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EUROPEAN EMPLOYMENT UPDATE

2020 EDITION INTRODUCTION

Our annual Employment In the 2020 edition of our European security contributions were also a hot Law Update aims to help Employment Law Update, we look topic with ’ Social Insurance organisations with a pan- at the important legislative Fund and ’s National Social changes from 2019, focusing Security Office strengthening their European presence keep on those that are likely to affect positions following a Supreme -to-date with changes to businesses in the coming year. This decision. We also see some positive and best practice. guide compiles updates from 34 progress on in , leading law firms and aims to assist , the UK, and in ‘daddy organisations with a pan-European ’ has been introduced. In presence in keeping up-to-date , employees undergoing with changes to legislation and best IVF now receive an additional, paid, practice. three-day rest leave per year.

We continue to see We do hope that you find the latest across dealing with a variety edition of the update useful. We have of employment law issues, from included contact details for all those implementing changes in relation to who have contributed, so please feel discrete to managing political free to contact any of our contributors uncertainty, and introducing or if you have any questions or require preparing for substantial further information. changes to underlying frameworks. Neil Maclean, Shepherd and There are a number of similarities Wedderburn LLP, Head of across the jurisdictions involved Employment in the update. on the taxation of independent contractors has been introduced in both the UK This brochure contains a summary of general and . Another common theme principles of law. It is not a substitute for specific legal advice, which should be sought is holiday entitlement including new in relation to any application of the subject acts in and . Social matter of this brochure.

2 CONTENTS

FINLAND PAGE 11 PAGE 16 PAGE 24 PAGE 32 ESTONIA PAGE 10

DENMARK PAGE 9 PAGE 19 RUSSIA PAGE 28 UK PAGE 36 IRELAND PAGE 17 PAGE 25 PAGE 22 BELGIUM PAGE 20 PAGE 5 PAGE 13 AUSTRIA PAGE 35 PAGE 4 PAGE 12 PAGE 8 PAGE 15 PAGE 33 ROMANIA PAGE 27 PAGE 30 PAGE 29 PAGE 31 BOSNIA & PAGE 6 PAGE 34 PAGE 26 PAGE 23

CYPRUS PAGE 7 PAGE 14

ITALY PAGE 18 PAGE 21 AUSTRIA

Personal holiday entitled to another personal holiday in the after of their period of paternity On 22 2019, the European current holiday year. The day worked is not leave. Court of ruled that the Austrian considered a holiday and has no effect on During the Daddy Month the employer is legislation under which is a their remaining holiday entitlement. not obliged to continue to pay the father. public holiday only for employees who are Recognition of maternity/ The father , however, be entitled to state members of certain Christian churches, paternity leave benefits under certain circumstances. and consequently only these employees (if On 1 2019, an amendment to the required to work on that public holiday) are Maternity Protection Act came into force. entitled to additional payment, constitutes The amendment states that maternity and direct discrimination on the grounds of paternity leave of up to 24 per . will towards their years of for all employment claims where length of As a result of this ruling, the Austrian service is a factor. legislator created a personal holiday for all employees to prevent employers from being Previously, periods of maternity and required to grant a paid public holiday on paternity leave had only been taken into Good Friday to every employee. account for the first child up to a maximum of 10 months and, moreover, only for certain Once per holiday year, employees can entitlements, namely notice period, holiday unilaterally determine one day that will entitlement and continued remuneration in be considered their personal holiday. In the event of sick leave. contrast to a regular holiday, while the employer can ask the employee not to take This amendment applies to all employees a particular day off, the employee is free to whose child was born on or after 1 August deny such a request, even if their presence 2019. at work would be necessary for operational reasons. Daddy Month The Austrian Paternity Leave Act was also The introduction of the personal holiday recently amended. Fathers are now legally did not lead to any increase in the statutory entitled to one month off work following the vacation entitlement of 25 days per year birth of their child, if they are living in the (rising to 30 days for employees with same as the mother. at least 25 years’ service). Instead, it is deducted from an employee’s existing Employees who take up their right to what holiday entitlement. is known colloquially as ‘Daddy Month’ enjoy special protection against dismissal. If, at the employer’s request, the employee The protection begins with the employee’s carries out work during their personal announcement or a later agreement, but holiday, then the employee is entitled to be at the earliest four months before the remunerated for the work they performed expected date of birth and ends four weeks in addition to their regular (holiday) pay for that day. The employee is not, however,

Thomas Angermair Partner T +43 15 33 4795 24 E [email protected]

4 BELGIUM

Social security contributions on the NSSO will use the ’s New outplacement scheme share-related benefits granted to strengthen its position and will for medical force majeure by a foreign parent company proceed with the levying of social security Until recently, workers who were dismissed Until recently, the National Social Security contributions on benefits granted by a could only claim outplacement support Office (NSSO) accepted that if a foreign parent company to a Belgian subsidiary’s (the provision of assistance to redundant parent company attributed benefits (shares, employees “as the counterpart for the work employees in finding new employment) if restricted stock units (RSUs) etc.) directly to performed”. they were either entitled to a notice period its Belgian subsidiary’s employees without The 2020 social elections of at least 30 weeks (general scheme) or the costs being charged to the latter, or are on their way if they were at least 45 years old with at the latter serving as a ‘point of contact’ to least one year’s service (special scheme). Every four years, Belgian companies must which the Belgian employees could turn (i.e. Recently, a third scheme has been added hold employee elections to select the if the Belgian employees could not claim for employees whose employment ends members of their Works Council and the the payment from their employer), then the due to medical force majeure, invoked by for Prevention and Protection shares or RSUs could be granted without the employer. at Work. The former applies to companies having to pay social security contributions. with at least 50 employees and the latter to It can be invoked without the employer In 2018, the NSSO caused companies with at least 100 employees. needing to serve notice upon or pay an a ‘minor ’ by substantially indemnity in lieu of notice to the employee The elections will take place in May broadening its interpretation of ‘salary’ if, after having followed a reintegration 2020. However, for employers, work started subject to social security contributions. As procedure, it has been established that in mid- 2019, the beginning of a result, benefits in general, and shares the employee is permanently incapable a 150-day procedure that precedes the and RSUs in particular, attributed by a ‘third of performing their and reintegration election date and during which is party’ (e.g. a foreign parent company) to the appears impossible or has failed. expected from employers on a regular employees of a Belgian (group) company basis. will be subject to Belgian social security contributions, even if the grant took place With every social election the legislator without the Belgian company ‘intervening’ introduces a number of new features. The in any way. most important ones for the 2020 elections are: This NSSO interpretation followed a of Appeal (CoA) ▪ the right to vote for temporary agency judgment in 2018 concerning commissions workers, subject to certain conditions; granted by a ‘third party’. The CoA stated that since these commissions were ▪ the election procedure will be further granted “as the counterpart for the work digitalised and made GDPR-compliant; performed”, they were subject to social and security contributions, despite the fact that the employee was not entitled to claim this ▪ employees no longer have to attend a remuneration directly from their employer. polling station as they can vote using a laptop or PC via a carrier connected to a In May 2019, the Supreme Court confirmed secure network. the CoA judgment. It is expected that

Philippe De Wulf Partner T +32 2 426 14 14 E [email protected]

5

Interpretation issues in the exception to the preliminary procedure is it reasonable to burden the with the Federation of Bosnia whereas financial claims were no longer this number of procedures? and Herzegovina exempt. At the same time, the of There were no significant changes to labour limitation period of three years for financial The amendments remain in force despite a in Bosnia and Herzegovina in claims was not amended. Neither were the number of legal practitioners bringing this 2019. However, due to changes introduced remaining deadlines; the 30-day maximum issue to the attention of the Federal Ministry in 2018 in the Federation of Bosnia and duration of the preliminary procedure and of Labour and Social Policy. The Herzegovina, a very important interpretation the 90-day deadline to initiate a court Court in has deferred the question issue has arisen in practice relating to the procedure. to the Supreme Court of the Federation procedure for protecting an employee’s of Bosnia and Herzegovina for a formal rights before the employer and the courts. The obvious questions that immediately interpretation, which would set out the arose, and which remain unanswered, are: mandatory practice for all courts. Before the amendments to the Labour Law were adopted in 2018, the original 2016 ▪ is this amendment in direct contradiction In 2019 the Supreme Court of Labour Law dictated that an employee to the three-year statute of limitations, the Federation of Bosnia and Herzegovina seeking court protection of their labour- since an employee can no longer request initiated an appellate procedure before related rights must first ask for this three years’ worth of financial claims (e.g. the Constitutional Court of the Federation protection via a preliminary procedure three past holiday allowances) but instead of Bosnia and Herzegovina arguing that held directly before the employer, within has to initiate a preliminary procedure the Supreme Court does not consider the 30 days of learning of the alleged violation before the employer every 30 days only specific amendment to be in accordance to their rights. The preliminary procedure for the claims arising from this period; with the of the Federation of could not last more than 30 days. Once the Bosnia and Herzegovina. ▪ upon the enforcement of the preliminary procedure had been finalised, amendments to the Labour Law, should It remains to be seen how the Constitutional the employee had 90 days to approach the employee immediately notify the Court will decide the outcome. If the the court in a standard litigation procedure. employer of all open claims and if so, appellate procedure does not result in The only exception to these procedural would claims older than 30 days be the annulment of the amendment, it also rules were financial claims from employees eligible?; remains to be seen how the Supreme Court for which no preliminary procedure was will take its final stance on this issue. prescribed and the employees were ▪ should the court apply one requirement free to go directly to the court. Financial for claims brought before the claims were limited to a three-year statute enforcement of the amendments to the of limitation period. This procedure has Labour Law, and another requirement to been transcribed from the previous labour claims raised after the enforcement of regulations in the Federation of Bosnia and the amendments to the Labour Law? Or Herzegovina. Therefore, the procedure was should the court continue proceedings widely recognised in practice and without in accordance with the procedures and any significant issues. premises from the 2016 Labour Law; and

The amendments in 2018 modified ▪ is it reasonable to expect employees to the relevant provisions describing the initiate a fresh litigation procedure every procedural requirements. Cases concerning month to avoid losing a timely claim and the termination of employment fell under

Lejla in cooperation with Karanovic & Partners T +387 33 844 000 E [email protected]

6 CYPRUS

General Healthcare System of the UK’s formal withdrawal from the EU, shall be subject to general law A new universal general healthcare system but the Council of Ministers must determine provisions. entered into effect in 2019. It is financed the precise date. If a deal is reached there might be a by contributions payable by employers, In a no-deal scenario, UK nationals who transitional period during which UK employees/beneficiaries, and the state. The have already exercised their lawful right nationals would be able to exercise such rate of contribution for employees is 5.2% to reside in Cyprus on the basis of EU free rights on the basis of EU free movement of earnings, comprising 1.85% paid by rules will have the right to reside rules, even after withdrawal. employer, 1.7% paid by the employee, and permanently in the Republic of Cyprus 1.65% paid by the state. From 1 2020, under the following circumstances: the rate of contribution for employees will increase to 10.25% of earnings, comprising ▪ where they have achieved five years’ 2.9% paid by the employer, 2.65% paid by continuous residence; the employee, and 4.7% by the state. ▪ where a retires, they have been Social Insurance Fund working for 12 months in the Republic of The rate of contribution for employees Cyprus prior to retirement, and have had to the Social Insurance Fund increased three years of continuous residence; on 1 January 2019 to 21.5% of ‘insurable earnings’ (i.e. income up to a maximum ▪ where the person has stopped working of €1.051 gross weekly income or €4.554 because of a permanent , but has gross monthly income). The employer pays already achieved two years of continuous 8.3%; the employee 8.3%; and the state residence; or 4.9%. ▪ where an employee has completed Extended statutory protection of three years of continuous employment adoptive mothers from dismissal and residence, and exercises employed The 2018 amendment to the Protection of or non-employed activity in another Maternity Law extended the period during Member State, but maintains their place which pregnant women are protected from of residence in Cyprus and returns to it at dismissal from three months to five months least a week. after the end of their maternity leave. Since For the calculation of the period(s) required 1 March 2019, this has been extended to for the right to permanent residence, the cover adoptive mothers. periods of legal residence or employment British workers in Cyprus after prior to, and after, the date of withdrawal of In 2019, the Right of Some Nationals the UK from the EU are counted . of the and the Members of Any UK nationals who do not exercise their their Family to Move and Reside Freely in right to reside in the Republic of Cyprus on the Republic Law of 2019 was published in the basis of EU free movement rules prior to the Official Gazette of the Republic. The law the date of withdrawal shall, by default, be is expected to come into effect on the date considered as third nationals, and

Alexandros Efstathiou Associate T +357 22 777000 E [email protected]

7

Amendment to the Act on the Moreover, the amendment grants the requires employers to send the documents Residence of Foreigners statutory authorisation to necessary for calculating sickness benefits The amendment to the Act on the issue quotas for economic migration. The and information on the method of wage, Residence of Foreigners simplifies the rules Government will be free to set transparent salary or fee payment to the local social for the entry and residence of and quotas for the of visa applications security authorities in electronic form. scientists. It introduces long-term residency or to issue long-term residence permits The amendment also allows employers for university students who have completed for certain gainful purposes, which are to request from the Czech social security their studies in the Czech Republic, and for to be further subdivided into categories authorities automatic ‘proactive notifications’ researchers who complete their research corresponding to the qualitative definition of an employee’s temporary sickness, which activities to allow them to seek employment of migration needs. In particular, there will should facilitate and accelerate checks on or start a business. They may reside in the be a visa of more than 90 days’ duration for employees on temporary sick leave. Czech Republic for up to months. business purposes; a long-term residence permit for ; and an employee The amendment also requires foreigners card. to attend adaptation-integration training upon their arrival in the Czech Republic. Other measures concern foreigners from As of 2021, this requirement will apply to outside the EU who come to the most newly-arrived foreigners who have Czech Republic for work or family purposes. long-term or permanent residence permits. Another new aspect concerns the ability to An exemption will apply, for example, terminate, via an accelerated procedure, the to foreigners residing in the territory of visa/permit of a foreigner who is a repeat the Czech Republic under a long-term offender, namely after a third conviction residence permit for the purpose of study; for an intentional . The termination of to internally transferred employees (under a an individual’s residence will no longer be transfer card); and to people aged under 15 reviewed in appeal proceedings. However, and over 61. they will be able to apply directly to the , which will be obliged to A special work visa has also been make a determination within 90 days. introduced, which will be issued by the Ministry of the Interior for a period of up to Most of the new rules took effect on 31 July one year, without an option to extend. The 2019. Government will decide, based on labour Introducing the electronic market demand, whether such visas will sickness certificate be granted and it will also determine the The amendment to the Sickness Insurance source countries, economic sectors, and Act contains changes related to the volume of migration. This will enable the introduction of a so-called e-Sickness Government to be flexible in responding Certificate. From 1 January 2020, doctors to the labour market situation. These visas will be required to issue temporary will not be issued if there is sufficient Czech employee sickness certificates, for both labour available in the labour market. employers and social security authorities, via electronic means only. The amendment

Václav Rovenský Partner T +420 224 103 316 E [email protected]

8 DENMARK

Transitional year for the informal tone in the workplace cannot serve the employment , the subsequent new Holiday Act began as a significant argument when assessing if storing and use of the audio recording may, on 1 September 2019 the against sexual harassment in the circumstances, constitute a breach. The Danish passed a new has been violated. Furthermore, the Holiday Act that changes the present amendment has resulted in a higher of holiday entitlement scheme to a concept compensation for breaches of the Act. of concurrent holiday, effective from 1 Secret audio recordings made by September 2020. This means employees employees do not automatically may only take holiday during the year in constitute a breach of contract which the holiday is accrued, and will no The Supreme Court of Denmark has longer be able to carry over holiday accrued recently concluded that an employee’s in one year to the next. secret audio recording does not On 1 September 2019, a year-long automatically constitute a breach of transitional or ‘freezing’ period was contract. The case concerned a customer introduced to facilitate the transition to the consultant who had been summarily new rules and to ensure that an overlap dismissed following a meeting at which between the two schemes would not enable the consultant had thrown a employees to take 10 weeks of holiday in mouse and had audio recorded the meeting one year. without the other participants’ knowledge.

All holiday accrued during the transitional The Danish Supreme Court found that the period will be ‘frozen’. This means that the summary dismissal could not be justified by holiday accrued during this period can the consultant throwing a computer mouse, neither be taken nor paid to the employees. as it had occurred during a heated debate, The Employees’ Fund for Residual Holiday and it could not be established that the Funds will oversee the administration of consultant had intended to hit anyone. all holiday accrued during the transitional With respect to the secret audio recording, period. When the employee leaves the the Supreme Court stated that a balancing labour market, the fund will disburse the exercise had to be carried out between accrued amount to the employee with the employee, the employer and other the addition of annual interest. During the affected . It should be emphasised transitional period, employees will be able whether the employee had a special reason to use any holidays that they have accrued to ensure of an infringement of in previous calendar years. their rights. In the specific circumstances, Amendment to the Danish the Supreme Court found the summary Act on Equal Treatment dismissal to be unjustified. The Danish parliament has passed an Furthermore, the Supreme Court stated amendment to the Act on Equal Treatment, that, even though a secret audio recording which entered into force on 1 January 2019. does not in itself constitute a breach of The amendment entails that a free and

Lise Høy Falsner Attorney-at-Law, Partner T +45 36 94 13 69 E [email protected]

9 ESTONIA

Changed paternity leave rules psychosocial hazards upon conducting the Finally, penalties for failure to conform to the As of July 2020, fathers will be entitled to analysis of the working environment occupational health and safety regulations paid paternity leave of 30 days (increased and must apply measures to prevent or have increased significantly and non- from 10 days) and can use such leave (either reduce such . compliant companies can now be fined up consecutively or in separate parts) any time to €32,000, more that ten times higher than Further amendments involve the rules from the 30 days preceding the estimated the earlier maximum fines. applicable to health checks. The period date of birth until the child reaches three for conducting a health check upon years of age. commencement of work has been Amendments to the Occupational extended from one to four months. In Health and Safety Act addition, employees who are unaffected The Occupational Health and Safety by occupational hazards are no longer Act went through considerable changes subjected to health checks by law. in 2019, with the aim of decreasing the Forming a working environment committee administrative burden for employers and is no longer required in companies with offering a legal framework better suited fewer than 150 employees, unless the for the needs of employees as well as Labour Inspectorate requests this (due employers. to specific risks present in the working Employers no longer have to inform environment). the Labour Inspectorate about the The rules of investigation of minor commencement of activities, changes in occupational accidents have been slightly their activity licence or forming a working relaxed – such accidents no longer need environment committee. A working to be reported to the Labour Inspectorate. environment committee, when formed, is However, accidents resulting in temporary no longer required to file regular activity incapacity for work, serious bodily injury, reports to the Labour Inspectorate. danger to life or of the employee The Occupational Health and Safety Act must still be thoroughly investigated and has been supplemented by a regulation reported to the Labour Inspectorate. addressing psychosocial hazards in the The amended law also allows the employer working environment. Psychosocial hazard to apply contractual penalties against is defined as: risk of an accident or violence; employees for breach of occupational unequal treatment; bullying and harassment health and safety rules. Penalties must be at work; work not corresponding to the agreed upon in writing, cannot exceed abilities of an employee; working alone for one month’s salary and can be applied an extended period of time, monotonous only if the employer has provided required work and other factors related to occupational health and safety training to management; organisation of work; and the employee. working environment that may affect the mental or physical health of an employee. Employers are required to consider

Karina Paatsi Partner T +372 665 1888 E [email protected]

10 FINLAND

Working Hours Act as a holiday instead of replacing it with grounds and need for processing should be Comprehensive reform of the Finnish holiday compensation was extended. The evaluated at least every five years. Working Hours Act came into force on 1 aforementioned concerns situations where January 2020. The aim of the new Act is to leave has been postponed due update the legislation to meet the needs of to the employee’s sickness or a comparable modern working life. The most significant reason. change is the possibility to agree a flexible Employment Act and arrangement. Employees Allowances Act working under this flexible working time Amendments with regard to termination arrangement will have the right to decide due to grounds arising from the employee the timing and work location for at least 50% or related to the employee’s person (for of their working time, whereas the employer example, breach or neglect of duties) will define the work duties and the targets entered into force in July 2019. Under the thereof as well as the schedule for the work. amended Finnish Act, when determining whether proper Furthermore, under the new Act, the and weighty reasons for termination exist, provisions concerning the maximum the number of employees working for the amount of annual overtime will be replaced employer is now specified explicitly as a with a maximum amount of total working factor that has to be taken into account in hours, including overtime. The employee’s the overall assessment of the situation. maximum overall working hours shall not exceed, on average, 48 hours per week in Furthermore, an employee’s right to a period of four months. In addition, new under the provisions introduce more general flexibility Unemployment Allowances Act is now and extend the possibility of companies enhanced in situations where employment without a collective bargaining agreement is terminated on grounds arising from the using working time banks. employee or related to the employee’s Annual Holidays Act person. Amendments to the Finnish Annual Holidays Act on the Protection of Act entered into force on 1 2019. The Privacy in Working Life changes ensure the employee’s right to Due to the General Data Protection four weeks’ paid in cases Regulation (GDPR), some amendments were of absence from work due to sickness or made to the Finnish Act on the Protection medical rehabilitation. The Act was updated of Privacy in Working Life. Amendments to implement the minimum requirements entered into force on 1 April 2019 relating laid down by the judgments of the Court of to the retention of information on an Justice of the . employee’s health. This information must be deleted immediately when legitimate In addition, the period during which grounds for processing cease to exist. The accrued annual leave must be granted

Carola Möller Partner T +358 29 000 6250 E [email protected]

11 FRANCE

French labour law has been subject (over the last 24 months). This measure income under certain conditions. To to several reforms over the last came into effect on 1 November 2019. qualify, these employees must be fit for five years, which have provided much- work, seeking employment, and have Calculation of needed flexibility and security to French unemployment benefit a professional reconversion project employment law. that requires training or have a plan to The Government wishes to avoid situations create or take over a company. The job in which job seekers earn more money The latest reforms brought by the Macron seeker must take the necessary steps to during a period of unemployment. That is ordinances and the Loi PACTE have complete their project, under the control why the provides for a new system changed the landscape of social law of the unemployment agency. Finally, the to calculate unemployment benefits. From and are the first step in a larger plan to employee must have worked in the same April 2020 the reference daily wage, based reinvigorate the French and company for the last five years. This rule on which the amount of unemployment attract foreign investors. entered into force on 1 November 2019. benefit is determined, will be calculated by The Macron reform entered into force taking into account the total number of days in September 2017, and one of its major (both those worked and those not worked) measures – the creation of the Social and from the first day of employment (previously Economic Committee (CSE) – became fully it only accounted for the number of days effective on 1 January 2020. Since that worked). date, all French companies meeting the headcount requirements (i.e. at least 11 Decrease of unemployment employees during 12 consecutive months) compensation for employees must implement a CSE. This reform reduces the compensation of New in 2019/2020: The Decree n°2019-787 the most highly paid executive employees. dated 26 July 2019 entered into force on 1 Those receiving more than €4,500 November 2019 relating to unemployment gross per month will receive a 30% insurance. reduction to their allowance from the seventh month of compensation. However, The measures contained in this Decree, and this measure does not apply to unemployed presented below, do not come into effect individuals aged over 57 years old. These on the same dates. Most of them have been new rules came into force in November applicable since 1 November 2019, but 2019. others will only become effective in 2020 or 2021. Resignation An employee who resigns is not entitled Conditions relating to unemployment insurance to unemployment indemnification (except in the case of ‘legitimate resignations’). The minimum working time required However, the French President Emmanuel to receive unemployment benefits has Macron decided to encourage the mobility increased from four months of work (over of employees who would like to change the last 28 months) to six months of work their profession or start their own business by providing them with a replacement

Eva Kopelman T +33 (0)1 45 05 82 83 E [email protected]

12 GERMANY

New German Trade Secrets Act trade secret; the of the information; The Trade Secrets Act constitutes a On 26 April 2019, the German Trade Secrets the value of this information to the company; comprehensive body of regulations. Act came into effect, implementing the EU and the size of the company. Although the Act strengthens the protection of the trade secret holder, it also increases Directive on the Protection of Undisclosed Reverse Know-How and Business Information. The the requirements regulating the protection The Act now allows the observation, purpose of the new Act is to protect trade of trade secrets. examination, dismantling or testing secrets from unlawful assumption, use and of a product or object that has been disclosure. made publicly available or which is in the legitimate possession of the person What is new? observing, examining, dismantling or testing Definition of a ‘trade secret’ the product. Information qualifies as a trade secret if: Court classification ▪ the information is not generally known The Act provides for the possibility of a or readily accessible and, therefore, has court classifying information as confidential. commercial value; The parties of a litigation can apply for such a court order. The information then has to ▪ it has been subject to reasonable be treated as confidential during the entire measures to keep it secret; and duration of a and, generally, even after . On the request of either party, ▪ there is a legitimate interest of the court can determine that only a limited confidentiality. number of people will be allowed to take A commercial value can be presumed in part in such a trial. cases where certain interests of the person What do trade secret lawfully controlling the information may be holders have to do? harmed by the unlawful assumption, use Companies should take measures to or disclosure of the information. Legitimate protect their sensitive information and to interests exist if the information concerns ensure this information can be considered the respective person’s scientific and a ‘trade secret’ within the scope of the Act. technical potential, business or financial Therefore, companies should determine interests, strategic positions or ability to what their quo is and trade secrets compete. should be categorised in terms of The requirement to take reasonable importance. Measures of protection can be: measures to preserve trade secrets is ▪ technical measures; new. The requirement poses challenges for companies, as they will have to comply ▪ organisational measures; and with the provision in order to protect sensitive information as a trade secret. ▪ legal measures. Reasonableness can be determined by looking at factors such as: the value of the

Prof. Dr. Martin Reufels Partner T +49 221 20 52 331 E [email protected]

13 GREECE

Abolition of recently adopted employee. Regarding overtime, the ▪ a General Registry of the Employees legislative measures part-time employee shall be paid at a Trade Unions shall be set up in the 117 of Greek Law 4623/2019 rate of 12% above the agreed wages for Ministry of Labour and Social Affairs; abolished retroactively the following two each additional working hour. The part- ▪ decisions of the general assemblies legislative measures: time employee is entitled to refuse the additional work in the usual way, which and other management bodies of the ▪ Article 9 of Greek Law 4554/2018 (liability cannot exceed the full-time daily working employees’ trade unions can be taken for third party contractors’ employees) hours of a comparable employee; by electronic voting, on terms ensuring on the joint and several liability of an transparency and secrecy; and engaging entity for the compliance of ▪ for UK-based companies that have ▪ during resolution of collective labour its third party contractor’s obligations posted employees to Greece, or that disputes, unilateral recourse to arbitration, towards the contractor’s employees; and will be posting employees post-Brexit, and until 31 December 2020, the Greek as a final and auxiliary ▪ Article 48 of Greek Law 4611/2019 (valid implementing provisions of Council means, is permitted where the collective ground for dismissal) that provided that Directives 96/71/EC and 2014/67/EU shall dispute concerns: an employee’s dismissal should be apply; – enterprises of a public nature of upheld only if there was a valid reason welfare; or for the termination of the employment ▪ the national, local and sectoral collective labour agreements may provide for agreement connected either with the – the conclusion of a collective labour special terms, or exclude from the employee’s capacity or conduct, or with agreement, where the negotiations application of specific terms, workers the operational requirements of the between the parties have failed who are employed in social economy employer, as per the meaning of Article definitively and its resolution is required enterprises, non-profit legal entities 24 of the Revised Social European for an existing reason of a general and enterprises facing serious financial . social or public interest related to the problems, such as companies in pre- operation of the Greek economy. Changes to individual and , bankruptcy, or or collective labour agreements extra-judicial settlement or restructuring Greek Law 4635/2019 introduced the status; following changes: ▪ a company’s collective labour agreement ▪ a delay of salary payment beyond two shall supersede the sectoral collective months, or the transfer of the employee labour agreements in cases of enterprises abroad shall be considered a unilateral in pre-bankruptcy or bankruptcy, or change of the employment contract to the mediation or extra-judicial settlement detriment of the employee; or restructuring status, if the sectoral collective labour agreement does not ▪ any part-time or rotational employment provide for any exceptions. Τhe national contract should be concluded in writing, sectoral or professional collective labour and within eight days of its conclusion agreement shall not supersede the the competent labour authorities should corresponding local labour agreement; be notified. Otherwise the individual shall be considered to be a full-time

Terina Raptis Partner T +30-210-3670400 E [email protected]

14 HUNGARY

Major changes to the The new legislation raised the overtime The most important change to the Labour banking period that may be agreed upon Code in 2019 was the introduction of the in a collective bargaining agreement from new, much disputed and controversial one to three years, when such a period voluntary overtime rules, labelled the is justified due to objective or technical ‘ Act’ by critics. The legislation reasons or reasons related to the work increased the yearly cap on overtime from organisation. 250 to 400 hours per annum. In practice, it will be possible for an The new law was established to try and employer to only pay the employee for resolve the issue surrounding the lack of overtime worked in a single lump sum after sufficient employee numbers in Hungary. three years. It sparked nationwide protests and was Critics have argued that the increase in reported in the foreign media. annual overtime to 400 hours combined with the increase of the reference period What is the ‘Slavery Act’? to 36 months (from 12 months), could have Increased cap on overtime the greatest impact on the most vulnerable As of 1 January 2019, in addition to the employees. 250 hour limit on overtime for full-time New rules on handling workers, another maximum of 150 hours employees’ personal data overtime may be ordered on the basis of As of April 2019, the Labour Code’s general an agreement between an employer and provisions on the processing of employee the employee. The number of overtime data was also amended in an effort to hours will be applied proportionately for comply with the EU General Data Protection part-time or fixed-term workers and where Regulation (GDPR). A new chapter set employment commences part way through out rules and offered clarification on the a year. handling of employee data and on the The agreement between employers control and monitoring of employees. It and employees on voluntary overtime also set out rules regarding the handling of must be evidenced by individual, written employees’ sensitive data, such as biometric agreements. Employees have the right to and criminal data, and confirms that keeping terminate the agreement at the end of the copies of employee identification cards calendar year. and other documents is prohibited. The new rules concur with earlier guidelines Extension of working timeframe published by the Hungarian Data Protection Under Hungarian law, employers may define Authority (NAIH). the working time of an employee in terms of the ‘banking’ of working time.

Dr. Hédi Bozsonyik Partner T +36 1 472 3000 E [email protected]

15 ICELAND

A new scheme for determination should be determined by law. Additionally, of salary for senior civil servants the transparency of other occupational Historically, a Salary Board has determined payments should be increased; the salary level for certain civil servants and ▪ the salaries of and the public elected representatives, namely Members of should be decided by law; Parliament, judges, , ministers, permanent secretaries, ambassadors, the ▪ all salaries decided by law will be of the and reconsidered on 1 May every year; some other civil servants. ▪ the redetermination should be based on In 2018, a working group the relative increase in salary averages appointed by the Government issued a as it appears in figures published by report that compared various schemes used ; to determine the salaries for senior civil servants in different countries. The report ▪ to ensure the of proposed amendments in determining such the Central Bank and the Financial salaries in Iceland. The working group found Supervisory Authority of Iceland (the that decisions made by the Salary Board FSA), which will be united from 2020, the frequently caused division in Icelandic Supervisory Board of the Central Bank . Therefore, the report concluded that and the Board of Directors of the FSA the current arrangement was unsuccessful should decide the salaries of their senior in achieving social cohesion. executives; and

The working group considered measures ▪ others that were under the Salary Board’s were necessary to prevent salary will negotiate their salaries or development being led by senior officials they will be decided by the Government and elected representatives; to equalise Employees Act No. 70/1996. salary development and subsequently lessen division caused by salary rulings, The Salary Board has now been abolished. and to make the salaries for these positions Currently, new legislation is being drafted more transparent and predictable. in the Ministry of Finance and Economic Affairs. Pursuant to a temporary provision To that end, the working group put forward in Act No. 60/2018, until the new legislation seven proposals: has been passed, the salaries for positions previously under the Salary Board’s ▪ it proposed that the salaries of senior jurisdiction will change according to civil servants and Members of Parliament relative increases to the salary average, should not be determined by the Salary as it appears in the figures published by Board or a similar body; Statistics Iceland.

▪ the salaries for Members of Parliament, the and ministers

Erla S. Árnadóttir Partner T +354 590 2600 E [email protected]

16 IRELAND

From an employment law perspective, 2019 pay gap (GPG) reporting a line between implementing appropriate has been dominated by a focus on work/ The much anticipated draft text of the measures and ultimately creating a new life balance, ranging from key legislative Government’s GPG Information was role. The issue to be addressed will be developments from the perspective of published in April 2019 and is expected to at what point the extent of an employer’s family leave and gender pay gap reporting, come into law by the end of 2020. duty tips the balance from the provision of to a landmark Supreme Court case reasonable accommodation to becoming that clarified the law when it comes to The bill envisages that employers with a disproportionate burden. There is no accommodating employees with a disability. more than 250 employees will be required one-size fits all approach and employers will to report and publish their GPG data. This need to approach each scenario on a case- Parental leave threshold will ultimately drop to employers by-case basis. Against the backdrop of a proposed EU of more than 50 employees within three Directive on improving work/life balance, years. there have been a number of important legislative developments in Ireland focusing The issue of GPG reporting is firmly on the on family leave this year – including Board agenda in terms of brand reputation, two Acts in relation to parental leave recruitment and retention of staff. Employers entitlements. are advised to take a number of practical steps to prepare before the bill becomes The Parental Leave (Amendment) Act 2019 law – including a ‘dry run’ audit to analyse increased the parental leave entitlement by and stress- areas within the business an additional eight weeks (to a total of 26 that may be contributing to the existence of weeks) and increased the eligible age of any GPG. the child from eight to 12. From a practical perspective, the additional eight weeks’ Reasonable accommodation parental leave is to be implemented in two The Supreme Court weighed in on the long- stages: an additional four weeks’ parental running legal of Daly v Nano Nagle leave from September 2019, followed by a School to clarify the extent of an employer’s second set of four weeks’ parental leave duty to reasonably accommodate a from September 2020. disabled employee. Following last year’s Court of Appeal decision, the Supreme The Parent’s Leave and Benefit Act Court appears to have imposed a more 2019 introduced paid parent’s leave for onerous burden on employers – requiring employees in Ireland for the first time. consideration of a redistribution of core Subject to Pay Related Social Insurance duties as well as more tangential tasks (PRSI) contributions, as of November 2019, associated with a role, but confirming that during the first year of a child’s life both an employer does not need to create a new parents will have access to two weeks’ role. paid parent’s leave. This will be paid by the state. It will be up to individual employers While clarity on the extent of an employer’s to determine whether or not to ‘top up’ the obligation to reasonably accommodate state amount. individuals with is welcomed, it may be difficult for an employer to draw

Duncan Inverarity Partner T +3531 649 2401 E [email protected]

17

Digital Labour Platform work Furthermore, the Riders’ Law covers the out in the national collective agreements On 3 September 2019, the Italian provision of activities organised through applied in similar or equivalent sectors; Government issued Law Decree 101/2019, digital platforms (defined as programs and ▪ Riders should be paid an integrative with amendments by Law 128/2019 (the procedures used, regardless of where minimum of 10% (set by the national Riders’ Law), through which: the company is established, to organise delivery activities by setting the price of the collective agreements or, lacking these, ▪ changes have been made to certain rules goods and the performance of the delivery by a ministerial decree) for deliveries applicable to contracts for self-employed activity). conducted during night hours, holidays or individuals carrying out activity on a in adverse weather conditions; continuous basis; and Notably, regardless of the above provision, under Italian Law self-employment ▪ the refusal of calls shall not trigger the ▪ specific measures have been introduced relationships trigger the risk that (depending exclusion from the digital platform through in favour of individuals carrying out mainly on the circumstances, e.g. how services which their activities are organised nor food delivery activities in urban areas, are rendered or the degree of of reduce the number of hours worked by using or motor vehicles, and the self-employed individual) if a de facto Riders; whose activities are organised through employment relationship is performed, the ▪ there should be mandatory insurance for digital platforms (the ‘Riders’). individual may claim employment status. accidents and professional diseases, and Before the Riders’ Law came into force, The Riders’ Law introduced a specific for health and safety provisions; and employment rules applied only to self- section under Legislative Decree 81/2015, in ▪ anti-discriminatory rules and provisions employed workers where: order to set minimum standards of rights for ensuring employee freedom and dignity the Riders: ▪ activities were personally and exclusively apply to the Riders. rendered by the self-employed individual ▪ the Riders’ agreements should be on a continuous basis; and made in writing for the purpose of legal . The Riders should be provided ▪ the activities were organised by the with any useful information for the principal with respect to time and place protection of their interests, rights and of work. safety;

The Riders’ Law has partially changed such ▪ the criteria used to determine Riders’ total provision. The employment rules apply by wages can be fixed by national collective operation of law if the activities are: agreements, taking into account how the activities are performed and organised ▪ mainly (and not exclusively) rendered by the principal. If no such criteria by the self-employed individual on a are included in the national collective personal and continuous basis; and agreements, Riders wages may not be ▪ organised by the principal (disregarding calculated on the basis of the number of time and place of work). deliveries made. The Riders should be paid a minimum hourly wage calculated on the basis of the set

Cristina Capitanio Partner T +39 06478751 E [email protected]

18 LATVIA

Amendments to the Labour Act include destruction or return of materials remote working location that might impact With effect from 1 May 2019, Parliament containing the trade secret, recall or their health and safety. adopted amendments to the Labour Act. withdrawal from circulation of the infringing In addition, when organising labour The amendments state that if a general goods; elimination of infringing elements protection at the undertaking, employers agreement is concluded in an industry from the infringing goods; destruction will be able to use information that stipulates a material increase in the of infringing goods and publication of a solutions such as tailor-made electronic minimum wage or hourly rate established by judgment. recording systems for the assessment of the Government, at the rate of at least 50% Amendments to the work environment risk or the training of above the minimum wage or the hourly rate, Labour Protection Act employees. The employer must ensure that the amount of the additional payment for Important amendments to the Labour Government supervisory and monitoring overtime work can be set at less than that Protection Act were adopted by Parliament agencies are able to access electronic prescribed by the general provisions of the on 3 2019 regarding employees documents related to labour protection. Labour Act, while no less than at the rate of working outside , otherwise known 50% of the hourly rate of the wage set forth as ‘remote working’. These amendments will come into effect on for the employee, or the lump sum payment 1 July 2020. for the volume of work performed. Until now, it has been possible for employers and employees to agree a On 7 March 2019 amendments to the remote working arrangement. However, Labour Act were adopted by the Parliament remote working was not defined by Latvian with regard to employees’ leave due to legislation. The adopted legislation now training with the National Guard or contains a definition of remote working, training with the army reserve. These which describes remote working as amendments came into effect on 4 April “performing work that an employee might 2019. normally carry out at the bequest of the Act on the Protection employer at another location outside the of Trade Secrets undertaking, including work performed The Act on the Protection of Trade using information and communication Secrets came into effect on 1 April 2019. ”. Remote working The purpose of the Act was to ensure arrangements are still agreed between the more efficient protection of trade secrets. employer and the employee. Protection of trade secrets is crucial, both The employer remains under an obligation during employment and after termination, to carry out a risk assessment of the because employees often possess sensitive working environment. However, the information about a company. amendments state that the employee The Act defines the of trade secrets, performing the remote work is obliged to including when obtaining a trade secret collaborate with the employer in assessing is considered lawful. It also prescribes the risks of the working environment. It is certain legal remedies in cases of unlawful the individual’s responsibility to inform their acquisition, where use or disclosure of a employer about any circumstance at the trade secret is established. Such remedies

Irina Kostina Head of Employment Law Practice T +371 67814848 E [email protected]

19 LITHUANIA

Taxation of employment income In addition, progressive rates of personal potential employees. The aim is to achieve From 1 January 2019 social insurance (PIT) were introduced. The rate transparency in the employee remuneration contributions of the employee and employer depends on the annual employment-related system. were combined. income received. A PIT rate of 20% is applicable to employment-related income This new requirement applies to The employee (the insured person) pays not exceeding €136,344 per year in 2019, all positions and to all forms of job social insurance contributions for , and this will increase to approximately advertisements including advertising sickness, maternity and healthcare. The €104,300 in 2020. A PIT rate of 27% is portals, company websites and LinkedIn. employee’s general rate of social and health applicable to employment-related income Public holidays insurance contributions is between 19.5% exceeding these thresholds. Parliament has expanded the list of public and 22.5%. The general rate is comprised Whistleblower Protection Law holidays by adding an additional day – 2 of: On 1 January 2019 the new Whistleblower November – Commemoration of all the ▪ social security contributions of 12.52% Protection Law came into effect, Faithful Departed (All Souls’ Day). This (a ceiling of €136,344 per year applied finally addressing the lack of effective change is effective from 1 January 2020. in 2019, which will increase to circa whistleblower protection. Its purpose is €104,300 in 2020 – tax does not apply to to clearly establish the rights and duties the amount exceeding this threshold); of whistleblowers, including the basis and forms of their legal protection, the means of ▪ health insurance contributions of 6.98%; protection available to them, and incentives and and assistance so that they can report violations of law. ▪ contributions to the second pillar pension fund of up to 3%, as chosen by the The new law forbids any negative action employee – the above ceiling applies in being taken against those who have 2019 and 2020. reported a violation of law. Negative actions include: dismissal from work; being The employer (the insurer) is only liable moved to a lower position or another to pay social insurance contributions for workplace; use of intimidation; harassment; unemployment, accidents at work and discrimination; limiting career opportunities; occupational diseases. The employer’s a reduction in salary; and passing negative general rate of social insurance information about the person to third contributions is just 1.45% of an employee’s parties. Whistleblowers are entitled to gross salary (the above ceiling applies in free legal assistance, rewards for valuable 2019 and 2020). information, and are exempt from liability for Furthermore, new contribution rates their participation in unlawful activity. for the Guarantee Fund and Long-Term Remuneration in job advertisements Employment Fund were introduced. An employer has to pay contributions at the From 27 July 2019 employers must provide rate of 0.16% to both funds (the above information about the amount and/or the ceiling applies in 2019 and 2020). range of remuneration (whether hourly, monthly, or annual) offered to

Ramūnas Petravičius Partner T +370 52681825 E [email protected]

20 MONTENEGRO

The adopted a ▪ employers will not be able to terminate new Labour Law on 24 December 2019, the employment of temporary employees which entered into force on 7 January when the employee is pregnant – no 2020. The General Collective Agreement, matter what stage the pregnancy is at, which was previously declared to be in and the employment must continue up to force until 30 2019, was amended one year from the child’s birth; and its application is extended until the end of 2020. Interesting changes have been ▪ the new law introduces ‘distance working’ introduced which are explored below. as well as ‘working from home’; and The new Labour Law ▪ there are significant changes to the rules surrounding publishing job During 2018 and 2019 significant steps and disciplinary proceedings against an were made regarding the adoption of the employee. new Labour Law. Following a period of intense discussion, the final draft of the Non-working Sunday new law was finalised in the last quarter In autumn 2019, the law on Domestic Trade of 2019. Although it caused considerable introduced an obligatory non-working controversy, the Government reported that Sunday rule for employees working in it is fully harmonised with EU legislation. The – this has had a huge impact on society changes effectuated under the new law are in general. Large shopping malls are now summarised below: closed on Sundays, as are grocery stores ▪ there is an obligatory form for consensual and markets. The change was generally well termination of employment and the received by the public. signatures have to be certified before a Reduced contributions notary public; to health insurance The Parliament of Montenegro adopted ▪ the new law introduces a four-year amendments to the law on Compulsory limitation period for claims arising from Social Security, which reduces an employment, instead of the existing ‘no employer’s health insurance contribution statute of limitations’ rule; from 4.3% to 2.3% of gross earnings. ▪ the maximum length of a temporary employment agreement has been extended from 24 to 36 months;

▪ it will no longer be possible for employees to sell unused annual leave;

▪ salaries have to be paid exclusively into bank accounts;

Stefan Lučić Independent attorney at law in cooperation with Karanović & Partners T +382 20 238 991 E [email protected]

21 NETHERLANDS

Reforms to Dutch employment law years before the contract converts into a On 1 January 2020 the Balanced Labour permanent one. Market Act (Wet Arbeidsmarkt in Balans or Changes for payrolling employees WAB) came into force. The most important Employees who are permanently seconded, elements of the WAB are: so-called ‘payrolling employees’, shall Introduction of a cumulative be entitled to – with the exception of ground for dismissal – the same terms and conditions The introduction of a cumulative ground of employment as the individuals employed for dismissal, for use in cases where the by the legal entity to which the payrolling facts and circumstances are not sufficient employees are seconded. In addition, to substantiate one of the other grounds payrolling employees will have the same for dismissal. If the employment contract is dismissal protection as workers employed terminated on this basis, the court may grant by the legal entity to which the payrolling the employee additional compensation of employees are seconded. up to half the statutory severance pay. Changes for on-call employees Changes to the statutory An employee with an on-call contract no severance pay longer needs to comply with a call if: Service after 10 years will be weighted the same as previous service years: at one ▪ the number of working hours is not, or third of a month’s salary per year of service not clearly, laid down in their employment instead of half of a month’s salary per year. contract (which is the case in so-called Employees will start accruing the payment zero-hour contracts); and on the first day of employment instead of ▪ the employee is given less than four days’ after two years. Furthermore, as of 1 April notice of the start of the work. This term 2020, employers will be compensated can be shorter than four days if set out in for paying the statutory severance pay an applicable collective labour agreement when they dismiss employees because of (the minimum notice is one day). long-term illness (lasting at least two years). If the employer cancels the assignment Changes to rules around fixed-term contracts within this period, the employee is entitled to be paid for the hours the assignment Under the rules in place until 1 January would have entailed. 2020, no more than three consecutive fixed- term employment contracts can be agreed Social security premiums in a two-year period before the employment Employers will pay a lower unemployment converts into a permanent contract, unless social security contribution for an employee the employment is interrupted for a period with a permanent employment contract of six months or more. This two-year period than for employees working on fixed-term will be extended so fixed-term contracts can contracts or on-call contracts. be agreed for a maximum period of three

Cara Pronk T +31 (0)20 6789 503 E [email protected]

22

Internship Law The highest subsidised amount is for a New Labour Law announced In May 2019 the Parliament of North net wage increase of up to MKD 6,000 The Government of North Macedonia Macedonia adopted a new Internship Law, (approximately €100) per month per insured announced the development of a new which allows companies to hire interns person, and the lowest amount is for a net Labour Law, which will introduce important outwith the educational process. wage increase of MKD 600 (approximately changes predominantly focusing on €10) per month per insured person. alignment with EU labour legislation. Any unemployed citizen of North Increased minimum wage The draft Labour Law is currently being Macedonia under the age of 34 years, negotiated by relevant stakeholders. A new minimum wage has been passed in who has completed primary , Expectations are that it will be adopted in North Macedonia, continuing the growth qualifies for an internship position under 2020. the Internship Law. The internship can last trend witnessed in previous years. As of between one and six months, and is limited December 2019, the minimum wage is MKD to one internship with the same employer. 14,500 (approximately €235) per week. Intern remuneration is dependent on the New law on Personal Income Tax length of the internship. The number of The new law on Personal Income Tax interns that the employer can hire depends (‘PIT Law’), introduced on 1 January on the number of full-time employees in the 2019, abandons the ‘flat’ tax rate of 10% company. and introduces progressive taxation. In Government subsidises addition to a tax rate of 10%, the new PIT wage increase Law envisages a rate of 18% applicable to The Government of North Macedonia will different types of labour-related income and subsidise contributions for mandatory an increased flat rate of 15%, instead of 10%, social insurance for increased wages on for various types of capital-related income. the basis of the newly adopted Law for Progressive taxation applies to labour- Subsidising Contributions for Mandatory related income (such as wages and Social Insurance due to Wage Increase. This pensions), whereas the 10% rate applies law is applicable from 1 November 2019 until to income up to tax bases of MKD 90,000 31 October 2022. (approximately €1,460) monthly or MKD Contributional subsidising may be used 1,080,000 (approximately €17,560) annually. by employers and self-employed people Income exceeding these amounts will be who hold active taxpayer status for the taxed at a rate of 18%. calculation and payment of contributions, The Government of North Macedonia and who do not have outstanding liabilities proposed an amendment to the PIT Law, on the basis of gross wages. The law which will effectively put the progressive excludes some employers from this taxation on hold from 1 January 2020 measure, such as employers that already until 31 December 2022. The proposed use other wage subsidy measures and amendment is currently proceeding through employers that have been granted financial Parliament. support for new employees.

Veton Qoku Attorney at law in cooperation with Karanović & Partners T +382 20 238 991 E [email protected]

23 NORWAY

New regulations regarding Supreme Court decisions on Both of the decisions are particularly permanent employment termination of employment important for employers bound by a New regulations relating to permanent and The Supreme Court of Norway concluded collective agreement. Employers not bound temporary employment came into force on in March 2019 that when downsizing, the by a collective bargaining agreement have 1 January 2020. The Working Environment decision ultimately depends on a total additional leeway in the process. Act, Section 14.9, now defines ‘permanent assessment of pre-set criteria. Several employment’ as continuous and indefinite employees claimed that their redundancy employment, where the employee is terminations were invalid and sued their given protection against termination of employer, . Skanska was bound by employment and has work security. a collective agreement, which stated that when downsizing, length of service could The purpose of the regulation is to limit the be deviated from if there are fair grounds for use of employees hired from temporary doing so. The employees won the case and agencies, where the employee does kept their jobs. The Supreme Court stated not have a guaranteed salary. With the that companies can emphasise criteria such new regulations the employee will be as competence and skill, and stated that guaranteed a particular monthly salary and such criteria can contribute to the survival the role must coincide with the expected of the business or at least strengthen the workload that the employer anticipates at prospects. However, the principle of length the time of taking on the individual. The of service has a particularly strong weight in criteria of predictability may be fulfilled companies bound by collective agreements, by a specific percentage, an average of and in this particular case there were not expected working hours or a shift plan. fair grounds for deviating from it. Whistleblowing and #metoo In October the Supreme Court decided on On 11 June 2019 the Parliament decided another case regarding the importance of that all the provisions in the Working length of service. The question before Environment Act Chapter 2A, regarding the court was whether the selection pool the right to notify censurable conditions at the employer had applied was objectively the undertaking, should be adjusted. The justified. Following an overall assessment, changes primarily make the provisions more the court’s conclusion was that the number accessible and easier to understand. The of employees and the composition of changes also strengthen the protection of the positions included in the selection employees making the notification of the pool resulted in the relevance of length censurable conditions. In addition, a new of service being substantially weakened. amendment was included in the Equality The Supreme Court concluded that the and Discrimination Act in June, establishing termination of employment was invalid. a low threshold to have #metoo cases tried The judgment also shows that the offer of before the Discrimination Committee. Both another suitable position does not make up of these new regulations came into force on for unreasonable selection criteria or a pool 1 January 2020. that is not objectively justified.

Lill Egeland Partner T +472 195 5624 E [email protected]

24 POLAND

Discrimination and mobbing certificates of employment, which no longer Employee Capital Plans (PPK) Since September 2019 it is easier for includes the employee’s parents’ . Employee Capital Plans (PPK) is a regulated employees to invoke provisions on general savings program that aims to In addition, further amendments to discrimination in disputes involving unequal encourage individuals to save in order to certificates include: treatment. The new legal environment have financial security once they reach 60 means that any unequal treatment of ▪ a longer period during which an years of age. PPK was introduced in the employees constitutes discrimination and all employee may apply to the employer largest entities (employing more than 250 criteria will be valid. The amendments also for a correction of a certificate of people) from July 2019. In the following extended the scope of employees entitled employment (from seven to 14 days); years, the obligation to establish PPK will be to seek compensation for mobbing (long extended. In 2021 it will cover the smallest term, repeated mistreatment, including ▪ clarification that the certificate of employers (fewer than 20 people) and the harassment and threats) at work. The pursuit employment must be issued on the last public sector. of compensation is no longer dependent on day of employment; Employee Pension Schemes the employee terminating employment first. ▪ clarification that the penalty ranging from An amendment has introduced new Changes to the PLN 1,000 to PLN 30,000 (from €234 to definitions and an electronic form of that affect proceedings €7,042) may be imposed for failure to communication between (potential) involving employees issue a certificate of employment within participants and employers. There are also A major change in the Civil Procedure Code the time limit (not for the sole ‘failure to new regulations concerning employee has also amended proceedings that are issue a certificate’, as it was previously); pension companies and wider obligations held with the participation of employees. and on employers in providing information Since 7 November 2019, at an employee’s to current and potential pension scheme ▪ the abolition of the employer’s obligation request, courts of first instance, in their participants. judgement, are able to oblige (among to specify in instructions to an employee others) the employer to retain the employee the appropriate labour court to which the Ban on Sunday shopping until the final conclusion of the proceedings employee may file a for correcting A partial ban on Sunday shopping has come involving that employee. a certificate of employment. into force in 2020 in accordance with the Sunday Trade Restrictions Act. The number Minimum wage Ending income tax contributions for young people of Sundays that shops are allowed to stay In 2020 the Polish national minimum wage Since 1 August 2019, young people (aged open will decrease from 15 in 2019 to seven will be PLN 2,600 gross per month (€610) under 26 years) are exempt from paying in 2020. The trading ban has been gradually for individuals working under employment personal income tax on gross annual phased in since its introduction in 2018. contracts, and PLN 17 gross per hour (€4) earnings up to PLN 85,528 (€20,240). for employees engaged under Until the end of 2019, receiving gross contracts. This is an increase of 15.6% on remuneration, without any income tax the minimum wage in 2019. contributions deducted, was conditional Certificate of employment on submitting a declaration stating an Due to changes introduced by the General individual’s intent to take advantage of this Data Protection Regulation (GDPR), since 29 benefit. From 2020 these declarations will June 2019 a new template must be used for no longer be required as the remuneration will be automatically paid gross.

Agnieszka Lisiecka Partner T +48 22 437 8200 E [email protected]

25 PORTUGAL

Amendment of the legal ▪ the duration of very short term contracts with either: rest, payment in lieu (under the framework on term employment has been extended from 35 to 70 days standard hourly rate) or an increase in the and agency work per year. The restriction preventing number of holidays. Going forward, this Recent changes to the Portuguese the use of this type of contract outwith will only be possible if at least 65% of the Labour Code have severely limited term or agricultural activities has been workforce approves it (limited to a maximum employment. The measures enacted include eliminated. It is now possible to use it in period of four years), or if provided in the the following: any activities that are characterised by an relevant CBA. irregular production cycle. ▪ the maximum duration of unfixed term In addition to the above amendments, the contracts has been reduced from six to The legal framework for agency work has Portuguese Labour Code also saw the four years; also been amended to: following changes introduced:

▪ the maximum duration of fixed term ▪ introduce a maximum of six extensions ▪ strengthening of Parental Rights; contracts has been reduced from three to when using agency work agreements; two years; ▪ introduction of additional duties and ▪ eliminate the minimum duration of such liabilities for the employer regarding ▪ while fixed term contracts can be contracts that excluded the applicability of harassment in the workplace; and extended three times, the duration of the user company’s collective bargaining such extensions cannot exceed the initial agreement (CBA) to temporary workers, ▪ limits placed on a non-affiliated duration of the contract; meaning agency workers will be covered employee’s ability to choose the by the CBA from day one; CBA applicable to their employment ▪ employers can no longer only hire relationship. candidates seeking their first job or long- ▪ impose a duty on the employer to term unemployed workers; provide the temporary worker with Forthcoming legislation information concerning the grounds that In 2020 it is expected that the Government ▪ only companies with fewer than 250 justify the execution of the agency work will introduce new legislation implementing employees can engage in fixed-term agreements; and additional social security contributions for recruitment on the basis that they are companies that report an excessive use launching new activities; ▪ introduce a mandate that if an agency of fixed term employment in their industry working agreement breaches legal sector. ▪ companies that make excessive use requirements the worker will be deemed of fixed-term recruitment have to pay a permanent employee of the user additional social security contributions. company. The additional contribution may be set at a maximum of 2% of the total sum of Another relevant amendment to the Labour wages; Code prevents an employer establishing a ‘bank of hours’ by individual agreement ▪ the trial period applicable to permanent with an employee. A ‘bank of hours’ is a employment contracts for candidates mechanism provided in Portuguese Law looking for their first job and long-term under which an employee may work up unemployed jobseekers has been to two additional hours per day. These extended to 180 days; hours do not qualify as overtime work. An employee can choose to be compesated

Nuno Ferreira Morgado Partner T +351 213 197 471 E [email protected]

26 ROMANIA

Increased gross minimum of Daily Workers, established under the new Employers are obliged to keep employees base salary legislation. informed of their rights in this by any possible means of communication (such as From 1 January 2019 the minimum monthly Value tickets gross salary increased to RON 2,080 (€440) programs and/or concrete actions). The newly adopted methodological norms for an average full-time employee and RON on the granting of value tickets (vouchers The period in which women 2,350 (€490) for employees who have offered to employees for discounted meals, can opt to continue working one year’s service in the field in which they until the age of 65 holidays, or entrance to the theatre, cinema, have graduated, working in positions that etc.) contain provisions on the validity The standard in Romania is require qualifications. of tickets. Employers are also obliged to currently 65 years for men and 61 years and In the industry, the current include relevant clauses in the internal two months for women. However, within minimum monthly gross salary for a full-time regulation (or in the negotiated collective 30 calendar days (previously 60 days) employee is RON 3.000 (€630). From 1 labour agreements). prior to the fulfilment of the standard age January 2020 a further increase has been conditions and minimum contributory period implemented, resulting in RON 2.230 (€470) Additional rest leave days for retirement, female employees can opt to for an average full-time employee. The other Employees undergoing an in vitro carry on working until they are 65. specific amounts remained unchanged fertilisation procedure (IVF) now receive an for 2020 as the long-term intention is to additional, paid, three-day rest leave per equalise the three differentiated salaries. annum, which is granted as follows: one day Daily workers at the time of egg retrieval and two days starting with the date of the embryo-transfer. An employee may not perform daily worker activities for more than 120 days during a News on harassment and equal calendar year, irrespective of the number treatment between women and men of companies for which they have worked. Methodological norms have been adopted There are certain sectors where daily setting out certain obligations in order workers can work for a maximum of 180 to prevent, combat and eliminate any days during a calendar year (e.g. the discrimination based on gender, and to sector and in ). ensure equal opportunities and treatment between women and men. Companies A company cannot employ a daily worker must: for more than 25 consecutive days. Should this be the case, a fixed-term employment ▪ have a clear internal policy to eliminate contract shall be signed by both parties. tolerance of harassment in the workplace, containing anti-harassment measures; Under the new legislation, daily workers and benefit from insurance under the public pension system (except for those in ▪ draft an internal procedure with respect the public health system and in the to rules for informing competent public insurance system for accidents at work authorities about non-compliance with the and occupational diseases). They are also legislation in this field. registered in the special Electronic Register

Gabriela Dinu Managing Associate, Head of Employment Practice T +40 21 20 11 200 E [email protected]

27 RUSSIA

Visa-free entrance to Russia for Introduction of a tax for Employees who would like to retain a paper 2020 UEFA European Football self-employed persons labour book may request this from their Championship Fan ID owners In 2019 a pilot project on the taxation of employer during 2020. For all new hires Due to the forthcoming 2020 UEFA ‘self-employed’ individuals (those who who will start a job in 2021, information European Football Championship being do not have an employer and do not hire about work periods will be recorded in hosted in Russia, foreign nationals who other individuals under labour contracts) electronic form only. have a Fan ID will be able to enter the was launched in , Moscow , New minimum wage country without a visa from 30 May 2020 Kaluga Region and . to 3 July 2020. Such foreign nationals are The minimum wage is expected to increase not required to obtain a visa in order to The Federal Tax Service has already warned by 7.5% in 2020. Employers cannot pay visit Russia for tourist purposes during the employers against re-hiring individuals as employees a basic salary below this legal aforementioned period established by law. self-employed in order to maximise tax and minimum. social security contributions. If the Federal New regulations regarding Tax Service discovers an employer has residence permits unlawfully re-hired individuals as self- Since 1 November 2019 certain categories employed persons, the company may face of individuals have been able to obtain a additional taxes and fees, and it may be Russian permanent residence permit for an held administratively liable. indefinite period. Previously, a permanent residence permit was issued for five years New litigation rules only, with the option to extend if necessary. In 2019 amendments to procedural legislation came into effect, which directly The list of individuals who can obtain a affect the procedure for handling labour Russian permanent residence permit, disputes. In accordance with the new rules, according to a simplified procedure, has only and individuals with legal- also been expanded. related higher education qualifications or a New rules regarding law degree can be representatives in court. severance payments The changes establish new cassation In 2020 new rules are expected to come revision rules. The amendment implies a into force to provide severance payments shortened limitation period of three months to employees who are dismissed when instead of six, in addition to all claims being a company goes into liquidation. The directly considered by the court presidium. new regulation is aimed at providing Previously, only selected cassation claims additional protection for this demographic could reach the presidium due to different of employees and will offer two options procedures of case revision. of payment structure: either a lump-sum payment at the date of dismissal or several HR digitalisation installments within two months of the In 2020 the plan is to replace paper dismissal date. The amount of severance labour books (statutory resources payment prescribed by law remains documents recording an employee’s unchanged. years of service) with electronic versions.

Irina Anyukhina Partner T +7 495 234 9692 E [email protected]

28 SERBIA

In 2019 legislation in Serbia underwent required to pay gradually decreasing year- interpretation and foresee that regulated various changes to provide regulatory on-year. staff leasing will have a positive impact on frameworks to existing and widely practiced the employment market. engagement mechanisms, which were It remains to be seen whether such tax previously lacking clear regulations or legal regulations will encourage employment recognition. authorities to apply the criteria to their own inspections as well. Law on personal income tax amended New law on staff leasing A so-called ‘independence test’ has been The long-awaited law on staff leasing has introduced. The purpose of the test is to been adopted and remains restrictive; establish whether independent contractors it limits the number of staff leased to a are indeed independent from the parties maximum of 10% of an employer’s total engaging their services, or whether they workforce. It also stipulates other specific are being contracted via entrepreneurial thresholds for companies employing fewer mechanisms solely to take advantage of than 50 workers. These limitations apply to a more favourable tax treatment. As part fixed-term employees only. of the test, nine comprehensive criteria Fixed-term employees may be leased are applied to each factual situation (e.g. for a maximum period of 24 months. If does the contractor perform works at the this deadline is exceeded, regulations of principal’s premises? Do they use the indefinite-term employment will apply. principal’s equipment? Do they receive Employers may lease workers for more than 70% or more of their annual income from 24 months only where they are entitled one principal or their affiliate? And is the by employment regulations to enter into a professional training they receive organised longer fixed-term employment contract (e.g. by the principal?). The aim is that, from a tax to work on a specific project or to replace perspective, independent contractors and an absent employee). ‘classic’ employees will eventually be in a similar tax position. Regarding indefinite-term employees, a new law entitles these individuals to The amendments also introduce an remuneration during gaps between periods incentive in 2020 for principals who are of leased employment, which cannot entering into employment agreements amount to less than the statutory minimum (which includes an obligation to pay wage in Serbia, as well as to severance pay applicable social contributions) with if they are made redundant. independent entrepreneurs. Such principals will be partially excluded from Overall, the new laws on employment the obligation to pay regular 70% salary tax regulations leave no room for discriminatory and social contributions for newly-engaged treatment of leased employees. We employees, which would be effective until anticipate that the new employment the end of 2022, with the sums they are regulations will pave the way for proper

Milena Jakšić Papac Partner T +381 11 3094 200 E [email protected]

29 SLOVENIA

The Slovenian employment and labour is already applicable for women, yet it would did not introduce any significant have decreased without the amendment. changes in 2019. However, during 2019 For both men and women, the pension- some employment-related laws were rating base has also increased for 15 years amended. We also anticipate some of the insured period, from 26% to 29.5%. modifications to labour regulations in early Furthermore, the pension will increase by 2020. 1.36% per child for up to three children. Labour Market Regulation Act Favourable treatment of An amendment to the Labour Market vacation allowance Regulation Act, which entered into force on Recent amendments to the Personal Income 27 December 2019, will raise the minimum Tax Act relieve taxes for vacation allowance. unemployment benefit (from €350 to The payment of the vacation allowance €530.19 gross), while also extending the is free of personal income tax and social insurance period required for the payment security contributions up to 100% of the of the benefit from nine to 10 months in the average monthly salary in Slovenia. last 24 months. In order to accelerate the Introduction of an electronic activation for older unemployed people, sick leave form the law specifically modifies the conditions An electronic version of the ‘justified for determining their benefit. However, restraint from work form’ will gradually unemployment benefit cannot be claimed replace the current paper form. by insured individuals who qualify for Consequently, employers will be required occupational and old-age retirement. A to submit their employee’s temporary work retired person will be entitled to work up to restraint electronically via an online system 90 hours a month for a maximum of three from 1 February 2020 (employees will no months in a calendar year. The annual longer be obliged to supply employers with number of hours of both temporary and a paper form). intermittent work remains unchanged (i.e. 720 hours). Increase of workers’ hourly wage Pension and Disability Insurance Act In accordance with the adopted amendment On 1 January 2020, extensive amendments of the Balance Act, as of 1 January to the Pension and Disability Insurance 2020 the minimum hourly wage for student Act came into force, aiming to provide workers increased from €4.89 gross (€4.13 improved social security for retired people, net) to €5.40 gross (€4.56 net). while increasing work activity among older employees through soft measures. The amendment offers an increase in the pension-rating base, to provide for 40 years of retirement, from the current 57.25% to 63.5% over six years. This percentage rate

Minu A. Gvardjančić Attorney at law in cooperation with Karanović & Partners T +386 1 200 9692 E [email protected]

30 SPAIN

There have been substantial changes in These systems should be established by alternatives to ensure disconnection training Spanish labour and employment legislation the Collective Bargain Agreement, by a and awareness measures for employees. during 2019, the most significant of which company policy, or negotiated with the include: workers’ representatives (e.g. agreeing a Looking ahead to 2020, following the policy that regulates the main principles General Election on 10 November 2019, ▪ Royal Decree 6/2019 of 1 March 2019, has of the recording system and the situations the Socialist and Podemos parties have established a new right for employees to in which the employee must record announced a pre- request an adjustment to their working working time). Failure to implement these agreement, which mentions several labour hours based on family needs (commonly mandatory tracking systems is punishable issues, including retirement pensions, a new known as ‘working schedule at will’). This with a fine. Equal Treatment Labour Law and the fight adjustment, which has been inserted against the precariousness in the labour in Article 34.8 of the Spanish Workers’ ▪ A new Personal Data Protection Law market. Statute, can involve either the duration was passed on 5 December 2018. or the distribution of working schedules This law regulates certain aspects of (e.g. it expressly includes schemes for employees’ use of IT resources (e.g. requesting remote working). The Article company email, , messaging, also states that the adjustment request etc.) within the scope of the employment must be reasonable and proportionate relationship. Subsequently, the law has to the employee’s needs and to the introduced new rights and entitlements company’s organisation and production. for employees. In particular, it expressly The Collective Bargain Agreement will states: establish the terms under which this right could be exercised. In its absence, – the employee’s right to privacy in the within a maximum of 30 days, both the use of those digital devices that are employee and the company must follow a provided by companies; negotiation process to assess the working – their right to “digital disconnection” schedule request. Once this process has (with a view to ensuring that employees ended, the company should either accept do not work during their rest time); and the employee’s request, reject it (arguing the proper objective reasons for doing – the employee’s right to privacy in so), or propose other alternatives in order relation to the company’s use of video- to meet the employee’s needs. surveillance or geolocation devices.

▪ Royal Decree 8/2019 of 8 March 2019, has Although the practical steps required stated the obligation for all companies to to underpin these rights are not clearly keep a daily record of the working hours defined by law, they have several practical rendered by their employees (regardless implications for companies that are of whether they work overtime or currently being analysed and measured. not). This Royal Decree provided for In this regard, companies will be obliged a transitional period of two months to establish specific policies defining the following its approval to set and approve a recording system to keep a daily record.

Ángel Olmedo Jimenez Partner T +34 91 514 52 00 E [email protected]

31 SWEDEN

New rules regulating a Further changes to employee protection prolonged right to work rules came into force on 1 January 2020. According to the rules stipulated under For example, an employer may give notice the Swedish Employment Protection of termination to an employee who has Act (Sw. Lagen om anställningsskydd), reached the relevant age at any time an employee’s entitlement to protection without having to prove an objective ground decreases after they have reached a for termination. certain age. Up to 31 December 2019, this Suggested amendments regarding implied that an employer could, regardless rules for posted workers of reason, terminate the employment of There is currently ongoing discussion an employee reaching the age of 67 years regarding possible amendments to the by the end of the month by giving the Swedish Posting of Workers Act (Sw. employee at least one month’s notice. If the Utstationeringslagen). Certain amendments employer failed to give notice within this have been proposed to further increase the time-frame, the employment would continue protection for posted workers operating as normal entailing, inter alia, an obligation in Sweden. Such amendments would, for for the employer to prove an objective example, imply that trade unions could ground for termination of employment. After use industrial action to enforce wage reaching the relevant age an employee demands following the level stipulated in an is not entitled to more than one month’s applicable collective bargaining agreement notice period and is not covered by certain (and not only the statutory minimum wage). rights, such as a preferential right to re- employment. Employers posting employees for a longer period (i.e. more than 12 or 18 Certain amendments to these established months) shall also be required to apply laws and rules have now been implemented additional statutory terms and conditions as part of the Swedish Government’s work of employment for posted workers which in extending the average working lives of its are applicable for equivalent workers citizens as part of changes to the country’s in Sweden. For longer postings, where pension system. industrial action is concerned, trade unions From 1 January 2020, the age from which will be able to enforce demands for terms employment protection is decreased will of employment where there is an applicable be raised to 68 years. From 2023 this will Swedish collective bargaining agreement. increase to 69 years, and from 2026 the The amendments are expected to come into age will increase further. force from 30 July 2020.

Emmy Falck Senior Associate T +46 8 677 54 23 E [email protected]

32 SWITZERLAND

The revised Act will enter the reference month. Personal and job- Information about the results into force in Switzerland on 1 July 2020. related characteristics include: education; The employer is obliged to inform their It obliges employers with more than 100 age; qualifications; experience; duties; and employees of the results of the report in employees to conduct an internal wage benefits. Differences between women’s and writing within one year. The results must equality analysis, to have this reviewed men’s wages for work of equal value are also be published to shareholders of listed by an external body and then confirm the considered wage inequalities if they cannot companies as part of their annual financial results in writing. be objectively rationalised. The standard statement. statistical procedure allows for a difference Employers obliged to Soft sanctions carry out analysis in wage of up to 5%. Wage inequalities do not directly impose Employers with over 100 employees are The first analysis must be conducted no legal sanctions. However, those employers obliged to analyse their wage equality later than 30 June 2021 and repeated every who do find wage inequalities in their for the year in question. For the purposes four years. If initial findings reveal that the reporting must repeat the analysis until of the report all employed persons, employer respects wage equality then they equality is achieved. Furthermore, excluding apprentices, are recorded as ‘full’ will be exempt from further wage equality employers operating with wage inequalities employees regardless of part-time working analysis. risk wage discrimination claims and damage arrangements. Review of analysis to their reputation. Employers are exempt from conducting the The analysis is subject to the Swiss Code Recommendation analysis if: of Obligations and must be reviewed by an Employers that will likely have to conduct independent body. Only accredited auditors, ▪ they are already subject to a wage the analysis should start collecting the employee representatives according to the equality analysis in a public procurement required data and may also wish to Participation Act and organisations which, or subsidy procedure, provided that the proactively prepare and conduct a trial according to their status, promote equality reference month is no more than four analysis. between women and men or safeguard years ago; or the interests of employees (trade unions) ▪ a report has proven that they respect and have existed for at least two years, are wage equality (subject to conditions). authorised to review an analysis. The analysis The independent body must review the The analysis can be conducted by either analysis to establish formal compliance the employer or appointed third parties, rather than material assessment. The details provided the method of reporting is both of the review (e.g. scope, requirement, scientifically and legally compliant. The procedure etc.) are only stipulated for Swiss Federal Government offers a free accredited auditors and must be determined tool (Logib) for employers to conduct the on an individual basis by agreement with standard statistical procedure. the other bodies.

For the report, all paid wages (consisting of Accredited auditors must report their results both basic and social wage components), within one year of conducting the analysis and personal and job-related characteristics and by 30 June 2022 at the latest. of all employees must be recorded for

Ueli Sommer Partner T +41 58 658 5516 E [email protected]

33 TURKEY

The major changes within the agreements made before 27 March 2018 employment legislation during the year should be returned to the tax authorities 2019 are as follows: and indicated the procedures of application to the Tax Offices. For further information Turkish Private Pension System (Individual Pension tax advisors should be consulted. Savings)/January 2019 Determination of the An amendment to the regulation of Date for Termination at Individual Pension Systems was published Mediation/March 2019 in the Official Gazette on 27 December Since October 2017 to bring a lawsuit 2018. It made some new arrangements for labour receivables or reemployment, to the mandatory Turkish private pension parties must have gone through mediation. enrolment of employees. Pursuant to the Social Security Institution’s Circular that was published on Official Firstly, employees under 18 years of age Gazette dated 28 February 2019, where an (young and/or child workers) are now employer and employee cannot agree on included in the scope of the system. The the re-employment of the employee during system previously included only those in the the mediation process, the termination will 18-45 age range. become effective and the termination date will remain the same. Furthermore, the Newly established employers with at least dismissal date will remain unchanged. five employees have to make an automatic Individual Pension System (BES) contribution Severance Pay Ceiling/July 2019 at the beginning of the following year. As The amount of severance pay for each per the new rules, employees who full year of employment is limited with the the system using the right of withdrawal, severance pay ceiling valid at the moment after being automatically enrolled in the of termination. The severance pay ceiling is system, shall be automatically re-enrolled determined according to the annual rates in the system after three years. This will announced for the period between January be a one-off application and shall be and June and between July and December. implemented according to the principles The ceiling amount for severance pay may announced by the Ministry. not be higher than the maximum retirement Income Tax General bonus to be paid to the highest ranking civil Communique March 2019 officer, subject to the Civil Servants Law, for Income Tax General Communique Number one year of service. As of 1 July 2019 the 306, published in the Official Gazette ceiling is TL 6,379.86 (€1,007.48). dated 15 March 2019 and numbered 30715, entered into force on the same date. Articles 10 to 15 of the Income Tax General Communiqué stated the conditions under which deductions under mutual termination

Senem Gölge Yalçın Attorney at Law T +90 212 359 57 00 E [email protected]

34 UKRAINE

Changes to labour law inspection introduced the following rules regarding the procedure regarding protection protection of disabled employees: of disabled employees On 5 June 2019 the of Ministers ▪ The Labour Service may conduct of Ukraine adopted Regulation No. 466, both scheduled and unscheduled which changed the governmental office inspections. Scheduled inspections are authorised to oversee compliance with legal to be conducted according to an annual requirements for the protection of disabled inspection plan and employers should employees (the Inspection Procedure be notified at least 10 days prior to the Regulation). Under the old legal regime inspection. Unscheduled inspections may this authority was vested with the Fund for be conducted without any preliminary Social Protection of Disabled Individuals. notification based on existing legal Under the new Inspection Procedure grounds, e.g. complaints from an Regulation, this authority is passed to the employee or disabled person, or untimely State Labour Service of Ukraine. As a result, reporting. However, such inspections may the labour service now has a broad range of not exceed a total of 15-30 days per year areas of supervision and control, including depending on the company size. identification of undocumented labour and ▪ An employer may prohibit the inspectors’ compliance with labour law requirements, access to the company’s premises such as compliance with the labour based on specific legal grounds, such as protection rules. Notably, the Inspection deficiencies in the documents authorising Procedure Regulation deals only with the the inspectors to conduct such an competence to check compliance with inspection or failure of the Labour Service the legal requirements for the protection to approve and/or make public templates of disabled employees. Under Ukrainian of inspection documents templates. law, all employers with more than eight employees must comply with the quota ▪ Upon completion of an inspection, the regarding the employment of disabled inspectors are required to issue final individuals. Companies with fewer than reports specifying whether an employer 25 employees must employ one disabled complies with the relevant employment person. For companies with more than quota for disabled individuals. 25 employees, the mandatory disabled employee quota is 4% of the average ▪ There is a specific list of documents number of employees during the respective that may be checked by the inspectors, calendar year. The Inspection Procedure including a schedule of positions and Regulation provides for overseeing salaries, employment agreements and compliance with the above noted quota and employment orders issued with regard to deals with issues of control over registration disabled employees. Inspectors cannot with, and timely reporting to, the Fund for request documents for review that are not Social Protection of Disabled Individuals. listed here. The Inspection Procedure Regulation

Armen Khachaturyan Senior Partner T +380 44 230 6000 E [email protected]

35 UK

Brexit that meet certain criteria, and the rules otherwise unenforceable covenants can Brexit was pushed back in 2019, and we will not apply where an individual would be amended by ‘ pencilling’ (deleting) anticipate that European migration to the legitimately be self-employed if the client certain words (in this case, ‘interested in’) to UK workforce will continue to decrease. engaged them directly. Businesses should render the covenant enforceable. The UK government continues to promise audit arrangements with contractors to to make no changes to the rights of EU determine whether the rules apply, and workers already in the UK. However, these prepare payroll for the impact of the new workers must submit an application under rules. the EU Settled Status Scheme or face being Parental Leave in the UK illegally. Following the result In two discrimination cases that were heard of the General Election on 11 December together in 2019, the Court of Appeal found 2019, the Conservative Party has a majority that it was lawful for employers to enhance government and we anticipate that Brexit maternity pay but to offer only statutory will go ahead at the end of January 2020. shared parental pay for fathers/partners. We The impact that this will have on UK expect that the decision will be appealed employment law remains to be seen, as to the Supreme Court, so many employers much of the European Law in force in the are adopting a ‘wait and see’ approach UK is ‘ plated’, with domestic legislation before making changes to their family leave going further than EU law requires. For policies. Public opinion is moving towards example, the minimum holiday entitlement more balanced parenting and offering for full-time workers in the UK is 28 days, equivalent enhancements could contribute compared to the 20 days mandated by the to resolving the gender pay gap. Moreover, EU. the Government is consulting on potentially Tax changes for independent wide ranging changes to the UK’s various contractors family leave regimes. In the UK, where an individual is acting like Restrictive Covenants an employee of a business, but has formed In 2019 the Supreme Court (SC) considered their own (personal service the use of restrictive covenants for the first company/PSC) to provide services to the time in 100 years. The SC examined the business, the PSC should operate PAYE use of the words ‘interested in’, within a on payments made to the individual, as non-compete restriction, finding that this well as paying employers’ NICs. The aim is prevented a former employee from holding to remove tax advantages for consultants even a minor shareholding in a competing providing services via a PSC who are not business. The breadth of this covenant truly in business on their own account. rendered it void as an unreasonable From April 2020, the responsibility for restraint of trade. The SC went on to look determining employment status and paying at the scope of the restrictive covenant payroll taxes will shift to the end client (i.e. doctrine in order to determine the correct the company engaging the contractor). test for severance. It was held that There are exemptions for small businesses

Kevin McCavish Neil Maclean Partner/Head of Employment Head of Employment and Thames T +44 0131 473 5181 T +44 3700 86 8802 E [email protected] E [email protected]

36 37 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 Cyprus Lejla Popara Attorney at Law in cooperation with Alexandros Efstathiou Karanovic & Partners Associate T +387 33 844 000 T +357 22 777000 E [email protected] E [email protected]

Czech Republic Denmark Václav Rovenský Lise Høy Falsner Partner Attorney-at-Law, Partner T +420 224 103 316 T +45 36 94 13 69 E [email protected] E [email protected]

Estonia Finland Karina Paatsi Carola Möller Partner Partner T +372 665 1888 T +358 29 000 6250 E [email protected] E [email protected]

France Germany Eva Kopelman Prof. Dr. Martin Reufels Counsel Partner T +33 (0)1 45 05 82 83 T +49 221 20 52 331 E [email protected] E [email protected]

Greece Hungary Terina Raptis Dr. Hédi Bozsonyik Partner Partner T +30-210-3670400 T +36 1 472 3000 E [email protected] E [email protected]

Iceland Ireland Erla S. Árnadóttir Duncan Inverarity Partner Partner T +354 590 2600 T +3531 649 2401 E [email protected] E [email protected]

Italy Latvia Cristina Capitanio Irina Kostina Partner Head of Employment Law Practice T +39 06478751 T +371 67814848 E [email protected] E [email protected]

Montenegro Lithuania Stefan Lučić Ramūnas Petravičius Independent attorney at law in cooperation Partner with Karanović & Partners T +370 52681825 T +382 20 238 991 E [email protected] E [email protected]

38 North Macedonia Netherlands Veton Qoku Cara Pronk Attorney at law in cooperation with Lawyer Karanović & Partners T +31 (0)20 6789 503 T +382 20 238 991 E [email protected] E [email protected]

Norway Poland Lill Egeland Agnieszka Lisiecka Partner Partner T +472 195 5624 T +48 22 437 8200 E [email protected] E [email protected]

Romania Portugal Gabriela Dinu Nuno Ferreira Morgado Managing Associate, Head of Employment Partner Practice T +351 213 197 471 T +40 21 20 11 200 E [email protected] E [email protected]

Russia Serbia Irina Anyukhina Milena Jaksic Papac Partner Partner T +7 495 234 9692 T +381 11 3094 200 E [email protected] E [email protected]

Slovenia Spain Minu A. Gvardjančić Attorney at law in cooperation with Ángel Olmedo Jimenez Karanović & Partners Partner T +386 1 200 9692 T +34 91 514 52 00 E [email protected] E [email protected]

Sweden Switzerland Emmy Falck Ueli Sommer Senior Associate Partner T +46 8 677 54 23 T +41 58 658 5516 E [email protected] E [email protected]

Turkey Ukraine Senem Gölge Yalçın Armen Khachaturyan Attorney at Law Senior Partner T +90 212 359 57 00 T +380 44 230 6000 E [email protected] E [email protected]

UK UK Kevin McCavish Neil Maclean Partner/Head of Employment London and Head of Employment Thames Valley T +44 0131 473 5181 T +44 3700 86 8802 E [email protected] E [email protected]

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