Are any legal changes planned that are likely to impact on the way employers 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 (2nd Edition)

Brazil Small Flag Brazil

The recent Labor Reform brought more than 100 changes to the labor and employment laws. The Labor Reform aimed to purport collective negotiations, and give more flexibility to employers and employees when bargaining about the working conditions, while preserving the minimum labor and employment standards provided for by the Constitution. It also innovated in some aspects, such as introducing the arbitration for resolution of some employment disputes. As these changes and new features are mostly business oriented, some of them may be challenged by employees’ union before labor courts.

South Korea Small Flag South Korea

N/A

Turkey Small Flag Turkey

Following the entry into force of the Code of Mediation for Legal Disputes in 2013, it has been noted that 72% of the overall disputes that were taken to mediation were related to employment law and almost all of such has resulted in settlement. Thus, to release the work load of the Labour Courts and to expedite the trial process, in late 2017, the Labour Courts Code has introduced a mandatory mediation process in employment law disputes (related to the employee receivables and reinstatement). Following the implementation of it, mediation has become a prerequisite to initiate a reinstatement claim or a claim on employee receivables before the court. This introduction is widely celebrated in the sector as, if implemented effectively, it is capable of reducing legal costs associated with employment law disputes as well as reducing the time and effort spent on long trial periods. However, if it degrades into a bureaucratic paper shuffling than a functioning alternative dispute resolution, it may, on the contrary to what is sought to be achieved, in fact prolong the entire process.

The Netherlands Small Flag The Netherlands

The route the employer has to choose to terminate a contract is determined by what ground it is based on. Before the Act the court had a broader competence concerning the h-ground to decide if ‘circumstances that are of such a severe nature that continuation of the employment contract cannot reasonably be expected’ were present. The judge could compensate ‘imperfect grounds’ by awarding a higher allowance.

The h-ground reads as an open norm, but it is not meant to be interpreted that way. It concerns situations which cannot be based on and are separate from one of the other grounds. The h-grounds is not meant to ‘fix’ an imperfect a- to g-ground.

Changes to bring back this competence are planned and allowing the judge to fix ‘imperfect grounds’.

Thailand Small Flag Thailand

A new provision was added to the LPA in 2017 which provides that the retirement of an employee at an age either agreed between the employer and employee or specified by the employer, is deemed to be a termination of employment under the LPA. Where there is no agreement on a retirement age, or the retirement age is not specified by the employer or the retirement age is specified to be at an age older than 60 years, an employee who reaches 60 years of age (or at any time thereafter) is entitled to express his/her intention to retire to the employer, and the retirement will take effect 30 days later. In these instances, the employer is obliged to pay severance pay in accordance with Section 118 of the LPA.

With respect to planned legal changes, the Ministry of Labour is proposing to amend the LPA on various issues, including the imposition of 15% interest where an employer fails to pay wages in lieu of advance notice upon termination of employment, and to extend the scope of severance pay provisions such that an employee having a length of service of 20 years or more would be entitled to severance pay of 400 days’ salary. There is as yet no definite date on which these proposed amendments are likely to be passed, and so it is highly recommended that employers should continue monitoring their progress.

United Kingdom Small Flag United Kingdom

On 7 February 2018, the UK government released its response, the “Good Work plan”, to last year’s Taylor Review of Modern Working Practices. The Taylor Review was initiated partly in response to a sharp rise in the numbers of individuals working in the so-called “gig economy”. Many of these individuals are engaged as self-employed contractors to perform key services provided by their employer. As self-employed contractors, they are not entitled to the benefits and rights enjoyed by workers and employees. However, it is often hard to distinguish the employer/contractor relationship from that of employer and worker/employee and many contractors may in practice be workers or employees.

Highlights of the government’s “Good Work” plan include: a recommendation for consultations to clarify the definitions linked to employment status (however, there is no immediate recommendation to introduce a new category); defining ‘working time’ for flexible workers who find jobs through online apps; and new enforcement for the failure to pay holiday or sick pay.

To prepare for changes relating to this issue, employers can audit the employment relationships within their engagement model to assess potential exposure and costs. This will help with the necessary analysis of the risks and practicalities of alternative engagement models.

In the short term, employers can look to reduce risk when terminating contractor engagements by activating such terminations, where possible, before an individual has met the minimum service requirement of the two years usually required to bring an unfair dismissal claim.

Canada Small Flag Canada

Ontario’s Employment and Labour Law Statutes
In 2015, the Ontario government announced the largest review of its labour and employment legislation in decades, which culminated in a Final Report released in May 2017. The government responded to the report by passing a bill to amend Ontario’s core labour and employment legislation: the Employment Standards Act, 2000 and the Labour Relations Act, 1995. While these changes are significant in many ways, they are unlikely to impact the way most employers approach termination of employment.

One exception is for employers of temporary help agency staff, who are now required to give one week’s notice or pay in lieu when an assignment is terminated in certain circumstances.

The new law will also shield unionized employees from termination without just cause during the period between certification and the date on which a first contract is entered into, and also during the period between the date the employees are in a legal strike or lock-out and the date the new collective agreement is entered into.

The Ontario government has indicated that their review of Ontario’s labour and employment law is still ongoing. As such, employers should keep apprised of any changes to legislation that may be forthcoming.

Alberta’ Employment and Labour Law Statutes
The employment and labour landscape in Alberta has recently undergone significant legislative changes.  The Fair and Family-Friendly Workplaces Act changes came into effect  on January 1, 2018, and the Employment Standards Amendment Regulation came into force on December 6, 2017. These changes collectively modify the Employment Standards Code of Alberta (the Code), which applies to 85% of employers in Alberta.

  • Minimum wage did not change on January 1, 2018, as it increased to $13.60/hr on October 1, 2017, and it will increase again to $15/hr on October 1, 2018.
  • Employers are no longer to be allowed to pay employees with disabilities less than the minimum wage.
  • Employers can only take deductions from an employee’s earnings if the deduction is: required by law, authorized by a collective agreement or authorized in writing by an employee.
  • On commencement of employment, employees can agree in writing to deductions for: company pension plans, dental plans, social funds, and registered retirement savings plans.
  • Overtime agreements will allow time to be banked for six months rather than three.
  • Overtime banking will be calculated at 1.5x for all overtime hours worked (currently hour-for-hour).

The following new unpaid job protected leaves are created by the legislation (in each case they are maximum amounts allowed per year):

  • Long-term illness and injury leave – up to 16 weeks for long-term personal sickness or injury.
  • Personal and family responsibility leave  – up to five days for personal sickness or short-term care of an immediate family member.
  • Bereavement leave – up to three days for bereavement of an immediate family member.
  • Domestic violence leave – up to 10 days  for employees addressing a situation of domestic violence.
  • Citizenship ceremony leave – up to a half-day for employees attending a citizenship ceremony.
  • Critical illness of an adult family member – up to 16 weeks for employees who take time off to care for an ill or injured adult family member.
  • Critical illness of a child – up to 36 weeks for parents of critically ill or injured children.
  • Death or disappearance of a child – up to 52 weeks for employees whose child disappeared as a result of a crime, or up to 104 weeks if a child died as a result of a crime.

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.

Philippines Small Flag Philippines

There have been no moves in changing Philippine termination laws which have been generally stable since the Labor Code was first implemented in 1974.

Israel Small Flag Israel

Currently there are no planned changes in legislation which are likely to have an impact on termination of employment.

Sweden Small Flag Sweden

No.

Ireland Small Flag Ireland

As of early 2018 there are no immediate legislative changes planned that will have an impact on the termination of employment in Ireland.

As a result of one High Court case in 2017, employers and their advisors are currently considering the possible entitlement of employees to legal representation and cross examination of witnesses in any procedure leading to termination of employment. This has the potential to create more onerous delays to such procedures.

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.

France Small Flag France

The Macron laws provide for minimum and maximum damages that the judge may award the employee in case of unfair dismissal, depending on the employee’s seniority and the company’s headcount.

Note that on top of this amount, employees may be entitled to additional damages in specific circumstances (dismissal in vexatious circumstances, violation of safety at work, etc.) and may also make salary claims (overtime, bonus, etc.).

The minimum and maximum amounts are as follows. These thresholds and caps apply except if nullity of dismissal is incurred (which is the case in the event of very serious violations such as harassment or discrimination for example).

Seniority in the company

Minimum indemnity
(in gross monthly salaries)

Maximum indemnity
(in gross monthly salaries)

Seniority in the company

Minimum indemnity
(in gross monthly salaries)

Maximum indemnity
(in gross monthly salaries)

< 11*

≥ 11*

0

N/A

N/A

1

16

3

13.5

1

0,5

1

2

17

3

14

2

0,5

3

3,5

18

3

14.5

3

1

3

4

19

3

15

4

1

3

5

20

3

15.5

5

1,5

3

6

21

3

16

6

1,5

3

7

22

3

16.5

7

2

3

8

23

3

17

8

2

3

8

24

3

17.5

9

2,5

3

9

25

3

18

10

2,5

3

10

26

3

18.5

11

3

10.5

27

3

19

12

3

11

28

3

19.5

13

3

11.5

29

3

20

14

3

12

≥30

3

20

15

3

13

-

-

-

Finland Small Flag Finland

No such legal amendments are currently planned.

However, as of 1 May 2017, small employers' (regularly employing less than 20 employees) administrative burden related to dismissals on financial or production-related grounds was reduced. Certain notification and explanatory requirements included in the Employment Contracts Act were revoked. As a result of the reform, the small employers no longer have an obligation to notify the employment office when it gives notice on financial or production-related grounds to at least ten employees or lays off at least ten employees. Further, the small employers no longer have to explain to the redundant employees the employment services available or to inform them of their right to an employment plan.

Since the notification requirements based on the Cooperation Act were not amended or revoked, big employers (regularly employing at least 20 employees) still have to comply with the notification requirements set out in the Cooperation Act.

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 of the statutory requirements applicable 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 open 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.

Belgium Small Flag Belgium

Currently, there are discussions to reform the legislation on collective dismissals by foreseeing an information phase open to elected politicians, with the possibility to invite the CEO to parliament in order to offer explanations on the envisaged collective dismissal, an obligation to conclude a social and financial plan, and also higher indemnities for employees. However, there is no consensus for the moment to modify the legislation in this way.

Austria Small Flag Austria

Employers are obligated to pay remuneration beyond the end of the employment relationship if either (i) they themselves give notice during their employees’ sick leave, (ii) they dismiss their employees unlawfully or (iii) gave reason to their employees to terminate the employment relationship without giving notice (Austritt).

On the contrary, if the employment relationship is terminated amicably, employers are currently under no obligation to pay continued remuneration. This shall change for terminations of employment that occur after June 30, 2018.

Then, employers will also be obligated to pay continued remuneration beyond the end of the employment relationship in case of a consensual termination of the employment relationship during a sick leave. As in the cases described above, the obligation to pay continued remuneration of the employer exists until the employee's ability to work is restored or until the employee’s claim for continued pay, which is limited in time by law, is exhausted.

United States Small Flag United States

There have been limited changes to the basic structure of federal employment law under the Trump administration during its first year. However, Trump administration leaders have taken some actions that favor employers and this is a trend that is likely to continue in 2018. This includes several recent decisions by the National Labor Relations Board (NLRB) that make it more difficult for workers to unionize and bargain with employers. In particular, a recent NLRB decision called for the adoption of a more employer friendly standard for reviewing employer policies that are alleged to “chill” protected activity.

Notwithstanding the transition to the new administration, enforcement litigation pursued by the Equal Employment Opportunity Commission (EEOC), and the U.S. Department of Labor (“DOL”) continued to push an aggressive agenda with more lawsuits filed on merits of discrimination in 2017 than in prior years. However, as Trump appointees are set to replace several EEOC and DOL leadership positions in 2018, this will likely result in a decrease of litigation in 2018, and promote a more employer friendly approach in the coming years.

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 employment related trends in Washington.

Switzerland Small Flag Switzerland

There are no sufficiently concrete legislation projects. Even longstanding discussions about an explicit legal anchoring of an increased protection for whistle-blowers have not yet produced any concrete results.

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.

New Zealand Small Flag New Zealand

90 day trial periods: legislation has been introduced to restrict 90 day trial periods (the ability to terminate employment on notice for any reason in the first 90 days of employment) to small medium enterprises (SME) employers (fewer than 20 employees).

Reinstatement: reinstatement while remaining a remedy, was removed as the primary remedy for termination in 2011. This is likely to be restored in 2018. The change is likely to be used by employees as a negotiation point in post-termination disputes.

Statutory redundancy compensation: the Labour-led coalition government formed in late 2017 have signalled that it intends to consult on minimum redundancy protection for workers affected by restructuring.

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.

Luxembourg Small Flag Luxembourg

N/A

Spain Small Flag Spain

Not to date.

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.

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 enacted two years ago 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.

India Small Flag India

Some important changes proposed in the labour law sector are as follows:

  • The Ministry of Labour and Employment has envisaged consolidating several labour laws into four codes. Some key highlights in one of the proposed codes i.e. the Labour Code on Industrial Relations Bill 2015 are:
    • Increase in the amount of severance compensation which is equivalent to 45 days average pay for every completed year of continuous service payable on termination of employment as opposed to the compensation presently payable under the ID Act i.e. equivalent to 15 days average pay for every completed year of continuous service.
    • Increasing the number of workmen from 100 to 300, to trigger the requirement of obtaining permission from the Government for retrenchment of employees

Updated: June 29, 2018