International Labor and Employment Law

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.

Major Changes Proposed to Ontario’s Labor and Employment Laws

On June 1, 2017, the Ontario government introduced the Fair Workplaces, Better Jobs Act (Bill 148).  Bill 148 is not yet the law of the province but, if enacted, it contemplates sweeping changes to both traditional labor and employment law in Ontario.  Broadly, the proposed Bill would raise the minimum wage in Ontario, change employee scheduling requirements, increase vacation time, make it easier for certain employees to unionize, and expand the use of arbitration during the negotiations for a first contract.


Proposed Employment Law Changes

Bill 148 proposes six broad changes to Ontario employment law:

  • Minimum Wage: Raises the minimum wage to CD$14 per hour by 2018, and CD$15 per hour by 2019.
  • Part-Time: Prohibits employers from enacting a pay differential based on a “difference in employment status.” This means that employers would be required to pay part-time, casual and temporary employees the same as full-time employees who perform the same job.
  • Scheduling: The Bill would amend scheduling requirements, allowing employees to more easily request schedule changes and refuse shifts that are given with less than 4 days’ notice. The bill would also mandate 3 hours’ worth of pay if an employee is required to report for any shift, be on call, or a shift is cancelled with less than 48 hours’ notice.
  • Vacations: Employees who have five years of service would now be entitled to three weeks’ vacation and vacation pay of at least 6% of their years’ salary.
  • Personal Emergency Leave: Mandates that the first two days of personal emergency leave are given with pay. The bill does not change the 10 day personal emergency leave entitlement, and the remaining eight days would still be given without pay.
  • Family Medical Leave: Family medical leave would be increased to 27 weeks in a 52 week period, the bill would create a new leave for the death of a child.


Proposed Labor Law Changes

Bill 148 also proposes ten broad changes to Ontario labor law:

  • Expanded Scope: The Ministry of Labour will review whether employees working in agricultural, horticultural, architectural, legal, dental, medical and surveying professions should continue to be excluded from coverage of the Ontario Labour Relations Act (LRA).
  • Employee List: Employers would be required to provide the union with a list of employees in an appropriate proposed unit, so long as the Ontario Labor Relations Board (OLRB) determines that at least 20 percent of the employees in the proposed unit are members of the union. This is a broader right of access to a list of employees as compared to the analogous Excelsior list provided before an election under United States labor law.
  • Remedial Certification: The proposed changes significantly expand the right to remedial certification and would require the OLRB to certify a union as a bargaining representative if the agency is satisfied that the employer’s breach of the LRA resulted in the union being unable to reach 40 percent support. This is a much broader protection than the bargaining orders (also known as Gissel orders) issued under United States labor law.
  • CardCheck Certification: In the building services, home care, community services, and temp-agency industries the LRA would now allow unions to be certified based on a card-check of members of the proposed unit. This has been on the wish list of unions in the United States for many years and represents a major boon for unions in Ontario.  Under this proposal, the OLRB will dismiss an application if fewer than 40 percent of the employees in the proposed unit are members of the union but will certify the union if it is satisfied that more than 55 percent of employees are members of the union.  If the OLRB finds that more than 40 percent, but less than 55 percent, of employees are members of the union, then the OLRB will hold a representation election.
  • First-Contract Arbitration: The bill would expand use of arbitration during negotiations for a first contract, and either party would be able to apply for a mediator. The appointment of a mediator would prevent any lockouts or strikes for a period of 20 days, after which time either party may apply to the OLRB for mediation-arbitration.
  • Successor Employer: The bill would expand successor rights to apply to any services provided by or to a building owner. This would mean that any purchaser of a building, or building services work, would likely be considered a successor employer.
  • Appropriate Bargaining Units: The bill would give the OLRB expanded powers to review, amend or consolidate bargaining units in order to promote collective bargaining.
  • Employee Return from Strikes: The bill proposes to remove the six month limit during which an employee on strike must apply to return to work. Instead there would be no time limit, and an employee will have the right to request reinstatement at the end of a strike or lockout, whenever that occurs.
  • Just Cause: The bill would expand the right to only be disciplined or terminated for “just cause” from the date of certification until the date of the first contract. Considering the length of time a first contract may take, this significantly expands the right to employees to be protected by a just cause standard, even before it is enshrined in an agreement.
  • Elections: Voting would be permitted electronically or by phone.


As is evident from the length of this post, Bill 148 will make sweeping changes to Ontario’s employment and labor laws. The bill will be discussed in hearings over the summer and there is not yet a defined schedule for when Bill 148 will be put up to a vote.  Nonetheless, employers may wish to participate in the hearing process in order to ensure that they are able to present their positions and concerns to the government while Bill 148 is still open to amendments and changes.  We will continue to monitor the progress of Bill 148 and will provide updates on this blog with any new information.


What Employers Need to Know about Europe’s General Data Protection Regulation

Proskauer has released a white paper on “What Employers Need to Know about Europe’s General Data Protection Regulation.” As you may know, on April 14, 2016, the European Parliament approved the General Data Protection Regulation (“GDPR”), which will replace the EU’s current data privacy standard and begin to apply on May 25, 2018. This paper provides a broad overview of the ways in which the GDPR will change data protection regulations across the EU, focusing on employee data and how it is treated differently from consumer data. This paper also highlights key areas of change from the current state of the law and suggests proactive steps an employer may take to better prepare for May 25, 2018. This is meant as a guide to assist employers with planning for and achieving compliance before the May 25th deadline. EU data privacy is an enormous challenge for multi-national companies, and many U.S. based companies doing business in the EU are struggling with what they need to do in order to get into compliance with the GDPR with respect to collecting, processing and transferring employee data. To read Proskauer’s full white paper titled, “What Employers Need to Know about Europe’s General Data Protection Regulation” please click here.

Update: India’s Parliament Passes Increased Maternity Leave

India’s Parliament has officially passed an increase to maternity leave in India.  The new law entitles most mothers to 26 weeks of paid leave.

We last reported that India’s Upper House of Parliament approved the increase in August, 2016.  However, India’s lower house held off approving the legislation until last week.  The new law provides mothers with the following protections:

  • Leave may start up to eight weeks before the expected delivery date.
  • The introduction of 12 weeks of paid leave for mothers adopting a child younger than 3 months old, and for women having a child through a surrogate.
  • All employers with 50 or more employees must provide a crèche (day nursery), and allow the mother four daily visits to the nursery;
  • Allows new mothers and their employer to agree to a period of time for the new mother to work from home after the 26 week leave ends; and
  • Employers must inform women of their right to maternity leave at the time of hire.

Nonetheless, the new provisions only apply to a mother’s first two children.  The increase to 26 weeks does not apply to mothers with 2 or more children. For those mothers, the leave continues to be 12 weeks.

Still, the increase goes far past the protections in most other countries, and notably exceeds the 12 weeks of unpaid leave provided to parents in the United States under federal law.  The law still requires Presidential assent and must be published in the Parliament’s Official Gazette in order to be fully enacted.  However, these procedural steps should occur within the next few weeks.

April 3, 2017 Update: The law was published in the Official Gazette on March 27th and officially went into effect on April 1st.  The provision regarding allowing new mothers and their employees to agree to a period of time for new mothers to work from home after the 26 weeks of leave will not go into effect until July 1, 2017.

The Top Ten Things You Should Know About UK Employment Law

top_ten_uk_employment_lawWhat 2016 lacked in employment law changes, it made up with political surprises (Brexit) and sweeping data protection changes (the GDPR). Due to these dynamic changes and in anticipation of what lies ahead, our UK employment team published the Top Ten Things to Know About the UK Employment Law Landscape in 2017. In this briefing, we highlight recent legal developments, look ahead to what’s coming in 2017 and provide practical steps companies can proactively take to respond to this ever-changing landscape.

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UK Employment Tribunal Rules that Individuals Working in the “Gig Economy” are Entitled to Paid Leave

An Employment Tribunal in the United Kingdom ruled that a bicycle courier for CitySprint, a delivery firm, was a worker rather than self-employed and therefore entitled to paid leave.  This is the most recent decision in a string of UK cases dealing with the “gig economy,” namely, repeated short-term work such as ride-sharing or courier services.

In the most recent case, Margaret Dewhurst worked as a bicycle courier for CitySprint, a company that organized and supplied courier services.  Ms. Dewhurst took two days of vacation and brought a claim against CitySprint requesting pay for those two days of leave under the United Kingdom’s Working Time Regulations.  Importantly, UK legislation differentiates between individuals who are “self-employed” and workers.  While workers are not entitled to the same rights as employees, they have certain rights which are not enjoyed by self-employed independent contractors, including the right to be paid the minimum wage, protections under whistleblowing legislation and the right to receive paid annual leave.

Turning to whether Ms. Dewhurst was a worker or self-employed, the Tribunal noted that she had signed a series of computer-based agreements on her first day, including that she is “a self-employed contractor” and that she is “an independent business….”  The agreements were not explained to Ms. Dewhurst.  Therefore, the Tribunal discounted these agreements, noting they had likely been “generated by the ‘army of lawyers’” and that they “illustrate[d] the inequality of bargaining power” between Ms. Dewhurst and CitySprint.

The Tribunal instead looked to the “true situation” of the work relationship, ruling that the while the express terms of the contract were a “key piece[] in the jigsaw,” they were ultimately not dispositive.  Ruling that Ms. Dewhurst was a worker rather than a self-employed contractor, the Tribunal focused on her day to day work. Specifically, the Tribunal noted that:

  • Ms. Dewhurst tended to work established days and hours;
  • Ms. Dewhurst did not work for other businesses;
  • Ms. Dewhurst received training about how to perform her courier duties;
  • Ms. Dewhurst had to wear a uniform;
  • Ms. Dewhurst did not have full control over accepting or declining jobs;
  • CitSprint handled billing client; and
  • CitySprint allocated the jobs.

The Tribunal concluded by noting that “[o]verall, [couriers] have little autonomy to determine the manner in which their services are performed and no change at all to dictate its terms.  In public, in dealings with their controllers and between themselves[,] the couriers regard themselves as part of the CitySprint family, for better and for worse.”  Therefore, the Tribunal ruled that Ms. Dewhurst was a worker and entitled to paid leave.

While this decision is technically tied to the facts of the case, its reasoning will likely apply to other workers in the “gig economy” who are part of a strong corporate structure with clear requirements and oversight. In particular, it highlights the potential risk of misclassifying individuals as independent contractors when they are in fact workers.  We will continue to monitor the rapidly developing law in this area.

UK Gender Pay Gap Reporting

We wrote about the Draft Gender Pay Gap Regulations in the April 2016 edition of A Month in UK Employment Law. In December 2016, the UK Government published a revised version of these Regulations which are expected to come into force on 6 April 2017.

As a reminder, the Regulations require private sector employers in the UK with at least 250 employees to publish certain information about the differences in pay between men and women. It is anticipated that 7,960 employers and around 11 million employees will be affected (34% of the total UK workforce).

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