Global HR News

British Columbia courts apply common sense to termination provisions

Over the past few years, employers have witnessed an onslaught of pro-employee decisions which have cast doubt on the enforceability of termination provisions in an employment contract. This has particularly been the case with recent cases in Ontario whereby any ambiguity however small has invalidated the whole termination clause denying the employer the right to limit notice of termination to the statutory minimum rates and instead exposing them to common law claims for reasonable notice. Thankfully the British Columbia Court of Appeal has seen sense and applied some much-needed logic to the issue.

In the case of Egan v Harbour Air, the employment contract included the following provision: "The Harbour Air group reserves the right to terminate your employment at any time without cause, provided that it gives proper notice and severance as required by the Canada Labour Code."

The employee argued that the clause did not clearly remove his entitlement to common law notice. While the clause stated that notice would meet the requirements of the Labour Code, it did not explicitly limit the notice period to the statutory minimum amount, and therefore it did not eliminate his right to common law notice.

The BC Court of Appeal disagreed and stated that proper interpretation of the contract does not involve dissecting the words in a termination clause in search of ambiguity to render the clause unenforceable. The Court further remarked that a general reference to the applicable legislation is enough to replace the application of common law notice periods. Therefore, unlike the Ontario courts, there is no requirement to include wording such as "limited to" or "only." Simply stating "in accordance with" or "as required by" is sufficient to deny an employee access to longer notice periods under common law.

The case is only binding in British Columbia and therefore it remains to be seen whether the courts in other provinces such as Ontario will start and review termination clauses with the same degree of common sense.

The risks of two-stage offer of employment

In the case of Adams v Thinkific Labs Inc., the employer sent a successful candidate an email offering employment. The email covered the key terms of the offer but did not make clear it was conditional on the employee entering an employment contract. The candidate accepted the offer and agreed on her start date. When the employment contract was issued a few days later it included a termination clause and non-compete which were not covered in the initial offer. The termination clause applied the statutory minimum period of notice and excluded the right of the employee to claim a longer period of notice under common law. The employment was terminated 20 months later and the employee claimed.

The Court held that the initial offer was sufficiently detailed to constitute an employment contract and that because the subsequently issued employment contract was issued without consultation or additional consideration, it did not have legal force citing the case of Krieser v Active Chemicals Ltd, which established that any detrimental change to employment terms requires additional and adequate consideration. Also relevant to the Courts decision was that the subsequent employment contract made reference to prior agreements, suggesting that the offer email was recognised as a contract, and it also omitted any reference to many of the benefits that the initial offer had covered.

Based on the Court’s decision the employer could not rely on the termination provisions in the subsequent employment contract and given that the initial offer did not attempt to limit the application of common law notice periods the employee was able to claim a five months’ notice period.

The British Columbia court assessed whether the initial offer survived as a full binding employment contract and whether the subsequent contract of employment and its termination clause was enforceable.

Right to disconnect

Effective from 26 August 2024, Australian employees will have the right to refuse employer or third-party contact outside of working hours conditional on the refusal not being unreasonable. What is considered unreasonable will depend on the reason for the contact, whether the employee is compensated for being contactable or working extra hours, the nature of the employee’s role and level of responsibility and the employee’s circumstances (including caring and family responsibilities).

All Modern Awards (collective agreements) are required to be updated with ‘right to disconnect’ provisions before 26 August 2024, and the rights will be recognised as a workplace right under Australia’s general protection laws.

It should be noted that the right to disconnect will not apply to small employers until 26 August 2025. A small employer is one with 14 or fewer employees (for international organisations this is counted on a global basis across all associated entities).

Increases to paid parental leave

On 1 July 2024, paid parental leave was increased from 20 to 22 weeks. A further increase to 24 weeks is scheduled for July 2025, and this will increase yet further to 26 weeks in July 2026. The extended leave is available to parents of children born or placed for adoption after July 2024.

Case of dog bite to home worker highlights the broad approach to work injuries

Employers in Australia must have workers compensation insurance to cover workplace injuries.

In a recent case, an employee submitted a claim for a dog bite she sustained while working from home. The employer’s insurer declined to pay out on the basis that the injury did not arise out of or in the course of her employment – it occurred outside of the employee’s front gate when she attempted to intervene in a dog fight that involved her daughter’s puppy. The employee argued that she wouldn’t have been at home at the time of the attack unless she was home-working and in order to keep a quiet work environment she had to keep the dog outside.

The insurer’s counter argument being that at the time she went outside to deal with the dogs her employment was interrupted and there was no causal connection with her employment at that stage. The Personal Injury Commission found in favour of the employee claiming that the employment was a substantial contributing factor to her injuries given that the attack occurred during the performance of her duties and that no employer would reasonably expect an employee to ignore the plight of the puppy and not to come away from her work to intervene.

The insurer appealed but at appeal the decision was upheld.

The case highlights the very broad approach taken by the Personal Injury Commission and the fact that accidents seemingly unrelated to an employee’s remote working may be deemed to have a causal link.

Karnataka court strikes down special Provident Fund provisions for international workers

The Employee Provident Fund (EPF) is a key element of India’s social security framework for employees. Employees and employers make mandatory EPF contracts though monthly payroll contributions. For domestic workers contributions into the EPF are only required if the individual earns less than INR15,000 in basic wages per month. However, the EPF scheme was amended in 2008 with the introduction of Paragraph 83 which extended the coverage to international workers. The effect of Paragraph 83 is that for international workers working in India and not covered by a social security agreement there is a requirement to apply EPF contributions regardless as to whether the employee earns more than INR15,000 per month (i.e. on their global salary).

The High Court of Karnataka has recently determined that Paragraph 83 is unconstitutional and struck down the clause arguing that the Provident Fund Act (PF Act) was introduced to protect lower paid industrial workers and was not intended for higher paid employees, hence the wage cap. They went on to comment that the EPF legislation is subordinate to the PF Act and therefore should not extend beyond the parameters originally set by the PF Act. The Court stated that foreign citizens and Indian citizens working in India should not be considered separate classes of employee and should be treat equally.

A clear response on the case has yet to be made by the Employee’s Provident Fund Organisation (EPFO) and its difficult to assess at this stage whether other States will follow suit.

Supreme Court clarifies ‘workman’ status under Industrial Disputes Act

The Industrial Disputes Act 1947 (IDA) provides enhanced termination rights but only to individuals who satisfy the definition of a workman. Employees operating in a managerial or supervisory capacity are excluded from the definition. In a recent case, the High Court of Karnataka held that an employee was defined as a workman because they neither had the power to hire or fire other employees, despite the fact that they had four employees reporting into them and held an internal job grading of Senior Manager of Sales. The employer appealed to the Supreme Court, which overturned the decision commenting that the lack of power to hire or fire other employees was not in itself essential, when determining whether an employee operated in a managerial or supervisory capacity and, as a result based on his other work responsibilities, the employee was not a workman and fell outside of the IDA.

Updates to Personal Data Protection Act

The Personal Data Protection Act (PDPA) has been updated to bring it in line with international standards such as the EU GDPR.

As a result of the updates the following apply effective from 1 July 2024:

• mandatory obligation to appoint a Data Protection Officer (DPO)
• mandatory data breach notification requirement 
• cross border data transfers is permitted so long as the destination country has equivalent levels of protection 
• data processors now have direct duties under the Act (not just data controllers) 
• sensitive data definition is expanded to include biometric data 
• penalties are increased (the limit rising from MYR300,000 to MYR1,000,000.

Employment Pass renewal considerations

Since 1 September 2023, new applications for Singapore’s main work visa the Employment Pass (EP) have been subject to increased qualifying salary requirements and additional points-based criteria under the COMPASS system. Under COMPASS points are awarded based on salary, qualifications, diversity, support for local employment, skills and whether the employer participates in Strategic Economic Priorities programmes.

Effective from 1 September 2024, the same eligibility requirements will be applied to EP renewals with the potential for existing EP holders to be refused a renewal based on their salary not being sufficient or their application not accumulating sufficient points under COMPASS (for many employers and for many roles points will be difficult to score given the categories covered).

New laws on workplace discrimination, flexible working and restrictive covenants

During the second half of 2024 employers will have three new areas of law to contend with:

1. The Workplace Fairness Legislation (WFL) will prohibit direct discrimination based on protected characteristics which include age, sex, marital status, pregnancy and caregiving, race, religion, language, disability and mental health conditions. Employers will need to introduce or review their anti-discrimination policies to ensure that it covers all the protected characteristics and ensure recruitment practices and dispute resolution processes also comply with the WFL.
2. The Ministry of Manpower together with the National Trade Union Congress and the National Employers Federation (together the tripartite partners), will issue guidelines to steer employers on the use of restrictive covenants such as non competes and non-solicitation duties. The position taken by the tripartite partners will be that restrictive covenants are to be used exceptionally and only applied where there is a genuine need to protect the employer’s legitimate business interests.
3. The Tripartite Guidelines on Flexible Work Arrangement Requests will come into effect on 1 December 2024, and are designed to make flexible work requests easier. The guidelines are mandatory and outline the specific duties required of an employer when they receive a flexible work request and establish a framework with regards to timing and process. Of particular importance is the process and conditions applied to a review and refusal of a request. Employers should have an internal policy and process that adopts the requirements of the guidelines and clearly communicates to employees their rights and how to exercise these rights.

Extended paternity leave and shared parental leave

Last year the Singapore government announced that paid paternity leave would double from two to four weeks, however the increase was managed on a voluntary basis and was optional for employers. Effective from 1 April 2025, the four weeks entitlement will become a statutory right for all eligible fathers of Singaporean children.

Currently, shared parental leave provides parents with up to 20 weeks of paid leave. A new shared parental leave scheme will increase this to 30 weeks. The increase will come in two stages, from 1 April 2025, parents will be entitled to an additional 6 weeks which will increase to 10 weeks from 1 April 2026.

Changes to rules covering employee inventions

From 7 August 2024, it should be easier for employers to claim inventions created by their employees.

Under the old rules, an employer was required to notify the employee in writing within four months that they sought to claim the rights to an invention, with the risk that the employee could have assigned the rights to a third party before receiving the employer’s notice.

The National Assembly of Korea revised the Invention Promotion Act so that if through consultation and agreement of the parties the employment contract assigns future inventions to the employer, then the rights are automatically acquired by the employer immediately on completion of the work. A notice will only be required in circumstances where the employer does not want to claim the invention, in which case the notice must be served on the employee within four months of the invention’s completion.

In the absence of an express clause in the contract, the employer the old rules will still apply and the employer will be required to serve the employee with a notification of its intent to claim the invention within four months.

Discretion to extend the mandatory retirement age to assist labour shortage

Taiwan has one of the lowest birth rates in the world and risks not having enough working taxpayers to pay for its burgeoning elderly population. One potential solution is to relax the current mandatory retirement age of 65. An amendment to Article 54 of the Labor Standards Act on 15 July, aims to provide employees and employers with the right to negotiate the extension of the retirement age. The extension is by mutual agreement and therefore it is still possible for both the employer and the employee to insist that retirement occurs at 65, however, the amendment at least provides some flexibility for those employees that are open to working beyond 65.

Artificial Intelligence Act

The EU’s Artificial Intelligence (AI) Act was passed into law on 2 August 2024, and Member States are required to designate a national authority to oversee its application. Most of its provisions won’t apply until 2 August 2026, however prohibitions of AI systems deemed to present an unacceptable risk will apply after six months and rules applying to General-Purpose AI models will apply after 12 months.

Most AI systems will fall into the ‘minimal risk’ category and fall outside of the Act. However, many of the AI-driven systems used by HR departments could potentially fall within the ‘high-risk’ category. Systems used for targeted job advertising, the filtering and selection of job applications or the evaluation of candidates are all likely to fall into the ‘high risk’ category. To be compliant with the Act, deployers of high-risk systems need risk mitigation, data logging and human oversight to ensure appropriate safeguards against bias that can disproportionately impact disadvantaged groups.

Mandatory employee training accounts

From 2023, Belgian employees have been entitled to training and the number of training hours they accrue depends on the employee’s work, the size of the employer and collective agreements. Employees can use their training credits for a full range of training – external, internal, digital, self-taught, on the job etc. A new digital platform, the Federal Learning Account (FLA), was rolled out earlier this year and is designed to assist employers with the recording and monitoring of training undertaken by their employees. Belgian employers have until 1 December 2024, to register their employees with the FLA.

The FLA will contain the following information on each employee.

• The identity of the employee, their role and relevant collective agreement.
• The current balance of training credits available.
• The training courses already undertaken and what value was gained.

An employer (or their agent) is required to update the FLA each calendar quarter and each employee has the right to access their FLA data.

The employer also has a positive duty to ensure that their workforce is aware of their training rights and the FLA. As a minimum, employees must be informed of the existence of the FLA on commencement of employment and once per year after that.

Changes to the Labour Code offer greater flexibility

Several key changes to the Labour Code are scheduled for 1 January 2025. The changes are designed to provide greater employment flexibility and include the following.

• Notice period: the notice period required to terminate an employee for conduct or performance issues will be reduced from two months to one month. Notice periods will also commence on delivery rather than the 1st of the following month.
• Probationary period: the current maximum probationary period of three months is to be extended to four months.
• Family and work: during the period of parental leave, the individual will be permitted to undertake the same type of work as listed in the employment contract but under a DPP contract (temporary work arrangement akin to a side job). Employees who return from parental leave before their child reached the age of two will be guaranteed to work in the same position and workplace.

Further revisions to working time regulations

Earlier in 2024, the Danish Parliament passed a bill to amend the Working Hours Act to require employers to register the daily working hours of their employees.

The requirement doesn’t apply to ‘self-organisers’. It is also the case that ‘self-organisers’ are exempt from the limits on working time and the requirements attached to statutory rest periods. However, what is a ‘self-organiser’ is not clearly defined for either exemption and, in response the Ministry of Employment proposed the following definition to be applied to both sets of rules.

An employee may be exempted if:

• the length of the employee's working hours cannot be measured or determined in advance or the employee can organise the working hours himself
• the employee can make independent decisions, or the employee has managerial functions.

If an employer considers that the employee is a ‘self-organiser’ it needs to be stated in the employment contract.

Expanding the right to local bargaining

Local bargaining is a means of agreeing employment conditions such as working hours etc, that would otherwise be dictated by the terms of a collective agreement. Local bargaining can offer increased flexibility to an employer helping to avoid some of the rigidity generated by industry collective agreements. Currently local bargaining is only an option for ‘organised’ employers, who are a member of the employer’s association relevant to their industry. The government is looking to introduce new rules in January 2025, that would extend the right to local bargaining to all employers (i.e. not just those that are a member of the relevant industry employer’s association) in the hope that this will generate more workplace flexibility.

Extension of Parents Leave Benefit

The Parent's Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2024 has increased parental leave from 7 to 9 weeks, effective from 1 August 2024. This leave provides eligible employees with the right to take time off during the first two years of their child's life.

Time limit to respond to employees request for permanent contract

A recent case in the Limburgh court has placed a spotlight on an employee’s right to request more predictable and secure working conditions. Under the provisions of the Dutch Flexible Work Act (which was updated to accommodate the recent EU transparency directive), an employee with 26 weeks of service has a right to request more predictable and secure working conditions. In this case, the employee was employed on a fixed term contract and requested permanent employment. When an employee submits a request, the employer must provide a written response within one month, which in this case the employer failed to do. The case provides a reminder to Dutch employers of the formality surrounding employee requests to change their employment terms. In the absence of a timely response from the employer, the employee’s request is deemed automatically granted.

Changes to law on non-competes

A bill to change Article 653 of the Civil Code is making its way through parliament. The bill proposes to tighten the rules on non-competes as follows.

• Maximum duration of one year after the termination of employment.
• The geographical extent of the restriction must be specifically stated and justified.
• The reason for having a clause must be explained to the employee.
• Compensation must be provided at a rate of 50% of the employee’s last wage for each month of its duration.

An effective date for the change is not yet known.

Longer parental leave for less benefit

Employees who are happy to reduce their parental benefit from 100% of their wages to 80% will be able to extend the period of parental leave from the usual limit of 295 days to 306 days. The arrangement can apply to children born or adopted on or after 1 July 2024.

Maternity leave extension for premature babies and cases requiring hospitalisation

The Ministry of Labour and Social Policy has announced a bill that will extend the maternity leave period by one additional week for each week that a child is in hospital following their birth. The maximum period of additional leave will be 15 weeks for babies born before the end of the 28th week and with a birth rate of no more than one kg. A maximum period of eight weeks will be applied for babies born between the 28th and 36th week and weighing no more than one kg, and for babies born after the 36th week but require hospitalisation between the fifth day after the birth and the eighth week. The additional leave must start immediately after the normal maternity period.

Service history for annual leave now includes periods of self-employment

The statutory leave allowance for employees in Poland is either 20 or 26 days per year, depending on whether they have completed 10 years of employment service. Severance pay and notice periods also depend on an employee’s service history. For the purpose of assessing entitlements, employment service includes service with all prior employers and is also considered to include periods of education. However, periods of self-employment have been excluded until now. New rules are set to be introduced later this year, which will change this. The new rules will ensure that self-employment and work performed under civil law contracts will count towards the period of service. These rules will apply retrospectively, taking into account an individual’s entire career to date.

Swiss-US Data Privacy Framework

The Swiss-US Framework will allow transfers of personal data from Switzerland into the US along the same lines as the existing framework agreed with the US and the UK’s data bridge. Switzerland has now officially added the US to its list of countries deemed to have adequate protection and in doing so transfers of personal data will become legal from 15 September 2024, conditional on the receiving organisation self-certifying with the Data Privacy Framework managed by the US Federal Trade Commission.

The current Data Privacy Framework is the successor to previous data transfer schemes such as Safe Harbor and the Privacy Shield which were both struck down by the European Court of Justice following cases raised by lead litigant and data protection activist Max Schrems. It remains to be seen whether the Data Privacy Framework is destined to the same fate as its predecessors.

Fines issued to 16,350 data controllers

Turkey’s Personal Data Protection Board has issued fines totalling €13.8 million to 16,300 data controllers for their failure to register with the VERBIS registry. The requirement to register applies to organisations whose main purpose is the processing of sensitive data or an organisation who meets certain size criteria, namely 50 employees or more and/ or an annual turnover of more than TRY25 million. Relevant businesses without a registration are advised to register without delay.

New labour government employment law reform

A new labour government came into power on 4 July 2024, and announced a major reform to existing labour laws. Key areas of focus are as follows.

• Increase to day 1 employment rights: employees will no longer require 104 weeks service to pursue an unfair dismissal claim. Probationary periods will still be permitted but it remains to be seen how these will align with an employee right to claim unfair dismissal. Parental leaves will also no longer need a qualifying period of service as will be the case for flexible work requests.
• Trade Union reforms: easier recognition and a duty on employers to inform staff in writing of their right to join a union.
• Ethnicity /Disability Pay Gap reporting: in addition to gender pay gap reporting employers with 250 employees or more will be required to also assess their pay data for gaps relating to ethnicity and disability, and in doing so particular care needs to be taken to ensure that UK GDPR is complied with given that the data will fall within the definition of special category data.     
• Zero hours contract ban.
• A ban on using firing and rehiring in order to change employment terms
• Statutory Sick Pay will no longer apply a three day waiting period and will be payable from the first day of absence.
• Introduce the right to disconnect. 
• Make bereavement leave a statutory right.  
• Employers will have a duty to protect an employee from sexual harassment by third party harassers.

Labour have indicated that the proposals will be put before parliament within the first 100 days of coming to power.

Comprehensive update to labour law

The Council of Ministers in the Kingdom of Saudi Arabia (KSA) have approved revisions to the KSA Labour Law. The revisions will take effect six months following their publication in the KSA Legal Gazette. The revisions will be accompanied by Implementing Regulations.

The key revisions are as follows:

• Probationary period: currently an employee can apply a 90-day period that can be extended by 90 days by agreement. To avoid the difficulty of securing the employees agreement the maximum probationary period will be increased to 180 days.
• Housing and transport allowance: the revisions will include an obligation on an employer to provide accommodation or transport or allowances to cover them.
• Overtime: currently all overtime receives an uplift of 50%, the revisions will make it possible for employer’s to also provide time off in lieu subject to the employee’s consent.
• Fixed-term contracts: all non-Saudi nationals are employed on fixed-term contracts and where the contract is silent on its duration this is determined by the length of the work permit. The revisions now set the term of the contract to one year in cases where the contract is silent.
• Employee’s notice period: for an unlimited term contract will be reduced from 60 days to 30 days (it will remain 60 days for an employer).
• Maternity leave: entitlement to maternity leave will increase to 12 weeks at full pay from the current 10 weeks.
• Parental leave: male employees will be entitled to three days paid leave if taken within seven days of the birth.
• Bereavement leave: three days for the death of a sibling.
• Resignation: resignation during a fixed-term contract will be permitted subject to a right of the employer to delay the request by up to 60 days for business reasons and the right of the employee to withdraw their resignation within seven days conditional on the employer having not already accepted it. The resignation shall be deemed effective on the earlier of the employer’s acceptance, the expiration of a 30-day period or at the end of the extended 60-day period.

Alternative saving scheme in lieu of end of service gratuity

As mentioned in previous bulletins, the UAE has introduced a savings scheme that operates as an alternative to the end-of-service gratuity payment that is paid to employees on termination. When terminated, employees are entitled to a gratuity equivalent to 21 days’ pay for each of the first five years of employment, rising to 30 days for each year worked beyond five years. Employers now have the option of making regular payments into a saving scheme in lieu of paying the end of service gratuity – the rate of contribution is set at 5.83% of the employee’s monthly salary for the first five years of service and 8.33% per month when service exceeds five years (reflecting the amount that would have to be paid out as a gratuity on termination). The benefit to the employee is that the funds are protected from future insolvency or inflation, and for the employer it can assist with cashflow and, also assist with employee attraction and retention.

The Ministry of Human Resources and Emiratization and the Securities and Commodities Authority have now approved two investment companies to provide the savings schemes. All companies in the private sector and those operating in the free zones (other than for DIFC and the Abu Dhabi Global Market) can now participate on a voluntary basis.