Doing Business in Europe

Doing Business in Europe
An Update on Key Labor and Employment
Law Developments
Silicon Valley, October 8, 2014
Agenda
 Holiday pay issues
 Reform of UK family-friendly rights
 Current challenges with mass layoffs and business transfer
issues in the UK
 Changes to employment laws in Belgium
 New redundancy rules and working time challenges in France
 Anticipated changes to laws in the Netherlands
 Round up of other expected Europe-wide developments on
data protection, the definition of trade secrets and gender
imbalance on company boards
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UK and Europe – holiday pay
 European derived right in each
member state, both to take holiday and
to be paid for it
 Calculating appropriate rates of pay
has been made complex following
recent European cases, in particular
Williams v British Airways Plc and Lock
v British Gas Trading
 DLA Piper is involved in a case shortly
to be decided which is likely to
determine extent of liability for UK
employees to include voluntary
overtime in holiday pay calculations
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UK and Europe – holiday pay
 If the case goes against employers,
employees (and ex-employees) may be
able to recover underpayments as far
back as 2006
 Virtually impossible to perform sensible
calculations retrospectively
 Many businesses with commission based
compensation systems, or where
employees work overtime, are now
seeking advice on how best to approach
making provision for the liability
 Very few are actively rectifying until the
outcome of the litigation is known
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UK – family friendly developments
Flexible working
 Since June 30, 2014 all employees with six
months’ service can request flexible working
 Simplified procedure
Shared parental leave
 For children due from April 5, 2015, working
couples can share 50 weeks’ leave and 37
weeks’ pay
 Employees can request to take leave in
blocks of a week and couples can take leave
at the same time
 Complex regulations will be difficult to
administer
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UK – flexible working
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UK – shared parental leave
Currently
 Additional Paternity Leave (APL) existed since
April 2011
 Fathers (or partners of adopters) are entitled to
take up to 26 weeks' APL between 20 weeks and
12 months after birth/adoption
 The mother (or adopter) must have returned to
work
 The employee must have provided appropriate
written evidence, including from the mother (or
adopter)
 Employees must withdraw request for APL in
certain circumstances
 Shared Parental Pay (SPP) available, but total
payments should not exceed mother's own
entitlement if she did not return
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UK – shared parental leave (cont’d)
New regime
 In force on December 1, 2014 for employees
whose EWC is on or after April 5, 2015
 52 weeks’ maternity leave and 2 weeks’ paternity
leave remains default position
 Additional paternity leave abolished
 New entitlement to shared parental leave
Challenges
 Complex eligibility tests
 Very flexible nature creates management issues
 Rejecting applications - must/should employers
have a sound business reason for rejecting
employee's proposal?
 The approach to enhanced benefits
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UK – mass layoffs
 European Directive on mass dismissals
implemented by UK
 Collective consultation needed where
20 or more employees at one
establishment to be made redundant in
a 90 days’ period
 30 days or 45 days, subject to numbers
 Award of up to 90 days' pay for failure
 Recent cases have caused problems
for employers with multiple
operations/sites in the UK – Woolworths
 Now need to aggregate all
redundancies across the country
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Significant changes to employment
laws in Belgium
 Background
 Harmonize the difference in treatment between white collar
employees and blue collar employees
 What’s new?
 Harmonized notice periods
 For both blue and white collar workers, notice must
now be calculated based on length of service
 Termination of fixed-term or specific task contracts
 Now possible to terminate fixed-term or specific term
contracts before their expiry without incurring
significant financial liabilities
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Significant changes to employment
laws in Belgium (cont’d)
 No trial Periods
 No longer possible to agree a trial period in an
employment contract, except in the case of students and
temporary agency workers
 Sick leave changes
 “Carensday”, that is, the first day of sick leave (which was
unpaid for blue collar workers), has been abolished
 Right to outplacement services extended
 New right for employees to take leave during their notice
period to search for new employment
 Existing right to use outplacement services extended
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Significant changes to employment
laws in Belgium (cont’d)
 New obligation to explain dismissal reasons
 Since April 1, 2014, all employers must explain to an employee
the reasons for their dismissal when requested to do so by the
employee
 Abolition of differences in relation to occupational
pensions
 May 5, 2014 bill implements gradual abolition of differences in
relation to occupational pensions
 From January 1, 2015, any newly implemented occupational
pension scheme which distinguishes between the two types of
worker will be discriminatory
 All distinctions will have to be eliminated entirely
by January 1, 2025

Recommendations going forward
 Review employment contracts, work regulations and company
policies to bring them into line with changes
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The Florange law:
new redundancy rules in France
 The Florange law
 Since April 1, 2014, any employer intending to shut
down a site must try to find a buyer before the closure
(and the associated redundancy measures)
 Practical implications
 The new law applies to: (i) companies employing at
least 1,000 employees in France and/or Europe; and
(ii) companies or groups of companies meeting the
legal requirements for a EWC or a Group Committee
 No legal obligation to find a purchaser, but companies
have to inform potential buyers of their intention to sell;
provide specific information to potential buyers;
consider purchase offers; provide a motivated response
to any purchase offers; inform the Works Council of the
offers and the reasons for refusal
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The Hamon law:
new rules in France for company sales
 The Hamon law
 As of November 1, 2014, in case of contemplated sale
(share deal or asset deal) of certain companies
(employing fewer than 250 employees and whose
turnover does not exceed specific thresholds), the
employer will have the obligation to inform the
employees in advance, in the event they are interested
in buying the company
 Practical Implications
 The employees must be informed at least 2 months
before the date of the contemplated sale
 The sale can occur before the 2 months’ period if all the
employees inform the employer that they are not
interested in buying the company
 In case of non-compliance with this obligation, the
sanction is the cancellation of the sale
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Working time challenges in France
Is there a ban on emails being sent by
French employees after 6 p.m.?
 Amendment to the SYNTEC CBA that applies to
executive employees subject to a specific
working time scheme (“convention de forfait en
jours sur l'année")
 Does not prevent employees from checking
their emails after 6 p.m., but they must
disconnect from remote working devices during
rest periods and employers must ensure means
are in place to ensure this happens
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Working time challenges in France
(cont’d)
 Validity of schemes by which executive employees work on
a daily basis over the year ("conventions de forfait en jours
sur l'année") is assessed more and more restrictively by the
courts
 Certain of these schemes provided by CBA (such as the
SYNTEC CBA) have been invalidated by the courts, and
new provisions have been negotiated, which are more
protective for the employees
 Employer should take actions such as:
 Implementing a tracking tool, in order to count days worked and
days off
 Reviewing the employee's workload during individual meetings on
a regular basis
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Changes to employment laws in the
Netherlands
 Changes coming into effect on January 1, 2015
 New rules on the use of non-compete restrictions in fixed-term contracts
 Such provisions will be prohibited unless they are necessary to protect a
substantial business interest (high threshold); court will be able to test the
justification and declare the restraint void
 New rules on probationary periods in fixed-term contracts and the
requirement to notify a fixed-term employee of non-renewal
 It will only be possible to include a probationary period if the contract's duration
is six months or more. Also, the employer must inform the fixed-term worker
whether or not to extend the contract one month before the contract end date. If
this does not happen, the employer will have to pay up to one month's pay as
compensation, reduced pro-rata if the required notice is given late
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Changes to employment laws in the
Netherlands (cont’d)
 Changes coming into effect on July 1, 2015
 New rules on conversion of fixed-term contracts into indefinite term
contracts
 Currently employers can offer up to three contracts for a definite period of time,
for no longer than three years in total. When entering a fourth contract
(immediately after the third contract or within three months after the expiration of
the third contract), the contract is converted into an indefinite contract
 From July 1, 2015, after two years of employment under definite term contracts,
the contract will convert into an indefinite contract (unless the chain of
consecutive contracts is broken by a six-month break)
 Reforms to Dutch dismissal procedures and severance payments
 Currently, the Dutch have a "dual dismissal system." If it is not possible to
terminate with mutual consent, an employer can terminate by giving notice after
receiving permission from the UWV or through a court ruling. It is proposed:
 New compulsory proceedings (UWV or court) will apply depending on the
reason for termination
 Severance payment will be capped at € 75,000 (or one year’s salary if
higher), but judge may remove the cap
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Some other important expected
Europe-wide developments
 Reform of the EU Data Protection Regime
 European Parliament approved proposals to reform and
harmonize EU data protection laws across Europe;
Council must adopt the proposals to become law
 Regulation setting out EU framework for data
protection and Directive on protecting personal data
For example:
 A company would have to seek prior authorization of
an EU national data protection authority before
disclosing an EU citizen’s data and would have to
inform the citizen about the request
 Right to erase personal data and new limits on
personal “profiling” on the Internet
 Draft proposes substantial fines for data breaches
of up to € 100 million or up to 5% of annual
worldwide turnover, whichever is greater
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Some other important expected
Europe-wide developments (cont’d)
 New EU Directive on Trade Secrets
 In December 2013 EU Commission adopted a proposal for a Directive to provide a
standardized level of protection for trade secrets across Europe
 Proposal aims to harmonize rules on the acquisition, use and disclosure of confidential
business information across the EU, including:
 Definitions of a trade secret and of unlawful acquisition and use of trade secrets
 Remedies for redress (including precautionary seizure of goods, interim injunctions,
compensation and damages)
 Limitation period of two years for claims
 Provision for the protection of trade secrets during litigation
 Proposed Directive is with the Council for adoption
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Some other important expected
Europe-wide developments (cont’d)
 Gender balance on corporate boards
 EU Parliament has approved legislative report on the EU Gender Directive, which will
require member states to ensure that companies take measures to adopt clear and
transparent appointment procedures to attain at least 40% female non-executive
directors by January 1, 2020
 Directive will apply to EU-incorporated companies with more than 250 employees
which are listed on any EU regulated market and which have an annual worldwide
turnover of more than € 50 million
 Where candidates are equally well qualified in terms of suitability, competence and
professional performance, priority should be given to the candidate of the underrepresented sex (unless an objective assessment tilts the balance in favor of the other
candidate). Companies must publish the gender composition of their board annually
 MEPs propose that companies which fail to introduce such procedures should face
penalties, including exclusion from public calls for tenders
 Directive requires the approval of the Council to become law
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Philippe Danesi
Philippe Danesi is involved in all aspects of employment law. He has a
broad experience in assisting companies in dealing with the employment
aspects of complex restructuring operations and related litigations.
He has specific experience negotiating and implementing social plans,
outsourcing, transfer of personnel and cross-border transactions as well as
in negotiating and implementing working time strategies and collective
bargaining agreements. He handles collective issues and litigation involving
unions and staff representatives before labor, civil, criminal and
administrative courts in France.
Philippe is recommended year after year in Chambers & Partners which
reports warm feedback from clients: "He is available and proactive, more
like a business partner than a legal adviser. His recommendations are
always practical. "Clients "trust him" […], "enthusiastically praise him as
'practical, responsive and top choice for complex issues - Chambers
Europe 2013. Described as "a daring partner", clients laud him for his
"impressively broad employment practice" - Chambers Europe 2012.
Tom Kerr Williams
Tom Kerr Williams is a London-based employment lawyer who has spent his
entire career using his legal skills to assist international businesses in
managing their global people issues and risk. He advises employers on the
full range of contentious and non-contentious issues arising from the
employment relationship, from strategic advice on board level engagements
and terminations, through the management of international projects, to
advising employers on outsourcing and managing workplace change,
including in a trade union context.
Tom has considerable experience acting for clients in the technology sector.
His clients range from established global businesses with large workforces
across the world to those just starting up. The focus of his work in recent
years has been on international projects, high value outsourcings, change
management programmes, assisting with the employment aspects of M&A
transactions and the management of complex and sensitive whistleblowing
and discrimination claims
Tom has executive experience in collective relations, and also has
considerable experience in non-union collective employee relations issues
such as consultation/negotiations with employee forums, collective
redundancies and TUPE and the setting up of and consultation with European
Works Councils.
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Ute Krudewagen
Ute Krudewagen focuses on providing multinational companies with solutions
to the challenges presented in managing a global workforce. In addition, she
counsels companies on employment issues triggered by cross-border
transactions.
Ute advises international and cross-border clients on a broad range of complex
employment matters, including background checks, employment agreements,
discrimination and harassment claims, social media issues, global policies and
procedures, non-compete and proprietary information agreements, works
council and union issues, codes of social responsibility, workplace privacy,
employee assignments and global mobility programs, global reductions in
force, and severance and retention plans.
Ute also counsels global employers on the issues associated with transactions,
including cross-border mergers and acquisitions, outsourcing, post-acquisition
integrations and tax restructurings. She has successfully addressed
employment issues in transactions with workforces in more than 60
jurisdictions in one transaction, with deal values ranging from US$2 million to
US$8 billion, including negotiation and drafting of the deal agreement,
employee transfers, consultations with unions and works councils, benefits
harmonization, interim operating models and acquisition-related downsizings.
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