Employment Trends Europe - December 2019

• Belgium
• England
• France
• Germany
• Italy
• Netherlands
• Spain
• Other articles of interest

Belgium

New Belgian legislation (in preparation) for potential no deal Brexit

On 03 April 2019, the Belgian Brexit Act was published containing transitional measures for British nationals and their relatives residing in Belgium. In a nutshell, until 31 December 2020, this Act extends the right of British nationals and their relatives, residing and working in Belgian territory to stay post Brexit and to continue to work.

However, researchers have calculated that up to 42,000 people could lose their jobs in the event of a no deal Brexit. Legislation is therefore being prepared to limit the impact for companies (a potential loss of 5% revenue) and employees. To this end, three instruments will be offered to employers affected by Brexit, which temporarily would reduce labour costs, yet also limit the loss of wages for employees:

• Economic unemployment - an employer may place employees into economic unemployment up to eight weeks of the calendar year (full time suspension) or up to 13 weeks spread over the calendar year (part time suspension). They will receive an unemployment allowance from the State.
• Temporary individual reduction of work - reduction by ½ or 1/5. An additional indemnity (on top of the normal salary) will be granted to these employees by the State.
• Temporary modification of working time - employers can temporarily lower the weekly working time for a certain period, without any impact on the salary of the employees concerned. Employers will receive financial assistance from the Belgian State.

GDPR and social elections

Next year, between 11 and 24 May 2020, employers in Belgium who employ 50 employees must hold social elections. These will be the first social elections which must comply with the GDPR. Under the GDPR, every organisation must be able to demonstrate how it uses the personal data it collects and how it is secured: after all, everyone has the right to clear, complete and easily understandable information about the processing of their own personal data.

The social election procedure involves processing a lot of (often sensitive) employee personal data, and this data must now be processed in accordance with the rules of the GDPR. Therefore proper preparation for the organisation of social elections must include:

• informing employees about processing their personal data during the procedure of the social elections; and
• ensuring sufficient technical and organisational measures are in place to protect personal data.

With regard to the retention of personal data, the social elections legislation provides for different mandatory maximum retention periods for the various forms of data:

• if you wish to keep data for a longer period than foreseen in the legislation, you must ensure you can justify it, and indicate in the record of processing activities the period to be respected;
• ensure that your HR processes are aligned to respect these periods and delete data at the end of the period; and
• do not keep personal data longer than necessary.

England

• Read our key cases and developments affecting employers in the UK over the last month.
• For more key employment law updates from us:
  • scroll through our key dates timeline showing recent and anticipated changes to employment law;, and
  • attend our upcoming events or catch up on training.

France

Strike from 05 December 2019

• In the context of Macron’s reform of State pensions, national trade unions called for a general and unlimited strike from 05 December 2019. Public transport services have been affected so in practice:
  • in order to avoid absences, employees have been encouraged to take a day of paid leave or an RTT day, subject to the employer’s approval. Most likely, when authorised by the company, employees are likely to work from home; and
  • an employee who is absent or late due to the strike has not committed any misconduct and the employer cannot take any disciplinary action.

Draft social security finance law for 2020

Examples of a few provisions:

• Renewal of exceptional purchase power bonus: eligible employees may benefit from tax and social exemptions on this bonus, within the limit of €1,000 per employee, and that would be subject to the conclusion of an Intéressement collective agreement.
• Compensation for leave of caregivers: employees taking a leave of absence to care for a disabled relative or a person with reduced autonomy will be compensated by social security.

Germany

Seasonal workers

• The court has ruled that employment contracts for seasonal workers are not fixed-term but so-called ‘limited contracts’. These contracts exist year-round but include an obligation to perform work and pay salary only for a limited time during each year (in this case April to October).
• With this decision, clauses in employment contracts that restrict the obligation to perform work and pay salary to a certain period of time each year are no longer subject to the Part-time and Limited Term Employment Act, but will be subject to the same limits as general terms and conditions. An assessment will now be made as to whether the employee is unduly disadvantaged, which is a simpler assessment than that of fixed-term contracts.
• In future, employers with seasonal operations will therefore have to consider carefully whether they want to offer their employees limited employment contracts - under simplified conditions - or whether they want to continue with the current practice of fixed-term employment contracts.

Part-time retirement

• Currently, there is the option of part-time retirement where employees work full time while being paid half of their salary for a period of time and then go into early retirement while officially still working and receiving half of their salary for the same fixed period of time.
• The court has now ruled that employees are not entitled to annual leave during the second phase of their part-time retirement due to a lack of obligation to work.
• With this decision, the Court is finally creating legal certainty for the treatment of holiday entitlement during partial retirement under this model.
• How this decision will affect other periods of leave, e.g. leave until the end of the employment relationship within the framework of a termination agreement or a court settlement, remains to be seen.

Overtime compensation during garden leave

• The court has ruled that it is possible to agree on the compensation of overtime during garden leave in a settlement agreement. This requires that inclusion of overtime is specified in the contract. Only then can the garden leave include their compensation.
• It is not necessary to specify the exact number of hours of overtime.
• If the settlement agreement does not include provision for compensation of overtime during garden leave, the overtime will have to be paid out in addition to garden leave.

Italy

Dismissal in the banking sector

• The Italian Supreme Court recently issued a ruling sanctioning the dismissal of bank employees who violate anti-money laundering rules.
• The court confirmed a Court of Appeal decision on a matter involving a former employee of a bank who had challenged the bank’s decision to dismiss him for: (i) failing to flag suspicious transactions, (ii) failing to prevent the transfer of the savings deposit of a company with authorisation to make foreign bank transfers, (iii) allowing transactions to be made on a bank account held by individuals under criminal investigation for tax fraud and money laundering, and (iv) violating bank procedures by processing a parent’s loan application and assigning credit without the necessary guarantees.
• The former employee’s actions had seriously jeopardised the trust relationship at the base of the employment relationship, as he was a branch director. The legal basis of his dismissal was not only permitted under Legislative Decree No. 231/2007, but also Bank of Italy directives and bank procedures specifically regarding the obligation to sufficiently secure loans to clients.
• The court ignored the former employee’s defence of his actions, whereby he claimed that the contested loan had been processed electronically as well as approved by competent credit analysts.

Joint liability of an employee and his new employer for using confidential information of former employer

• An Employment Court in Milan recently ruled that an employee, when leaving one company for another, is liable for confidential information that he or she misappropriates from the former employer, and that the new employer is also liable if the information is used to the new company’s benefit or downloaded onto the new company’s computer systems.
• The case in question involved two staffing companies and two employees who moved from one company to the other. The two individuals had decided to move together to the new company, but before doing so, one sent screenshots to the other of certain resumes contained in the database of the former employer’s IT systems.
• The court ruled that this was in violation of the Italian Intellectual Property Code, but also that the new company was liable based on three factors: (i) the information was received and downloaded onto the new company’s computer system and included in its database; (ii) the employee who received the information used the resumes to offer clients from the old company more advantageous contracts; and (iii) the new company contractually undertook to take responsibility for the new employees were they found to have violated any non-compete undertakings.

Netherlands

Lapse of accrued holidays

The European Court of Justice (the “Court”) ruled that European Union law precludes legislation under which holidays will automatically lapse if an employee simply did not request to go on holiday. In particular, employers must:

• ensure in a concrete and transparent manner that the employees are actually in a position to take up their holidays and if necessary, (formally) induce them to take such leave;
• inform the employees (in writing) of the fact that their holidays will lapse after the applicable expiry period under Dutch law; and
• make such notification in an accurate and timely manner, so that the holidays can still be taken and the employer is in a position to prove that it has acted in line with its obligations as indicated by the court.

eRecognition on the UWV employers’ portal

From 1 November 2019, an employer can only login on the UWV (the Institute for Employee Benefit Schemes) employers’ portal by using eRecognition (eHerkenning) and any old UWV accounts will be phased out. Access to this portal is necessary to obtain government approval to terminate employment in case of redundancy or where an employee is incapacitated.

Further information is available.

Dormant employment agreements of sick employees

Employees who are incapacitated for work are, in principle, entitled to at least 70% of their last earned salary for the first 104 weeks of leave. During this period an employer is prohibited to terminate their employment agreement. After this period, the employer will no longer be obliged to continue to pay (part of) their salary and the employment agreement can then be terminated. When terminating an employment agreement on the initiative of the employer, the employee will, in principle, be entitled to a statutory transition payment.

In order to avoid paying this statutory transition payment, it was quite common for Dutch employers to not (take the initiative to) terminate the employment agreement in these cases and the sick employee simply remained on the payroll (i.e. a dormant employment agreement remained).

On 8 November 2019, the Supreme Court ruled that the employer must, in principle, terminate the dormant employment agreement and pay compensation. Other key points of interest are:

• The amount of the compensation must be at least equal to the statutory transition payment that would be due upon termination of the employment agreement on the day after the day on which the employer would be able to terminate the employment agreement (e.g. after the period of 104 weeks has lapsed).
• On 1 April 2020, a new law will enter into force making it possible for employers to receive compensation from the UWV (more or less) equal to the statutory transition payment, if the employment agreement terminated due to long-term illness. However, the exact amount to be compensated by the UWV can deviate from the amount that has actually been paid by the employer. In order to receive the highest possible compensation from the UWV, it is recommended to terminate the dormant employment agreements prior to 1 January 2020 (i.e. prior to the Balanced Labour Market Act entering into force, which provides for a different calculation method of the statutory transition payment).
• Refusal to terminate a dormant employment agreement by the employer may be regarded as a shortcoming in the performance of the employment agreement and will not be compensated by the UWV. Also, it is unclear which moment is decisive for determining the extent of the damage (i.e. after the period of 104 weeks has lapsed or only when the employee requests termination of their dormant employment agreement).
• It is therefore recommended for employers to not wait for the request from employees, but actively approach their dormant employees and inform them of their legal position (and terminate their dormant employment agreements prior to 1 January 2020).

Spain

Paternity Leave

Spain has taken a step forward with regard to paternity rights. It has been agreed that paternity leave will gradually become equal to maternity leave, up to 16 weeks, increasing to 12 weeks as from January 2020 and 16 weeks by 2021. In addition to this, in 2021 taking leave will be compulsory for both parents during the first six weeks following childbirth. This change for fathers is quite significant in comparison to the two days’ leave in force one year ago.

New conciliation measures

New regulations, promoting equality between men and women, recognise the right of employees to adapt their working time, without having to reduce their salaries, in order to allow a better work-life balance. In the absence of collective bargaining or an individual agreement, such adaptation will be dealt with individually, under a mutual agreement basis, and, in the event of rejection, the company must be able to justify its decision. This will result in HR teams having to deal with more sensitive requests and is likely to increase litigation based on family grounds.

Related Insights

• UK - General Election Update - Labour Intensive 05 December 2019 – 05 December 2019
• UK - Court of Appeal rules that controversial email was privileged – 24 October 2019