International Labor and Employment Law

Ireland Moves Forward with New Parental Leave Policies

The President of Ireland is on track to sign into law a new amendment to parental leave laws after the country’s upper house (“Seanad Éireann”) approved it on May 8, 2019. The law had previously passed the lower house (“Dáil Éireann”) on June 13, 2018. The amendment now returns to Dáil Éireann for final approval before the President signs and enacts it into law.

The Parental Leave (Amendment) Bill 2017 (the “Parental Leave Bill”) expands existing protections for Irish employees. The original Parental Leave Bill was passed in 1998 and provided 14 weeks leave for parents of children up to five years old. In 2006 leave was extended to parents with children up to eight, and to 16 years of age for children with disabilities or long-term illnesses. In 2013, leave was extended from 14 to 18 weeks. The Parental Leave Bill makes two big changes.

  1. Parents will now be entitled to up to six months of leave for each child; and
  2. Parents will be entitled to leave for children up to 12 years old.

Regarding paid parental leave, the amendments will provide new parents with two weeks’ paid leave each at a rate of €245 per week.

Coverage for Existing Parents

The new entitlements will be extended to parents who have already exhausted the four months provided under existing law as long as their children are 12 years of age or younger. The changes will be phased in over the next two years. An additional four weeks of parental leave will be available starting in September 2019, with the final four weeks available beginning in September 2020.

Motivation for the Bill

The bill’s authors, the Social Democrats, say that the legislation is aimed at helping working class families with work life balance. The emphasis is driven at least in part by the European Pillar of Social Rights, a non-binding charter that Ireland endorsed in November 2017. The charter names parental leave and work-life balance as key objective and the European Commission has created corresponding proposals to increase such policies in member states.

As of a 2018 European Commission assessment of paternity and parental leave policies in the EU, all member states offered some parental and/or paternity leave, but the benefits varied and the distinction between the two types of leave was often confusing. Parental leave specifically was provided in 16 member states, but was only well-paid in 13 of those states and in only 10 did the period of well-paid leave extend to eight or more weeks.

Potential Effects

While the short-term impact for employers will be increased costs corresponding to the new entitlement payments, the goal is for the new policies to allow more parents to remain in an increasingly more accommodating and attractive workplace. Some employers may also choose to follow the state’s lead and offer greater paid parental leave.

For example, this month one multi-national company announced it would provide 26 weeks of fully paid paternity leave to new fathers in Ireland, matching a previous commitment to maternity leave.

 

An Increasingly Hairy Situation: Discriminatory Employment Decisions Based on Hairstyles

Hairstyles are gaining more attention in the labor and employment context. Earlier this year, Austria’s Supreme Court allowed a former employee to reopen his discrimination claim upon discovering evidence that the employer may be engaging in discriminatory conduct by imposing hairstyle-related requirements on employees. In 9 ObA 4/19g, a staffing agency’s employee was denied a position on account of his long hair, and sued the staffing agency for sex discrimination under the Equal Treatment Act, which prohibits differing treatment on the basis of sex without an objective justification. The employee lost the initial suit but successfully revived the claim upon discovering that the staffing agency’s handbook prescribed the manner in which both males and females were to wear their hair, including requiring that males keep their hair short. The Supreme Court confirmed the lower courts’ rulings to reopen the case, finding that the handbook could shed “new light” on the initial legal assessment. The employer will likely have to change its policy in order to avoid further claims in the future.

In the United States, New York and California are leading the fight against discriminatory decisions based on hairstyle. As we previously reported, the New York City Commission on Human Rights (“NYCCHR”) recently issued enforcement guidance on race discrimination on the basis of hair with regard to employer policies that restrict or ban certain hairstyles commonly associated with “communities of color, religious minorities, and other communities,” and stating that the City’s Human Rights Law “protects the rights of New Yorkers to maintain natural hair or hairstyles that are closely associated with their racial, ethnic or cultural identities.” We also recently reported that proposed legislation in California seeks to amend the State’s education and government laws to define “race or ethnicity” to include certain hairstyles and hair texture. The preamble to the proposed legislation notes that “hair today remains a proxy for race.”

We suspect that an increasing number of jurisdictions, both in the United States and abroad, will turn their attention to protecting individuals against discriminatory action on the basis of their hairstyle. Employers should note these early developments and carefully evaluate their appearance and/or grooming policies, and decisions based on those policies. We will continue to monitor this trend.

In Historic First for Asia, Taiwan Legalizes Same-Sex Marriage

On May 17, 2019, the Taiwanese Parliament approved a bill legalizing same-sex marriage, making Taiwan the first country in Asia to adopt such legislation.  Under the new law, same-sex couples now are able to marry legally, effective May 24, 2019.

The Parliament’s actions came about as a result of a 2017 decision by the Taiwanese Constitutional Court.  In that decision, the court rejected the Taiwan civil code’s definition of marriage as being between a man and a woman as unconstitutional.  The court offered the Taiwanese government two years to amend that provision in light of its ruling.

Instead of amending the definition, Taiwanese lawmakers opted to pass a new law altogether.  The Parliament had debated three separate bills.  Two of those bills had been offered by conservative groups and would have recognized same-sex unions by terms other than “marriage.”  The Parliament rejected those versions and instead passed the most progressive of the three bills, one permitting same-sex couples to apply for marriage.  Interestingly, this is despite the fact that a 2018 Taiwanese referendum showed that the majority of Taiwanese people oppose same-sex marriage.

After learning that the law had passed, Taiwan’s President Tsai Ing-wen tweeted “On May 17, 2019 in #Taiwan, #Lovewon. We took a big step towards true equality, and made Taiwan a better country.”

Certain issues with the law remain, including that it may not allow cross-national same-sex marriages and only allows same-sex couples to adopt children that are blood relatives.  But advocates are still pleased with the progress that this law signifies, and hope that it signifies the start of a broader trend across Asia.

Taiwan has long been considered the most progressive country in Asia in terms of gay rights, and its annual gay pride parade draws visitors from many other countries.  In neighboring China, same-sex marriage is still illegal, but homosexuality was decriminalized in 1997.  Taiwan’s progressive step forward is especially welcome in light of recent actions taken in Brunei, which we reported on in our April 17, 2019 blog post.

Mexico Overhauls Federal Labor Law in Workers’ Favor

Mexico Overhauls Federal Labor Law in Workers’ Favor

On May 1, 2019, International Workers’ Day, Mexico published amendments to its Federal Labor Law in the Federal Official Gazette and secured the right of Mexican workers to organize and enter into collective bargaining agreements. The Mexican Senate voted 120 to 0 to pass the Labor Reform Decree, which will regulate amendments made to Mexico’s Federal Constitution in February 2017.[1] The Decree also ensures Mexico’s compliance with Convention No. 98 of the International Labor Organization and memorializes the labor reforms that President Andrés Manuel López Obrador promised to implement when he negotiated the United States – Mexico – Canada Agreement (“USMCA”) in November of 2018.[2]

Workers’ Rights

The Decree outlines Mexican workers’ right to engage in collective bargaining and to organize and join a union. The right to freely organize is coupled with union members’ right to a personal, free and secret vote. Importantly, the Decree states that workers may not be forced to join a union. These changes are major. They are meant to alter the fabric of Mexican labor relations by creating independent unions and workplaces free from coercion, discrimination and violence.

Prior to these changes, Mexican unions were largely controlled by companies. For decades, Mexican workers did not have the right to organize freely, there were no democratic elections, and labor contracts were negotiated with little input from workers. Companies often entered into “protection agreements” by recognizing unions and signing contracts, creating “white unions” or “protection unions” that represented the interests of the companies, not the workers. Now, the law requires proof that a union represents the majority of workers and that those workers consent to any proposed union contracts. Before entering into a collective bargaining agreement, a union must prove that it represents the interest of the workers it represents by obtaining a certificate of representation from the federal conciliation entity created by the Decree. The same certificate will be necessary in order for a strike to begin.

With respect to workers’ voting rights, the personal, free and secret vote of workers is required before a collective bargaining agreement is concluded, for the election of union leadership, and the resolution of inter-union conflicts. Union representatives must secure at least 30% of the vote of workers participating in the election process. These new voting mechanisms are meant to ensure the eradication of “protection unions” from Mexico’s labor landscape.

Labor Justice Reform

The Decree also includes major changes to Mexico’s labor justice system. State and federal labor courts, resolving labor disputes as a part of the judiciary, will replace current Conciliation and Arbitration Boards. Conciliatory efforts must now take place in a single, mandatory hearing before a matter reaches a labor court. The Federal Conciliation and Labor Registration Center will preside over these conciliatory procedures and register labor organizations, union contracts and internal work rules. State-level conciliation centers will only preside over conciliation procedures. Changes to the labor justice system will be implemented within the next three years.

USMCA

The Mexican Senate passed the Decree before its close of session in anticipation of the American Senate reviewing these changes within the context of USMCA. Annex 23-A of USMCA requires Mexico to pass and implement certain labor reforms, essentially bringing Mexican labor law in line with U.S. labor law. Mexico has now passed the Decree, but the U.S. has made clear that it will not ratify USMCA unless Mexico can show that it will implement these changes.

Impact on Employers

These changes are likely to engender a global effect given the potential for independent unionization to lead to pay raises and other company concessions in a country where the minimum wage is currently around $5 USD.

Employers with a workforce presence in Mexico should revisit existing labor relations policies and prepare for a significant increase in independent unionization. Employers should also review any existing union contracts to ensure compliance with the Decree’s mandates.

Most immediately, the Decree requires certain human resources changes. Employers must:

  • Provide employees with an opportunity, in their individual contracts, to designate a beneficiary who will receive payment of their salary and accrued benefits in case of death or disappearance.
  • Provide employees access to all information concerning their income and deductions, including pay stubs, whether in printed form or by other means. (Online Digital Tax Receipts may replace printed pay stubs.)
  • Implement policies and protocols addressing the prevention of gender discrimination, violence and sexual harassment and the elimination of forced labor and child labor.

[1] Amendments to Mexico’s Federal Constitution Articles 103 and 123, in effect since February 24, 2017, promulgated changes to the labor justice system in Mexico by creating specialized labor courts, centralizing collective bargaining agreements and union organization registration, requiring unions to prove that they represent a majority of a company’s workers before executing a collective bargaining agreement, and guaranteeing personal, free and secret voting.

[2] In September of 2018, Mexico ratified Convention No. 98 of the International Labor Organization, which protects the rights of union members to organize freely and participate in collective bargaining. Convention No. 98 will enter into force on November 23, 2019.

Major Reform to the Thailand Labor Protect Act

On December 13, 2018, the National Assembly of Thailand approved significant amendments to the country’s Labor Protection Act (“LPA”). The amendments took effect on May 6, 2019.

Under the amendments, employees with 20 or more uninterrupted years of service will be entitled to receive 400 days’ pay as severance. This is an increase from the current maximum payment of 300 days’ pay for employees with 10 or more uninterrupted years of service.

The amendments also increase the amount of maternity leave employers must provide pregnant employees. Whereas the current LPA requires employers to provide employees with 90 days of maternity leave, the amendments require employers to provide 98. Public holidays during a period of leave as well as pre-natal doctor visits are counted against the period of maternity leave. Employers are responsible for up to 45 days’ wages during an employee’s maternity leave.

The current Labor Protection Act provides employees “necessary business leave,” but does not define how many necessary business leave days an employee is entitled to. The amendments address this issue, requiring employers to provide employees with a minimum of 3 days of paid necessary business leave per year. Neither the current law nor the amendments define “necessary business leave,” however, leaving open the question of when an employee may take such leave.

The amendments also provide that employees cannot be transferred as a result of a change in employer without their consent and a new employer is obligated to assume all of the rights and obligations of the old employer.

An employer who plans to relocate an employee’s current work location must provide at least 30 days’ advance written notice. Such notice must be placed conspicuously at the workplace and state which employees will be relocated along with the date of the relocation. An employee who believes that his or his family’s ordinary course of living will be materially affected may refuse to relocate. In this case, the employee’s employment contract will be deemed terminated on the date of relocation and the employee will be entitled to severance.

Under the current LPA, an employer may terminate an employee who has an indefinite term employment contract without cause and without giving otherwise statutorily required notice by making a payment in lieu of notice. The law, however, does not specify when this payment must be made. The amendments address this by requiring that employers make payments in lieu of notice on the effective date of termination.

The new amendments also require all wages, including overtime and holiday pay to be paid equally to male and female employees who engage in the work of the same type, quality, and quantity. Additionally, employers who temporarily suspend business operations (for any reason other than an act of god) are required to pay employees 75% of their usual daily wages, at a minimum, during the suspension of business.

Employers who fail to make payments in lieu of notice of termination, payments pursuant to a temporary suspension of business, or other payments under the Labor Protection Act must pay their employees interest on such payments at a rate of 15% per year.

Failure to comply with the LPA’s amendments will subject employers to penalties. Accordingly, employers should review their policies and work rules to ensure compliance with the new amendments to the LPA.

The European Parliament Approves EU-Wide Standard for Whistleblower Protection

Per our previous post, the European Parliament and the Member States agreed to adopt new rules that would set the standard for protecting whistleblowers across the EU from dismissal, demotion, and other forms of retaliation when they report breaches of various areas of EU law. According to a press release issued by the European Parliament on April 16, 2019, the Parliament approved these changes by an overwhelming majority. The new rules require that employers create safe reporting channels within their organization, protect whistleblowers who bypass internal reporting channels and directly alert outside authorities, including the media under certain circumstances, and require that national authorities provide independent information regarding whistleblowing. This legislation marks a significant departure from the jurisdiction-specific approach that has resulted in disparate protection across Europe, with some jurisdictions, like Germany and France, offering relatively limited protection when compared to other jurisdictions, such as the UK. These changes, if approved by the EU ministers, will set a uniform baseline and therefore considerably increase whistleblower protections in the EU. Member States will have two years to achieve compliance. For an additional discussion as to the implications of this legislation, see this article by The New Times. We will continue to monitor this development.

 

Brunei Now Penalizes Homosexuality with Death by Stoning

At a time when much of the world is accepting LGBTQ individuals and relationships, the pendulum has swung in the opposite direction in the small nation of Brunei.  Earlier this month, Brunei put into force a new set of harsh criminal provisions mandating extreme physical punishment for certain acts forbidden by Islamic law, most notably that any individual found guilty of a homosexual act will now be punished with death by stoning.

The new criminal provisions were originally announced by Brunei’s Sultan Hassanal Bolkiah in 2014.  Bolkiah has led Brunei since 1967 and is one of the wealthiest people in the world due to Brunei’s oil exports.  In December 2018, Brunei’s Attorney General released a notification that the laws would be put into force beginning in April 2019.

The new laws also require the death penalty for adultery, abortion, and certain forms of blasphemy against the Quran or the Prophet Muhammad.  The law additionally requires amputation of limbs for stealing and 40 lashes for lesbian intercourse.  Children that have reached puberty are treated as adults under the law, while children older than seven may be punished by whipping.

Many members of the LGBTQ community already have fled Brunei fearing persecution.  Meanwhile, governments and NGOs around the world have urged Brunei to reverse its new mandate.  Human Rights Watch described the laws as “barbaric to the core” and against international law.  The United States Department of State released a statement that the new code “runs counter to [Brunei’s] international human rights obligations, including with respect to torture or other cruel, inhuman or degrading treatment or punishment.”  Despite the opposition, Brunei officials thus far have stated that Brunei will keep the laws in place.

Brunei joins nine other countries[1] that penalize homosexuality with the death penalty.  At a time when multinational companies are making increasing efforts to promote global diversity, Brunei exemplifies the special challenges posed in understanding and working with a variety of legal requirements, as well as cultural values and perspectives.

[1] Afghanistan, Iran, Mauritania, Nigeria, Qatar, Saudi Arabia, Somalia, Sudan, and Yemen.

Major Changes to Singapore’s Employment Act, Effective April 1, 2019

Major changes to Singapore’s Employment Act (“EA”) took effect on April 1, 2019. First, the EA was expanded to include more employees and offer greater protections. Before April 1, the EA’s core provisions excluded managers and executives earning more than S$4,500, and its Part IV provisions, which provide additional protection to select groups of workmen (i.e. manual laborers) and non-workmen (i.e. general white-collar employees, such as receptionists), excluded non-workmen earning more than S$2,500. Now, the EA’s core provisions apply to all employees (except for seafarers, domestic workers, and public servants who continue to be excluded), and the Part IV provisions were amended to cover non-workmen earning up to S$2,600, and increase the overtime rate payable cap to match the new threshold.

Second, wrongful dismissal claims previously were heard by the Ministry of Manpower, but now will be heard by the Employment Claims Tribunals (“ECT”). The ECT will hear these matters in addition to salary-based claims, thereby eliminating an employee’s need to navigate separate adjudicatory channels when bringing both types of claims against an employer. Additionally, the minimum service period managers and executives must complete before bringing a wrongful dismissal claim for a dismissal with notice, as applicable, was reduced from one year to six months.

Third, the EA now requires that employers accept all medical certificates issued by doctors and dentists registered under the Medical Registration Act and Dental Registration Act, respectively, when issuing reimbursements and granting paid sick leave. This is a significant change from the EA’s previous provision, which required acceptance of certificates from government and company-approved doctors and dentists only. Moreover, employers may, but are not required to, accept certificates from other types of health practitioners as well.

Fourth, employers now may make other deductions, in addition to those already authorized by law, upon the employee’s written consent, which the employee must be allowed to withdraw penalty-free at any time.

Employers who are affected by the amendments and have not made changes to their practices and policies in order to comply with the changes should do so immediately. For more information, the current version of the statute may be accessed here and a guide summarizing the changes, which was released by the Tripartite Alliance for Fair & Progressive Employment Practices and the Ministry of Manpower, may be accessed here.

U.S. Court Holds No Foreign Law Exception to the ADEA and Title VII in GM Bias Case

On January 30, 2018, Shawn Wang (“Plaintiff”), filed suit against GM (China) Investment Co., Ltd. (“GMCIC”) and General Motors (GM) alleging, among other things, age discrimination in violation of the Age Discrimination and Employment Act (“ADEA”) and race and national origin discrimination under Title VII. Plaintiff, a naturalized U.S. citizen, was a GMCIC employee in Shanghai, China until he was terminated. GM filed a motion to dismiss arguing that it was required to terminate Plaintiff in order to comply with China’s mandatory retirement age law. On March 5, 2019, the Eastern District of New York denied the motion to dismiss the suit.

Background

Title VII and the ADEA each contain a “foreign law” exception that shields employers from liability for actions involving an employee in a workplace in a foreign country. The exception applies where compliance with Title VII and the ADEA would otherwise cause the employer, or a corporation controlled by the employer, to violate the laws of the country where the workplace is located. To receive protection, the employer’s conduct in question must be necessary in order to avoid violating a foreign law.

Chinese law creates a mandatory retirement age of sixty years old for male employees. Upon reaching sixty years of age, an employee’s labor contract is terminated.

Decision

After reviewing Chinese case law, the Court noted that, although an employee’s labor contract is terminated on his sixtieth birthday, the law permits the individual to continue his relationship with his employer as an independent contractor. The Court continued by pointing out that, under Chinese case law, contracts entered into by parties to create independent contractor relationships are not subject to the statutory retirement age. Accordingly, under Chinese law, the Court found that it would have been lawful for GMCIC to maintain a working relationship with Plaintiff as an independent contractor.

Next, the Court turned to GMCIC’s retirement policies which expressly stated that the company could, at its discretion, continue an individual’s employment after reaching retirement age on a year-to-year basis until the age of sixty-five. Indeed, in response to Plaintiff’s EEOC charge, GM indicated that, in rare instances, where GMCIC’s business needs require the services of a former employee, the company will enter into independent contractor relationships for those services.

Ultimately, the Court held that GM did not meet their burden in demonstrating that they would have violated Chinese law by continuing a working relationship with Plaintiff beyond his sixtieth birthday. The Court held that, contrary to GM’s contentions, the law would have permitted GMCIC to maintain an independent contractor relationship with Plaintiff.

On April 5, 2019, GM filed a motion seeking certification of an interlocutory appeal to the Sixth Circuit. In its motion, GM argued that certification for the appeal was appropriate because the foreign law exceptions present novel legal issues for which there is no guidance from the Sixth Circuit.  Resolution of these issues on appeal, GM argued, would advance the litigation by facilitating settlement, narrowing the issues, or causing Plaintiff’s claims to be dismissed.

Implications

In light of this decision, employers should review applicable foreign laws thoroughly to determine whether compliance with those laws can be accomplished consistently with Title VII and the ADEA.

UK Court of Appeal Allows Asda Supermarket Employees’ Equal Pay Claims to Proceed

Earlier this year, the UK Court of Appeal held that a class of 30,000 female Asda retail employees could compare themselves to male employees working in Asda’s distribution warehouses for purposes of their equal pay lawsuit. The Court’s analysis and decision has broad implications for gender pay litigation in the UK.

Background

The Court of Appeal’s decision is only the latest development in this long-running litigation. In fact, although this case has been pending since 2014, this decision still only tackles the preliminary issue: whether female employees working in Asda’s retail stores may compare themselves to male employees employed in an entirely different position and at a different location. After holding a hearing on that preliminary issue, the Employment Tribunal ruled in October 2016 that the plaintiffs were entitled to make such a comparison. Asda appealed to the Employment Appeal Tribunal, which affirmed. Asda then appealed to the Court of Appeal.

Decision

The Court of Appeal analyzed UK’s Equality Act of 2010, which in relevant part permits plaintiffs in an equal pay lawsuit to compare themselves to either: (i) higher-paid comparators at their same employment establishment; or (ii) at a different establishment where “common terms” of employment apply. Here, the plaintiffs sought to rely on the second limb of the standard, meaning that the court had to determine its meaning. After a thorough review of  the case law, the Court of Appeal determined that the plaintiffs may compare themselves to male employees at Asda’s warehouses so long as the warehouse employees’ terms and conditions of employment would be the same had they worked at the supermarkets where the plaintiffs worked, and vice versa (referred to as the “North hypothetical”).

This concept can be tricky to apply. Essentially, a court must first determine the hypothetical question of whether the male distribution employees would have broadly the same terms of employment had they worked at the plaintiffs’ retail stores, even if they never would in reality. Similarly, the court then asks the further hypothetical question of whether or not the female retail employees would have broadly the same terms of employment had they worked in the distribution centers. As the Court stated, “[t]he effect of the case-law and of North in particular is that in such a case ‘wherever they work’ extends even to a workplace where they would never in practice work because the nature of its operations is so different.” To be clear, the proper analysis is not to compare the terms of the plaintiffs’ employment to the terms of their comparators. Instead, the court compares each group’s terms to the terms that the hypothetical group of the same employees working at the other location would have.

Here, the Court recognized that Asda employees enjoy the same terms of employment regardless of where they worked. Therefore, because each group would have the same terms had they worked at each other’s establishment, plaintiffs’ claims could proceed.

Implications

Unless Asda appeals to the Supreme Court, this case will now proceed to the next two relevant questions—whether plaintiffs and their comparators roles are of equal value, and if so, whether their pay differential is based on sex. Asda has argued that any pay differences are instead based on market rates for the different positions.

The Court of Appeals’ determination seems to be moving towards a high water mark of ruling that essentially all of a company’s employees will be suitable comparators in an equal pay lawsuit, provided that the company’s terms and conditions of employment do not differ for each location. With similar cases currently pending against British supermarkets Tesco, Morrisons, and Sainsbury’s, this decision likely will have an important impact on how UK courts analyze those and other equal pay cases going forward.

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