International Employment Law Alert – July 2024

Belgium

Social Penal Code updated. On 8 May 2024 the House of Representatives approved the Bill amending the Social Criminal Code and various labour law provisions. Employers should note the increase in certain sanctions and the existence of new violations particularly:

• Stricter punishment for specific and repeated breaches.
• Noteworthy additions include the possibility of imprisonment in cases of harassment, or when the worker’s health is at risk.

Infertility treatments: protection for employees who are absent from work for infertility diagnosis and treatment. From 28 April 2024 the Labour Act now ensures that an employee who has undergone infertility treatment or medically assisted procreation may not be dismissed for two months following the date they were advised by medical certificate. Consequently, employees undergoing infertility treatment benefit now from protection against dismissal and discrimination. Dismissal or discrimination breaches made by employers may entitle an employee to a protection indemnity equal to six months’ salary for each breach, and these payments may be cumulated. Employees are advised to be mindful of these protections when considering dismissal or decision impacting working conditions of employees undergoing fertility treatment.

New legislation on private investigation. On 8 May 2024 the Chamber adopted new legislation on private investigations, which replaces the current outdated act regulating private detectives. The Act also applies to internal investigation services within companies.

Internal investigation services are defined as “the organisation in a structured manner of private investigation activities, i.e. activities involving the collection of intelligence obtained from the processing of information on individuals or legal entities or concerning the circumstances of acts committed by them where the purpose of the activities is to gather the information to safeguard the interests of the principal / employer in a (potential) conflict”.

Given the broad definition, any organised form of internal investigation services (e.g. investigation teams on employee conduct) could fall within the scope of the new Act. Based on the preparatory guidance to the Act, it can, however, be argued that only internal services which are established with the sole purpose of conducting private investigation activities qualify as “internal investigation services”. As a result, it could, for instance, be argued that an internal HR department that only occasionally conducts an investigation in relation to employees does not qualify as “internal investigation services” and is thus not bound by the provisions of the Act when conducting such an internal investigation.

Internal investigation services falling within the scope of the Act should comply with a number of obligations. Most noteworthy are:

• Prior receipt of a Ministerial licence.
• The obligation to have or to contract a Data Protection Officer.
• Conduct / integrity rules for the internal investigation service members.
• Requirements in relation to criminal record, age, training, safety, applying to individuals involved in the internal investigation services, the Board of Directors and the persons who exercise control over the company.
• In order for internal investigation services to conduct investigations into employees, the possibility and modalities of this investigation must be included within so-called “regulations” which must be established through employee or union concertation (e.g. a collective bargaining agreement, work rules, a decision from the works council). Companies have two years to comply with the obligation to adopt regulations.
• The right of an individual interrogated during an interview to be accompanied by a person of his/her choice (e.g. a lawyer).
• An interview report may be handed over to employees who are interviewed during the course of the investigation.
• If an employer decides to act on an investigation report, the employee concerned must be informed immediately of the private investigation carried out and of the possibility of accessing their personal data and supplementing, improving or deleting it, unless the Public Prosecutor has given written authorisation not to inform them or to inform them at a later stage.

In case of non-compliance of the Act, this could have the following consequences:

• A company could receive a warning, an out-of-court settlement (covering 30% of the amount of the administrative fine, but not less than €100) or an administrative fine (ranging from €100 to €25,000);
• If evidence has been obtained in breach of the Act (e.g. lack of valid licensing, failure to comply with the obligation to notify the subject of an investigation, collection of prohibited information, prohibited methods, etc.), the evidence will be considered null and void and cannot be used in legal proceedings.

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

England

Read our Employment Law Alerts covering recent cases and developments in the UK.

France

New Decree and Q&A on profit-sharing law. A new decree dated 30 June 2024 implements several measures from the law on profit-sharing that was published on 29 November 2023.

The decree provides for modalities of allocation of the Value Sharing Bonus into an employee savings or retirement plan as well as the related documentation.

It also details the conditions for the implementation of the company Value Sharing Plan (PPVE), including details on communication to and control of administration for these plans.

The decree also increases the ceiling for employer contributions to employee savings and retirement plans, lists the specific labels that qualify an investment as “green” or “socially responsible”, and provides for additional details to complete the November 2023 law (ie the possibility to pay profit-sharing bonuses in advance and calculation of profit-sharing for paternity leaves, among others).

This decree follows a Q&A published by the Government on 6 June 2024 that provided clarification on the scope of those subject to the new obligation to negotiate on sharing exceptional profit as well as the content of the agreement to be negotiated.

Organisation of a medical examination by the employer. A 5 July 2024 decree has provided detail of how to handle a situation when there has been an employer-initiated medical examination to verify the legitimacy of an employee’s sick leave when salary continuation is provided by the employer.

This decree codifies the practices that have evolved through case law over the past 15 years and allows an employer to request to a doctor to conduct a medical examination, either at the doctor’s office or at the employee’s home, to assess whether sickness leave is justified in principle and/or duration.

Should the doctor determine that the employee’s sickness leave is not justified, the employer is no longer obligated to continue to pay the employee's salary.

The decree also details the information allowed to be shared by the doctor to the employer, as well as an obligation for the employer to notify its employee of the examination results.

Works Council elections – mandatory information required. A decree dated 6 June 2024 clarifies the content of the minimum mandatory information that must be provided by employers to trade unions within the invitation to negotiate a pre-electoral agreement.

As of 8 June 2024, the invitation to negotiate the agreement must include the following information:

• the name and address of the employer, and, where applicable, the designation of the establishment;
• the title and identification of the applicable CBA, where applicable;
• the place, date and time of the first negotiation meeting.

Fight against racism, antisemitism and discrimination. The Ministry of Labour has published an awareness-raising guide for Works Councils members on preventing and fighting racism, antisemitism and discrimination based on origin.

The guide, published on 18 June 2024, aims to inform Works Councils’ members of their responsibilities in the fight against all forms of discrimination and of the tools available to them to fight and prevent discrimination.

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

Germany

Legalisation of cannabis in Germany. Since 1 April 2024, the consumption and limited possession of cannabis has been permitted in Germany. Employers should be aware of the potential labour law consequences of this legislative change. Questions may arise about e.g. the employer's right to ask during the recruitment process; consumption during working hours; the possibility of prohibiting cannabis; permissible drug tests or about potential consequences under labour law. In order to ensure legal clarity, it is generally recommended (as for alcohol) to provide a company rules, to update policies and standard employment contracts. Please find more details to those questions in our latest Insight.

Clawback of compensation payments for post-contractual non-compete for Managing Directors. In April 2024, the Federal Court of Justice decided for the first time that a provision in a managing director service agreement stipulating a retrospective cancellation and clawback of compensation payments for a post-contractual non-compete, in the case of a breach of the post-contractual non-compete, can be effectively agreed. This should in principle only apply to managing directors and not to employees. Companies should consider including such a provision in future managing director service agreements. We are happy to provide you with detailed advice.

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

Italy

Gender Equality Report deadline extended. The Government has further extended the deadline to submit gender reports relating to the two-year period covering 2022-2023. The new deadline is 20 September 2024.

Dismissal for economic reasons. A recent ruling by the Italian Constitutional Court has found that in the case of a dismissal for economic reasons (such as redundancy) where an employee is hired after 7 March 2015, the employee is now entitled to higher protection than in the past. Previously, case law provided only for economic compensation of between 6 to 36 month’s wages. Now the employee is entitled to be reinstated if the dismissal is found to be unlawful due to an insufficient reason.

Whistleblowing case-law. According to recent case-law, protection against retaliatory dismissal cannot be invoked if the whistleblower’s purpose in reporting allegations is to discredit colleagues. A Court has upheld an executive’s dismissal, who secretly spread the content of their report and also made serious allegations against their superior which were later proved to be unfounded

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

Netherlands

“Pseudo self-employment” enforcement moratorium to be lifted. From 1 January 2025 onwards, any employer who makes use of the services of self-employed persons will risk that the agreement entered into with the self-employed person will be requalified as an employment agreement, both from a legal and a tax perspective. Employers may become subject to audits and inquiries by the Dutch Tax Authorities (DTA) in order to assess whether indeed the agreement with a self-employed persons is characterised correctly, or whether the working relationship under review should be requalified as an employment relationship instead, resulting in significant additional payroll withholding tax obligations at company-level. From an employment law perspective, a re-qualification has its own risks, most notably dismissal protection and continued payment of wages during sickness. We provide further Insight on this.

Anonymous whistleblower reporting. The consultation on the draft general order (AMvB) on anonymous whistleblower reporting (the “Draft Decree”) ends on 31 August 2024. The Draft Decree provides for an amendment of the Whistleblower Protection Act (the “Act”). In short, the Draft Decree triggers an obligation for employers that are obligated to establish an internal reporting policy and reporting channel in line with the Act, to also explicitly provide for the opportunity to make an anonymous report of (suspected) wrongdoing. While it is not yet clear when the Draft Decree (in its final form) will be published and subsequently enter into effect, we do expect that the implementation of the obligation to provide for anonymous reporting might be time-consuming for most employers (regardless of their size). Based on some of the critical reactions to the Draft Decree received during the consultation period (amongst other from the Dutch whistleblowing authority, the House for Whistleblowers), it is to be hoped that the Draft Decree will undergo an amendment after further evaluation. We will closely monitor this process over the coming months and will provide a more detailed update once the Draft Decree is finalised and clarity can be provided on the implementation date.

Admission system for posting of workers. The government has proposed an admission system for temporary employment agencies and other companies that provide labour. From 1 January 2027, temporary employment agencies may only post workers if they are authorised to do so by the Ministry of Social Affairs and Employment. The government therefore encourages them to request the authorisation at the ministry no later than 1 July 2026. Companies that do lend personnel, but this is not their core business, can ask the ministry for a dispensation.

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

People’s Republic of China

Delayed retirement to be pushed further. According to the current effective rules and regulations, female employees in management or technical positions must retire at the age of 55, other female employees retire at the age of 50, and male employees retire at the age of 60. The current retirement age in China is relatively early on a global scale. Due to the increase in life expectancy per capita, the transformation of labour practices, the prolongation of years of education and the increasing pressure on pension payments, the Central Committee of the Communist Party of China (“CPC”) formally proposed a delayed retirement plan in 2013. On 21 July 2024, the third plenary session of the 20th CPC Central Committee released the Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese Modernization (“the Decision”), pushing further the delayed retirement plan. The Decision announced that in accordance with the principles of voluntariness and flexibility, the reform of gradually delaying the mandatory retirement age should be promoted in a steady and orderly manner. Professor Yuan Xin of Nankai University shared his understanding of the Decision: Voluntariness means that the employees can choose voluntarily between the statutory retirement age set now and the statutory retirement age to be delayed later; Flexibility refers to the place of work, hours of work, nature of work, type of work, and even wages and salaries. So far, the specific delayed retirement plan has not yet been announced, but it is expected to be announced by 2025.

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

Singapore

Tripartite Guidelines on Flexible Working Arrangement Requests. These guidelines were published in April 2024 following the increase in flexible working arrangements (“FWAs”) and will come into effect from 1 December 2024. They introduce a structured approach for both requesting and managing FWAs, setting minimum standards for all employers. These guidelines detail the process for employees to formally request FWAs, which could include flexi-place, flexi-time, and flexi-load arrangements, and outline the responsibilities of employers in considering these requests. Employers are encouraged to adopt FWAs to attract and retain talent, enhance business resilience, and meet employees' needs for work-life balance. The guidelines emphasise the importance of mutual trust, open communication, and case-by-case evaluation of FWA requests, aiming to foster a more inclusive and productive workplace culture. They also provide a framework for handling disagreements and encourage employers to communicate decisions within two months. As with all Tripartite guidelines, they are not binding but will be used by the Tripartite Alliance for Fair and Progressive Employment Practices and the Ministry of Manpower to support the adoption of FWAs and the handling of cases related to FWAs, so compliance is strongly recommended.

Updates to Workplace Safety and Health subsidiary legislation. Singapore has introduced two significant updates to certain existing subsidiary legislation passed pursuant to the Workplace Safety and Health Act 2006, effective from 1 June 2024, aimed at reducing workplace accidents and fatalities. Firstly, the maximum fines for safety breaches that are a major cause of serious harm have been increased under these subsidiary legislation from SGD 20,000 to SGD 50,000 for first convictions, enhancing the deterrent effect against safety violations. Secondly, a new requirement has been introduced to the Workplace Safety and Health (General Provisions) Regulations 2007 which mandates the installation of video surveillance systems in construction sites with a contract value of SGD 5 million or more where high-risk work activities occur. These systems must record high-quality colour images with certain formatting specifications, and the recordings must be retained for at least 30 days, or 180 days following a reportable incident. Non-compliance with the video surveillance requirements could result in a fine of up to SGD 20,000, imprisonment for up to two years, or both. Employers are urged to ensure awareness and compliance with these updated regulations to avoid penalties and promote workplace safety, whilst observing their obligations under the Personal Data Protection Act 2012 when dealing with employees’ personal data.

New support scheme for retrenched workers. Singapore is set to introduce a new support scheme in late 2024 for citizens facing involuntary unemployment, aiming to provide temporary financial assistance and encourage skill upgrading for better long-term employment opportunities. The new support scheme was announced by Prime Minister Lee Hsien Loong and further discussed by Manpower Minister Tan See Leng in his May Day Message, with more details of the scheme expected later in the year. It is part of a broader effort to prepare workers for future jobs and ensure fair, progressive, and safe workplaces. Enhancements to existing programs like the Workforce Singapore’s Career Conversion Programme and the launch of the Overseas Markets Immersion Programme are also planned to support skill development and global market exposure.

Spain

Breast-feeding leave (option of reducing the working day or accumulation without being subject to collective agreement). From 23 May 2024, the Workers' Statute Act was modified to allow employees to directly request an accumulation of breastfeeding leave instead of taking one hour off per day for the care of their infant, for a period of nine months following childbirth without the need for this to be stipulated in a collective agreement. The number of accumulated days of leave is not extended to 28 (as initially announced), but the calculation of the accumulable days will be made on an individual basis, depending on the time of the request, the age of the infant, the type of contract (temporary or indefinite) and the working scheme (full or part-time). Employers will need to update family leave policies to reflect this.

No automatic cause for termination due to permanent illness. We are anticipating a modification of the Workers' Statute Act in order to remove permanent illness as an automatic cause of termination of an employment contract. In cases of permanent illness, employers are now obliged to adapt the employee’s role or change to another vacant post, unless this will involve excessive expense.

Modification to unemployment benefit. From 1 November 2024, a new scheme for unemployed people will widen the scope of those entitled to access unemployment benefit, as well as extending access requirements and the sum received. As a result, this reform will lead to the extension of access to unemployment benefits to groups that lacked this coverage, such as those under 45 years old without family responsibilities.

See our May Spanish Employment Flash for further detail on any of the above or contact our Spanish team.

UAE / ADGM

New regulatory framework for whistleblowing in the ADGM. Effective from 5 July 2024, the Abu Dhabi Global Market (the “ADGM”) has enacted two new sets of regulations: the Whistleblower Protection Regulations 2024, and the Employment Regulations (Amendment No. 1) 2024. These regulations aim to significantly enhance protections for individuals who report misconduct in good faith within the ADGM.

The Whistleblower Protection Regulations provide a comprehensive framework to safeguard whistleblowers from civil, contractual, and employment-related retaliations. Entities within the ADGM are required to implement and maintain appropriate policies for facilitating protected disclosures, protecting the identity of whistleblowers, and designating individuals or departments to receive such disclosures.

The Employment Regulations (Amendment No. 1) 2024 further strengthen these protections by prohibiting employer retaliation against employees who make protected disclosures. This includes protection from dismissal, forced resignation, adverse changes to employment terms, and any other actions causing detriment or disadvantage to the employee.

By 31 May 2025, ADGM entities must implement written policies to facilitate protected disclosures, protect whistleblower identities, and designate authorised individuals or departments to confidentially handle these disclosures. We provide further insight on the consultation paper here.

Approved investment funds for the voluntary alternative End-of-Service Benefits Scheme. The Ministry of Human Resources and Emiratisation (“MOHRE”) has announced two approved investment funds, Lunate and Daman Investments, to administer the voluntary alternative end-of-service benefits scheme (the “Savings Scheme”). This initiative, supported by Cabinet Resolution No. (96) of 2023 and Ministerial Resolution No. (669) of 2023, offers an alternative to the traditional end-of-service gratuity system. The approved funds provide secure, Sharia compliant investment options designed to protect employee benefits against inflation, employer default, and bankruptcy.

UAE employers (outside the DIFC) are now able to offer their employees the option to opt-in to the Savings Scheme or remain with the traditional end of service gratuity benefit for their expat employees (non-GCC national employees). For employers who decide to opt into the Savings Scheme for their employees, instead of paying out a lump sum gratuity payment on termination of employment, employers would instead make a monthly contribution into a fund on behalf of the employees, based on an employee’s basic salary.

Compliance with the payment schedule is important to avoid penalties, including fines of AED1,000 per beneficiary per month for late payments. We provide further insight on the topic here.

Consultation on Proposed Amendments to the ADGM Employment Regulations 2019. The Abu Dhabi Global Market (“ADGM”) Registration Authority issued Consultation Paper No. 6 of 2024 on 26 July 2024, proposing significant amendments to the Employment Regulations 2019.

These changes aim to clarify ambiguities, modernise provisions to reflect current work practices and provide greater clarity on the rights and obligations of both employers and employees within the ADGM. Notable proposed amendments include clarifying employee entitlements during the probation period, amending the definition of 'Employee' to be less restrictive and allowing for full-time remote employees, and explicitly permitting remote/hybrid working arrangements. The proposed regulations also introduce a definition of part-time employee, and how part-time employees’ entitlements are to be calculated.

The proposed regulations remove the statutory entitlement to overtime pay, while retaining the maximum weekly working hours. The proposed changes include new adoption entitlements, such as paid paternity leave for adopting fathers and increase the age cut-off for adopted children from 3 months old to 6 months old, as well as new bereavement leave entitlements.

The amendments expand employee duties to their employer, allow termination of employment due to unauthorised absence after formal notification, and require employers to provide a certificate of experience upon termination. Importantly, end-of-service gratuity will be payable regardless of the reason for termination, and the amendments clarify payment timelines upon termination.

Enhancements to provisions on discrimination, harassment, victimisation, and employer vicarious liability are also proposed.

This consultation follows the recent enactment of the Whistleblower Protection Regulations 2024 and the Employment Regulations (Amendment No. 1) 2024, which significantly enhance protections for individuals who report misconduct in good faith within the ADGM. Entities within the ADGM are encouraged to review the consultation paper and provide their feedback by 26 August 2024. The final form of the regulations is expected to be enacted in the fourth quarter of 2024.

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