Global HR News

Manitoba Mandatory Menstrual Products

Manitoba has introduced new legislation requiring employers to provide menstrual products in workplaces at no cost, marking a first-of-its-kind development at the provincial level in Canada.

The reform, implemented through amendments to workplace health and safety regulations, reflects a growing focus on workplace inclusion, wellbeing and basic employee needs.

What is changing?

Under the new requirements:

• employers must provide menstrual products (e.g. pads and tampons) free of charge
• products must be available in workplace washrooms or another accessible location
• a covered disposal container must be provided near toilets to support safe and hygienic use.

The requirement applies across provincially regulated workplaces, regardless of sector.

Timing

• The new rules were introduced in March 2026.
• They will come into force in September 2026 (with a transition period to allow employers to prepare).

Key policy rationale

The reform aims to improve access to essential hygiene products in the workplace and support health, safety and dignity at work while promoting gender equity and inclusion.

Practical implications for employers

Employers should begin preparing by:

• ensuring products are consistently available and accessible to workers
• reviewing workplace facilities and hygiene provisions
• implementing processes for restocking and maintenance
• considering cost and procurement arrangements (including initial setup and ongoing supply).

The obligation applies even where no current employees require the products, meaning it must be treated as a standard workplace provision.

Québec: New regulation strengthens employer duties on workplace sexual violence

Québec has introduced a new regulation significantly expanding employer obligations to prevent and address sexual violence in the workplace, marking a continued shift toward broader health and safety responsibilities.

The regulation forms part of a wider legislative framework addressing psychological safety and workplace conduct, and places increased emphasis on proactive risk management.

What is changing?

The new regulation requires employers to implement structured, preventative measures to identify and address sexual violence risks.

Key elements include:

• a requirement to take active steps to prevent or stop sexual violence
• a broader definition of “workplace”, covering not only physical worksites but also:
  • work-related social events
  • digital communications
  • interactions with clients, supervisors and third parties.

This reflects a recognition that workplace risks increasingly arise outside traditional work environments.

Key employer obligations

The regulation sets out a structured compliance framework, including:

• providing written information to employees on:
  • identified risks and risk situations
  • preventative measures in place
  • complaint and reporting procedures.
• implementing mandatory training on preventing sexual violence
• establishing a formal complaint and investigation process for incidents or concerns.

These measures are intended to ensure that prevention, awareness and response mechanisms are clearly embedded into workplace operations.

Timing

• Most of the regulation will come into force on 27 May 2027.
• Certain training-related obligations will follow in 2028.

Practical implications for employers

Employers with operations in Québec should begin preparing by:

• reviewing and updating workplace policies on harassment and violence
• integrating sexual violence risks into health and safety programs
• developing training programmes and internal communication frameworks
• ensuring there is a clear, accessible complaint and reporting mechanism.

The regulation is likely to increase scrutiny of both preventative measures and incident handling, particularly in complex or non-traditional workplace settings.

Key takeaway

This development reflects a broader shift toward holistic workplace safety obligations, encompassing both physical and psychological risks.

For employers, the focus must move beyond reactive compliance to proactive risk identification, training and governance, ensuring that protection against sexual violence is embedded across all aspects of the working environment.

Expanded workplace incident notification laws on the horizon

Australia is preparing to introduce broader workplace incident notification requirements, significantly increasing reporting obligations for employers under updated Work Health and Safety (WHS) laws.

The changes follow amendments to the model WHS framework and will take effect once adopted by individual states and territories.

What is changing?

The reforms expand the scope of reportable incidents, reflecting a wider definition of workplace harm, particularly around psychosocial risks.

Key additions include:

• extended absences – notification required where a worker is absent (or expected to be absent) for 15 or more consecutive days due to a work-related physical or psychological issue
• work-related suicide or attempted suicide – including suspected cases linked to the workplace
• violent incidents – a new category capturing conduct exposing individuals to serious physical or psychological harm
• broader definitions of serious injury/illness and dangerous incidents – capturing a wider range of workplace events.

These changes represent a shift from traditional physical safety incidents toward holistic workplace risk reporting, including mental health and behavioural risks.

Timing and scope

• the changes do not apply immediately and require adoption by each jurisdiction
• most states and territories are expected to implement the reforms, although Victoria may not adopt the model laws. 

Practical implications for employers

The expanded notification framework will require employers to strengthen internal systems and processes, particularly:

• incident identification and reporting – capturing a broader range of events, including psychosocial risks
• absence tracking – monitoring extended absences and assessing whether they are “reasonably attributable” to work
• cross-functional governance – ensuring HR, legal and WHS teams collaborate to assess reportability
• evidence and record-keeping – maintaining sufficient documentation to support notification decisions.

Failure to adapt may increase regulatory and reputational risk, given the heightened focus on timely and accurate reporting.

Key takeaway

The reforms mark a clear evolution in Australian workplace safety regulation, with a move toward expanded employer accountability and greater visibility of psychological and behavioural risks.

Employers should begin preparing now by reviewing reporting frameworks, strengthening internal coordination, and ensuring they can identify and assess non-traditional workplace incidents under the new regime.

Fair Work Act may apply to employees working overseas

A recent Fair Work Commission decision highlights that Australian employment law can apply to employees working entirely outside Australia, creating significant compliance risks for employers with international workforces.

The key takeaway is that location alone is not determinative—the application of the Fair Work Act depends on the nature and structure of the employment relationship. The Fair Work Act has a broad territorial reach, and may apply where an employment relationship is sufficiently connected to Australia.

In a recent case, an employee who lived and worked in New Zealand for an Australian company was found to be covered by the Act’s unfair dismissal provisions, despite working offshore. 

Key legal test

The Commission focused on whether the employee was an “Australian-based employee” working for an Australian employer.

Under Section 35(3) of the Fair Work Act employees are excluded from the Act when they are engaged outside Australia to perform duties outside Australia. In assessing whether the exclusion applies the Fair Work Commission applied a two limb test:

1. was the employee engaged to perform duties outside Australia
2. was the employee engaged outside Australia.

In this particular case the first limb of the test was satisfied — the employee was a New Zealand resident performing their duties in New Zealand.

In determining the second limb of the test — whether the individual was ‘engaged outside Australia’ the Commission held that the contract was accepted and came into force when the employer, based in Australia, received the employee’s email accepting the employment offer.

Practical implications for employers

Employers with overseas employees should:

• avoid assuming that local law applies exclusively based on work location
• review where and how contracts are issued, accepted and governed
• assess whether overseas roles are closely connected to Australian operations
• ensure that, where the Act may apply, termination and employment practices comply with Australian requirements.

Failure to do so may expose employers to:

• unfair dismissal claims
• underpayment risks
• breaches of minimum employment standards.

Key takeaway

This development reinforces that the Fair Work Act can follow the employment relationship beyond Australia’s borders, depending on how that relationship is structured.

For employers, the key risk lies in assuming that offshore arrangements fall outside Australian regulation – when in fact, jurisdiction may still apply, requiring full compliance with Australian employment law obligations.

“Payday super” to transform employer payment obligations

Australia is introducing a major reform to its superannuation regime, with the new “Payday Super” rules taking effect from 1 July 2026. 

The change represents a fundamental shift in how employers calculate, process and pay superannuation contributions, with a move from quarterly to real-time, payroll-aligned obligations.

What is changing?

Under the current system:

• superannuation contributions are typically paid quarterly, within 28 days of the end of each quarter.

From 1 July 2026:

• employers must ensure contributions are paid on each payday
• contributions must be received by the employee’s super fund within seven days of payday.

This creates a significant increase in payment frequency, with each payroll cycle becoming a compliance trigger.

Additional changes

The reform introduces several supporting changes to the calculation and reporting framework:

• super contributions will be calculated based on a new concept of “qualifying earnings” rather than the existing earnings base 
• the Australian Taxation Office (ATO) will have greater real-time visibility of compliance, supported by enhanced reporting requirements.

Importantly, there are no transitional arrangements, meaning employers must be fully compliant from the commencement date. 

Why this matters

The shift is designed to:

• reduce unpaid or delayed superannuation
• improve transparency for employees
• enable earlier regulatory intervention where contributions are missed.

For employers, however, it significantly increases the operational and compliance burden, particularly around payroll timing and accuracy.

Practical implications for employers

Employers should take immediate steps to prepare, including:

• reviewing and updating payroll systems and processes
• ensuring alignment between payroll and superannuation payment cycles
• assessing cash flow impacts, given more frequent payment obligations
• strengthening data accuracy and reporting controls.

Failure to comply may lead to financial penalties and increased enforcement action, particularly given the ATO’s enhanced oversight.

Proposed right to request working from home

Victoria is proposing new legislation that would introduce a statutory right for employees to request working from home, signalling a further shift toward formalising flexible working arrangements.

The reform would build on existing flexible working frameworks by strengthening employee rights and increasing employer obligations in responding to such requests.

What is changing?

Under the proposed framework:

• employees would have a formal right to request to work from home
• employers would be required to properly consider and respond to requests, rather than simply exercising managerial discretion
• any refusal would need to be based on reasonable business grounds and supported by clear justification.

The proposal reflects a broader policy direction toward embedding remote and hybrid working as a standard feature of employment structures.

Key focus areas

The legislation is expected to emphasise:

• procedural fairness in handling employee requests
• greater transparency around decision-making by employers
• alignment with broader workplace and equality considerations, including accessibility and work-life balance.

It is also likely to increase scrutiny of how organisations manage flexible working at a systemic rather than ad hoc level.

Practical implications for employers

If implemented, employers in Victoria will need to:

• establish clear processes for handling work-from-home requests
• document decision-making and justification where requests are refused
• ensure consistency across the business to avoid discrimination or employee relations risks
• review existing flexible working, hybrid working and location policies.

There may also be increased exposure to disputes or regulatory challenge where requests are not handled appropriately.

Key takeaway

The proposed right to work from home represents another step toward formalising flexible working as a legal entitlement rather than a discretionary benefit.

For employers, the key shift is from informal arrangements to structured, defensible decision-making, with clear processes and documentation becoming critical.

Delhi: Major reforms to Shops and Establishments framework

Delhi has introduced significant reforms to its employment regulatory framework through the Delhi Shops and Establishments (Amendment) Act, 2026, representing a shift toward greater operational flexibility alongside enhanced worker safeguards.

The amendments recalibrate a range of core employment rules, including coverage thresholds, working hours, overtime and night work provisions.

Key areas of reform

1. Introduction of an applicability threshold

The Act now applies only to establishments with 20 or more employees.

• This marks a substantial change from the previous position, where the law applied regardless of workforce size.
• Smaller establishments are now fully excluded from the Act’s scope, rather than subject to lighter-touch requirements.

2. Increased flexibility in working hours

Daily working limits have been adjusted to allow greater operational flexibility:

• a 10-hour daily cap (including rest breaks) is now permitted
• in practice, this allows for longer continuous working periods, supported by revised rest break rules.

The mandatory rest interval has also been extended:

• breaks are now required after six hours of continuous work (previously five hours)
• this enables more flexible shift structuring.

3. Expansion of overtime limits

Overtime provisions have been significantly liberalised:

• weekly overtime cap increased from 54 to 60 hours
• annual cap replaced by a quarterly cap of 144 hours, effectively allowing substantially higher overtime across the year.

This change materially increases flexibility for businesses managing peak workload periods.

4. Standardisation of spread-over limits

The maximum “spread-over” (total working day including breaks) has been uniformly set at 12 hours across all establishments.

• This replaces previously differentiated limits for shops and commercial establishments.
• Provides a clearer and more consistent compliance framework.

5. Night working rules – liberalisation with safeguards

• Young persons remain prohibited from working at night.
• For women employees, night work has been liberalised subject to strict conditions, including: 
  • prior written consent
  • mandatory security, transport and CCTV measures
  • minimum presence of two women employees
  • compliance with sexual harassment legislation
  • restrictions following childbirth or miscarriage.

This represents a shift toward enabling greater workforce participation, particularly in sectors requiring extended operating hours, while maintaining protective measures.

6. Updated definition of “child”

The minimum age threshold has been increased from 12 to 14 years, aligning with broader labour protection standards.

Practical implications for employers

The amendments require employers to reassess operational and compliance frameworks, particularly:

• coverage analysis – determining whether the business now falls within scope
• shift planning and workforce management – leveraging increased flexibility while maintaining compliance
• overtime management – monitoring expanded permissible limits
• workplace safety and governance – ensuring compliance with enhanced obligations for night work.

Key takeaway

The reforms represent a clear policy shift toward balancing business flexibility with employee protection.

For employers, the changes offer greater operational agility, particularly around working time and overtime, but also introduce heightened expectations in areas such as workforce safety, particularly for night work.

A proactive review of policies, working time arrangements and compliance systems will be essential to fully align with the updated framework.

Labour Codes fully operational with notification of central rules

India’s labour law framework has now moved decisively into its operational phase, following the notification of final Central Rules under all four Labour Codes on 8 May 2026.

This marks the transition from legislative reform to practical, day to day compliance, with a unified framework now governing wages, social security, industrial relations and workplace safety.

Scope and applicability

The Central Rules apply where the Central Government is the “appropriate authority”, including sectors such as railways, mines, ports, air transport and other centrally regulated industries.

They are also particularly relevant for:

• multi-state employers (especially under the Social Security Code)
• large private-sector organisations operating across jurisdictions.

For other establishments, State Rules will apply, although the Central Rules provide a strong indication of the regulatory direction.

Key developments by Code

1. Wages: standardisation and tighter compliance

 The Central Wage Rules introduce a more structured framework for working time and wage administration:

• 48-hour weekly limit for employees, with overtime payable at no less than two-times' wages
• mandatory weekly rest days
• stricter procedural safeguards for wage deductions (including requirement to establish charges and provide opportunity to respond)
• increased digitisation and streamlined reporting, with fewer overlapping compliance requirements.

Implication: Greater consistency in wage practices, but enhanced procedural discipline for employers when managing deductions and overtime.

2. Social security: expanded coverage and flexibility

The Central Social Security Rules introduce several notable changes:

• fixed-term employees become eligible for gratuity after one year of service
• employers may opt out of voluntary PF/ESI coverage after five years (with employee consent)
• mandatory crèche facilities for establishments with 50+ employees (or allowance in lieu)
• specific obligations for gig/platform employers, including worker registration timelines
• limitations on continued eligibility for older gig workers based on engagement status.

Implication: Expanded coverage for non-traditional workers and increased compliance expectations around employee welfare and benefits.

3. Health, safety and working conditions: formalisation and digitisation

The Central OSH Rules introduce a more structured compliance regime:

• automatic registration deemed within seven days of application
• mandatory appointment letter content requirements
• increased focus on electronic record-keeping and wage slips
• safety Committees required for establishments with 500+ workers
• crèche obligations extended across multiple sectors
• continued 48-hour weekly working limit, with quarterly overtime caps
• enhanced requirements for medical examinations and workplace welfare.

Implication: Employers must strengthen documentation, tracking systems and safety governance frameworks.

4. Industrial relations: formalised processes and workforce governance

The Central Industrial Relations Rules introduce more structured internal governance:

• grievance Redressal Committees (GRCs) required for establishments with 20+ workers
• defined procedures for worker complaints and resolution timelines
• introduction of Model Standing Orders (MSOs) for key industries
• deemed certification of MSOs where the regulator does not object within 30 days
• re-skilling fund contributions required on retrenchment.

Implication: Increased formalisation of employee relations and dispute resolution processes, with greater transparency and accountability.

Practical implications for employers

With the Central Rules now in force, employers, particularly those under central jurisdiction, should prioritise:

• compliance audits across all four Codes
• review of employment contracts, policies and standing orders
• implementation of electronically integrated HR and payroll systems
• establishment of internal governance structures (e.g. GRCs, safety committees)
• assessment of gig workforce obligations and benefits structures.

For multi-state employers, these rules also serve as a template for likely State-level developments.

Increased scrutiny of non-solicitation and no-poach clauses

Recent decisions from the Austrian Supreme Court (OGH) and the European Court of Justice (ECJ) signal a clear trend toward greater protection of employee mobility, with both courts adopting a substance-over-form approach to restrictive covenants.

The rulings reflect growing judicial focus on whether contractual provisions actually restrict labour market competition, rather than how they are labelled.

Key development – Austrian Supreme Court

In a recent OGH decision, the court found that an employee non-solicitation clause may effectively constitute a post-termination non-compete clause where its practical impact restricts an individual’s ability to work.

The court assessed whether the clause:

• limits the employee’s ability to carry out economic activity after termination
• goes beyond preventing active poaching of colleagues
• has a similar economic effect to a non-compete restriction.

Where these conditions are met, the clause will be subject to the strict statutory requirements governing non-compete clauses under Austrian law.

Practical implication: Employers cannot avoid regulatory constraints simply by labelling restrictions as “non-solicitation” provisions.

Key development – European Court of Justice

In parallel, the ECJ confirmed that no-poach or non-hire agreements between companies may infringe EU competition law, where they restrict labour market competition.

The court emphasised that:

• competition law applies not only to product and service markets, but also to labour markets
• employees are a key competitive resource
• agreements limiting hiring or solicitation may constitute anti-competitive conduct
• such restrictions must satisfy necessity, proportionality and context-specific justification.

Emerging common principle

Across both decisions, a consistent principle is clear:

• courts will evaluate the real economic effect of restrictions on employee mobility
• both employment law and competition law frameworks may apply in parallel.

This creates a dual lens: under labour law — assessing whether clauses restrict individual economic activity, and under competition law — assessing whether agreements distort market competition.

Key takeaway

These developments reflect an increasing regulatory focus on protecting employee mobility and labour market competition. For employers, the key risk is no longer just enforceability under employment law, but combined exposure under both employment and competition law regimes, requiring careful structuring of restrictive covenants and talent-related agreements.

New Private Investigation Act creates significant compliance risk for internal investigations

Belgium’s Private Investigation Act (PIA), in force since December 2024, is fundamentally changing how companies conduct internal workplace investigations, with early court decisions already demonstrating its strict application.

The legislation significantly expands the regulatory framework and introduces material risks for employers and in-house legal teams, particularly where investigations are used in disciplinary or dismissal processes.

Key change – broader scope

A major shift under the new regime is its expanded scope:

• the Act now applies not only to external investigators but also to internal company investigations, including those conducted by HR, legal, audit and compliance teams
• it is sector-agnostic and mandatory, meaning employers cannot contract out of its requirements.

As a result, many routine workplace investigations, such as those involving misconduct or fraud, may now fall within regulated “private investigation” activity. This became very apparent following an Antwerp Labour Court case in December 2025 where the court declared an employer’s workplace investigation null and void due to a failure to comply with statutory time limits under the PIA.

Immediate legal risk

The most significant risk is the impact on evidence in employment proceedings:

• Belgian courts have already declared investigation reports null and void where PIA requirements were breached
• non-compliant investigations may lead to evidence being ruled inadmissible, undermining dismissals or disciplinary action.

This creates a direct litigation risk, particularly in dismissal for cause cases.

Key employer obligations

The PIA introduces strict procedural and documentation requirements, including:

• adoption of a formal private investigation policy (by a statutory deadline of 16 December 2026) 
• clear documentation of investigation scope, process and legal basis
• ensuring investigations are conducted for a legitimate interest and within strict timelines (once the final report is completed the employer has 30 days to decide whether to take further action or not)
• compliance with data protection and transparency obligations, including informing individuals of investigations.

In some cases, organisations may also need licensing or formal authorisation for structured investigation functions.

Organisational impact

The Act has a wide internal impact:

• internal teams (HR, legal, compliance) may now be treated as regulated investigators
• investigation processes must be formalised and standardised
• employers will need to ensure alignment between investigation practices and legal documentation.

Notably, even where HR teams are exempt from licensing requirements, they must still comply with all other procedural rules. 

Key takeaway

The Belgian Private Investigation Act represents a step change in how employee investigations are regulated, moving toward a highly formalised and compliance-driven model.

For employers, the risk is immediate and practical: failure to comply can invalidate investigation findings, directly affecting the ability to defend dismissals or enforce disciplinary outcomes.

A structured review of investigation procedures, policies and governance frameworks should therefore be prioritised.

Changes to mutual termination agreements may reshape exit strategies

Recent legislative changes in France are beginning to reshape the landscape for individual mutual termination agreements (rupture conventionnelle), one of the most widely used methods for ending employment relationships.

While the mechanism remains popular, the reforms signal a clear policy shift aimed at reducing costs and limiting overuse.

Background

Since their introduction in 2008, mutual termination agreements have become a key feature of the French labour market, offering:

• a consensual alternative to dismissal or resignation
• access to unemployment benefits for employees, unlike in cases of resignation
• a relatively low-risk exit route for employers.

However, their extensive use has attracted increased scrutiny due to financial impact on the unemployment system.

What is changing?

Recent reforms introduce both cost increases and reduced employee incentives:

• Higher employer contributions
  • From 1 January 2026, the employer social charge on termination indemnities increased from 30% to 40%.
• Reduced unemployment benefits (from September 2026)
  • Under 55: reduced from 18 months to 15 months.
  • 55 and over: reduced from 27 months to 20.5 months.

These changes are intended to reduce public spending and discourage reliance on negotiated exits. 

Practical impact

The reforms are likely to affect employer behaviour in several ways:

• increased cost may make mutual termination less financially attractive compared to dismissal
• reduced employee benefits may lead to more complex negotiations, particularly around severance
• employers may face upward pressure on termination payments as employees seek to offset reduced benefits.

Despite this, the mechanism is expected to remain widely used due to its flexibility and simplicity.

Strategic considerations for employers

Employers using mutual termination agreements should:

• reassess the cost-benefit position compared to other termination routes
• anticipate higher settlement expectations from employees
• factor the reforms into workforce planning and restructuring strategies.

Key takeaway

France’s reforms do not remove the mutual termination framework, but they clearly reduce its relative attractiveness for both parties.

For employers, the key shift is toward a more cost-driven and negotiation-sensitive approach, with greater focus on balancing financial exposure against litigation risk in exit strategies.

New supplementary birth leave introduces additional parental rights

France has introduced a new “Supplementary Birth Leave” (congé supplémentaire de naissance), expanding parental leave entitlements and reinforcing support for working families.

The new entitlement comes into force from 1 July 2026, following the Social Security Financing Act for 2026.

What is changing?

The reform introduces a new category of leave designed to allow parents additional time to care for a child during the first months after birth or adoption.

Key features include:

• An individual right for each parent to take one or two months of additional leave 
• The ability to take leave: 
  • as a single period
  • split into two one-month periods.

The leave must generally be taken within nine months of the birth or arrival of the child.

Interaction with existing leave

• The new leave:
• does not replace existing parental leave rights
• operates in addition to:
  • maternity leave
  • paternity and childcare leave
  • adoption leave
  • other family-related leave entitlements Employees are generally required to have taken their existing parental leave entitlements before accessing this additional leave.

Eligibility

The entitlement applies to:

• employees meeting Social Security eligibility requirements (including minimum contribution/activity thresholds)
• children born or adopted on or after 1 January 2026 (with transitional provisions for earlier births expected after this date).

The leave is available to both parents, including:

• the mother
• the father
• a spouse, civil partner or cohabiting partner living with the mother.

Each parent has an individual entitlement, and leave can be taken simultaneously or separately.

Practical implications for employers

Employers in France should prepare for:

• longer cumulative employee absences following birth or adoption
• increased complexity in leave coordination and workforce planning
• additional administrative requirements (e.g. notice handling and scheduling)
• potential impacts on resourcing, particularly in smaller teams.

Importantly, where eligibility conditions are met, employers cannot refuse the leave, reinforcing its status as a statutory entitlement.

Proposed shift from daily to weekly working time limits

Germany is preparing a significant reform of its working time rules, with the government expected to publish a draft bill aimed at introducing greater flexibility in how working hours are structured.

The proposal would move away from the current daily maximum working time model toward a system based on weekly limits, marking a structural change to the German Working Time Act.

What is changing?

Under the current framework, employees generally:

• work a maximum of eight hours per day (extendable to 10 hours subject to averaging rules).

The proposed reform would:

• replace the focus on daily limits with a weekly working time cap
• allow greater flexibility in scheduling working hours across the week
• potentially permit longer individual working days, provided overall limits and rest periods are respected.

This approach aligns more closely with EU working time principles, which emphasise weekly limits rather than strict daily caps.

Additional measures

The reform is expected to be introduced alongside requirements for electronic working time recording, aimed at ensuring that increased flexibility does not lead to excessive or unmonitored working hours. 

Political and practical considerations

The proposal remains politically contentious:

• trade unions have expressed concerns that moving away from daily limits could weaken employee protections
• further negotiation is expected before any legislation is finalised.

Importantly, the reform is not yet law and remains at draft stage pending legislative approval.

Practical implications for employers

If implemented, the reforms could have a material impact on workforce management in Germany, including:

• greater flexibility in shift planning and working time arrangements
• potential need to redesign working time policies and compliance frameworks
• increased focus on robust time-recording systems.

Key takeaway

The proposed shift to a weekly working time model represents a fundamental change in German employment law, with the potential to significantly increase flexibility for employers.

However, the reform is still under development and remains subject to political negotiation, meaning employers should monitor developments closely while maintaining compliance with existing daily limits.

Restrictions on automatic “garden leave” clauses following termination

A recent decision by the German Federal Labour Court (BAG) confirms a significant shift in the treatment of contractual “garden leave” (Freistellung) clauses, with implications for standard employment contract drafting.

The ruling reinforces that employers cannot rely on blanket contractual provisions to remove employees from active work following termination.

Key development

The court examined a contractual clause allowing the employer to:

• unilaterally release the employee from work following termination
• continue paying salary until the end of the notice period.

The BAG held that such general, unconditional release clauses are invalid, as they place the employee at an unreasonable disadvantage.

Legal reasoning

The decision is grounded in a core principle of German employment law:

• employees have not only a right to remuneration, but also a right to actual employment
• this right generally continues until the end of the notice period, even after termination is given.

A clause that automatically overrides this right, without conditions or case-by-case assessment, fails to meet the requirements of fairness under German law. 

Key clarification

While the clause itself was found invalid, the court also confirmed that:

• garden leave may still be lawful, but only were justified by specific circumstances
• employers must demonstrate legitimate, overriding interests (e.g. protection of business interests or operational considerations).

In other words, the issue is not the concept of garden leave, but the use of pre-defined, unrestricted contractual rights.

Practical implications for employers

Employers in Germany should review:

1. Employment contracts
   Standard clauses granting automatic release rights may be unenforceable.
   Greater emphasis is needed on conditional, case-specific drafting.
2. Termination processes
   Garden leave decisions must be supported by documented business rationale.
   Automatic removal from duties following notice is no longer defensible.
3. Associated benefits and assets
   Withdrawal of benefits (e.g. company cars) linked to release provisions may be challenged if the underlying clause is invalid.

Key takeaway

This decision reflects a broader judicial trend toward strengthening employee rights during the notice period, particularly the right to remain actively employed.

For employers, the practical shift is clear: garden leave must be justified on a case-by-case basis and cannot be implemented solely through standard contractual wording.

New rules on contractual retirement ages take effect

Ireland has commenced the Employment (Contractual Retirement Ages) Act 2025, introducing new obligations for employers operating fixed retirement age provisions in employment contracts.

The reform strengthens employee protections by providing a clear statutory framework for challenging mandatory retirement.

What is changing?

Under the new regime:

• employees who are subject to a contractual retirement age can formally request to remain in employment beyond that age
• employers must consider and respond to such requests in a structured manner.

This introduces greater procedural requirements where previously retirement at a contractual age could often be applied more automatically.

Key employer obligations

Employers must now:

• establish a formal process for handling retirement extension requests
• assess requests on an objective and reasonable basis
• provide a reasoned written response where a request is refused.

The legislation effectively requires employers to justify retirement decisions in a way that can withstand scrutiny.

Practical impact

The changes significantly increase the risk of challenge where:

• retirement is applied without clear business justification
• decisions are inconsistent across the organisation
• there is a lack of documented process or reasoning.

The reform also aligns with broader trends in employment law toward age equality and extended workforce participation.

Practical steps for employers

Employers should review:

• employment contracts – confirm how retirement ages are drafted
• retirement policies and procedures – ensure they incorporate a compliant request process
• manager training – to handle requests consistently and appropriately
• documented justification frameworks – particularly where requests are refused.

Key takeaway

The Act represents a shift from retirement as a contractual formality to a regulated decision-making process, requiring employers to actively justify why employment should end at a particular age.

For employers, the priority is ensuring that retirement practices are transparent, consistent and defensible.

New Labour Decree introduces “fair pay” framework and platform worker protections

Italy has introduced a significant package of labour reforms through Decree Law No. 62/2026, with a focus on pay structures, employment incentives and the regulation of platform work.

The measures reflect a broader European trend toward stronger labour protections, particularly in the context of digitalisation and evolving workforce models.

Key areas of reform

1. Introduction of a “fair salary” concept

Rather than legislating for a statutory minimum wage, the decree introduces a “fair salary” benchmark, based on the remuneration levels set by the most representative national collective bargaining agreements (CBAs).

This reinforces the central role of collective bargaining and aims to address concerns around inconsistent pay levels across sectors.

2. Incentives to promote permanent employment

The decree introduces a range of targeted hiring incentives, including social security contribution relief for up to 24 months where employers:

• hire long term unemployed individuals (including women and younger workers) on a permanent basis
• convert eligible fixed-term contracts into permanent roles
• recruit employees in economically disadvantaged regions.

These measures are designed to encourage labour market stability and long-term employment relationships.

3. Increased focus on platform work and labour classification

New provisions seek to address labour exploitation in the gig/platform economy, including:

• a “substance over form” approach to employment status
• a presumption of employment where there is evidence of control or direction, including via algorithms.

This reflects increasing regulatory scrutiny of algorithmic management and worker classification.

Practical implications for employers

The reforms introduce a number of compliance considerations, particularly for organisations operating in Italy or managing cross-border workforces:

• pay structures  — employers must ensure alignment with applicable collective agreements
• hiring and workforce strategy — incentives may influence decisions around permanent vs fixed-term contracts
• platform work models — engagement structures may need review in light of stricter classification rules.

Key takeaway

The Labour Decree represents a structural shift in Italian employment regulation, combining financial incentives with enhanced worker protections. For employers, the direction of travel is clear: greater reliance on collective bargaining benchmarks, increased scrutiny of non-traditional work models, and a policy focus on stable employment outcomes.

Sanctions for “right to disconnect” obligations now in force

Luxembourg has brought into force administrative sanctions for non-compliance with the statutory “right to disconnect”, marking a shift from policy obligation to active enforcement.

The development significantly increases compliance risk for employers using digital tools in the workplace.

What is changing?

Since 2023, Luxembourg law has required employers to implement a framework ensuring employees can disconnect from work-related communications outside working hours.

However, from 4 July 2026, sanctions now apply for non-compliance.

Scope of the obligation

The obligation applies:

• to all employers, regardless of size
• wherever employees use digital tools for work purposes.

Employers must establish a structured regime governing how the right to disconnect is implemented in practice.

Key employer obligations

The required framework must include:

• practical and technical measures for disconnecting from digital tools
• awareness and training initiatives
• compensation arrangements, where employees are exceptionally required to remain available outside working hours.

The regime should be adapted to the organisation’s specific circumstances and operational needs.

Sanctions

Failure to comply may result in:

• administrative fines ranging from €251 to €25,000
• enforcement by the Labour and Mines Inspectorate (ITM), taking into account the severity and circumstances of the breach.

This represents the first time the regime is backed by financial penalties, following a transition period since the law’s adoption.

Practical implications for employers

Employers operating in Luxembourg should:

• ensure a formal right-to-disconnect policy or framework is in place
• review how after-hours communication is managed in practice
• implement training and awareness measures for managers and employees
• document exceptions and business justification where availability is required.

Given the broad application of the law, even organisations with relatively informal practices may now face enforcement exposure.

Capability dismissals and PHI – increased risk for employers

A recent Scottish Court of Session decision highlights a significant risk for employers when managing capability dismissals involving employees entitled to Permanent Health Insurance (PHI) benefits (i.e. income protection cover).

The ruling suggests that, in certain circumstances, PHI payments may continue to qualify as “wages” even after employment has ended, exposing employers to extended financial liability. 

Key issue

The case centred on an employee who was:

• absent due to long-term illness and eligible for PHI benefits
• dismissed on capability grounds
• not receiving PHI payments due to employer error.

The employee argued that the employer should not have dismissed her while she remained entitled to PHI benefits and that those payments should continue to be treated as wages post-termination.

Key legal development

The Court of Session took a broader view of “wages” and indicated that:

• PHI payments can fall within the statutory definition of “wages” (i.e. sums payable in connection with employment)
• this may allow employees to pursue unlawful deduction from wages claims even after dismissal.

Crucially, the decision challenges the assumption that termination automatically ends all payment obligations under a PHI arrangement. 

Why this matters

The ruling can significantly increase employer exposure:

• potential liability for long-term or even multi-year PHI payments
• risk where the employer has failed to properly secure insurance cover
• greater scrutiny of whether dismissal has the effect of depriving employees of contractual benefits.

Practical implications for employers

Employers offering PHI or income protection schemes should review:

• contractual wording – ensure PHI benefits are clearly defined and appropriately limited
• insurance arrangements – confirm alignment between policy coverage and contractual promises
• dismissal processes – exercise caution before dismissing employees on long-term sickness absence
• benefit governance – ensure accurate enrolment and administration of PHI schemes.

Key takeaway

This decision highlights a material litigation risk in capability dismissals involving PHI.

Where benefits are poorly drafted or not properly implemented, employers may face ongoing payment obligations even after employment ends, significantly increasing the cost of dismissal decisions.

Even though this is a Scottish judgment it could well be appealed to England’s Supreme Court which would ensure wider application to employers in England and Wales also.

Employment tribunal time limits to double from October 2026

The UK Government has confirmed plans to extend the time limits for bringing most employment tribunal claims, with effect expected from 1 October 2026.

Under the proposed changes, the current limitation period of three months will be extended to six months for a wide range of statutory employment claims.

What is changing?

The reform forms part of the wider Employment Rights Act 2025 framework and will apply to most employment-related claims, including those concerning worker status, consultation rights, and other statutory protections.

The extended deadline will generally run from the date of the relevant act or the last act in a series, and will apply only where that date falls on or after 1 October 2026. 

Importantly, existing procedural rules will remain unchanged, including the requirement to notify Acas and engage in early conciliation before lodging a claim.

Increased exposure for employers

The extension of time limits is expected to have a direct impact on employer risk exposure:

• longer window for claims – employees will have significantly more time to consider and pursue claims
• potential increase in claim volumes – including claims that may previously have been out of time
• extended period of uncertainty – workplace disputes are likely to remain “live” for longer.

These changes come at a time when tribunal caseloads are already increasing, potentially compounding pressures on employers. 

Practical implications

Employers should begin preparing for a shift in litigation risk and internal processes, including:

• reviewing document retention policies, particularly for grievance, disciplinary and dismissal processes
• ensuring robust record keeping and audit trails are maintained for longer periods
• focusing on early resolution strategies, given the extended timeframe for claims.

Key takeaway

The move from a three month to six month limitation period represents a significant structural change in UK employment law. For employers, this marks a transition toward longer running disputes and heightened compliance expectations, reinforcing the importance of consistent HR processes and defensible decision making.

Pressure builds to overhaul modern slavery framework

There are increasing calls for the UK Government to reform its approach to tackling modern slavery, with recent reports highlighting both the growing scale of the issue and limitations in the current legal framework.

A key concern is that developments in technology and digital platforms are making it easier for traffickers to identify and exploit individuals at scale, raising questions about whether existing laws remain fit for purpose.

Proposed shift to a new regime

The Independent Anti Slavery Commissioner and other stakeholders are advocating for a fundamental change to the current system under the Modern Slavery Act 2015. 

At present, organisations are primarily required to publish annual transparency statements outlining steps taken to address modern slavery risks. For further details on the current regime see our prior insight: Modern Slavery. However, critics argue that this reporting focused approach lacks sufficient enforcement and impact.

In response, proposals have been put forward to introduce a mandatory human rights due diligence regime. This would move beyond disclosure requirements and instead require businesses to actively:

• identify and assess risks within their operations and supply chains
• take steps to prevent and mitigate harm
• demonstrate ongoing compliance.

Increased liability and enforcement

Under the proposed framework, organisations could face civil and regulatory penalties where they fail to prevent serious human rights abuses. In more severe cases, liability could extend to criminal sanctions, including for senior management.

The proposals also include:

• restrictions on the import and export of goods linked to forced labour
• a strengthened disclosure regime with penalties for non compliance.

Practical implications for employers

While these reforms have not yet been implemented, they signal a clear direction of travel toward stronger corporate accountability in the UK, broadly aligning with developments in other jurisdictions.

Employers, particularly those with complex or international supply chains, should anticipate a shift from policy based compliance to evidence based due diligence, requiring more robust systems, governance structures, and documentation.

New statutory right for employees to raise data protection complaints internally

From 19 June 2026, a significant change to UK data protection law has introduced a new statutory right for employees (and other individuals) to raise data protection complaints directly with their employer.

The reform, introduced under the Data (Use and Access) Act 2026, represents a shift toward internal resolution of data protection issues, with organisations now responsible for handling complaints before they escalate to the regulator.

What is changing?

Employees can now formally complain to their employer about how their personal data is handled, including:

• the use, storage or retention of personal data
• responses to subject access requests or other data rights
• data security issues, including potential breaches
• accuracy or processing of personal information.

Importantly, individuals do not need to label their concern as a “complaint” for it to trigger the legal process.

New employer obligations

Employers must implement and maintain a compliant complaints framework, which includes:

• providing a clear and accessible route for raising complaints
• acknowledging complaints within 30 days
• investigating concerns and responding without undue delay
• communicating the outcome of the complaint to the employee.

Employers must also ensure employees are informed of this right, typically via privacy notices.

Practical impact

The reform represents a shift in how data protection disputes are handled:

• complaints are expected to be resolved internally first, rather than going directly to the ICO
• employers face increased expectations around process, documentation and responsiveness
• existing channels, such as grievance procedures, can be used – but must meet statutory standards.

Key takeaway

The introduction of a formal right to complain directly to employers marks a significant strengthening of organisational accountability under UK data protection law.

For employers, the priority is clear: robust, accessible and well-governed complaints processes are now essential, both to manage risk and to minimise escalation to regulators.

UK / India: Social security agreement to reduce cross-border employment costs

The UK and India have signed a bilateral social security agreement, expected to come into force in summer 2026 alongside the wider UK–India trade deal.

The agreement represents a significant development for employers with cross-border operations or internationally mobile employees between the two jurisdictions.

Key features

The agreement is designed to eliminate dual social security contributions for temporary assignments:

• employees on qualifying assignments will remain subject to only one country’s social security system
• this typically applies to temporary postings of up to 36 months
• relief is accessed through a Certificate of Coverage issued by the home country
• the rules apply reciprocally to UK employees working in India and vice versa.

This is expected to reduce the risk of overlapping contributions (e.g. UK National Insurance and Indian Provident Fund payments) for employers and employees.

Impact for employers

For organisations managing international assignments, the agreement should:

• reduce assignment costs by removing duplicate social security liabilities
• simplify compliance in cross-border payroll arrangements
• support short-term secondments and business travel between the UK and India.

Limitations and ongoing risks

The agreement is narrow in scope and does not address wider employment and tax considerations. Key areas that remain unchanged include:

• Corporate tax / permanent establishment risk arising from cross-border activity
• Employment taxes and payroll obligations, including withholding and reporting requirements
• Incentive plans and equity arrangements, which may still create complexity across jurisdictions

Employers should therefore avoid treating the agreement as a complete solution to cross-border workforce structuring.

Key takeaway

The UK–India Social Security Agreement is a positive development for internationally mobile workforces, offering clear cost efficiencies and administrative benefits.

However, it addresses only one element of cross-border risk, and employers should continue to adopt a holistic approach covering tax, legal and regulatory considerations when deploying employees internationally.

Supreme Court clarifies burden of proof in overtime disputes

A recent ruling by the Spanish Supreme Court provides important clarification on how the burden of proof operates in overtime claims, particularly where employers fail to maintain compliant working time records.

The decision refines the interaction between Spain’s working time recording obligations and overtime litigation risk.

Legal background

Spanish law requires employers to:

• maintain a daily record of each employee’s working time, including start and end times
• retain these records for four years, with access for employees, representatives and labour authorities.

In addition, any recording system must be objective, reliable and accessible to be valid.

Key development

The Supreme Court has clarified that:

• the absence of working time records does not automatically shift the burden of proof to the employer
• employees must still provide evidence supporting their overtime claims in certain circumstances.

However, the court also emphasised that employers remain responsible for providing the primary means of verifying working time.

Practical implications

The ruling reinforces that:

• working time records are the key evidential tool in overtime disputes
• alternative evidence (e.g. witness testimony) is generally considered less reliable.

For employers, failure to maintain compliant records may not automatically result in liability, but it creates significant evidential and litigation risk.

Practical steps for employers

Employers in Spain should:

• ensure working time systems are robust, reliable and audit-ready
• maintain accurate daily records for all employees
• review consistency between working time records and contractual schedules
• prepare to evidence working time in disputes, particularly where schedules are irregular.

Given the court’s emphasis on system quality, non-compliant or inadequate records may be treated as equivalent to no records.

Key takeaway

The decision confirms that overtime claims will be assessed on a case-by-case basis, with no automatic presumption in favour of either party.

However, the broader message is clear: employers bear responsibility for maintaining credible, compliant working time records, which remain central to defending or managing overtime claims.

Courts scrutinise “hybrid remuneration” models in employment disputes

A recent Dubai Court of Cassation decision highlights growing legal risk where employers use hybrid remuneration structures (combining fixed salary with performance based or revenue linked elements).

The ruling underscores that, in employment disputes, courts will look beyond contractual wording and assess how remuneration operates in practice.

Key issue

The dispute centred on the true characterisation of an employee’s remuneration:

• the employer relied on the fixed salary stated in the employment contract
• the employee argued that actual pay operated as a revenue linked or participation-based model, resulting in higher earnings

The court examined whether the practical payment structure should be used to calculate statutory entitlements such as notice pay, leave and gratuity.

Key legal principles

The decision reinforces several important principles under UAE employment law:

• substance over form — courts may prioritise how remuneration works in reality over how it is described contractually
• evidentiary consistency is critical — inconsistencies between contract terms, payroll practices and litigation arguments can undermine an employer’s position
• hybrid pay models increase litigation risk where documentation and implementation are not aligned.

The judgement also highlights that a party’s inconsistent legal position during proceedings can materially weaken its case. 

Practical implications for employers

Employers operating in the UAE, particularly in sectors using incentive-heavy or revenue-sharing models, should take note:

• align employment contracts, policies and payroll practices
• clearly define which elements of pay form part of “wages” for statutory purposes
• ensure consistent internal and litigation positions on remuneration structures
• review bonus/commission frameworks for legal clarity and evidentiary support.

Key takeaway

The decision reflects a broader trend in UAE employment disputes toward greater judicial scrutiny of modern compensation structures.

For employers, the risk is clear: where there is a mismatch between contractual terms and real-world payment practices, courts may adopt a broader interpretation of remuneration; potentially increasing statutory liabilities.