Orrick World: A Quarterly Report of Global Employment Law Issues for Multinationals - Fall 2012

[author: Gary Siniscalco]

Asia Employment Law Update

China Adopts New "Immigration Law"
On June 30, 2012, the Standing Committee of the National People’s Congress adopted the Exit and Entry Administration Law of the People’s Republic of China (PRC), which will take effect on July 1, 2013 and supersede the Law of the PRC on the Entry and Exit Administration of Foreigners and the Law of the PRC on the Exit and Entry Administration of Chinese Citizens.

Supreme People's Court of China Issues Draft Interpretations on the Trial of Cases Involving Labor Disputes
On June 27, 2012, the Supreme People’s Court (SPC) issued a draft version (for comments) of the Interpretation on Several Issues Concerning the Application of Laws in the Trial of Cases Involving Labor Disputes (IV).

Labor Dispatch Provisions of the Labor Contract Law to Be Amended
On July 6, 2012, the Standing Committee of the National People’s Congress published draft amendments to the PRC Labor Contract Law focusing on the labor dispatch-related provisions of the Labor Contract Law. The amendments are designed to address the continued and substantial use by many companies of dispatched workers who should, but in practice often do not, receive the same treatment as regular employees.

Revision of Worker Dispatch Law in Japan
The revised Worker Dispatch Law went into effect on October 1^st this year as a measure to protect and stabilize the status of non-permanent employees who are more easily subjected to layoffs. Staffing companies are now prohibited from dispatching day laborers (hiyatoi haken) in principle and are obligated to give consideration to whether dispatched workers receive treatment comparable to regular employees in terms of wages, training and benefits. Companies accepting dispatched workers are prohibited to accept former employees as dispatched workers if less than one year has passed since separation, and when terminating a contract with the staffing companies, they are also obligated to take measures such as introducing new job opportunities for the dispatched workers or covering the costs required for work suspension allowances.

Read more on Asia employment law updates.

France Employment Law Update

Under President Hollande, France has begun to make a number of changes to employment law regulations.

New Definition of Sexual Harassment Offense
On May 4, 2012, the Constitutional Council repealed provisions of the French Criminal Code related to the criminal offense of sexual harassment (article 222-33) for being too vague. Parliament passed new sexual harassment legislation in August 2012.

Modification of the Social Security Treatment of Severance Indemnities
Previously, the termination indemnities (including the severance indemnity and the settlement indemnity) paid as of January 1, 2012, were subject to united social security contributions. New legislation in August 2012 increased the social security ceiling on termination payments.

Reinstatement of Taxes and Social Contributions on Overtime Hours
Previously, overtime hours were exempted from taxes for the employee and small employers (fewer than 20 employees) benefited from a partial reduction of social security contributions. The Public Finance Act modifying the 2012 budget, dated August 16, 2012, modifies this treatment for larger employers and expanded social security contributions.

Read more on French employment law updates.

Germany Employment Law Update

Whistleblowing in Germany
The European Court of Human Rights ("ECtHR") recently issued a judgment on the topic of whistleblowing (ECtHR, Judgment dated 21.07.2011-28274/08). The Court overruled a judgment of the German Regional Labor Court of Berlin in a case for unfair dismissal. The judgment will likely impact other parts of German case law. The decision of the ECtHR has led to an intense debate on the topic of whistleblowing, as it may have an impact on the current view and the rules of practice in Germany with regard to unfair dismissal and whistleblowing.

Read more on Germany employment law updates.

South Africa Employment Law Update

South Africa Employment Law Update
Businesses in South Africa may soon find the benefits of using agency workers far less attractive if proposed amendments to the Labor Relations Act ("the LRA") are enacted into law. The proposed amendments to the LRA seek to restrict the employment of more vulnerable and lower-paid workers by temporary work agencies to situations of genuine temporary work. Read More

UK Employment Law Update

Consulting on Business Strategy
In the UK, there is no general requirement to consult employees on business issues or strategy. However, collective redundancy legislation does require employers to consult meaningfully with employee representatives where 20 or more redundancies are proposed within a 90-day period, which can mean that the business is effectively consulting on strategy. Where the number of proposed redundancies is 20-99 employees, consultation must be for a minimum of 30 days before the first dismissal takes effect, and this is increased to 90 days where 100+ employees are impacted. Consultation is first triggered when the proposals are identified, but this will also include the situation where a higher-level business strategy decision is taken that would inevitably lead to those redundancies, such as a decision to close an office. The penalty for any breach of these requirements is up to 90 days’ full pay for each affected employee (regardless of the number of redundancies).

Guidance on Data Search Requirements
The Information Commissioner in the UK has published guidance on how organizations can comply with the Data Protection Act in relation to archiving or deleting personal information. Problems often arise in this area for employers in Europe when they receive a subject access request from an employee (or ex-employee). A subject access request is a request for a copy of all the personal data that an employer is processing about an individual, and such a request can require far-ranging searches and disclosure of thousands of emails, documents and other information. They are often used as a tactic in litigation and can be very effective in obtaining what is effectively early disclosure of a wide-ranging set of documents.

Read more on UK employment law updates.

United States Employment Law Update

Federal Court Decisions Permit Two Dodd-Frank Whistleblower Cases to Proceed
Two federal district courts recently issued decisions adopting a broad interpretation of the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") and allowed Dodd-Frank whistleblower claims to proceed past motions to dismiss. These decisions could contribute to further increases in the number of Dodd-Frank whistleblower claims filed against employers. Read More

The NLRB Finds That Social Media Policy Violates the National Labor Relations Act
In its first ruling on an employer’s social media policy, the National Labor Relations Board found that Costco Wholesale Corporation’s social media policy in its employee handbook violated the National Labor Relations Act. Among the policy provisions reviewed, the Board analyzed Costco’s policy prohibiting employees from posting electronically statements that damage the company or any person’s reputation. Read More

EEOC Delays Release of Strategic Enforcement Plan, Suggesting Revisions to Draft Plan Likely
On September 4, 2012, the EEOC released for comment its draft Strategic Enforcement Plan (SEP). The EEOC invited the public to comment on the SEP by September 18, 2012, with a plan to vote on the draft at the end of September 2012 and to have the SEP become effective October 1. But that time has now passed with no word from the Commission. This suggests that the Commission is closely evaluating the comments submitted and considering which, if any, to incorporate into the final plan. There may also be disagreement within the Commission over portions of the draft plan. As a result, we do not expect the EEOC to issue the final SEP until mid-October at the earliest. Read More