Global HR News

Move to a four day week?

In November 2024 a Constitutional Amendment Proposal was submitted which sets out a 4x3 standard working week (four days of work followed by three days of rest). Currently the constitution has a 6x1 work schedule (six days of work followed by a day of rest). The proposal would limit working hours to eight hours per day and 36 hours per week. The 6x1 working regime is still used in the hospitality and healthcare sectors which would be significantly impacted by the change. The proposal still need approval from the House of Representative and also Congress and therefore is someway off.

Ontario– employment contracts must include how vacation pay is paid

Under the terms of the Ontario Employment Standards Act 2000 vacation time and vacation pay are separately legislated, and with regards to the latter the standard approach is to pay a lump sum before the employee commences their vacation. Previously a deviation from this (such as paying it as it accrued) was permitted with the simple agreement of the employee. Following a recent update to the ERA any deviation must be agreed in writing- for new hires this is most easily achieved by including a clause in the employment contract, whereas for existing employees we would recommend that the update is either communicated through a policy or letter.

Uttar Pradesh exempts IT firms from applying Shops & Establishment Act

Employees that fall outside of the definition of workman in the federal Factories Act are instead usually covered by a local State Shops & Establishment Act. 

In the State of Uttar Pradesh the government has exempted IT establishments from certain sections of the local Shops and Establishment Act. The exemption will last two years and excludes IT workers from the provisions covering hours of work and overtime subject to certain conditions: 

• The employees must not work beyond 12 hours per day 
• Be provided with a break of 30 minutes for every five hours worked
• Any hours worked in excess of 48 hours per week must be compensated with pay at twice the normal rate   
• The total number of overtime hours must not exceed 125 in any three month period 
• There must be at least one day of rest per week 
• Work performed on a public holiday must be compensated with a compensatory day off.

Amendment to Child Care and Nursing Care Act  

Employers in Japan have already faced a wave of changes to the Child Care and Nursing Care Act, including updates to paternity leave, shared parental leave and extended rights for fixed term employees.

Additional changes are scheduled for 1 April 2025 and include expanded flexible working for parents of children aged three or over but not yet in elementary school. As part of the package of flexible working employees will be able top request adjusted start times, remote working, shorter working hours, additional leave options and on-site care facilities, and exemption from the requirement to work overtime.

Childcare leave (five days per year to attend to a sick child) will be extended to third grade children.

Employers will also have greater duties to encourage telework arrangements and to also consult with pregnant employees to ensure that workplace adjustments are considered.

Retirement age changes

Commencing April 2025 employers must ensure that their retirement age is not below 65 years of age- if the current retirement age is below 65 the employer must either raise it or abolish it. Employers are also encouraged to implement measures to ensure that employees can continue in employment beyond 65 and up to the age of 70.

Economic termination and international redeployment

In a recent case the Employment Court has advised that when contemplating an economic termination an employer must have regard for internal redeployment opportunities in other international locations especially where there are high levels of integration between the group functions/locations. The employer will be entitled to assess the practicalities and costs when assessing options – but in all cases overseas redeployment must be considered.

Platform Workers Bill

Platform workers are those that have work assigned to them through online platforms (such as delivery riders etc). Singapore have introduced legislation that provides additional protection for platform workers. Effective from 1 January 2025 platform workers now have access to work injury compensation insurance. This is in addition to the right to opt into the Central Provident Fund (CPF) which was granted to platform workers in November 2024.

Upgrades to childcare, maternity and paternity leaves

Towards the end of 2024 South Korea introduced a number of enhanced parental leave rights which will come into force on the 23 February 2025 and are summarised below:

• Parents of a child with severe disabilities will be entitled to up to 18 months Childcare Leave which can be used in 4 separate periods.
• Rights to reduced working hours to assist with childcare for parents of children up to age 12 or in the 6th grade of elementary school or below to assist with childcare (previously up to the age of 8 or in the 2nd grade of elementary school or below).
• Paternity leave increased from 10 to 20 days with government funded payments (to be used within 120 days following childbirth and up to 4 separate periods).
• Rights to reduced working hours during pregnancy to be used during the first 12 weeks or after 32 weeks of pregnancy (previously 36 weeks).
• Maternity leave extended to 100 days from the standard 90 days for premature births.
• Fertility treatment leave increased from 3 to 6 days (the first two days paid by the employer).

AI Act ( Regulation 2024/1689) – employers take note

Applicable to all Member States the Act entered into force on 1 August 2024 and becomes fully applicable from 2 August 2026. However prohibitions on certain AI activities will start and apply from 2 February 2025 banning the use of AI where it is considered harmful or discriminatory.

The Act aims to regulate the use of AI based on a risk classification – the lowest risk uses fall outside of the regulations, whereas high risk uses are subject to strict requirements with the most risky being completely prohibited.

What many employers have failed to appreciate is that many of the applications of AI in the workplace are considered high risk and therefore subject to the regulations. AI used in recruitment and selection, performance management, redundancy selection, task assignment etc are all considered high risk. AI that evaluates emotions in the workplace or scores people based on social behaviour or personal traits would fall within the prohibited group of AI applications and is therefore banned from 2 February 2025.

The requirements of the Act place greater responsibilities on the provider than the deployer of the AI application. An employer could be deemed a provider and not just a deployer if modifies the intended purpose of the application, makes a substantial modification or puts its own name on the application.

High risk AI applications require the provider of the AI to have a risk management system, technical training, detailed user instructions, strict record keeping, human oversight, quality management processes, and report serious incidents.

Whereas the deployer of the AI are responsible for using the AI system in accordance with instructions, assigning human oversight, keeping logs, monitoring performance and compliance, informing users about the system, conducting impact assessments, explaining decisions to individuals, reporting serious incidents, and cooperating with the authorities.

ECJ decision on overtime for part time workers

In many Member States the local labour laws require an employee to work beyond the standard working hours (such as 40 hrs per week) before they are entitled to overtime premiums.

In a recent case involving two German nurses the European Court of Justice (ECJ) has held that part time workers are disproportionately disadvantaged by this rule and should get an overtime premium for any work performed beyond their contracted hours (even if this does not take them beyond the standard working hours of a full time employee). Given that more women than men are employed in part time positions continuing to apply overtime premiums based only on hours exceeding the standard working week could constitute indirect discrimination based on gender.

It is likely that the most Member States will need to revise their labour laws and collective agreements will need to follow suit in order to comply with the ECJ decision.

In 2022 new legislation was enacted which requires all employers to register with a government online training platform, the Federal Learning Account (FLA). The FLA records training activities for each employee and needs to be maintained by the employer.

As a result of a changing political landscape the obligation to register was postponed until the end of March 2025 and 9it remains to be seen whether the initiative will be scrapped completely.

Self scheduling of working hours

Effective from 1 January employees will be able to schedule their own working hours conditional on the employee observing the required statutory rest periods. Previously this arrangement was only available to remote workers. The employee must ensure that the agreement of employee is recorded in writing and also set the time frame over which the hours are managed (the agreement can be terminated without stipulating a reason with 15 days’ notice). Where the arrangement allows for uneven weeks, there is a requirement that the weekly hours do not exceed the statutory weekly maximum averaged over a 26 week period. The employer must also ensure that the hours are appropriately recorded and monitored.

Labour Code changes

A draft amendment to the Labour Code could see changes early this year to probationary period and termination notice periods. Probationary period will be extended from the current three months to four months and notice periods for termination will be reduced to one month and will take effect as soon as it’s served (currently the notice period starts on the first day of the following month).

Digital employment contracts from 1 January 2025

Wet inked signatures on hard copy documents has been a key requirement of employment contracts and their supporting documents. The Fourth Bureaucracy Relief Act (BEG IV) changes this position.

Effective from 1 January 2025 the rules relating to employment contracts have been relaxed allowing for an electronic format and conditional on the following applying:

• The document must be accessible to the employee – this can be achieved by emailing the document to the employee’s private email address whereupon they can save or print it themselves.
• The employer must request that the employee provide proof of receipt (i.e. acknowledge by return email).
• The document no longer requires a handwritten signature, a scanned signature will be sufficient.

Note that there are exceptions to the new law where the old rules will still apply, such as for certain sectors (construction, hospitality, freight, meat processing industries etc), when a collective agreement requires it, for fixed term employment, agreements covering post termination non competes, and agreements with interns.

Also from 1 January 2025 employment reference letters can be provided in electronic format with the consent of the employee. The relaxation is a welcome development given the formalities that employers have had to deal with (wet ink signatures on unfolded paper).

Countdown to pension auto-enrolment 

A reminder that in September 2025 Ireland will be introducing an auto-enrolment pension regime. Under the current PRSA arrangements an employer is only obliged to provide a pension scheme and its for an employee to decide whether they want to join, and if they do the employer is under no obligation to provide an employer contribution. Contrast this with the new auto-enrolment scheme which requires an employer to automatically enrol eligible employees and make an employer contribution of 1.5% with the employee contributing 1.5% (the State also makes a contribution of 1%).

The rates of contribution will increase from year four as detailed in the table below.

Contributions will be applied to salaries up to €80,000 per year and will not be applied during periods of unpaid leave.

Employees will have the right to opt out, but only after six months at which point their contributions will be refunded, but the employer and State contributions will remain invested.

Eligible employees are those that meet the following criteria

• Aged between 23 and 60
• Earning €20,000 or more per annum across all employments
• Do not have existing supplementary pension coverage.

Employee awarded €170k for flawed redundancy process

When terminating an employee in Ireland for economic reasons there must be a genuine reason for redundancy and a fair redundancy process should be followed.

In the case of Kevin Foley v Digital River Ireland Limited, the employee, a Senior Director of Sales, claimed that the process applied was a sham despite the employee attending three consultation meetings and being given the right of appeal against the decision to make their role redundant. The case focussed on the appeal process itself which was managed entirely as a written exercise without a hearing and which was presided over by the US parent company’s General Legal Counsel despite him being more junior in position than those that had made the original decision to terminate. The issue for the employer was that the Employee Handbook contained a section on appeals which included the right to be accompanied (raising a presumption that there would be a hearing) and that the appeal would be overseen by a more senior position in the organisation.

In delivering their decision the Court Adjudicator accepted that there was a genuine redundancy situation but that a failure to hold an appeal hearing where the employee could be accompanied and the fact that it was managed by a lower graded employee was a major weakness and in breach of its own policy. As a result the employee was awarded €170,000 for unfair dismissal, despite having less than 18 months service.

30 % tax ruling latest changes 

The Netherlands has a special tax regime for expatriate employees who can benefit from a tax free reimbursement of up to 30% of their salary during the first five years of their employment in the Netherlands. In January 2024 the regime was scaled back reducing the tax-free allowance to 20% during the second 20 months of the five year period and to only 10% during the last 20 months of the period.

However, as part of its 2025 budget announcement the government has made a U-turn on its 2024 changes. The latest approach sees the 30% rate return for 2025 and 2026 and from 2027 the rate will be reduced to 27%. The salary requirement for eligibility will also be increased from 2027 to €50,436 per year.

Moratorium lifted on sham contractor enforcement

In 2026 the Dutch government introduced the Employment Relationships Deregulation Act (DBA Act) to target sham contractor arrangements by setting out clear criteria to determine employment status. Widespread uncertainty ensued, industry pushed back and in response the government introduced a moratorium in which businesses could get their house in order and the Tax and Customs Administration would hold off taking any enforcement action. The moratorium period ended as at 1 January 2025 and the authorities are now active in their pursuit of sham arrangements  Businesses that engage with self employed contractors should therefore be alert to the risks of an investigation ( either as a result of authority scrutiny or a claim from the individual themselves) and its financial impact given the potential for tax and social security liability, overtime, sick pay, annual leave and termination rights. We would recommend that relationships are assessed against the criteria outlined in the DBA Act.

Christmas Eve is a new public holiday

In the last week of 2024 the Polish President announced that Christmas Eve (Dec 24th) would be a new public holiday commencing 2025.

Salary Register — details withheld on the grounds of privacy is ok

Employers in Spain are legally required to maintain a salary register that details the average salaries of their workforce grouped by gender, grade and professional group. In a recent case the Spanish Supreme Court decided in favour of an employer who withheld salary information because an employee was the only member of a specific professional group. The Court held that the law does not require the inclusion of data in the register if it has the result that an individuals salary can be identified.

Unfair Dismissal Compensation breaches EU law

In 2024 the General Workers Union (UGT) of Spain complained to the European Committee of Social Rights (ECSR) that Spain’s approach to compensation for unfair dismissal breached Article 24 of the European Social Charter in which ‘in the event of termination of the employment relationship without valid reason, the right to adequate compensation must be recognised’.

The UGT argues that because Spain applies a fixed 33 days salary per year of service (maximum of 24 payments) it cannot be said to provide adequate compensation in all cases and that it does not meet the requirements of the European Social Charter to be both ‘dissuasive’ to employers and ‘compensatory’ for workers. In fact the compensation structure has led to a practice amongst employers to openly acknowledge that a termination is unfair in order to benefit from a termination process that is both swift and certain with regards to process and financial outlay.

Currently the Spanish legislation remains unchanged however local courts have started to apply the ECSR ruling when assessing unfair dismissal cases.

New code to be applied to fire and rehire

Effective from 20 January 2025 employment tribunals will have the power to increase compensation claims by up to 25% where the employer has unreasonably failed to follow the Statutory Code of Practice on Dismissal and Re-engagement (the Code).

The Code has been introduced to provide greater protection to employees when an employer forces through a change to their employment terms by firing and rehiring them. The Code doesn’t outlaw the process but it does provide more structure and additional safeguards so that firing and rehiring is seen as very much an act of last resort by an employer.

New duties under the Economic Crime and Corporate Transparency Act (ECCTA)

The Economic Crime and Corporate Transparency Act (ECCTA) was given royal assent on 26 October 2023 and its provisions will be introduced gradually over the coming years.

The initial round of changes became effective on 4 March 2024 requiring the following:

• Businesses must provide a registered email address to Companies House.
• Businesses to confirm that they are carrying out a ‘lawful purpose’ in their business activities.
• Businesses to confirm that their registered address is an ‘appropriate address’ and PO box addresses are no longer permitted.

Effective from 27 January 2025 individuals are now able to shield their residential addresses previously used as a company’s registered office from the Companies House register.

From 25 February 2025 qualifying individuals and organisations will be able to register as Authorised Corporate Service Providers (ACSPs) – which are third party organisations authorised to assist companies with their compliance under the Act. Companies House will have enhanced powers to strike off companies that have been registered on a false basis.

On 25 March 2025 a new voluntary identity verification process will be introduced for new and existing directors and people with significant control (PSC), and anyone acting for the company. The identity verification process can either be completed directly with Companies House or using a ACSP.

Identity verification will become compulsory for new directors, SC’s and LLP members in Autumn 2025, and existing appointees will be required to complete the identification process by their company’s next confirmation statement deadline.

More clarity on consultation requirements for an individual redundancy

A 2024 Employment Appeal Tribunal decision introduced a new requirement for individual redundancies which required employers to engage in ‘general workforce consultation’ at an early formative stage. It has long been the case that an employer must follow a statutory collective consultation process where the employer proposes to terminate 20 or more employees in a 90 day period, but below this threshold the employer was required to only engage in consultation with the individual at risk of termination.

However last years case changed this position generating a fair amount of confusion. Thankfully the decision was recently overturned by the Court of Appeal who determined that ‘general workforce consultation’ is not a requirement for a fair termination in small scale redundancies.