EUROPEAN EMPLOYMENT LAW UPDATE

2017 Edition INTRODUCTION

An organisation’s workforce is one of its most important assets. However, for organisations with a pan-European presence, keeping up to date with changes in legislation and best practice can seem like a never-ending task.

This is especially true in the of employment law, where change can be fast paced. With Britain’s impending from the , and the consideration of more general questions about the EU’s future direction, more changes are expected in the coming years.

We have collaborated with a number of leading law firms across to create this guide to European labour law changes. In it, we summarise recent amendments to labour laws across Europe and highlight the key reforms being introduced in 2017.

In a number of jurisdictions, a similar theme of changing employment legislation can be seen, as many countries have implemented recent EU Directives such as the directive on seconding employees abroad. Many countries have looked to increase protections for whistleblowers, update provisions, and make new attempts to help employees better balance their private and professional lives. The Guide also outlines key reforms in some of the traditional areas of employment law including increases to the minimum wage in several jurisdictions, and updates to the law on unfair and collective dismissal.

Contact details for all of the contributor firms are provided within the Guide, so please do get in touch if you have any questions.

This brochure contains a summary of general principles of law. It is not a substitute for specific legal advice, which should be sought in relation to any application of the subject matter of this brochure.

European Employment Law Update 2 CONTENTS

Austria 4 18 5 19 Bosnia & 6 20 7 21 8 22 Czech 9 23 10 24 11 25 12 26 13 27 14 28 15 UK 29 Ireland 16 Key Contacts 30 17

3 European Employment Law Update

▪▪ Business meetings. The MSchG and the VKG were ▪▪ Seminars. amended by several provisions related to parental part-time work. ▪▪ Trade fairs and similar events. Most importantly, where parents ▪▪ Conferences. request to work part-time, their working time must be reduced by The exemptions apply in these at least 20%, but this is subject to a Thomas Angermair situations as long as no further minimum working time of 12 hours Partner services may be provided by the per week. Furthermore, parents T +43 1 533 4795 24 posted employees. may now claim their right to parental E [email protected] leave at a later point in time, rather According to the LSD-BG, than immediately upon birth or employees who usually conduct their after the partner’s parental leave. work in Austria but are employed Certain provisions of the MSchG with a foreign entity that is not concerning the prohibition on work subject to an Austrian collective for (expectant) mothers as well bargaining agreement will still be as termination protection are now entitled to the same minimum applicable to freelance employees as wage as comparable employees of well. comparable Austrian businesses. Similarly, foreign employees who are The Austrian Supreme Court also Employees posted to Austria posted to Austria are entitled to the came to a significant decision entitled to comparable wages same minimum wage as Austrian pertaining to lump sum overtime The new Act against the Dumping of employees of Austrian businesses arrangements, holding that the Wage and Social Services (Lohn-und for the entire duration of the posting. entitlement of employees to an Sozialdumping-Bekämpfungsgesetz, agreed overtime lump sum is to LSD-BG) replaces the old regulations The employer will need to notify be suspended during the period of contained in the Employment Law Austrian public authorities of the parental part-time employment. Harmonisation Act with effect as of posting in advance. Additionally, 1 2017. certain documents, such as the employment agreement, payslips, The LSD-BG aims to ensure and records of working time will compliance with minimum standards need to be available at the place of of employment for both domestic work. employment, cross-border employee leasing, and posting of employees. There are substantial civil penalties ‘Posting’ describes the situation for employers who fail to meet the where one or more workers, for requirements of the LSD-BG regime. a limited period, carry out their work in the territory of a state Parental part-time different than the one in which According to the Maternity they normally work. Posting differs Protection Act (Mutterschutzgesetz, from employee leasing (leasing MSchG) as well as the Paternity describes the situation where an Leave Act (Väter-Karenzgesetz, employee is integrated into an VKG), parents are entitled to work Austrian undertaking and is subject part-time until the child’s seventh to its functional supervision and birthday or until the child starts instructions). school, if the employee has been employed for at least three years There are several exemptions from and the business unit employs more the LSD-BG, namely short-term than 20 employees. The purpose of postings for various purposes such this system is to reconcile family and as: working life for both parents.

European Employment Law Update 4 BELGIUM

social security contributions for Payment of the occupational the first six hires. This so-called pension is now obligatory when the “target group reduction” had employee takes up his/her statutory previously applied only to the first pension. five employees. With respect to the first employee, if hired between Case-law update regarding 1 January 2016 and 31 December manifestly unreasonable Philippe De Wulf 2020, no normal employer social dismissal Partner security contributions are due (for an Since 1 2014, employees T +32 2 426 14 14 indefinite period). engaged under an open-ended E [email protected] employment contract may claim New rules on occupational damages, ranging from between pension schemes three and 17 weeks’ salary, if On 1 January 2016, a new Act the dismissal is “manifestly entered into force, reshaping the unreasonable”. A “manifestly landscape of occupational pension unreasonable” dismissal is a schemes in Belgium. Amongst other dismissal: things, this modified the return ▪▪ For reasons unrelated to guarantee and linked payment of the the employee’s capability or pension capital to the taking up of conduct, or to the operational the employee’s legal pension. requirements of the undertaking. Social security contributions have been reduced The employer must guarantee ▪▪ That would never have been To enhance the competitiveness a minimum return on certain so decided by a normal and of the Belgian economy, there contributions to the occupational reasonable employer. has been a reduction in the social pension plan, replacing the old return security contributions paid by guarantee rates. A flexible interest So far, few judgments have been employers. Previously, these were rate has been introduced from 1 delivered on these rules. In cases approximately 35% for white-collar January 2016, which is linked to where the dismissal was considered employees and around 40% for blue- the ten-year bond return over the to be justified, the courts highlighted collar employees (including sector past 24 months and limited to a that they were only permitted to contributions). minimum interest rate of 1.75% and undertake a “marginal check” of the a maximum interest rate of 3.75%. grounds relied on by the employer. The so-called “Tax Shift Act” For 2017, the return guarantee will Only if the decision to dismiss would has, from 1 April 2016, reduced be equal to the minimum of 1.75% not have been taken by any other the basic rate to 30%, further (for both employer and employee normal and reasonable employer dropping to 25% from 1 January contributions). placed in the same circumstances, 2018. On top of this basic rate, would the dismissal be unjustified. In additional employer social security Another significant reform is that, the cases where the dismissal was contributions and contributions that from 1 January 2016, as a general declared manifestly unreasonable, the employer must pay arising from rule the occupational pension damages awarded were equal to sector level agreements remain capital can only be paid out when eight or ten weeks’ salary. due. Therefore, on average, the total the employee actually takes up rate of social security contributions his/her legal pension (legal [early] that an employer must pay on its retirement). However, if the Pension employees’ salaries will be just over Scheme Rules so provide, the 30%. Employee contributions remain employee can also ask for this fixed at 13.07% of gross salary. payment from the moment he/she meets the conditions to take up To encourage employers to hire his/her legal (early) pension while personnel, Belgian law provides continuing to work. that they can benefit from 20 quarterly reductions in employer

5 European Employment Law Update

the employer rejects the trade employment termination. union’s initiative for a collective ▪▪ Opposite to the complex bargaining agreement or refuses disciplinary proceedings under to engage with the union, the the previous law, before employer cannot adopt an termination for breach of work Employment Rulebook. duty or discipline, an employer ▪▪ Exceptions allowing fixed term is now obliged to deliver to the Goran Babic employment exceeding 24 employee a written notice stating Partner, Attorney-at-Law, months are set as follows: the grounds for termination, in cooperation with together with the facts and –– in case of longer absence of Karanovic & Nikolic evidence and must allow a another employee – until his/ T +387 51 212 104 waiting period of eight days for her return, E goran.babic the employee to respond. @karanovic-nikolic.com –– in case of a specific project – ▪▪ Under the new provisions on until the project completion, collective bargaining agreements, but not longer than 60 these agreements can now be months, and concluded for a maximum period –– with an unemployed person of three years. with less than five years until retirement – until retirement Although these provisions aim In 2016, employment legislation conditions are met. to create more flexible solutions activity in Bosnia and Herzegovina ▪▪ Minimum period of annual in employment relations and a has been marked by the publication leave is increased from 18 to 20 more competitive labour market, of Labour Laws in both its entities, working days. the fact that no general collective the Federation of Bosnia and agreements in the RS have yet been Herzegovina (Federation of BIH) and ▪▪ Maximum number of overtime signed creates a lot difficulties and the Republic of Srpska (RS). hours per employee is set to uncertainties in the implementation four hours a day and ten hours of the new Labour Law. Once The Labour Law of the Federation a week. On a yearly basis, the collective bargaining process of BIH from 2015 (discussed in the maximum overtime has been between the social partners ends, 2016 edition of this publication), has increased from 150 to 180 hours we may become more aware of the been challenged on the grounds per calendar year, unless a overall effects of the new law on the of constitutionality of its adoption collective agreement allows up to employment market in the RS. procedure. In order to rectify the 230 hours. mistake in procedure, it has been, ▪▪ Verification of an employee’s once again, formally adopted signature on a consensual and published in 2016, without termination agreement is now amendments. necessary for this agreement to become legally binding. New Labour Law in the RS For the RS, the new Labour Law ▪▪ The law provides a list of introduces significant changes grounds for dismissal. As well in the overall relations between as the grounds existing in the employer and employees, reflecting previous law, underperformance employers’ requests to modernise is now explicitly listed. To rely the law and harmonise it with EU on this ground, an employer regulations. The main changes are must first provide appropriate as follows: instructions for the employee on how to improve. If the employee ▪▪ Employers with more than 15 continues to underperform employees must have either upon the expiry of a reasonable collective bargaining agreements improvement period, the or Employment Rulebooks. If employer may proceed with the

European Employment Law Update 6 CROATIA

change has raised further issues scale groups of undertakings for about the treatment and necessity the purposes of informing and of providing detailed reasons on consulting employees). Practical termination of that kind, giving implementation of the procedures rise to a certain degree of legal set by the Act on European Works uncertainty. Councils (Official Gazette 93/2014), and prescribed pursuant to the Saša Divjak Regulations on hours of work By-laws on the procedure in election Senior Partner Amendments made to the provisions of employees’ representatives from T +385 1 539 1600 regulating working hours and the Croatia to the Special Negotiating E [email protected] schedule of working hours have Body and the European Works opened up possibilities of a more Council (Official Gazette No. 89/15), flexible organisation of work have resulted in a significantly processes; e.g. the introduction of increased number of employers “bank of hours” offers employers organising elections for employees’ and employees the possibility of representatives. stepping out of the legal framework, resolving the issue of the increased working arrangement in a more flexible way, in accordance with business needs. In practice, this will The most recent changes to the allow parties to deal with an Labour Act introduced in August extended work week, regulating the 2014 have been more or less total number of working hours during successfully implemented. No the period of uneven distribution of changes to the Labour Act were working time with no restrictions, as made this year, so we comment long as the total number of working below on the implementation in hours (including overtime work) does practice in the most notable areas. not exceed the average of 45 hours a week within a four-month period Redundancy termination – (or six months, if so agreed under a procedural issues collective bargaining agreement). With respect to the procedural issues regarding redundancy Employee representation termination, the minimisation of Although no changes were certain elements of the employers’ introduced to the Labour Act, (in practice) non-essential obligations some changes were made and e.g. abandoning the need to practical issues raised in the field of produce a Redundancy Plan as well influence and co-determination of as the limitation of the influence employees in transnational bodies of state bodies on reorganisation – more specifically in the light of procedures have jointly resulted in the establishment of European less burdensome and less time- Works Councils, and the procedure consuming obligations on the for the election of members to employers. the Special Negotiation Body, in line with the application of the The Labour Act has not yet resulted EWC Directive (Directive 2009/38/ in any material changes to current EC of the European Parliament practice in respect of termination and of the Council as of 6 May procedure, but it has raised some 2009 on the establishment of issues following the introduction a European Works Council or a of a new termination reason: non- procedure in Community-scale fulfilment during a trial period. This undertakings and Community-

7 European Employment Law Update CYPRUS

Yiannis Karamanolis Senior Associate T +357 22 777000 E [email protected]

Notice of termination to End of special contributions absentees due to incapacity of private sector employees, The Termination of Employment pensioners, and the self- Law was amended on 25 July 2016 employed in relation to provisions on absence For the fiscal years between 2012 due to incapacity. This followed and 2016, a special contribution was the case of an employee who was automatically imposed where gross dismissed upon her return to work, monthly earnings exceeded €2,500, after an extended period of absence as a means of quick tax collection while receiving cancer treatment. in response to the fiscal crisis. As of 1 January 2017, the In response, the House of special contributions have ended. Representatives amended the relevant legal provisions regarding Amendment of the Social the notice of termination that Insurance Law must be given when employees The Social Insurance Law was are absent due to incapacity. amended on 2 December 2015, in In particular, pursuant to the relation to maternity allowance, to amendment, if an employee is away the effect that, in case of a childbirth from work on grounds of incapacity that leads to the birth of more than for up to 12 months, the employer one child, maternity allowance shall may not give a notice of termination be paid to the mother for a period of of employment at any time between 18 weeks plus four weeks for each the first day of absence until the last additional child. day of absence plus a period of time equal to a quarter of the total period of absence. In the past, the law only prohibited employers from giving such a notice for up to six months from the first day of absence.

European Employment Law Update 8

bruises, haematoma, and swelling. response to a rising injury rate and, An amendment to the Regulation especially, the number of casualties took effect on 21 July 2016 and at construction sites. For example, remedied this by reducing the points if the contracting party fails to have granted to the pain suffered as a a work safety plan drafted before result of certain types of injuries. The work at the site commences or fails evaluation methodology applicable to update it during the construction Václav Rovenský to social disadvantage for individual process, it is subject to penalties of Partner damage to health resulting from up to CZK 400,000 (approximately T +420 224 103 316 some occupational diseases was €14,800). If the contractor fails E [email protected] also adjusted. to duly cooperate with a work safety coordinator, it is subject to Increased support for employers penalties of up to CZK 1,000,000 who provide protected jobs to (approximately €37,000). disabled employees Act No. 435/2004 Coll. applies to the support of Czech state grants intended to help employ people with disabilities. Employers can establish jobs (so-called “protected jobs”) for which they can receive a subsidy Higher minimum wage from the state, provided that they The Labour Code imposes a comply with certain requirements. minimum wage for every employee Additional cash support (a subsidy for their weekly work (40 hours per to cover wage costs) is granted if week). As of 1 January 2016, the more than one-half of the particular minimum wage was CZK 9,900 employer’s employees are disabled (approximately €366) per month employees in protected jobs. An and the minimum hourly wage CZK amendment effective as of 1 April 58.70 (approximately €2.10). As 2016 increased the subsidies to of 1 January 2017, the minimum such employers up to CZK 8,800 wage will be raised to CZK 11,000 (approximately €325). The subsidy (approximately €407) per month and for employing health-disadvantaged the minimum hourly wage to CZK 66 people continues to amount to (approximately €2.40) and shall apply CZK 5,000 (approximately €185). to all employees. Employers will then have the opportunity to apply for a greater Compensation for work injuries increase of the subsidy in order to and occupational diseases cover the higher costs resulting from Not long after Governmental employing disabled people, up to the Regulation No. 276/2015 Coll. amount of CZK 2,700 (approximately (in effect as of 26 October 2015) €100). imposed new rules and policies applicable to labour-related Amendment to Labour Inspection compensation for pain and social Act disadvantages, unjust differences In 2016, there were three were revealed in relation to the point amendments to the Labour evaluation system for pain in certain Inspection Act (Act No. 251/2005 types of health damage resulting Coll.). One of the amendments from work injuries; for example, too introduced new work safety- many points were allotted to some related offences and administrative rather minor injuries, such as falls delinquencies, especially in relation without fractures which result only in to the construction industry, in

9 European Employment Law Update DENMARK

Finance Act for 2012, which meant The approach of the EU Commission that individual employee shares has led to the appointment of and call options for or subscription a committee – consisting of rights to shares granted as part of an representatives from the social employment have since then been parties of the labour market and the taxed as ordinary salary income due Ministry of Employment – for the at marginal rates of up to 56%. purpose of updating the Holiday Henriette Stakemann Act and aligning it with Denmark’s Attorney-at-Law, Partner However, on 12 May 2016, the international obligations. D +45 36 94 12 28 Danish Parliament passed a bill to E [email protected] reintroduce a similar tax-privileged equity compensation (Section 7P).

Under Section 7P, the point of taxation is postponed until the shares are sold by the employee, at which point any realised gains will be taxed as share income (at a maximum of 42%). The company is free to decide whether all or only some of their employees will be Repeal of the 70-year compulsory offered the opportunity to acquire termination rule employee shares. The 70-year rule set forth in the the Danish Act on Prohibition As was the case under the previous against Discrimination in respect of rules, the company which is giving Employment has been repealed to the equity compensation will not the effect that as of 1 January 2016, have a right to deduct the equity individual employment agreements compensation expense. should no longer provide for the automatic termination of the The new provision applies to employment relationship due to the agreements on equity compensation employee having reached the age of entered into on 1 July 2016 or 70. later and to agreements amended after this date. However, certain Provisions in employment contracts conditions must be met for Section on automatic termination should 7P to apply. have been deleted by 31 January 2016. If the employment contracts Radical amendments to the have still not been amended, there is Danish Holiday Act expected a risk that the employer is in breach On 27 April 2015, the EU of the provisions of the Danish Act commission stated that the Danish on Employment Contracts which, in Holiday Act was not in compliance the worst case, may entail payment with the EU Working Time Directive. of compensation. The EU Commission found that the Danish Holiday Act, in regard to Reintroducing tax-privileged the disparity between the holiday equity compensation qualifying year (1 January – 31 Until November 2011, companies December) and the holiday year in were able to pay employees share- which the holiday is taken (1 May – based salaries with significant tax 30 April), is in conflict with the EU privileges (Section 7H). Section 7H Working Time Directive. was repealed as part of the Danish

European Employment Law Update 10 ESTONIA

▪▪ EDCs will have an obligation to is four hours per day. Such a limit lead the parties to a compromise has been difficult to adhere to and will be able to approve especially by IT sector companies settlements. which are required to ensure the ▪▪ Reviewing and processing time constant availability and functioning of applications will be extended of important IT-systems. from 30 days to 45 days. Pirkko-Liis Harkmaa The new bill proposes to remove ▪▪ Existing upper limit of €10,000 on Partner the limitations on on-call hours monetary claims will be removed. T +372 665 1888 for employees whose main task E [email protected] ▪▪ Monetary claims of up to is to ensure operability of critical €3,200 will be settled in written information and communication proceedings. technology services and networks or ensuring of information security. This ▪▪ Similar types of claims will be will be subject to the conditions that: able to be aggregated. ▪▪ It has been agreed in the ▪▪ It will be specified that if the employment contract or collective employee of an Estonian bargaining agreement. employer is based abroad, then any claims should be filed with ▪▪ The overall duration of on-call the EDC in the location of the hours does not exceed 130 hours Proposed New Act for Resolving employer. per 28 calendar days. Employment Disputes ▪▪ The longer on-call hours do not Employment Disputes Committees ▪▪ With the consent of the EDC, pose any health risks for the (EDCs) are bodies which have parties will be able to agree particular employee. existed in parallel to civil courts for to conduct proceedings in a a long time, aiming to be a quicker, language other than Estonian. The amendment also introduces cheaper, and less formal way of ▪▪ Parties will be able to choose to a higher compensation for on-call resolving employment disputes. use mediation rather than regular hours – one-fifth of the employee’s Both employers and employees EDC proceedings. salary. may file claims to the EDC. If a party to the dispute is not happy The new law is supposed to The bill is in Parliament and the with the EDC decision, the same come into force as of 1 July 2017; amendments are likely to be adopted dispute can then be referred to however the bill has not yet reached within the first half of 2017. civil court. The procedural rules Parliament where it would have have become outdated, and so the to pass three readings before final Ministry of Social Affairs has initiated adoption. a new bill aiming to ensure simple, speedy, cheap, and fair out-of-court Changes to limits on on-call hours settlements in employment related for the IT sector disputes. Another recent bill initiated by the Ministry of Social Affairs aims to The most important changes include: offer more flexibility for the IT sector to use on-call hours for certain ▪▪ Procedural rules will be made positions. On-call arrangements more clear and specific (although currently require the agreement remaining less complicated and of both the employer and the formal than the civil court rules). employee and are subject to extra ▪▪ EDCs will acquire powers to compensation of one-tenth of the adjudicate on additional disputes employee’s salary. Due to the need related to employment, such to follow the mandatory limits on as disputes concerning health work and rest hours, the current and safety, and collective maximum number of on-call hours employment relations.

11 European Employment Law Update FINLAND

share of social security Changes in employment contributions. legislation Amendments to the Employment Changes in the Job Alternation Contracts Act are currently under Leave Act consideration. The main purpose of The amended Job Alternation Leave the amendments is to increase the Act came into force on 1 January rate of employment. New legislation JP Alho 2016. Following the amendments, is expected to come into force in Partner an employee is required to have an January 2017. T +358 29 000 6264 employment period of at least 20 E [email protected] years (previously 16 years) in order Under the proposals, the maximum to be entitled to job alternation leave length of the trial period would be and the maximum duration of the job extended from four months to six alternation leave has been reduced months. In addition, the employer to 180 calendar days (previously 360 would be entitled to extend the calendar days). In addition, the total trial period in the case of employee of the job alternation allowance was absence during the trial period due amended so that the full amount for to incapacity or family leave. all employees is currently 70% of the unemployment allowance they In addition, the period during which would be entitled to if they were the obligation to re-hire employees Finnish competitiveness pact unemployed (previously, employees would apply is to be shortened concluded with long work careers were entitled from nine months to four months. The Finnish labour market to higher job alternation allowance). However, if the employment organisations signed the Additionally, it is not possible to relationship lasted for 12 years, the Competitiveness Pact on 14 June divide the job alternation leave into re-hire period would be six months. 2016. The main aim of the Pact is periods anymore. to improve the competitiveness of Additionally, it will be possible to Finnish businesses. Changes in the Annual Holidays enter into a fixed-term employment Act contract with a long-term The labour market organisations will The amended Annual Holidays Act unemployed person without a implement the Competitiveness came into force on 1 April 2016. justified reason for a maximum Pact by negotiating new collective Annual holiday now accumulates period of one year. bargaining agreements containing, for up to 156 days (i.e. six for example, the following months) during a period of family provisions: leave. Previously, annual holiday Retirement reform is expected accumulated during the entire family to come into effect in 2017. It ▪▪ No collective salary increases for leave. The aim of the amendment is anticipated that the general the next year. is to reduce public costs relating to retirement age will be increased ▪▪ An extension to annual family leave. gradually from the current age of working time by 24 hours 63 to 65. The retirement age of (without increasing the salaries Additionally, an employee’s right employees born in or after 1965 will accordingly). to postpone his/her annual holiday be adjusted to take into account the due to incapacity for work has been change in life expectancy. ▪▪ Training opportunities promoting restricted. According to the new Act, employment for employees made an employee is entitled to postpone A new form of early pension is a redundant. holiday days that exceed six holiday years-of-service pension scheme ▪▪ An entitlement to occupational days, if the employee has become intended for individuals who have health care for six months after incapacitated for work due to reached the age of 63 and worked the obligation to work has ended childbirth, illness, or accident during at least 38 years in physically hard when employees are made his/her annual holiday. The restriction work. redundant. applies only to annual holiday ▪▪ A reduction to the employers’ exceeding 24 holiday days.

European Employment Law Update 12 FRANCE

In order to avoid deadlock situations, the legal and case-law provisions if an agreement has been signed concerning the specific working by the employer and by trade time for the executives, employers unions representing less than 50% will still be able to validly conclude of employees, the agreement can individual agreements of working be validated by a vote held among time based on a fixed number of company employees. days per year, provided they: Isabelle Pontal ▪▪ Establish a checklist document These new rules apply from 1 Counsel with the number and the date of January 2017 for agreements T +33 1 45 05 80 08 days or half-days worked. E [email protected] relative to working time, rests, and holidays, and as of 1 September ▪▪ Ensure that workload is 2019 for all other types. compatible with the respect of daily and weekly rest periods. The right to disconnection ▪▪ Organise an annual review with From 1 January 2017, annual the employee to raise the topic negotiation regarding “professional of the employee’s workload equality and life quality” will also (which must be reasonable), their refer to how employees can exercise work organisation, the balance the right to disconnection. The between their professional idea is that the employee should activity and private life, and The major change in French not always be connected to their their remuneration. This review employment law this year has employer by mobile, tablet, or will effectively bridge the gap been the introduction of the Act of laptop. between the agreements. 8 August 2016, also known as the Labour Law. The bill was subject to Rules relating to executives This new provision will secure the various protests and challenges, so The Labour Law also sets out employer’s position on this issue by the government enacted a procedure guidelines for executives who are avoiding future litigation launched to shorten the parliamentary debates subject to a specific working time by executives claiming that they are period and get the legislation based on a fixed number of working entitled to payment for additional passed. days per year. The new legislation hours due to the fact that the adheres to the conditions of validity company-wide agreement is not Key provisions that the French Supreme Court laid compliant. The new Act contains provisions down in several decisions dating including: from 2011. In addition to rules regarding the right to disconnection, ▪▪ Prioritisation of company- the Law deals with: wide agreements over branch agreements, especially in respect ▪▪ Method of evaluation and regular of working time. monitoring by the employer of the employees’ workload. ▪▪ Simplification of the rules of review for collective agreements. ▪▪ Method by which the employer and the employee communicate ▪▪ Consolidated definition of periodically about workload dismissal for economic reasons. to ensure balance between ▪▪ New system to evaluate the professional and personal lives. health of the employees, as well ▪▪ Employee remuneration. as their unfitness. ▪▪ Organisation of work within the The most important feature is the company. generalisation of company-wide majority agreements, which will More importantly, if a company- gradually enter into force over time. wide agreement is not aligned with

13 European Employment Law Update GERMANY

agreements. Businesses of clients leasing. Before the assignment, the that fall under the scope of such individual employee must be named collective bargaining agreements under reference to the respective but are not bound by them may also agreement between the client and extend the maximum assignment the temporary employment agency. period by shop agreements with the works council. A reference in The contract between employer Prof. Dr. Martin Reufels the employment contract to the and the respective employee will be Partner respective collective bargaining considered invalid if the employee T +49 221 20 52 331 agreement will not suffice. However, leasing agreement with the client E [email protected] in the case of companies not subject does not contain such a declaration. to collective bargaining agreements, In this case, an employment the permissible assignment period relationship between the assigned may only be extended to a maximum employee and the client is deemed of 24 months, unless the collective to exist unless the employee bargaining parties explicitly allow an expressly declares that he/she extension by shop agreement that wishes to adhere to the employment exceeds 24 months. contract with the employer.

Equal pay after 9/15 months According to the Equal Pay principle, On 21 October 2016 the German the employee is entitled to the Parliament passed a bill that involves same remuneration as comparable several changes to and amendments employees of the client, unless there of the German Temporary is an applicable collective bargaining Employment Act (AÜG), which take agreement that provides for lower effect on 1 April 2017. Due to the wages. With the new legislation, number of amendments, only the the possibility of deviation from the three main changes introduced by Equal Pay principle by collective the new legislation are outlined bargaining agreements will be below. restricted to a period of no more than nine months of assignment. Maximum period of assignment Previous assignments to the same There will be a maximum period client – regardless of whether the of assignment of 18 months for respective employers are identical – each employee with regard to the have to be taken into account. The same client (the host business). nine-month period may be extended Previous assignments to the same up to 15 months by the collective client – regardless of whether the bargaining parties, provided that respective employers are identical – the collective bargaining agreement have to be included when calculating foresees a progressive remuneration the maximum permissible period adjustment that begins no later than of assignment, unless the period six weeks after the commencement between the assignments exceeds of the assignment. three months. Prohibition of concealed Collective bargaining parties – to temporary employment which the clients but not the Concealed temporary employment temporary employment agencies and will be prohibited, meaning that any their employer’s association belong agreement between employer and – may deviate from this maximum client must explicitly state that the period of assignment by concluding assignment of employees under the their own collective bargaining agreement constitutes personnel

European Employment Law Update 14 HUNGARY

Employment of students administrative penalty that can be Significant changes regarding the imposed upon a natural person who, employment of students in full-time within the framework of organised education entered into force as of employment, among others, 1 September 2016. Students of breaches the regulations relating school cooperative groups could to healthier and safer workplaces; previously fulfill the requirement fails to comply with the obligation Dr. László Pók of personal involvement under an of the registration, investigation, Partner employment relationship. However, documentation, and reporting of T +36 1 472 3000 according to the new rules, in the an accident at work in due time; E [email protected] future such relationships will not fails to comply with the obligation be regarded as employment but as of data disclosure regarding cases special legal relationships, with only of occupational disease or harmful some specific rules of the Labor exposure; or prevents the employee Code applicable. One new feature representative for occupational particularly of note is that one day safety from effectively exercising of paid holiday shall be provided his/her rights. The maximum amount to students for each 13 days of of the penalty is HUF 500,000 work. This was necessary to ensure (approximately €1,555); however it compliance with EU rules regarding may be imposed repeatedly. paid holidays. This may cause an Changes in the Labor Code 8-10% cost increase for those Some important changes regarding who use the services of school the provisions of the Labor Code cooperative groups. (Act I of 2012) have been accepted in 2016. One of the most significant Employees’ representative for changes, from the employers’ point occupational safety of view, is that an amendment to The Labor Safety Act was also the Labor Code has made it possible the subject of amendments in for employers to withdraw a notice 2016. Employers should note of termination in writing within 15 that an employee representative days if the employee informs the for occupational safety must be employer about her pregnancy or elected for all employers with at in regards to receiving treatment least 20 employees. (This threshold related to a human reproduction was 50 employees before the procedure after the giving of the modification.) The provision of the notice. With this new possibility conditions for the election and the of withdrawing a termination conducting of the election will be notice, employers may avoid the the responsibility of the employer. consequences of the unlawful This means that the election of termination of protected employees. an employee representative for occupational safety has become Provisions of Directive 2014/67/ an obligation for a larger number of EU have also been implemented employers. According to the Labor into the Labor Code in respect to Safety Act, the election must be held the rules concerning the posting of at employers where no employee workers within the framework of the representative for occupational provision of services, especially in safety has been elected, by 8 July connection with the administrative 2017, i.e. six months after the new requirements, control measures, and legislation comes into force. the subcontracting liability. The amendment of the Labor Safety Act also introduced an

15 European Employment Law Update IRELAND

new Act brings the Irish legislation employers. An individual is now not in line with the Grounding EU obliged to disclose certain criminal Directive and case law from the convictions which date back seven Court of Justice of the European years or more to a future or current Union as well as case law emanating employer. The Act ensures that from Irish courts and tribunals. only certain convictions arising One further consequence of the from minor offences can become Duncan Inverarity Act is that if fixed term contracts “spent”. The Act brings Ireland Partner are offered post retirement the into line with the practice in other T +3531 649 2401 employer will have to demonstrate Member States of the EU – Ireland E [email protected] evidence of objective justification for was the only EU country without the termination of employment at some form of legislation allowing that point of expiry of the fixed term convictions to become “spent”. The contract. Act is premised on the concept of “forgive and forget” allowing past Industrial relations offenders to move on with their lives The industrial relations landscape in and not be tarnished by a previous Ireland has been particularly active offence. Certain offences will never in 2016, with major industrial action become “spent” however, such having been either taken or proposed as a conviction for a sexual offence by transport workers, teachers, or an offence resulting in a prison Paternity leave and members of Ireland’s Gardaí sentence of greater than 12 months. The Paternity Leave and Benefits (Irish police). Continued unrest is Act 2016 commenced on 1 expected both in the transport sector September 2016 and provides long and the lower paid private sector awaited statutory leave and benefit as the trade unions escalate their for fathers. Up until now Ireland campaigns for pay reform after what had been one of the few member is characterised as years of austerity states without some form of leave (resulting from the financial crisis) for fathers. The Act provides that disproportionately affecting lower a “relevant parent” will be entitled paid workers. There has also been to two continuous weeks’ state an increase in applications under the paid leave in respect of births or Industrial Relations (Amendment) adoptions from September 2016. Act 2015 which provides a Payment will be at the rate of €230 mechanism whereby employers who per week. This is the same as the choose not to engage in collective current rate of maternity benefit. bargaining can be brought before Similar to maternity leave, employers the Labour Court. The Labour Court can top up paternity benefit if they can make a binding determination wish but are under no obligation to in relation to pay and terms and do so. conditions of employment for the workers involved. These Labour Compulsory retirement Court referrals require employers to The Employment Equality benchmark their employees’ terms (Miscellaneous Provisions) Act and conditions of employment 2015 (which came into force at the against industry standards and can beginning of 2016) continues to be quite costly to defend. allow employers to set compulsory retirement ages; however, they Spent convictions must now be objectively justified The Criminal Justice (Spent by a legitimate aim and the means Convictions and Certain Disclosures) of achieving that aim must be Act 2016 changes what individuals proportionate and necessary. The have to reveal about themselves to

European Employment Law Update 16 ITALY

extended, the measures/tax relief Monitoring of employees introduced by the 2016 Financial Act. The Jobs Act amended Article 4 of the Italian Workers’ Statute (Law no. Secondment of employees to 300/70) with the aim of balancing Italy a greater use of technology at With the enactment of Legislative workplace with the employees’ Decree no. 136/2016 and rights not to be controlled when Cristina Capitanio implementation of the Directive carrying out their duties. The Partner 2014/67/EC, new regulations apply new provisions contain, among T +39 06478751 to the secondment of employees in others, new rules governing the E [email protected] the EU. These new provisions apply procedures to be followed to obtain to companies established in an EU the authorisation needed – in the Member State that seconds to Italy absence of an agreement with one or more employees, within the the internal works councils – to framework of a service agreement, install video surveillance systems to another company (even within the and other devices potentially able same corporate group) or business to monitor the working activity. In unit, provided that an employment any case such monitoring shall be relationship continues to be in place permissable only for reasons related with the seconded employee. The to the employer’s organisation and legislation also applies to temporary production, safety at work or the Tax benefits in connection with workers staffed by external agencies protection of the employer’s assets. variable salary amounts and welfare established in a Member State plans have been introduced by that send their workers to a user The above authorisations are not the 2016 Financial Act as well as company with a registered office or required in the case of devices confirmed and extended by the a business unit in Italy. In addition, “used by the employee to carry 2017 Financial Act. Furthermore, the Labour Inspections Authority out their activity/duties” as well in 2016 new rules on transnational has confirmed via a circular dated as to devices “used to register secondments to Italy came into 9 January 2017 that the new the employees’ access and force. Monitoring of employees is provisions will also apply, with presence”. This is a significant step currently among the topics of great certain limits, to non-EU companies in liberalising the use of technology interest for employers, following the seconding employees to Italy. in the workplace. Its application in new provisions introduced by the relation to the criteria applicable 2015 Jobs Act. According to the new rules, the in deciding whether a device is seconded employees must be used by the employee to perform Fiscal benefits and welfare plans granted the same terms and his/her work remains, however a The 2016 Financial Act (Law no. conditions of employment that apply controversial point. During 2016 208/2015) applied a favourable tax to employees carrying out similar some preliminary guidelines were regime, within certain limits, to working activities in the place where published on this point by the amounts paid as variable bonuses the secondment is performed. administrative/regulatory authorities connected to the achievement of Furthermore, new obligations in (including the Labour Inspections productivity, efficiency, quality, and terms of advance communication Authority/Data Protection Authority) innovation targets, or as profit as well as increased powers of but more clarity is expected through sharing. The 2016 Financial Act also inspection to the competent labour case law. provided for measures aimed at authorities to verify whether the boosting and extending the range secondment is genuine have Advance information and privacy of benefits eligible for income tax been introduced. In the case of law requirements are to be met relief as well as promoting the role unlawful secondment, the seconded to enable the employer to use of collective bargaining agreements employee will be deemed to be the collected information for any at company level in the definition employed by the host company purposes related to the employment and regulation of tailored welfare which, along with the seconding relationship. schemes. The 2017 Financial Act company, will be subject to serious confirmed, and in certain cases administrative sanctions.

17 European Employment Law Update MACEDONIA

▪▪ Geneva Labour Statistics available if related directly to a Convention of 1985. punishable act endangering their ▪▪ Geneva Rural Workers’ life or the life of a close person, the Organisations Convention of well-being of the general public, 1975. public security, the environment etc. The whistleblower’s personal data Law on Whistleblowers’ is, as a general rule, protected in Veton Qoku Protection accordance with the law on personal Attorney-at-Law, The Law on Whistleblowers’ data protection. in cooperation with Protection (the Law) came into force Karanovic & Nikolic in March 2016. The Law regulates Initial reports regarding the T + 389 2 3223 872 protected whistleblowing, the rights implementation of the Law suggest E veton.qoku@ of whistleblowers, and the actions that even though the Law came into karanovic-nikolic.com and obligations of the institutions or force in October 2015, and has been legal entities related to the protected implemented since March 2016, whistleblowing. institutionalised mechanisms have in practice rarely been implemented, The categories of protected with most institutions and entities whistleblowers include people who failing to appoint responsible are working for the institution or persons for receiving information entity/person to whom they are from whistleblowers, or to enact Collective Bargaining Energy disclosing the information, as well rulebooks for protected internal Agreement as volunteers, interns, or any person whistleblowing, as prescribed by the The Collective Bargaining Energy otherwise engaged within the Law. Agreement entered into force as of institution or entity in question. November 2016. The Agreement aims to implement international The Law introduces three types of labour standards and standardise protected whistleblowing: working conditions across all of ▪▪ Internal whistleblowing, where the branches of the energy sector, the whistleblower reports inside as well as to provide a framework the institution or entity where of rights for employees. Some of they suspect that unlawful or the specifics of the Agreement illegal activity has been or might include upgraded health and safety be committed. measures, following the example set by European law; shortened ▪▪ External whistleblowing, where working hours for employees under the whistleblower makes a report dangerous or harmful conditions to competent state institutions. that might be specific to the sector ▪▪ Public whistleblowing, where the (noise, vibrations, radiation, harmful information is made publically gases, as well as dangers from use available by the whistleblower. of tools, electricity, explosions etc.); more detailed provisions on forced The Law provides for the protection administrative leave; and annual of public whistleblowing, as well as leave recourse provisions. protection of the whistleblower’s personal data and identity. These Accession to Geneva provisions apply generally when the Conventions whistleblower has given information The Government of the Republic of in accordance with the sequences Macedonia adopted a decision for of whistleblowing set out in the Macedonia to accede to the: Law (internal, external and finally – public), though the whistleblower ▪▪ Geneva Night Work Convention may make the information publicly of 1990.

European Employment Law Update 18 MONTENEGRO

and trade unions, the employment of foreigners. Article of Trade Unions and the Union of 66 related to the confirmation by the Free Trade Unions of Montenegro Employment Agency, confirmed the GCBA and extended necessary for the employment of its validity until 30 June 2018. foreigners, which proves that there are no registered unemployed On a related note, the Montenegrin workers in Montenegro qualified to Stefan Lucic Labour Law provides for high- work on jobs for which foreigners Attorney-at-Law, in cooperation level regulation of a number of apply. with Karanovic & Nikolic entitlements (such as the length T +382 20 238 991 of paid leave, amount of salary While Articles 64 and 66 had legal E stefan.lucic@ compensation and salary increase, force, employers contested that karanovic-nikolic.com the conduct of disciplinary these Articles caused a high number proceedings etc.), leaving the of difficulties in the employment of detailed regulation to collective foreigners, especially in the tourism agreements (general collective sector. Therefore, the Montenegrin agreement, branch collective Government decided to approve agreements) and/or employment employers’ requests to delete these agreements. provisions, which ensures easier employment of foreigners. Branch Collective Agreement for The Montenegrin employment and the Construction and Building labour legislative did not introduce Materials Industry any significant changes in 2016. Amendments to this Agreement However, it is notable that the were signed on 22 January 2016, by General Collective Bargaining the Trade Union, the Representative Agreement, concluded in 2014, was Union of Construction, and the extended to remain in place until Building Materials Industry. Notable June 2018. Certain changes were amendments provide that the introduced in the Branch Collective employee is entitled to paid paternity Agreement for the Construction and leave in the case of childbirth, lasting Building Materials Industry and in five working days, which is longer the Branch Collective Agreement for than paid leave provided under Education. The Law on Foreigners, the General Collective Bargaining which regulates employment and Agreement which provides for residency procedures of non- three working days of paid leave. residents in Montenegro, also Additionally, the employer is obliged underwent some changes. to pay severance to employees upon retirement in the amount General Collective Bargaining of four times the minimum net Agreement wages in Montenegro. The previous The Montenegrin General Collective amount was 2.5 times net wages in Bargaining Agreement (GCBA) came Montenegro. into force on 30 March 2014, as a result of bargaining among the Law on foreigners representatives of the Government, Amendments removed the representative trade unions and the provisions found in Articles 64 and Employers’ Union of Montenegro. 66 of this law, which employers had The GCBA was initially valid for 2 objected to. years, and applied to all employers in Montenegro. The disputed Article 64 outlined the limit for issuing temporary residence On 27 June 2016, the Government, and work permits for the seasonal

19 European Employment Law Update NETHERLANDS

client strictly act in accordance good news for employers as this with the contract terms. would mean that those who have entered into a collective agreement In any other case, payroll taxes will would have fewer costs in cases of be due. Penalties for non-compliance business related dismissals. These include interest and a penalty of up changes are scheduled to enter into to 100% of the payroll taxes which force on 1 January 2018. Els de Wind have incorrectly not been deducted. Lawyer Intended change to statutory T +31 20 678 9242 Until 1 January 2018 a transitional transition fee in case of long-term E [email protected] period is in place. Before this date, illness independent contractors and clients Under Dutch law, employees who are to bring their contracts and are ill enjoy dismissal protection practices in line with the amended for a period of two years of illness. legislation. During this period, the tax During the same period they are authorities will not enforce the new entitled to continuation of at least legislation as long as parties act in 70% of their salary. Contractual good faith. Following criticism of the provisions in employment contracts policy, the Dutch government has granting employees more than recently announced that it intends 70% are common. Since 1 July to amend the legislation to make it 2015, employers are required to pay Key Developments from 2016 more flexible in practice. We are still employees who are ill a statutory awaiting the proposal from Dutch transition fee if they are dismissed Changes in the assessment government in this respect. after the two-year period. Following of payroll tax liability for protests from employers, the independent contractors Key Developments for 2017 Dutch Minister of Social Affairs has Until recently, independent proposed that employers be repaid contractors could, under Dutch Intended change to statutory the statutory transition fee paid to tax law, apply for a Declaration of transition fee in cases of employees who are ill for two years Independent Contractor Status business related dismissals or more out of a government fund. (Verklaring arbeidsrelatie, VAR), Under the new dismissal rules, In order to pay for this measure, meaning the client could assume which came into force on 1 July the nationwide social security that the contractor did not qualify 2015, an employee who has been contributions for employers will as an employee for tax purposes employed for at least 24 months be increased. These new rules are and that no payroll taxes needed to and whose employment contract is scheduled to enter into force on 1 be deducted from payments to the terminated or not extended at the January 2018. contractor. In such cases, the Tax employer’s initiative, is in principle Authority could not hold the client entitled to a statutory severance liable for payment of these taxes. payment, called the transition fee. Parties to a collective labour From 1 May 2016, a stricter regime agreement may agree on a similar was introduced, under which clients arrangement as long as the value only do not need to deduct payroll of total compensation to which taxes if: the employee is entitled is at least i. The contract between the at the same level as the statutory contractor and the client is based transition fee to which the employee on a template contract published would have been entitled. The Dutch by the Dutch Tax Authority; or Minister of Social Affairs has recently proposed to drop the requirement ii. The contract drafted by the that the alternative arrangement is contractor and the client was ‘preapproved’ by the Dutch Tax at the same level as the statutory Authority, provided that (in both transition fee for dismissals for situations) the contractor and the business related reasons. This is

European Employment Law Update 20 POLAND

The scope of people unable have to agree a method for to work in arduous working determining the number of hours conditions narrowed taken in performing a commission or According to the European providing services in a contract; and Commission, the previous law, if the contract was not concluded in prohibiting the employment written, electronic or documentary of women in arduous working form, the principal would have to Agnieszka Lisiecka conditions, was an obstacle in confirm, in one of those forms, the Partner ensuring gender equality. After arrangements for confirming the T +48 22 437 8200 the amendment, it only applies number of hours taken in performing E agnieszka.lisiecka@ to women who are pregnant or a commission or providing services. wardynski.com.pl breastfeeding. Otherwise, the contractor would be able to submit, in the form Written confirmation of the type chosen from the above three and of contract and required working in the period up to the payment of conditions remuneration, the number of hours On 1 September 2016, an spent on performing the contract. amendment to the Labour Code came into effect requiring that an Change of the laws on seconded employee must receive a written workers confirmation specifying the parties, The Act on Posting Workers in Withdrawal of the specific-task the type of contract, and the working the Framework of the Provision of contract conditions; and that the workplace Services came into effect on 18 The specific-task employment regulations must be communicated June 2016. The Act implements contract was withdrawn on 22 to the employee before admitting EU legislation and provides rules February 2016. that person to work. Failure to for posting workers to the territory confirm the employment contract of Poland and their protection, as Unification of termination notice concluded with the employee well as monitoring compliance periods in writing before admitting that and cooperating with appropriate Since 22 February 2016, notice person to work will constitute an authorities of other member states. periods for a fixed-term employment offence punishable by a fine of The Act imposes a number of duties contract have been made equal to from PLN 1,000 up to PLN 30,000 on employers, mostly in relation the notice periods for an indefinite- (approximately €6,758). to the State Labour Inspectorate, term employment contract and which has been granted enhanced therefore last two weeks, one Minimum wage for work inspection powers. month, or three months, depending A new minimum wage of PLN 2,000 on the employee’s length of service. (approximately €464) per month applies from 1 January 2017. Limitations on fixed-term contracts Minimum wage for contracts of Under the new rules, a period of mandate employment under a fixed-term Contracts of mandate are employment contract, as well as agreements to perform certain the total of periods of employment work within a specified period, in under fixed-term employment exchange for fixed remuneration. contracts concluded between the From 1 January 2017, the minimum same employer and employee, may hourly wage for workers on a not exceed 33 months, regardless contract of mandate will be PLN 12 of intervals between successive (approximately €2.80). The current contracts. In addition, an employer bill would make it impossible to may conclude no more than three waive the right to remuneration fixed-term employment contracts at the current minimum rate. The with any one employee. parties to an agreement would

21 European Employment Law Update PORTUGAL

Misconstrued employment Bank of hours schemes internships Portugal has in recent years Some companies have been using implemented the possibility of the internships to mask what is, in use of “bank of hours” schemes. reality, an employment relationship. These were particularly important New legislation aiming to prevent to companies as they have enabled such false employment relationships a significant reduction in overtime Nuno Ferreira Morgado will be enacted in 2017. The Public work costs. Partner Prosecutor’s office will bring legal T +351 213 197 471 proceedings against companies The government has now E [email protected] seeking to ensure a judicial announced its intention to prohibit declaration of the misclassification of introducing such schemes by way said internships and the recognition of individual agreements with of the existence of employment employees. In addition there is also contracts. an intention to introduce limitations on the possibility of providing for It was also announced that, in the bank of hours schemes in collective context of these proceedings, bargaining agreements. companies would not be entitled to terminate the internships or to settle with the workers in question. National minimum wage Following years of the bailout Fixed-term employment: programme, the national minimum limitations on hiring wage was increased in 2016 to €530 It is expected that the government per month for full-time workers. It will enact new legislation in 2017 is expected that it will be further concerning fixed-term hiring. The increased to €557 by 2017, €580 by purpose of these measures is to 2018 and €600 by 2019. limit fixed-term hiring, in particular when hiring long-term unemployed Reinstatement of bank holidays workers and workers looking for During the bailout programme, four their first job. bank holidays were suspended. In 2016, these bank holidays were In addition, the government will also fully reinstated. Portuguese workers have the possibility of increasing now have the right to enjoy 14 the employer’s social security bank holidays in addition to the 22 contribution for companies that business days of holidays. do use fixed-term employment contracts. Measures against forced work The government introduced new Collective bargaining legislation extending the liability for The government has announced its employment credits and pecuniary intention to limit the possibility of fines applicable in the context of employment bargaining agreements employment-related administrative lapsing. This will reverse the offence proceedings, to companies legislative changes enacted during that use agency work and/or benefit the bailout programme which led from services rendered by third to the termination of more than 40 parties where such services are collective bargaining agreements. rendered in its premises. The new legislation is expected to come into force in 2017.

European Employment Law Update 22 RUSSIA

abolition of the major institution Job Descriptions) came into force regulating migration issues. The from 1 July 2016. Professional Federal Migration Service (FMS). standards set out the requirements Its functions were transferred to for an employee to hold a position, the Russian Federation Interior and set out a defined job title, Ministry, and since the transfer description of job functions, took place there has been a and requirements for essential Irina Anyukhina personnel reduction in the FMS and knowledge, education, and skills. Partner certain delays in executing regular Generally, they are non-regulatory T +7 495 234 9692 procedures. and are used for example in E [email protected] recruitment procedures and Prohibition on leasing of personnel certification. However, personnel some employers are now legally Since 1 January 2016 leasing required to apply the professional personnel has been generally standards. For example, joint stock prohibited. Leasing personnel is companies and insurance companies defined as work, performed by an have to apply the professional employee (an “assigned employee”) standard of an accountant for at the direction, on behalf, and education and work experience – under the control of an entity (or when employees are hired to jobs individual – the “host company”) that require the provision of certain Legislation changes which is not the formal employer statutory benefits. In October 2016, significant changes of the assigned employee. A new in Russian labour legislation came type of contract was introduced into Higher minimum wage into force. Mandatory deadlines for the Russian legislation: a contract Under the Russian law, there is a salary payments were set out. Now, on provision of personnel. This federal minimum wage, which is salary must be paid by employers contract may be concluded only by applicable to all employers across each half-month not later than the private employment agencies or, Russia. From 1 July 2016, the 15th day after the end of the period in strictly defined cases, by legal minimum wage was increased from for which the salary is due. Further, entities, including foreign ones 6,204 RUR (approximately €96) to the interest rate for a delay in salary (for example, for the provision of 7,500 RUR (approximately €115). As payment has been increased. personnel between affiliated legal of 1 July 2017, there will be another Administrative responsibility for non- entities and legal entities which rise to 7,800 RUR (approximately payment or underpayment of salary are parties to a shareholders’ €120). at a fixed time or for establishment agreement). Private employment of salary at a rate less than the agencies, which have the right to Statutory Minimum Wage Index was provide personnel, must obtain state also increased. accreditation. In addition, there is an exhaustive list of grounds based on The term of legal recourse for which employment agencies may the settlement of an individual provide personnel (for example, employment dispute about non- to replace temporarily absent payment or underpayment of salary employees retaining their workplace and other employee’s entitlements in accordance with the labour was increased to up to one year legislation). (previously, the term was three months). Employees are now also Legislation on intra-group allowed to file a court claim at their secondments is underway but until it place of residence. is adopted, intra-group secondments are generally prohibited. Migration law There was a significant change Professional standards in the migration law with the Professional Standards (Statutory

23 European Employment Law Update SERBIA

▪▪ CBA for Chemistry and Non- filled-in notification form. Employers Metal Industry. are also obliged to submit a certificate from the Central Registry The CBA for Agriculture, Food, of Social Insurance, as proof of Tobacco and Water Management is, change of insurance grounds for for the time being, applicable only seconded employees, within seven to the signatory parties i.e. only to days following the secondment. Jelena Danilovic those employers that are members Senior Associate, of the Union of Employers of Serbia. Other important provisions of the Attorney-at-Law, in cooperation Law include: As for the other two CBAs, their with Karanovic & Nikolic ▪▪ Business trips abroad not transitory provisions note that these T +381 11 3094 427 exceeding 30 days continuously agreements will apply only after E jelena.danilovic@ or 90 days within the calendar the Government enacts a decision karanovic-nikolic.com year are not considered a on extended applicability of such secondment. CBAs to all employers within the respective industry. ▪▪ Secondments cannot exceed 12 months – however, extension is It still remains to be seen whether possible. or not the Government will actually ▪▪ Employees must consent, in render such a decision on any of the written form, to the secondment. New minimum salary above CBAs. A new minimum salary amount has ▪▪ Employers are obliged to execute been adopted at the state level of New Law on Conditions for an annex of the employment RSD 130.00 net per working hour Secondment of Employees contract with the employee, (approximately €1.04 net). The new Abroad regulating the secondment. minimum amount will be in force as The new Law on Conditions for ▪▪ The employer is also obliged to of 1 January 2017 and will last until Secondment of Employees Abroad provide seconded employees 31 December 2017. and their Protection (the Law) is with accommodation and food, applicable in Serbia as of 13 January commuting costs, as well as a All employers need to abide by the 2016. salary that amounts to, at least, new amount and cannot provide the minimum salary applicable in employees a basic salary that is The Law regulates the secondment the country of secondment for below this legal minimum. of employees abroad in a more the duration of the secondment. modern manner compared to the This new amount overrides the previous law. The previous law, previously valid minimum salary that adopted back in 1998, envisaged was in force for the two previous a complicated administrative years, of RSD 121.00 net per procedure before the competent working hour (approximately €0.90 ministry when seconding employees net). abroad, which included an obligation of employers to inform the ministry New branch collective bargaining of planned secondment at least 30 agreements adopted days in advance, by submitting a set Recently, several new branch of required documents. collective bargaining agreements (CBAs) for different industry groups The main characteristic of the have been adopted: new Law is its more relaxed administrative procedure. Employers ▪▪ CBA for Agriculture, Food, are now obliged to notify the Tobacco and Water Management. ministry of secondments at least ▪▪ CBA for Construction and one day before the secondment, by Construction Materials Industry. submitting only one document – a

European Employment Law Update 24 SLOVENIA

of an employment contract. The acknowledgment on the illegality of employee may request the court the employment relationship. Such to establish the existence of the a lawsuit may be filed during or 30 employment relationship for an days after the civil law contract is indefinite period of time. terminated.

In the past year the court has taken In doing so, the court has therefore Beganovic a view that is the opposite of the taken a further step in providing Associate, Karanovic & Nikolic previous court practice in this area. additional security to employees T +386 1 200 9680 who are engaged in a working E jasmina.beganovic@ Until recently the court claimed that process based on civil law contracts. karanovic-nikolic.com it may establish the employment It can be expected that such relationship only in cases when employees will obtain rights from the employee has previously made the employment relationship more a claim that the termination of easily than before. the employment relationship was illegal. It was quite common that the employee would file a lawsuit for establishment of the employment relationship for indefinite periods of time once the civil law contract was Establishment of employment terminated, but the court rejected relationship in the case of a civil this claim as the employee had not law contract previously filed a claim questioning While the Employment Relationship the legality of the termination of the Act itself has not gone through major employment relationship. Therefore amendments in the past year, the the employee’s request for courts have implemented significant establishment of the employment changes regarding the issues which relationship was not rejected due to are not regulated by this Act. substantial reasons, but only due to the procedural reason of failing to In the past few years civil law previously file a separate dismissal- contracts, containing all elements related claim. of the employment relationship, have been very common on the In its more recent decisions, at Slovenian labour market, despite the beginning of 2016, the court efforts of the legislator to prevent took the opposite position and such contracts and to promote stated that the above-described employment contracts, especially requirement of the older court employment contracts for indefinite practice was unreasonable as it periods of time. Civil law contracts resulted in situations in which the represent a burning issue as they employee was obliged to file a normally provide less security than request for finding termination of an employee would receive under the employment relationship to be an employment contract of indefinite illegal, while such an employment duration. For that reason, the law relationship wasn’t even established gives priority to the latter, and sets by the court and as such didn’t out that civil law contracts may formally exist. Contrary to this, in be concluded only in exceptional its recent decisions the court has cases. In the case of a civil law taken the view that the employee contract, which de facto represents may file a lawsuit for establishment employment, the law provides for of the employment relationship the presumption on the existence independently of a request for an

25 European Employment Law Update SPAIN

accruable after such date could be in its judgment of 17 October 2016 accumulated at a rate of 33 days per that the criteria to determine the year of service, up to a maximum of existence of collective dismissal 42 months. – and therefore the need to meet the relevant formal requirements – However, the judgment was must not only be based on the total overruled by the Supreme Court number of workers in the company, Vicente Calle judgment of 18 February 2016, but also on the number of workers Partner which clearly stated that the at each work centre affected by it, T +3491 514 5200 resulting severance compensation provided that there are more than 20 E [email protected] amount could not exceed 720 days’ workers at the work centre. salary, unless a higher amount had been accrued prior to 12 February Until now, Spanish regulations have 2012. not conformed to European Law, and legislative amendments are Annual Employment Policy Plan therefore expected in the short term. for 2016 On 31 August 2016, the Annual Now the country has a new Employment Policy Plan for 2016 government as a result of an alliance was published, establishing the between the conservative party and employment objectives for 2016. one of the new parties in Parliament. Although numerous legislative This Plan defines the active As a result, legislative changes on reforms in labour matters have taken employment policy services and labour law are expected in the short place in recent years (in particular, programs to be carried out by the term as it was part of the alliance the Labour Reform of 2012), new State as a whole and by Regional agreements. legislative norms have been scarce Governments under the framework in the past year due to the political of their authority in this respect, as situation in the country. well as the indicators to be used to evaluate the degree of achievement. Notwithstanding the above, there have been a few major legislative Extension of the Employment changes and court judgments, with Activation Program the most relevant as follows: On 16 April 2016, the Royal Decree- Law extending the Employment Maximum severance Activation Program was published. compensation for unjustified The program was designed for the dismissal long-term unemployed in a situation The Labour Reform of 2012 changed of special need, with family burdens, the system of calculating severance and actively seeking employment. compensation for unjustified It involves the implementation of dismissal, differentiating the period active employment policies in order before and after the Reform, to increase opportunities for people entitling workers to compensation in receipt of financial unemployment of 45 and 33 days’ salary per year benefit amounting to 80% of current respectively, up to a maximum of monthly public income indicator of 720 days. multiple effects (€426) to return to the labour market. In its judgment of 2 February 2016, the Supreme Court ruled New criterion for the assumption that even if the maximum of 720 of collective dismissal days’ severance compensation Following recent European legal was exceeded at 12 February doctrine (ECJ judgment dated 13 2012, the severance compensation May 2015), the Supreme Court ruled

European Employment Law Update 26 SWEDEN

directed to the employer, as well as and promotion; training; salaries alarms communicated through the and other terms of employment; employer’s internal whistleblowing and options for combining work and system. External alarms are those parenthood. directed to a public authority. In contrast to the previous rules There is no requirement that the regarding active measures which Magnus Berterud serious wrongdoing must be proven only covered gender, ethnic origin, Counsel by the employee or the agency and religion or other system of T +46 8 677 54 87 worker in order for the protection belief, the new rules include all E [email protected] under the Whistleblower Act to grounds for discrimination. Hence, take effect. With respect to internal from 1 January 2017, employers are alarms or alarms to the employee’s required to consider transgender trade union, it is sufficient that the identity or expression, disability, individual raising the alarm has sexual orientation, and age in a concrete suspicion about such their active measures to prevent activities. However, the accuracy discrimination and promote equal requirements are higher for external treatment. alarms. For such alarms, the individual must have a well-founded Additionally, the rules regarding reason for the allegation of serious salary surveys have been tightened. New legislation for the protection wrongdoing. As a general rule, the Employers are now obliged to of whistleblowers individual must also first raise the conduct salary surveys every year A new law with the purpose alarm internally. compared to the previous rules of enhancing the protection of which provided for such obligation whistleblowers will come into effect An employer or client company who every third year. in Sweden on 1 January 2017. acts in breach of the Whistleblower This legislation (referred to as the Act may be liable for damages. The obligation to take active Whistleblower Act) provides special measures applies to all employers. protection against reprisals from New rules in the Discrimination However, the obligation to document the employer for employees who Act the work in writing differs depending raise the alarm regarding serious As of 1 January 2017, more on the number of employees in the wrongdoings in the employer’s stringent rules entered into force company. All employers must also business. “Reprisals” extends to all in the Discrimination Act regarding have guidelines and routines for the kinds of actions or omissions that the employer’s obligation to take purpose of preventing harassment, may result in negative consequences active measures for the purpose sexual harassment, and reprisals. for the employee. However, it is not of preventing discrimination and only employees that are covered promoting equal treatment. These Non-compliance with the new rules by the new Act – agency workers new rules impose an obligation on may result in a conditional fine order. also enjoy equivalent protection in the employer to systematically and relation to the client company. continuously: ▪▪ Investigate. In order for an employee or agency worker to be protected under the ▪▪ Analyse. Whistleblower Act, the alarm must ▪▪ Take preventive measures. be raised in accordance with the procedure laid down by the Act. ▪▪ Evaluate and follow-up on risks In this respect, the Whistleblower of discrimination or non-equal Act distinguishes between three treatment in the employer’s different ways of raising an alarm: business. internal alarms, alarms to the employee’s trade union, and external This work is to be done in relation alarms. Internal alarms are those to: working conditions; recruitment

27 European Employment Law Update SWITZERLAND

of emergencies. No registration is Expenses required for work lasting eight days The EU company also needs to or less per calendar year (on an pay expenses in relation to the aggregate company basis) except assignment of its employees, in for construction, hospitality, cleaning particular the actual costs for food and security services as well as and housing or hotel accommodation itinerant workers (including itinerant in Switzerland. Ueli Sommer traders, peddlers, market-traders, Partner stall-keepers, circus and fairground Remedies T +41 58 658 5516 workers) where registration In case of non-compliance EU E [email protected] eight days in advance is always companies can receive a fine of compulsory. up to CHF 5,000 (approximately, €4,657). In case of severe or Prohibition of employee lending repeated breaches a company can Only a company’s own employees be banned from providing services can be posted, not temporary into the Swiss market. workers hired from an agency. This is because employee lending from Summary abroad into Switzerland is prohibited. Taking into account the mandatory Furthermore, the employment of compliance with Swiss minimum employees solely for the purpose salary standards, any EU company Project work in Switzerland of sending them to a project in tendering for project work in It is common for EU firms to have to Switzerland is in most cases also Switzerland needs to familiarise itself send their employees to Switzerland prohibited employee lending. with the additional costs resulting in order to fulfil their contractual from a potential assignment and obligations. However, as Switzerland In the IT industry in particular, include such costs in its offer for the is not part of the EU, working in it needs to be ensured that the project. Switzerland – even for short periods services are exactly described in the – is subject to some restrictions service agreement and that such Moreover, it is important to track and formalities. Furthermore, the service does not qualify as mere the days spent in Switzerland. If the applicable regulations may have employee lending. 90 days have already been used for an impact on the pricing which any other projects or are not sufficient EU firm tendering for a project in Compliance with local salary for a project, a formal work permit Switzerland should be aware of. standards needs to be obtained for at least part During the project work in of the workforce. At the moment, Registration process Switzerland, the EU company the process of obtaining a work EU companies may send employees has to comply with mandatory permit can take up to three months to Switzerland for up to 90 working working conditions (e.g. health so timing is of great importance. days per calendar year without and safety standards, maximum needing to obtain a work permit. It working hours, minimum breaks), is important to note that the 90 days minimum vacation requirements are on an aggregate basis for the (generally 20 days on an annual company and not per employee. The basis) and with the minimum salary rule only applies to EU citizens and requirements set forth by Swiss third country nationals who have had law, in governmental working a valid EU work permit for at least 12 conditions or collective bargaining months. agreements. If no minimum salary requirements are formally set, the Switzerland has implemented an minimum Swiss market conditions online registration process for this. have to be complied with. The Swiss Registration has to take place at government makes regular checks least eight days before the start of on workplace conditions. work in Switzerland, except in case

European Employment Law Update 28 UK

down, as well as the protections for take to resolve the gap, however this agency workers currently afforded is not required. The reports will have by EU law. to be published on each employer’s UK public website by April 2018, On the assumption that a “hard and uploaded to a governmental ” will take the UK out of the database. single market, UK employers will Katie Russell also face increased administrative A failure to comply will amount Partner and financial barriers in recruiting to an unlawful act under the UK T +44 207 429 4661 EEA nationals, although again the Equality Act 2006, and may result in E [email protected] details of a new immigration system enforcement action by the Equality are still to be ironed out. and Human Rights Commission.

For EEA nationals who have Apprenticeship Levy already exercised their right of free From April 2017, employers with a movement and are currently living total annual payroll of more than £3m and working in the UK, transitional will have to pay 0.5% of their wage arrangements on immigration status bill towards this levy (subject to an are likely to be agreed as part of offset of £15,000 per employer). the formal Brexit negotiations. A Different practical arrangements cut-off date may be imposed as the for using the funds raised will apply Brexit UK Government will want to avoid across England, Scotland, Wales, Following the UK’s vote to leave creating an increase in European and , but in essence the EU, the UK Government has immigration in advance of Brexit. the policy intention is to increase stated their intention to preserve Whether or not these arrangements funds available for training in the UK the rights guaranteed by EU law. will confer limited or permanent through apprenticeship schemes. They will do this by converting all EU residence status is an area of provisions into domestic law on the potential uncertainty. date of exit. These provisions will, thereafter, be subject to UK case law Gender Pay Gap Reporting in relation to their implementation From April 2017, UK employers with and interpretation. Also, depending over 250 employees will have to on what international obligations are produce and publish gender pay gap in place following Brexit, the rights reports detailing: and obligations will no longer be ▪▪ The percentage difference enshrined as part of EU law, and will between mean and median be subject to amendment by the UK hourly pay for male and female Parliament. employees. As an alternative UK body of case ▪▪ The proportion of males and law in relation to these rights females who received a bonus in develops over time, the UK courts the past 12 months. could reverse recent decisions of ▪▪ The percentage difference the Court of Justice of the European between mean and median Union (for example, the decisions in bonus pay. respect of the calculation of holiday pay, and the mandatory carrying ▪▪ The proportion of male and forward of annual leave accrued female employees in each salary during sick leave). In addition, the quartile. rules on collective consultations in situations of redundancies and Employers can choose to include an business transfers (under the UK explanation of any existing pay gap TUPE Regulations) may be watered and set out what action they plan to

29 European Employment Law Update KEY CONTACTS

Austria Belgium – – Thomas Angermair Philippe De Wulf Partner Partner T +43 1 533 4795 24 T +32 2 426 14 14 E [email protected] E [email protected]

Bosnia and Herzegovina Croatia – – Goran Babic Saša Divjak Partner, Attorney-at-Law, in cooperation Senior Partner with Karanovic & Nikolic T +385 1 539 1600 T +387 51 212 104 E [email protected] E [email protected]

Cyprus Czech Republic – – Yiannis Karamanolis Václav Rovenský Senior Associate Partner T +357 22 777000 T +420 224 103 316 E y.karamanolis@ E [email protected] chrysostomides.com.cy

Denmark Estonia – – Henriette Stakemann Pirkko-Liis Harkmaa Attorney-at-Law, Partner Partner D +45 36 94 12 28 T +372 665 1888 E [email protected] E [email protected]

Finland France – – JP Alho Isabelle Pontal Partner Counsel T +358 29 000 6264 T +33 1 45 05 80 08 E [email protected] E [email protected]

Germany Hungary – – Prof. Dr. Martin Reufels Dr. László Pók Partner Partner T +49 221 20 52 331 T +36 1 472 3000 E [email protected] E [email protected]

Ireland Italy – – Duncan Inverarity Cristina Capitanio Partner Partner T +3531 649 2401 T +39 06478751 E [email protected] E [email protected]

European Employment Law Update 30 Macedonia Montenegro – – Veton Qoku Stefan Lucic Attorney-at-Law, in cooperation with Attorney-at-Law, in cooperation with Karanovic & Nikolic Karanovic & Nikolic T + 389 2 3223 872 T +382 20 238 991 E [email protected] E [email protected]

Netherlands Poland – – Els de Wind Agnieszka Lisiecka Lawyer Partner T +31 20 678 9242 T +48 22 437 8200 E [email protected] E agnieszka.lisiecka@ wardynski.com.pl

Portugal Russia – – Nuno Ferreira Morgado Irina Anyukhina Partner Partner T +351 213 197 471 T +7 495 234 9692 E [email protected] E [email protected]

Serbia Slovenia – – Jelena Danilovic Jasmina Beganovic Senior Associate, Attorney-at-Law, in Associate, Karanovic & Nikolic cooperation with Karanovic & Nikolic T +386 1 200 9680 T +381 11 3094 427 E Jasmina.Beganovic@ E jelena.danilovic@ karanovic-nikolic.com karanovic-nikolic.com Spain Sweden – – Vicente Calle Magnus Berterud Partner Counsel T +3491 514 5200 T +46 8 677 54 87 E [email protected] E [email protected]

Switzerland UK – – Ueli Sommer Katie Russell Partner Partner T +41 58 658 5516 T +44 207 429 4661 E [email protected] E [email protected]

31 European Employment Law Update Produced by Shepherd and Wedderburn LLP

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