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Employment Trends Europe - October 2020

A summary of events affecting employment law from July to October 2020 in Belgium, England, France, Germany, Italy, the Netherlands and Spain.

15 October 2020

Publication

As employers around the world continue to navigate their way through the pandemic, we highlight notable events and developments affecting employment law in the following jurisdictions:

Our Feature page covering Covid-19 workforce and employment issues provides updates to all the key issues across our international network.

Our Firmwide Feature page also provides timely updates and broader guidance on how to navigate this period of global uncertainty across services and sectors.

Belgium

Belgium’s implementation of the new EU Posted Workers Directive

With the Act of 12 June 2020, Belgium implemented EU Directive 2018/957 amending Directive 96/71/EC on the posting of workers. This Act came into effect on 30 July 2020 and immediately applied to any pending posting periods.

The main rules remain unchanged

Belgium's employment legislation will still immediately apply when posting workers to Belgium. Employers must comply with the labour, salary and employment conditions provided by the Belgian statutory provisions that are criminally enforced, as well as those Collective Bargaining Agreements (CBAs) that are declared generally binding by royal decree ( i.e. working time, overtime, compensatory rest, night work, vacation, holidays, salary protected employees, discrimination, as listed below):

  • The Labour Act of 16 March 1971, which includes stringent provisions on working time;
  • The Public Holidays Act of 4 January 1974;
  • The Coordinated Vacation Act of 28 June 1971;
  • The Act relating to temporary employment, interim work and putting employees at the disposal of 24 July 1987;
  • The Act of 4 August 1996 relating to the well-being of employees;
  • The Salary Protection Act of 12 April 1965;
  • The Anti-Racism Act of 30 July 1981;
  • The various Anti-Discrimination Acts of 10 May 2007;
  • National and sector level collective bargaining agreements that are declared generally binding.   

The above labour, salary and employment conditions apply from the first day of a worker's posting to Belgian territory.

What is new: a "second layer" of Belgian employment provisions kicks in once the posting period exceeds 12 months.

Once a posting period exceeds 12 months, an employer must comply with any and all Belgian labour, salary and employment conditions provided by Belgian statutory provisions even if there is no criminal penalty for a breach, as well as any CBA's that are declared generally binding by royal decree. An example would be a posted worker's entitlement to guaranteed salary in case of sickness. On the other hand, it is important to mention that termination rules and supplementary pension schemes are explicitly excluded and out of scope.

If several posted workers replace each other to perform the same work at the same location, then the total duration of activity of such a 'chain' of posted workers will be taken into account to determine when the 12 month period is reached.

Please note that the transportation sector is temporarily excluded from this rule.

Restart Social Election Procedure

As a result of the coronavirus pandemic, social elections were suspended after the submission of the lists of candidates by the trade union delegations on X+35 (X = date employer posts announcement of the election date). This was regulated by law on 4 May 2020.

New election period

The National Labour Council has confirmed its initial proposal from 24 March 2020, to set a new election date (day Y) between 16 and 29 November 2020. This new day Y will be the benchmark for a new electoral calendar starting from day X+36, the day on which the election procedure will automatically resume. After the suspension, companies will also have to set a new election calendar for the remainder of the social elections' procedure, on the basis of the new day Y.

Internal and external communication

The consultative bodies or, in their absence, the employer, should communicate the new electoral calendar, the new day Y and, if applicable, the new timetable of the social elections both internally and externally.

For the internal communication to the employees, the consultative bodies or the employer must also post (in the same places as the initial posting of the new social election date) at least 7 days before resumption of the procedure. For any external communication, the above information must be delivered simultaneously to the representative employee organisations and executives (if applicable), either electronically (via a web application) or by letter to these employee organisations and to the Employment Ministry.

New rules on temporary unemployment as of 1 September 2020

Sectors and companies that are substantially impacted

Companies and sectors that are substantially impacted by the COVID-19 crisis can continue to apply the current and simplified 'Covid-19 force majeure' temporary unemployment regime until 31 December 2020, these include:

  • The list of in-scope sectors determined by the Minister of Work .
  • Companies with a number of unemployment days (due to economic reasons or "Covid-19 force majeure") in the second quarter of 2020, of at least 20% of the total number of working days declared to the National Social Security Office (NSSO).

However, to benefit from such continued use, these employers must send a new C106A-Corona-HGO/EPT form by e-mail to the National Employment Office (RVA/Onem) and await approval.

Sectors and companies that are not substantially impacted

For sectors and companies that are not substantially impacted by the Covid-19 crisis, the current 'Covid-19 force majeure' regime can no longer be applied as of 1 September 2020. However, for these companies, the government has introduced a transitional unemployment regime due to economic reasons for the period of 1 September until 31 December 2020.

To benefit from this transitional regime for white-collar workers the employer must:

  • be faced with a substantial decrease of at least 10% of its turnover or production,
  • offer two training days per month to its impacted white-collar workers, and
  • be bound by a collective bargaining agreement or a business plan, which indicates the substantial decrease in sales or production and must include a commitment to offer two training days per month.

Of course, it is also possible to make use of the general regime for temporary unemployment for white-collar workers. Under the general regime, broader criteria apply to those who wish to apply, and the business plan can cover a longer period than the transitional unemployment regime, which is only applicable until the end of 2020.

England

France

Long-term furlough (APLD)

Due to the economic consequences of Covid-19 furlough has been implemented widely by employers over the past few months., In addition to the original furlough scheme, a new Decree provides for a new long-term scheme and has been applicable since 31 July 2020.

This new scheme ("activité partielle de longue durée" or "APLD") can be requested for a period of 6 months and is renewable, within the limit of 24 months (consecutive or not) over a period of 36 consecutive months.

Employees placed under APLD have their working time reduced up to a maximum of 40% (in exceptional circumstances, it can be up to 50% by collective agreement and approved by the Labour Administration).

Employees placed under APLD receive at least 70% of their gross remuneration (i.e. 84% of their net salary) capped to 4.5 times the hourly minimum wage (i.e. €45.67 gross).

The APLD must be implemented via collective agreement or via a unilateral document drafted by the employer. This document must be approved by the Labour Administration and include undertakings from the employer on maintaining jobs and professional training.

For requests made from 01 October 2020, the employer receives from the State a subsidy of 56% of the employee's gross remuneration. However, the Government has declared that another Decree or Ordinance may be released soon to increase the subsidy up to 60%.

In case of economic dismissal of employees placed under APLD (or employees concerned by the employer's undertakings on maintaining jobs), the employer will have to reimburse the State subsidies.

Whistleblower's bad faith

French law prohibits any form of retaliation or sanctions against a whistleblower (please see our Webinar from September 2019). However, this protection does not apply if the employee has acted in bad faith. A recent Supreme Court decision has further illustrated what constitutes bad faith.

According to the Supreme Court, bad faith is established when the employee is aware of the falseness of the facts reported, but the mere fact that they have been reported is not sufficient to demonstrate bad faith.

In this recent case, an employee had been dismissed after having filed a complaint with the police. The complaint did not result in criminal proceedings against the Company. The Court of Appeal considered the employee was acting in bad faith because the complaint would inevitably destabilise the Company. The French Supreme Court overruled the Court of Appeal decision and judged that this does not demonstrate bad faith by the employee. Therefore, this dismissal was null and void.

Bad faith is only characterised when it is proved that the employee knew that the facts were false.

Financial support to hire younger employees

A Decree dated 05 August 2020 created a State subsidy up to a maximum €4,000, to encourage the hiring of employees aged less than 26 years of age. This subsidy is temporary and subject to conditions, among which, (non-exhaustive list):

  • The employer must not have made any redundancies for economic reasons relating to the subsidised role since 01 January 2020;
  • The employee must be hired under an indefinite-term contract or fixed-term contract of at least three months;
  • The employment contract must be concluded between 01 August 2020 and 31 January 2021;
  • The remuneration may not be less than 2 times the minimum wage, i.e. €3,078.90 gross based on the legal working time.

The subsidy must be reimbursed in case of fraud.

Sexual harassment

Under French law, sexual harassment is a criminal offence qualified by (i) a material element (repetition of acts or statements with a sexual connotation) and (ii) an intentional element (the author has the intention to commit the offence).

Alongside the criminal offence, sexual harassment is also prohibited under French labour law, in the context of the employment contract. However, the definition of the French labour law does not require to prove an intentional element.

In light of the above, the French Supreme Court has recently found that an employer - who has been discharged from the offence of sexual harassment by the criminal judge (because of the absence of intentional element) - could still pay damages for sexual harassment by the civil judge (as no intentional element is required in labour law).

In a recent case, an employee had been dismissed for gross misconduct. She sued her employer in the criminal court for sexual harassment and in the labour court for null and void dismissal. While the criminal court ruled that the intentional element was not proven so the employer was discharged, the labour court ruled the opposite, that, as the intentional element is not required by labour law, sexual harassment was established  therefore,   the employee was entitled to damages for a null and void dismissal.

Paternity leave

The duration of paternity leave (for the father or the husband, spouse or partner), which has been in place since 2002, is currently 14 days (11 days in addition to three days of birth leave) or 18 days in the event of multiple births.

A draft law is soon to be presented before the Parliament to double the duration of paternity leave, increasing to 28 days (including a mandatory minimum of 7 days) and would apply from July 2021.

As a reminder, this leave is financed by French social security with daily allowances up to the monthly Social Security threshold for the current year (i.e. €3,428 in 2020).

If the employer provides enhanced paternity leave, the company will be required to provide the increased compensation to the employee as part of this measure.

Paternity leave is calculated in calendar days, i.e. including Saturdays, Sundays and public holidays.

Unlike birth leave, paternity leave is not necessarily taken at the time of birth. However, it must begin within four months of the birth.

Germany

Below are recent developments which although connected to the coronavirus pandemic will continue to effect employment law in Germany for some time:

Short-time work:

  • There has been an increase to the short time work allowance: from the fourth month of reference to 70% of lost net remuneration (or 77% if you have at least one child). As of the seventh month, it increases to 80% of the lost net salary (or 87% if the employee has at least one child).
  • Short time work allowance can be received for up to 12 months.
  • Currently, until the end of 2020 a maximum period of 21 months applies under certain conditions.
  • Please note that terminations for operational reasons are still possible during short-time work. However, it should be noted that the allowance is no longer paid after termination.

There have other notable permanent changes to employment law:

  • The Works Council may hold meetings via video or telephone conferences.
  • Employees allowed to obtain doctor certificates via telephone as long as the illness is of the upper respiratory tract and the certificate is for a maximum of seven days.

The Association Sanctions Act:

The Association Sanctions Act, which will significantly expand the possibilities for sanctioning crimes committed from within companies and increase the importance of compliance management systems has been discussed further by the German Government.

As mentioned in our previous ETE, it is therefore expected that compliance will be even more important for employers in the future and until now, only natural persons could be punished. With the new Act, penalties for companies can include severe fines.

This is expected to come into force after a transitional period at the beginning of 2023, but companies are well advised to start preparing now by tracking and optimising internal processes with regard to compliance, which could be taken into account as mitigating measures in the future.

Italy

Ban on dismissals

Currently, due to Covid-19 legislation, individual and collective redundancies must not be carried out. In lieu of redundancies, employers must use state-funded furlough (cassa integrazione) up to 15 November 2020 or 31 December 2020 (depending on when the company began using the state-funded furlough). If a company does not utilise the entirety of available furlough, the ban on redundancies applies until 31 December 2020. The ban does not apply:

  • to executives (dirigenti);
  • if the company is wound up; or
  • if a company-level collective agreement is signed between the company and the trade unions and the redundant employees accept the general agreement.

Extension of the state of emergency

The state of emergency in Italy has been extended until 31 January 2021, with the following effects on employment:

  • Remote working continues to be possible until 31 January 2021, without individual agreements in place with employees. Given this extension, most companies are now making the required preparations and putting remote working policies in place.

  • Disabled and vulnerable employees can work remotely until the end of the state of emergency period.

  • Employees with children aged 14 years and younger who are home under quarantine from school can either: (i) work from home; or (ii) take advantage of 50% state-paid leave (under conditions set by the National Social Security Department (INPS), recently clarified in a circular published on 2 October 2020). The leave is available only:

    • to hired employees of a company,
    • to employee's whose work cannot be carried out at home;
    • to one parent at a time, and
    • during school quarantine periods between 9 September 2020 and 31 December 2020.

  • Employers must have a Covid-19 policy in place for at least the duration of the state of emergency.

Netherlands

New subsidy scheme extended

The Cabinet has extended the Temporary Emergency Relief Measure for the Preservation of Work (the NOW Scheme) by three periods of three months from 1 October 2020. During the first period, companies with a reduction in turnover of at least 20% will be eligible for aid. From January 2021, there must be a fall in turnover of at least 30%.

The aim of the scheme remains to support employment and income, but it will also be important for companies and workers to adapt to the current economic situation. Compensation to companies for continued payment of wages will be phased out in stages. At the same time, there will be room for employers to reduce the wage bill without this being at the expense of the subsidy.

The most important changes

  • NOW 3 applies until 1 July 2021 (three periods of three months).
  • The minimum loss of turnover to qualify for the scheme will increase from 20% to 30% from the second period onwards.
  • The aid over nine months has a phasing out of compensation rates: from 80%, to 70% to 60%.
  • In return for the reduction in compensation, there is the possibility of gradually reducing the wage bill by 10%, 15% and 20% without this being at the expense of the subsidy.
  • The maximum wage to be reimbursed per employee will be reduced in the third period (April, May, June 2021) to a maximum of 1x the daily wage.

Safeguarding jobs and employment

The scheme serves two purposes. Firstly, it provides a helping hand to companies in need of support to overcome the crisis. In this way, employment will be maintained as much as possible. Secondly, it offers companies the opportunity to prepare, together with their employees, for the new economic situation: not all jobs can be maintained. The Cabinet has therefore decided to gradually reduce the rates of compensation in wage costs, and to provide scope to reduce the wage bill without this being reflected in the level of the subsidy. The NOW is part of a comprehensive support and recovery package in which the government also makes money available for training or to assist a change in role. Together, this gives employers and employees room to adapt their business operations.

Companies eligible for NOW 3

In the first period, the scheme will apply to all employers with an (expected) loss of turnover of at least 20%, if they also meet the conditions.

From the second period - from January onwards - this will be increased to 30%.

Conditions NOW 3

In the first period, the scheme applies to all employers with an (expected) loss of income of at least 20%, if they also meet the conditions. From the second period - from January onwards - this will be increased to 30%.

Use NOW3 after NOW 1 and/or 2

For participation in NOW 3 from 1 October, it does not matter whether you previously participated in prior NOW schemes.

Duration NOW 3

NOW 3 will run from 1 October for three periods of three months until 1 July 2021.

When to apply

The government body for employee insurance (UWV) aims to open the next application period on 16 November 2020. An application can be made retroactively for the first period (1 October to 31 December). The second period runs from 1 January 2021 to 31 March 2021 and the third period runs from 1 April 2021 to 30 June 2021. For each period, an employer may decide whether to make an application, regardless if a claim was made previously for the NOW 1 or 2.

Remuneration rate and reduction of the wage bill

The employer may receive an allowance for labour costs, whereby the maximum reimbursement percentage is the percentage of the total wage bill in the event of a loss of turnover of 100%. This reimbursement percentage is gradually reduced per period. This reduction is as follows: In the first period - from 1 October onwards - the maximum reimbursement rate is 80%, in the second period 70% and in the third period 60%. At the same time, the Cabinet wants to give employers with a long-term loss of turnover the scope to reduce part of the wage bill, without reducing the subsidy.  The exemption percentage is the percentage of the total wage bill that the employer can reduce without affecting the level of the subsidy for wage costs. The exemption percentage for the wage bill rises from 10% in the first period, 15% in the second period and 20% in the third period.

The (voluntary) reduction of the wage bill can be achieved in various ways. Consider using natural staff turnover, retaining fewer staff, or by asking employees to make a voluntary wage sacrifice. The correction to the subsidy amount in the event of a redundancy when applying for the NOW 3 has been abandoned.

Maximum wage to be reimbursed per employee

In the first two periods of three months (October/November/December and January/February/March), the maximum wage to be reimbursed per employee will be equal to the NOW 1 and 2, i.e. a maximum of 2x the daily wage, which amounts to €9,538 per month. In the third period (April/May/June) this will be reduced to a maximum of 1x the daily wage. This brings the situation during the last period more in line with the usual social security system.

Spain

New Royal Decree Law on homeworking

A new Royal Decree Law (RDL) on homeworking regulations (RDL 28/2020) was published in the Spanish Official Gazette on 23 September 2020 and will come into force on 13 October 2020.

Key points included in this RDL are:

  • The RDL applies to regular homeworking situations. (the definition of "regular" is at least 30% of working time over a period of three months, i.e. an average of 1.5 days a week working from home).

  • It is not applicable to companies that have been forced to temporarily implement homeworking due to the coronavirus pandemic. However, the Decree expressly reminds that in these cases employers must provide the means, equipment, tools and consumables required for the development of remote work, as well as the necessary maintenance.

  • Homeworking is voluntary, both for the employee and for the company, and requires to be agreed in writing (details to cover are provided in the Decree). A copy of the agreement must be registered at the employment office and provided to the Workers Legal Representatives (WLR).

  • In the terms established in the agreement or in collective negotiation, the company will need to provide the means, equipment and tools linked to the development of working from home and to cover the expenses arising as a result of this.

  • Companies with a current homeworking policy that was negotiated with the WLR will be able to continue with those regulations for one year (or until its duration expires, if earlier) and up to a maximum of three years (if agreed with the WRL). For companies where the homeworking policy had not been collectively negotiated, there is a three month window to comply with the new regulations.   

  •  Remote workers shall have the same rights and remuneration as those in the workplace, as well as the same obligations (including time recording obligations).

  • The obligation to ensure the safety and health of employees during working time remains with the company in cases of homeworking. The regulation states that companies must take the necessary measures to do so.

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This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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