International Employment Law Alert – October 2025

England

Employment Rights Bill – roadmap and progress towards royal assent

Prior to the summer recess we saw a flurry of updates in relation to the Employment Rights Bill. On 01 July 2025, the government published an “Implementation Roadmap” which sets out a clear timeline for different provisions in the Bill coming into effect. Of particular note, changes to the qualifying period for unfair dismissal are not planned until 2027, with consultation on those changes planned for “summer/autumn 2025”. Significant new amendments to the Bill were proposed by the House of Lords, but ultimately rejected by the House of Commons. On 28 October 2025, the House of Lords will vote on the updated Bill. If the Bill passes, the Bill should receive royal assent in early November 2025.

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

France

Transposition of the EU Pay Transparency Directive – draft law expected

The French government is preparing to transpose the EU Directive on pay transparency through a draft law in the autumn, following consultations with social partners. Among the key measures being considered are:

• including a salary range in job offers;
• prohibiting questions to candidates about their current remuneration;
• including applicable collective bargaining agreement provisions in job offers;
• providing employees with annual written information about their right to request details on pay levels within the company (with a two-month response deadline);
• administrative sanctions for non-compliance with these obligations.

Alongside this, the current gender equality index will be completely overhauled by 2027.

The French Supreme Court continues to align French law with European Union Law

Two Supreme Court decisions on 10 September 2025, have both ruled in favour of harmonising French law with European regulations.

• Occurrence of sickness leave during paid leave. On 10 September 2025, the French Supreme Court (Cour de cassation) ruled that when an employee falls ill during their paid annual leave, the corresponding annual leave must be rescheduled, providing the sickness leave was duly notified to the employer. This ruling explicitly aligns with European Union case law on the right to rest. The European Commission had issued a formal notice to France on 18 June 2025 for non-compliance of its domestic legislation with European case law.
• Consideration of paid annual leave in calculation of the overtime threshold. In another ruling on the same day, the Supreme Court decided that paid annual leave must be considered as working time when calculating overtime, on a weekly basis. This ensures that employees are not penalised financially for taking leave. The Court explicitly departed from traditional French case law to align with the European Court of Justice. It should however be noted that the decision applies only when overtime is calculated on a weekly basis and not under other working-time arrangements such as the forfait-jours scheme which does not entitle any payment of overtime.

These two rulings seem to bring to a close a long judicial saga that began in September 2023, when the French Supreme Court had already reshaped the rules on the accrual of paid leave during periods of sickness leave. Having recognised the right to accrue paid leave while on sickness leave, the Court has now completed this alignment of French law with European standards on paid leave entitlements.

Right to silence

On 19 September 2025, the Constitutional Council (Conseil Constitutionnel) ruled that employers have no obligation to inform employees of their right to remain silent during preliminary interviews before dismissal or sanctions. The Council held that this right, derived from Article 9 of the 1789 Declaration, applies only to punitive sanctions, not private employment measures. Therefore, the Labour Code remains constitutional in its current form. As a consequence, the Constitutional Council decision clarifies that no further procedural change is required on that point for employers.

Clarification of the role of the Works Council in the deployment of artificial intelligence (AI)

Recent court rulings confirm that employers must consult their Works Council before introducing AI systems that may affect work organisation, employee roles, or data processing. The Nanterre (14 February 2025) and Créteil (15 July 2025) courts both suspended AI deployments until consultation occurred, emphasising that even pilot phases can trigger consultation duties when tools are effectively operational. The Paris Court (2 September2025) adopted a more balanced stance, distinguishing between genuinely new technologies - such as generative AI platforms - and mere updates, like an HR chatbot using unchanged technology. The guiding principle is the degree of impact on employees’ working conditions, autonomy, or workload. These rulings signal that AI implementation must be integrated into an ongoing social dialogue, with employers anticipating consultation early to avoid legal and operational disruption.

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

Germany

EU Pay Transparency Directive

The EU Pay Transparency Directive (effective June 2023) must be implemented into German law by June 2026, however Germany is yet to initiate the legislative process. An expert commission was formed in July 2025 to develop proposals for national implementation. Their recommendations are expected to be submitted by the end of October 2025. Therefore, the first draft government legislation is not expected to be published before the end of this year, or even early 2026. Given the approaching transposition deadline, it is likely that Germany will implement the Directive with minimal changes, potentially implementing it largely as it is.

Extension of maternity protection following miscarriage

From 1 June 2025, the Maternity Protection Act was amended to cover women who experience a miscarriage from the 13th week of pregnancy onwards with staggered protection periods introduced:

• From the 13th week onwards: up to 2 weeks of maternity protection.
• From the 17th week onwards: up to 6 weeks of maternity protection.
• From the 20th week onwards: up to 8 weeks of maternity protection.

During these protection periods, employers may not require affected women to work, unless they explicitly consent to work, whereby this consent may be revoked at any time. Those affected are also entitled to maternity pay during the protection periods. A breach may be sanctioned with fines of up to €30k and if the breach is intentional and endangers health, criminal liability may apply.

Working Time Act Reform

Since May 2025, the new government has announced its intention to reform the Working Time Act with a focus on reducing bureaucracy and increasing flexibility. According to the coalition agreement, the planned reform includes introducing a weekly maximum working time instead of the current daily limit, in line with the European Working Time Directive, and making electronic time recording mandatory in an unbureaucratic manner, with transitional rules for small and medium-sized enterprises. While no concrete legislative proposal has been published yet, the Federal Ministry of Labour has initiated discussions with relevant social partners this autumn, which are expected to lead to initial legislative proposals by the end of 2025 or early 2026. Further developments are pending.

Minimum wage

Minimum wage will be €13.90/hour starting January 2026 and will increase to €14.60/hour from January 2027.

Re-employment of retirees on fixed-term basis

As part of the 2025 Pension Package (Rentenpaket 2025), the German Federal Cabinet has approved a draft law aimed at easing the re-employment of individuals who have reached the statutory retirement age. Former employees will be allowed to be re-employed by their former employees on a fixed-term basis without objective justification, subject to the following conditions:

• Total duration of fixed-term with the same employer must not exceed eight years.
• Maximum of twelve fixed-term contracts without objective justification may be concluded between the same parties.

This change is intended to support workforce retention and provide greater flexibility for both employers and retirees wishing to continue working beyond statutory retirement age. Adoption is expected by end of 2025 and we will track entry into force.

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

Hong Kong

Phase 2 of the Mandatory Reference Checking (MRC) scheme launched in September 2025

Aiming to combat “rolling bad apples”, the MRC scheme was introduced for authorised institutions regulated by the Hong Kong Monetary Authority in May 2022, mandating checks on misconduct, integrity concerns and disciplinary actions from past employers. From 30 September 2025, Phase 2 of the Scheme requires financial institutions to vet conduct histories of candidates in a wider range of regulated roles, significantly broadening the scope. We have outlined the key preparations and compliance requirements for authorised institutions for the Phase 2 rollout here.

Hong Kong 2025 Policy Address: employment highlights

On 17 September 2025, Hong Kong Chief Executive John Lee delivered the 2025 Policy Address, introducing key employment-related initiatives. These include setting the minimum wage rate under the new annual review mechanism, improving work injury compensation for digital platform workers, enhancing occupational health and safety measures, promoting family-friendly employment practices to support childcare, strengthening employee retraining and re-employment schemes and addressing abuse of the Enhanced Supplementary Labour Scheme and illegal employment. We provide an overview on these developments for employers to note here.

Please contact our Hong Kong team for further detail.

Italy

EU Whistleblowing Directive – new guidelines

The Italian Anti-Bribery Authority (ANAC) has developed a new set of draft guidelines regarding internal reporting channels (which are still subject to public consultation), offering detailed clarification on the appropriate establishment and operation of internal whistleblowing channels, especially concerning their use within company groups. ANAC has outlined that, for company groups employing more than 249 individuals, the management of the internal whistleblowing channel can be delegated to an external party, which could be the parent company. This arrangement requires a specific service agreement between the company of the group and the external party. Employees of the company have the option to either:

• submit their whistleblowing report directly to the third party, which will handle it according to the service agreement, or
• report directly to their employer company.

According to the guidelines, whistleblowing reports are recommended to be submitted and processed in a written form through an IT platform to ensure confidentiality and prevent data breaches. Alternatively, if a report is made verbally, it can be made via phone, voicemail or a face-to-face meeting (which should be scheduled within a reasonable timeframe) and should be adequately recorded and documented. It is likely that ANAC will publish the final version before the end of the year, albeit no significant changes are expected compared to the current draft.

Whistleblowing - Milan Court rules on the burden of proof reversal

The Milan Labour Court has for the first time applied Article 17(2) of Legislative Decree 24/2023, giving full effect to the new whistleblower protection mechanism. In cases of dismissal following a whistleblowing report, it is now up to the employer to prove that the measure is based on legitimate and independent reasons, unrelated to the report. In this case, the judge fully applied the principle of reversal of the burden of proof, i.e. once a close temporal link between the report and the dismissal is established, the employer must prove the legitimacy of their action. Employers should be reviewing internal policies and providing HR training to reflect this new case law that strengthens whistleblower protection and also ensure thorough documentation of disciplinary reasons.

Fixed-term contracts - extension of individual grounds until 31 December 2026

Under the conversion law of Decree 95/2025, parties now have until 31 December 2026 (extended from 31 December 2025) to individually specify the grounds for extending a fixed-term contract beyond 12 months, up to a maximum of 24 months, where no collective bargaining provisions apply. This extension also covers temporary agency work. Contract templates and HR procedures should be updated with this extension and ensure the proper identification and formalisation of individual grounds is reflected in fixed-term contracts that exceed 12 months.

AI Act and employment law updates

The Government recently approved a new law on AI (Law No. 132/2025) which entered into force on 10 October 2025. The law, reflecting the EU's AI Act (Regulation (EU) 2024/1689), consists of 28 articles and addresses AI development across multiple sectors including labour. The Law introduces specific safeguards for the management of employee selection, evaluation, and monitoring processes using AI systems. It establishes transparency obligations for employers, the right to information for employees, and the need for impact assessments to prevent algorithmic discrimination. The Law also establishes a National Observatory on the impact of AI on work, with the aim of maximising the benefits and mitigating the risks arising from the use of AI systems in the workplace alongside promoting training for workers and employers in this field.

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

Netherlands

Implementation of the EU Pay Transparency Directive delayed

The implementation of the EU Pay Transparency Directive into Dutch legislation has been postponed until 1 January 2027, instead of the original deadline of 7 June 2026. Subsequently, employers with 150 or more employees will be required to meet reporting obligations for the first time in 2027, rather than 2026. For employers with 100-149 employees, the first reporting deadline remains in 2031.

Key changes under the forthcoming legislation aimed at enhancing pay transparency and addressing pay inequality in the workplace will consist of, among others:

• the obligation to include salary ranges in job advertisements;
• a prohibition on asking candidates about their salary history during the recruitment process;
• mandatory reporting on pay disparities (for companies with more than 100 employees);
• the right of employees to request information on individual and average pay levels by gender and for equivalent work; and
• pay structures that are based on objective criteria.

Whistleblower Protection Act update

This Act entered into force in February 2023. On 10 July 2025 the outgoing Minister informed the House of Representatives that, after receiving significant critique, the regulation of anonymous reporting would no longer be implemented by way of a general administrative order (AMvB). Instead, regulation of anonymous reporting will be included in the legislative proposal aimed to improve the enforcement role of the House for Whistleblowers (this is expected in Q2 2026).

Please contact our team in the Netherlands for further details.

Singapore

Conclusion of public consultation on the Workplace Fairness Act (WFA) second bill

On 19 September 2025, the Ministry of Manpower concluded its public consultation on the WFA second bill. The consultation paper sought feedback on the proposed procedural rights and processes for workplace fairness claims, including expanding the Employment Claims Tribunal’s (ECT) jurisdiction to hear workplace fairness claims up to S$250,000, while the limit for other claims remains at S$20,000 (or S$30,000 for union-assisted claims). This second bill is expected to be tabled in Parliament at the end of 2025, building on the WFA passed in January 2025, and is expected to be the second of two bills to fully enact Singapore's first anti-workplace discrimination legislation, with the first bill having been passed on 8 January 2025.

Non-Compete Breach Possible Beyond Named Competitors

In Centricore v ATT Systems, former employees coordinated their resignations and launched a rival business. Although the non-compete clause stated that employees should not engage in competitive activities with named competitors after leaving the company, the Court upheld the clause and interpreted it disjunctively. The Court treated the list of competitors as a separate part of the clause and determined that the restriction also applied to businesses of a similar nature, even if they were not listed as competitors. This case underscores the importance of precise drafting in non-compete clauses and highlights their potential scope, as they can still bind employees even when specific competitors are not named.

Employees may bring civil claims after ECT action

In Goh Hui En Rebecca v IG Asia, an employee filed a civil claim in the High Court seeking outstanding bonuses and incentives, as well as damages for defamation and negligence, after successfully claiming wrongful dismissal against the employer in the ECT. The Court ruled that additional claims arising from the same set of facts or events can be pursued in other forums, as long as they are made in good faith and are reasonable. This case serves as a reminder to employers that further litigation following the resolution of an ECT proceeding should be factored into assessments of potential exposure and litigation risk.

Please contact our team in Singapore for any further detail.

Spain

Independent Whistleblower Protection Authority now operational

From 1 September 2025, the Independent Whistleblower Protection Authority (AAI) has been operational, marking a critical milestone for companies required to establish an Internal Reporting System (SII) under Spain’s Whistleblowing Directive transposition. These entities now have a short window, until 1 November 2025, to notify the AAI of the appointment of the individual or body responsible for the internal reporting channel. While the online platform for registering is not yet available, the AAI anticipates it will be operational soon. We outline the key points to consider when making this appointment here.

It is important to act now as non-compliance with this law can result in significant penalties with fines of up to €1 million for companies, and up to €300,000 for individuals, in addition to other sanctions.

EU Work-life Balance Directive – extending parental leave

The Royal Decree-Law 9/2025 introduces significant changes to parental leave, aligning Spanish legislation with the EU Work-Life Balance Directive. Effective from 31 July 2025, parental leave is extended from 16 to 19 weeks per parent, or 32 weeks for single-parent families. The first six weeks are mandatory and must be taken consecutively. The following 11 weeks can be taken flexibly but must be used within 12 months of the child’s birth. Additionally, there is an extended two-week period of paid, non-transferable parental leave, or four weeks for single-parent families, which can be used until the child turns eight.

While the 17 weeks of parental leave during the first 12 months applies from 1 August 2025, the two-week extended parental leave is retroactive for those with babies born from 2 August 2024. However, applications for this extended leave will be accepted starting 1 January 2026.

During the leave, parents will receive financial assistance equivalent to 100% of the regulatory contribution base, covered by Social Security. This assistance applies to the full 19 weeks of extended parental leave (32 weeks for single parent families) with companies having the option to supplement the benefit up to the amount of gross remuneration.

The Supreme Court rules on compensation limits for unfair dismissal and compliance with international standards

On 16 July 2025, the Supreme Court confirmed that compensation for unfair dismissal cannot exceed the limits set by Article 56 of the Workers' Statute. The ruling emphasised that these compensation limits comply with international standards, specifically ILO Convention 158 and Article 24 of the European Social Charter, which only require that compensation be "adequate." The Court clarified that these international standards do not have direct effect within the Spanish legal system, meaning judges cannot modify the legal compensation amounts. Additionally, the Court noted that decisions by the European Committee of Social Rights are not binding on Spanish courts, leaving their application to the discretion of legislators or collective bargaining agreements.

Please contact our team in Spain for further detail.

DIFC

Significant change for DIFC employment claims

A new Practice Direction was issued from the DIFC Courts with respect to employment claims in force from 9 October 2025. In short:

• Confidentiality of proceedings. Employment cases before the DIFC Court of First Instance will default to private hearings, with final judgments published in anonymised form (unless full publication is deemed necessary in the interests of justice).
• Adverse costs orders. As a general rule each party will bear its own legal costs in employment disputes. The Court may, however, make an adverse cost order in cases of unreasonable conduct, bad faith, or vexatious proceedings.
• Fee waivers and reductions. The Registrar now has discretion upon application to waive, reduce, or cap filing fees based on the claimant’s financial means, case complexity, and the interests of justice. Instalment payments may also be permitted where hardship is demonstrated.

Landmark DIFC ruling on enforceability of UAE-law restrictive covenants

In AES Middle East Insurance Broker LLC & Ors v GSB Capital Ltd, the DIFC Court’s first “Team Move” dispute to final judgment, confirmed that non-solicitation covenants governed by UAE federal law can be enforced in the DIFC Courts. This resolves previous uncertainty and is a significant development in business protection litigation. Although the covenants were valid, AES failed to prove any substantial breach or causative loss. The Court also clarified that LinkedIn connections and WhatsApp contacts are not inherently confidential unless tied to protected sources. All claims of inducement, conspiracy, misuse of confidential information, and vicarious liability were dismissed. We provide key insights on this judgment here.

ADGM

Landmark ADGM arbitration ruling

In the cases of Mathonnet v Modus Operations LLC and Ayotte v Modus Operations LLC, the ADGM Court of First Instance ruled that arbitration clauses in executive service agreements are enforceable for employment disputes. The Claimants argued that ADGM Employment Regulations and compensation rules implied disputes must go to court, invalidating arbitration clauses. The Court disagreed, stating the rules are procedural and do not exclude arbitration. The arbitration clauses were upheld, and the Court stayed proceedings in favour of arbitration under s.16 of the Arbitration Regulations 2015, awarding costs to the employer. This confirms that well-drafted arbitration clauses in employment contracts will be enforced by ADGM Courts. Employers should ensure arbitration provisions in employment agreements are clear and enforceable to avoid jurisdictional challenges.

Please contact our team in the Middle East for further detail.