Germany. Federal Labour Court (BAG) invalidates blanket garden leave clauses
Netherlands. EU Pay Transparency Directive - "delayed, but clean implementation" expected.
Singapore. Implied term of mutual trust and confidence recognised in employment contracts
Spain. Whistleblowing transposition - notification deadline looms
England
Employment Rights Act 2025
Implementing legislation has been published to bring key provisions of the Employment Rights Act 2025 into force. From 6 April 2026, the Employment Rights Act 2025 (Commencement No. 2 and Transitional and Saving Provisions) (Amendment) Regulations 2026 (SI 2026/323), effect the introduction of sexual harassment as a qualifying disclosure, double the potential protective award for failure to collectively consult, and introduce obligations on employers to keep records of workers' annual leave. Alongside this, the Employment Rights Act 2025 (Commencement No. 3 and Transitional Provisions) Regulations 2026 commence sections 10 and 13 of the ERA 2025 (relating to sick pay and policies). Separate amendment regulations also remove the waiting period for statutory sick pay (SSP), making it payable from the first day of sickness absence and to remove the lower earnings limit for SSP eligibility from 6 April 2026. In addition, the Employment Rights Act 2025 (Enforcement) (Consequential Amendments) Regulations 2026 (SI 2026/302) and the Police and Criminal Evidence Act 1984 (Application to Enforcement Officers) Regulations 2026 (SI 2026/303) were made on 16 March 2026, and came into force on 7 April 2026. These regulations will enable the Fair Work Agency to carry out enforcement actions with effect from 7 April 2026.
In a bite-sized series of videos, our employment team unpacks the key reforms under the Employment Rights Act 2025, with practical takeaways to help you prioritise and prepare. You can watch and subscribe to these here.
Read our recent Employment Law Alert covering recent cases and developments in the UK.
Belgium
Draft labour law legislation
On 3 February 2026, the Belgian government introduced a draft bill proposing a range of reforms to employment legislation. The draft bill was further amended on 11 March 2026. The entry into force of most provisions is currently envisaged for 1 June 2026. The proposal forms part of a broader effort to update Belgium's labour law framework and would, if adopted, introduce the following changes:
Increased flexibility in work schedule regulations: Employers would be able to include a general working time framework in the Work Regulations, rather than listing all applicable full-time work schedules within the company.
The reduction of minimum weekly working time for part-time workers: Minimum working time would be set at one tenth, instead of one third, of the working time of a comparable full-time employee within the company.
The liberalisation of night work: All employees would be allowed to perform night work between 8 pm and 6 am, whereas such work is currently prohibited in principle.
A cap on maximum statutory notice periods: For newly hired employees, the maximum notice period would be limited to 53 weeks.
New rules on sickness leave and pay
From 1 January 2026, Belgian employers must introduce new sickness absence rules, including a formal contact procedure with employees on sick leave (to be included in the Work Regulations), and an assessment of work capacity after eight weeks' absence. Employment may be terminated for medical force majeure after six months' uninterrupted sickness (if no reintegration process is ongoing). "No medical certificate days" are reduced from three to two, with small employers allowed to ban them entirely via Work Regulations. The relapse period for sick pay is extended to eight weeks, obligations are eased for partial work resumption, and employees on a reintegration track may face benefit sanctions if they miss two medical appointments without valid reason.
Implementation of EU Pay Transparency Directive
The EU Pay Transparency Directive has not yet been transposed in the private sector; social partners are negotiating at National Labour Council level. A transposition of the Directive in Belgium by 7 June 2026 is rather unlikely, even though the Directive has already been transposed, or is in the process of being transposed (at least partially), in the public sector in certain Belgian regions.
Draft Act of 10 February 2026
On 10 February 2026, Belgium proposed a reform of voluntary overtime, implementing a structural quota of 360 hours per year (450 in HORECA) that can be worked without justification and without compensatory rest, outside the internal working time limit but within the EU 48‑hour average over a four‑month reference period. Of these 360 hours, 240 are exempt from tax and social security and paid without overtime premium, while 120 are fully taxable and attract an overtime premium once normal limits are exceeded. The regime applies in all sectors, is in principle reserved to full‑time workers, and only allows part‑timers to perform voluntary overtime in limited circumstances, subject to a prior written annual agreement. The new rules are expected to take effect from 1 June 2026.
Draft Act of 23 February 2026
On 23 February 2026, Belgium proposed introducing a trial period to employment contracts. The draft bill reduces the notice period to one week during this initial six‑month period, allowing either party to terminate the contract by giving one week's notice. In practice, the first six months of the contract will again operate as a trial period, and the same one‑week notice will also apply where the employee gives counter‑notice during these first six months. These new provisions will apply to all employment contracts starting from the entry into force of the Act, i.e. the first day of the second month following its publication in the Belgian Official Gazette.
Please contact our team in Belgium for further details.
France
EU Pay Transparency Directive - Draft law
A draft law transposing the EU Pay Transparency Directive has been circulated to the French social partners.
The draft law confirms that the current gender equality index is intended to be replaced by seven pay‑transparency indicators for companies with at least 50 employees, with updated reporting information and corrective measures. Where an unjustified pay gap for the same work or work of equal value (7^th^ indicator) of at least 5% is identified, employers would face a structured escalation process, potentially involving a pre-assessment phase, a joint pay assessment, and binding corrective measures adopted by collective agreement or, failing that, unilateral decision. The draft law also introduces a new employee right to pay information, amends the definition of work of equal value to include work conditions and soft skills, and tightens recruitment transparency rules (pay ranges in job ads, ban on salary‑history questions).
It however appears unlikely that France will meet the 7 June 2026 transposition deadline set by the Directive. Based on the current state of discussions, it appears more realistic that transposition in France will take place in the last quarter of 2026, measures expected to come into force in early 2027.
HR Data retention guidance - CNIL update
On 2 April 2026, the French data protection authority (the CNIL), published an updated reference framework on retention periods for personal data used in human resources management. This document is designed as an operational tool for organisations processing employee and candidate data. It clarifies how long HR data may be kept in active databases and, where relevant, in intermediate archives, by distinguishing between legally mandatory retention periods and retention periods recommended by the CNIL.
The framework covers a wide range of HR activities, including recruitment, personnel administration, payroll, working time monitoring, workplace security, professional vehicles, collective labour relations, occupational accidents, litigation management and whistleblowing systems. It provides benchmarks to help employers align their data retention practices with the principles of data minimisation and storage limitation under the GDPR, while taking into account obligations arising from French labour, social security, and tax law.
Please contact our team in France for further detail.
Germany
EU AI Act implementation
On 11 February 2026, the Federal Government presented a draft law, the KI Market Surveillance and Innovation Promotion Act - KI‑MIG, implementing the EU AI Act at national level. The draft designates the Federal Network Agency (Bundesnetzagentur) as the central AI supervisory, notifying and coordination authority. The Bill aims at a lean, innovation‑friendly enforcement framework and includes measures such as an AI service desk and regulatory sandboxes. Entry into force is expected ahead of the main application of the EU AI Act in August 2026.
No works council election for app/AI organisations
The next regular works council elections are scheduled for spring 2026. In digital, decentralised platform organisations and AI-supported management systems, the typical prerequisites for an independent business establishment are often lacking. Employees are provided with apps or AI tools that take over many tasks, such as shift planning, job assignment, communication, and reporting sickness, without any human management functions "on site". You can find out more in this article written by Dr Sascha Morgenroth and Jasper Hertle.
Federal Labour Court (BAG) invalidates blanket garden leave clauses
In a decision dated 25 March 2026, the BAG ruled that standard‑form contractual clauses permitting employers to automatically place employees on garden leave upon termination are ineffective. The Court held that termination alone does not justify removing an employee from active employment during their notice period; instead, any garden leave must be supported by case‑specific reasons reflecting a genuine employer interest. While the full decision has not yet been published, employers should already review and revise existing garden leave clauses, to ensure that garden leave clauses are enforceable.
Please contact our team in Germany for further detail.
Hong Kong
Expanded "continuous contract" definition
On 18 January 2026, the working-hours threshold for a "continuous contract" under the Employment Ordinance was lowered. As a result, more part-time and casual workers will come under the statutory protection net and gain access to more labour benefits. Previously, an employee had to work at least 18 hours per week for four consecutive weeks to be considered being employed under a "continuous contract". Under the new rule, an employee will be regarded as such if they have been employed for four consecutive weeks and have either: (i) worked at least 17 hours per week; or (ii) where they worked less than 17 hours in any week, worked at least 68 hours in that week and the three preceding weeks.
Government Budget 2026-27: employment highlights
On 25 February 2026, Hong Kong Financial Secretary Paul Chan delivered the Government's 2026-27 Budget. Key employment-related measures include: (i) promoting employment through additional funding for the Re-employment Allowance Pilot Scheme and the Employment Programme for the Elderly and Middle-aged; and (ii) continuing efforts to attract Mainland and overseas talent to Hong Kong through various talent admission schemes.
Please contact our team in Hong Kong for further detail.
Ireland
EU Pay Transparency Directive implementation
With the June 2026 deadline for implementing the EU Pay Transparency Directive fast approaching, pressure is mounting for the Irish Government to publish the long-awaited Pay Transparency Bill. The first step came in January 2025 with the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024 proposing two key measures; requiring salary ranges in job adverts and banning questions about pay history. While Ireland already mandates gender pay gap reporting for employers with over 50 staff, including data on mean and median hourly pay of fulltime, part-time and temporary male and female employees, reasons for pay gaps, and measures to address them, the reporting requirements of the new Directive go further. It introduces a requirement to report pay gaps by "categories of workers", meaning employees performing the same work or work of equal value. This will require employers to analyse pay structures at a more detailed level than currently mandated. For employers with 150 workers or more the first reports (including 2026 pay data) are due by 7 June 2027. Under the Directive, employees will also gain the right to access average pay information, broken down by gender, for colleagues doing the same or equivalent work.
While it has not yet been confirmed, indications from relevant Government departments suggest that a pragmatic approach may be taken, with employers not being penalised for failing to have all elements of the Directive in place immediately upon the transposition deadline. This is particularly relevant in a context where the effectiveness of employer preparation will depend, in part, on the availability of official guidance and national toolkits which are unlikely to be finalised until closer to, or even after, the transposition deadline.
Worthy of note is the fact that the Directive mandates joint pay assessments where gender pay gaps of 5% or more are identified in any worker category and cannot be justified by objective, gender-neutral factors or remedied within six months. These assessments must be conducted in cooperation with worker representatives.
Retirement age
Ireland's Employment (Contractual Retirement Ages) Bill 2025 has now been signed into law, but it has not yet been commenced as the required ministerial order has not been issued. This is to allow the Workplace Relations Commission to issue guidelines on how the new laws will be interpreted in practice. This legislation, once in force, will allow (but not compel), an employee to stay in employment until the State Pension Age of 66. The overall objective of the Bill is to provide additional protection, specifically for those employees who do not consent to retire at a contractual retirement age set below the state pensionable age.
Collective Bargaining
The Department of Enterprise Trade and Employment has launched Ireland's Action Plan to promote Collective Bargaining 2026-2030. The Action Plan fulfils Ireland's obligations under the EU Adequate Minimum Wages Directive which requires Member States with collective bargaining coverage below 80 per cent to establish a framework of enabling conditions and publish an action plan. Ireland's industrial relations framework has long been characterised by its voluntarist tradition, whereby employers are not legally required to recognise trade unions for collective bargaining purposes. The Action Plan whilst introducing targeted measures to encourage greater collective bargaining coverage, appears unlikely to dislodge Ireland's voluntarist collective bargaining system.
Please contact our team in Ireland for further detail.
Italy
EU Pay Transparency Directive implementation
Italy is making headway on implementing the EU Pay Transparency Directive, with a draft Legislative Decree currently under parliamentary review. The Italian approach closely mirrors the EU rules, while also incorporating local practices. the Decree proposes the following:
Job comparisons for equal work will mainly rely on national collective agreement (CCNL) classifications, with employer frameworks as a gender-neutral tool (to be confirmed in final guidance and practice).
The Ministry of Labour may issue further guidance by the end of 2026 on how to assess work of equal value.
For hiring, employers must disclose pay or pay ranges in job adverts and are banned from asking about salary history.
Employees will have the right to request average pay data by gender, with employers required to respond within two months; companies with 100 or more staff may also publish this information proactively, such as on an internal intranet.
Detailed gender pay gap reporting will be phased in for employers with 100 or more employees-starting with those over 150 staff by June 2027, and those with 100-149 by June 2031.
If a uniform pay policy applies across a group, pay gap data can be reported at the national level.
Notably, if an unjustified pay gap of 5% or more is found in any worker category, a joint assessment with worker representatives is triggered.
The final decree or future regulations are expected to clarify penalties for non-compliance, which may include administrative fines.
Gender Pay Report
As of 1 March 2026, employers can fill in and submit the mandatory biennial report on the pay of male and female employees related to years 2024-2025, with a hard deadline of 30 April 2026, via the Ministry of Labour's online portal. The obligation applies to public and private employers with more than 50 employees, while employers with fewer than 50 employees may submit the report on a voluntary basis often recommended in practice since the submission of the report grants the company the same incentives, including a reduction in social security contributions, as well as in certain public funding/tender contexts. Foreign-headquartered companies must file only if they have one or more Italian sites/units that collectively exceed 50 employees, in which case a single report covers all Italian employees. Companies that have already submitted the gender pay report may either submit a new report or amend the report previously submitted available on the government portal. Non-compliance can trigger labour inspectorate action and administrative sanctions. If the breach persists beyond 12 months, companies may be sanctioned with a one-year suspension of contribution benefits. False or materially incomplete reporting can also be sanctioned with a fine ranging between Euro 1,000.00 and Euro 5,000.00.
Please contact our team in Italy for further detail.
Netherlands
EU Pay Transparency Directive - "clean implementation" expected
The Netherlands is moving towards a straightforward implementation of the EU Pay Transparency Directive, with a slightly amended legislative proposal sent to the Council of State's Advisory Division in January 2026. The updated proposal clarifies key definitions and, crucially, provides detailed guidance on how to determine organisation size for reporting obligations. This is particularly important for companies hovering around the 100-employee threshold and for employers with a large, flexible workforce or many posted workers. Under the new rules, an employer must count all employees, including posted workers employed during the previous calendar year, using full-time equivalent (FTE) calculations rather than simple headcount. Part-year employment is counted proportionally. The final proposal is expected to be submitted to the House of Representatives in the second quarter of 2026.
Modernising legislation governing restrictive covenants
Nearly two years after the initial consultation closed, the legislative proposal to restrict the use of non-compete, relationship and anti-poaching clauses in employment agreements is expected to be submitted to the House of Representatives in Q2 2026. The proposal will likely have been amended since the consultation period. One anticipated provision is that a non-compete clause will be void unless the employee earns at least 1.5 times the modal income (which, in 2026, is expected to be €72,000 gross for a full-time position).
Scope of 20% bonus cap to narrow after Parliamentary greenlight
In January 2026, the House of Representatives approved an amendment to narrow the scope of the Dutch bonus cap. The Senate still has to vote on the proposal, but should it be adopted then the 20% bonus cap will only be applicable to so-called 'identified staff' (i.e., those whose actions materially influence the firm's risk profile). The narrowed scope would also apply in relation to a number of other bonus rules for example, in relation to retention payments. We are closely monitoring the ongoing discussions in the Senate.
Please contact our team in the Netherlands for further detail.
People's Republic of China
Amendments to the Measures of Beijing on Implementation of the PRC Trade Union Law
The amended Measures were released on 27 March 2026 and will come into force on 1 May 2026, introducing the following two key points:
- The amended Measures detail the rules regarding the participation in trade unions of dispatched workers and non-standard platform workers, such as delivery riders, livestreamers, and freelance drivers; and require the relevant authorities, in conjunction with trade unions, to guide platform companies in standardising employment practices and to facilitate negotiations on matters such as remuneration structure, order allocation and occupational protection, thereby safeguarding the rights and interests of non-standard platform workers.
- The amended Measures further stipulate that where a company unilaterally terminates an employee's employment contract, it must notify the company's trade union of the reasons five working days in advance. Where no trade union has yet been established, the company must notify the higher level trade union.
Please contact our team in the People's Republic of China for further detail.
Singapore
Implied term of mutual trust and confidence in employment contracts
In Prashant Mudgal v SAP Asia Pte Ltd, the Singapore High Court affirmed that the implied term of mutual trust and confidence exists in employment contracts. This is a significant development as it comes on the back of earlier decisions casting doubt on the implied term's existence. The implied term requires employers not to conduct themselves in a manner calculated to destroy or seriously damage the employment relationship without reasonable and proper cause. However, the term does not go so far as to fetter an employer's contractual right to terminate employment. On the facts, the employer breached the implied term by placing the claimant on a pre-ordained performance improvement plan, having already decided to remove him. Employers should therefore ensure that performance improvement plans are genuinely remedial and properly documented. We provide further insights on this case here.
New ONE Pass (AI and Tech) track for foreigners
The Ministry of Manpower has announced the introduction of a new ONE Pass (AI and Tech) track in January 2027, aimed at attracting top talent in technologies like AI and quantum computing. This will replace a previous pass that stands outside the usual immigration framework, simplifying the regime. Like the existing ONE Pass (meant for top talent across all sectors), this new track is expected to offer eligible tech experts a five-year renewable stay in Singapore, passes for family members, and the ability to work for multiple employers at a time. While the existing ONE Pass regime requires applicants to have a minimum S$30,000 monthly salary or outstanding achievements, the new AI and Tech track would allow the monthly salary threshold to be met in part through non-cash components such as shares or options, albeit still subject to a minimum S$22,500 monthly salary. Eligibility will also depend on the applicant's experience and the prospective employer's profile.
Review of mandatory retrenchment notifications
Alongside an ongoing review of Singapore's primary employment statute, the Ministry of Manpower is also considering whether to require employers to give advance notice of retrenchments. Under the current framework, employers with at least 10 employees must notify the Ministry within 5 working days after employees are notified of their retrenchment. Trade unions have lobbied to mandate advance notifications, to facilitate earlier intervention and support. Employers and the Minister for Manpower have highlighted concerns around confidentiality, operational flexibility, and shortened timelines for redeployment discussions. Findings are expected in the second half of 2026.Please contact our team in Singapore for further detail.
Spain
Whistleblowing transposition - notification deadline looms.
The Independent Whistleblowing Protection authority (AIPI) has kicked off the two-month window for companies to comply with Royal Decree 1101/2024 by notifying the appointment of their internal information system manager. This requirement applies to all companies with over 50 employees, as well as others specified by law, regardless of size. The notification period runs from 10 February to 10 April 2026. To assist, the AIPI has released an official form and a detailed manual outlining the necessary documentation and procedures for appointing or removing the responsible person. Companies must act promptly to ensure compliance and avoid penalties.
Increase in statutory minimum wage
In February 2026, the Government approved a 3.1% increase in the statutory minimum wage, raising it to a total of €17,094 per year, which equates to €1,221 in 14 instalments. This increase will have retroactive effect from 1 January 2026 and will only impact employees whose total annual salary is below the specified amount. The update to the minimum wage only affects those employees whose total annual salary was less than €17,094.
Please contact our team in Spain for further detail.
DIFC / ADGM
UAE - managing workforce risk in a heightened geopolitical environment
In the current regional environment during the US/Israel-Iran conflict, employers should adopt a proactive and documented approach to employee safety and workforce management. While UAE law does not impose prescriptive obligations (such as mandatory remote working or evacuation), the key legal risk lies in whether the employer has acted reasonably and proportionately based on the information available at the time and fulfilled their duty of care. In practice, this may involve active monitoring of developments, ongoing risk assessment, and clear internal governance and decision-making processes. Many multinational employers are adopting flexible working arrangements where feasible as a risk mitigation measure. We are available to assist with guiding UAE employers through this difficult period.
DIFC data protection - private right of action introduced
Amendments to the DIFC Data Protection Law No. 5 of 2020 (introduced by DIFC Law Amendment Law No. 1 of 2025) introduced a private right of action. Individuals (including employees, contractors and applicants) may now bring claims directly before the DIFC Courts for breaches of the law. This marks a shift from a primarily regulatory enforcement model to one that includes direct litigation risk. For employers, this is particularly relevant given the volume and sensitivity of employee data processed (e.g. HR records, investigations, payroll and performance data). We are aware of at least one claim recently filed before the DIFC Courts in the employment context, although no judgment has been issued to date. This highlights the increased risk of claims arising in practice. Employers should review internal data protection practices, including access controls, data sharing procedures and cybersecurity measures.
DIFC Courts - first employee compensation award for victimisation
The DIFC Court of First Instance has, for the first time, awarded compensation to an employee for victimisation under the DIFC Employment Law. The Court found that the employer unlawfully victimised the employee after she brought harassment proceedings, including placing her on unpaid leave and subsequently terminating her employment. The employee was awarded compensation equivalent to three months' pay, and the Court also issued a declaration of unlawful treatment. In reaching its decision, the Court emphasised the seriousness of retaliatory conduct linked to a "protected act" and was critical of the employer's actions, noting they were in direct contravention of the law. This decision highlights the increasing willingness of the DIFC Courts to enforce anti-discrimination and victimisation protections, and to award meaningful compensation. Employers should ensure that workplace decisions are carefully managed and documented, particularly where an employee has raised complaints or initiated proceedings, and that appropriate policies and training are in place.
Please contact our team in the Middle East for further detail.
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