Employment Trends Europe - May 2019

Upcoming events

  • Quarterly webinar - European Employment Law Update - 17 May 2019, 09:30-10:00.
    Covering: An update on recent developments in Employment law across our practices in the UK, France, Germany, Italy, the Netherlands and Spain.
    Hot Topic update: #MeToo.
  • TMT Sector Update - 23 May 2019, 09:30-17:30. This sector focused training day offers the chance to hear about a broad range of TMT-related topics from a variety of legal and business speakers operating within the TMT sector.
  • Quarterly webinar - Asia Employment Law Update - 03 July 2019.
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Details of webinars, conferences and telephone conference calls covering developments in employment law are available here.

Belgium

New legislation for the 2020 Social Elections

At its plenary session on 28 March 2019, the Federal Parliament adopted a bill aimed at regulating and simplifying the rules for holding the 2020 Social Elections. Social Elections are held every four years in Belgium in order to elect workers’ representatives who will sit on the company’s collective bodies, namely the Works Council and/or the Committee for Prevention and Protection at Work (CPPW).

The key elements of the new Act are summarised below:

Employment threshold - the threshold of employees required for the establishment of a Works Council remains at 100 (or, in limited cases, 50 if the number of employees since the last elections has dropped below 100 but still amounts to at least 50 for the 2020 Social Elections). The threshold of 50 employees still applies to the CPPW.

Reference period - the new Act amends the reference period for calculating the average number of employees. For the 2020 elections, this period started on 01 October 2018 and runs until 30 September 2019. As was previously the case, the average number of employees can still be calculated over four quarters, but the period has been brought forward by one quarter. This way, companies will know by 01 October 2019 at the latest whether it must start the election procedure in December 2019.

For temporary agency workers, this period runs from 01 April 2019 to 30 June 2019.

Election date (day Y) - the Social Elections must be held between 11 May and 24 May 2020.

Voter lists - in light of the GDPR, the Parliamentary Explanation (in line with advice 156/2018 of the Data Protection Authority) states that if electoral lists are made available electronically, this must be done on a closed platform or on an intranet secured by the employer that is only accessible by employees of the company. Sending electoral lists by email is therefore not permitted.

Electronic voting - the decision to proceed to electronic voting no longer has to be taken unanimously by the Works Council, the CPPW or the trade union delegation (unless internal regulations stipulate that all decisions have to be taken unanimously).

Protection against dismissal for company directors

Under the new Belgian Companies Code, the current “ad nutum dismissal” principle - by which company directors can be dismissed at any time without notice or indemnity - will no longer be mandatory but will be optional. This change enables companies to offer their directors protection against dismissal (such as providing a notice period and/or compensation) under the articles of association or individual service agreements. However, the shareholders can still terminate a director’s mandate at any time for legitimate reasons, without notice or indemnity in lieu of notice. If a director believes that there is no legitimate reason for the termination, he or she may contest this before the business court. If the reason is found not to be legitimate, the court will decide whether it is appropriate to reinstate the director or award compensation for the dismissal.

Introduction of a mobility allowance

Since 01 March 2019, employers have been able to offer a mobility allowance as an alternative to a company car. A mobility allowance is intended to accommodate “greener” transport choices for employees and be a more sustainable alternative, without increasing the cost to the employer.

There are three options available to all eligible employees (combinations are possible). These options are:

  1. an environmentally friendly company car - at least as environmentally friendly as the car being exchanged
  2. other more sustainable means of transport, including public transport, bicycles, car-pool or car-sharing services, and
  3. a cash balance, payable to the employee at the end of the year.
Maximum voluntary overtime hours increased from 100 to 120

The system of voluntary overtime allows an employee who is asked to do overtime by their employer, and who wishes to do so, to work a limited quota of 100 hours of overtime per calendar year. This quota can be increased to a maximum of 360 hours by a collective bargaining agreement that is declared generally binding.

With CBA 129 (a national CBA that is applicable to the private sector in Belgium), the quota for voluntary overtime has now been increased to 120 hours per calendar year for all companies in the private sector. This new quota does not affect existing industry-level CBAs with a higher quota. It also remains possible for industries to further increase the quota to a maximum of 360 hours per calendar year under a CBA that is declared as generally binding.

England

Working Relations, our monthly newsletter, reviews the most important cases and developments affecting employers in the UK.

CJEU decision: employers must record working time

On 14 May 2019, the CJEU ruled that Member States must require employers to set up a system enabling daily working time to be measured - otherwise it would be impossible for workers to ensure compliance with the working time limits under the EU Working Time Directive and Charter of Fundamental Rights.

Member States are free to define how to implement such a system, including the form it must take, having regard to sector characteristics and size of operations.

The case (CCOO v Deutsche Bank) was brought by a Spanish trade union in a group action against Deutsche Bank before the National High Court in Spain (see Spain below), and then referred to the CJEU.

The Working Time Regulations, which implement the EU Directive in the UK, currently require employers to maintain “adequate records” to show that workers (other than those who have opted out) are working within the weekly and night working time limits. However, the Regulations do not require all hours of work (or rest breaks) to be recorded. Health and Safety Executive guidance states that specific records are not required and that employers may be able to rely on other records, such as pay records, to meet their obligations. It therefore seems likely that the Working Time Regulations may not comply with the EU Directive, and will likely require review.

The onus is therefore on the UK as a Member State (rather than individual employers) to ensure that its legislation meets the requirements of EU law. There does not seem to be any immediate action that needs to be taken by employers in the UK.

France

Bonus clawback for Material Risk Takers

A new bill on “growth and transformation of companies” has been adopted by the French Parliament and will be enforceable after it has been deemed compliant with the constitution.

Amongst its various provisions, new provisions on Material Risk Takers have been adopted, which provide for the following:

  • the possibility to claw back or reduce the bonus of a Material Risk Taker when the employee has breached their duty of integrity or disregarded the Company’s rules, and
  • for calculation of severance pay, bonuses received by Material Risk Takers will not be taken into consideration to assess the average remuneration of the employee.
Gender pay gap reporting now in force

Companies with at least 50 employees must calculate, on an annual basis, an Index of five indicators scored out of a total of 100 points (according to the methodology to measure equal pay between men and women, as provided in the decree). Each indicator has a value in points and is determined based on a sliding scale of points.

The final scores are required to be published by:

  • 01 September 2019, for companies with at least 251 to 999 employees, and
  • 01 March 2020, for companies with 50 to 250 employees.

Companies with at least 1,000 employees were required to publish their results of the Index on gender pay by 01 March 2019.

New sanctions for failure to comply

On 30 April 2019, a new decree was published which provides for a new sanction for companies which:

  • fail to publish the final score (on the date indicated above)
  • fail to implement corrective measures where they have a final score of less than 75 points, or
  • fail to establish a professional gender equality agreement (negotiated with trade union representatives, providing for measures to achieve professional equality between men and women) or, if applicable, an action plan in this respect.

When it becomes aware of any such failure, the Labour Administration has the power to issue formal notice to comply with a time limit as short as one month (however this may be longer depending on the nature of the failure). This new decree therefore puts an end to the six-month grace period awarded before. Should the company not comply with its obligations within the imposed time limit, the Labour Administration may impose a maximum fine of one per cent of total monthly payroll (for each month it fails to comply with such obligations).

This new sanction applies to all formal notices given from the 01 May 2019.

Germany

Temporary part-time working law

On 01 January 2019, the temporary part-time working law (“Brückenteilzeitgesetz”) came into force. Since then, employees can request a reduction in their working hours for a period of one to five years, providing that the following criteria are met:

  • the employer has more than 45 employees
  • the employee making the request needs to have been employed for a period of more than six months
  • there are no legitimate operational/business reasons to refuse the request, and
  • only a limited number of employees can request temporary part-time working if there are less than 200 employees employed by the employer.
Protection of Business Secrets

On 21 March 2019, the German parliament passed new legislation for the protection of business secrets (“Gesetz zum Schutz vom Geschäftsgeheimnissen”). This transfers the EU Trade Secrets Directive (2016/943) into German national law.

New law for Tax Accompaniment in case of Brexit

On 29 March 2019, the Law for Tax Accompaniment in case of Brexit (“Brexit-Steuerbegleitungsgesetz”) came into force. This law is designed to increase the attractiveness of Germany as a base for British financial institutions.

Under the new law, risk takers in financial institutions are deemed to constitute “senior executives” if they earn three times the upper limit for the German pension insurance (currently €234,000 in Western Germany / €208,000 in East Germany), with the consequence that their protection under the German Dismissal Protection Act (“Kündigungsschutzgesetz”) is weakened. If litigation follows the dismissal, the employer can terminate the employee’s employment by making a request to the court without the need for justification. The employee is then entitled to compensation of basically up to twelve months’ salary.

Flexible working for all employees

The German Social Democratic Party has proposed a new law which would entitle all employees to work from home.

Italy

European Parliament adopts directive on transparent and predictable working conditions

The recent adoption by the European Parliament of minimum rights for workers under the directive on transparent and predictable working conditions will prove complex for various EU jurisdictions, including Italy. The directive is designed to benefit workers without fixed or guaranteed hours, including those working in the ‘gig economy’, such as the growing number of riders who deliver online food orders by bike. The minimum rights for workers include compensation for last-minute cancellation of work; the requirement that mandatory training be provided free of charge; and a ban on exclusivity clauses.

Italy, along with other Member States, will have three years to transpose these rules into its domestic law. The complexity, however, lies in the definition of “workers” at an EU and Member State level, as well as that the European Parliament has excluded “genuinely self-employed” individuals from the new rules.

Indeed, in Italy (as illustrated in previous editions of ETE), riders have been considered in the most recent court decisions as genuinely self-employed, autonomous workers – the very same category of individuals that the European Parliament has excluded from the new protections. Thus, the transposition of these new rules is set to prove problematic and will require further consideration.

Netherlands

The Balanced Labour Market Act

On 05 February 2019, the Balanced Labour Market Act (Wet arbeidsmarkt in balans) (the "Act") was adopted by the House of Representatives. The expected date of implementation is 01 January 2020, although the Act must still be adopted by the Senate. The purpose of the Act is to reform the labour market and to close the gap between permanent and flexible employment agreements.

The key reforms are summarised below:

Transition payment - Currently, employees who are dismissed and have been in service for two years or more receive compensation in the form of a transition payment from their employer (unless the dismissal was prompted by serious misconduct on the part of the employee). Under the Act, employees will now become entitled to the transition payment from the start of employment, notwithstanding the probationary period. Further, under the new Act, the amount of the transition payment will be calculated based on one-third of the monthly salary for each year of service during the entire employment term.

This is a significant change from the current law for employees with ten years of service or more, since the transition payment for these employees is currently calculated based on one-third of the monthly salary for each year of service during the first ten years and fifty per cent of their monthly salary for each year of service after ten years.

Reason for dismissal - Employees who are employed under an employment contract for an indefinite period of time can currently only be dismissed if the employer can demonstrate that there is a reasonable ground for dismissal and one or more of the statutory dismissal grounds are fully satisfied. Under the Act, a cumulation of grounds for dismissal will be permitted and, as a result, an employment contract may be terminated unilaterally if there is a combination of two grounds or more. However, this cumulation will only be possible in respect of grounds relating to the so-called “personal reasons”. The grounds relating to business or economic reasons or long-term illness are excluded. If the employment contract is terminated based on a cumulation of dismissal grounds, the court can award an additional payment to the employee amounting to a maximum of fifty per cent of the transition payment to which the employee is entitled.

Other reforms under the Act include:

  • the maximum number of consecutive fixed term employment contracts has increased from two (in a period of two years) to three in a period of three years in total
  • more favourable working conditions for on-call employees, and
  • a new definition for ‘payrolling’ will come into force, and as a consequence (amongst others) payroll employees must be treated in the same way as employees who work directly for the employer.

Finally, the proposed changes to probationary periods have not been adopted. This means that: i) including a probationary period in an employment contract not exceeding six months will not be possible ii) the probationary period in a fixed term employment contract agreed upon for a period of longer than six months and up to two years may not be longer than one month and iii) the probationary period in a fixed term employment contract with a duration of two years or more, or a permanent employment contract, may not exceed two months.

Spain

Recording of working hours

Following the Royal Decree-Law 8/2019 of 12 March 2019, companies in Spain are now required to record the exact start and end time of each worker’s working day, on a daily basis (although there may be some flexibility in specific cases). Prior to the Royal Decree-Law 8/2019, specific time recording was only compulsory for part-time employees.

The specific manner in which the company must document and organise the working hours records may be established by collective negotiation, company agreement, or in the absence of such an agreement, by the company’s decision following consultation with the workers’ legal representatives.

According to Royal Decree-Law 8/2019, the data collected on working hours should be preserved for at least four years, and shall be made available to employees, their legal representatives and the Labour and Social Security Authorities. Failure to comply with this obligation shall be considered a serious infringement, with a potential maximum fine amounting to €6,250.

Gradual increase in length of paternity leave

The Royal Decree-Law 6/2019, dated 01 March 2019, sets out the gradual increase in the length of paternity leave. Since 01 April 2019, the length of paternity leave has been eight weeks, the first two of which must be enjoyed immediately after childbirth, uninterrupted and on a full-time basis.

The length of paternity leave will gradually increase until it becomes equivalent to maternity leave by 2021 as follows:

  • eight weeks from 01 April 2019, of which the first two weeks are compulsory and must be uninterrupted
  • twelve weeks from 2020, of which the first four weeks are compulsory and must be uninterrupted, and
  • 16 weeks from 2021, of which the first six weeks are compulsory and must be uninterrupted - when equivalence with the length of maternity leave will be achieved.

Other elexica articles of interest

Reduced Dismissal for Top-Banker - 28 February 2019

Government proposals to limit and regulate employer non-disclosure agreements - 07 March 2019

Labour Leader: The SFC takes steps to tackle the problem of “rolling bad apples” in Hong Kong - 13 March 2019

Off-payroll working in the private sector: further policy paper and consultation - 14 March 2019

Government responds to CMA’s recommendations in connection with adverse effects on competition within the investment consultancy and fiduciary management markets - 15 March 2019

Prosecutions for snooping employees - 01 April 2019

Employment claims - compensation limits change - 06 April 2019

Belgian Brexit contingency measures regarding migration and social security in he event of a “no-deal” - 12 April 2019

FCA Business Plan 2019/20: Culture Proposals - 26 April 2019

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.