In Germany, as of 1 January 2017, various amendments to the law on severely disabled persons came into force. Of particular importance is a new regulation relating to the dismissal of severely disabled employees.

Until the recent changes came into force, before the dismissal of a severely disabled employee the representative body for severely disabled employees had to be heard in accordance with the relevant provisions of the German Social Code Book IX (SGB IX). However, this was not a prerequisite for the effectiveness of the dismissal and therefore rather irrelevant.

Since the beginning of this year, however, the hearing of the representative body for severely disabled employees is a prerequisite for both the dismissal of a severely disabled employee with due notice and without (section 95 para. 2 sentence 3 SGB IX – new version). This means, that a dismissal without such prior hearing is ineffective.

However, if at the hearing, the representative body for severely disabled employees objects to the intended dismissal, the employer can nevertheless proceed with the dismissal. In such a case, the employee may also not claim further interim employment or the like. The legislator has introduced the hearing obligation rather as a mere formal requirement.

However, many questions relating to this new regulation remain. As a precaution, it should first be assumed that similar conditions apply to the content of the hearing of the representative body for severely disabled employees, as in the case of a works council hearing pursuant to the provisions of section 102 of the German Works Constitution Act – BetrVG. In particular, the reasons for the dismissal should be presented in detail. There is also much to suggest that the deadlines set out in section 102 BetrVG for the statement of the works council could be used as guidance for hearings regarding the dismissal of severely disabled employees.

Moreover, considering the unclear wording of the new law, we recommend that the hearing of the representative body for severely disabled employees should take place before the application to the integration office for the necessary approval of the intended dismissal pursuant to the relevant provisions of the SGB IX.

In a decision dated December 7, 2016, Italy’s Supreme Court – the Corte di Cassazione – confirmed that the dismissal of an individual employee for redundancy can be legally grounded solely on business-related reasons, such as improving the company’s competitiveness, reducing costs, or increasing profits. The decision was based on the constitutional principle of “freedom of private enterprise.”

Despite many significant labour law reforms in Italy in the past couple of years, the definition and rules regarding redundancy dismissals date back to 1966, and have never been changed. This type of dismissal, unlike dismissals for serious misconduct (so-called “just cause” dismissals), is based on “reasons related to productive activity, work organization and its regular functionality.”

The burden of proof in the event of a dispute regarding the validity of a redundancy dismissal will always be on the company.

Although there is no statutory requirement that the company demonstrate that the dismissal was required to avoid a crisis situation or prevent the negative economic health of the company, a stream of Italian case law decisions held that in order for the company to demonstrate the validity of an individual redundancy dismissal it had to prove “the need to tackle unfavourable and not transitional economic trends of the company.” The recent decision of the Supreme Court, as well as a series of other recent decisions, indicate a shift away from this approach by clarifying that while the court will check whether the reasons listed in the dismissal letter are true, it is not permitted to scrutinize the reasonableness or correctness of the economic or business reasons upon which the company grounded the dismissal.

In France, employees who suffer from workplace discrimination are entitled to bring claims against their employer. Workplace discrimination is strictly prohibited and is characterized when a person is treated less favorably than another because of his or her origin, sex, marital status, pregnancy, physical appearance, health, disability, sexual orientation, gender identity, age, political opinions, trade union activities, his/her belonging to an ethnic group, or his/her alleged race or religion.

Employees or future employees who have been subjected to discrimination can either take legal action directly or authorize a union to act on their behalf. However, even if a union takes legal action, the employer will automatically and immediately learn the name of the employee concerned. Moreover, such procedure does not permit a demonstration that the discrimination is collective.

In this context, as from 20 November 2016[1], French law has been modified to allow representative trade unions and associations to launch class action suits in order to show that several candidates or employees have been directly or indirectly discriminated against by the same employer. The identities of the discriminated persons remains unknown at the beginning of the procedure.

The purpose of the class action can be either to put an end to the discrimination or to obtain damages (or both).

Before commencing the class action, the trade union or the association must contact the employer and request it to cease the discriminatory situation.

As from such date, the employer :

• has one month to inform the works council (or, if any, the staff delegates or representative unions within the company) of the request made by the union or association. A dialogue between the employer and the staff representative should lead to a solution in order to stop the discrimination.
• has six months to stop the discrimination. If no action has been taken at the end of such six-month period, the trade union or association which initiated the class action may commence proceedings before the tribunal.

During the course of the procedure undertaken by the unions or association, the time limit for introducing an individual action is suspended. Therefore, an employee or candidate can decide to take legal action after obtaining the judgement related to the class action in order to obtain compensation for the damages which were not included within the scope of the judgment.

[1] Article L 1134-6 to L 1134-10 of the French Labour Code

Mit dem geplanten Entgelttransparenzgesetz will die Bundesregierung Lohnunterschiede zwischen Frauen und Männern abschaffen. Durchschnittlich ist die Vergütung von Frauen in gleichwertigen Positionen 7 Prozent niedriger als die von Männern. Dieser sogenannte „Gender Pay Gap“ soll mit dem am 11. Januar 2017 vom Bundeskabinett beschlossenen „Gesetz zur Förderung der Transparenz von Entgeltstrukturen“ bekämpft werden.

Mehr zum Thema finden Sie in einer Kolumne von Rechtsanwältin Dr. Anja Lingscheid.

A number of developments in UK employment law are expected this year. This post takes a look at some of the key changes.

Mandatory gender pay gap reporting

In the UK, on average, women earn less than men. In order to address this issue, and following a lengthy consultation, draft regulations have been published which, subject to parliamentary approval, will come into force in April 2017.

Under the Regulations, private and voluntary sector employers with at least 250 employees will be required to publish annual gender pay gap figures.

Employers must publish:

• the difference between the mean (average) hourly rate of pay of male and female employees;
• the difference in the median hourly rate of those employees;
• the difference between the mean and median bonus pay paid to relevant employees and the proportion of male and female employees who were paid a bonus; and
• the proportion of male and female employees set out in quartile bands divided according to rates of pay.

Employers will have the option to include a narrative explaining any pay gaps or other disparities, and setting out what action, if any, they plan to take to address them. The provision of a narrative will be strongly encouraged, but it will not be mandatory.

The Regulations do not contain any sanctions for failure to comply. However, the Explanatory Notes state that a failure to comply will constitute an unlawful act within the meaning of section 34 Equality Act 2006. This allows the Equality and Human Rights Commission to take enforcement action against defaulting employers.

Once Parliament has approved the Regulations, we are promised the publication of non-statutory guidance. This will be welcomed by employers.

Draft regulations have also been published which impose similar obligations on public sector employers with 250 or more employees.

Apprenticeships

The apprenticeship levy is due to come into effect in April 2017.

The apprenticeship levy will require all UK employers (in both the private and public sectors) which have annual wage bills of more than £3 million, to pay 0.5 per cent of their annual wage bill towards the cost of apprenticeship training. This will replace the current system which enables employers to choose and pay for the apprenticeship training they want.

Employment tribunal fees

Historically, unlike in the civil courts system, no fees were payable for instituting employment tribunal proceedings. However, fees were introduced under a new system in July 2013 so that since then, claimants have to pay a fee on issuing a tribunal claim, and a further fee if the claim goes to a hearing (the level of the fees being dependent on the complexity of the claim).

The trade union, UNISON, has issued two judicial review challenges against the introduction of the fees. Both were dismissed by the High Court and in August 2015, the Court of Appeal dismissed UNISON’s appeal. UNISON has now appealed to the Supreme Court and the hearing is scheduled to take place in March 2017.

Alongside these proceedings, the Government has been carrying out a review of the employment tribunal fees system which is due to be published early in 2017.

Grandparental leave

The Government plans to extend the right to shared parental leave and pay (currently enjoyed by parents and their partners) to working grandparents.

A consultation on the new right was initially proposed for May 2016 but was postponed until after the EU referendum. It is expected that the consultation will be published at some time this year with a view to legislation coming into force in 2018.

References in the financial services sector

During 2015, the UK financial services regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), consulted on proposed changes to the way affected financial services firms and insurers seek and provide references for candidates for certain regulated roles as part of a wider package of reforms which aim to improve the accountability in banks and insurers.

The final FCA and PRA rules on regulatory references were published in a policy statement in September 2016 and are scheduled to come into force on 7 March 2017.

As 2017 is a Presidential election year in France, we do not expect major changes in employment legislation to occur in France in the near future.  However, this does not mean that French employment lawyers will be unoccupied.

First and foremost, the El Khomri law (dated 8 August 2016), which significantly modified the employment law landscape in France, is progressively coming into effect: a number provisions only entered into force on 1st January 2017, and implementing decrees are still awaited in a number of areas.

The main measures which have come into force on 1st January 2017 are:

• New rules regarding negotiation of collective agreements, with the goal of facilitating the conclusion of collective agreements at the company level (particularly through a ratification process of agreements through a referendum among employees),
• A new hierarchy of rules regarding certain matters (working time and paid leaves): collective agreements at company level may prevail over sector-wide collective bargaining agreements,
• A “right to disconnection” from electronic communication devices outside of working hours has been created for the benefit of employees (the scope thereof is however still being discussed),
• Some new flexibility has been added regarding working time provisions, and
• The specific procedure aiming at acknowledging an employee’s disability has changed entirely in order to make it more straightforward (although professionals are not convinced this goal will be achieved).

Second, a huge effort commenced a few months ago of rewriting of the French Employment Code, in order to simplify labour legislation (not an easy task – the 2016 French Employment Code is 3,000 pages long and studded with of cross references).

This is an even more ambitious task than the changes made by the El Khomri law: the owners of this  work were assigned the role of restructuring the French employment code to identify, for each topic, (i) those rules which are of public order and cannot be modified by agreement, (ii) those rules which may be amended through collective agreements, within certain limits, and (iii) those rules which will be applicable if no collective agreement is relevant.

French employment law is permanently changing, testing our adaptability capacities!

Much attention was focused recently on President Obama’s decision, in the final days of his presidency, on commuting the sentence of Chelsea Manning, who provided certain classified information to WikiLeaks. In France, new legislation has recently been passed and implemented harmonizing the protection of whistleblowing employees (https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=4BBFD240827AF0FD9A6340FF254E6F1B.tpdila21v_3?cidTexte=JORFTEXT000033558528&categorieLien=id).

Who is concerned?

Under the new regulation, whistleblowers are defined as “any individual who reveals or reports, acting selflessly and in good faith, a crime or an offence, a serious and clear violation of an international commitment which has been ratified or approved by France or of an unilateral act of an international organisation adopted on the basis of such commitment, or a serious breach of a law or regulation, or a serious threat or harm to the public interest, of which the individual has had personal knowledge”.

Facts, information or documents, regardless of their form or the manner in which they are materialised, which are subject to professional secrecy rules (lawyer or doctor) and national defence secrets are excluded from the scope of the new rules.

Whistleblowers’ obligations

The law provides that in order to benefit from the protection afforded by the new rules, whistleblowers must follow a specific procedure:

• First, the report must be made to a direct or indirect supervisor or a person appointed for this purpose;
• If such report is not followed by any action (or in case of serious and imminent danger, or where irreversible risks are triggered), the report can be made to the judicial or administrative authority, or the representative of a professional order;
• As a last resort, the report may be made public/reported to the press.

The report may also be addressed to the defender of rights (“Défenseur des droits”), an independent administration that acts as an ombudsman that will help the whistleblower to redirect such report to the relevant authority.

Companies’ obligations

Internal reporting procedures must  be implemented by private and public sector entities employing at least 50 employees. These procedures must ensure strict confidentiality of the identity of the whistleblower, the identity of the person on which the report is made and the information collected. An upcoming government decree (which has been announced to be promulgated in March 2017) will specify the conditions and modalities under which these procedures should be implemented.

Larger companies attaining a sufficient turnover and headcount are required to implement additional measures (including compliance programs).

Protection afforded to the whistleblowers

The Sapin II Law provides for anti-retaliation rules, and protects whistleblowing employees (in compliance with the abovementioned rules) against discrimination. Protection is also afforded to the person in respect of which the report is made. Measures contravening such principles are susceptible of being declared null and void, and employees dismissed in breach of such rules may bring an action before the Employment court, in summary proceedings.

Moreover, whistleblowers cannot be held criminally liable for disclosing a secret protected under French law, provided the disclosure is necessary and proportionate to safeguard the interests involved and complies with the reporting procedures provided by the law.

A significant amount of new employment legislation is expected or is already in place for 2017. Key changes will be in the hiring of temporary workers through an agency (referred to as “personnel leasing” in Germany), employee protection and equal treatment.

Reform of laws regarding personnel leasing

One of the main developments in 2017 will be the long expected reform of the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG), as well as other related laws, with effect from 01 April 2017. Aiming to reinforce the rights of temporary workers during personnel leasing and in particular to prevent the malpractice of work contract arrangements (Werkverträge), (these are contractual arrangements under German law intended to circumvent the applicability of the German Act on Temporary Employment), the key changes include:

• A maximum leasing duration of 18 months (extendable in certain cases by way of a collective labour agreement or works agreement);
• A requirement that the personnel lease be labelled as such in the agreement between lender and borrower;
• The principle of equal treatment will apply including equal pay, with restricted possibilities of deviation;
• The prohibition of the use of temporary workers as strike-breakers;
• Consideration of temporary workers in most relevant legal thresholds in rules on works constitution and corporate co-determination.

Maternity Protection

Initially planned to take effect in January 2017, significant changes to the German Maternity Protection Act (Mutterschutzgesetz – MuSchG) aimed at improving the health protection of nursing mothers and pregnant women as well as the (unborn) child, are expected to be implemented in the course of 2017. Changes are expected to include the expansion of the scope of the Maternity Protection Act so that it covers not only employees and homeworkers, but also – amongst others – third party managing directors, apprentices and trainees as well as, in certain cases, pupils and university students. Further, it is intended to extend the 12-week maternity protection period after childbirth (i.e. the period during which employees are not allowed to work) to mothers who have given birth to a disabled child, and the special protection against dismissal to mothers who have had a miscarriage after week 12 of pregnancy. The latter may then not be dismissed for a period of 4 months after such miscarriage.

Changes intended to improve wage equality

Aiming to close the „gender pay gap“ in Germany, the Federal Cabinet decided upon the introduction of the Law for the Promotion of Transparency of Pay Structures (Entgelttransparenzgesetz) at the beginning of this year. Planned to take effect in July 2017, the law in particular affords employees in companies with normally more than 200 employees, the right to information regarding the criteria and procedure for wage determination as well as the right to information about the average monthly gross wage and two other wage components of comparable employees of the opposite gender, if there are at least six employees in that comparable position. Besides this, companies with more than 500 employees are requested to examine (by way of a survey, an analysis and a final report) their compliance with wage equality requirements in their business and, if a breach is determined, to implement the necessary measures to ensure compliance.

For more information, please see our previous blog post in German.

Envisaged changes regarding rules on occupational pensions

A draft bill for a law aimed at making occupational pensions more popular with SME’s and low-income earners (Betriebsrentenstärkungsgesetz) is currently being discussed and – if passed – will be implemented in 2017. The proposed changes include the introduction of a defined contribution commitment and the ability to stipulate compulsory deferred compensation in collective labor agreements (which will include a right of objection for the employee, the so called “opting-out system”). Furthermore, the proposed changes include a special tax relief for employers when they pay a certain amount of occupational pension for their employees and fulfill further requirements as stated by the draft bill.

Recent changes for severely disabled employees

The law on the improvement of the participation and self-determination of persons with disabilities (Bundesteilhabegesetz) came into force on 01 January 2017 and considerably strengthens the protection afforded to severely disabled employees. Most importantly, the dismissal of a severely disabled employee with or without due notice is now (similar to the rules governing the participation of the works council participation before a dismissal) invalid, if the representative body for severely disabled employees is not heard prior to the dismissal. Furthermore, it is intended that the definition of “disability” will be as defined by the UN Convention on the Rights of Persons with Disabilities with effect from 01 January 2018.

For more information, please see our previous blog post.

Discussed changes for part-time employment

Another draft bill currently discussed could lead to amendments to the German Act on Part-Time Work and Fixed-Term Employment (Teilzeit- und Befristungsgesetz – TzBfG). The proposals include the introduction of a right for employees who temporarily switch from full-time to part-time work, to return to their full-time employment. Such a right currently only exists for those who switch to part-time employment during parental leave and leave for carers.

Minimum wage adjustment

Finally, while transitional provisions still apply to certain industrial sectors, the minimum wage was increased from EUR 8,50 to EUR 8,84 as of 01 January 2017.

This post was prepared with the assistance of Kilian Kliemann, Trainee, Norton Rose Fulbright LLP (Munich).

In France, the issue of religious behavior in the workplace is extremely sensitive.

The principle under French employment law is that while public sector employers are required to enforce a policy of strict neutrality, in private sector companies, a balance must be maintained between the principle of secularism and the prohibition of discrimination based on religious beliefs.

On this basis, French employers can limit certain religious’ behavior in the workplace if :

• the prohibition is justified by the nature of the tasks to be performed by the employees,
• the prohibition responds to a determining and essential professional requirement, and
• the prohibition is proportionate to the goal to be achieved.

The El Khomri law dated 8 August 2016 has created a new principle under which employers can create  restrictions on religious behavior in the company’s internal regulations (“règlement intérieur”),  which is a specific document which must be established in all companies employing at least 20 employees, setting out the main rules regarding health and safety, discipline, discrimination and harassment.

To help companies, the French Labour Ministry has also recently published a guide in a Q&A format. This guide has the goal of defining the potential behavior and attitudes which could be considered as inappropriate and/or discriminatory so that employers avoid such situations.

But the subject of discrimination related to religion is never far off.

Recently the French Supreme Court, in a decision dated 1st February 2017,  effected a fairly strict application of the prohibition of discrimination based on religion. This decision concerns employees who are required to take a public oath to be authorized to perform their duties (e.g. public notary, accounting experts, lawyers, or public inspectors).

In the relevant case, an employee, who was recruited to work for the public transportation service, refused to pronounce the words “I do swear” when taking the oath because of her Christian religion. Therefore, she suggested to replace the traditional formula by the sentence “I make the commitment/I undertake”. The tribunal refused her proposal and the company decided to dismiss her for serious misconduct as she could not be considered as a sworn public officer.

The Supreme Court ruled that this dismissal was discriminatory as it was based on the employee’s religious beliefs. Therefore, even though French law tries to soften the possibility for the employers to prevent employees from manifesting their religious beliefs, non-discrimination remains a constitutional principle which cannot be jeopardized.

However, it is important to note that the Supreme Court based its decision on the fact that the expression “I do swear” was not required in order for the duties to be performed by the employee at hand. Therefore, the solution might be different if a lawyer refused to take the oath with the traditional formula.

Proposed changes to the current Working Conditions Act (Arbeidsomstandighedenwet) (the Act) are expected to have a direct impact on all companies in the Netherlands. The changes will mainly impact on the current relationship with the occupational health & safety service provider (Arbodienstverlener); existing policies in relation to sickness prevention; and conditions that apply to the services of the company doctor. The employer will also have to attribute a clearer role to the prevention officer (preventiemedewerker) and the works council or employee representative body (ERB) (if any) will have a right to consent to such appointment.

Although there will be a transition period of one year after the implementation date for companies to become fully compliant, it is important to review the changes below as a change to existing policies and procedures is unavoidable.

Most important changes to the Act

Clearer role of the prevention officer

At present, an obligation exists to appoint at least one prevention officer within a company. The officer is responsible for

– the creation and running of the risk inventory and evaluation (RI&E);

– providing information and education;

– recording and investigating accidents;

– advising the works council/ERB; and

– answering questions on health and safety from employees within the organization.

The proposed changes to the Act attribute a clearer role to the prevention officer. The employer will be required to enter into an agreement with the prevention officer in relation to his duties and the performance of his role, and the company doctor must support the prevention officer in the execution of his role and vice versa.

Right of consent for the works council or ERB

The works council or ERB (if any) has the right to consent to the decisions of the employer that relate to the appointment of a prevention officer; his role within the organization and the envisaged cooperation with the company doctor/occupational health & safety service provider; and the appointment of other company doctors/other occupational health & safety service providers who can provide a second opinion. The new Act refers to applicability of Article 27 paragraphs 3-6 of the Dutch Works Councils Act, which means that any of the aforementioned proposed decisions can in principle not be implemented by the employer if such consent is not obtained.

Additional rights and obligations of the company doctor

The amended Act will also introduce additional rights in relation to the roles of the company doctor.

• All employees will have the right to visit a company doctor during office hours without the employer’s prior approval. Such a right also exists even if the employee is not on sick leave or if no health issues are present. These visits are confidential and the employer will not be notified.
• The employer will have to provide the company doctor with full access to the workplace. The idea is that this will increase the ability of the company doctor to advise on sickness prevention from a company broad perspective.
• The company doctor will in principle have to grant employees the right to a second opinion.
• The company doctor can be penalised if he fails to allow the employee a second opinion and he does not have a complaints procedure in place; he does not collaborate with the prevention officer and/or the works council; or he fails to give his advice in relation to the testing of the RI&E to the works council or ERB.
• The company doctor will be granted the right to consult with the works council or ERB (if any). This will mean that the company doctor can be involved in establishing the health & safety policy.
• The company doctor will be obliged to report occupational diseases to the Netherlands Centre for Occupational Diseases (Nederlands Centrum voor Beroepsziekten).

Health & Safety framework agreement

Minimum requirements will apply to the framework agreement with the occupational health & safety service provider, including the requirements for prevention of occupational diseases and long-term absence; the rights and obligations of the company doctor and how these can be safeguarded; and the rights of employees in relation to health & safety, including reference to the second opinion and the complaints procure.

Action required

After the implementation date, companies will have a year to amend the existing arrangement with their occupational health & safety service provider and their internal regulations. The existing agreement with the occupational health & safety service provider and internal policies in relation to inter alia health & safety, absenteeism, sustainable employability etc. should be reviewed and then modified to the requirements of the new Act. We expect a pro-active approach from occupational health & safety providers in this respect.

Changes to current policies are essential as the Inspectorate of Social Affairs and Employment (Inspectorate SZW) will have greater scope to impose penalties on employers, occupational health service providers and company doctors in cases of non-compliance with the new regulations.

Conclusion

All Dutch companies are affected by the above changes and should take action to become compliant. Please feel free to contact Maartje Govaert or Thomas Timmermans for any advice or further questions in respect of the above.

On 7 March 2017, one year after the implementation of the Senior Managers and Certification Regime (SM&CR) which was introduced to improve accountability in the financial services sector, two further requirements have come into effect: The regulatory reference requirements; and the rolling out of the Conduct Rules to a wider range of employees.

Regulatory references

The new rules on regulatory references will apply to certain large financial services firms (mainly UK banks, building societies and insurers).  The premise is that where a firm is proposing to hire a candidate for certain senior management roles a reference must be sought from all the candidate’s employers over the preceding six-year period.  This would apply even if the employee has worked outside the UK or for an unauthorised firm, in which case the hiring firm must make reasonable efforts to obtain a reference.

Under the new regime, a firm who receives a request for a reference must respond within six weeks using a mandatory template. The template requires that any information relating to the fact that the applicant was not a fit and proper person or details of any breach of the individual conduct rules is included.  The reference need only disclose matters where a firm has concluded these points – and this would not cover matters where disciplinary issues have come to light but a firm has not yet reached a conclusion or where the individual has resigned prior to the completion of the investigation or disciplinary process.  This will also affect the terms of any settlement agreement as employers are prohibited from entering into an agreement with the employee about the information in the regulatory reference.

Employers who are regulated will also have a duty to update regulatory references within six years of the employee leaving the business where they become aware of information which would have affected the original drafting.

The purpose of the regulatory references is to make it harder for senior staff with poor conduct records to be “recycled” between firms. It remains to be seen whether the new rules will have the desired effect of weeding out all those with poor conduct records and how employers in this sector will deal with the additional regulatory burden.

Conduct rules

The Conduct Rules are an important component of the regime to increase the accountability of senior individuals. The rules are intended to provide a framework against which the regulators in the UK (the Prudential Regulatory Authority and the Financial Conduct Authority) can judge an individual’s actions as part of the general supervision of a firm.

From 7 March 2016, the new Conduct Rules replaced the Statements of Principle and Code of Practice for Approved Persons (APER) for senior individuals. From 7 March 2017, the Conduct Rules will also apply to certain individuals in relevant firms who were not previously covered by APER. The rules will now apply directly to nearly all staff within the relevant firm.  Only those staff  who are considered  ancillary staff (i.e. whose role is not specific to the financial services business of the firm, for example catering staff) will not be covered.  One reason behind the extension of the Conduct Rules to such a wide population of individuals was so that a common understanding of what is acceptable and unacceptable behaviours at all levels of a firm could be achieved and therefore culture change could be effected.

The rules are split into first tier, which comprises of individual conduct rules that the regulators consider relevant across all roles in which individuals are subject to the conduct rules, and second tier which apply to senior managers.

Firms must also ensure that all staff who are subject to the rules are aware of them and how they apply to their jobs. This includes delivering suitable training to provide a broad understanding of all of the rules and a deeper understanding of the practical application of the specific rules which are relevant to the employee’s individual work.

From 7 March employers will need to have in place policies and procedures relating to the conduct rules to cover a much wider section of the workforce.

Dual employment is a sensitive subject in French employment law as it enables employees to raise claims against a different employer from that with which the employment contract was signed.

The matrix-type organisation of groups of companies, which has become the rule, can have adverse consequences if employees have the feeling that they are employed by the group as a whole and not by the company to which they are bound under their employment contract).

As long as the economic situation of the employer is flourishing, the risks are remote. However, issues generally arise when the French member company of the group which actually employs the employee shuts down its operations and effects redundancies.

In such circumstances, employees may not benefit from the financial resources available within the group and are tempted to demonstrate that the parent company was also their employer, in order to base a claim that the parent company should be ordered to assume and support the obligations of the subsidiary.

This concept originated approximately 6 years ago and since that time, French employment courts have for the most part accepted such legal recognition. However, they have recently changed their position and a shift in the courts’ decisions can be observed beginning in 2014, leaning toward a restrictive stance of dual employment, the courts considering that dual employment would require a showing of an unusual level of interference of the parent company in the economic and social management of its subsidiary. This interference must go beyond the necessary coordination of economic actions between companies belonging to the same group and the economic domination which can transpire from the usual relationship between a parent company and its subsidiaries.

As an example, in a decision dated 6 July 2016, the Supreme Court decided that a dual employment situation did indeed exist due to a link exceeding the usual cooperation between a subsidiary and its parent company.

In this case, the Supreme Court observed that (i) in the context of reorganization, a certain number of employees of the parent company’s central services (IT, HR and accounting employees) were transferred to another entity of the group, (ii) the recruiting of employees was centralized and the subsidiary company had no power of recruitment, and (iii) the contractual, administrative and financial issues were handled by another company of the group.

French case law regarding dual employment is still changing, and against all odds, a Court of Appeal recently opened a new door to employees, holding that in certain circumstances, even where dual employment cannot be characterized, employees could still bring a tort action in court against the parent company to obtain damages.

Uncertainties regarding dual employment therefore still exist, and extreme control by parent companies over their French subsidiaries is therefore to be avoided.

This post was contributed by Jahan Meeran, Trainee Solicitor, Norton Rose Fulbright LLP, London

A recent decision of the Employment Appeal Tribunal (EAT) illustrates the pitfalls of not adopting a sensitive consultation process in the event of redundancy..

In the case, the claimant had been employed by the property management division of his employer for over 40 years. Following a strategic review, the company decided to reduce the number of director roles. On 6 January 2014, the claimant was put on garden leave and placed into a redundancy pool comprising only himself. On 8 January a letter was sent to the claimant addressing him with the wrong name (“Paul” instead of “Peter”). Via further correspondence in January 2014 he was later provided with a list of alternative vacancies and suggestions. In a final consultation meeting on 13 February he was confirmed redundant. He was then sent a dismissal letter on 14 February which had the wrong termination date in it. The claimant believed that the redundancy process was a sham and that the company had a policy of dismissing employees at around age 60 and brought a claim for unfair dismissal.

The employment tribunal found that the consultation was insensitive but that the claimant had not been unfairly dismissed.

The EAT disagreed. It found that the consultation process was perfunctory and insensitive and therefore, absent any further findings or information, it cannot have been reasonable. The unfair dismissal claim was therefore remitted to another employment tribunal.

The case demonstrates that the redundancy process must be handled in a sensitive manner. Communications should be carefully drafted and the decision to place ‘at risk’ employees on garden leave should not be taken lightly.

Dismissing an employee due to economic difficulties is extremely delicate in France. A law dated 8th August 2016 has specified the definition of the economic grounds for dismissals, providing that economic difficulties are, in particular, characterized by a significant evolution of an indicator such as a significant drop of turnover, a significant drop in purchase orders, operating losses, worsening of cash flow or gross operating profit or any other elements which can evidence such economic difficulties.

Case law imposes a very strong obligation on employers before envisaging any redundancy and the main applicable principles regarding employees’ individual rights have not been subject to any major changes, in spite of the numerous courts decisions and the multiple laws passed over the last few years. To summarize briefly:

• Employers are required to establish objective criteria as set forth in relevant legislation or by the applicable collective bargaining agreement and apply them to each category of affected positions for the purpose of determining which employees will be subject to the dismissal procedure. The French Supreme Court has recently held that when applying the selection criteria, the companies need to take into account all relevant criteria, and no criterion may be neutralized;
• Employers are required to consider re-deploying any potentially redundant employees elsewhere in the company and the group. The redundancy can only be notified after the employer has studied all the redeployment possibilities within the company and the group;
• The employees dismissed on economic grounds are also entitled to several benefits and indemnities related to the termination of their employment contract (notice period, severance payment, paid holidays indemnity etc);
•  Moreover, employees also benefit, depending on the company’s / group’s headcount, from a personalised redeployment leave financed by the State or from a redeployment leave financed by their employer, the goal of which is to support the employees in order to help them find another job or retrain;
•  Also, a re-hiring priority is applicable during a period of one year following the expiry of the employment contract: if the employee so requests, the employer is required to offer the employee any position available in the company following the economic dismissal compatible with the employee’s qualifications.

Employees who are dismissed in the context of a collective redundancy procedure generally also benefit from additional rights (indemnities, assistance from outplacement agencies, etc.) resulting from the employer’s obligation to implement a job saving scheme (“plan de sauvegarde de l’emploi”), when the termination of at least 10 employees is contemplated in a company employing at least 50 employees. Such scheme should be negotiated with union representatives or decided unilaterally, and is subject to approval by the labor authorities. The purpose of a job saving scheme is to avoid or limit the effects of any dismissals.

The duty of care is an obligation for companies to prevent social, environmental and governance risks related to their activities. A very recent law published on 28th March 2017 has reinforced such duty of care.

The duty of care concerns French companies employing, at the end of 2 consecutive fiscal years, at least 5,000 employees in France or at least 10,000 employees in the entire world (the headcount should be assessed including the employees of their subsidiaries).

These companies must establish and publish a “duty of care plan” to identify and prevent environmental, human rights, health and safety and corruption risks regarding not only their own activities, but also those of their subsidiaries, subcontractors and suppliers with which a long term commercial relationship exists, in France and abroad. This plan should include the following :

• a risk mapping aimed at identifying, analysing and classifying such risks;
• procedures for regular evaluation of the situation of subsidiaries, as subcontractors and suppliers;
• appropriate actions in order to mitigate the risks and prevent serious harm;
• a warning mechanism and a compilation of all the reports/alerts related to the existence and materialization of such risks, such documents being prepared in cooperation with the representative unions of the company;
• a mechanism for monitoring the measures taken and an evaluation of their efficiency.

Breach of such requirement, or a failure to implement such plan may result in liability of the company. A claim can be brought before a court, in summary proceedings, after a formal notice which has remained unanswered following a three-month period. The court can also order the company to comply with its obligations, including by levying penalties on a daily basis in the event of non-compliance.

In addition, the civil liability of the company can be triggered, if the breach caused a loss to a third party.

The text was promulgated in response to various scandals, such as the April 2013 disaster in Bangladesh, in which one building – the Rana Plaza – collapsed, resulting in the death of over 1,000 workers. Several events have raised Europe’s awareness of the working conditions of subcontractors.

Although the law has been welcomed by public opinion, it remains strongly contested by employers who fear a decline in competitiveness for companies. However, it should be noted that the French Constitutional Court struck down a provision in the Law providing that the courts could order companies not in compliance with the duty of care to pay a civil fine amounting to up to EUR 30 million, resulting in a mitigation of the risk of failure of competitiveness of companies.

This new “duty of care” obligation is consistent with the government’s determination to protect subcontracted workers.

In France, for example, the law guarantees to foreign workers working temporarily on the French territory a minimum protection regarding their working conditions as well as a minimum salary.

In this respect, and amongst other requirements, the project owners have to verify that their foreign contractors or subcontractors have filed the required declaration of secondment and have appointed a representative in France.

Failure to comply with this requirement could lead to an administrative fine of up to EUR 2,000 per seconded employee (capped to EUR 500,000) as well as to the suspension of the service provided by the contractor during a maximum one month’s period. Since August 2016, this obligation of verification has applied to all the members of the chain of subcontractors.

L’obligation de vigilance est une obligation faite aux entreprises de prévenir les risques sociaux, environnementaux et de gouvernance lié à leurs activités. La loi du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre, publiée le 28 mars 2017 au Journal Officiel, renforce l’obligation de vigilance.

Le devoir de vigilance s’applique aux entreprises françaises employant, à la clôture de deux exercices consécutifs, au moins 5 000 salariés en France ou 10 000 salariés dans le monde (filiales comprises).

Ces sociétés doivent établir et publier un plan de vigilance afin d’identifier et de prévenir les risques en matière d’environnement, de droits humains, de santé, de sécurité et de corruption aussi bien au niveau de leurs propres activités que de celles de leurs filiales, sous-traitants ou fournisseurs avec lesquels est entretenue une relation commerciale établie, en France comme à l’étranger.

Le plan de vigilance doit contenir les mesures suivantes :

• Une cartographie des risques, destinée à leur identification, leur analyse et leur hiérarchisation ;
• Des procédure d’évaluation régulière de la situation des filiales, des sous-traitants ou fournisseurs avec lesquels est entretenue une relation commerciale établie ;
• Des actions adaptées d’atténuation des risques ou de prévention des atteintes graves ;
• Un mécanisme d’alerte et de recueil des signalements relatifs à l’existence ou à la réalisation des risques, établi en concertation avec les organisation syndicales représentatives de la société ;
• Un dispositif de suivi des mesures mises en œuvre et d’évaluation de leur efficacité.

Si l’entreprise n’établit pas de plan de vigilance ou ne l’exécute pas, sa responsabilité peut être recherchée. En effet, en cas de mise en demeure restée infructueuse pendant trois mois, la société peut être contrainte, dans le cadre d’une action en référé, de se conformer à ses obligations légales, le cas échéant sous astreinte. La responsabilité civile de l’entreprise peut également être engagée lorsqu’un dommage à autrui est causé.

Le texte de loi a été élaboré en réponse à différents scandales telle que la catastrophe d’avril 2013 au Bangladesh où un immeuble – le Rana Plaza – s’est effondré, provoquant la mort de plus de 1 000 travailleurs. Plusieurs évènements ont permis à l’Europe de prendre conscience des conditions de travail des sous-traitants.

Bien que cette loi ait été accueillie favorablement par l’opinion publique, elle reste très contestée par les employeurs qui craignent un déclin de la compétitivité de leurs entreprises. Toutefois, il faut souligner que le Conseil Constitutionnel a annulé la possibilité pour les tribunaux d’infliger une amende civile de 30 millions d’euros aux sociétés ne respectant pas l’obligation de vigilance. Dès lors, le risque d’une baisse de compétitivité des entreprises doit être considéré comme faible.

Ce devoir de vigilance nouvellement introduit est conforme à la volonté du gouvernement de protéger les salariés des sous-traitants.

En France, par exemple, la loi garantit aux travailleurs étrangers détachés provisoirement sur le territoire français une protection minimale concernant leurs conditions de travail et leur salaire.

A ce titre, le donneur d’ordre est notamment tenu de vérifier que ses cocontractants ou sous-traitants étrangers ont réalisé les déclarations de détachement nécessaires et ont désigné un représentant en France. Tout manquement à ces obligations pourrait conduire à l’application d’une amende administrative de 2 000 euros par employé détaché (plafonnée à 500 000 euros) ainsi qu’à la suspension de la prestation de service pendant une durée maximale d’un mois. Depuis août 2016, cette obligation de vérification s’applique à tous les membres de la chaine de sous-traitants.

The Supreme Court in the UK has given its decision in the conjoined cases of Essop v Home Office (UK Border Agency) and Naeem v Secretary of State for Justice, concerning indirect discrimination.  It has held that it is not necessary for a claimant in an indirect discrimination claim to prove the reason why they were put at a particular disadvantage.

Indirect discrimination arises where an employer applies an apparently neutral rule (known as a provision, criteria or practice (PCP)), which puts an employee (and others who share the protected characteristic) at a particular disadvantage compared to others who do not share that characteristic.

The first case involved a requirement for staff at the UK Home Office to pass a core skill assessment test before they could be promoted to a higher grade.  The claimants, who were all from black and ethnic minority backgrounds and aged over 35, failed the relevant test.  Statistical evidence showed that individuals within that group were less likely to pass the test, although the reason for the lower pass rates by this group were not clear.  At the employment tribunal the employment judge held that it was not sufficient to show that the employees had suffered a disadvantage – to prove personal disadvantage they also needed to show the reason why they had failed the test.  The Court of Appeal agreed, holding that the claimant had to show the reason why the requirement put the group at a disadvantage and that they had individually failed the test for the same reason.

The second case involved an incremental pay scale in the Prison Service, which rewarded length of service. Since Christian chaplains had been salaried employees for longer than Muslim chaplains, their average pay was higher than Muslim chaplains. The claimant brought proceedings which claimed the incremental pay scheme indirectly discriminated against Muslim chaplains. The Court of Appeal rejected the claim on the basis that it was not enough to show that the length of service criterion had a disparate impact on the Muslim chaplains, but it was also necessary to show that the reason for the disparate impact was something peculiar to the protected characteristic.

The Supreme Court, in considering both these cases, held that the concept of indirect discrimination had never required an explanation of the reasons why a particular PCP puts one group at a disadvantage. However, what there must be is a causal link between the PCP and the disadvantage, but not necessarily between the characteristic and the treatment.  There was concern expressed that if the claimant did not have to show the reason why they were put at a disadvantage then this would result in “undeserving” claimants who had failed the test for no reason related to the disparate impact, (for example, because they had turned up late or had failed to complete the test) bringing claims.  However, the court clarified that in those circumstances the respondent would be able to argue that the particular claimant was not put at a disadvantage by the requirement, as there was no causal link between the PCP and the disadvantage.  In addition, there would be a “material difference” between the circumstances relating to each case.

There is also no requirement that the PCP puts every member of the group sharing the particular protected characteristic at a disadvantage. For example, some women may be taller and stronger than some men and would therefore be able to meet a height or strength requirement.  However, as a group they may be more disproportionately disadvantaged.

It is also always open for the respondent to show that the indirect discrimination can be objectively justified as a proportionate means of achieving a legitimate aim. The Essop case was therefore remitted to the Employment Tribunal to determine the claims.  In the Naeem case the Employment Tribunal had already found that the PCP complained of was objectively justified and therefore, although the court held that there was indirect discrimination, it was bound by the tribunals factual findings.

The main issue from these cases is therefore the effect on what the claimant has to prove. They effectively remove the additional hurdle which required an employee to explain the reason for the PCP causing the disadvantage.

Health and safety of employees is highly protected in France. Employers are  responsible for the prevention of any damage to their employees’ health and safety resulting from their work. Amongst other things, French law requires employers to ensure that their employees are protected from any harassment at work.

But another provision of the French Employment Code, which is far less known outside of France, states that employees are also liable to take care, not only of their own health and safety, but also of that of other employees in the company who could be affected by their behaviour or negligence.

The French Supreme Court recently had occasion to clarify the scope of such principle in a recent decision dated 8th March 2017.

In that case, a wide investigation was launched in a retail store in the south of France (member of a significant distribution network) following the disclosure, by a former employee, of an email revealing a pattern of harassment conducted by the management of the store. In the context of this investigation, around 30 employees testified before a bailiff as to the unacceptable actions of the director of the retail store. The responsibility of the human resources manager was also raised, given in particular that she had tried to protect the director against employees.

Following such investigation, the director of the retail store was dismissed for serious misconduct. The HR manager was also dismissed for misconduct, based on her lack of action against the director’s harassment policy and also based on her breach of her own health and safety obligation. The employer also considered that she was partly responsible for the deterioration of the employees’ working conditions.

The HR manager filed a claim against her employer, arguing she did not commit any misconduct because she did not harass the employees herself.

The Court of Appeal, confirmed by the Supreme Court, dismissed the HR manager’s claim, considering in particular that:

• She was completely aware of the unacceptable behavior of the director towards the employees, as she worked in close cooperation with him;
• She did nothing to end the harassment even though as a HR manager, it was her role to ensure a smooth social climate.

This decision is an illustration of an employee’s duty of care. The French employment code provides that all employees may be liable in this respect, taking into account their training and their abilities. HR managers are naturally in the front line given the scope of their duties, and it can easily be imagined that they are subject to a reinforced requirement to protect other employees against any policy of harassment.

Just for once, we will talk about French lawyers. We say “for once”, because only a minority of lawyers in France are employees (a very large majority of us are self-employed).

From a French employment law point of view, although the employee in the particular case we will discuss here was a lawyer, that is actually completely irrelevant to the principle at stake, as the decision rendered by the French Supreme Court can be extended to any employee, regardless of their role.

Generally speaking, an employee’s poor performance may result in dismissal, and poor performance is widely used in France as a legitimate ground for termination of an employee’s contract. In the event of litigation, French courts will verify that certain conditions are met, particularly that the targets assigned to the employee were duly communicated to them (in the French language), and also that such targets were achievable.

In the present case, an employee was recruited as a lawyer by a law firm. In addition to her duties as a lawyer, she was entrusted with the management of a secondary office of her law firm. During the first three years of her employment, she was not subject to any criticism or reproach. At the beginning of the fourth year however, she was notified in writing that the turnover she achieved was significantly under budget, in particular due to late invoicing of her clients. She was dismissed for poor performance a few months thereafter.

The employee challenged her dismissal, arguing notably that the poor results used by her employer as justification for the termination of her employment contract were due not only to the fact that several employees of the secondary office she managed were often absent (and she had not been granted the ability to recruit additional staff), but also that she returned from maternity leave on the basis of a part time contract.

Both the Court of appeal and the French Supreme Court held that the employee’s dismissal was unfair as the poor performance could not be accountable to her. The underlying idea is consistent with the prior decisions of the Supreme Court: an employee cannot be dismissed for poor performance in cases where their employer has not provided them with sufficient material and human resources to perform their duties.

It is not only employees who have the right to claim discrimination: Applicants for employment can also be discriminated against. Employers must therefore ensure that any recruitment process is not discriminatory.

A recent case of Government Legal Service –v- Brookes considered a recruitment process to the Government Legal Service (GLS).  Applicants to that service are required to sit a psychometric test known as the Situational Judgement Test (SJT).  The claimant contacted the GLS in advance and informed them that she was likely to find the multiple-choice format of the SJT particularly difficult because of her Asperger’s Syndrome. She suggested adjustments that could be made, but was informed that an alternative test was not available, but that she would be entitled to additional time at a later stage.  As a result she completed the SJT and narrowly missed the pass mark and so did not proceed to the next stage of the recruitment process.

The individual claimed indirect disability discrimination, discrimination arising from a disability, and a failure by GLS to make reasonable adjustments and was successful in the employment tribunal.

The first ground of appeal to the EAT related to the indirect discrimination claim. To prove indirect discrimination the claimant needed to show that the “provision, criterion or practice” (PCP) (i.e. the requirement that all applicants pass the SJT) put a group of individuals who had Asperger’s Syndrome at a disadvantage compared to those who did not have the syndrome. It was also necessary to show that the claimant herself was at such a disadvantage and it was this part of the tribunal’s decision that was appealed.

The EAT held that the employment tribunal had been entitled to conclude (from medical evidence and an assessment of the claimants background and experience) that the PCP placed the claimant herself at a disadvantage. No alternative theory had been put forward by GLS as to why she had failed to achieve the pass mark and therefore it was possible for the tribunal to conclude, on a balance of probabilities, that it was as a result of the format of the test.

The second ground of appeal was whether the requirement to sit the SJT in the form of multiple choice questions was unjustified both for the indirect discrimination claim and also in determining the reasonable adjustments that the employer should make.

The EAT held that it was not possible to justify the process as being a proportionate means of achieving a legitimate aim. Whilst the EAT acknowledged that it was necessary for the GLS to test an applicant’s competency, this was not the only means of doing so as an alternative form of assessment (namely short narrative responses) was available. The argument in respect of the reasonable adjustments was similar; given the scale and duration of the recruitment process and the resources of the GLS, an alternative option could have been available.

Employers should therefore take care in establishing the testing process. Although psychometric testing is often used to provide a level playing field and to avoid human intervention or judgment, if an employer is asked to make an adjustment to the assessment process for recruitment which could be processed without affecting the validity of the test, then it should be carefully considered.