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Global HR News

International HR updates digest: November 2025

As an international employer, it is essential to stay up-to-date with all the regulatory changes that impact your people. Our specialists have compiled useful information on recent and upcoming changes to HR compliance from around the world.

This month’s edition includes Australia’s payday Superannuation reform, Singapore’s proposed overhaul of the Employment Act, new family leave systems in Taiwan and Thailand and the latest countries to implement the EU’s Transparency Directive.

Americas


Canada

Ontario court awards $5.4 Million in landmark whistleblower retaliation case

In a precedent-setting decision, the Ontario Superior Court has awarded $5.4 million to a whistleblower under the Ontario Securities Act (OSA), marking the first judicial interpretation of the Act’s anti-reprisal provisions.

Case overview: McPherson v. Global Growth Assets Inc.

Ian McPherson, former CEO and Ultimate Designated Person at Global Growth Assets Inc., raised internal concerns about improper influence and compliance breaches involving the company’s founder and his daughter. Shortly after voicing these concerns, McPherson was terminated without cause.

He filed a claim under the OSA’s whistleblower protections, alleging unlawful reprisal. The employer counterclaimed for slander and negligence.

Court findings

Justice Centa ruled that:

  • McPherson had a reasonable belief that securities laws were being violated
  • he engaged in protected whistleblowing activity on multiple occasions
  • his termination was at least partly motivated by his intent to report misconduct, constituting unlawful reprisal, even if other reasons for dismissal existed.
Key takeaways for employers
  • Whistleblower protections are broad: Employees are protected when reporting suspected securities law breaches, internally or to regulators.
  • Burden of proof lies with the employer: Employers must demonstrate that no retaliation occurred.
  • Partial motivation is enough: Even if whistleblowing is only one factor in a dismissal, it can trigger liability.
  • Statutory damages can be severe: Awards may include double remuneration without mitigation, even for short employment periods.

This ruling sets a powerful precedent and underscores the importance of handling whistleblower concerns with transparency and care.

British Columbia introduces extended leave for serious illness or injury

On 20 October 2025, the Government of British Columbia introduced Bill 30, the Employment Standards (Serious Illness or Injury Leave) Amendment Act, 2025. If enacted, this legislation will expand job-protected unpaid leave under the Employment Standards Act (ESA) for employees facing long-term health challenges.

Key provisions of bill 30
  • Leave duration: Eligible employees may take up to 27 weeks of unpaid, job-protected leave within a 52-week period if unable to work due to a serious personal illness or injury.
  • Medical certification: To qualify, employees must provide a certificate from a health practitioner confirming: 
    • the medical condition
    • the start and expected end dates of the leave.
  • Leave structure:
    • leave must be taken in minimum one-week increments
    • if the full 27 weeks are not used, the remaining entitlement may be resumed or extended within the same 52-week window
    • if an employee returns to work but later becomes unable to continue due to the same condition, they may resume leave without a new certificate, provided the original entitlement hasn’t been exhausted.
Comparison with short-term sick leave

Under recent ESA amendments, BC employers are prohibited from requesting proof of illness for short-term sick leave.

In contrast, Bill 30 requires formal medical documentation for extended leave, reflecting its focus on serious and prolonged health conditions.

Alignment with federal and provincial standard

This proposed leave aligns BC’s employment protections with:

  • the Employment Insurance Sickness Benefits program
  • similar extended leave provisions in other Canadian jurisdictions.
Employer action points
  • Policy updates: Employers should prepare to revise internal leave policies to incorporate the new extended leave entitlement.
  • HR training: Ensure HR teams understand the eligibility criteria, documentation requirements, and leave tracking procedures.
  • Communication: Clearly inform employees about their rights and obligations under the new leave framework.

If passed, Bill 30 will enhance support for employees undergoing long-term medical treatment while ensuring employers maintain compliance with evolving labour standards.

Ontario court warns employers: Don’t delay statutory termination payments

A recent Ontario Superior Court decision in Carroll v Oracle Canada has sent a strong message to employers: delaying statutory termination entitlements can result in significant legal and financial consequences.

Case summary:

Mr. Carroll, a Global Strategic Client Executive at Oracle Canada, earned a base salary of $180,000 and annual commissions exceeding $700,000. After three years and seven months of service, he was terminated due to restructuring. Oracle paid him statutory termination entitlements with the exception of $57,740.55 in commissions earned during his notice period (this was paid eight months later).

Court findings:
  • The court found Oracle’s delay in paying the commissions was a deliberate tactic to pressure Mr. Carroll who was financially vulnerable post-termination into accepting a less favourable settlement.
  • The court awarded punitive damages equal to the withheld commissions, citing a breach of the duty of good faith in contractual performance.
Key takeaways for employers:
  • Pay all statutory entitlements promptly: Statutory entitlements should include all aspects of an employee’s remuneration, including commissions and holiday pay etc and must be paid without delay. Using them as leverage in negotiations risks punitive damages.
  • Avoid power imbalances: Courts are increasingly sensitive to employer conduct that exploits post-termination vulnerabilities.
  • Review employment agreements: Ensure termination clauses are enforceable and reflect both statutory and common law obligations.
  • Act in good faith: Employers must demonstrate fairness and transparency in post-employment dealings.

This ruling reinforces the importance of paying out statutory entitlements first, then negotiating, and highlights the risks of strategic delay tactics.

Asia Pacific

Australia

Remote work rights strengthened- lessons from Louise v Metcash

A recent Fair Work Commission ruling has reinforced employee rights to request flexible working arrangements, particularly in the context of post-pandemic return-to-office mandates.

Case overview:

Catherine Louise, employed by Metcash Trading Limited, had worked remotely since the start of her employment during COVID-19. In late 2024, Metcash introduced a policy requiring certain staff to return to the office at least three days a week. Ms Louise requested an exemption, citing her teenage daughter’s cystic fibrosis and the associated health risks of workplace exposure.
Metcash declined the request, offering a compromise of two office days per week. Ms Louise rejected this and escalated the matter to the Fair Work Commission.

To be valid an employees request for flexible working must fall into one of the circumstances listed in section 65(1A) of the Fair Work Act and is required because of those circumstances. 
An employer can refuse a request if all of the following requirements under s 65A(3) are met:

  • the employer has held discussions with the employee and genuinely tried to reach agreement
  • those discussions have not resulted in agreement
  • the employer has considered the consequences of the refusal for the employee
  • the refusal is on reasonable business grounds.
Commission Findings:
  • Ms Louise’s request was valid under the Fair Work Act, as it was made due to her parental responsibilities (a valid circumstance under s65 (1A).
  • Metcash had satisfied the requirement for discussions to be held with the employee- however Metcash failed to demonstrate reasonable business grounds for refusal and critically did not adequately consider the personal consequences for Ms Louise.
  • The Commission emphasised that flexible work requests must be assessed on individual circumstances, not just standard policies or employment contracts.
Key takeaways for employers:
  • Consult thoroughly: Engage meaningfully with employees and document discussions.
  • Assess consequences: Consider the personal impact of refusal on the employee.
  • Provide evidence: Be prepared to justify refusals with credible, documented business reasons.
  • Avoid overreliance on contracts: Flexibility may require deviation from standard terms.

This decision serves as a reminder that employers must approach flexible work requests with empathy, diligence, and a clear evidentiary basis.

Poorly drafted alcohol policy costs employer $63,500

In a recent case (Tamati v MQT Pty Ltd), the Fair Work Commission ruled that an employee’s dismissal for refusing an alcohol breath test was unfair, highlighting the risks of unclear workplace policies. The employer was ordered to pay $63,500 in compensation due to procedural flaws and a vague drug and alcohol policy.

Case background
  • Three employees attended a four-hour lunch where alcohol was consumed.
  • One employee returned to the office and behaved disruptively, prompting a breath test request.
  • A second employee, who had one drink and was reportedly ‘acting a bit different,’ was also asked to take a test.
  • She questioned the grounds for the test and ultimately refused, leading to suspension and dismissal for serious misconduct.
Commission findings
  • The employer’s policy allowed testing based on reasonable suspicion, random checks, or post-incident events, but failed to define what constituted reasonable suspicion.
  • The policy did not specify penalties for refusing a test.
  • The employee was not provided with the policy, nor directed to any clause justifying the test.
  • The employer’s witnesses gave conflicting reasons for the test, undermining the legitimacy of the request.
  • No formal investigation was conducted, and the misconduct allegation was not properly communicated.
  • The Commission found the dismissal was harsh, unjust, and unreasonable, and ruled that the employee’s refusal was justified under the circumstances.
Key lessons for employers
  • Draft clear policies: Define when and how testing will occur, what constitutes reasonable suspicion, and the consequences of refusal.
  • Ensure procedural fairness: Communicate clearly, allow employees to respond, and base decisions on evidence, not assumptions.
  • Apply policies consistently: Follow established protocols and document all steps.
  • Respect privacy: Handle testing and investigations sensitively.
  • Review regularly: Update policies to reflect legal standards and workplace needs.

This case underscores the importance of well-drafted and consistently applied workplace policies, especially in areas involving health, safety, and employee rights.

Payday super reform-what employers need to know before July 2026

The Australian Government has introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025, marking a major shift in how superannuation guarantee (SG) contributions are administered. The reform, known as Payday Super will take effect from 1 July 2026, aligning SG payments with each employee’s payday rather than the current quarterly schedule.

Key changes under payday super
  • Payment timing: SG contributions must be received by the employee’s super fund within seven  business days of each payday.
  • Fund allocation: Super funds must allocate or return contributions within three business days, down from the previous 20-day window.
  • Reporting requirements: Employers must report qualifying earnings (QE) and SG liabilities for each employee via Single Touch Payroll, giving the ATO real-time visibility.
  • Late payment offsets: For post-1 July 2026 remuneration, late payment offsets will be automatically applied to the earliest outstanding QE day. Pre-2026 periods still require manual election.
  • Expanded opt-outs: High-income earners and employees with multiple employers will benefit from broader exemptions to avoid excess contributions.
ATO compliance approach (2026–2027)

The ATO’s draft Practical Compliance Guideline PCG 2025/D5 outlines a risk-based approach for the first year:

  • Low risk: Employers who attempt timely payments and correct errors quickly will likely avoid review.
  • Medium risk: Timing issues resolved within 28 days may trigger ATO review.
  • High risk: Unresolved shortfalls after 28 days will be a priority for enforcement.

After July 2027, the ATO is expected to adopt a stricter compliance stance.

Penalties and enforcement

Employers failing to comply may face:

  • SG shortfall charges
  • daily interest (currently 11.36%)
  • administrative penalties up to 60% of the shortfall
  • additional fines from the Fair Work Ombudsman under the National Employment Standards.
Action points for employers

To prepare for the transition, employers should:

  1. Upgrade payroll systems to handle more frequent SG processing.
  2. Review pay codes to ensure correct entitlements are captured.
  3. Maintain accurate records, including choice forms and TFN declarations.
  4. Plan cash flow to meet the tighter contribution deadlines.
India

Punjab simplifies labour rules for shops and establishments

The Punjab government has enacted the Punjab Shops and Commercial Establishments (Amendment) Act, 2025, introducing several business-friendly changes aimed at easing compliance and increasing flexibility for employers.

Key changes:
  • Reduced compliance for small businesses: Establishments with fewer than 20 employees are now exempt from most provisions of the Act. These businesses only need to notify the designated authority of their operations within six months of starting up.
  • Relaxed registration requirements: For businesses with 20 or more employees, the registration deadline has been extended from 30 days to six months. If the registration certificate isn’t issued within 24 hours of application, registration is granted automatically.
  • Extended working hours:
    • daily working hours increased from nine to 10 hours
    • quarterly overtime limit raised from 50 to 144 hours
    • daily spread of working hours extended to 12 hours.
  • Updated penalties: Fines for non-compliance have been revised, with higher penalties for repeat offences. Certain breaches are now eligible for compounding, reducing the administrative burden on employers.

These amendments reflect Punjab’s commitment to creating a more supportive regulatory environment for businesses, particularly small enterprises.

Maharashtra amends shops and establishments law to ease compliance and extend working hours

On 1 October 2025, the Governor of Maharashtra promulgated the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) (Amendment) Ordinance, 2025, introducing significant changes to the 2017 Act. The Ordinance is now in effect and reflects the state’s broader push to simplify labour compliance and support business flexibility.

Key Employment Law Changes
  1. Applicability threshold raised
    The Act now applies only to establishments with 20 or more non-managerial employees, up from the previous threshold of 10.
    Establishments with fewer than 20 non-managerial staff are only required to submit basic details to the Facilitator and are exempt from full compliance with the Act.
  2. Registration requirements
    The registration obligation now applies only to establishments meeting the new 20-employee threshold.
    Smaller establishments benefit from reduced administrative burden.
  3. Daily working hours
    The maximum daily working hours have been increased from nine to 10 hours.
    The weekly limit remains at 48 hours, meaning a five day workweek at 10 hours/day would trigger mandatory overtime compensation.
  4. Overtime limits
    The quarterly overtime cap has been raised from 125 to 144 hours.
  5. Spread over of work
    The maximum spread over (total time between start and end of work) has been extended from 10.5 to 12 hours per day.
    Previously, this was only allowed for urgent or intermittent work.
  6. Rest breaks
    Employees must now receive a minimum 30-minute break after six hours of continuous work, up from the previous five hour threshold.
Implications for employers
  • Policy updates required: Employers must revise internal HR policies to reflect the new working hour limits and registration thresholds.
  • Overtime management: Businesses must monitor weekly working hours to avoid unintentional breaches and ensure proper overtime compensation.
  • Operational planning: The extended spread over and rest intervals may require adjustments to shift scheduling and workforce planning.
Strategic context

This reform aligns Maharashtra with similar initiatives in Punjab (see further details above) and Telangana, aimed at reducing regulatory friction for small businesses and promoting ease of doing business. However, employers must balance the flexibility offered with compliance risks, particularly around overtime liabilities.

Japan

Tighter work permit rules for business managers

Japan has implemented more stringent requirements for foreign nationals applying for business manager work permits, effective October 2025. The changes reflect the government’s efforts to ensure that applicants are genuinely engaged in business operations and not using the visa category as a workaround for residency.

Key changes to the business manager visa
  • Stricter scrutiny of business viability: Immigration authorities will now assess the economic substance of the applicant’s business more rigorously. This includes evaluating:
    • the scale and sustainability of operations
    • office space and staffing arrangements
    • financial projections and actual performance.
  • Enhanced documentation requirements: Applicants must provide
    • detailed business plans
    • proof of capital investment (minimum ¥5 million)
    • evidence of physical office space (virtual offices are no longer sufficient)
    • employment contracts for at least two full-time staff (excluding the applicant)
    • On-site inspections: Authorities may conduct site visits to verify the legitimacy of the business setup.
  • Renewal challenges: Renewals will be subject to stricter review, especially if the business has not met its initial projections or failed to hire staff.

Implications for foreign entrepreneurs and companies

  • Startups and SMEs: New businesses must be well-prepared with robust documentation and a clear operational footprint in Japan.
  • Existing permit holders: Those seeking renewals should ensure compliance with the updated criteria and be ready for audits.
  • Corporate sponsors: Companies sponsoring foreign executives must ensure their Japan operations meet the new standards.

These changes signal Japan’s intent to align immigration policy with economic substance and labour market integrity.

Singapore

Consultation paper on second workplace fairness bill

Singapore’s Ministry of Manpower (MOM) has released a consultation paper outlining proposals for the second phase of the Workplace Fairness Act (WFA), following the initial bill passed in January 2025. This second bill focuses on dispute resolution mechanisms and procedural aspects of workplace fairness claims.

Key proposals:
  • Two-tier dispute resolution: Employers must first address grievances internally. If unresolved, claims proceed to mandatory mediation before potential adjudication by the Employment Claims Tribunal (ECT).
  • Expanded jurisdiction and compensation limits: The ECT will handle claims up to SGD250,000, while higher-value claims will be heard by the General Division of the High Court (GDHC). This marks a significant increase from previous compensation caps under the wrongful dismissal framework.
  • Private hearings: All claims, regardless of forum, will be heard privately to protect confidentiality and reduce public scrutiny.
  • Union representation: Employees in unionised companies may be represented by their unions. Notably, employers may also be represented by unions during mediation and hearings, an entirely new provision.

MOM is inviting public feedback on these proposals, which aim to streamline dispute resolution and enhance fairness in the workplace.

Review of employment act to reflect modern workforce needs

Singapore’s Ministry of Manpower has initiated a comprehensive review of the Employment Act 1968, the country’s core labour legislation. A Tripartite Work Group (TWG), comprising representatives from unions, employers, and government, met for the first time in August 2025 to begin this process.

Purpose of the review:
  • The review aims to modernise the Act in response to shifts in workforce demographics, evolving work arrangements, and economic challenges. It seeks to:
  • protect core employment standards across all sectors
  • balance business and worker interests, while allowing flexibility for sustainable agreements between employers, employees, and unions
  • maintain Singapore’s competitive edge by ensuring a productive and adaptable labour market.
What to expect:

The TWG will consult widely with stakeholders and is expected to deliver its recommendations in the second half of 2026. Key areas under consideration include protections for diverse worker groups and reducing regulatory burdens for businesses.

This initiative follows the last major update to the Employment Act in 2019 and signals Singapore’s commitment to keeping its employment framework relevant and responsive.

Tightens vaping laws- employers urged to take action

Singapore is stepping up its enforcement against vaping, now treating it as a drug-related issue due to the rise in drug-laced e-vaporisers. In his August 2025 National Day Rally speech, the Prime Minister announced stricter penalties, including the temporary classification of etomidate, a substance found in some vapes, as a Class C drug under the Misuse of Drugs Act.

Implications for employers:
  • Legal liability: From 1 September 2025, allowing drug activity on company premises including use of etomidate-laced vapes can result in fines up to SGD10,000 and/or five years’ imprisonment. Corporate liability may extend to directors and officers if offences occur due to their consent, neglect, or connivance.
  • Policy updates recommended: Employers are advised to:
    • explicitly prohibit vaping-related conduct in HR policies
    • define disciplinary actions for violations
    • communicate the company’s stance clearly to all staff.

Although enforcement against companies has been rare, authorities are expected to increase scrutiny. Proactive policy updates and internal communications can help mitigate legal and reputational risks.

Taiwan

New parental leave system in 2026

Taiwan’s Ministry of Labor has announced a major reform to its parental leave system, set to take effect in 2026. The new day-based parental leave model replaces the current rigid structure that requires leave periods of at least six months, offering greater flexibility for working parents and helping employers retain skilled staff amid labour shortages.

Key features of the new leave system
  • Short-term leave by the day: Employees will be able to take parental leave on a daily basis, rather than committing to extended blocks.
  • Entitlement limit: Parents may take up to 60 days of day-based leave.
  • Income support: During this period, employees will receive 80% of their regular salary.
  • Support for small businesses: Enterprises with 30 or fewer employees, which represent over 97% of Taiwan’s businesses will receive a NT$1,000 daily subsidy per employee to offset staffing costs.
  • Application process: Employees must apply five days in advance, except in emergencies (e.g. child illness, school closure), where one-day notice is sufficient.
Interaction with existing leave rights

The new scheme complements Taiwan’s Gender Equality in Employment Act, which already allows:

  • Seven days of family care leave per year, counted within the 14-day personal leave entitlement.
  • Hourly family care leave, up to 56 hours annually.

Once these entitlements are exhausted, employees may use remaining personal leave hours for caregiving. Employers cannot reject such requests or penalise employees through attendance bonuses or performance reviews.

Employer responsibilities and compliance

To align with the new framework, employers will need to:

Update internal policies to reflect daily parental leave entitlements and wage subsidy procedures.

  1. Ensure fair treatment of employees using parental leave, avoiding indirect discrimination.
  2. Plan for workforce continuity, especially in small teams, to manage short-notice absences.
  3. The government will also recognise exemplary employers through its work-life balance award, encouraging family-friendly practices.

Taiwan’s shift to day-based parental leave marks a progressive step toward a more inclusive and adaptable labour system. It acknowledges the unpredictable nature of caregiving and empowers employees to balance work and family life more effectively. Success will depend on clear implementation guidelines, timely subsidy disbursement, and employer commitment to fostering a supportive workplace culture.

Thailand

Labour law reforms to modernise work-life protections

On 24 September 2025, Thailand’s House of Representatives unanimously approved two draft Labour Protection Bills, marking the most significant overhaul of the country’s employment laws in decades. The reforms aim to align Thailand’s labour standards with global benchmarks, focusing on work-life balance, inclusivity, and employee welfare.

Key proposals in the first draft bill
  • Reduced working hours:
    • Standard working week reduced from 48 to 40 hours.
    • For hazardous occupations, the limit is further reduced to 35 hours.
  • Mandatory rest days:
    • Employees must receive at least two rest days per week (currently just one day).
    • No more than five consecutive working days allowed.
  • Expanded annual leave:
    Paid annual leave increased to 10 days after 120 days of continuous service.
    (previously, employees received six  days only after completing a full year).
Social protections in the second draft bill
  • Broad non-discrimination clause:
    • Protects employees from discrimination based on disability, gender identity, religion, beliefs, or political views.
  • Menstrual leave:
    • Female employees entitled to up to three days per month, separate from sick leave.
    • Aims to destigmatise health issues and promote gender-sensitive workplaces.
  • Family care leave:
    • Up to 15 days annually for caregiving responsibilities.
  • Breastfeeding support:
    • Employers must provide private, equipped breastfeeding facilities.
    • Includes dedicated break times for nursing mothers.
Implications for employers
  • Employers will face new compliance obligations, including:
    • Adjusting working hours and leave policies.
    • Ensuring workplace facilities meet new standards.
    • Updating anti-discrimination and parental support policies.
  • The reforms reflect Thailand’s commitment to tackling employee burnout, gender inequality, and low birth rates through progressive labour policies.
Next steps

The draft bills are currently under review by an ad hoc committee.

Businesses should begin evaluating internal policies and employment models to prepare for the anticipated changes.

These reforms signal a transformative shift in Thailand’s labour landscape, encouraging employers to foster more inclusive, flexible, and supportive work environments.

European Union

Belgium

Increase employer meal voucher contributions from January 2026

The Belgian government has announced a forthcoming increase to the maximum daily employer contribution for meal vouchers, raising it from EUR 6.91 to EUR 8.91, effective 1 January 2026.

This adjustment is expected to be formalised through a Royal Decree in the coming weeks.

Key details of the reform
  • New contribution limits:
    • Employer contribution: Up to EUR 8.91 per day.
    • Employee contribution: Minimum EUR 1.09 per day (unchanged).
  • Applicability:
    • Employers bound by collective bargaining agreements will be required to implement the increase.
    • Employers not subject to such agreements may choose to maintain the current contribution level.
  • Tax and social security treatment:
    • Provided all regulatory conditions are met, the employer’s contribution remains exempt from tax and social security charges.
Context and related developments

This increase coincides with the government’s broader plan to abolish eco vouchers and cultural vouchers, although no draft legislation or timeline has been published. The higher meal voucher value may serve as partial compensation, given that:

  • Eco vouchers can total up to EUR 250 annually.
  • Cultural/sport vouchers can reach EUR 100 annually.
Operational considerations for employers
  • Eligibility and distribution:
    • Meal vouchers must be granted for each effectively started working day, excluding holidays and sick leave.
    • Vouchers are issued electronically via licensed providers, who may charge service fees.
  • Part-time employees:
    • Employers may calculate meal vouchers based on actual hours worked, provided this is formalised through a collective agreement or work regulations (if no staff representation exists).
Next steps for employers
  • Review existing collective agreements and internal policies to determine whether the increase is mandatory.
  • Prepare for potential cost implications and update payroll systems accordingly.
  • Monitor for the publication of the Royal Decree and any further legislative developments regarding eco vouchers and cultural vouchers.
Czechia

Cafeteria benefits under scrutiny

The popular cafeteria system, a flexible employee benefits model widely used in Czechia, is facing renewed scrutiny over its tax classification. While the system has long been praised for its ability to tailor benefits to individual employee preferences, questions are emerging about whether these benefits should be treated as wages in kind rather than non-taxable perks.

What is the cafeteria system?

The cafeteria model allows employees to earn credits, points, or vouchers based on performance, tenure, or other criteria. These can be redeemed for a range of benefits, such as wellness services, travel, or education. It’s essentially a loyalty program designed to boost engagement and retention.

Tax classification debate
  • The key issue is whether these benefits qualify as non-taxable employee perks or should be treated as wages in kind, which carries different tax implications.
  • The Czech Income Tax Act (Sections §6(9)(d), §24, and §25) outlines specific conditions under which benefits may be exempt from taxation.
  • If the benefits do not meet these conditions, they may be considered part of the employee’s taxable income.
Labour law considerations
  • Employers may need to formalise benefit arrangements through a Wage-in-Kind Agreement (Dohoda o naturální mzdě) or obtain Consent for Wage in Kind (Souhlas s naturálním plněním).
  • These steps ensure compliance with both tax and labour law requirements.
What employers should do
  • Review existing cafeteria systems to ensure they meet legal and tax criteria.
  • Consider consulting tax professionals to avoid unexpected liabilities.
  • Be prepared for potential changes in how these benefits are treated by financial authorities.
EU

Landmark ECJ ruling expands protections for carers of disabled children

The European Court of Justice (ECJ) has issued a significant ruling that broadens the scope of discrimination protections under EU law. Employers across Europe must now consider the impact of workplace policies on employees who are carers of disabled individuals, even if those employees are not disabled themselves.

Indirect associative discrimination recognised: The ECJ confirmed that EU law prohibits not only direct but also indirect discrimination based on association. This means that workplace practices disadvantaging caregivers of disabled persons may be unlawful unless objectively justified.

Case background

An Italian employee requested permanent morning shifts, which would provide her time to accommodate a strict care routine each afternoon for her disabled child. Her employer declined, offering only temporary adjustments. The ECJ ruled that such caregivers are protected under EU equality law and employers must consider reasonable accommodations unless they impose an undue burden.

Implications for employers
  • EU-based employers must assess whether their policies disproportionately affect caregivers and be prepared to justify them.
  • Reasonable adjustments, such as fixed or flexible working hours may be required.
  • UK employers are not bound by the ruling post-Brexit and currently UK law does not cover indirect associative discrimination (only direct discrimination by association) however, the case may still prove influential in future tribunal cases.
Action points:
  • Review rostering and flexible working policies.
  • Train managers on the risks of associative discrimination.
  • Prepare for increased scrutiny of refusals to accommodate caregiving responsibilities, particularly in light of upcoming UK legislation requiring reasoned responses to flexible working requests.

This ruling marks a pivotal shift in European employment law and signals growing recognition of caregiving responsibilities in workplace equality frameworks.

Finland

Changes to holiday scheduling rights under annual holiday act

The Finnish government is preparing a legislative amendment to the Annual Holiday Act that would significantly alter how saved holidays are scheduled. Currently, employees have the right to decide when to take holidays saved beyond the statutory 24-day entitlement. Under the proposed changes, this decision-making power would shift to employers, unless otherwise agreed.

Current framework:
  • Employees may save holidays exceeding 24 days for future use (it’s open to employers and employees to mutually agree to save holidays exceeding 18 days).
  • The timing of these saved holidays is currently at the employee’s discretion.
Proposed changes:
  • Employers would gain the right to determine when saved holidays are taken, unless a different arrangement is agreed upon.
  • The change applies specifically to holidays saved under mutual agreement beyond 18 days.
  • The reform is intended to improve workforce planning and operational flexibility for businesses.
Timeline and next steps:
  • A formal legislative proposal is expected in early 2026.
  • If enacted, the amendment would mark a notable shift toward employer discretion in holiday scheduling.

Employers in Finland should begin reviewing their internal leave policies and collective agreements to prepare for potential changes. This reform could have implications for staffing strategies, employee relations, and compliance planning.

France

Higher employer costs for mutual termination agreements

As part of its draft 2026 budget, the French government has proposed a significant change to the taxation of mutual termination payments (rupture conventionnelle), aiming to curb the widespread use of this exit mechanism and reduce pressure on the unemployment insurance system.

Key proposed changes
  • Employer contribution increase: The current employer contribution of 30% on mutual termination indemnities would rise to 40%, making negotiated exits more costly and aligning them more closely with standard dismissal costs.
  • No change to employee tax exemptions (yet): While the draft budget does not alter income tax exemptions for employees receiving these payments, the issue remains under debate and could be revisited during parliamentary discussions.
Rationale behind the reform
  • The government is concerned that mutual termination agreements are being used to facilitate access to unemployment benefits in cases that do not reflect genuine job loss.
  • By increasing the financial burden on employers, the reform seeks to discourage excessive reliance on this mechanism and promote more sustainable workforce planning.
Timeline and legislative process
  • The proposed changes are part of the Social Security financing bill.
  • If adopted, they will take effect from 1 January 2026.
  • Parliament has 70 days to debate the budget, with final approval expected by December 2025.
Additional budget measure
  • Lunch vouchers taxed: Another notable change is the introduction of an 8% tax on lunch vouchers, ending their previous tax-exempt status.
Implications for employers
  • Cost planning: Employers should anticipate higher costs for mutual terminations and reassess exit strategies.
  • Policy review: HR and finance teams may need to update internal policies and budget forecasts.
  • Strategic workforce management: Businesses should consider alternative approaches to workforce restructuring that balance cost and compliance.

Sick leave during holiday position clarified

Following landmark rulings by the French Supreme Court in September 2023, France has introduced new legislation, effective from 24 April 2024, to align its national laws with European Union standards on paid holiday accrual during sickness absence.

Key changes introduced
  1. Accrual of paid leave during sick leave
    Employees on non-work-related sick leave now accrue up to two working days per month, capped at 24 days per year.
    Employees on work-related sick leave accrue up to two and a half working days per month, with a maximum of 30 days per year.
  2. Employer notification obligations
    Upon return from sick leave, employers must inform employees, within one month of: 
    The number of paid leave days accrued.
    The deadline by which the leave must be used.
  3. Carry-over period
    Accrued leave must be used within 15 months from the end of the accrual period.
    If not used within this timeframe, the leave is forfeited.
    The start of the carry-over period depends on the duration of the sick leave.
  4. Retroactive application
    •  The law applies to sick leave taken between 1 December 2009 and 23 April 2024.
    • For current employees, claims for leave accrued before 24 April 2024 must be submitted by 23 April 2026.
    • For former employees, the claim period is three years from the date of contract termination.
    • For non-work-related sick leave, retroactive claims are capped at 24 working days, including any other accrued leave.
Implications for employers
  • Policy updates: Employers must revise leave policies to reflect the new accrual and carry-over rules.
  • Record-keeping: Accurate tracking of sick leave and holiday accrual is essential.
  • Communication: Clear and timely communication with employees returning from sick leave is now a legal requirement.

This legislative update provides clarity and legal certainty for both employers and employees, ensuring compliance with EU law and reducing the risk of disputes over holiday entitlements.

Germany

An exception to written form requirement for terminations?

In a significant ruling, Germany’s Federal Labour Court has clarified that the strict written form requirement for terminating employment under Section 623 of the German Civil Code (BGB) does not automatically apply to termination notices issued from abroad. This decision has important implications for cross-border employment relationships.

Background of the case
  • A US-based employer terminated the employment of a worker located in Germany.
  • The termination notice was sent from the US without a handwritten signature (i.e. wet ink), which is normally required under German law.
  • The employee challenged the termination, arguing it was invalid due to non-compliance with Section 623 BGB.
Court’s reasoning
  • The court applied Section 11(1) of the Introductory Act to the Civil Code (EGBGB), which allows a declaration to be valid if it complies with:
    • the law of the place where it was made, or
    • the law of the country where it takes effect.
  • Since US law does not require a specific form for termination notices, the German written form requirement did not apply in this case.
  • The court emphasised that while Section 623 BGB is a mandatory protective provision, it does not function as an overriding norm for declarations made outside Germany.
Implications for employers
  • Cross-border terminations may be valid even if they do not meet German formal requirements, depending on the law of the country from which the termination is issued.
  • However, employers should still ensure that the termination is effectively received and recognised under German law.
  • To avoid disputes, it remains best practice to issue termination notices to employees working in Germany with a handwritten signature from a legal representative in all cases.
  • Employers should include clear choice-of-law and jurisdiction clauses in employment contracts for international roles.

This ruling provides greater clarity on the intersection of German and foreign laws in employment termination and highlights the importance of conflict-of-law analysis in global workforce management.

Italy

Abuse of parental leave a valid reason for termination

The Italian Supreme Court found in favour of an employer who terminated an employee who spent their time during their parental leave working at their wife’s beach resort. In its findings, the court commented that the parent-child interaction specifically promoted by parental leave was undermined in this case because a third party was caring for the child.

Disclosure of the reason for an employee’s absence is unlawful

In a recent case, the Italian Data Protection Authority ruled that employers are prohibited from disclosing the reason for an employee’s absence, in this specific case the employer had used the abbreviation MAL (i.e. sickness) next to the employee’s name on a staff notice board and in doing so breached their right to privacy under GDPR.

Supreme Court bans mass monitoring of workplace emails

In a landmark ruling, Italy’s Supreme Court (Court of Cassation, Labour Section) has reaffirmed that emails sent or received at work are protected as private correspondence under Article 8 of the European Convention on Human Rights (ECHR). This decision has significant implications for employers seeking to monitor employee communications, even after the employment relationship has ended.

Case background
  • A group of former employees was accused of unfair competition.
  • The employer accessed their email communications stored on company servers, arguing the data was freely accessible and admissible as evidence.
  • The trial court accepted the emails and ordered damages.
  • The Court of Appeal overturned the decision, ruling the emails were private.
  • The Supreme Court upheld the appeal, confirming that workplace emails fall within the scope of private life and correspondence.
Key legal principles
  • Proportionality and justification: Monitoring must be justified by specific, legitimate needs and conducted in a proportionate manner.
  • Prior notice required: Employees must be informed in advance about any monitoring practices.
  • Ban on mass monitoring: Blanket or non-defensive monitoring — especially without notice — is prohibited.
  • Post-employment monitoring: The ban applies even after the employment relationship ends.
Implications for employers
  • Policy review: Employers should revisit internal IT and privacy policies to ensure they comply with legal standards.
  • Transparency: Clear communication with employees about monitoring practices is essential.
  • Evidence limitations: Email content may not be admissible in legal proceedings unless obtained through lawful and proportionate means.

This ruling reinforces the importance of respecting employee privacy in digital communications and aligns Italian law with broader European human rights protections.

Artificial intelligence law adopted

The Italian Law on Artificial Intelligence became law on 23 September 2025 entering into force on 10 October 2025. In addition to setting out a legal framework for the use of AI in healthcare and science and how it will be factored in copyright applications Article 11 creates a duty on employers to inform employees of the use of AI in the workplace and to provide appropriate training to employees required to use AI.

Netherlands

Court reclassifies service contract as employment relationship

A recent Dutch court ruling has reaffirmed that the substance of a working relationship outweighs its formal structure, particularly when distinguishing between a contract for services and an employment contract. The case involved an individual working through his close corporation, but the court ultimately found that the arrangement met the legal definition of employment

Case summary
  • The individual provided services under a contract between his close corporation and a company.
  • The contract was for one year, with full-time work expected over 46 weeks.
  • The individual was required to work three days per week at the company’s office and could only take on external assignments with the company’s consent.
  • He received a fixed monthly fee, bore no entrepreneurial risk, and was integrated into the company’s operations.

Despite both parties intending to avoid an employment relationship, the court found that the actual working conditions reflected an employment contract.

Legal framework applied

The court relied on the Dutch Supreme Court’s Deliveroo judgment, which emphasises:

  • The agreed rights and obligations between parties.
  • The actual execution of work, including control, location, schedule, and risk.
  • The irrelevance of stated intentions if the arrangement meets the statutory definition of employment.
Court’s conclusion

The court ruled that:

  • The individual was not free to determine his working hours or location.
  • He was not permitted to work for other clients without approval.
  • He did not bear commercial risk and was paid a fixed fee.
  • He functioned as an employee both internally and externally.

As a result, the court found that an employment contract existed, and the termination was invalid. The individual was awarded:

  • A transition payment
  • Fixed damages
  • Fair compensation, totalling €35,000 gross.
Key takeaways for employers
  • Substance over form: Courts will assess the real nature of the working relationship, not just the contract label.
  • Risk of reclassification: Using service contracts to avoid employment obligations may backfire if the arrangement resembles employment.
  • Legal exposure: Reclassification can trigger obligations under Dutch labour law, including dismissal protections and applicability of collective agreements.

Employers should carefully review service arrangements to ensure they do not inadvertently create employment relationships, especially when using close corporations or freelance structures.

Portugal

Major labour law reforms proposed

The Portuguese government has introduced a draft bill, Trabalho XXI aimed at overhauling the country’s labour laws. The proposed reforms would reverse several measures from the 2023 Decent Work Agenda and introduce new provisions to modernise employment practices.

Key proposed changes:
  • Parental leave enhancements: Adjustments to initial parental leave, exclusive paternity leave, breastfeeding leave, and flexible working arrangements for employees with caregiving responsibilities.
  • Contract and leave reforms: Changes to the duration of fixed-term contracts, rules around absences, vacation entitlements, and flexible working time arrangements.
  • Termination and rights waiver: New rules on the waiver of labour rights and termination procedures, including:
    • Lifting the ban on outsourcing after redundancy dismissals.
    • Modifying disciplinary dismissal procedures for companies with fewer than 250 employees.
    • Revising the legal consequences of unlawful dismissals.

The bill is currently under discussion, and its final scope and timeline for implementation remain uncertain.

Definition of length of service to include non-standard work arrangements

On 15 October 2025, the President of Poland signed into law a bill that significantly broadens the scope of what counts toward an individual’s length of service under the Labour Code. The reform, which enters into force on 1 January 2026, aims to address long-standing disparities in employment entitlements for individuals engaged in non-traditional work arrangements.

Key changes introduced
  • Expanded coverage: The new law allows periods of self-employment, mandate contracts, agency agreements, and other non-standard forms of work to be included when calculating length of service.
  • Eligibility conditions: These periods will count toward service-based entitlements only if the individual is in an active employment relationship at the time of claiming the benefit.
  • Social security contributions required: Only periods during which social security contributions were paid will be eligible. Verification will be based on certificates issued by the Social Security Agency (ZUS).
Impact on employee entitlements

The reform enables more workers to qualify for:

  • additional holiday leave
  • long-service awards
  • access to roles requiring documented work history.

However, the law does not extend entitlements such as leave or severance pay to individuals who are not currently employed under a formal employment contract.

Strategic implications for employers
  • HR policy updates: Employers should prepare to update internal systems and policies to reflect the broader definition of length of service.
  • Verification processes: Ensure mechanisms are in place to collect and validate social security contribution certificates for prior non-standard work.
  • Workforce Planning: This change may affect eligibility for benefits and promotions, requiring a review of current entitlements frameworks.

This reform is part of Poland’s broader effort to modernise labour laws and promote fairness across diverse employment models.

Major reform of freelancers and B2B contractors planned

Poland is preparing to introduce a new legal framework that could significantly impact freelancers and self-employed professionals, particularly those working under B2B contracts. Central to the reform is the proposed entrepreneur test, a tool designed to assess whether a contractor is genuinely running a business or effectively functioning as an employee.

What is the entrepreneur test?

The test evaluates the nature of the working relationship based on several criteria, including:

  • working predominantly for one client
  • following instructions on when and where to work
  • using tools or systems provided by the client
  • bearing little to no financial or business risk.

If these indicators are present, authorities may reclassify the arrangement as employment, regardless of the formal contract. This could lead to stricter labour oversight, administrative requalification, and potentially substantial retroactive payments for companies.

Impact on key sectors

Industries such as IT and professional services, where B2B contracting is common may face increased scrutiny. Businesses are advised to review their contractor relationships and prepare for possible changes in classification and compliance obligations.

How the new process works

Starting in 2026, Poland’s National Labour Inspectorate (PIP) will gain new powers to reclassify civil contracts as employment agreements through administrative decisions, without needing court involvement. The following process has been proposed:

  • PIP conducts an inspection (onsite or remote)
  • a district inspector issues a reclassification decision
  • the contractor is immediately treated as an employee
  • social security (ZUS) and tax liabilities may be pursued separately
  • appeals can be made to the Chief Labour Inspector and then to the courts, but the decision remains enforceable during the appeal.
Penalties and enforcement:
  • Fines for misclassification can reach up to PLN 60,000.
  • Inspections will target companies with high-risk cooperation models.

This reform signals a shift in regulatory thinking: flexibility in B2B work must not undermine employment rights or social contributions. Businesses should treat this as a strategic compliance issue, not just a legal one. With limited time before implementation, companies should:

  • review current contract structures
  • assess risk exposure
  • document genuine independence in B2B relationships
  • seek early legal advice to avoid costly audits.
Slovakia

New equal pay act from June 2026

Slovakia is preparing to implement a new Equal Pay Act, effective 1 June 2026, aimed at closing one of the EU’s widest gender pay gaps. The legislation transposes Directive (EU) 2023/970 and introduces robust measures to promote pay transparency and eliminate gender-based pay discrimination.

Key features of the new law:
  • Transparent pay structures: Employers must establish pay systems based on objective, gender-neutral criteria. These must be documented and accessible to employees, and agreed with employee representatives where applicable.
  • Recruitment transparency: Job ads must use gender-neutral language, and employers will be prohibited from asking candidates about past or current pay.
  • Pay determination and progression: Employers must disclose the criteria used to set and adjust pay. While smaller employers (under 50 staff) are exempt from some disclosure obligations, they must still apply neutral criteria.
  • Employee rights: Workers will have the right to request:
    • Their individual pay level.
    • Average pay data by gender for equivalent roles.
    • Clarifications on pay-related information. Employers must respond within two months and inform staff annually of these rights.
  • Reporting obligations:
    • Employers with 100–249 employees must report every three years.
    • Those with 250+ employees must report annually.
    • First reports are due by 7 June 2027 (for employers with 150+ staff) and 7 June 2031 (for those with 100–149 staff).
    • Unjustified pay gaps of 5% or more must be addressed within six months or trigger further obligations.
  • Enforcement and penalties:
    • Employees may claim compensation for breaches, including lost earnings and non-financial harm.
    • Employers face fines up to EUR 4,000 for non-compliance.
    • The Labour Inspectorate will have powers to impose additional sanctions.

This legislation is expected to significantly impact employment practices across both public and private sectors in Slovakia.

Spain

Mandate on digital working time records across all employment types

The Spanish government has published a draft Royal Decree aimed at standardising digital systems for recording employee working hours. If approved, the regulation will apply universally, regardless of company size or employment type and marks a significant shift away from manual or paper-based tracking.

Key features of the proposed regulation
  • Mandatory digital systems: Employers must implement objective, reliable, and accessible digital time-tracking systems. Manual logs will no longer be permitted.
  • Universal scope: The requirement applies to all employment contracts, including full-time, part-time, fixed-term, training, flexible, hybrid, and even senior executive roles, which were previously exempt.
  • Employee rights:
    • Employees must have real-time access to their own time records.
    • Any changes to time records must be explicitly approved by the employee.
  • Labour inspectorate access: Inspectors will have continuous remote and on-site access to time records for compliance checks.
  • Approved registry of tools: The government plans to create an official registry of certified digital time-tracking systems, ensuring tools meet standards for security, traceability, and accessibility.
Additional requirements
  • Employers must establish formal protocols for time registration, including consultation with worker representatives.
  • Training obligations will be introduced to ensure proper use of the systems.
  • The regulation also covers outsourced and temporary agency workers, ensuring consistency across employment arrangements.
Implementation timeline and enforcement
  • The Royal Decree is expected to be enacted without parliamentary approval, entering into force 20 days after publication.
  • A transitional period will likely be granted to allow companies to adapt.
  • No increase in fines is expected at this stage, though enforcement will be strict.
Strategic implications

This initiative aligns with EU directives and aims to improve labour conditions, employee wellbeing, and national competitiveness. Employers should begin reviewing their current time-tracking systems and prepare to transition to certified digital solutions.

Whistleblower reporting deadline postponed

The Spanish Independent Authority for Whistleblower Protection (A.A.I.) has officially postponed the deadline for businesses with 50 or more employees to report the appointment or removal of individuals responsible for managing internal whistleblowing channels. Originally expected to be 1 November 2025, the deadline will now begin only once the Authority publishes the official online notification form on its website.

Key update highlights

The A.A.I. issued a clarification on 8 October 2025, confirming that the two-month reporting window has not yet started.

The reporting obligation will only be triggered once the notification form is made available online.

This update overrides previous guidance that set the deadline at 1 November 2025.

Employer action points
  • Monitor the A.A.I. for the release of the notification form.
  • Prepare internal documentation identifying the designated individual or team responsible for managing whistleblowing reports.
  • Ensure readiness to comply promptly once the reporting window officially opens.

This postponement provides businesses with additional time to align their internal reporting structures with Spain’s whistleblower protection framework, which implements the EU Whistleblower Protection Directive.

Turkey

Foreign choice of law no longer permitted

Article 27(1) of the International Private and Procedural Law Code (MÖHUK), which allowed parties to choose foreign law in employment contracts, was annulled on 10 September 2025. From this date forward only Turkish law will apply to employees whose normal place of work is Turkey. Existing employment templates should be reviewed to ensure compliance.

Poland

Definition of length of service to include non-standard work arrangements

On 15 October 2025, the President of Poland signed into law a bill that significantly broadens the scope of what counts toward an individual’s length of service under the Labour Code. The reform, which enters into force on 1 January 2026, aims to address long-standing disparities in employment entitlements for individuals engaged in non-traditional work arrangements.

Key changes introduced
  • Expanded coverage: The new law allows periods of self-employment, mandate contracts, agency agreements, and other non-standard forms of work to be included when calculating length of service.
  • Eligibility conditions: These periods will count toward service-based entitlements only if the individual is in an active employment relationship at the time of claiming the benefit.
  • Social security contributions required: Only periods during which social security contributions were paid will be eligible. Verification will be based on certificates issued by the Social Security Agency (ZUS).
Impact on employee entitlements

The reform enables more workers to qualify for:

  • additional holiday leave
  • long-service awards
  • access to roles requiring documented work history.

However, the law does not extend entitlements such as leave or severance pay to individuals who are not currently employed under a formal employment contract.

Strategic implications for employers
  • HR policy updates: Employers should prepare to update internal systems and policies to reflect the broader definition of length of service.
  • Verification processes: Ensure mechanisms are in place to collect and validate social security contribution certificates for prior non-standard work.
  • Workforce planning: This change may affect eligibility for benefits and promotions, requiring a review of current entitlements frameworks.

This reform is part of Poland’s broader effort to modernise labour laws and promote fairness across diverse employment models.

Major reform of freelancers and B2B contractors planned

Poland is preparing to introduce a new legal framework that could significantly impact freelancers and self-employed professionals, particularly those working under B2B contracts. Central to the reform is the proposed entrepreneur test, a tool designed to assess whether a contractor is genuinely running a business or effectively functioning as an employee.

What is the entrepreneur test?

The test evaluates the nature of the working relationship based on several criteria, including:

  • working predominantly for one client
  • following instructions on when and where to work
  • using tools or systems provided by the client
  • bearing little to no financial or business risk.

If these indicators are present, authorities may reclassify the arrangement as employment, regardless of the formal contract. This could lead to stricter labour oversight, administrative requalification, and potentially substantial retroactive payments for companies.

Impact on key sectors

Industries such as IT and professional services, where B2B contracting is common may face increased scrutiny. Businesses are advised to review their contractor relationships and prepare for possible changes in classification and compliance obligations.

How the new process works

Starting in 2026, Poland’s National Labour Inspectorate (PIP) will gain new powers to reclassify civil contracts as employment agreements through administrative decisions, without needing court involvement. The following process has been proposed:

  • PIP conducts an inspection (onsite or remote)
  • a district inspector issues a reclassification decision
  • the contractor is immediately treated as an employee
  • social security (ZUS) and tax liabilities may be pursued separately
  • appeals can be made to the Chief Labour Inspector and then to the courts, but the decision remains enforceable during the appeal.
Penalties and enforcement:
  • Fines for misclassification can reach up to PLN 60,000.
  • Inspections will target companies with high-risk cooperation models.

This reform signals a shift in regulatory thinking: flexibility in B2B work must not undermine employment rights or social contributions. Businesses should treat this as a strategic compliance issue, not just a legal one. With limited time before implementation, companies should:

  • review current contract structures
  • assess risk exposure
  • document genuine independence in B2B relationships
  • seek early legal advice to avoid costly audits.
UK

Umbrella firms to be regulated under employment rights bill

The UK’s Employment Rights Bill (Part 2) introduces sweeping changes that will, for the first time, bring umbrella companies under formal regulation. Umbrella companies act as an intermediary employer taking control of payroll and tax remittances on behalf of the end client often used in temporary labour supply chains umbrella companies will be reclassified as employment businesses, subjecting them to the same legal obligations as traditional recruitment agencies.

Key regulatory changes

Umbrella companies will be required to comply with the Conduct of Employment Agencies and Employment Businesses Regulations, including:

  1. No worker fees: Umbrella firms will be prohibited from charging workers general “administration” fees for being on their books.
  2. Guaranteed pay: Workers must be paid on time for work completed, even if the client has not yet paid the umbrella company.
  3. Key information documents: Firms must provide workers with a summary of contract terms, pay arrangements, deductions, and illustrative pay examples at the start of each assignment.
  4. Written terms and record-keeping: Robust documentation and assignment records will be mandatory.
  5. Suitability checks: Umbrella firms must verify worker qualifications and legal compliance before placement.
Enforcement and penalties
  • Breaches of the Conduct Regulations are criminal offences, with unlimited fines and potential bans of up to 10 years for directors.
  • Civil claims may arise from workers or clients harmed by non-compliance.
  • Non-compliant contract terms will be rendered unenforceable.
Impact on platform-based staffing models

Tech platforms that facilitate freelance or gig work may also fall within scope if they actively participate in employment arrangements. This could require them to comply with documentation and worker protection standards posing a challenge for app-based staffing models.

Strategic implications for businesses
  • Umbrella companies: Must audit operations and prepare for compliance with agency-style regulations.
  • Recruitment agencies: Should review relationships with umbrella providers and prepare for joint tax liability rules effective from 2026.
  • End clients: Must understand their labour supply chains and ensure all intermediaries are compliant to avoid reputational and legal risks.

This reform marks a significant shift in the UK’s approach to regulating flexible labour arrangements and is expected to reshape the temporary staffing landscape.

Consultations under the employment rights bill

The UK Government has launched a series of consultations under the Employment Rights Bill (ERB), signalling further reforms to workplace protections and employee entitlements. The consultations, published on 23 October 2025, cover three key areas:

  1. Enhanced dismissal protections for pregnant employees and new mothers
    The government aims to strengthen safeguards against dismissal for:
    • employees who are pregnant
    • those on maternity leave
    • those returning from maternity leave (with proposed protection for at least six months post-return).
    The consultation seeks views on:
    • circumstances under which dismissal should remain permissible
    • timing and duration of the enhanced protection period
    • whether similar protections should extend to other types of family leave
    • practical implementation support for employers
  2. Bereavement leave including pregnancy loss
    The ERB proposes a day-one right to unpaid bereavement leave, including for pregnancy loss before 24 weeks. The consultation explores
    • eligibility criteria (e.g. relationship to the deceased)
    • types of pregnancy loss covered
    • timing and structure of leave
    • notice and evidence requirements for both employees and employers.
    The government is particularly interested in feedback from charities, individuals with lived experience, and employers to ensure the policy is compassionate and workable.
  3. Trade union access and worker awareness
    This consultation focuses on:
    • strengthening trade union access to workplaces
    • introducing a duty for employers to inform workers of their right to join a union.
  4. Consultation deadlines
    • Trade Union matters: 18 December 2025
    • Pregnancy-related dismissal and bereavement leave: 15 January 2026
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Stuart Buglass
Stuart Buglass
Partner, HR Advisory, Global Business Solutions