International Labor and Employment Law

New York’s Push to Prevent Sexual Harassment in the Workplace has Global Implications

As we have previously reported, New York has significantly heightened employers’ responsibilities with regard to the implementation of anti-sexual harassment policies and training in the workplace. Some of the most notable changes New York employers have adjusted to include the adoption of written policies that explain the complaint and investigation procedure and all possible avenues of redress, a new onus on managers and supervisors to report all complaints of sexual harassment they receive and instances of such misconduct that they observe or become aware of, and mandatory annual anti-sexual harassment training for all employees.

Although this law is specific to New York, these changes are relevant to global employers with employees in the State. While some jurisdictions afford more protection than others, multi-national employers generally have been encouraged — but not required — to implement sexual harassment prevention policies and training. But multi-national companies with cross-border reporting structures, where a New York employee either reports to or supervises a non-US employee, should consider complying with the new requirements as soon as possible in order to avoid liability under New York State and City laws. This is even more the case where a global employer has adopted compliant anti-sexual harassment training and policies in New York, but has not extended such training and policies to its other locations. We highly recommend as a best practice that multi-national companies adopt and undertake global anti-harassment and discrimination policies and training.

European Union Issues Landmark Employment Discrimination Ruling

On December 4, 2018, the European Court of Justice (“ECJ”) issued an important decision on age discrimination in relation to the age requirements for new recruits to the Irish police force.

Facts

This case relates to the applications made by three Irish citizens to join the Irish national police. Their applications were refused because of their age, and in particular Ireland’s blanket requirement that all police force applicants be aged between 18 and 35. The three Irish citizens filed a discrimination claim with Ireland’s Workplace Rights Commission (“WRC”), contending that the Irish legislation violated European law prohibiting age discrimination. Over the Irish Minister of Justice and Equality’s objection, the WRC agreed to hear the case.

Courts Below

The Minister subsequently brought a claim to Ireland’s High Court, contending that the WRC, an administrative body, lacked the authority to choose between EU and national law, and that only an Irish court was authorized to take such action. The High Court agreed, holding that the WRC was unauthorized to rule on a conflict between EU and Irish law. The WRC appealed to Ireland’s Supreme Court, which asked the ECJ for a preliminary ruling on the matter. Specifically, the ECJ summarized the question posed as “whether a national body established by law in order to ensure enforcement of EU law in a particular area must be able to disapply a rule of national law that is contrary to EU law.”

ECJ’s Decision

The WRC argued that because it was created by statute to, amongst other things, ensure compliance with anti-discrimination legislation, given that EU law was a source of such legislation that applied in Ireland, it must therefore have the jurisdiction to challenge and to disapply national laws in conflict with EU law.

In ruling on the matter, the ECJ distinguished between a tribunal permanently striking down a national law versus choosing not to apply it in the case at hand. Although only Irish courts had the ability to strike down a national law, the ECJ determined that administrative bodies tasked with enforcing EU law must at least be able to decline to follow conflicting national laws. Those bodies must “do everything necessary . . . to disregard national legislative provisions which might prevent directly applicable EU rules from having full force and effect.” Put differently, the ECJ determined that the duty to “disapply national legislation that is contrary to EU law is owed not only by national courts, but also all organs of the state—including administrative authorities.”

Because the WRC was tasked with ensuring employers’ compliance with EU discrimination laws, the ECJ ruled that it must be able to forego applying contrary Irish laws, such as the police force’s age requirements. Otherwise, EU law would be rendered less effective and discrimination claimants would face higher hurdles in seeking justice.

Next Steps

This case will now return to Ireland’s Supreme Court, which will likely remit the matter to the WRC to determine whether there has in fact been age discrimination, taking into account EU law. This ruling may also have significant wider and more general implications as to the ability for administrative bodies to account for EU law, even where such law is, on the surface, incompatible with national statutory provisions.

Japan’s Labor Reform Caps Overtime in a Bid to Curb Karoshi

From low productivity to the death of citizens by overwork, Japan’s labor practices have long maintained a complicated relationship with the country’s workforce. The problem of death by overwork is so prevalent the Japanese have created a word for it: karoshi. On June 29, 2018, Japan passed the “Work Style Reform Law” (the Law) to address some of these issues.

Currently, Japanese law permits employers to enter into special agreements with employees that require them to work an unlimited number of overtime hours. The Law however, generally will limit overtime work to 45 hours per month with a maximum of 360 hours in a year. During busy periods, the overtime limit will be relaxed allowing for up to 100 hours of overtime not to exceed a maximum of 720 hours in a year. In addition, employees may not work, on average, more than 80 hours of overtime per month. This figure will be averaged over a period of two, three, four, five, and six consecutive months. These overtime provisions will go into effect in April 2019 for large employers and April 2020 for small and mid-sized employers. Violation of these provisions will subject employers to financial penalties.

Highly skilled professional workers, however, are exempt from the protection of these overtime provisions. Under the law, highly skilled professional workers must: (i) work a job requiring specialized skills, and; (ii) earn an annual salary of ¥10.75 million or more (roughly $95,000 USD). Labor reform supporters have sharply criticized this exemption as a license to continue the practice of overwork. Meanwhile, supporters of the Law have characterized the exemption as a nod to the working style of professionals where hours and results do not necessarily correlate. Future administrative guidelines will provide employers insight as to what jobs fall into the exemption. The exemption will take effect in April 2019.

In addition, the Law will require employers to treat regular and fixed-term employees equally. Although further administrative guidelines will be issued regarding this provision, employers should: (i) prepare to provide increased compensation and benefits for fixed-term and other non-regular employees; and (ii) begin reviewing the compensation differences between their regular and fixed-term employees to identify any disparities. Enforcement of this provision will likely involve disclosure requirements for employers. This provision will take effect in April 2020 for large employers and April 2021 for small and mid-sized employers.

The Law also contains provisions mandating the use of paid time off. Japanese labor culture has long led to a chronic and voluntary under-usage of paid time off by employees. The Law addresses this issue by requiring that employees entitled to 10 days of annual paid leave or more use at least five of those days each year.

The use of a work-interval system is also encouraged under the law. The law notes that employers should “make efforts” to ensure that there is a minimum interval between the end of a day’s working hours and the beginning of the next day’s working hours. This provision will take effect in April 2019.

We will continue to monitor the Law and its future administrative guidelines and blog about any updates.

UK Decision Puts Employers on Notice for Vicarious Liability at Work-Related Events

With the holiday party season just around the corner, tragic events in the United Kingdom present a worst-case scenario for reveling workers and for employers who may find themselves held responsible. Bellman v. Northhampton Recruitment Ltd. extends the bounds of employer vicarious liability where an employee is injured at a company-related social event. But, the extraordinary facts at play and the Court’s hedging opinion suggest that the decision’s implications may be limited.

Facts

In December 2011, Northhampton Recruitment held its annual company holiday party at a golf club. Much of the company was in attendance and alcohol was served. As the party wound down, the Managing Director, Mr. Major, led a group of employees to an after party at a nearby hotel. Among this group was one of Major’s friends and a Sales Manager at the company, Clive Bellman. Once at the hotel, the employees continued to drink, and Major and Bellman eventually got into a drunken argument. The argument was initially sports-related, but soon migrated to a co-worker’s employment terms and other work-related matters before Major called others over and began lecturing the group about how he was their boss and the one with power. Eventually Bellman challenged Major, Major punched him twice, and Bellman fell, striking his head on the hotel’s marble floor. Bellman fractured his skull, needed multiple operations, and is now brain damaged with memory and speech impairment.

Lower Court

Bellman decided to sue Northhampton Recruitment, claiming that the company was vicariously liable for the assault. The court found for the employer, stating that the fight was unrelated to work such that the company was not vicariously liable for the incident: “Standing back and considering matters broadly, what was taking place at 3:00 a.m. at the hotel was a drunken discussion that [a]rose after a personal choice to have yet further alcohol long after a works event had ended”.

Court of Appeal

Bellman appealed, claiming that contrary to the ruling of the lower court, there was sufficient connection between Major’s position at the company and the assault to make the company vicariously liable for the incident. Specifically, Bellman pointed out that the assault was a result of challenging Major’s position of authority, authority the company vested in him, and that the assault was fueled by company-provided alcohol.

On appeal, the Court agreed with Bellman. Concurring with all of the above, the Court also pointed out that Major helped organize the holiday party, then paid for cabs to the after-party, and proceeded to buy drinks at the hotel, paying on the company’s behalf. Further, while the argument may have started over personal matters, the roughly 45 minutes leading up to the assault were related to work. Key to the appeal, Major was not on even footing with the other employees at the hotel. He held himself out the entire time as a Manager and cloaked himself in the company’s authority, lecturing and summoning co-workers, right up until the moment he assaulted Bellman.

Implications

At first glance, Northhampton’s broad interpretation of the “close connection” test is a concerning development for employers. Hours after a holiday party, at a different location, at an event unanticipated by the company, a personal argument leads to a tragic act of violence for which the employer becomes liable. However, this needs to be tempered by the very particular facts, including Northhampton’s business model, Major’s role at the company, the nature of the argument and a particularly tragic outcome.

First, Northhampton was by nature a 24-hour business. The company is a recruitment agency for truck drivers. Employees are on-call at all times and Major specifically was always on call in a management capacity, including at the time of the assault. Second, Major held immense responsibility at the company. He was in charge of all aspects of the business. His broad power is even more significant given the undisputed way in which he wielded it over the other employees at the hotel leading up to the assault. Further, the assault itself was after the argument turned to the company’s plans for the upcoming year, a specific employee’s contract, and other topics that directly fell under his remit. Lastly, this is simply a tragic set of facts. Major and Bellman knew each other a long time and an event intended to bring employees together ended in one employee’s life being ruined. Throughout the decision the Court hints towards the particularly sympathetic plaintiff, one who did not even sue his assaulter because he did not want to cause him harm. In the concurring judgment, Lord Justice Irwin may have summed it up best: “I do emphasize that this combination of circumstances will arise very rarely, liability will not arise merely because there is an argument about work matters between colleagues, which leads to an assault, even when one colleague is markedly more senior than another. This case is emphatically not authority for the proposition that employers became insurers for violent or other tortious acts by their employees”.

Even though this is a decision that is highly fact specific, as the holiday season approaches, it is a timely reminder of the perils of alcohol-fueled work-parties. Indeed, even setting aside the legal issues of vicarious liability, any inappropriate behavior at a work-related event is likely to have negative repercussions and contaminate the workplace. As such, we recommend the following tips for holiday parties:

  • Remind employees that they should be aware that the event (and any after-parties) are related to work and that they should conduct themselves accordingly.
  • Encourage employees to look out for one another, for example calling out behavior before it escalates and recommending to a colleague that it may be a good time for them to leave.
  • Avoid an atmosphere and culture that encourages heavy drinking, and in particular unlimited alcohol until the early hours.
  • Set the tone from the top – if management acts inappropriately it sends a message that such conduct is acceptable.

Countries Implement New Gender Pay Gap Measures

This past year, multiple countries enacted new laws aimed at reducing gender pay disparity. Although it has long been illegal in many countries to pay women less than men, a noticeable gender pay gap has persisted. The laws described below demonstrate that countries are now attempting bolder and more innovative strategies toward reaching true pay equality.

We’ve previously written on the UK’s new regulations that require companies to publicly report their gender pay gap. Under the UK’s approach, companies with over 250 employees are required to publish any differences in salaries and bonuses between men and women within their organizations. Companies’ first reports under this legislation were released in April 2018, and over 10,000 companies reported. Failure to report is considered an unlawful act and could lead to an enforcement action by the UK’s Equality and Human Rights Commission. But specific penalties for noncompliance remain unclear. Instead, the reputational harm that companies may face from not reporting or reporting large pay disparities is likely the main consequence contemplated by the law. A recent analysis conducted by Leathwaite indicates that the UK’s gender pay gap has already begun to noticeably improve since the law’s enactment.

In September 2018, France enacted a similar regulation that requires companies to publish information regarding their gender pay gap and what actions they have taken to remove it. If a company’s pay gap surpasses a certain threshold, it will be required to propose an improvement plan. Failure to report or to adequately improve pay disparity within three years can result in financial penalties of up to 1% of the company’s total payroll. France is planning to phase companies into compliance, with companies employing over 250 employees being covered beginning in January 2019. All other companies will be covered starting in January 2020. Earlier this year, France also announced that it was considering requiring companies to install software directly into their payroll systems that would allow the government to monitor any gender pay gap within their company. Assumedly, this software would cut out the risk that companies choose not to report or inaccurately report their pay equity figures.

Meanwhile, Germany’s newly-enacted Wage Transparency Act has created the novel approach of allowing employees to find out from their employer whether they earn less than their male or female counterparts. Under the German law, employees of companies with over 200 employees now have the right to find out what their coworkers of the same level and opposite gender are being paid. Although an employee will be unable to find out what any specific employee makes, he or she will have the right to learn the average salary of employees of the opposite gender. The law requires that there be at least six comparable employees so that the employer may create a meaningful average. The assumed goal of Germany’s approach is that greater transparency will increase employees’ requests for raises, ultimately lessening the gender pay gap. But some have criticized the law for putting the onus on employees to act, rather than requiring that companies themselves take steps to equalize pay. Additionally, companies with over 500 employees will be required to publish reports regarding any pay disparities that they have, as well as their efforts to lessen those disparities.

Perhaps the most aggressive approach to date has come out of Iceland. Despite already being considered one of the world’s most gender-equal country, Iceland’s new pay equity law, which took effect in January 2018, requires that any company with at least 25 employees prove to an external auditor that it provides equal pay to its employees. After reviewing the company’s data, the auditor will determine whether to certify that the company is in compliance with Icelandic law. This certification process will be required every three years and companies that fail to be certified may face stiff fines. Experts have praised Iceland’s bold approach, as employees will no longer need to file legal action should they believe that they are receiving unequal pay. Instead, it will now be the employer’s responsibility to proactively demonstrate that all of its employees are being paid fairly. Iceland’s law currently is being phased in, and all companies will be covered by 2021.

Finally, the Canadian federal government is considering legislation that would apply to all federally regulated employers with at least ten employees. While some Canadian provinces already have pay equity measures in place, Canada’s new federal proposal would require that covered employers ensure that they are providing equal pay and create a pay equity plan that detects and corrects any unjustified differences in compensation. Employers with over 100 employees also will be required to create a pay equity committee. If the law is passed, the Canadian government would establish the position of Pay Equity Commissioner, whose role will be to administer and enforce this legislation.

We will be tracking which of these new approaches has the most significant effect on the gender pay gap, how companies choose to comply with these new requirements, and whether more countries join in on the trend of trying bolder strategies towards equalizing pay.

“I am what I am, so take me as I am” – Historic decision of India’s highest Court decides gay sex no longer criminal

Commencing with the famous quote of German thinker Johann Wolfgang von Goethe, India’s Supreme Court has today legalised sexual relationships between same-sex people. This landmark decision ends a long fight against Section 377 of the Indian Penal Code 1860 (IPC) which had criminalised certain homosexual acts. In its decision, the Supreme Court held that: “Criminalising carnal intercourse is irrational, arbitrary and manifestly unconstitutional.”

Background

For over 150 years, certain homosexual acts could result in individuals facing life imprisonment and/or heavy fines under Section 377 IPC.

Over recent years there have been calls for this law to be repealed. There was backlash in 2013, when the Supreme Court decided in to maintain the law. By 2017, however, the Supreme Court of India had recognised that “sexual orientation is an essential attribute of privacy”, describing it as an “essential component of identity”. Nevertheless, the law criminalising certain homosexual acts remained in force.

Decision

But today that law is no longer in force. Today’s decision, found that Section 377 IPC was unconstitutional, as it criminalises consensual sexual acts between competent adults. It has been heralded throughout the LGBTQ community globally. The individuals claimed that the right of sexuality, the right to sexual autonomy and the right of choice of a sexual partner were guaranteed principles of the Constitution. They mentioned, that every sexual orientation is an expression of the right of privacy as an essential attribute (referring to K.S. Puttaswamy vs. Union of India and Others), grounded in Art. 21 of the Constitution, regulating same-sex relationships as a criminal offence destroying the inherent idea of freedom. Furthermore, Art. 19(1)(a) of the Constitution would have been violated by Section 377 IPC as it impedes the growth of personality and relation building endeavour to enter into a live-in relationship, which can be expressed through words, action, behaviour or any other form. Putting forward the decision in NALSA case, wherein transgenders have been recognised as a third gender, the rights of the LGBT community would also need equal constitutional protection. Also the individuals submitted, that Section 377 would involve several fundamental rights, namely right to privacy, right to dignity, equality, liberty and right to freedom of expression and referred to Art. 21 of the Constitution, which protects gender identity and, therefore, sexual orientation. Any ulterior decision would run counter to several cases, as NALSA, Manoj Narula and Naz Foundation, wherein the concept of constitutional morality and guarantee of choice of partner was laid down. Moreover, Section 377 would be a violation of the rights of LGBT persons to form associations (Art. 19(1)(c)), eligibility of such persons and the reputation as an element of personal security (referring to Kishore Samrite v. State of U.P.). At least, individuals further contended that LGBT persons are forced to seek assistance of private resources such as Gay Housing Assistance Resources to access safe and suitable shelter, fearing prosecution and persecution, under Section 377, so these members are in need of care and protection of the State.

By contrast, opponents argued that right of privacy should not be extended in order to enable unnatural offences. It was also argued that homosexual persons would be more susceptible and vulnerable to contracting HIV/AIDS. Confronting the argumentation of the individuals on Puttaswamy, opponents submitted that there wouldn’t be an unlimited right to privacy, as such “acts are undignified and derogatory to the constitutional concept of dignity”. Reliefs, given by the Court in the NALSA case would content that no further reliefs can be granted. As well, the family system would be “in shambles”, the institution of marriage would be detrimentally affected, causing legal uncertainty. Unconstitutionality of Section 377 IPC would run counter to all religions practised in the country. In addition, opponents referred to State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat and Others, therefore the interest of a citizen or a section of the society is secondary to the interest of the country or community.

In its decision, the Supreme Court held that the law could “subject the LGBT community to social pariah” and was “manifestly arbitrary”, noting that its own decision in 2013 was “constitutionally impermissible”. The law was dynamic rather than static and simply taking a static interpretation without envisaging the shifts would be against the principles of the Constitution. Further, the Supreme Court analysed the origins of Section 377 and its misuse causing serious damage to the LGBTQ community. Decisions of foreign courts were also taken in account, including Canada (2004), the U.S. (2015) and the ECHR decision in Euan Sutherland v. U.K. (2001), all of which had decriminalised homosexual behaviours, reinforced equality and/or permitted same sex marriage. Emphasising the “freedom of choice to perform sex for procreation or otherwise” the Supreme Court concluded, that “it cannot be said to be against the order of nature”, as Section 377 IPC had asserted. However, any sexual act of non-consensual nature between two individuals continue to be an offence under Section 377. Finally, the Supreme Court held that “ergo, Section 377 IPC, so far as it penalizes any consensual sexual relationship between two adults, be it homosexuals, heterosexuals or lesbians, cannot be regarded as constitutional”.

It will be exciting to see how this decision will affect the employment and immigration scenery in India and how the Indian law makers as well as the authorities may put the basic ideas, envisaged by the Supreme Court, into practice.

 

 

The European Commission proposed a new Directive on whistleblowers’ protection

On April 23, 2018, the European Commission introduced a proposal for a Directive to strengthen the protection of whistleblowers reporting breaches of European Union law.

This proposition is premised on the assessment of an insufficient and uneven protection of whistleblowers in the European Union. Indeed, the only protection in the EU system was the trade secrets Directive, which exempts whistleblowers from liability for reporting misconduct or illegal activity, even if it involves the disclosure of trade secret. But the EU legislation did not protect whistleblowers against retaliation, and most Member States still do not provide a protection to whistleblowers in their national system.

The European Commission pointed out that recent scandals such as the Panama Papers or Luxleaks have shown that “whistleblowers can play an important role in uncovering unlawful activities that damage the public interest and the welfare of our citizens and society”. However, in 2017, 81% of Europeans indicated that they did not report corruption that they experienced or witnessed.

Therefore, the proposed Directive aims to set new EU-wide standards guaranteeing protection for whistleblowers.

This new protection will apply to every person – employees, as well as self-employed workers, contractors, unpaid trainees and even job applicants – who reports, in good faith, breaches of EU rules in the areas of public procurement ; financial services, prevention of money laundering and terrorist financing ; product safety ; transport safety ; protection of the environment ; nuclear safety ; food and feed safety; animal health and welfare ; public health ; consumer protection ; protection of privacy and personal data; and security of network and information systems. It also will apply to breaches of EU competition rules, violations and abuse of corporate tax rules and damage to the EU’s financial interests.

Member States will have to set out a three tier reporting system ensuring confidentiality and including:

  • internal reporting channels ;
  • reporting to competent authorities if internal channels do not work or could reasonably be expected to work ; and
  • public reporting, if no appropriate action is taken after reporting through other channels or in case of imminent or clear danger to the public interest or irreversible damage.

Under the proposal, all companies with more than 50 employees or with an annual turnover of over €10 million and all state and regional administrations and municipalities with over 10.000 inhabitants will have to establish internal reporting channels and procedures for receiving, following-up and giving feedback on reports in a reasonable timeframe, not to exceed three months.

Smaller companies are exempted from such obligations, with the exception of the ones operating in the field of financial services or vulnerable anti-money laundering or counter terrorist financing.

Finally, the proposed directive sets out minimum standards on the protection of reporting persons, forbidding any dismissal, demotion and other forms of retaliation against a whistleblower who has followed the relevant procedures.

The new directive is likely to be finalized at the end of 2019 and Member States shall bring into force laws to comply with this Directive by May 15, 2021.

Puerto Rico Heading Towards At-Will Employment

On May 30, 2018, the Puerto Rican Senate voted in favor of overturning an Act that provided significant protections to Puerto Rican employees. The repeal would roll back the current law, Act No. 80, which prohibits employees from being terminated without just cause, thus making it significantly easier for employers to terminate employees.

Currently, private and public sector employees in Puerto Rico who are hired for an indefinite period of time cannot be terminated without just cause. This means that under Act No. 80, an employee currently can be terminated only if the employer has legally justified reasons that are: 1) present; 2) can be proven, and; 3) tend to affect the wellbeing and normal course of the business. Under the current law, reasons that constitute just cause can include: improper behavior by the employee, poor job performance, lateness, negligence, inefficiency, failure to follow protocols and security measures, lack of productivity, lack of competence or ability to perform in a reasonable manner as expected by the employer, constant or repetitive complaints by clients, multiple violations of an employer’s rules, defamatory comments, or divulging privileged information.   If an employer violates the Act, the company is liable for up to two weeks of pay based on the employee’s highest recent salary for each year of service completed, potentially leading to a large statutory award.

In order to attempt reforming the current state of the law, the Puerto Rican Governor announced on May 28th a proposal that would have permitted any employee to be terminated for any reason, other than an illegal reason, thereby potentially converting all employees into “at-will” employees. The repeal came about as a part of the restructuring of Puerto Rico’s debt. As part of the restructuring, the Junta de Supervision Fiscal (“JSF”), the supervisory board for Puerto Rico’s economy, wanted to eliminate Act No. 80 in order to make Puerto Rico more business friendly and increase the availability of jobs. Indeed, it seemed that this broad proposal was a compromise by the Governor and the JSF, as the JSF had previously been advocating for eliminating Christmas bonuses and reducing paid time off.

Nonetheless, the Puerto Rican Senate tempered the broad proposal, and modified the proposal so that only new hires will be employed at-will, and individuals formerly covered by Act No. 80 would remain protected and require just cause for any termination. The Puerto Rican Senate also modified the implementation date so that it would go into effect immediately after passage instead of waiting until January 1, 2019. While the proposal now has passed in the Senate, there may not be the necessary support needed to pass the House of Representatives. The House of Representatives started Public Hearings on the proposal on June 4th, 2018 to determine the expected impact of the repealing of Act No. 80.

The proposal still has significant hurdles to clear before it overturns the current law. Unions, such as the Central Puertorriqueña de Trabajadores (CPT), have called for the House of Representatives to vote against the repeal. Furthermore, the change may have a major impact on the labor force in Puerto Rico as it is expected that if the bill passes the House, Puerto Rican workers may unionize at higher rates in order to secure the same protections through bargaining. Currently, only about 10% of private sector workers in Puerto Rico are in a union. The change also may lead to an increase in litigation for unfair dismissal. While employers do not need to make any immediate changes, we will continue to monitor the progress of this proposal closely and blog about any updates as it may have a major impact on the employment landscape in Puerto Rico.

China Has a #MeToo Moment, But Still Lacks Anti-Harassment Enforcement

The #MeToo movement may have spread to China, but the legal landscape still does not provide significant protections to potential victims. On January 1, 2018, a former doctoral student at Beijing’s Beihang University, Luo Xixi, posted on Weibo, China’s Twitter, an allegation that her former doctoral supervisor had sexually harassed her while she was a student. Luo included the hashtag #MeToo. In the wake of Luo’s allegation, and three other incidents that had been reported within the prior month, Chinese authorities took steps to limit assault on campus. By the middle of January, Luo’s former professor was removed from teaching, on January 16, 2018, the Ministry of Education announced that it would be developing policies to prevent sexual harassment at universities in China, and on January 21, more than 50 teachers from Chinese universities issued a joint statement calling for new legislation to stem sexual harassment on campus.

Nevertheless, while these actions may indicate that the #MeToo movement has spread to China, the Chinese government still provides little to no protection for victims of harassment in the workplace. To begin with, the Chinese government has a fraught history with individuals trying to raise awareness of sexual harassment. In 2015, the Beijing police arrested five women who were planning to distribute pamphlets regarding the risks of sexual harassment on public transit. They were detained for over a month.

Furthermore, China still lacks any strong workplace anti-discrimination or anti-harassment laws. China has scattered laws and regulations that generally prohibit discrimination and “sexual harassment against women.” Nonetheless, there is no comprehensive law and limited remedies available to plaintiffs who bring suit. This is only further highlighted by surveys that indicate that nearly one third of women in China have experienced sexual harassment at work, and potentially up to 70 of women at Chinese universities have experienced some form of harassment.

It is unclear whether these public reports of harassment, and the Chinese government’s seemingly swift response to the allegations, indicates a shift in policy or whether any new legislation will be passed in response. We will continue to monitor the situation and provide any updates.

Brazil’s President Approves Labor Reform Bill

On July 14, 2017, Brazil’s Labor Reform Bill (Law No. 13.467) (the “Bill”) was published after it was approved by President Michel Temer. The new law will go into effect on November 11, 2017.

The Labor Reform Bill will make extensive changes to several provisions of the Brazilian Labor Code. The Bill is significant because it represents the country’s first attempt to modernize and overhaul labor rules that date back to the 1940s.

Most significantly, the Bill offers more leeway to collective bargaining and provides that agreements negotiated between employers and workers on a range of issues override labor legislation unless such agreements extinguish basic labor rights foreseen in the Federal Constitution (such as, for example, minimum wage, prior notice and FGTS). A collective bargaining agreement will prevail even if there is no express consideration.  In doing so, the Bill prioritizes direct negotiations between workers and employers over existing labor regulations, thereby reducing employer costs by allowing companies to negotiate contracts freely with employees.

In addition, the Labor Reform Bill provides for the following noteworthy changes:

  • Union’s Contribution: Union’s contribution, currently mandatory, will be voluntary and employees’ authorization will be required. Employers’ union contribution also will be voluntary.
  • Terminating the Employment Contract by Mutual Agreement: Employees may negotiate resignations with employers and, upon mutual agreement, the parties may terminate the employment contract. In such case, employees may be entitled to: a 50% payment in lieu of notice; a 20% fine on the existing balance in the FGTS account; and a withdrawal of 80% of the existing balance in the FGTS. Although employees will be entitled to other labor funds (e.g., Christmas bonus, vacation, etc.), they will not receive unemployment insurance.
  • Vacation Period: Vacation periods will receive more flexibility, as the vacation period may be split in three periods, one of which must be for a minimum period of 14 calendar days, and no vacation may be shorter than five calendar days.       This provision applies to all employees, regardless of age.
  • Home Office: For the first time, working at a home office will be legally regulated, as employees may work from a home office if agreed to in a written employment agreement (even though employees in a home office may not receive overtime pay).
  • Part-Time Job: A part-time job may now comprise up to 30 hours per week (up from 25 hours per week) where overtime work is prohibited or up to 26 hours per week with the possibility to work six additional, pre-contracted, hours of overtime. Part-time workers are entitled to the same amount of vacation time as full-time employees and part-time workers may sell one-third of their vacation.
  • Free Negotiation of Employment Agreements: Employees with a university degree and salaries equal to or higher than two times the cap of the social security benefit may freely negotiate employment agreements directly with employers without union participation.
  • Ratification of Termination: Regardless of an employee’s time of service, the employee’s termination will no longer require union or Regional Office of the Ministry of Labor ratification.
  • Mass Termination: Union authorization will not be required to enter into a collective bargaining agreement to implement a mass termination program.
  • Voluntary Dismissal Plan: Unless otherwise specified by the parties, adhering to the Voluntary Dismissal Plan will provide a full and irrevocable release to the employment agreement.
  • Court Precedent: Courts, through precedent or other ordinance, will not have the power to restrict legally provided rights or create obligations that are not legally foreseen.

While supporters of the Bill argue that such labor reform will revive and bolster Brazil’s struggling economy, benefit job growth, increase flexibility in the job market and lower the risks associated with new hires, challengers (including unions) decry that the Bill’s changes will reduce job security and weaken organizing power.

We will continue to follow and monitor the impact of this Bill.

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