Employment Law Alert International – October 2023

Belgium

Extension of the protection against discrimination. A new bill provides for additional protection against discrimination by modifying the existing discrimination legislation, extending the scope and aligning legislation with case law. This includes the explicit recognition of discrimination on multiple grounds: cumulative discrimination (discrimination based on multiple protected criteria that are cumulated but remain separable) and intersectional discrimination (discrimination based on multiple protected criteria that interact and become inseparable). The bill also provides for the explicit enshrinement of the concepts of discrimination by association and by assumption. It also provides additional sanctions in case one or multiple forms of discrimination are found to have occurred.

Additional voluntary overtime hours. The Council of Ministers approved the (re)introduction of 120 hours of additional voluntary overtime per calendar year, so-called 'relance'-hours, as from 1 July 2023. The 120 relance-hours per calendar year come on top of the regular quota of voluntary overtime (100 hours per calendar year), for the period from 1 July 2023 to 30 June 2025. This means that, on top of the 100 annual hours of regular voluntary overtime, an employee can perform:

• 120 relance-hours during the third and fourth quarter of 2023;
• 120 relance-hours in 2024;
• 120 relance-hours during the first and second quarter of 2025.

In order to allow an employee to perform relance-hours, a prior written agreement must be concluded. No overtime pay or compensatory rest is due for these hours and they are exempt from social security contributions and income taxes. This system exists in parallel with the already existing overtime rules and the 100 hour voluntary overtime system, but is more beneficial for employees and employers.

Training registration tool. According to a new bill, the Belgian government intends to introduce the "Federal Learning Account" tool requiring employers to keep track of training attended by employees. To ensure that every employee has access to training, an individual right to training was introduced at the end of 2022. Besides formal training, employees often receive informal training, such as self-study on an e-learning platform, coaching by a colleague, on-the-job training, etc. The Federal Learning Account will require employers to record all training employees attend within 20 working days of attendance and the government will be able to check this for compliance. The government is targeting 1 January 2024 as the start date.

England

Read our Employment Law Alert affecting employers in the UK over recent months.

France

Protection against dismissal in case of miscarriage. On 7 July 2023, a new law came into force protecting female employees who experienced a miscarriage between the 14th and 21st week (included) of amenorrhoea against dismissal. This protection applies for 10 weeks following a miscarriage. A dismissal in breach of the protection would be considered null and void and the employee could be entitled to damages amounting to at least six months' pay. The employee can still be dismissed for gross misconduct or if the employment contract cannot be maintained for reasons other than miscarriage. Female employees in such situations are also now entitled to their daily allowances from social security in case of sick leave without any waiting period.

Whistleblowing case law. As a reminder, the law transposing the EU Whistleblowing Directive came into force on 1 September 2022. Two recent rulings from the Supreme Court (Cour de Cassation) have shed further light on the subject:

• On 1 June 2023, the Court asserted that an employee's dismissal due to their report or testimony to facts likely to constitute a misdemeanour (délit) or a felony (crime) will be null and void (and whistleblower protection thus applies) if the judge finds that the facts denounced are likely to constitute a misdemeanour or a felony, and that the employer could not legitimately be unaware that the employee was reporting such facts. The report must therefore be quite specific in order for the individual to benefit from protection and judges, when assessing whether the protection should be granted, should analyse it carefully.

• On 13 September 2023, the Court reiterated that an employee who reports or testifies to facts constituting an offence or crime of which they may have become aware in the course of their duties is not subject to the requirement to act in a disinterested manner. This condition has in fact been removed by the recent law on whistleblowing. The only requirement is that the whistleblower must not have acted in bad faith (which can only result from knowledge of the falsity of the facts denounced) and without direct financial consideration.

Request for paid leave: change of rules. Since 13 September 2023, French courts no longer apply the French Labour Code, which excludes or limits the accrual of paid leave for employees on sick leave, in order to comply with European directives. Until now, ordinary sick leave periods (of non-occupational origin) were not treated as periods of actual work for the purposes of acquiring paid leave. As a result, employees did not acquire any paid leave during such periods (unless otherwise stipulated in the collective bargaining agreement, some of which indeed already neutralised the impact of all or part of sick leave on the accrual of paid leave).

In three high-profile rulings, the French Supreme Court stated that:

• Employees are now entitled to paid leave during any period of sick leave (even non-occupational ones);
• In the event of an accident at work or occupational illness, employees acquire paid leave during the period of absence without any time limit (previously this right was limited to 1 year);
• Paid leave back payment requests (which can now be made at any time) will cover the last three years.

From when? This case law may be invoked in disputes relating to periods prior to 13 September 2023. Employers will therefore most likely be faced with claims or disputes from employees or former employees for previous periods of sick leave.

For which holidays? The Court specified that these rulings apply to all paid leave entitlements (but not, de facto, to the acquisition of Reduction of Working Time (RTT) days).

Focus on the statute of limitations: Claims in relation to holidays are time-barred after three years, like claims on wages, as from the expiry of the period during which the paid leave could have been taken, it being specified that the limitation period only begins to run if the employer has taken the necessary measures to ensure that the employee can effectively exercise their right to leave.

For further details on any of the above please contact our French team.

Germany

Update on the Whistleblowing Protection Act. The Whistleblower Protection Act entered into force on 2 July 2023. The Act is intended to expand the previously incomplete protection of whistleblowers in Germany. Financial institutions (irrespective of the number of employees) and companies with more than 249 employees are already obliged to establish and manage an internal reporting system. Companies with more than 50 but less than 250 employees will only be subject to this obligation from 17 December 2023.

Other specifics of the Whistleblower Protection Act in Germany are:

• whistleblowers must be given the opportunity to provide information verbally, in writing and in person;
• the internal reporting office must confirm receipt of disclosures within seven days;
• within three months, the reporting office must inform the whistleblowers of measures taken;
• anonymous disclosures shall also be followed up on; and
• to protect whistleblowers from "reprisals," the law contains a far-reaching reversal of the burden of proof: if a whistleblower is "disadvantaged" in connection with his or her professional activities, it is presumed that this disadvantage is a reprisal. In addition, claims for damages by the whistleblower based on reprisals may be considered.

Mass dismissal notices. An ECJ judgment from July 2023 has triggered a turnaround in case law on collective redundancies. The Federal Labour Court has to date (largely) assumed the invalidity of terminations in the event of errors in the consultation or notification procedure. With this ruling from July 2023, the ECJ now interprets the underlying directive collectively, ie the obligation to send a mass dismissal notice to an employment agency does not provide individual protection for employees. As a consequence, the breach of the obligation to notify is not likely to justify the invalidity of terminations. It can be assumed that the Federal Labour Court will follow this ECJ case law and, in any event, will not declare subsequent terminations to be invalid in the case of this type of infringement. Therefore, the purpose of involving an employment agency (ie preparing the agency for an increasing number of employees to be available for new employment) will not justify the invalidity of termination.

Italy

New hires Labour Decree for employees under 30. Law Decree no. 48/2023 states that employers who hire employees under 30 years of age, and on a permanent basis, will receive a social contribution exemption for a period of 12 months at the rate of 60% of monthly gross remuneration taxable for social security purposes.

Please note that the law specifically states that this incentive can be combined with the other incentive regarding the hiring of people under 36 years old, as well as with other incentives provided by the law. However, in such cases the limit of the exemption will decrease from 60% to 20% of the monthly gross remuneration.

To benefit from this provision, employers must hire employees under 30 years old who are:

• not working;
• not studying;
• enrolled in a specific program aimed at helping young people enter employment (ie Programma Operativo Nazionale Iniziativa Occupazione Giovani).

The following procedure must be followed to benefit from this incentive:

• the application for the incentive must be sent online to the National Social Security Authority (INPS), which will provide within five days a response regarding suitability;
• following such notification, the applicant is given a mandatory deadline of seven days to provide the confirming employment contract;
• the applicant must notify the INPS if the employment contract has been concluded.

Whistleblowing Directive guidelines published. Guidelines relating to the implementation of external and public reporting channels - which also provide indications and principles that can be taken into account - were issued by Italian Anti-Bribery Authority (ANAC) on 12 July 2023. Therefore, employers must review their internal whistleblowing policies against these guidelines (and any subsequent and possible guidelines that ANAC and other authorities may issue) by the relevant deadline. For further details please contact our Italian team.

Extension of remote working exceptional rules. Certain exceptional rules that govern remote working have been extended until next 31 December 2023 (unless this deadline will be further extended by the local authorities) for the following categories of employees:

• "Vulnerable employees" (ie employees with an illness listed in the Decree of the Italian Ministry of Health of 4 February 2022). These employees have an absolute right to perform their work remotely if they request to do so. This means that (i) the Company cannot turn down their request to work remotely, and (ii) if the employee's role is not consistent with remote working, the Company should assign her/him task and duties that can be performed remotely;

• employees with children under 14 years old, and

• and employees who, according to a medical assessment, are at higher risk of being infected with Covid-19 (eg because of their age or their medical conditions).

Such employees have the right to work remotely (if requested by them) only if (i) their tasks/duties can be performed remotely and (ii) in case of employees with children < 14 years old, the other parent is not unemployed.

Netherlands

Whistleblowing update. On 18 April 2023, a letter was submitted with additional questions to the Minister of the Interior and Kingdom Relations regarding the new whistleblowing law outlining the certain issues that remained unclear. For employers, the most important question is whether the role of a confidential counsellor can be combined with the role of an independent reporting channel, since the two roles could represent conflicting interests and therefore considered to be incompatible. However, according to the Minister, the two roles can in fact be combined since the confidential counsellor merely acts as an intermediary between the reporter and the independent investigator and informs the reporter of the different options available to them. The confidential counsellor cannot follow up on a report themselves and is therefore independent in their role. 

The Minister has since indicated that they aim to have a general order finalised, which will include the additional rules for anonymous reporting, following the summer break. It is expected that this general order will enter into force mid-2024. On 13 September, a debate between the Minister and the members of the House of Representatives took place. The main topics discussed during the debate that are important for employers to note, are:

• The State Secretary anticipates presenting a new bill for the implementations of sanctions and the monitoring role of the House of Whistleblowers by mid-2024. The State Secretary has expressed the intention of exploring options for funding this system through contributions from employers. The precise approach for this funding will be further elaborated upon in the near future.
• A fund has been created to ensure the provision of support to whistleblowers in the process they go through when raising particular concerns. This fund is currently operational, offering both psychosocial support and legal help. The House of Whistleblowers will most likely play a role in this. It will indicate whether it does indeed have the impression that there is wrongdoing or alleged wrongdoing, after which the provision of support can be used by the employee.

See here for further information on implementation of the EU Whistleblowing Directive in the Netherlands.

Salary continuation obligation for employees who have reached the state pension age. The period for entitlement to continued salary payment for a sick employee who has reached the state pension age will be reduced to six weeks as of 1 July 2023. This will apply for new cases of illness starting 1 July 2023. After these six weeks, the ban on giving notice due to illness will no longer apply. Currently, the term is 13 weeks.

Employers will have to continue to pay the salary of an employee who has reached the state pension age for the first six weeks of illness. After this term, the ban on giving notice does not apply anymore. Employers will need to amend relevant HR /payroll policies and procedures.

Future Pensions Act. In force from 1 July 2023, a transition phase will commence in which employers / trade unions and employees can make arrangements regarding the amendment of their pension scheme and afterwards how pension providers will implement these arrangements. The new Future Pension Act will change, among others, the following:

• the pension premium will be a flat-rate and age independent; and
• the pension schemes can only be defined contribution pension schemes, with three new types of pension schemes.

We recommend contacting us regarding the explicit steps that will need to be taken. In any event, we recommend starting to consider the different options early and to have sufficient time to implement a new pension scheme as the deadline is 1 January 2028.  From then,  current defined contribution schemes will no longer be compliant and tax penalties will be due.

Non-competition clause. There is a plan to draft a Bill to restrict the use of non-compete clauses in employment agreements intending to:

• legally limit the duration of the non-competition clause;
• geographically define the clause, and require this geographical demarcation to be justified in the employment agreement;
• state what substantial business interest of an employer is protected by the non-competition clause.
• ensure the employer must pay minimum compensation to its employee if the non-compete clause is invoked. This will probably be a percentage of the most recent salary of the employee.

PRC

PRC visa application process optimised for foreigners. On 20 September 2023, to make it more convenient for foreigners to apply for visas, China implemented  updates to streamline the visa application process for foreigners. The revised application form aims to simplify the procedure by reducing required information. The new form consists of seven major sections and 15 subsections, mainly focusing on the applicant's educational background, family details, and travel history. The previous requirement of reporting international travel history for the past five years has been shortened to just one year. Also, applicants are now only required to provide information on the highest level of their education.

Adjustments made to average employee salary and social security contribution base in 2023. Starting from 1 July 2023  there have been updates across various regions of China with respect to the local average salary and social security contributions. In Shanghai, the average monthly salary has been updated to CNY12,183, with the social security base set at CNY36,549. In Beijing, these figures are CNY11,297 and CNY33,891 respectively. The implications for employers include:

• increased labour costs due to higher social security contributions for employees; and
• corresponding effects on the amount of severance pay for employee termination.

The PRC update has been provided by May Lu, Managing Partner at Shanghao YaoWAng Law Offices.

Singapore

Tripartite Guidelines to Enhance Support to Working Caregivers. To better address the needs of working caregivers, the Singapore government formed a tripartite workgroup consisting of the Ministry of Manpower, National Trades Union Congress, and Singapore National Employers Federation, as well as various unions, employers, workplace fairness and professional bodies to develop a set of guidelines on flexible work arrangements (FWAs) expected to be launched in 2024. The guidelines are set to ensure that FWA requests are fairly and properly considered in a practical manner, taking into account both workers' and businesses' needs. The workgroup will also develop a strategy to support employers and employees in following the guidelines, and recommend ways to promote effective and sustainable provision and use of FWAs. These are aimed at helping employees achieve better work-life harmony and promote a more engaged and productive workforce.

Final Report on Workplace Fairness Legislation. The Singapore government has accepted the final recommendations of the Tripartite Committee on Workplace Fairness on Singapore's first Workplace Fairness Legislation, as set out in the committee's final report. This offers clarity in several anticipated areas, including the definition of discrimination which refers to any adverse employment decision due to any protected characteristic, and inclusion of breastfeeding as a protected characteristic and an expanded definition of caregiving responsibilities. A new tripartite advisory will be issued to provide guidance on the reasonable accommodations to persons with disabilities. The legislation is expected to be implemented in 2024.

Public Consultation to the New Proposed Advisory Guidelines on Artificial Intelligence. As the use of artificial intelligence (AI) becomes more pervasive across multiple sectors,  Singapore's Personal Data Protection Commission (PDPC) invited feedback on its public consultation paper on the Proposed Advisory Guidelines on Use of Personal Data in AI Recommendation and Decision Systems. This seeks to introduce certain proposed clarifications on how the Personal Data Protection Act 2012 (PDPA) may apply to the collection and use of personal data being used to deploy and develop AI systems that embed machine-learning models, and which are used to make decisions autonomously or to assist a human decision-maker through recommendations and predictions. Further, the proposed guidelines aim to provide baseline guidance and best practices for organisations on how to be transparent with their use of AI systems. This will be of relevance to employers with the use of AI increasing in frequency in employment and HR contexts across all stages of the employment relationship.

Spain

RED Mechanism. On 12 July 2023, the Official State Bulletin published the Royal Decree 608/2023 which implements the RED Mechanism for Employment Flexibility and Stabilisation (in force since 13 July), the main purpose of which is to implement article 47.bis of the Workers' Statute ("ET"), regulating the so-called "RED mechanism" which, once activated in certain circumstances and/or for certain sectors, will allow the application of measures to reduce working hours and suspend employment contracts under certain conditions.

The Royal Decree also introduces significant amendments in relation to the regulation of collective dismissal procedures, including:

• Companies planning to close one or more of their workplaces, entailing the definitive termination of the activity and the loss of employment of 50 or more employees, are obliged to give prior notification to the competent labour authority. This notification must be made at least six months before the start of the consultation period. In the event that it is not possible to comply with this notice period, the notification must be made as soon as possible, providing justifiable reasons why the deadline could not be observed. In addition, a copy of this notification must be sent to trade union organisations and to those representing the sector to which the company belongs, both nationally and in the autonomous community where the workplaces are located.

• The provisions relating to the legal regime for Temporary Redundancy Proceedings (ERTE-Furlough) are similarly aligned with those mentioned above in relation to RED Mechanisms.
  This includes a redefinition of suspension or reduction measures, aspects such as the possibility to withdraw and reapply measures to employees, the restriction that employees are not affected by a combination of measures and the prioritisation of reduction measures over suspensions.
  Access to exemptions from social security contributions during ERTE is regulated, adding that these are conditional on the requirement to fulfil a commitment to maintain employment. In addition, the restrictions in the RED mechanism on prohibition of overtime, outsourcing or new hiring apply to "ordinary" ERTEs.

Further detail on this mechanism is available in our October Flash published here.

Please contact our Spanish team with any queries on implementation of this mechanism.

UAE / DIFC

DIFC issues first California adequacy decision. On 9 August 2023, the Dubai International Financial Centre (DIFC) announced that the Commissioner of Data Protection had issued the first adequacy decision, for the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CCPA as amended). The adequacy decision determines that the CCPA as amended is equivalent to the DIFC Data Protection Law No. 5 of 2020 i.e. personal data can now be transferred between the DIFC and California without the need for additional safeguards.

Employers should monitor current and future data flows from the DIFC to recipients in the jurisdiction of California and make appropriate amendments to relevant contracts (if applicable).

End of Service benefit changes. The UAE has announced two proposed changes to the UAE end of service benefit system which may be relevant to your UAE business. The first change (a new End of Service Gratuity Scheme) will most likely apply to all UAE employers excluding the DIFC (it is not clear yet whether the ADGM will adopt the changes). On 31 August 2023, the second proposed amendment, only applying to employers in the DIFC was announced that could place an obligation on DIFC employers of GCC nationals to make "top-up" payments into a qualifying scheme, in addition to GPSSA contributions. This may require DIFC employers to pay the positive difference into a qualifying scheme where there is a shortfall between what would have been payable into a scheme if the individual had not been a GCC national, and what is paid under the GPSSA. Monthly payments are subject to a de minimis threshold of AED 1,000. Amendments are also proposed to deal with the situation when an employer is prohibited from contributing into a Qualifying Scheme for an employee due to sanctions. Further detail on both these proposed changes is available here.