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We recently recorded a lively discussion with several of our Baker McKenzie colleagues to discuss the major developments impacting multinational employers operating in Europe. For your convenience, click here for a link to the recording.

To preview some of the key changes our team highlighted, read on!

The socio-political climate across Europe is contributing to a challenging environment for multinational businesses operating in the region. Economic growth has slowed, there is significant political tumult in a number of countries, and geopolitical tensions and conflict have further complicated supply chains, investment decisions and regulatory compliance.

The European Union is advancing several regulatory priorities that will significantly impact global employers, particularly in the areas of pay equity, competition law, and employee representation.

  • The EU Pay Transparency Directive, set to be implemented by June 2026 mandates (among other things) that employers: (i) disclose salary ranges in job postings and (ii) prohibit inquiries into candidates’ salary histories. Companies with over 250 employees must report gender pay gaps annually, and if disparities exceed 5% without objective justification, they must conduct joint pay assessments with worker representatives.
  • The EU is intensifying enforcement against anti-competitive behavior, with a focus on labor market collusion, such as wage-fixing and no-poach agreements. Employers must be vigilant in their hiring practices and inter-company collaborations to avoid breaching competition law, which now increasingly encompasses employment-related conduct. For more, see our article: Antitrust Scrutiny of HR Practices Intensifies Globally.
  • The EU Commission is seeking to amend the existing European Works Councils legislation which, if the latest proposal is approved, will significantly strengthen workers’ and EWCs’ rights.

At a high level, here are a few of the specific changes – all discussed in further detail in the recording – unfolding in particular countries:  

  • Belgium’s new federal government is focusing on reducing the public deficit, leading to strikes and opposition. Key reforms aim to increase the employment rate and provide more flexible working arrangements. The new legislation introduces a framework for internal investigations into employee conduct, requiring companies to review their investigation protocols by December 2026.
  • France is experiencing political instability and rising unemployment rates. Recent developments include a mandatory profit-sharing obligation for companies with 11 to 50 employees, a two-year postponement of sustainability reporting obligations, and incentives for foreign investments despite economic difficulties.
  • Germany’s new coalition government is pushing for significant investments in infrastructure and digitalization. Upcoming changes include an increase in minimum wage, digitalization of employment-related documents, and a requirement for companies to record working hours, aligning with EU regulations.
  • The Netherlands is adopting a more conservative approach to workforce management due to economic uncertainties. Key employment law changes include stricter enforcement of contractor misclassification and broadening discrimination protections. We are advising companies to review their contractor relationships to avoid potential legal issues.
  • Spain’s left-wing government is struggling to implement employee-friendly legislation due to coalition dynamics. Key employment law developments include a proposed reduction in working hours, changes to disciplinary dismissal procedures requiring a hearing before termination, and efforts to navigate the fragmented political landscape.
  • The UK government is planning significant employment law reforms, including making unfair dismissal a day-one right, increasing union access to workplaces, and changing collective redundancy thresholds, impacting how organizations manage layoffs across multiple sites.

Tune in to learn more, and as always, reach out to your Baker McKenzie employment lawyer with any questions.