Employment 2023

Introduction

The Chambers Employment Guide 2023 introduces employment law matters across 53 jurisdictions. The Guide contains the latest legal information from around the globe on the main changes in employment law that have been enacted or decided in the past year, general remarks on employment contracts and conditions, non-compete and non-solicitation clauses, the data privacy law, the employment of foreign workers, “new work”, the role of unions, termination of employment, employment disputes and dispute resolution.

Employment Law

People are at the core of every company’s potential for added value. They manage the ongoing business and develop innovations for future progress and growth. This is why the key component for success in any organisation is how its people work together. The way in which this co-operation is achieved and the framework within which organisations can shape it is regulated by employment law. Due to the relationship of superiority and subordination between employer and employee, the employer enjoys a considerable advantage within this framework. Employment law therefore acts as a balance between the contractual freedom of the parties on the one hand and the protection of employees on the other.

To further redress the disparity between employer and employee, most jurisdictions provide for collective employment law in addition to individual employment law. Individual employment law deals with the legal relationship between the employer and the employee, while collective employment law deals with matters between employers or their coalitions (employers’ associations) and trade unions or co-determination bodies (eg, works councils).

Further peculiarities arise in the event of disputes. In employment law, the economic interests of the parties are particularly important. Employers pursue economically calculated goals; employees rely on their employment relationship for their livelihood. In practice, this often requires quick, pragmatic and interest-driven solutions. More than in almost any other field of law, negotiation skills are indispensable in order to succeed in employment law and cannot be replaced by mere legal expertise.

Global Employment Law

Employment law is primarily national law – the scope of application of employment laws is determined by national boundaries. This leads to different practical implementations and regulations in different countries. One advantage of this is that the states concerned can individually adapt regulations to their requirements and structures. However, in a world where cross-border relationships, takeovers and international contracts have become common practice, this approach can also lead to difficulties, precisely because regulations are designed and applied individually by each country. It is therefore imperative for managers and HR staff not only to know the local employment law standards, but also to have a more general overview and to be aware of the standards in other countries.

This has been confirmed particularly by the global COVID-19 crisis and its aftermath. Throughout the course of the pandemic, companies recognised that there was less need than previously for a constant workforce in the office, and they became more receptive towards remote working arrangements. As a result, we have seen a global trend towards more flexible working models. As employees strive to work flexibly around the globe, local employment laws are reaching their limits. At the same time, countries have been concerned with amending legislation to ensure the health and safety of employees taking advantage of these new possibilities.

Current Developments

Several current developments have influenced employment law globally in recent years and will continue to do so in the future.

Flexible work models

Models such as working from home, mobile working, video conferences and desk sharing have been part of the modern world of work since the COVID-19 crisis at the latest. Along with new regulations come a variety of laws that aim to support a healthy work-life balance as the two areas become increasingly blurred. A good example can be found in Belgium, which has implemented a law which foresees the “right to disconnect from work”.

Work-life balance

Companies around the world are increasingly concerned with work-life balance as a non-monetary incentive in the competition for the best staff members. Many legislators are supporting this trend with regulations that make it easier to combine family and career, with a particular focus on combating the growing shortage of skilled workers. In Europe, this has been driven mainly by the need to adopt EU directives in national law. These include, for example, the right to paid birthday leave and parental leave in many EU member states, as well as regulations regarding part-time working models and provisions regarding remote working.

Inflation crisis

Rising inflation is also having a global impact. On top of significant financial losses during the COVID-19 crisis, a global slowdown in economic growth – driven in part by the war in Ukraine and the global energy crisis as well as the COVID-19 aftermath – has caused a striking fall in real monthly wages in many countries. The cost of living has increased rapidly, with a particularly significant impact on low-income groups.

While schemes such as short-time work compensation and wage subsidies have largely protected wage levels from the effects of the pandemic, adequate adjustment of minimum wage rates could be an effective tool to help maintain purchasing power and living standards in the current inflation crisis.

Supply chains

There are also developments regarding the fair treatment of staff in supply chains. The global aim is to improve the protection of human rights all the way along global supply chains. To meet this objective, the prohibition in particular of child labour and forced labour is to be enforced and controlled, as well as the prohibition of substances that are harmful to people and the environment. As early as June 2011, the Human Rights Council issued the UN Guiding Principles on Business and Human Rights. These principles aim to address violations of human rights in the context of economic activities. In order to effectively implement these values and principles adopted by the UN, the German government, for example, is pushing for internationally comprehensive standards regarding fair global supply and value chains with its own national legislation. The German Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtgesetz – LkSG) is the binding implementation of the UN Guiding Principles and came into force in January 2023.

Whistle-blower protection

One of the most significant European and global developments has been the adoption of the Whistleblowing Directive in national law by EU jurisdictions. Although most member states have now implemented the directive, many initially gave employers a period of grace in which to establish internal reporting processes, some of which will soon expire.

Outside Europe, countries are also encouraging employees to report information on violations of laws or regulations they become aware of at work. In Singapore, for example, the Ministry of Manpower recently took steps to raise awareness of the various channels through which workers can report health and safety problems at work, and to provide legal protection for workers who raise concerns.

Transparency

Global developments in the area of transparency – particularly pay transparency – are likely to continue since the entry into force of the EU Pay Transparency Directive in April 2023. Member states have three years to implement the directive into national law, which will lead to significant changes for many member states. There have also been developments in this area outside Europe, including in the US, where New York has become the latest US state to introduce legislation on pay transparency in job advertisements.

Equal pay

There have also been a number of recent developments in case law on equal pay. In Germany, for example, the Federal Labour Court recently rejected an employer’s attempt to justify a pay gap between men and women on the basis of pay negotiation variations.

Climate crisis

The climate crisis will have a lasting impact on employment law. The conditions under which work is performed vary in terms of carbon footprint. One example is the efforts by employers to minimise travel distances and the associated CO₂ emissions caused by employees travelling to work. In terms of employment law, this means that regulations regarding remote working or the promotion of climate-friendly means of transport are relevant. The sustainable use of resources and the reduction of transport distances require global production chains to be set up more locally in different locations. A correspondingly closer linkage of operational processes requires global alignment and more flexible options under employment law.

The Guide’s Purpose

Employment law is always in a state of flux and is constantly faced with new challenges due to ever-evolving technology and digitalisation, as well as social developments. Thus, new working models are regularly introduced all over the world and methods are developed to adapt work to modern lifestyles, the needs of society and the circumstances of everyday life. A variety of measures, which differ from country to country, have not infrequently led to highly divergent and sometimes contradictory results. A comparative view of local employment laws in international relations would thus appear essential in a globalised world of work.

Remaining appraised of new legal developments and maintaining the visibility of these on the horizon continues to be critical for employers. As employment laws differ from country to country, this guide aims to answer the most relevant questions in employment law in its participating countries and to provide an insight into current issues.