Are any legal changes planned that are likely to impact on the way employers in your jurisdiction approach termination of employment? If so, please describe what impact you foresee from such changes and how employers can prepare for them?

Employment & Labour Law

Ireland Small Flag Ireland

As of early 2017 there are no immediate legal changes planned that will have an impact on the termination of employment in Ireland.

However, the Irish Government is considering removing an employer’s entitlement to set a mandatory retirement age. The current legislative position (in line with EU law) provides that when setting a mandatory retirement age, an employer must ensure the age can be objectively and reasonably justified by a legitimate aim and that the means of achieving that aim is appropriate and necessary. Recently, the Government has given consideration to the proposition of abolishing mandatory retirement ages in their entirety. Instead, employers would be permitted to initiate a practice whereby employees would be incentivised financially to take voluntary retirement at a certain age. However, the discussion of this topic is at a very early stage and it remains to be seen what type of changes will come about in relation to mandatory retirement ages.

At the very least, in order to deal with the issue of mandatory retirement ages in this jurisdiction currently, an employer should be well positioned to justify the reasons for the setting of a particular retirement age.

Singapore Small Flag Singapore

The Employment Claims Tribunals (“ECT”) and Tripartite Alliance for Dispute Management (“TADM”) will start functioning in April 2017. These avenues will give employees (including those not under the EA) and employers an alternative expeditious and relatively low-cost method of resolving salary-related disputes, including claims for salary in lieu of notice. Parties having their claims heard by the ECT are not allowed to be legally represented. It is anticipated that these new initiatives will improve accessibility to dispute resolution for both employers and employees.

The ECT may raise the likelihood of challenge by employees, particularly employees who would previously have been deterred by the costs of commencing action in the courts.

Employers should carefully review their employment documents and termination processes to ensure compliance with Singapore laws.

United States Small Flag United States

We do not foresee major changes to the basic structure of federal employment law under the new U.S. administration. As the Trump administration generally favors less regulation of business, key government agencies such as the National Labor Relations Board (NLRB) and Equal Employment Opportunity Commission (EEOC) will likely be more employer-friendly. For example, the NLRB may narrow what it considers “protected concerted activity”, relax the standard by which employers are considered “joint employers”, and increase leniency towards employee handbooks. Similarly, the EEOC will likely be faced with increased budget scrutiny, which may impact its enforcement efforts.

At the same time, employers should remember that state law is often the dominant influence in employment law matters, and the states remain free to either follow or resist any potentially more pro-employer trend in Washington.

Spain Small Flag Spain

Not to date.

Turkey Small Flag Turkey

In the first quarter of the year of 2016, the draft law on Labour Courts ("Draft Law") which introduces an alternative dispute resolution method to be applied just before the initiation of employment lawsuits has been published. The concept of the mandatory mediation has been created by the amendments in order to reduce the workload of Labour Courts and to accelerate the judicial procedures. According to the Draft Law, application for mediation shall be a prerequisite to initiate a lawsuit regarding any claim arising from the employment relationship. In the case that the employment contract is terminated without any valid ground or just cause, the employee shall apply for mediation within one month from the termination notice. If the parties cannot come to an agreement at the end of the all procedures before the mediator, related lawsuit may be initiated before Labour Courts within two weeks from the date of issuance of the final minutes. It is expected that the Draft Law will be at the agenda of the Grand National Assembly of Turkey within coming months.

Other notable expectations on labour law related legislations is about the severance payment of employees. Establishment of a fund regarding the severance payment of employees has become a long-debated issue in Turkey. Although any draft law is yet to be published, the debate and the issue have been reawakened recently as one of the plans of the Turkish Government. Severance payments are expected to be made by employees to a fund which will be established specifically for this purpose. It is intended that all employees would obtain severance payment regardless of the reasons of termination and the term of the employment contract.

Colombia Small Flag Colombia

It is foreseen the increasing of legal provisions and court ruling creating protection to additional group of employees not to be dismissed (i.e. single parents in the private sector, etc.) without just cause and without the authorization of the Ministry of Labor, which will make more difficult for the employers to terminate the employment agreements with or without just cause.

Considering the above, the employers need to be prepared to either open spaces of negotiation with those employees to agree on termination by mutual consent with payment of voluntary termination bonuses or adjust to such situations.

Switzerland Small Flag Switzerland

Longstanding discussions about an explicit legal anchoring of an increased protection for whistleblowers have not yet produced any concrete results.

Moreover, there are no sufficiently concrete legislation projects.

Japan Small Flag Japan

No specific legislation is currently under consideration with respect to termination issues. However, from 1 April 2018, employees operating under a fixed-term contract which (i) was executed or renewed on or after 1 April 2013, (ii) has been renewed at least once, and (iii) has continued in effect for more than five years may request the contract to be converted into a contract with an indefinite term (please see reply to Question 1). Employers should be mindful of this so as to avoid any inadvertent conversions resulting from automatic renewals, as well as when offering new fixed-term employment arrangements.

Some employers have already taken measures such as the following to cope with this change:

  • amend the work rules for fixed-term employees to set forth the maximum length of employment at five years, and introduce a system to switch fixed-term employees to permanent employees,
  • create a new category of employees employed for an indefinite term with a scope of responsibility suited for former fixed-term employees, and
  • be more proactive in converting well-performing fixed-term employees to regular permanent employees, while being more selective in renewing the contract for fixed-term employees before the maximum five-year period.

Thailand Small Flag Thailand

As of the date of this article, there is no legal change planned that are likely to impact on the way employers approach termination of employment. However, we would recommend that the employers keep monitoring the court precedents as a number of topics of labour laws (e.g. unfair termination) are ruled on a case-by-case basis.

India Small Flag India

While there are many big ticket reforms that have been proposed by the Government of India to the existing labour laws, one that is likely to impact the way employers approach termination of employment is the proposal to simplify the process of termination of workmen in manufacturing units having up to 300 workmen. At present, a manufacturing unit employing 100 or more workmen on an average in the preceding 12 months is required to obtain prior approval of the government before terminating any workmen. Such limit is proposed to be increased to 300. Further, the retrenchment compensation under the ID Act which currently is payable at the rate of 15 days’ wages for every completed year of service is proposed to be increased to 45 days. Therefore, while the employers having smaller establishments will find it easier to terminate the workmen without any approval requirements, the overall cost of termination would be much more than what is currently incurred by the employers. As of now, there is no light on when these proposals are likely to be implemented by the government. However, the employers would need to be prepared to bear the additional cost as and when these proposals are enforced.

Uruguay Small Flag Uruguay

As from the date of this questionnaire, there is no specific legal change plan likely to have an effect on the approach of the termination of employment.

UAE Small Flag UAE

It is widely acknowledged that the UAE Labour Law is in need of amendment so that it can more appropriately address the requirements of today’s workforce. However, no specific measures are under consideration at the present time.

China Small Flag China

The LCL of China is an employee-friendly law, where freedom and rights support the rights of employees and constraints and obligations lie primarily upon employers. Under the rapidly rising labour costs and the continuous increase of labour disputes, common views on the modification of the LCL exist supporting the introduction of lower standards of termination in some cases. One is to define high-level employees and treat them differently, including putting less protection on the reasons for termination. The other is to define small and micro-sized employers and treat them differently, exempting them from some statutory requirements applying to other employers such as the formulation of employer’s work rules and the termination of certain employees. So far, several drafts have been discussed, but whether, how and when to modify the LCL are still live questions.

Currently, employers must follow the existing laws and regulations strictly so that they can maintain compliance management and control the legal risks as much as possible.

Sweden Small Flag Sweden

No.

South Korea Small Flag South Korea

No.

France Small Flag France

A law dated 8th August 2016 made it possible for the judge to rely on a prefixed amount to grant damages for unfair termination. The grid is as follows:

Length of service Damages (in months salary) Length of service Damages (in months salary)
0 1 22 14.5
1 2 23 15
2 3 24 15.5
3 4 25 16
4 5 26 16.5
5 6 27 17
6 6.5 28 17.5
7 7 29 18
8 7.5 30 18.25
9 8 31 18.5
10 8.5 32 18.75
11 9 33 19
12 9.5 34 19.25
13 10 35 19.5
14 10.5 36 19.75
15 11 37 20
16 11.5 38 20.25
17 12 39 20.5
18 12..5 40 20.75
19 13 41 21
20 13.5 42 21.25
21 14 43+ 21.5

An additional month may be awarded if the employee is aged 50 or more upon dismissal, and another month may be added in case of specific difficulties of reemployment.

The court is not bound to apply this grid, but it may be inclined to do it by way of simplicity. This tool is likely to determine the way exit negotiations are conducted since it gives a hint of what a court may award if the negotiation fails.

Austria Small Flag Austria

It is currently suggested to ease up to protection of elderly employees to promote their employment.

Canada Small Flag Canada

Ontario’s ‘Changing Workplaces Review’
The Ontario government is in the process of updating its core legislation governing provincially-regulated workplaces in Ontario: the Employment Standards Act, 2000 and the Labour Relations Act, 1995. As part of that process, an interim report was commissioned by two special advisors. The report was delivered in July 2016, and contained proposals that would, if implemented, impact on the way employers approach termination of employment. The proposed changes included:

  • introducing union-like job protections for non-union employers that would potentially restrict the ability to terminate employment without cause;
  • introducing joint and several liability for franchisors and franchisees in respect of the employment standards entitlements of franchisee employees; and
  • changing or eliminating current exclusions from the ESA, such as the exclusion for managers and supervisors.

The advisors’ final report is expected to be released in the spring or summer of 2017. Once it is released, the Ontario government will decide which recommendations, if any, will be implemented. As such, employers should keep apprised of any changes to legislation, as well as any transitional provisions/procedures that apply with respect to such changes.

Erratic Case Law Regarding Contractual Termination Clauses
It is settled law that an employer and employee can contract out of the common law requirement to provide reasonable notice of termination by means of a termination clause that clearly displaces the common law and is in compliance with employment standards legislation. However, the case law in many jurisdictions is inconsistent as to precisely when a contract in fact displaces the common law and in fact complies with minimum employment standards.

For example, there is case law that holds that a termination clause which could, potentially, breach employment standards legislation is void and enforceable, even if there was no actual breach in the circumstances. Other case law suggests that an employment contract must only conform to provincial employment standards legislation for the particular employee, in the particular circumstances. It is likely that appellate courts will continue to weigh in on this debate in the future. In the meantime, employers should be cautious in drafting their employment contracts in order to ensure that they are clear, unambiguous, and compliant with employment standards legislation in all scenarios and circumstances.

Belgium Small Flag Belgium

To our knowledge no such legal changes are being planned. The uniform status law came into force on 1 January 2014 and fundamentally changed the way employers must approach termination of employment.

The Government announced that it was examining ways to make collective dismissals more intricate and/or expensive. It is too early to comment on this as no concrete plans have been communicated yet.

Italy Small Flag Italy

The Italian Labour Law was radically and widely reformed in 2015, so we do not expect any major legal changes especially in terms of dismissal. In terms of impact, indeed the reform recently enacted should enable the employers to approach termination of employment (for employees hired from 7 March 2015) having more clearly in mind the possible monetary consequences of an unfair dismissal, this facilitating the creation of a budget by the company.

Luxembourg Small Flag Luxembourg

N/A

Germany Small Flag Germany

A legal change recently occurred with respect to dismissals of severely disabled employees. The employer is now also obliged to consult the council of employees with disabilities within the operation before terminating an employment relationship with a severely disabled employee (with the prior consent of the relevant state authority). Otherwise the termination is invalid only because the consultation is missing.

Mexico Small Flag Mexico

An important Constitutional amendment is awaiting approval by state congresses where, among other changes, the current Conciliation and Arbitration Board will be replaced by courts in the judicial branch. While this is not a change that will directly impact the way employers approach termination of employment in Mexico, we believe that a completely new judicial and adjudication system will shape litigation around alleged wrongful terminations. It is expected that the protective nature of the FLL will continue, but there is a chance that independent courts (as opposed to the current Labour Board of the Ministry of Labour) may have a more balanced vision of the contending parties at trial.

Finland Small Flag Finland

No such legal amendments are currently planned.

However, as of 1 January 2017 a number of employer-friendly amendments regarding the length of a probationary period and shortening the re-employment obligation of a redundant employee entered into force. These amendments make it easier to terminate the employment of new employees not suitable for their tasks and recruit new employees due to changed circumstances after making employees redundant.

Further, also as of 1 January 2017, employers now have an obligation to offer a possibility to participate in education or training promoting employment to employees made redundant on financial and production-related grounds. In addition to education or training, employers are also now obligated to offer occupational health care services to redundant employees for six months after the termination of the obligation to work. Pursuant to previous legislation, employers were obligated to offer occupational health care services only to employees in employment relationship at that time.

Updated: May 4, 2017