Yesterday we hosted a dynamic panel featuring four of our favorite European colleagues for a breakfast briefing in Palo Alto. Susan Eandi moderated a lively discussion with Nadège Dallais (France), Bernhard Trappehl (Germany), Fermin Guardiola (Spain) and Nicola James (United Kingdom).
Our colleagues gave guests an inside look at sociopolitical trends driving employment law change in each of their respective countries, as well as sharing important updates related to practical issues employers are currently facing.
In case you missed it, here are a few of the headlines:
France: French government reclaiming its global appeal for business
- Since Macron was elected, there have been significant changes aimed at increasing the attractiveness of France for businesses. Several positive changes for employers include:
- Increased certainty when it comes to unfair dismissal damages (new caps)
- Simplification of employee representative bodies (the four main employee representative bodies will progressively merge to one CSE (“Comité Social et Economique”) over the next several years)
- Reform to economic redundancies (economic difficulties are now limited to those encountered at the French level instead of the group level)
- A few hot topics to be aware of:
- The right to work from home is an emerging concept in France; we strongly recommend having a policy or employment agreement provisions in place that outline the parameters for employees
- Employees have a right to disconnect. Contrary to press reports, this does not mean employers must cut off email at a certain hour. Rather employees should be apprised of their right to disconnect
- Bonus plans offered to French employees must be in French (this has tripped up US employers on a few occasions)
- The government is currently considering more stringent legislation related to gender pay . . . stay tuned
Germany – The new France?
- Employment law changes announced by the “Grand Coalition” are making life a bit more complicated for German employers. For example:
- Maximum duration for fixed-term employment contracts without objective reason decreased from 24 months to 18 months
- New restrictions on fixed-term employment contracts with objective reasons (not allowed if employee has been employed for more than 5 years)
- New “right to return to full-time” from part-time work
- Newly enacted “Transparency of Remuneration Act” responds to global focus on the gender pay gap
- Includes right to information on the remuneration paid to peers of the gender for comparable work (if >200 employees in Germany)
- Encourages company auditing (for companies > 500 employees in Germany)
- Establishes a reporting obligation (for companies > 500 employees in Germany)
- Authorities are demonstrating increased interested in misclassified employees
- Drastic criminal charges (including imprisonment) are possible
- Use of independent contractors can be legal if well-planned; ask your Baker McKenzie lawyer about the “bridge point model”
Spain – On a come back
- After a period of difficult economic times, Spain is coming back. GDP growth in FY17 was larger in Spain than in the US or Germany, though Spain’s unemployment rate is still high
- Experiencing near legislative paralysis (with the exception of Catalonia!) but will likely see changes coming soon given the upcoming election. Stay tuned as several draft bills are in Parliament:
- Simplification of employment contracts (only one fixed term contract and indefinite term contracts; both will have severance compensation but terminations should not be complex)
- More obligations with respect to gender pay are proposed
- Proposed change to require equality of remuneration for subcontract’s and main contractor’s employees.
- Considering an obligation to record daily working hours in all situations
- Increased focus on protecting trade secrets given as Spain will incorporate the EU Directive of Trade Secrets; now is a good time to review related policies, procedures and employment contracts in Spain
- Rise in labor inspections and litigation from contractors challenging their employment status
UK – Brexit looms large, the future of the gig economy is litigated and the press fixates on gender pay gap numbers
- Brexit looms with many important details left to be sorted. However, from an employment law perspective, we expect little will change for the time being as all EU law is being incorporated into UK law
- Unlike the US, the UK has 3 types of employment status: employee (lots of rights), self-employed contractor (minimal rights, if any), and worker (middle ground where individuals have some rights like holiday pay, national minimum wage, and union recognition)
- In a recent wave of misclassification lawsuits, there has been a trend for finding individuals who have entered into contracts as self employed contractors to, in fact, be workers. For instance, in recent litigation involving Uber, drivers were deemed workers for performing personal work. However, one recent case has bucked the trend in which Deliveroo riders were found to be self-employed contractors. A different conclusion in Deliveroo was reached because their contracts included a provision allowing for substitution, meaning their riders were not required to provide personal service. In any event, it’s too soon rely on any of these decisions as they are all subject to further hearings.
- The first publishing deadline of the UK Gender Pay Gap reporting just passed yielding intense media scrutiny of data and high levels of public interest
- Under the 2017 regulations, employers with 250+ employees in the UK must publish the percentage difference in mean and median hourly pay and bonus paid to women compared to men, among other things
- As a result, we are finding an increase in employers conducting equal pay audits under the advice and privilege of legal counsel
For more details, please contact your Baker McKenzie lawyer.