Employment Law Alert International – January 2024

Belgium

Looking forward - three things on the horizon for 2024:

1. Social elections and a looming protection against dismissal. Private sector companies with an average of at least 50 employees are legally obliged to organise social elections and elect employee representative bodies (scheduled between 13 and 26 May 2024). From January 2024 (date between 14 and 27 January 2024), employees who become candidates for the employee representative bodies benefit from protection against dismissal even before the employer is informed of their candidature: the lists of candidates will only be presented by the trade union organisations between 19 March and 1 April 2024. This period, known as the "occult period", thus constitutes a period wherein any employee could be protected against dismissal. In some cases, this period could last until 12 May 2024. Since an employer is unable to know which of their employees are protected against dismissal during this period, it is highly recommended to avoid dismissals during the occult period.

2. Annual holidays: carry over of untaken leave days. From 2024 onwards, an employee who falls ill during an annual holiday period will retain his or her holiday days and will be able to take them at a later date (no later than 24 months after the holiday period), provided that he or she complies with a number of different obligations. Days of incapacity to work due to illness or accident occurring during the annual holiday period no longer count as holiday days. This possibility of carry-over also applies to other forms of work interruption (maternity leave, birth leave, adoption leave, care leave, parental leave, etc.).

3. Individual right to training. From 2024, the number of individual training days per full-time employee will be at least five days for companies with 20 or more employees. A lower number may be set by a collective labour agreement (CLA) at sectoral level, but the minimum is two training days per year. Employers with at least 10 and fewer than 20 employees must provide at least one day of individual training per year per full-time employee. Employers with fewer than 10 employees are excluded from this obligation, but may still decide to grant training days to their employees. Companies with at least 20 employees must prepare an annual training plan by 31 March each year. To monitor all training completed by employees, employers will be required to use the Federal Learning Account, a digital application that will come into force no later than 1 April 2024 and those who do not comply with these obligations will be published online in a "naming and shaming" list.

Updates from 2023 Q4:

Delay to Occupational Pension Plan Transparency Act coming into force. A new Act, aimed at enhancing transparency for second pillar pension plans has been delayed entering into force as Sigedis (the responsible entity for the statutory data) is not ready to manage the new legislation. On 22 December 2023, the Act of 11 December 2023 containing various provisions relating to pensions was published in the Belgian Official Gazette and this postponed the entry into force of several provisions of the Transparency Act. The modified schedule for entering into force, along with new obligations is as follows:

• Payment procedure: 1 January 2025 (instead of 2024)
• New procedures in the event of retirement and death: 1 January 2026 (instead of 2024);
• Annual pension statement: 1 January 2026 (instead of 2024);
• Additional pension statements for some events (retirement, exit) during the year: 1 January 2028 (new);
• Affiliation document: 1 January 2026 (instead of 2025)
• Template affiliation document FSMA: 1 January 2026 (new);
• Transparency report : 1 January 2027 (instead of 2026);
• Upload the transparency report on "mypension.be": 1 January 2028 (new).

Appointment of a "person of trust" for employees. To increase the presence of persons of trust in companies and to ensure that more employees have access to this key figure from 1 December 2023 an Act has come into force making it mandatory for companies with more than 50 employees to appoint a person of trust. It is mandatory for companies with less than 50 employees if requested by the trade union delegation or by all employees. Level 2 sanctions will apply if these rules are not complied with (ie criminal fines of €400 to €4000 or an administrative fine of €200 to €2000), multiplied by the number of employees affected).

Return of mobile phone number after termination of employment contract. From 1 January 2024, employees can ask their former employer to return their mobile phone number, if they owned it before they started working. For this purpose, they have to submit a written request to their former employer within one month of the end of their employment contract, regardless of the reason for the termination of the contract (i.e. even in the event of dismissal for serious reasons, termination by mutual agreement, resignation). The employer may not refuse this request if it is made in the manner laid down and within one month of the end of the employment contract.

Please contact our Belgian team for further detail on any of the above.

England

Looking forward -  things on the horizon for 2024:

Read our top ten case law developments from 2023 and predictions for 2024 here.

Updates from 2023 Q4:

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

Regulations relating to retained EU employment law now in force. Read more here.

France

Looking forward - three things on the horizon for 2024:

1. Mandatory negotiations on correcting discriminatory practices. A draft law is currently being discussed in Parliament to reinforce measures against discrimination, with a proposal of "testing" processes to detect discriminatory practices within companies, notably at the stage of hiring, and to impose obligations for employers found guilty of such discriminations.

 2. Paid holidays and sickness absence. Following rulings from the French Supreme Court in September 2023 (stating that employees on sick leave continue to accrued paid leave), the French Labour Ministry announced that clarifications should be provided in the first quarter of 2024, regarding the acquisition of paid leave during sickness absence.

3. Rules on termination of employment contracts. Rules governing the statute of limitation for claims relating to the termination of an employment contract (possibly shortening from 12 to two months), as well as the rules governing mutual termination may be subject to change.

Updates from 2023 Q4:

New measures on profit-sharing. A recent law which came into force on 1 December 2023 aims at developing the implementation of value-sharing schemes within companies and thus provides (among others) for the following new measures:

• Profit-sharing offsetting: There is now a prohibition to replace an existing remuneration item by mandatory profit-sharing.

• The existence of a non-mandatory profit-sharing agreement can no longer justify  postponement of the implementation of a profit-sharing scheme for companies with more than 50 employees.

• Two value-sharing bonuses (prime de partage de la valeur or PPV) can now be paid per year, and exempt from certain social contributions and taxes up to certain ceilings (€3,000 or €6,000 depending on the company's situation). These bonuses can now be invested in a company savings plan (PEE), resulting in additional tax advantages for employees.

• A new optional scheme known as the "company value sharing plan" (PPVE), lasting three years and similar to the Phantom Stocks schemes has been introduced into French law, enabling employees to receive a bonus if the company's value rises. Under certain conditions, this bonus can benefit from tax and social contributions exemptions, up to the limit of ¾ of the annual social security ceiling (ie, up to €34,776 for 2024).

• As from 1 January 2025, companies with between 11 and 49 employees will have to introduce at least one value-sharing scheme if they are profitable (net taxable profit of at least 1% of turnover over three consecutive years). The system introduced may be a profit-sharing plan (mandatory or not), an employee savings plan or a value-sharing bonus (PPV).

Procedure for offering a permanent employment contract after a fixed-term or temporary contract. As from 1 January 2024, all employers must comply with new procedure when offering a permanent contract after a fixed-term or temporary contract. Employers are now required to:

• Notify the offer of a permanent employment contract before the end of the initial employment contract and allow the employee a "reasonable period" for consideration, without further details yet as to what would be considered as a "reasonable period".

• Notify "France Travail" (which has replaced "Pôle Emploi" from 1 January 2024) of every refusal of a permanent employment offer, attaching a specified set of justifying documents, within a one-month timeframe.

Please contact our French team for further details on any of the above.

Germany

Looking forward - three things on the horizon for 2024:

1. Reform of the Working Hours Act. Working time recording is currently the overriding topic in German employment law. While the draft law was presented in April 2023 and includes the necessity to record the start, end and duration of daily working hours, the law is disputed. Implementation is expected to take some time

2. Introduction of the Employee Data Protection Act. A draft bill concerning the regulation and monitoring of employees in the workplace as well as the processing and transfer of data within groups of companies is expected to be presented in 2024.

3. New regulation on works council remuneration. On 1 November 2023, the German government presented a draft bill to amend the Works Constitution Act (BetrVG) with regard to the remuneration of works council members. Following a ruling by the Federal Court of Justice in January 2023, according to which the payment of excessive remuneration to works council members can constitute a criminal offence of breach of trust, many companies have reduced the remuneration of works council members. The amendments in the bill are based on the Federal Labour Court's case law and clarify that works council members may not be paid less than comparable employees. The bill still has to be discussed in the Bundestag and Bundesrat. Given the urgency of the issue, it is expected to be adopted quickly in 2024.

Updates from 2023 Q4:

Mass dismissal notices - new case law. An ECJ judgment from July 2023 has triggered a turnaround in case law on collective redundancies. To date, it has been largely assumed that terminations are invalid in the event of errors in the consultation or notification procedure. The ECJ now interprets the Directive collectively, ie: the obligation to send a mass dismissal notice to an employment agency does not provide individual protection for employees, so the breach of the obligation to notify is not likely to justify the invalidity of terminations. This is one to note in the event of redundancies.

Digitisation of the obligation to provide evidence informing employees of conditions of employment. A new draft bill was introduced to amend the law on the evidence of the essential conditions of employment, allowing employers to provide this evidence electronically (which is currently not possible). Since this draft bill was introduced by the opposition party, the chances of success are unclear.

Expiry of the implementation period of the Whistleblower Protection Act. Since 17 December 2023, the transitional period for setting up an internal reporting channel in accordance with the Whistleblower Protection Act for employers with at least 50 employees has expired. Employers who have not set up such an internal reporting channel now face fines of up to €20,000.

Please contact our German team for further details on any of the above.

Hong Kong

Looking forward - two things on the horizon for 2024:

1. The first weekday after Christmas Day will be added as a statutory holiday starting from 2024, increasing the number of statutory holidays from 13 to 14.

2. The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), which expands the scope of Hong Kong judgments enforceable in the Mainland to include those issued by the Hong Kong Labour Tribunal, will come into operation on 29 January 2024.

Updates from 2023 Q4:

Potential update on the "continuous contract" requirement. The Labour Advisory Board has agreed in principle to revise the "continuous contract" requirement by using the aggregate working hours of four weeks as the basis of calculation, and is deliberating on the working hour threshold. The Hong Kong Government will amend the Employment Ordinance as soon as possible after the Board has reached a consensus.

"Multiple entry Visa" to the Mainland for foreigners working in Hong Kong registered companies. Foreign staff of Hong Kong registered companies may apply with the Chinese Visa Application Service Centre for "multiple entry visas" valid for two or more years to the Mainland, enjoying priority processing.

More eligible universities listed under the Top Talent Pass Scheme (TTPS). The number of eligible universities listed under the TTPS has increased to 184 as eight more top Mainland and overseas institutions will be included. The Aggregate List of Eligible Universities under the TTPS covers the top 100 universities under the four designated world university rankings in the past five years.

Italy

Looking forward - three things on the horizon for 2024:

1. Minimum-wage Directive implementation. Italy has until November 2024 to transpose the EU directive n.2041/20422 on minimum wage. The directive obliges EU countries to  review local laws on this matter, and for Italy this includes updating the minimum-wage amount provided within national collective agreements.

2. Parental leave. For 2024 only, parental leave taken by both parents until the child's sixth birthday, will be paid at the rate of 80%, instead of the ordinary rate of 60% for the second month.

3. Hiring women. From January 2024 to December 2026, a 100% social contribution exemption is granted to employers who hire women that are "victims of violence". They must be hired on a permanent or fixed-term basis (until the 18th month from the hiring date) or from fixed-term to permanent basis.

Updates from 2023 Q4:

Remote working extended for certain exceptions to end of year. Exceptional rules that govern remote working (ie applicable to "vulnerable employees", those at higher risk from Covid-19 and employees with children under 14) have been extended to 31 March 2024, unless this deadline is further extended by local authorities.

Amends to the Workers' repatriation regime. On 19 December 2023, the Italian Government released the final version of a legislative decree amending the Workers' repatriation regime. Eligible applicants will receive tax relief reduced to 50% of all income generated in Italy applicable for a maximum of five tax periods. A cap of €600k on gross income will apply. The new regime will also apply to foreign individuals moving to Italy from one company of the same group to another. In these cases, the minimum period spent outside of Italy has been increased to (i) six fiscal years if the employee has not previously been employed in Italy by the same employer or by another entity of the same group or (ii) seven fiscal years if the employee has previously been employed in Italy by the same employer or by another entity of the same group. These new rules do not apply to employees who are registered in the Official Register of the Italian resident population (anagrafe della popolazione residente) by 31 December 2023 as they will continue to benefit from the previous (and more beneficial) regime.

National Collective Bargaining Agreement for Credit Sector employees agreed. This was renewed and is effected from 23 November 2023. There are economic and non-economic changes to note including increases to the minimum wage, training hours and sickness leave.   There are decreases to working hours of 30 minutes per week from July 2024. This agreement will last for three years and will expire on 31 March 2026.

Please contact our Italian team for further details on any of the above.

Netherlands

Looking forward - three things on the horizon for 2024:

1. Future of Pensions Act. In light of this and taking into consideration the transition period in place until 1 January 2028, this year employers and pension administrators (such as pension funds and insurers) should identify the required implementation actions and, subsequently, initiate the first steps towards alignment with the new pension system.

2. ESG - reporting obligation work-related mobility of employees. From 1 July 2024, employers with at least 100 employees are obligated to report on the business traffic and commuting of their employees. This data from 2024 must be submitted no later than 30 June 2025 via an online form.

3. Expected entry into effect of the Equal Opportunities in Recruitment and Selection (Supervision) Act. If passed by the Senate, the Act will impose on employers with at least 25 employees an obligation to have a written procedure which is aimed to prevent labour market discrimination (see below).

For further detail on these three 2024 developments please see our New Year newsflash here.

Updates from 2023 Q4:

Whistleblowing update. On 20 December 2023, the State Secretary informed the House of Representatives on the current state of affairs regarding the matter of whistleblowing. The most important updates from the State Secretary were:

• The expected entry into effect of an aid scheme for the granting of legal aid and mediation (in the event of a suspected wrongdoing) is 1 February 2024. On the basis of this aid scheme, (potential) reporters of wrongdoings who get into conflict with their employer after reporting may, subject to certain conditions, qualify for support from a lawyer or a mediator. There is an intention of exploring options for (partly) funding this system through contributions from employers, we await further details on this point.

• The preparation of a legislative proposal aimed at an amendment of the Whistleblowers Protection Act. The consultation period for the legislative proposal is expected to start in the first half of 2024.

• The preparation of a general administrative order (AMvB) that shall provide for further regulation on anonymous reporting. The order is expected to be presented for consultation within a number of weeks.

Equal opportunities in Recruitment & Selection. The legislative proposal for the Equal Opportunities in Recruitment and Selection (Supervision) Act (the Act) is generally expected to be passed by the Senate sometime in the coming months. If and when entered into effect, among other things, the Act will introduce an obligation for employers with at least 25 employees* to have a written procedure which is aimed to prevent labour market discrimination. In any event, the procedure should include effective measures to prevent labour market discrimination (and the employees who are involved in the recruitment and selection process - such as recruitment, HR or other employees conducting job interviews - should be made aware of the existence and contents of the procedure). The procedure should be freely accessible for everyone and updated as often as necessary to reflect prior experience and evolving knowledge on labour market discrimination. Another measure included in the proposed Act is a so-called 'duty to verify'. This shall apply to employers who outsource (certain) recruitment and selection activities to third parties. Such employers will have to verify whether those third parties actually have a written procedure in place aimed at the prevention of labour market discrimination. *For employers with less than 25 employees, there is - in principle - no obligation to have the procedure in writing.

Clarifying assessment of labour relations and legal presumption bill. A new bill is under consideration clarifying when to work as an employee or when to be self-employed. The bill intends to combat false self-employment and introduce a legal presumption under which workers paid lower than €32.24 an hour are deemed to be performing their work under an employment contract.

Please contact our Netherlands team for further detail on any of the above.

People's Republic of China

Looking forward - two things on the horizon for 2024:

1. New regulations for foreigners using social security. In order to facilitate the implementation of The Convention Abolishing the Requirement of Legalisation for Foreign Public Documents in China, new regulations have been published for foreigners participating in China's social security.

2. A delayed retirement age to be implemented. PRC will gradually implement a policy of delaying the retirement age. Currently, female employees in management or technical positions retire at the age of 55, other female employees retire at the age of 50 and male employees retire at the age of 60.

Updates from Q4 2023:

Further expansion of the coverage of work-related injury insurance. Recently, Shanghai, Anhui Province, Hainan Province, and Hubei Province have issued notices and opinions to further expand the coverage of work-related injury insurance. For example, in Shanghai, key points for the modification are centred around over-age employees (those who have reached the statutory retirement age but are not yet over 65 years old) with their work-related injury insurance premiums to be paid monthly by their employers (the payment base determined by labour compensation).

Beijing releases the Demonstration Text of a Labour Contract for Foreign Employees. On 30 November 2023, the Beijing Municipal Human Resources and Social Security Bureau published via their website, in both English and Chinese, the "Demonstration Text of a Labour Contract for Foreign Employees". This template consists of 10 chapters and 25 articles, covering issues such as the terms of a labour contract, job content, place of work, work hours, rest and leave, and remuneration. It also includes clauses on how to ensure work safety and handle labour disputes.

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

Singapore

Looking forward - three things on the horizon for 2024:

1. Workplace anti-discrimination and harassment. The passing of Singapore's first Workplace Fairness Legislation, expected to take place in the latter half of 2024, is set to be a crucial focal point for employers in Singapore as this will have wide ranging implications throughout every stage of the employment lifecycle. The new law will, amongst other things, create compliance obligations such as for employers to put in place grievance handling processes to handle reports of workplace harassment and discrimination. Employers may also see greater numbers of salary-related and wrongful dismissal claims, based on workplace discrimination and harassment, as the Employment Claims Tribunal is expected to have jurisdiction to hear such claims following the enactment of the new law.

2. Financial institutions mandatory reference checks. Arising from the Monetary Authority of Singapore (MAS)'s response to mandate reference checks (see below), employers who are financial institutions will have to study the relevant MAS notice when this is available to understand its impact and the reference check requirements applying to them to ensure they meet their regulatory obligations. The record keeping obligations will also have an interplay with the issue of employee data privacy and data privacy law requirements.

3. AI regulation. The Singapore Personal Data Protection Commission is conducting a public consultation to seek views on the proposed clarifications on how the Personal Data Protection Act 2012 applies to the collection and use of personal data to develop and deploy AI systems that embed machine learning models used to make decisions, recommendations, or predictions. It remains to be seen whether this will have an impact on employment processes but more clarity coming up on the use of personal data in AI systems is expected.

Updates from Q4 2023:

Mandatory reference checks for financial institutions. The MAS on 12 December 2023 released its Response to Feedback Received on Proposals to Mandate Reference Checks which confirms that the regulator will proceed to impose mandatory reference check requirements on financial institutions. This will be imposed via notices which MAS is drafting to ensure financial institutions conduct and respond to reference checks on a minimum set of standardised information. The aim of such mandatory reference checks is to mitigate the risk of "rolling bad apples", where individuals who engage in misconduct in one firm, move on to another firm without disclosing their earlier misconduct to the prospective employer. In the response, the MAS approved a lookback period of five years which starts from the date of the reference check being performed.

Spain

Looking forward - three things on the horizon for 2024:

1. Increase in Social Security contribution costs. The new Intergenerational Equity Mechanism (IEM) - aimed to ensure the economic sustainability of the Spanish pension system - imposes an additional Social Security contribution for companies and employees. By 2024, the IEM contribution cost per employee will be 0.7% -0.58% paid by the company and 0.12% by the employee.

2. Reduction of the maximum legal working day. The reduction of the maximum legal working day to 38.5 hours/week in 2024 and 37.5 hours/week in 2025 is under discussion. Currently, the maximum legal working week is set at 40 hours, and it is foreseen that the reduction in working time will not lead to a reduction to the employee's salary.

3. Increase in the Minimum Interprofessional Salary (MIS). The Ministry of Employment has recently approved a 5% increase in the minimum wage. The MIS, currently set at €1080 per month will increase to €1134 per month.

Updates from 2023 Q4:

Posted workers - registration with Social Security. Posted employees are workers employed in Spain by a company that carries out its activities in Spanish territory and are sent to another country in order to carry out paid work on behalf of that company. A new order cites four newly approved employment situations for posted employees assimilating to registration in the social security system:

1. When the company moves the employee to a country without a bilateral agreement on the co-ordination of social security systems.

2. When the company posts the employee to a country with a bilateral agreement, but this agreement does not include the employee because it only applies to nationals of each of the parties.

3. If a bilateral agreement applies but the maximum period of duration of the agreement has expired.

4. When an employee goes to a country with an international instrument on coordinating social security systems, but not for the posting of employees by their companies to the territory of the other party.

For further detail on the above, please contact our Spanish team.

UAE / DIFC

Looking forward - three things on the horizon for 2024:

1. Stricter implementation of Emiratisation policies. Effective 1 January 2024, non-Free Zone companies with 20-49 employees must hire at least one UAE citizen during 2024 (increasing to two UAE citizens by 2025). The existing rules regarding Emiratisation continue to apply to non-Free Zone companies with 50 or more employees (who must raise Emiratisation rates by 2% annually to achieve an overall rate increase of 10% by 2026). “Financial contributions” must be paid to the UAE government for the failure to meet Emiratisation targets.

2. Enhanced entitlements for GCC Nationals in the DIFC. Proposed amendments to the DIFC Employment Law, requiring employers of eligible GCC Nationals to make “top-up” payments into a Qualifying Scheme, in addition to the General Pensions and Social Security Authority (GPSSA) pension contributions.

3. Development of mental health legislation (Federal Law No. 10 of 2023 on Mental Health). New law introduced to protect an employee from termination and exploitation while suffering from a mental health issue.

Updates from 2023 Q4:

End of service benefit changes in UAE. The UAE has introduced the optional End of Service Gratuity Scheme (the "Savings Scheme"), impacting private sector employers (including those in the Free Zones but excluding the DIFC). The new Savings Scheme is similar to the DIFC Employee Workplace Savings ("DEWS") system in terms of providing a structured and investment-oriented approach to end-of-service benefits.

This Savings Scheme, established under Cabinet Resolution No. (96) of 2023 and Ministerial Resolution No.668 of 2023, offers an alternative to the traditional end of service gratuity system.

Key points for the Savings Scheme are:

• Voluntary for employers - choice between the current end of service gratuity model or the new Savings Scheme. If the employer has opted in to the Savings  Scheme, employee participation is mandatory.

• Employer contributions are based on employee wages. Employees with less than five years' service will receive 5.83% of their monthly basic wage, increasing to 8.33% for employees with more than five years' service.

• Employees can voluntarily contribute an additional amount to their savings (up to 25% of their annual salary).

• Investment options range from low risk to high risk portfolios.

• The management of the investment funds is entrusted to entities licensed and regulated by the Securities and Commodities Authority, ensuring adherence to strict financial management and regulatory standards.

• Employers who wish to participate in the scheme must participate for a minimum of one year. During this period, withdrawal from the scheme must be approved by the Ministry of Human Resources and Emiratisation.

• Failure to comply with the terms of the Savings Scheme can result in substantial penalties for the employer, including fines and inability to obtain new work permits.

Emiratisation (non-Free Zones companies). Increased focus on Emiratisation targets, with the Ministry of Human Resources and Emiratisation (MOHRE) emphasising the importance for private sector companies, particularly those with 50 or more employees, to meet the 2023 Emiratisation targets. This target, set at a 2% annual growth rate in the Emiratisation of skilled jobs, must have been achieved by 31 December 2023. Failed compliance resulting in financial contributions due from January 2024. MOHRE suggests utilising the Nafis platform to find qualified UAE nationals for vacant positions. MOHRE also cautions against false Emiratisation practices and highlights the benefits for companies meeting these targets, such as reduced service fees and government procurement priority. Companies with between 20-49 employees are reminded that they must hire one UAE national in 2024.

Employment Disputes (does not include DIFC or ADGM). From 1 January 2024, the UAE Labour Law introduced a significant amendment to the procedure for resolving individual labour disputes. For cases where the value does not exceed AED 50,000, the Ministry of Human Resources and Emiratisation (MOHRE) will now adjudicate and deliver a binding resolution.

Decisions made by MOHRE in these instances will carry the same legal weight as a final verdict given by the Labour Courts. Parties who wish to contest MOHRE's ruling can appeal to the Court of Appeal within 15 days of notification of the decision. Decisions made by the Court of Appeal on these matters will be final and binding.

Companies operating within free zones (such as the DIFC and the ADGM) are not impacted by this change.

For further detail on the above, please contact our team in the Middle East.

---