s continuing service.
• Force majeure leave
  An employee can take up to two days (16 hours) off work to deal with urgent family matters, such as illness or accidents. The time off is paid at 50% of the employee’s normal rate of pay and the employer is obliged to permit the time off on condition that the request is received, at the latest, on the day that the leave is required.
• Protection for working parents
  An employee with a child under the age of eight years has the right to decline working at night, overtime or split shifts.

Employees will be allowed to take sick leave due to ‘incapacitating menstruation’. From 1 June 2023, women who suffer from secondary incapacitating menstruation will be allowed to take three to five days of sick leave every month, under a regulation modifying the law on sexual and reproductive health and abortion. 

Statutory sick leave benefits will be paid from the first day of absence, without requiring a minimum contribution period. To be eligible for the leave, women must have been medically diagnosed with secondary incapacitating menstruation (dysmenorrhea) and must have a medical certificate.

New rules for cross border home-workers

As a result of a derogation from the rules set out in Regulation EC 883/2004, effective 1 July 2023 cross border employees who also work from home will be able to avoid paying social security contributions in the country of their residence if they spend no more than 49% of their time there. Previously the limit was set at 25%. The country where the employer is established will issue the employee with an A1 certificate as evidence of their social security participation.  

The employer will have the burden of proof in the event of a challenge and will need to be able to show that the employee has worked at least 51% of their working time in the employer’s country. Further details are expected on how the scheme will operate.

The latest twist on international data transfers

Transfers of EU personal data to the US have been a major area of scrutiny for a number of years. In 2015 the Safe Harbor mechanism that allowed for US-bound transfers was shut down following the high profile Schrems I decision by the CJEU. The Privacy Shield which replaced it had a similar fate as a result of the CJEU decision in the Schrems II case. On both occasions the court cited the risk of bulk surveillance by the US security agencies as being incompatible with the principles of the GDPR.

In the wake of these decisions international organisations have been relying on the European Commission’s Standard Contractual Clauses as a means of legitimising their EU data transfers to the US and any other country which lacks an adequacy decision. However despite this there has been continuing interest on the matter particularly from the Irish regulator, the Data Protection Commission (DPC) who have been investigating the social media giant Meta and its data transfers from Ireland to the US using Standard Contractual Clauses. 

On 23 May 2023 the DPC announced that it would be fining Meta EUR1.2 billion because it had violated the terms of the GDPR by continuing to transfer EU personal data to the US post Schrems II relying on Standard Contractual Clauses. In its findings the DPC found that the US does not guarantee the same level or protection as the EU for personal data and using the Standard Contractual Clauses was not sufficient in itself to make up for that failure, and that there were no supplemental measures put in place to compensate for those two factors.

For international organisations the decision confirms that using Standard Contractual Clauses in isolation will not generally be sufficient to legitimise a transfer of EU data to countries without an adequacy decision – instead there is an additional action on a business to carry out impact assessments and implement additional measures to ensure the provisions of the GDPR can be complied with.

Whistleblowing Directive update

EU member states were required to implement the Directive no later than 17 December 2021.

As at today’s date the law has been adopted by 21 countries with Slovakia, Poland, Luxembourg, Hungary, Estonia and Czechia yet to implement the law.

Germany has only recently passed its domestic law to implement the requirements of the Directive. The Whistleblower Protection Act comes into force in mid July 2023.

The law provides a unified framework to protect those persons reporting breaches of EU law from retaliation. The directive is very prescriptive in its requirements for company level reporting and investigation. The rules apply in the private sector to each legal entity employing 50 or more employees. Many organisations already have company whistleblowing policies however in most cases these will not be sufficient to meet the requirements of the directive especially given the formality required for internal reporting channels and confidentiality requirements.

Many organisations now need to determine whether the requirements of the EU directive will be applied across all of their international territories as the gold standard, or restricted to their European operations. Companies with more than 250 employees should be complying with the terms of the directive now, whereas companies with 50 to 249 employees are required to comply before the end of 2023.    

Plan to increase unpaid parental leave days

If enacted the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 will provide parents with up to 100 days of flexible unpaid parental leave, up from the current limit of 30 days. The bill also provides additional flexibility to allow pregnant employees to take up to six weeks prior to the date of birth and will also remove current restrictions that prevent parents from taking more than eight weeks at the same time. 

The changes supplement the increased rights to paid parental leave that were introduced earlier this year and take effect from July 2023. They provide a single paid leave scheme with a flexible 20-week entitlement which will allow parents to access the paid leave in multiple blocks of leave and will remove the requirement for the main claimant to be the birth parent.

Consent required to work on a public holiday

In a recent case the Federal Court of Australia ruled that employers cannot require employees to work on a public holiday without their consent. The court’s decision makes clear the difference between a request and a requirement – the former being acceptable and the latter being unlawful. This is the case even if the employment contract or local enterprise agreement includes wording requiring work be performed on a public holiday. The court acknowledged that for some employers public holiday cover was essential, but outlined that when issuing rosters to employees it is essential that the employee understands that they retain the right to refuse.

Australian employers who ‘require’ employees to work on public holidays are in breach of the Fair Work Act 2009, according to a Federal Court of Australia decision released on 28 March 2023. Key to the decision was the distinction between a ‘requirement’ to work and a ‘request’ to work, the latter being an important component of making a ‘reasonable request’ to work on public holidays under the Fair Work Act 2009. Employers should remember to offer employees the opportunity to refuse or accept the request to work a public holiday before the rota is finalised.

Timing of payment in lieu of notice

In the recent case of Southern Migrant and Refugee Centre Inc v Shum (No 3) the Federal  Court reminded employers that a payment in lieu of notice should be paid in accordance with section 117(2) of the Fair Work Act 2009 which means it should be paid prior to the termination date. It has become common practice for employers to pay a payment in lieu of notice along with other final salary payments, however following the Federal Courts comments it would be advisable to ensure that payment is made prior to the termination – a failure to do so will be breach of the Fair Work Act leading to financial penalties.

Queensland supports an upgrade to its anti-discrimination regulations

The Queensland government plans to introduce a new legal framework before the end of 2024 which will provide a revised definition of discrimination, a reverse onus of proof, a longer period to bring a claim (two years), an updated list of protected characteristics, and positive duties on an employer to eliminate discrimination and sexual harassment and accommodate persons with a protected characteristic.

As a result of the changes employers will have to take a much more positive role in preventing discrimination and harassment and this will likely require risk assessments, policies, training and implementing prevention plans.

Overtime payable when either weekly or daily limits exceeded

In a recent case the Supreme Court confirmed that overtime is payable where working hours have exceeded the daily limit of the working day, despite the fact that the weekly limit had not. Argentina’s labour statute (Law 11,544) provides ‘The duration of work may not exceed eight hours per day or forty-eight hours per week’. Additionally Decree 16, 115/1933 provides that there can be unequal distribution of hours throughout the week conditional on the excess not exceeding 1 hour per day.

The Supreme Court’s decision overturned the judgement of a lower court which found in favour of the employer on the basis that the employee’s working week was under 48 hours even though 12 hours were worked on a Saturday. The Supreme Court held that it was clear that the law set two limits – a daily limit and a weekly limit and that employers should be observing both.

Visa requirements for nationals of Australia, Canada , USA and Japan

Reversing its current visa waiver scheme, effective 1 October 2023 nationals of Australia, Canada, USA and Japan will require a visa to enter Brazil on business or for leisure. The change is a reaction to lack of reciprocity shown by the countries who all require Brazilian citizens to have an entry visa when visiting their country (Brazil unilaterally introduced the waiver to encourage tourism). 

Job adverts in British Columbia (BC) may need to disclose wage

The Pay Transparency Act Bill No 13 proposes that BC employers be required to include wage and salary ranges on all publicly advertised job vacancies and additionally that large employers be required to publish publicly accessible pay transparency reports. The Bill also prohibits employers from asking job applicants for their compensation history or retaliating against employees when they have disclosed their pay to their colleagues or potential candidates. 

Other provinces are also in the process of enacting similar legislation in an attempt to mirror the federal government’s Pay Equity Act.
Further details are expected to be released in Q3 2023.

Weekly working time reduction  

Chile will introduce a phased reduction to the 45-hour working week reducing to 44 hours from 2024, 42 hours from 2026 and 40 hours from 2028. 

Additional provisions include:

• the potential for the weekly hours to be averaged over a maximum four week period (conditional on any week not exceeding 45 hours) 
• the working week can be worked over a minimum of four days (currently the minimum is five days)
• employers must provide a minimum of one week’s notice of any change to an employee’s hours
• unionised employees can work for an extended 52-hour period subject to the union’s agreement      
• an employer must have electronic tracking of working time
• more permitted categories of employee allowed to work overtime.

Enhanced medical insurance cover for foreign workers

The requirement for enhanced medical cover for foreign workers will be introduced in two phases starting on 1 July 2023. 

From 1 July 2023 all medical insurance policies, renewals or extensions must include an increased annual claim limit of SGD60,000 and employers will have to make a co-payment for claim amounts exceeding the first SGD15,000. 

From 1 July 2025 additional enhancements (such as standardization of allowable exclusion clauses, age-differentiated premiums and direct reimbursement by insurers) will apply to all policies.

The insurance industry will upgrade their offerings in line with the required enhancements, however this is likely to be reflected in increased premiums.

Working from home (WFH) guidelines  

On 1 March 2023 Taipei City enacted its WFH guidelines. As a result employers operating in Taipei must have policies with their employees covering WFH. 

The guidelines require that employers do not change working terms or performance appraisals simply because an employee is working from home. Employers are also required to ensure the welfare and safety of employees working from home ensuring that the working conditions are suitable, that rest periods are being observed and that there are provisions in place to ensure the mental and physical health of their home-workers – such as the right to disconnect. 

Employers should consider how they cover the provision of equipment and expenses for working from home.