Orrick World: A Quarterly Report of Global Employment Law Issues for Multinationals - February 2013

by Orrick, Herrington & Sutcliffe LLP

Asia Employment Law Update

Chinese Labor Contract Law Amended to Improve Worker Protection
On December 28, 2012, the Standing Committee of the National People's Congress issued a Decision on Amending the Labor Contract Law of the People's Republic of China (the "Amendments"), which will come into effect from July 1, 2013. This is the first amendment to the Labor Contract Law since it was issued on January 1, 2008 ("Original Labor Contract Law"). Read More

Amendments to Fixed-Term Labor Contracts in Japan
On August 10, 2012, amendments to the Japanese Labor Contract Act were enacted that establish three new provisions regarding fixed-term employment contracts. They are to come into force on April 1, 2013. In Japan, where dismissal is extremely difficult and equal pay for equal work is not an established principle, many companies hired a large number of fixed-term employees as a form of labor adjustment and to control labor costs. As a result, the number of fixed-term employees in Japan currently exceeds 20 percent of all employees, creating a social problem of unstable employment and lower wages. The amendments seek to resolve this issue. Read More

China and Hong Kong contact: Elizabeth Cole
Japan contact: Yumiko Ohta

France Employment Law Update

Brief Overview of Employment Law Changes in France

  • Previously, overtime hours were exempted from taxes for the employees and gave rise to a partial reduction of social security contribution for employees and employers. The public finance act modifying the 2012 budget, dated August 16, 2012 changed this treatment:
    • As of August 1, 2012, overtime hours are subject to tax;
    • As of September 1, 2012, overtime hours are subject to social security contributions, for the employees.
  • The indemnities paid on the occasion of a registered mutually agreed termination used to escape social charges. Article 21 of the law for the financing of social security ("LFSS") for 2013 makes these indemnities subject to social charges of 20 percent for the fraction that was previously free of all social security contributions. As for example, for a €100,000 indemnity:
    • Before the LFSS for 2013, in case of termination by mutual consent, termination indemnities used to be partially exempted from social contributions. The law set forth a €72,744 maximum legal amount allowing for social security contribution exemptions. A €100,000 indemnity was subject to the following social contributions: €0 to €72,744 = no contributions and eight percent "contribution for the reimbursement of the social debt" (CSG-CRDS), paid only on a fraction of this sum, but that we will apply to the whole amount for simplification purposes (€5.819) ; €72,744 to €100,000 = no exemption on these €27,256 which gave rise to social contributions of around €13,000. The total social contributions amounted to around  €18,819.
    • After the LFSS for 2013, such termination indemnities are subject to the following social contributions: €0 to €72,744 = 20 percent = €14,548 + ; €72,744 to €100,000 = same social contributions as stated above. The total contributions amount to around €18,819 + €14,548 = €33,367.
  • The same law (LFSS for 2013) has increased the penalties for non-compliance with previous observations from the social security inspectorate and for undeclared work: 10 percent and 25 percent respectively. As for example:
    • The repeated mistake in the social contributions calculation gives rise to a 10 percent increase in the penalties if the same mistake has already been done in the past, leading the social security to a social contributions reassessment.
    • In case of "concealed work" ("travail dissimulé") which can be characterized, for example, if additional hours are not mentioned on the pay slips), additional social contributions are due on the salary that have been paid, or that should have been paid for the concealed work, and these additional social contributions are subject to a 25 percent penalty.

France contact: Christine Guillot-Bouhours

UK Employment Law Update

Recent UK Employment Law Developments
The UK government has been busy ushering in the new year with a new round of proposed changes to UK employment law and related procedures. Read More

Ending It All:  The Importance of Proper Notice of Termination
In the recent case of Geys v. Société Générale, Mr. Geys, who was employed as managing director was given a letter in November 2007 by Société Générale stating: "I am writing to notify you that Société Générale, London has decided to terminate your employment with immediate effect". Mr. Geys was then escorted from the building and never returned to it. Despite this, the English Supreme Court ruled in January this year that his contract of employment was not terminated. Read More

Religion at Work and Cross Employees
On 15 January 2012 the European Court of Human Rights (the "ECHR") handed down its judgment in the case of Eweida and Others v. the UK. The fundamental question in the case was whether UK law provides employees with adequate protection from discrimination when manifesting their religious beliefs at work, for example wearing a visible Christian cross around their neck. The ECHR held that the UK law did offer sufficient protection in many instances of such religious discrimination, but not in all. Read More

UK contact: Nicola Whiteley

United States Employment Law Update

President Obama Signs into Law the Theft of Trade Secrets Clarification Act
On December 28, 2012, President Obama signed into law the Theft of Trade Secrets Clarification Act. The Act amends the Economic Espionage Act of 1996 (EEA) and expands the jurisdiction of federal courts over cases concerning misappropriation of trade secrets. It was enacted in response to a recent Second Circuit decision that arguably narrowed the jurisdictional scope of the Economic Espionage Act of 1996. Read More

EEOC's Plan May Mean Narrower, More Aggressive Oversight
As we currently reported on our January 9 blog, on Dec. 17, 2012, the Equal Employment Opportunity Commission released its strategic enforcement plan (SEP). The SEP resulted from the broader strategic plan unveiled by the EEOC earlier this year, outlining the commission's activities for 2012-2016. The SEP confirms that combating systemic discrimination will be one of the EEOC's primary objectives. Read Orrick's "EEOC's Plan May Mean Narrower, More Aggressive Oversight" on Law360. Read More

Tough New EU Data Protection Proposals Edge Closer
On Jan. 10, 2013, Jan Philipp Albrecht, the European Parliament's Rapporteur, presented his report on the European Commission's proposals for a new General Data Protection Regulation (GDPR). With his recommendations, data protection laws edged closer to a hard new reality for organizations collecting personal data from individuals in the European Union. Read More

United States contacts: Mike Delikat and Gary Siniscalco

Edition Editor:  Gary Siniscalco

Visit Orrick's Employment Law and Litigation Blog to help you stay one step ahead of the ever-changing legal landscape. Save the URL as a favorite => http://blogs.orrick.com/employment/.

Orrick's global employment law team represents many of the major multinational employers of the world across a broad array of employment law and human resource counseling matters in the U.S., Europe and Asia. Our lawyers provide strategic and results-oriented advice on all aspects of employment disputes and contentious matters before agencies, tribunals and in the courts, with special expertise on discrimination matters, wage-and-hour issues, cross-border trade secret protection and wrongful termination actions. Working with Orrick's Global Corporate Solutions team, we also provide advice on data privacy and protection issues, employee benefits matters and global equity compensation programs. We have innovative single point of contact representations, which allow companies with operations throughout the world to benefit from consistent and high quality advice delivered efficiently and economically. For more information about our ability to assist you in over 100 countries, please feel free to contact any one of our employment lawyers or any member of our global corporate solutions team.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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