International Employment Law Alert – October 2026

England

The ET should not have rejected Next’s material factor defence – paying warehouse operatives more than retail staff for recruitment and retention was a legitimate aim driven by market forces. The EAT has found that the ET wrongly categorised Next’s aim as a cost-saving, rather than focussing on the fact that paying a higher market rate to warehouse operatives was necessary for recruitment and retention. It did not matter that Next could have afforded to pay retail staff at the same higher level but chose not to do so. The claim is brought by 3,540 retail sales consultants, whose work had been found to be of equal value to that of warehouse operatives at Next's Yorkshire distribution centres. Retail staff challenged Next's material factor defence under section 69 of the Equality Act 2010, arguing that Next's aim was "costs only". The EAT held this was wrong in law: on the Tribunal's own findings, Next needed to pay the market rate for warehouse work because of recruitment and retention needs specific to that role, not gender, and an aim that was not rendered illegitimate simply because the Respondent could have afforded to pay the Claimants more. This decision is set against the backdrop of the government’s consultation on equal pay and pay discrimination, which acknowledges the challenges with these claims. We are preparing a response to the consultation to highlight the issues we have seen in practice and the potential implications of the government’s proposals. (Next Retail Limited and Next Distribution Limited v Thandi & ors [2026])

You can also read our Employment Law Alerts that cover the recent cases and developments in the UK that employers need to know about over this quarter.

Belgium

Private Investigation Act - employer compliance looming. The Belgian Private Investigations Act, which entered into force on 16 December 2024, significantly changes the legal framework applicable to internal workplace investigations. Given the broad definition of "private investigation activities", not only dedicated investigation teams, but also HR departments conducting investigations into employee misconduct, may fall within the scope of the legislation.

The Act introduces a number of important compliance requirements, including licensing obligations, governance and training requirements, rules governing investigative measures (such as employee interviews), data protection obligations, and the need to establish clear internal investigation procedures through a policy.

Companies have until 16 December 2026 to implement the required internal regulations.

The law does not impose a specific format. Such regulations may be included in a flexible internal company policy, provided the employer can demonstrate that employees were properly informed (e.g., through an acknowledgment of receipt, a general email, publication on the intranet, etc.).

As of 16 December 2026, employers that have not adopted such a regulation will no longer be permitted to conduct private investigations of their employees, and risk the nullity and inadmissibility of any findings or investigative actions.

New working time registration obligation on the horizon. Draft Belgian legislation would introduce a general obligation for employers to record employees’ daily and weekly working time, with entry into force currently envisaged for 1 January 2027, subject to a transitional period until 31 March 2027.

Under the proposed framework, employers would remain free to choose the technology used to record working time. Badge systems, apps, timesheets or dedicated software could all be used, provided they allow the actual hours worked to be established objectively. A traditional clock-in/clock-out system would not necessarily be required: recording deviations from a normal work schedule may suffice, as long as the employee's actual working time can be objectively reconstructed. By contrast, systems that merely presume working time based on a theoretical schedule would not meet the proposed requirements. Working time records would need to be retained for five years. Exemptions would apply to employees whose working time is not predetermined, or measured, or is largely self-determined, i.e. managerial/trust positions (based on actual role, not title), sales representatives, home/teleworkers, and mobile staff working mainly off-site.

The legislation remains in draft form. On 30 September 2026, the Belgian National Labour Council, which brings together representatives of employers and employees, issued a highly divided opinion on the proposed working time recording framework. Employer representatives opposed the introduction of a general recording obligation due to the associated administrative burden and costs, while employee representatives supported the reform and called for stricter recording requirements, stronger enforcement mechanisms and effective sanctions.

Employers may wish to check whether their existing time-tracking practices would meet these requirements and identify which employee groups fall within or outside of the scope of this proposed legislation.

New Criminal Code and Social Criminal Code amendments now in force. The new Belgian Criminal Code and several amendments to the Social Criminal Code entered into force on 1 September 2026, with four developments particularly relevant to corporate governance and HR.

1. The former mutual exclusivity rule has been abolished: both the company and the individuals involved may now be held criminally liable for the same offence, increasing personal exposure for directors and management.
2. The traditional perpetrator/accomplice distinction has been replaced by a broader concept of criminal participation. Directors can now face liability not only for directly committing an offence, but also for knowingly contributing to or facilitating it through action or omission.
3. The Social Criminal Code amendments widen the available sanctions to include probation, community service and pecuniary penalties (set by reference to the benefit expected from or obtained through the offence).
4. Criminal fines, administrative fines and alternative sanctions generally cannot be combined, but for the most serious (Level 4) offences, a criminal fine may now be imposed alongside an alternative sanction.

Please contact our team in Belgium for further details.

France

French Finance Bill 2027 - overhaul of the tax and social treatment of severance payments. On 1 October 2026, the French Government tabled before the National Assembly a draft Finance Bill (PLF) and a draft Social Security Financing Bill (PLFSS) for 2027, which will materially reform the tax and social security regime applicable to severance payments, aligning the exemption threshold on a single annual social security ceiling (PASS), i.e. €48,060 for 2026.

The new regime is intended to capture all sums paid in connection with termination of an employment contract, including amounts paid pursuant to a settlement agreement, and is likely to weigh heavily on ongoing and future negotiations.
At this stage, this is in draft and strongly criticised by practitioners on both the employee and employer side, so may still be amended before final adoption.

EU PTD Transposition. A bill has been presented to the Council of Ministers on 10 September. For now, the bill has not yet been presented to the Parliament for debate. Progressive entry into force is expected between late 2026 and 1 January 2028.

Please contact our team in France for further detail.

Germany

Plans for major employment reforms on working time and the EU Pay Transparency Directive (EU PTD) have been further delayed. The employment law reforms announced by the Federal Government over the summer, particularly regarding working time and time recording, have not yet advanced. At a meeting of the governing coalition on 7 October 2026, the coalition parties reiterated their intention to proceed with the reforms, but no new formal decisions or concrete timetable were announced. Germany has also missed the implementation deadline for the EU PTD, and the draft implementing bill expected by the end of 2026 has not yet been presented by the Government.

Partial incapacity for work will be applicable from 1 January 2028. The introduction of partial incapacity for work has been postponed by one year and is now scheduled to take effect on 1 January 2028.

Employer access to dismissed employees’ job application records. If a dismissal is found invalid, the employer may be required to pay the employee’s remuneration for the period following the dismissal. However, the employee may lose part of this entitlement if they deliberately failed to pursue suitable alternative employment. The Federal Labour Court clarified in its decision of 26 August 2026 (5 AZR 37/25) what information employers can obtain to establish such a failure. Employees must disclose vacancies referred to them by the Federal Employment Agency or Jobcenter, but do not have to proactively provide details of their applications or their outcomes. The employer must first show that a referred vacancy was suitable and reasonable; only then is the employee required to explain their application efforts.

Proposed reform of Germany’s anti-discrimination law (AGG). The German Government is proposing several amendments to the General Equal Treatment Act (AGG), including extending the deadline for asserting discrimination claims from two to four months, establishing a conciliation body at the Federal Anti-Discrimination Agency (Antidiskriminierungsstelle des Bundes) and strengthening the Agency’s involvement in court proceedings. The draft remains under discussion and may still be amended.

Please contact our team in Germany for further detail.

Hong Kong

Guidance on use of agentic AI. The Office of the Privacy Commissioner for Personal Data has published “Protecting Personal Data Privacy in the Use of Agentic AI” to help organisations use agentic AI in compliance with privacy law. It identifies key privacy risks and provides practical recommendations, supported by a security checklist, to address them.

HK 2026 Policy Address. Key employment-related measures suggested under the Policy Address include: (i) relaxing the extension of stay requirements for visas under the Top Talent Pass Scheme for technology start-up talent, (ii) introducing a new visa for non-locals attending short-term training programmes, and (iii) introducing legislation to enhance the process of recovering default mandatory provident fund contributions from employers.

Please contact our team in Hong Kong for further detail.

Ireland

Employment Equality (Gender Pay Gap Information) (Amendment), and Another Matter, Bill. This is expected to be enacted during 2026 and will introduce mandatory gender pay gap reporting via a centralised portal. The portal is already publicly accessible, but use remains voluntary until the amending legislation is enacted. Once in force, employers will be required to register on the portal and publish their gender pay gap reports going forward on an ongoing basis. No immediate action is required beyond monitoring developments, with enactment anticipated in 2026/2027; the bill is listed as a priority on the Government’s Autumn Legislative Programme. Exact timing is still to be determined, but the Department of Children, Disability and Equality, which is responsible for transposing the EU PTD in Ireland, has indicated that implementation will proceed on a phased basis. In contrast, the EU PTD implementing legislation has not been listed as a priority by the Government.

Based on the Department's statements to date, pre-employment pay transparency obligations look likely to be prioritised for earlier transposition. These include providing candidates with pay levels or pay ranges in advance of employment and prohibiting employers from asking prospective employees about their pay history. The Directive's many references to cooperation with employee representatives are of considerable concern in Ireland, where a voluntarist model of industrial relations has traditionally prevailed and formal worker representation structures remain relatively uncommon. We expect some clarification when local legislation issues.

New guidance on the AI use in Tribunal and Court proceedings. The High Court President has published Practice Direction HC 142 on the responsible use of generative AI tools in Irish court proceedings, effective from 1 September 2026. The Court of Appeal has, in parallel, issued Practice Direction CA16, which reflects the High Court’s approach, to ensure continuity between the two. Separately, the Workplace Relations Commission (WRC) has issued its own updated guidance on AI use in tribunal proceedings.

In the civil courts, there is no general obligation to disclose AI use in preparing pleadings or submissions, but an express declaration is required where GenAI has been used to substantively create evidential documents such as affidavits or witness statements. Non-compliance can lead to sanctions including rejection or striking out of court documents (in whole or in part), adverse costs orders, or the expunging of a claim or defence.

Before the WRC, disclosure of AI use remains voluntary across all document types, but parties stay fully responsible for the accuracy of any AI-generated submissions, and misuse may damage a party's credibility in more serious cases.
Although this is only relevant where legal proceedings arise, it would be worth building into practice immediately given both bodies are already applying this guidance.

Minimum wage increase. On 6 October 2026, the Irish government announced that, from 1 January 2027, the national minimum wage will increase by 79 cents to €14.94 per hour.

Please contact our team in Ireland for further detail.

Italy

DSARs, email and remote monitoring – Garante sanctions and guidance. On 12 March 2026, the Italian Data Protection Authority (the Garante) fined an insurance company €50,000 following a former employee's complaint about an inadequate response to a data subject access request (DSAR) under Article 15 GDPR. The Garante also ordered full access to the former employee's mailbox and required compliance within 90 days.

The decision gives broader guidance for employers: mailboxes should not be pre-screened or split into "personal" versus "work-related" emails before responding to a DSAR, and full disclosure must be given; trade secrets have only limited scope to restrict Article 15 access rights; and email metadata should generally not be retained beyond 21 days, with longer retention requiring compliance with Article 4 of the Workers' Statute.

In a more recent decision issued on 6 August 2026, the Garante fined an employer €39,000 for failing to properly handle an employee’s request for access to personal data in the context of a disciplinary proceeding.

Note that Garante decisions sit apart from employment court judgments, which often diverge from or adapt them to specific sectors, and these decisions may still be appealed, so a wait-and-see approach before taking material steps is reasonable. However, employers may consider creating or reviewing a DSAR response framework, verifying metadata retention practices, and/or updating privacy notices and policies as needed.

Increased penalties for failure to employ disabled employees. On 3 August 2026, Ministerial Decree No. 100 increased the amounts payable under Italy's mandatory disability quota regime (Law No. 68/1999). This will come into effect from 1 January 2027. The daily partial exemption contribution rises to €44.32 per working day for each disabled employee not hired, and the daily administrative sanction for non-compliance increases from €196.05 to €221.60. Employers should be checking their compliance with the disability quota and review any existing exemptions or arrangements with the Labour Office, in light of this increase.

Renewal of NCBA of Credit Sector. The National Collective Bargaining Agreement (NCBA) of the Credit sector expired on 31 March 2026. Negotiations between the employers’ association and the trade union are still ongoing (no final agreement issued yet). The main points addressed during negotiation concern: (i) an average monthly increase of €518.00, (ii) a reduction of standard working hours from 37 to 35 hours per week and (iii) economic effects backdated to 1 April 2026, so arrears would accrue for every month of negotiation. Parties asked for an extension on timing to negotiate up to December 2026. Meanwhile, the terms and conditions provided by the expired NCBA apply.

New INPS guidelines on sickness leave. In September 2026, the National Social Security Institute (INPS) issued new guidelines which amended the previous rules on medical certificates. In case of medical examination carried out at the doctor’s office, the medical certificate will now also cover the day of illness immediately prior to the date on which the certificate is issued. It is however not possible to backdate the commencement of the sickness absence period beyond this limit. Moreover, the following conditions must be met: (i) the doctor must fill in the date on which the illness started and (ii) the previous day must not be a public holiday and must not fall on a Saturday or Sunday.

Automatic enrolment in supplementary pension funds. From 1 July 2026, newly hired employees entering their first job will have 60 days from the hiring date to make an explicit choice on their TFR (Italy's statutory severance pay) allocation. If no choice is made within this period, automatic enrolment in a supplementary pension scheme will apply. For employees who already had previous employment relationships in the private sector before 1 July 2026, a distinction must be made between:

• individuals who, at the time of hiring, declare that they are enrolled in a supplementary pension scheme fund, wholly or partially, through the allocation of TFR. In such case the 60-day choice mechanism applies; and
• individuals who, at the time of hiring, declare that they have not previously joined a supplementary pension fund, wholly or partially, by the allocation of TFR. In this scenario, automatic enrolment does not apply and the TFR remains with the employer/INPS Treasury Fund.
• Fixed-term contracts of less than 60 days are excluded.

Please contact our team in Italy for further detail.

Netherlands

Implementation of the European Pay Transparency Directive delayed. The Dutch implementation of the Pay Transparency Directive is unlikely to take effect on 1 January 2027 as previously planned. This is because the House of Representatives has scheduled the parliamentary debate on the legislative proposal for implementation in December 2026 and January 2027. It remains important to keep preparing as we do not expect a significant delay, and preparation will take considerable time regardless.

Transition period for the Provision of Personnel (Accreditation) Act. On 1 January 2027, the Provision of Personnel (Accreditation) Act (PoPA) will enter into force, with enforcement of the accreditation requirement taking effect from 1 January 2028. From that date, only accredited parties will be permitted to provide workers in the Netherlands, and hirers may only engage accredited parties. Employers may qualify as a "lender" under PoPA if they make workers available to another party in the Netherlands for payment, where that work is performed under the other party's direction and supervision. Where there is any doubt as to whether PoPA applies, employers should assess their position as soon as possible: registration for the transitional provisions is only open from 1 November to 31 December 2026 (inclusive), and applications for first accreditation can only be submitted between 1 May and 30 June 2027 (inclusive). Please contact our team in the Netherlands if you require help with a quick assessment of applicability.

Consultation on the legislative proposal for the Self-Employed Persons Act. On 1 October 2026, the Dutch government opened a public consultation on the legislative proposal for the Self-Employed Persons Act (Zelfstandigenwet). The proposal aims to (i) give self-employed persons and those engaging them more clarity, (ii) tackle pseudo self-employment (schijnzelfstandigheid), and (iii) give genuinely self-employed workers the recognition they deserve. Most notably, it introduces a self-employment assessment and a working relationship assessment, intended to clarify in advance whether a worker qualifies as self-employed or as an employee. The consultation closes on 29 October 2026. We are closely monitoring relevant developments.

We will be providing practical insights into the latest developments that matter most to employers in the Netherlands on Tuesday 3 November 2026. You can register here.

Please contact our team in the Netherlands for further detail.

People's Republic of China

Shanghai's Local Sick-Leave Pay Policy reverts to the national baseline. On 15 August 2026, Shanghai’s local policy that previously established a seniority-based sick-leave pay framework, Hu Lao Bao Fa [1995] No. 83, expired and was not renewed. As a result, from 16 August 2026, there is no longer a mandatory local calculation method for sick-leave pay in Shanghai, and the determination of sick-leave pay reverts to the national baseline under Lao Bu Fa [1995] No. 309: sick-leave pay may be paid below the local minimum wage but must not be lower than 80% of the local minimum wage. In practice, employers in Shanghai should review their current company policies, employment contracts and collective agreements on sick-leave pay to determine whether they can apply the 80% minimum-wage standard going forward, while ensuring that any existing contractual or policy commitments are not breached.

Please contact our team in the People's Republic of China for further detail.

Singapore

Efforts to attract asset management talent to Singapore. The Monetary Authority of Singapore (MAS) has announced a suite of measures to attract asset management talent into Singapore and strengthen its competitive position. Further details are expected to be released in the first half of 2027. The measures include:

• A tax exemption for profit-related returns earned from the provision of fund management services to qualifying funds;
• A hedge fund investment programme for the government to co-invest alongside qualifying hedge fund managers; and
• An immigration track, specific to global leaders and senior investment professionals.

We provide further insights on this proposal here.

An employee dismissed without any reasons stated succeeds in wrongful dismissal claim. In the first instance employment tribunal decision of JJF v JJG [2026] SGECT 9, an employee dismissed from employment without any reasons stated, and who failed to prove his allegation of discrimination, nevertheless succeeded in a statutory wrongful dismissal claim. The tribunal reasoned that discrimination allegations aside, given the employment record – which involved confirmation of probation, a modest pay raise and year-end bonus, and continued work – it was more likely than not that the situation fell within the statutory description: “dismissed without just cause or excuse". This cements a growing divide between the statutory wrongful dismissal test (which is emerging as a reasons-based inquiry, not determined only by contractual compliance) and the common law wrongful dismissal test (where the predominant inquiry is on compliance with contractual terms). We provide further insights on this case here.

Please contact our team in Singapore for further detail.

Spain

EU Transparent and Predictable Working Conditions Directive: Royal Decree published. On 15 September 2026 Royal Decree 723/2026 was published transposing the EU Directive on transparency and predictable working conditions and will entail a significant increase in the amount of information that employers must provide workers. This Royal Decree will enter into force on 5 October 2026.

Among other developments, the Royal Decree substantially expands the minimum content of the contractual information to be provided, incorporating matters relating to the organisation of working time, remuneration, algorithmic decision-making systems, equality plans, protocols on the prevention of harassment, measures aimed at ensuring the genuine and effective equality of LGBTI people and certain procedures relating to changes to, or termination of, the employment relationship.

The Royal Decree also lays down new requirements regarding the form and timing of the provision of this information, as well as specific rules for employment relationships already in force.

Further details on the implications for employers and the measures we recommend adopting to ensure compliance are available here.

EU Pay Transparency Directive: draft Royal Decree published. The last draft was published on 3 August 2026 by the Ministry of Labour and Social Economy. Public consultation closed on 24 August 2026, and the draft has not yet been approved, so changes remain possible. We are monitoring for the final approved text, which we expect to be published soon.

Draft Royal Decree on working time registration: approval delayed to September 2026. The draft Royal Decree introducing mandatory digital daily working time registration has been delayed with the Ministries of Labour and Economy agreeing to postpone approval to September 2026 to redraft the text accordingly. There have not been updates so far and we are monitoring the final approved text.

Recent Supreme Court judgments:

• Validity of private settlement agreement in the context of a termination: The case turned on whether a settlement agreement signed on the same day as the dismissal — acknowledging unfair dismissal and offering compensation below the statutory amount, subject to later ratification before the conciliation body — was effective from signature or only upon conciliation. The Court declared that the dismissal was unfair and that the employer was obliged to pay the difference between the sum offered and the statutory amount. The court clarified the requirements for a full waiver: (i) a clear and sufficiently detailed breakdown of the amounts being settled; (ii) actual payment or a clear intention to pay those amounts; (iii) a time gap between the dismissal and the signing of the settlement agreement (not simultaneous); (iv) consent that is free of defects; (v) where a lower amount is agreed, it must reflect a genuine negotiated settlement and not a generic waiver of rights; and (vi) referral to administrative conciliation does not render the agreement’s extinguishing effect conditional.
• Overlapping of public holidays with weekends and vacation time and its compensation: Spanish courts treat weekly rest and public holidays as distinct, autonomous rights with different functions. As a result, when a public holiday falls on what would otherwise be a weekly rest day, it will generally give rise to separate compensation rather than being absorbed into that rest day. This case law, initially developed for shift workers, has now been extended to employees with fixed weekly rest days. However, this compensation duty is independent of annual working-time compliance, and it does not apply where the "rest day" in question has been redistributed elsewhere in the year and does not extend to holidays falling within calendar-day vacation periods that exceed legal minimums. The 75% statutory surcharge applies only where the employee had to work on the bank holiday, not merely where it coincided with a non-working day. Any recognised compensation must generally be taken promptly, with retroactive effect limited to the non-time-barred period.

Please contact our team in Spain for further detail.

UAE

Middle East – workforce planning and employee safety amid regional escalation. Recent developments in the region demonstrate the importance of employers maintaining robust workforce contingency measures and regularly reviewing their response plans. While many employers in the UAE have spent considerable time developing protocols and business continuity arrangements since the conflict began earlier this year, businesses operating in Saudi Arabia may now wish to revisit or implement similar measures in light of the evolving security landscape. Although employment laws in the UAE and Saudi Arabia do not prescribe specific requirements such as mandatory remote working, travel restrictions or employee evacuations, employers should continue to consider their broader health and safety obligations and duty of care towards employees. In practice, this may involve reviewing travel policies, assessing whether flexible or remote working arrangements are appropriate, establishing clear communication protocols, considering contingency plans for workforce disruption, and ensuring that appropriate support is available to employees affected by regional developments. The key legal and operational consideration is whether employers have taken reasonable and proportionate steps to identify and manage foreseeable risks based on the information available at the time. A proactive, well-documented and regularly reviewed approach can help organisations protect their workforce while maintaining business continuity during a period of continued uncertainty.

We are available to assist employers with reviewing workforce contingency plans, remote working arrangements, travel policies and other employment-related considerations arising from regional developments.

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