AR_Labour16_045vud

LABOUR & EMPLOYMENT
ANNUAL REVIEW 2016

Published by
Financier Worldwide
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Annual Review • August 2016
Labour & Employment
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Fi n a n c i e r Wo r l d w i d e c a nva s s e s t h e o p i n i o n s o f l e a d i n g
p ro fe s s i o n a l s a ro u n d t h e wo r l d o n t h e l a t e s t t re n d s i n
l a b o u r & e m p l oy m e n t .
LABOUR & EMPLOYMENT
A U G U S T 2 0 1 6 • A N N U A L R E V I E W
UNITED STATES..................................................... 08
Rebecca Torrey
MANATT, PHELPS & PHILLIPS
CANADA ............................................................... 12
François Garneau
MILLER THOMSON
MEXICO ................................................................ 16
Francisco J. Peniche Beguerisse
CREEL, GARCÍA-CUÉLLAR, AIZA Y ENRÍQUEZ, S.C.
FRANCE ................................................................ 20
Laurent Guardelli
COBLENCE & ASSOCIÉS
GERMANY ............................................................. 24
Dr Christopher Melms
BEITEN BURKHARDT
Contents

LABOUR & EMPLOYMENT
A U G U S T 2 0 1 6 • A N N U A L R E V I E W
DENMARK ............................................................. 28
Tommy Angermair
ADVOKATPARTNERSELSKABET KIRK LARSEN & ASCANIUS
ITALY .................................................................... 32
Vittorio De Luca
DE LUCA & PARTNERS
INDIA ................................................................... 36
Vijay Ravi
KOCHHAR & CO.
SINGAPORE .......................................................... 40
S Suressh
HARRY ELIAS PARTNERSHIP LLP
Contents

A N N UA L R E V I E W • L A B O U R & E M P L OY M E N T 2 0 1 6

INTRODUCTION
Companies operating in today’s global economy have access
to,and are able to establish a presence in,diverse and lucrative
new markets. But when they do, those companies will be
exposed to a host of economic, structural and technological
issues, which must be overcome if they are to be successful.
Oneofthemostnotablechallengesisacompany’srelationship
with its employees, including local employment laws, labour
relations and the availability of human capital.The process of
attracting and retaining key staff remains a major issue for
companies around the world. How organisations respond to
these challenges is of paramount importance.
For companies operating within the EU, the task of managing
cross-border business will be exaggerated by the passing of
new EU provisions concerning data processing policies. Other
challenges must also be taken into account, including the
UK’s Brexit vote, which has put a question mark over the
movement of people, including employees, within the bloc.
The extent of this issue, and any future restrictions it brings,
remains to be seen, but there are sure to be a labour and
employment implications.
By comparison, labour relations in the US appear to be
clearer. Over the last 12 months, important pieces of
legislation governing individual employee rights have been
implemented at a local and regional level. Variously, these
include mandatory paid sick leave beneﬁts, minimum hourly
wage increases, protection from discrimination based on
sexual identity and expression, the elimination of gender pay
disparities, and protection for workplace whistleblowers.
A N N UA L R E V I E W • L A B O U R & E M P L OY M E N T 2 0 1 6

A N N UA L R E V I E W • L A B O U R & E M P L OY M E N T
8 • FINANCIER WORLDWIDE • AUGUST 2016 www.financierworldwide.com
UNITED STATES
REBECCA TORREY
MANATT, PHELPS & PHILLIPS
TORREY: The most notable development over the past 12 months has
been the proliferation of laws and regulations, on a local and regional
level, thanks to Congressional gridlock from partisan politics and a call
to action by President Barack Obama. The employee rights conferred
recently by local and state laws and regulations involve mandatory
paid sick leave beneﬁts, minimum hourly wage increases above $10
per hour, protection from discrimination based on sexual identity and
expression, elimination of gender pay disparities, and protection for
workplace whistleblowers. One or more of these enactments were
initiated in the cities of San Francisco, Seattle,Washington DC, NewYork
and Los Angeles, and on a state-wide basis in Connecticut, California,
Massachusetts and Oregon. Other jurisdictions are following suit by
offering generally the same rights but formulated differently, along with
local administrative enforcement and private rights of action.As a result
of the variety of legal requirements, and with changes occurring multiple
times per year in different locales, compliance obligations in the US have
become increasingly complex and challenging for organisations to follow
and manage.
TORREY:Whiletheprotectionofindividualemployeerightshasexpanded,
the reach of labour unions remains stagnant domestically. Union activity
remains vibrant in the healthcare, entertainment and communications,
and services industries, though it is declining elsewhere among private
employers. The National Labour Relations Board, the federal labour
relations regulatory and enforcement agency,has increasingly challenged
employers’ policies, prohibiting employees from posting conﬁdential
business information on social media on grounds they restrict concerted
activities by workers and their right to communicate openly about the
terms and conditions of employment, regardless whether an employer
is subject to a collective bargaining agreement. The agency focused
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN THE US OVER
THE LAST 12 MONTHS OR
SO? HAVE THERE BEEN ANY
SIGNIFICANT CHANGES
TO EMPLOYEE RIGHTS OR
COMPANY OBLIGATIONS,
FOR EXAMPLE?
Q HOW WOULD YOU
DESCRIBE LABOUR
RELATIONS IN YOUR REGION
AT PRESENT? TO WHAT
EXTENT HAS THE INFLUENCE
OF UNIONS AND WORKERS
COUNCILS GROWN?

AUGUST 2016 • FINANCIER WORLDWIDE • 9 8www.financierworldwide.com
UNITED STATES • REBECCA TORREY • MANATT, PHELPS & PHILLIPS
recently on limiting employers’ ability in general to restrict collective
action through the use of class action waivers in employment arbitration
agreements.
TORREY:Classactionlawsuitsremainthedominanttrendinemployment
litigation. Wage and hour class actions challenging erroneous or unfair
payroll practices and policies continue to proliferate, with the largest
number of cases ﬁled in the state of California. Class actions may be
brought by a single affected employee asserting claims on behalf of
other affected employees with a look back period of up to four years.
As employers develop protections to defeat class certiﬁcation, including
class action waivers in employment arbitration agreements,the plaintiffs’
bar uses new tactics to net the ample attorney fee awards derived from
multi-million dollar settlements. Employees working in California also
assert collective actions based on the Private Attorney General Act, an
alternative way to assert claims on behalf of similarly situated employees
that established substantial monetary penalties for numerous Labor
Code violations, including the failure to pay wages, include the precise
information required on employee wage statements or timely provide
adequate meal and rest periods. Other recent litigation trends include
class challenges to gender pay disparities and improper pre-employment
background screening practices alleged to invade individual privacy
rights.
TORREY: Certain state and federal laws require minimum advance
notice to employees affected by job loss from plant closures and
other laws require a consideration period, information about group
layoffs and a revocation period for negotiated departures of employees
over 40 years of age involving a release of potential claims. With an
Q ARE YOU SEEING ANY
RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN THE US?
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
EMPLOYMENT ISSUES DO
THEY NEED TO EVALUATE

increase in employment events associated with restructuring, including
terminations, demotions and pay cuts, the risk of litigation expands.
Departing employees seek an understanding of why they were
selected over others and resentment may bring claims. Organisational
restructuring can destabilise the remaining workforce due to increased
workload, lost relationships and fear for the future. Because the process
disrupts people’s livelihoods, these decisions require discernment and
vision, along with financial planning. The most common problems we
see result from inattention to the human side of restructuring while
focusing on headcount and profitability.
TORREY: The best run companies we see have a collaborative environment
and clear business objectives with an incentive compensation system
that rewards contributions to those values. Hiring individuals with skills
and personal traits consistent with the organisation’s culture and goals,
coupled with direct, timely feedback on performance, aids in the retention
of employees who will enhance the team. Identifying problem situations
and attending promptly to substantial deficiencies may improve individual
performance.Wherenotableimprovementisnotoccurring,werecommend
helping a problematic employee move on. Most companies delay far
too long to address these issues and act on inappropriate or inadequate
performance. Procrastination by management in addressing misbehaviour
or lack of productivity is disheartening to others and often drives away the
key talent who an organisation hopes to attract and retain.
TORREY: The key challenge for management, including in the process of
incentivising and rewarding employees, comes from a misunderstanding
of what drives employees on an individual level. The management of
people requires emotional intelligence to discern individually and
generationally what sparks employees to put in their best effort.
Assuming that every employee is similarly motivated is the basic
mistake underlying most compensation systems. Organisations that
can discover what motivates various individuals at different points in
Q INYOUR OPINION, HAS
IT BECOME MORE DIFFICULT
FOR COMPANIES TO REWARD
THEIR EXECUTIVES AND
EMPLOYEES?WHAT DO
COMPANIES NEED TO TAKE
INTO ACCOUNT
Q WHAT GENERAL ADVICE
WOULD YOU GIVE TO
COMPANIES ON MANAGING
THEIR HUMAN CAPITAL AND
RETAINING KEY TALENT?
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
ADJUSTING PENSIONS AND
BENEFITS? WHAT KINDS
OF RISKS AND LIABILITIES
MIGHT ARISE IN SUCH
CIRCUMSTANCES?
“The most common problems we see result from inattention to
the human side of restructuring while focusing on headcount
and profitability.”

AUGUST 2016 • FINANCIER WORLDWIDE • 11www.financierworldwide.com
their development and implement suitable incentives within a system
viewed as fair and transparent overall are most likely to accomplish their
business goals with the available resources.
TORREY: Current political and social instability,coupled with the inability
to resolve historic and cultural conflict on a macro level, are the most
significant challenges to global business. The hope to expand business
and develop cross-national expertise is frustrated by political leaders
with myopic agendas who create an atmosphere of paranoia and fail
to serve the well being of others. The ability to collaborate and address
our natural differences constructively lags far behind the technological
means we have to conduct business globally. A shift could occur if the
innovative, dedicated talent in forward-looking organisations would
engage long-term in social and political concerns with an eye toward
profiting humanity.
Q AS GLOBALISATION
CONTINUES,WHAT
ADDITIONAL CHALLENGES
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
EMPLOYMENT AND DEALING
WITH FOREIGN WORKERS?
Rebecca Torrey
Partner
Manatt, Phelps & Phillips
+1 (310) 312 4172
rtorrey@manatt.com
Rebecca Torrey is a partner at Manatt, Phelps & Phillips. Ms Torrey is experienced in all aspects of employment
law, with an emphasis on defending employers in single plaintiff and class action cases in state and federal court.
Ms Torrey regularly advises employers in the full range of employment matters, including wage and hour issues,
protecting trade secrets and the use of nondisclosure agreements, unlawful harassment prevention, EEO and
affirmative action compliance (including regression and adverse impact analysis), leaves of absence, background and
drug screening, employment agreements, the use of independent contractors and hiring and termination decisions.
www.manatt.com
WHEN STRUCTURING
COMPENSATION PACKAGES,
INCENTIVES AND BENEFITS?

CANADA
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN CANADA OVER
SIGNIFICANT CHANGES
FOR EXAMPLE?
FRANÇOIS GARNEAU
MILLER THOMSON
GARNEAU: In June 2016, the finance ministers representing the federal
government and eight provinces agreed to revamp the Canada Pension Plan.
The ministers agreed to gradually and substantially increase the average
monthly worker contribution until 2023. These additional sums will increase
the maximum annual benefits by close to one-third in order to bring the
maximum annual benefit to C$17,478.As a result of this, Ontario decided not
to go forward with its own pension plan proposal. Quebec, which had already
set up a distinct plan in 1965 and had already increased contributions, is not
part of this arrangement.However,Ontario implemented some major changes
to its employment legislation by enacting Bill 132, which shall come into force
on 8 September 2016. Essentially, the Act expands the Occupational Health
and Safety Act so that ‘workplace harassment’ includes ‘workplace sexual
harassment’.Thismeansthatthematterwillnotonlybedealtasahumanrights
issue but also as a workplace issue. The Act also introduces new obligations
concerning the conduct of investigations into workplace harassment,including
the establishment of a written programme implementing the employer’s
workplace harassment policy. Employers may also be required to hire a third-
party investigator at their own expense.
GARNEAU: In October 2015, the previous federal conservative government
was defeated at the polls and replaced by a majority liberal government led
by Justin Trudeau. Prior to the election, the conservative government had
introduced legislation which would have compelled unions to disclose all
transactions over $5000 and to disclose the details of the remuneration of
union executives making more than $100,000 a year. Police Associations, the
Federal Privacy Commissioner and the Canadian Bar Association objected
to the legislation. Most provinces also contested the legislation on the basis
that it was unconstitutional. In December 2015, the new government waived
the disclosure requirements and indicated that it would repeal the law. The
new government also followed through with its promise to re-establish the
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN CANADA?
CANADA • FRANÇOIS GARNEAU • MILLER THOMSON
previously existing tax credit for contributions to union venture capital funds.
In 2013, the previous government had indicated that the credit would be
gradually reduced and eliminated. This was met with strong opposition not
only from union leaders but also from most of the Quebec business class as
the union venture capital funds have become an integral part of venture capital
financing in Quebec.
GARNEAU: On the individual side, the most recurring issues in employment
related litigation are related to discrimination and the duty to accommodate
arising from one’s family status, the duty of good faith in an employment
context and the conflict between an employee’s fundamental rights to privacy
in the context of random drug testing. In Ontario, ‘family status’ obligations
are increasingly being invoked to contest an employer’s decision to sanction
or dismiss an employee for absenteeism. In one recent decision, an employer
dismissed an employee who had worked for the employer for one month
because he had been absent for three days to care for his sick children. The
employer claimed that the employee in question should have made reasonable
efforts to find alternative child care arrangements.This argument was rejected
by theTribunal which held that an employee did not have to make alternative
arrangements when the absence was “infrequent, sporadic or unexpected”.As
for the duty of good faith in employment relationships, in 2014 the Supreme
Court rendered a decision which recognised that there was now a general
duty of honesty in contractual performance, thus bringing the common law
in line with the civil law doctrine of abuse of rights which applies in Quebec.
Since then, Canadian courts have relied on this decision to impose a duty of
good faith in the employment relationship. A similar conclusion was reached
in a decision from Newfoundland and Labrador where an employee, under an
acute stress reaction,told his employer he was“done”after being reprimanded
by his employer. The Supreme Court of Newfoundland and Labrador found
that the employer should not have concluded that the employee had resigned

from his position because “the implied term of good faith and fair dealings
which applied to both parties and to the employment contract required the
employer to give Mr Evans time to cool off and reconsider”.
GARNEAU:Typically,a collective dismissal will occur where a certain threshold
number of employees are terminated within a specific period of time. Most
of these legislations require that the employer maintain the group insurance
and pension benefits during the collective dismissal notice period. In addition,
for those employees who are entitled to additional notice, at common law or
underthecivilcode,themajorityofthecaselawrecognisesthattheemployees
should be compensated for the loss of their group insurance coverage or
employer pension contributions during this period.Employers therefore should
not expect to see a substantial reduction of their payroll costs during these
periods.
GARNEAU: Over the past few years, employee loyalty toward employers has
been steadily declining.In order to ensure post-employment loyalty,restrictive
covenants are becoming even more important and definitely a chief concern
for employers that wish to protect confidential information and avoid unfair
competition from former employees. However, in Quebec, the civil code
provides that where the employee is dismissed without good and sufficient
cause, the employer cannot rely on a non-competition clause which becomes
ineffective.
GARNEAU: The question of executive compensation is still a major divisive
issue. Shareholder frustration with the compensation practices of some of
Canada’s largest companies is still quite tangible, and 2016 has seen a slight
increase of negative votes during ‘say-on-pay’ votes involving Canada’s 20
largest companies. However, for the time being, only Canadian Pacific Railway
Ltd.,whichhelditsannualmeetingearlierthisyear,haslostits‘say-on-pay’vote
THEIR EXECUTIVES AND
EMPLOYEES?WHAT DO
COMPANIES NEED
WOULD YOU GIVE TO
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?
“In order to ensure post-employment loyalty, restrictive
covenants are becoming even more important.”

with 50.1 percent of votes cast against the company’s executive compensation
practices. Even though the results of such votes are usually not binding upon a
board of directors, the board generally takes into consideration the opinion of
the shareholders when implementing its compensation practices.
GARNEAU: Since 1 December 2015, employers using a work permit stream
to hire foreign talent under Canada’s ForeignWorker Program are now subject
to the Administrative Monetary Penalty (AMP) regime for violations of the
Immigration and Refugee Protection Regulations. Not only is this new AMP
regime broader, but also more constraining as it imposes new penalties for
non-compliance to the Temporary Foreign Worker Program, as well as the
International Mobility Program where a Labour Market Impact Assessment is
notrequired.ToensurecomplianceacrossCanada,thegovernmenthasdecided
to randomly inspect one in four employers in 2016 and has entrusted these
inspectors with wider investigatory powers.
François Garneau
Partner
Miller Thomson
+1 (514) 871 5415
fgarneau@millerthomson.com
François Garneau is a labour and employment lawyer and partner in the Montreal ofﬁce of Miller Thomson. His
clientele consists of employers from various economic sectors, be it pharmaceutical companies, oil companies, mining
companies, computer consulting ﬁrms, food product companies or other manufacturing companies. He has also acted
for Crown corporations including Canada Post Corporation, Loto-Québec, Hydro-Québec and the Société Générale
de Financement. In addition, he represents senior executives in negotiations involving employment termination, and
provides counsel in the drafting of employment contracts.
www.millerthomson.com
Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
TO TAKE INTO ACCOUNT
WHEN STRUCTURING

MEXICO
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN MEXICO OVER
SIGNIFICANT CHANGES
FOR EXAMPLE?
FRANCISCO J. PENICHE BEGUERISSE
CREEL, GARCÍA-CUÉLLAR,AIZA Y ENRÍQUEZ, S.C.
PENICHE: In June 2015,a legislative decree that amended and modiﬁed
the Mexican Federal Labour Law (FLL) regarding the employment of
underage workers came into force.The new law forbids the employment
of workers under 15 years old, and restricts the employment of workers
from 15 to 17 years old to several conditions. There is prohibition
regarding employees working overtime. Underage employees are also
forbidden from being involved in dangerous activities. Moreover, the
consent of the parents of underage workers is required. The Mexican
Republic is divided in geographical areas for purposes of the minimum
wage; however, on 1 October 2015, geographic zone B was eliminated
and as a result there is now a nationwide minimum wage.
PENICHE: Attempts by organisations to unionise employees have not
increased; however, it is worth mentioning that a reform proposal
to the FLL is currently being examined in Congress. The reform has
been designed to strengthen the freedom of the unions and prevent
companies with no employees from executing ‘protective’ collective
bargaining agreements. The reform proposal also seeks to dismiss
every petition for a strike during the process of registering a collective
bargaining agreement in order to discourage strike petitions from unions
that do not represent the potential affected employees. Strikingly,
however, Mexico is enjoying a period of relative labour peace.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN MEXICO?
MEXICO • FRANCISCO J. PENICHE BEGUERISSE • CREEL, GARCÍA-CUÉLLAR,AIZA Y ENRÍQUEZ, S.C.
PENICHE: Senior management litigation is increasing in Mexico.
In the past, it was unlikely to see these types of claims filed against
former employees. The challenge for companies, however, is that new
compensation components such as stock options, restricted units, and
so on, are now common in Mexico. However, these kinds of benefits are
not regulated under the FLL, which makes their interpretation by the
relevant authorities uncertain.We have seen court precedent regarding
stock options issued, providing that when included in employment
agreements, stock options should be considered part of the employee’s
total compensation and consequently should be considered when
calculating a potential severance payment.
PENICHE: Pursuant to the FLL, employers can only terminate
employment relationships with their employees based on the specific
causes provided therein. Restructuring is not considered justifiable
grounds for employment termination.Accordingly, dismissals triggered
by reorganisation are considered unjustified, entitling employees
to severance payments. Any unilateral reduction of employment
benefits will give just cause to affected employees to terminate the
employment relationship and claim severance payment. Consequently,
any restructuring process must be carefully planned and formalised.
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

WOULD YOU GIVE TO
PENICHE: From a legal perspective, companies should develop policies
and train employees to maintain a healthy work environment and avoid
problemssuchassexualharassmentandmobbingintheworkplace.From
an administrative perspective, companies should consider developing
variable compensation alternatives which provide economic incentives
to employees based on their productivity and efficiency, rather than
just seniority. Providing a healthy work environment and an attractive
compensation scheme increases the odds that human capital and key
talent remain in the company.
PENICHE: Due to the increasingly competitive and unpredictable nature
of the global markets, fixed compensation schemes for executives are
changing.They are becoming a much more variable scheme based on an
individual’s performance, as well the ability of the company to achieve
its global target.When structuring compensation packages, companies
should take into consideration the fact that all benefits presented to
an employee will very likely be considered acquired rights and part of
their total compensation for potential severance payment. Thus, such
benefits may increase substantially the amount of an employee’s final
payment, and even the considerable economic contingencies in case of
litigation.
MEXICO • FRANCISCO J. PENICHE BEGUERISSE • CREEL, GARCÍA-CUÉLLAR,AIZA Y ENRÍQUEZ,
FOR COMPANIES TO
REWARD THEIR EXECUTIVES
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING
“Providing a healthy work environment and an attractive
compensation scheme increases the odds that human capital
and key talent remain in the company.”

Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
PENICHE: The FLL does not contemplate the execution of secondment
agreements. Different circumstances during an expat’s assignment
may trigger legal consequences, such as an expat being considered
an employee of the Mexican host entity under the FLL, which may
entitle him or her to all mandatory employment and social security
beneﬁts. In addition, certain tax consequences for both the expat and
the Mexican host company could arise. Moreover, the FLL does not
allow employment at will, so unless a justiﬁed cause for termination
exists, employees will be entitled to severance payments.
MEXICO • FRANCISCO J. PENICHE BEGUERISSE • CREEL, GARCÍA-CUÉLLAR,AIZA Y ENRÍQUEZ, S.C.
Francisco J. Peniche Beguerisse
Partner
Creel, García-Cuéllar,Aiza y Enríquez, S.C.
+52 55 4748 0670
francisco.peniche@creel.mx
Francisco Peniche is a partner at Creel, García-Cuéllar,Aiza y Enríquez, S.C., in Mexico City, where he heads the Labor
and Employment practice area. He advises clients on labour and employment matters, including hiring, transfer and
termination of executives, employment matters related to corporate transactions, reorganisations and negotiation
and execution of collective bargaining agreements. He also represents clients in major downsizings and was recently
engaged for several opinions in connection with the application of data privacy laws to employers in Mexico.
www.creel.mx

FRANCE
LAURENT GUARDELLI
COBLENCE & ASSOCIÉS
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN FRANCE OVER
SIGNIFICANT CHANGES
FOR EXAMPLE?
GUARDELLI: Three major pieces of legislation have been provided
by parliament in less than a year regarding all aspects of labour and
employment, from relations with personnel representative bodies to
collective bargaining rules, health and safety at work, redundancies or
trade union law. For example, a bill which has been in parliament for five
months and has just been realised, has amended virtually 50 percent
of our more than 3500 pages of labour code. For instance, a brand new
definition of the economic grounds of dismissal has been provided for,
and this definition marks a major change.
GUARDELLI: While French labour relations may look very tough
from abroad, you have to look at a company level in order to really
understand what labour relations are, beyond major strikes and other
street fights. One must remember that in France, unions have been
provided with numerous prerogatives but only 7 or 8 percent of French
employees are actually union members. Moreover, unions are present
in important companies, where union representatives, as well as
employee representatives in general, are almost professional, making it,
if not easy, at least feasible to work with them.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN FRANCE?
FRANCE • LAURENT GUARDELLI • COBLENCE & ASSOCIÉS
GUARDELLI: Beyond so-called ‘collective’ litigation – meaning
litigation regarding unions and personnel representatives – which is a
technical as well as strategic type of litigation, one cannot forget to
mention litigation that relates to health and safety at work, starting
with harassment and ending, unfortunately, with rare cases of suicide
at work. This range of cases all deal with working conditions and so-
called ‘socio-psychological’ risks, an issue companies must now address
in a proactive way.
GUARDELLI:A 2013Act has reshaped the entire procedure of workforce
reduction, giving the labour inspector a great deal of powers to control
both the procedure and the grounds of the dismissal. In this respect,
one must deal with the fact that the administration is now the main
counterpart, alongside the personnel representative bodies, as it wields
a considerable amount of control. From a legal security standpoint,
the experience of giving powers to the administration has become a
positive, since corporations are able to work within precise timelines
and can ensure a project is going to go through the administrative
supervision process – a task that was far more difﬁcult in the past with
the judiciary. For instance, the risk of seeing an entire restructuring
process declared null and void months after employees are dismissed
has diminished a great deal, though it is not totally absent.
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

WOULD YOU GIVE TO
GUARDELLI: Retaining key talent is essential to companies that have
to manage their workforce in an increasingly competitive market.
Companies should consider alternative means of remuneration,
including company benefit schemes whereby the individual will be
able to provide some type of security for themselves and their family.
Obviously, making sure they take part of the company’s capital in one
way or another is also beneficial, since management packages are not
just limited to LBOs.
GUARDELLI: In this respect, what needs to be looked at very carefully
is obviously the tax environment, since, fairly enough, France has been
blamed for amending its tax provisions too often. Advice should start
with a close analysis at each individual’s personal situation, as well as
their status in the company, since employees and directors may not be
treated similarly depending on the financial package that is proposed
to them.
FOR COMPANIES TO
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING
“Remuneration plans in France cannot, as in most European
countries, be unilaterally amended in the course of the fiscal
year during which they are calculated.”

Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
GUARDELLI: While everyone understands that HR management
techniques are border-free, one should not forget that each country,
including France, has specificities which prevent the implementation
of unilateral decisions taken from above, with no consideration for the
local environment. As a single, but frequent, example, remuneration
plans in France cannot, as in most European countries, be unilaterally
amendedinthecourseofthefiscalyearduringwhichtheyarecalculated,
especially when they depend upon objectives; these objectives cannot
be amended either.Too often we see decisions amended – for example,
one specific element of calculating a worldwide commission plan, with
no required acceptance of employees and subsequent court cases
where employees claim unilateral modification of the plan,is prohibited
under French law, which can result in full payment of commission. It
is therefore important to ensure beforehand the feasibility of any such
decisions in order to prevent judicial issues.
Laurent Guardelli
Partner
Coblence & Associés
+ 33 1 53 67 24 24
lg@coblence-avocat.com
Laurent Guardelli is a labour and employment partner at Coblence and Associés. He advises companies and top
executives on their relations with employees, personnel representation bodies and the labour administration. He is
particularly active with the French subsidiaries of Anglo-Saxon groups. He also works with top executives to negotiate
their status at the time of hiring and when they leave the company. He manages the labour aspects of corporate
transactions. He was admitted to the Paris Bar in 2000 and holds an advanced degree of University Paris II Panthéon-
Assas and a Phd (Paris II Panthéon-Assas and St John’s College Oxford).
www.coblence-avocat.com

GERMANY
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN GERMANY
OVER THE LAST 12 MONTHS
OR SO? HAVE THERE BEEN
ANY SIGNIFICANT CHANGES
FOR EXAMPLE?
DR CHRISTOPHER MELMS
BEITEN BURKHARDT
MELMS: We have seen the following notable developments in
employment law in our region over the last 12 months or so. There
have been major changes to the Act on Collective Agreements with
enactment of the so-called ‘Principle of Collective Agreement Unity’
(Tarifeinheitsgesetz) on 3 July 2015, also the Act on Minimum Wages
of 11 August 2014 and the Act on Equal Participation of Men and
Women in Managerial Functions in Private Economy and in the Public
Sector of 24 April 2015.All three of these new laws have significantly
changed employee rights or company obligations in our region. The
amendment to the Act on Collective Agreements has provided for the
supremacy of certain trade unions over other smaller trade unions if
big trade unions conclude collective agreements. Small trade unions
in specific branches of industry – for example, locomotive drivers or
pilots – were created and recognised by the Federal Labour Court
(Bundesarbeitsgericht). They were fighting for collective agreements
onlyfortheirmembers,whereasthenewjurisdictionontherecognition
of these small trade unions resulted in various industrial conflicts
which were not well received by the public. The law changing the
Collective Agreements Act provides that any collective agreements
with the biggest trade unions in a certain sector will prevail over
any other collective agreement concluded by smaller trade unions.
Consequently, smaller trade unions filed constitutional complaints
with the Federal Constitutional Court (Bundesverfassungsgericht)
which are yet to be decided. Two complaints, however, have already
been rejected. A final decision is expected before the end of 2016.
The law on Minimum Wages, implemented in 2015, has drastically
changed the relationship between employees and employers. Since
this law has been in place, employees – and with some exceptions
even trainees – are entitled to a minimum wage of €8.50 per hour,
and as of 1 January 2017, €8.84 per hour. Finally, the Act on the Equal
Representation of Men and Women in certain companies provides for

GERMANY • DR CHRISTOPHER MELMS • BEITEN BURKHARDT
RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN GERMANY?
at least a 30 percent quota of women – and men – on the supervisory
boards of public companies. If a company does not comply with this
obligation, the courts are entitled to cancel the previous election of
certain supervisory board members and fill the seats with appropriate
women or men.
MELMS: At present, we would describe labour relations in our region as
beingcooperative,ifnotfriendly.Thishascertainlybeensupportedbythe
excellent national economic situation, with the average unemployment
rate in Germany reaching an extremely low figure of about 6 percent,
in some regions even significantly less. A low unemployment rate has
always resulted in a friendly atmosphere in the relationship between
employers and employees. However, we have still experienced a couple
of relatively harsh strikes in some sectors, such as the railways and the
airlines sectors.
MELMS: We see the tendency to agree upon a mediation process,
although under German law mediation is not enforceable, in
employment agreements or in collective agreements, for example.
However, it does provide for a potentially quick solution. Mediation
proposals are not binding per se, as both parties are free to agree upon
the results of a mediation process.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

MELMS: During the process of restructuring, one critical and difficult
provision is Sec. 613 of the German Civil Code, governing the provision
on the transfer of undertakings. This clause is difficult to handle as it
requires considerable preparatory activities, and it is easy to fall into the
legalloopholesofthisclause.Iftheoperationprovidesforaworkscouncil
(Betriebsrat), the collective provisions in Sec. 111 Shop ConstitutionAct
must be carefully considered. The legal requirement to negotiate with
the works council on a Social Plan, so-called Reconciliation of Interest,
must follow certain formal procedures.
MELMS: If companies wish to retain their key talent, they should
consider agreeing upon notice periods that exceed statutory provisions,
in order to bind talented employees to the company for as long as
possible. The downside is that an employer must comply with those
notice periods if it wants to terminate the employment. In addition,
companies should provide for attractive benefits, such as educational
programmes or cooperation with leading universities. Finally, and most
importantly, companies should consider establishing special policies
relating to the promotion of women in their organisation. This will
not only provide equal opportunities to both men and women in the
company, but it will also make the company much more attractive
when it comes to recruiting new talent.
MELMS: It has become more difficult for certain companies to reward
their employees as the European Union has set up strict guidelines and
provisions on the remuneration of certain groups of employees, mainly
in the investment sector and in insurance companies. The general idea
THEIR EXECUTIVES
WOULD YOU GIVE TO
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?
“It has become more difficult for certain companies to reward
their employees as the European Union has set up strict
guidelines and provisions.”

of these principles is that remuneration should reflect the performance
of the employee over a period of at least three years. For employees
and executives in any other sector, this should be no more difficult than
it has been in the past; however, it is recommended that companies
structure their remuneration policies in a similar way to the financial
sector.
MELMS: The most complicated challenges faced by multinational
companies in term of cross-border employment have been created by
the new EU provision on data processing policies. The main problem,
which has been an issue for many years, was the transfer of personal
data from one Member State to the US. The new EU provision sets
principles on safe harbour policies and contains more restrictions on
the free transfer of data to the US.
Dr Christopher Melms
Partner
BEITEN BURKHARDT
+49 89 35065 1143
christopher.melms@bblaw.com
Dr Christopher Melms is a partner in BEITEN BURKHARDT’s Munich office and head of the Labour & Employment
Law practice group. His practice focuses on the food and semi-luxuries industry, the health sector, as well as on
media, entertainment and publishing companies. He advises and represents German and foreign companies with
regard to collective bargaining and labour management relations law. His activities are concentrated on advising of
companies within the scope of processes of change under collective bargaining agreements – for example, changes in
pay scale, company collective agreements, etc. – and negotiations with trade unions and works councils.
www.beiten-burkhardt.com
Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING

DENMARK
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN DENMARK
FOR EXAMPLE?
TOMMY ANGERMAIR
ADVOKATPARTNERSELSKABET KIRK LARSEN & ASCANIUS
ANGERMAIR: Over the last 12 months, the Danish parliament has been
unusually active in terms of implementing changes to key labour market
legislation. This is normally very stable compared to the corresponding
legislation in many other European countries. There have been radical
changes in rules applicable to restrictive covenants, including a maximum
duration of 12 months, entitlement to compensation irrespective of other
income during restriction period and a general prohibition against clauses
regarding non-solicitation of colleagues. Rules on statutory severance
pay based on length of service have been simplified, with new amounts
and required service thresholds. Access to agree on an automatic end of
employment at the age of 70 years has been abolished. Furthermore, in
August 2015 the Danish government established a committee which is
expected to propose radical changes to the current,and very unique,Danish
holidaysystemforthepurposeofobtainingcompliancewiththeEUWorking
Time Directive (2003/88/EC) following a recent statement from the EU
Commission. However, the most significant legislative development was
the final adoption of the General Data Protection Regulation (2016/679)
on 27 April 2016 which will have a massive impact on Danish employers
effective from 25 May 2018.
ANGERMAIR: Historically, the Danish labour market has been regulated, to
a large extent, by collective bargaining agreements (CBAs). Typically, CBAs
require the establishment of one or more works councils if the employee
headcount is 35 and above. Accordingly, historically, unions and works
councils have had a strong influence on the Danish labour market.However,
it is my impression that in recent years that influence has decreased
substantially due to a number of factors.The main factors appear to be the
apparently rapidly rising number of employers not covered by CBAs and
employees without union membership, as well as the increasingly strong
influence of EU legislation.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

DENMARK • TOMMY ANGERMAIR • ADVOKATPARTNERSELSKABET KIRK LARSEN & ASCANIUS
RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN DENMARK?
ANGERMAIR:The hottest topic in employment law litigation has been the
protection of disabled employees against discrimination following recent
case law from the European Court of Justice (ECJ) which introduced a
very wide and vague legal definition of disability. Furthermore, the Danish
Supreme Court and Eastern High Court have very recently given judgments
regarding the Danish Transfer of Undertakings Act which implemented the
EU Acquired Rights Directives (98/50/EC and 77/187/EEC), in particular
whether or not a certain transfer constituted a transfer of undertakings in
the sense of said directives.
ANGERMAIR: In terms of such processes,the most important employment
issue is typically avoiding claims of discriminatory treatment due to
pregnancyormaternity,disability,age,part-timeorfixedtermemployment,
and so on, which may lead to substantial compensation claims, contribute
to a negative atmosphere in the work place and/or negative press coverage.
Discrimination claims are generally more likely to end up in court than
most other employed related claims due to the potentially high level of
compensation and the relatively high union focus on pursuing the claims. If
such a claim is successfully brought to court by an employee, the employer
will be liable to pay compensation amounting to as much as 12 months
totalcompensation,includingfixedandvariablesalaryaswellasthevalueof
benefits. In terms of significant staff reductions, negotiating loyalty or stay-
on packages with key employees tends to be very important to maintaining
a motivated and efficient workforce. Completing a certain collective
consultation procedure is required under certain circumstances but in most
cases that procedure does not lead to significant issues – as opposed to in
most other European countries – considering that the procedure can largely
be designed according to the employer’s preferences and that neither the
works council, the unions nor any other party is empowered to block or
delay the decision to proceed with the envisaged restructuring.
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

WOULD YOU GIVE TO
ANGERMAIR: To facilitate a relationship between the company and
its employees which remains mutually beneficial, the company should
focus on promoting the individual employee’s personal and professional
development as well as promoting employee behaviour which supports the
company’s short and long term goals. In terms of promoting employee
development, it is important for companies to ensure that their employees
are assigned challenging tasks, that they receive credit for their work and
that they are afforded the opportunity to outperform their manager if they
are skilled enough to do so. Companies should also strive to ensure that
at any given time their compensation and benefits schemes incentivise
behaviour which supports the company’s short and long term goals.
ANGERMAIR: Compensation and benefits are obviously absolutely
crucial in terms of promoting the right employee behaviour and retaining
the right employees. A company should always consider whether their
current compensation and benefits schemes promote the right employee
behaviour which supports the company’s short and long term goals.This is
an obvious point for most leaders but in practice this has always been and
still is a difficult exercise for companies. It has not necessarily become more
or less difficult recently.In my opinion,too many companies apply standard
schemes which are not adequately tailored to the individual company and
the individual type of employees, or fail to update the schemes to account
for significant changes affecting the company. In most cases, taking the
road less travelled by, for example, implementing and maintaining tailored
schemes, is absolutely worthwhile, although this often requires a far more
substantial effort. From a strictly Danish legal perspective, it is important
for companies to take into account the leaver rights protection with
regard to incentive and compensation schemes, which in my experience is
remarkably strong compared to most other jurisdictions.
FOR COMPANIES TO
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING
“Internal HR, mobility and legal functions tend to face more
comprehensive and complex challenges.”

Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
ANGERMAIR: As the number of foreign workers rises due to increasing
globalisation, it will be more challenging for multinational companies to
ensure a smooth transition, to integrate the foreign worker into the local
staff and thereby to create a strong foundation for the foreign worker’s
performance. Internal HR, mobility and legal functions tend to face more
comprehensive and complex challenges, which creates a demand for
strengthening these functions in terms of headcount and skills. Many
Danish entities in multinational companies work closely with colleagues
in the UK – typically colleagues in regional group functions – which often
involves the relocation of employees between Denmark and the UK. Brexit
is very likely to result in work permit requirements being imposed on
employees relocating between EU member states and the UK, considering
the successful leave campaign’s promise to reduce UK immigration from
EU member states, and the new UK prime minister’s declared intent to
keep this promise.
Tommy Angermair
Head of Employment & Corporate Immigration Law
Advokatpartnerselskabet Kirk Larsen & Ascanius
+45 2710 3439
ta@kirklarsen.dk
Tommy Angermair is head of the ﬁrm’s employment law and immigration law department. Since 2007, he has
exclusively worked on employment law and corporate immigration law matters. He has advised mostly large
multinational clients on complex employment and immigration law matters for several years. Mr Angermair is
also one of the most experienced legal experts in employee data protection law (specialist level since 2004). He is
recommended in the 2016 editions of the Legal 500 EMEA Employment) and Chambers Europe (Employment). In
2015 and 2016, Mr Angermair was a speaker at four major global legal conferences on hot corporate immigration law
topics.
www.kirklarsen.dk

ITALY
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN ITALY OVER
SIGNIFICANT CHANGES
FOR EXAMPLE?
VITTORIO DE LUCA
DE LUCA & PARTNERS
DE LUCA: Over the last 12 months, significant developments have
characterised Italian employment law.A broad, in-depth reform known
as the Jobs Act was implemented in 2015. The reform has radically
changed several aspects of employment and self-employment
relationships in Italy. In particular, the reform provided for the
reorganisation of all types of employment contracts,the introduction of
permanent contracts with increasing levels of protection, thus defining
a new system of compensation in the event of unlawful dismissals
marked by the certainty and objectivity of the law. This has reduced
the possibility of reinstating employees who have been unlawfully
dismissed to merely cases of discriminatory termination only, and
thus almost entirely eliminates the discretionary power of the courts.
To help reduce unemployment, simplify the existing legislation and
ensure greater flexibility in employment relationships, the reform also
introduced social security exemption system for new hires, liberalised
fixed-term contracts and significantly reviewed the regulation of duties,
drastically increasing cases where downgrading is lawful.
DE LUCA: In the past, labour relations had a fairly influential role in
the labour market, based on a triangular system where trade unions,
employers and public authorities were involved in negotiations.
However, in recent years, many unions have lost their past negotiating
power against the government. This has also been confirmed by the
recent Jobs Act reform, which has been implemented without any
substantial trade union involvement. Therefore, trade unions should
overcome the role of national trilateral negotiation, promoting instead
increased negotiations on a company level and workers’councils’power
of representation.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN ITALY?
ITALY • VITTORIO DE LUCA • DE LUCA & PARTNERS
DE LUCA: Historically, since reinstatement entitlement was introduced
into the workers’ statute, the most frequently recurring theme in
employment has been dismissal. However, due to protections against
unfair dismissal, litigation concerning dismissal due to discrimination
is still fairly uncommon. Since overall employee protection – and in
particular, the chance for employees to be reinstated at work – have
been radically reduced due to various reforms implemented since 2010
andtheimplementationofeffectivealternativedisputeresolution(ADR)
procedures, we expect that in the future, the number of court disputes
for unfair dismissal will drastically decrease and at the same time, a
higher number of dismissals due to discrimination will be brought to
the attention of judges, as happens in most western countries.
DE LUCA: The restructuring of a company, including a reduction of the
workforce, entails several actions.The most important are those related
to the joint meeting to be held with unions in terms of bargaining
power, timing and possible disruptive actions. The entitlement of the
unions to meet the employer derives from the Italian implementation
of law arising from speciﬁc European Union directives.According to the
law, unions are indeed entitled to request that an employer participate
in meetings in order to explain the reasons behind redundancies, and
verify whether there may be alternatives to such dismissals and, if
not, to agree on possible company measures. During the consultation
procedure, companies are required to consider, in terms of costs and
beneﬁts, the opportunity to reach an agreement with unions by making
any economic or organisational concessions in order to speed up the
process and avoid any possible disruptive actions being carried out by
the latter. If the parties fail to reach an agreement, the employer is, in
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

any case, entitled to deliver dismissal letters and employees are free
to object to the reason behind the dismissal, which may be an unfair
dismissal.
DE LUCA: In our experience, managing people by setting objectives
and offering fair, performance-related bonuses, rewards and retains
key talent. As a general rule, employers should always be clear about
the targets employees are expected to meet. It may be useful to draft
and negotiate specific retention plans aimed at granting employee
cooperation for a predefined period of time, especially for companies
acquired via investment funds which need to prevent key managers
from being able to decide to leave before the end of an investment
period.
DE LUCA: In recent years, it has become more difficult to reward
executives, due to their increased expectations in terms of having
tailor-made employment offers.The main thing that employers should
avoid when structuring compensation packages, incentives and benefits
is to use standard international contracts which have not been adapted
and made compliant with local regulations. For instance, international
companies often apply complex employment contracts to Italian
employees without considering that in Italy, the main provisions
governing employment relationships are defined by National Collective
Bargaining Agreements. As far as a fixed annual salary is concerned,
National Collective Bargaining Agreements provide for the minimum
annual remuneration to be granted to employees depending on their
level of employment. Furthermore, under Italian law, employees and
managers are entitled to the so-called leaving indemnity, consisting of
compulsory deferred compensation due to the employee at the end of
the employment relationship equal to 1/13.5 of the annual salary due
to them.
FOR COMPANIES TO
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING
WOULD YOU GIVE TO

Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
DE LUCA: From an employment law perspective, secondment always
involves complex provisions and multiple issues to be dealt with. In
particular, cross-border employment often entails companies having
to take into consideration employment agreements and comfort
letters that must be compliant with both the country of origin and
the country of destination of the employee. Furthermore, cross-
border employment requires companies be fully compliant with local
laws, international treaties against double taxation, and bilateral and
multilateral conventions for social securities. Movement of personnel
within the European Union is granted by speciﬁc regulations according
to which,under certain conditions,employees are entitled to contribute
to their country of origin, even when they are seconded to a different
country.
Vittorio De Luca
Managing Partner
De Luca & Partners
+39 02 3655651
vittorio.deluca@delucapartners.it
Vittorio De Luca, managing partner of the ﬁrm, usually advises corporations and private equity funds. He is regularly
involved – as an expert in employment and labour related matters – in primary reorganisations, M&A, restructuring
and private equity transactions.Thanks to his degree in Jurisprudence and Economics, he is highly skilled in
understanding business needs. Mr De Luca collaborates regularly with ‘Il Sole 24 Ore’ and is the author of a number of
articles in the specialist press. He has been interviewed in mass media journals as an expert in employment law and is
a regular contributor to seminars and conventions.
www.delucapartners.it
“In Italy, the main provisions governing employment
relationships are defined by National Collective Bargaining
Agreements.”

INDIA
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN INDIA OVER
SIGNIFICANT CHANGES
FOR EXAMPLE?
VIJAY RAVI
KOCHHAR & CO.
RAVI: Last year, in a move aimed at initiating significant labour
reforms, the Indian Ministry of Labour announced plans to introduce
five draft codes which would consolidate 44 labour laws that are
currently applicable to businesses. The move has been designed to
decrease the multiplicity of compliances in labour laws, improve labour
relations and ease the process of doing business in India. Following the
announcement, three draft legislations have been made public. One of
the important draft codes that has been introduced is the Labour Code
on Industrial Relations Bill, 2015 (LCIR Bill). There are a number of key
proposals included in the LCIR Bill. First, severance compensation to
‘workmen’ would be payable at the rate of 45 days of average pay for
every year of service. Second, an industrial establishment in which less
than 300 workers are employed would not require prior government
permission or approval for lay-offs and closure.Third, 10 percent or 100
workers employed in an establishment, undertaking or industry would
be required to be members of a trade union for it to be registered.
Fourth, in an industry in which 100 or more workers are employed
in the preceding 12 months, the employer is required to constitute a
works committee consisting of representatives of the employer and
workers engaged in the establishment.This works committee would be
required to promote measures for securing amity and good relations
between the employer and the employee. Finally, workers employed
in an industrial establishment cannot go on a strike without giving 14
days notice to the employer.Another significant development has been
an amendment to the Payment of Bonus Act, 1965 pursuant to which
all employees drawing a monthly salary of INR 21,000 or less would be
entitled to statutory bonus. This amendment has significant financial
implications for employers. The government is also considering a
proposal to increase paid maternity leave from the existing 12 weeks
to 26 weeks.

INDIA • VIJAY RAVI • KOCHHAR & CO.
RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN INDIA?
RAVI: Presently, labour relations in the private sector are cordial. There
have been sporadic instances of labour unrest in public sector banks and
the automotive industry.Trade unions in India are mostly concentrated
in the public sector and the private sector workforce is not generally
unionised. In the recent past, following some large scale lay-offs in the
IT sector, trade unions afﬁliated to political parties have attempted to
unionise employees in the sector.
RAVI: A large portion of employment litigation in India relates to
allegations of unfair dismissal and demands for reinstatement. Some
Indian companies that engage temporary workforces – on contract
through third-party contractors – have had to defend claims for
permanent employment from aggrieved contractual employees. In
recent years we have seen increasing complaints of sexual harassment
in the workplace. Other recent trends include litigation initiated
by employers to protect conﬁdential information and enforce non-
compete restrictions in an attempt to dissuade employees from joining
competition.A positive development has been the willingness of labour
authorities to attempt to resolve labour disputes through mediation in
a pragmatic manner.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

RAVI: It is not mandatory under Indian laws to engage in a consultation
process during the process of restructuring. However, it is imperative
that all statutory compliances – including notice requirement and
payment of severance compensation – are ensured while undertaking
any reduction in the workforce. In situations involving mass lay-offs,
there is a risk of employees joining together to negotiate a severance
package which is better than what is mandated by law. In the event of
a transfer of business, employee consent is required for their transfer
to a new employer, to avoid liability of severance compensation. Also,
employees must be assured the benefit of continuity of service following
a transfer. Any change in terms of service – including benefits – would
require giving prior notice to employees.
RAVI: Managing attrition to ensure competitive advantage is a key
issue for every employer. To retain key talent, tools that companies
generally employ include a fair performance appraisal mechanism, a
retention bonus as part of the compensation package, regular training
programmes which enable an employee to enhance their skills, and
overseas assignments to gain global experience.
RAVI:A growing Indian economy and increasing foreign investment into
India has meant opportunities for talented individuals. Average salaries
in most industries have been moving northwards. Multinationals have
salary packages which are significantly higher than the minimum wages
prescribed by the government. Many companies have introduced joining
bonuses, stock option plans, performance bonuses, and so on, as part of
theircompensationpackagesinordertoattractandretainkeyemployees.
Employers in the IT sector, which has witnessed a mushrooming of start-
ups, are increasingly including stock options and similar equity incentive
plans, with staggered vesting periods, to motivate employees to be part
of their growth story. An increasing trend is the inclusion of a variable
component in the compensation structure which is linked to individual
performance and overall profitability of the company or group.
FOR COMPANIES TO
AND EMPLOYEES?WHAT
DO COMPANIES NEED
WHEN STRUCTURING
WOULD YOU GIVE TO
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER
RAVI: International workers taking assignments in India must ensure
that they have an appropriate visa. Employment visas are granted only
to highly skilled or qualified professionals for jobs for which qualified
Indians are not available. Expatriate employees are mandatorily
required to make social security contributions in India and the same
can be withdrawn only when they reach the age of superannuation,
subject to the provisions of any social security agreement between the
home country of the expatriate employee and India. Multinationals
seconding expatriate employees to India must also be careful in
avoiding tax exposure in India as a consequence of being deemed to
have a permanent establishment in India.
Vijay Ravi
Senior Partner
Kochhar & Co.
+91 11 4111 5222
vijay.ravi@kochhar.com
Vijay Ravi is a senior partner in Kochhar & Co. and co-chairs the firm’s labour and employment practice. His practice
primarily focuses on advising corporate clients on employee relations, dispute management and resolution and
developing best employment practices and policies that are Indian law compliant. He also has extensive experience
in delicate and sensitive labour related issues associated with business acquisitions, corporate restructurings and
divestments and transactions involving outsourcing arrangements. His robust experience and expertise benefits
clients in obtaining an in-depth understanding of the prevailing industrial regime for the effective implementation of
both collective and individual employment arrangements.
www.kochhar.com
“A growing Indian economy and increasing foreign investment
into India has meant opportunities for talented individuals”

SINGAPORE
Q WHAT NOTABLE
DEVELOPMENTS IN
EMPLOYMENT LAW HAVE
YOU SEEN IN SINGAPORE
FOR EXAMPLE?
S SURESSH
HARRY ELIAS PARTNERSHIP LLP
SURESSH: From 1April 2016,all employers in Singapore will be required
to issue itemised pay slips and a document summarising the key
employment terms (KET) to employees covered under the Employment
Act (Chapter 91). Employers who do not issue itemised pay slips or
KET to employees can be ﬁned. From 1 April 2016, the Ministry of
Manpower (MOM) will set up a framework to treat less severe breaches
of the Employment Act as ‘civil breaches’ which attract administrative
penalties. Currently, employers must offer re-employment to eligible
employees who turn 62, up to the age of 65. If the employer does not
offer the retiring employee re-employment, the employer must pay the
retiring employee Employment Assistance Payment. From 1 July 2017,
the re-employment age will increase to 67.
SURESSH: Labour relations in Singapore are generally good. Labour
unrestandindustrialactionisveryunusual.Disputesthatariseareusually
resolved between employers and unions with the aid of mediation from
the MOM. Employers are prohibited from preventing their workers from
forming unions if they wish to do so. However, all such unions have to
be registered under the Trade Union Act. Existing trade unions often
actively seek to recruit members and seek recognition from employers.
Once recognised, they are able to negotiate directly with the employer
for collective agreements or on other matters.Workers councils are not
common in Singapore and are not legally recognised.
Q HOW WOULD YOU
DESCRIBE LABOUR
AT PRESENT? TO WHAT
COUNCILS GROWN?

SINGAPORE • S SURESSH • HARRY ELIAS PARTNERSHIP LLP
RECURRING THEMES IN
EMPLOYMENT RELATED
LITIGATION IN SINGAPORE?
SURESSH: Employment litigation in Singapore falls primarily into two
categories. The ﬁrst category covers cases arising after termination
where the departing employee makes claims for sums that they believe
they are entitled to. These claims are usually for performance bonuses,
share options and outstanding salary.The second category is for cases by
employers who are trying to enforce covenants that prevent departing
employees from working for competitors. In Singapore, such clauses
are prima facie invalid unless the party who seeks to have it enforced
can show that it is intended to protect his own legitimate interests and
that it is reasonable in all circumstances.
SURESSH: Employers who are retrenching employees must do so
responsibly and fairly. Tripartite partners – including the MOM, the
National Trades Union Congress (NTUC) and the Singapore National
Employers Federation (SNEF) – have released the tripartite guidelines
on managing excess manpower and responsible retrenchment. If the
company is unionised, the relevant union should be consulted; this is
usually provided for in the collective agreement. Companies should
also notify the Labour Relations & Workplaces Division of the MOM
or the Tripartite Alliance for Fair and Progressive Employment Practices
(TAFEP) of their impending retrenchment exercise as soon as possible.
The EmploymentAct provides for a minimum notice period requirement
for termination of employment.
Q FOR COMPANIES
IN THE PROCESS OF
RESTRUCTURING,WHAT
WHEN RESIZING THE
WORKFORCE, REDUCING
PAYROLL COSTS AND
MIGHT ARISE IN SUCH
CIRCUMSTANCES?

WOULD YOU GIVE TO
SURESSH: Managing human resources and retaining key talent is
a matter of relationships between the employer and employee.
The employer should not look to the law as a tool to manage its
workforce.
SURESSH: All foreign workers who intend to work in Singapore must
have a suitable work visa or work pass.There are different work passes for
different categories of workers and salary ranges. For certain industries
and passes, the MOM has quotas for foreign workers to ensure that
there is a Singapore ‘core’. In the case of executives who are applying
for employment passes, the employer may be required to advertise the
job opening on Jobs Bank for at least 14 days before the application
is submitted. Jobs Bank is a government run job matching portal that
helps to facilitate online job matching between local job seekers and
employers.
Q AS GLOBALISATION
CONTINUES,WHAT
FACE MULTINATIONAL
COMPANIES IN TERMS
OF CROSS-BORDER

S Suressh
Partner
Harry Elias Partnership
+65 6361 9365
suressh@harryelias.com.sg
S Suressh is a partner in the firm’s civil and commercial litigation practice group. He is also a recommended lawyer
in The Legal 500. His main area of practice is in commercial litigation, in particular disputes relating to corporate
and shareholder disputes, misfeasance by company officers, international transactions and employment. He advises
on compliance issues, in particular relating to money laundering, competition and data protection. He recently
represented an international freight forwarding group in connection with investigations by the Competition
Commission of Singapore into rate fixing.
www.harryelias.com
“The employer should not
look to the law as a tool to
manage its workforce.”

FWS U P P L E M E N T
www.ﬁnancierworldwide.com
A N N U A L R E V I E W

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