Belgium
New expat tax regime. This new regime is in force from 01 January 2022. Two categories of expatriates will have access to the regime, (i) the researchers-employees and (ii) the other expatriates, who can be either employees or self-employed directors. The main difference between both categories is that researchers should have a qualifying degree or relevant professional experience of at least 10 years, while the other expatriates should earn a gross salary of at least €75,000 per calendar year. Under the new tax regime, the tax-free foreign travel exclusion is no longer applicable. The main advantage will be a tax-free allowance for recurring expenses resulting from the secondment or occupation in Belgium (e.g. cost of housing, cost of living) of up to 30% of the gross salary, with a cap of €90,000.
Also, the expatriate can benefit from an exemption for four other types of allowances (in principle uncapped), i.e. (i) relocation and moving expenses, (ii) the cost of furnishing a home in the first six months, (iii) school fees up to the age of 18 years, and (iv) application and consulting fees relating to this regime. The new regime is limited in time to five years, which can be extended by another three years. Under the old system, there was no specific time limit, but after 10 years an audit was usually performed to see whether the conditions for non-residency were still met.
EU Whistleblower Directive. A preliminary draft bill has been issued (but not yet published) and the National Labour Council has provided its advice on 30 November 2021. It is currently unclear when the preliminary draft bill will be published. Please see here for further detail on the draft bill.
Join our employment law webinar series over the coming weeks. We will be providing overviews of hybrid working, what’s new in HR and relevant recent case law updates in Belgium for employers and HR practitioners.
England
High Court dismisses a former banker’s £46 million claim for loss of earnings. In a lengthy judgment that will be a relief for many employers, the High Court has found that on the facts there was no implied contractual duty to indemnify an employee for future financial loss and no duty of care in tort was established. Imposing an implied term that the employer would indemnify employees for future economic loss as a result of harm experienced while carrying out their duties, would have had potentially far-reaching consequences, particularly for global institutions sending employees overseas. From a practical perspective, an express contractual term is helpful to defeat an argument that such an indemnity should be implied. (Benyatov v Credit Suisse).
Dismissal for raising numerous frivolous grievances was fair. A helpful example for employers of a situation where an employee’s dismissal for bringing numerous vexatious and frivolous grievances, which he was unwilling to progress or withdraw, was fair, according to the EAT (upholding the ET). The employee’s conduct was sufficiently serious for dismissal to be within the band of reasonable responses. The ET had not erred by failing to consider whether the employee’s conduct amounted to gross misconduct in the contractual sense. (Hope v British Medical Association)
Government backs new five-year review to continue focus on gender balance on FTSE boards. The government announced that it will back a new initiative to monitor women’s representation at senior levels of FTSE companies: The FTSE Women Leaders Review. This new five-year review will follow the successful Hampton-Alexander Review that saw 50% increase in women on FTSE boards in just 5 years. Women on Boards reported numbers for Women on Boards of FTSE 350 companies, as at 11 January 2021: • FTSE 100 at 36.2% • FTSE 250 at 33.2% • FTSE 350 at 34.3% (Source: BoardEx). New leadership is currently being appointed to steer the review and take forward new targets.
FCA speech on culture and hybrid working, D&I and climate change. On 24 September 2021, the FCA published a speech by Sheldon Mills delivered at the Investment Association, in which he set out the FCA's expectations on culture and hybrid working, diversity and inclusion and climate change. He talked about hybrid working as the lasting cultural impact of the pandemic, which brings with it both opportunities and challenges. D&I remains a key priority where the investment management sector needs to make up ground and that firms are expected to look hard at how they can build greater diversity in leadership and foster a culture of inclusion. The FCA also expects climate change to form a central part of how firms do business.
Read our Employment Law Alert affecting employers in the UK over recent months.
France
New inflation bonus to pay: Employers were supposed to pay this new bonus in December 2021 (unless practically impossible), and no later than 28 February 2022. This €100 bonus is available to employees aged 16 or over (as of 31 October 2021), residing in France, but also to trainees if they are paid more than the minimum salary provided for by law. Eligibility is assessed for the month of October 2021: the employer is therefore obliged to pay the inflation bonus to an employee who was a part of its workforce in October 2021 (regardless of the number of days he or she worked in October 2021), even if he or she left the company at the time of payment of the bonus. An employee who is absent for the whole of October 2021 (for whatever reason, except for parental leave, in which case the CAF (Family Affairs Fund) will pay it) will still receive this inflation bonus. This bonus is paid to employees with an average net salary of less than €2,000 per month. The employer must ensure that the gross pay due to the employee between 01 January and 31 October 2021 is less than €26,000 gross (this ceiling is pro-rated if the employee has not been employed for the entire period; it does not have to be pro-rated for part-time employees). On the payslip, the €100 should appear on the line entitled "Inflation bonus - Exceptional State aid" or "Inflation bonus". This allowance must be declared in the DSN of the month following its payment.
New paid leave for parents of children with cancer or chronic illness. Parents are now entitled to two days paid leave upon receiving the news that their child has cancer or a chronic illness. This is regardless of the size of the company or the seniority of the employee. Employees are required to show evidence of illness to their employer. This leave is considered effective working time and cannot result in a diminution of the employee’s remuneration.
EU Whistleblowing Directive: On 19 January 2022, the Senate examined the draft law to improve the protection of whistle-blowers and the bill to strengthen the role of the Human Rights Defender in terms of whistleblowing, adopted by the National Assembly after the accelerated procedure. It is mandatory for France to transpose the 2019 EU Directive to harmonise the status of whistleblowers within the European Union. However, there will not be a definitive text until around mid-February, the text is still under review at the Senate, with the mixed joint-committee (commission paritaire mixe). Further detail on the implementation for France is available here.
Germany
New Government’s plans for a modern working environment: The new federal government has presented ambitious plans for employment law with the intent to "shape the modern world of work, enable professional opportunities and reconcile security and flexibility". Their initial reform covers areas such as minimum salary increases, working time, fixed-term contracts, mobile working, contracts and employee leasing, co-determination, tariff autonomy, remuneration transparency and whistleblowing. We have summarised the new Government’s plans here.
Mandatory employer contribution for deferred compensation related to pension schemes as of January 2022. From 1 January 2022, employers are obliged to pay a contribution for all deferred compensation related to pension schemes, regardless of the date the contract was concluded. We explain further here.
Works council elections. Between 1 March and 31 May 2022, new works councils will be elected in a large number of companies in Germany. In addition to the Works Council Modernisation Act (Betriebsrätemodernisierungsgesetz), which came into force last year (you can read more about this here), changes in the German Election Regulations (Wahlordnung) will lead to significant changes in the upcoming works council elections. Since obstructing works council elections is a criminal offense in Germany, employers should be aware of the key changes, which we have summarised here.
EU Whistleblowing Directive. The new Coalition Agreement, that was agreed on 8 December 2021 by the new federal government, provides that the Directive is to be transposed into Germany law in a “legally secure” manner. The draft law has so far been controversial and due to the delay incurred from federal elections implementation of the Directive is not expected until mid-2022. Employers are strongly recommended to take action and start the implementation of a whistleblowing system that meets the requirements of the EU Directive as a minimum standard. Please see here for further details on the draft law or catch up on demand our webinar here.
Our quarterly publication outlining the key employment trends for Germany is available here.
Hong Kong and Singapore
Implied duty of mutual trust and confidence in Hong Kong and Singapore: The implied term of mutual trust and confidence is a well-established principle that forms part of the substratum of the employment relationship in both Hong Kong and Singapore. However, the scope of application of this implied term differs between these two common law jurisdictions.
In the recent Hong Kong Court of First Instance judgment in Lam v Equal Opportunities Commission, a Hong Kong court refused to extend the application of the implied term to the context of termination, thereby affirming an employer’s largely unfettered right to terminate an employment relationship at any time for any reason in accordance with the express terms of the contract.
In contrast, even though such a contractual right to terminate with notice or the payment of salary in lieu thereof exists in Singapore, the most recent legislative amendments to the Employment Act in 2019 do not give Singapore employers the same unfettered right as their Hong Kong counterparts.
We cover this case in our recent podcast Labouring in Employment! A monthly podcast on Asia employment law.
Italy
Gender Equality provisions: The Italian government recently approved a new law to encourage gender equality by providing companies that are compliant with Gender Equality provisions certain tax advantages and making it compulsory for public and private companies with 50 employees to submit a report on the ratio of male/female staff and include an analysis of related remuneration. For companies with less than 50 employees this report is voluntary. The measures adopted by the employer to promote gender equality between employees will be certified by a “Gender Equality Certificate”. Although no reporting deadlines have been set yet, these provisions are applicable since 01 January 2022 and companies must submit their report online every two years. For further information on how these provisions will affect your company please contact our Milan team.
EU Whistleblowing Directive. This has not yet been transposed into national law, although Italy already has comprehensive whistleblowing protection in place. Please see here for a comparison on how the Directive will differ to the Italian regime.
Netherlands
Diversity and gender balance in large companies: From 1 January 2022, a new law (Balancing the Ratio of Men and Women in the Management and Supervisory Boards of Large Public and Private Companies Act) has come into effect which introduces (1) the obligation for large Dutch companies to set an appropriate and ambitious target figure in order to achieve a more balanced ratio between men and women in the supervisory boards, management boards and top management levels and (2) an introductory quota for the supervisory boards of Euronext Amsterdam-listed companies. Further details are available here.
Reimbursement of costs when working from home: From 1 January 2022, employers may grant employees a daily allowance for extra costs incurred during working from home up to €2 per day, which is not subject to wage tax deduction. Please note that the employer can only grant one type of allowance per day: a travel allowance or a working from home allowance. The National Institute for Budget Education (NIBUD) has estimated that the additional costs related to working from home amount to €40 per employee per month (on a fulltime basis).
Employee representation: From 1 January 2022, the Works Council Act has been amended so an employee can participate in the elections and be elected for the works council after being employed with the company for 3 months (reduced from 6 months). Also, temporary workers will be entitled to participate in the elections after 15 months of employment (instead of 24 months) and can be elected after 18 months.
EU Whistleblowing Directive. Although the implementation deadline has not been met, the provisions of the Directive have applied to employers in the public sector from 17 December 2021.To employers in the private sector, this will only apply after implementation in national law. For further details on this please see here.
PRC
Provinces extend maternity leave and issue childcare leaves for female employees. Following the national third-child policy, provincial administrations in China have substantially extended maternity leave for pregnant employees by amending the local family planning provisions. In Shanghai, the newest amendment to the provision grants an additional 60 days of maternity leave. A pregnant female employee will now be entitled to a total of 158 days (98-day statutory leave and 60 days Shanghai local leave) maternity leave. The amendment further issues five days’ childcare leave for every parent with a child under 36 months (3 years). The amount paid during childcare is equal to the employee’s normal salary.
China overhauls the Law on Protection of Women's Rights and Interest. On 20 December 2021, the National People's Congress announced a draft version of the Law on Protection of Women's Rights and Interests, aiming towards dealing with current gender issues in employment and other areas. The draft adds a new specific definition for "discrimination against women" defining the banned workplace discrimination such as, mentioning gender preference in job posts or asking a female applicant about her marital status. Further, the new draft provides clear descriptions of behaviour that qualifies as sexual harassment in the workplace, including, sharing sexually explicit images or offering benefits in exchange for sexual favours.
Spain
Labour Reforms: The Royal Decree Law 32/2021 reforms the Spanish current labour law for:
- temporary contracting,
- collective bargaining agreements,
- subcontracting and
- temporary flexibility in the event of objective causes or force majeure.
These reforms are set to come into force in 2022 and are intended to bring “stability and security in employment” ending “anomalies involving temporary and precarious work”.
Further detail on the labour reform is available here.
If you require more information on how these reforms will affect your employees, please get in touch with our team in Madrid.
EU Whistleblowing Directive: Spain has not yet transposed this EU Directive. Please see here for further details on this.
UAE/DIFC
Introduction of new UAE labour law. On 15 November 2021, a new Law on the regulation of labour relations was issued replacing the old law from 1980 marking the first substantial change to the UAE federal employment and labour law in 40 years. For more information please see our recent article on the top 15 changes.
Change to the working week. From 1 January 2022, the UAE has adopted a 4.5 working week with weekdays now being Monday to Friday, with a half day on Friday for those attending prayers. Weekends are now Saturday and Sunday. This applies to public workers in the UAE while private sector employees and entities in the DIFC have more flexibility. Many have chosen to adopt a Monday to Friday five day working week, although those who observe prayers are able to work a half day on a Friday.
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