Be Global: Global employment law trends and predictions at the close of an extraordinary year
2020 has been an extraordinary year for employers as the pandemic and its effects continue to have a profound impact on labour markets and workplaces the world over. Many businesses were forced to rapidly transition to remote working while dealing with unprecedented economic challenges, as countries shut down and governments introduced schemes and subsidies to avoid devastating global job losses. Employers have taken on a level of responsibility for worker health and safety like never before, implementing measures to protect workers not just from an infectious virus but also the damaging impact of the pandemic on mental wellbeing. With vaccines being rolled out around the world, many employers are now asking if they can or should mandate employee inoculation. All this during a year when the focus on inequality inside and outside our workplaces deepened following worldwide anti-racism protests sparked by the killing of George Floyd, the reverberations of the #MeToo movement continued to be felt, and the climate crisis intensified.
As we look ahead to 2021, many challenges remain. There will be some tough months ahead, but there are also opportunities. 2020 revealed an enormous capacity for rapid business transformation and the willingness and ability of employers and employees to adapt and innovate at pace out of necessity. Many workplaces will change for the better, with workers able to enjoy greater flexibility in how and where they work. Companies that build on the high levels of employee engagement and support that we have seen this year are likely to reap benefits in terms of employee trust, loyalty and productivity. The crisis has also caused many businesses to pause and rethink, to make sure their purpose meets the needs of workers, customers and communities. Our new work paradigm could help bring real and meaningful change.
In this review of 2020 and preview of 2021, we identify the top trends impacting global employers and share our predictions for the coming months. We also have produced country by country reviews of 2020 and previews of 2021 for over 35 countries across EMEA, APAC and the Americas.
Remote working
While the mass global migration to home working started as a necessary temporary lockdown measure, as the pandemic continued to prevent a return to normal, home working became a longer-term reality for millions of employees around the world. Businesses had to move quickly to set up the infrastructure and equipment to enable remote working, deal with employees stranded abroad due to closed borders, and manage the panoply of risks related to a remote workforce (including cybersecurity, wage and hour, health and safety, home office expense reimbursement to name but a few). This raised unprecedented practical challenges as many countries did not have the legal infrastructure in place to address employers’ and employees’ obligations and rights in relation to home working on this scale.
Remote working as a longer-term or even permanent option raises additional challenges, from corporate establishment and tax implications for employees working from outside their “home” country, to potential impacts on organizational culture and employee expectations. Our Global Remote Work Guide addresses the key challenges across 32 countries.
In recent months, we have seen an upsurge in new laws regulating remote work / telework – a trend we expect to continue. For instance, Spain approved a new remote work law in September 2020. In France, social partners concluded a new national agreement on telework in November 2020. Russia’s new rules will come into force on 1 January 2021. New rules on remote work / teleworking are also expected during 2021 in Poland, Colombia, Brazil and remain under discussion in Portugal and Germany. In Hong Kong, while not directly aimed at remote working, recent amendments to discrimination legislation have made it clearer that employers can be liable for the conduct of their employees towards other individuals when working in locations outside the office, such as co-working spaces.
In workplaces where employees can work from home longer-term, we expect many employees will opt for a more flexible and hybrid experience going forward, working partly in and out of the workplace. This will have consequences not only for the amount of workspace required and how it is configured, but also workplace culture, forcing employers to think about how to create a level playing field and shared experiences for all employees, regardless of where they are based. Employers that embrace a hybrid work environment and make it work for everyone, are likely to reap dividends.
Government support schemes / subsidies
An extraordinary number of government funded support measures were introduced around the world this year in an effort to keep businesses afloat and protect jobs. Many consisted of some form of employment support scheme allowing employers to furlough / stand down employees and / or reduce working hours and with government funding to top up wages for hours not worked (e.g. in UK, France, Germany and Denmark). Other countries (e.g. Hong Kong, Ireland, Australia and the US) offered wage subsidy schemes or enhanced unemployment benefits for employees working in businesses that could demonstrate a decline in business.
Most of these schemes came with significant conditions, including restrictions on employers terminating employees, or at least declaring an intention to retain employees, with the risk of clawback if the conditions were not met. There was also the potential for serious brand damage for businesses taking funds that were not seen as strictly necessary for survival.
Some countries went further; Italy for instance imposed a ban on all employers making economic dismissals, whether or not they themselves had benefited from government support. The ban started in March 2020, remains in place at the time of writing, and has been extended to 31 March 2021 (and possibly beyond). Spain’s termination ban obligates employers who benefitted from state support to retain staff six months after business resumption. In the UK, the press has reported that a number of high profile businesses returned furlough subsidies after backlashes when healthy revenues or senior level salary raises were announced.
While many of these schemes have been or are starting to be phased out, some will continue well into 2021. Employers should check that there are no on-going restrictions in place before taking any significant cost-cutting measures.
Restructuring / cost saving measures
With many workplace closures running into many months, and widespread labour market disruptions continuing, the global subsidies have not been enough to prevent all fallout, and some of the badly hit sectors had no choice but to implement significant and wide ranging cost saving measures.
Restructuring fairly and lawfully is challenging at the best of times and more complex than ever as a result of considerations introduced in response to the pandemic. As discussed above, many employers have been subject to restrictions on termination, whether that’s an express ban on all economic terminations, such as in Italy, Spain, Argentina and India, or a ban on dismissals during / after receiving government support, such as in Portugal and Hong Kong. Some countries that offered employer subsidies didn’t impose an express ban on dismissals but nonetheless strongly encouraged employers not to implement layoffs e.g. the Netherlands and UK (during the original furlough scheme). In France, while dismissals have not been banned, the administration is likely to be more demanding on social plans and subsidies may need to be repaid if dismissals proceed.
Business justification is an essential element of a restructuring process, and while the pandemic is likely to be a justification for layoffs, it’s worth remembering that the threshold differs across countries. In some, including the UK, US and Australia, it can be relatively straightforward to justify a redundancy, whereas in others, the threshold is higher, e.g. in France, Spain and Japan, where evidence of losses or a decline in revenue is required over a set period. Where government subsidies remain in place, even if there is not an express ban on dismissals, the justification for dismissals may be challenged at least until any subsidies have been exhausted. Even in those countries typically considered less risky, businesses may need to account for new laws and requirements. In the US, for example, several states enacted significant changes to Worker Adjustment and Retraining Notification (WARN) acts – laws that require employers to give advance notice to employees of qualified plant closings and mass layoffs based on statutorily defined thresholds.
Communication, information and consultation, all essential components of a restructuring program, are made all the harder when employees are not in the workplace or on a period of furlough / leave. This year many employers have had to navigate consultation remotely. Some countries suspended some of the formalities required; for instance in France, timeframes for approval of social plans were suspended for a limited period and video conference was recommended for works council consultation. In China, where wet signatures are generally mandatory for employment documents, for a time companies could use e-signatures as a result of the pandemic.
At the same time, this year we have seen many examples of trade unions and works councils working constructively alongside employers in a spirit of collaboration to find ways for businesses to stay viable while protecting as many jobs as possible.
We anticipate that restructuring will continue to be a major focus for many businesses well into 2021.
COVID-19 testing and vaccinations
The pandemic has brought health, safety and medical issues to the fore in the workplace in a way we haven’t seen before. Employers have had to grapple with infection prevention measures in the workplace, the provision of masks and protective equipment, implementing social distancing, temperature and symptom testing, tracing apps, virus testing, and more recently, questions around the rollout of the COVID-19 vaccine and whether this could or should be made mandatory.
These challenges engage a complex range of legal considerations including health and safety laws, employment and discrimination laws, personal injury risk, human rights as well as significant privacy issues, many of which we considered in our article on the top issues for global employers to address in return to work plans.
Now that COVID-19 vaccines are starting to be rolled out around the world, a question many employers are asking is whether they can or should mandate employee inoculation. Aside from the legal issues – of which there are many – it is probably too early to say, given that, at the timing of writing, there are so many unanswered questions: When will the vaccines become widely available to working age people; which vaccine/s will be available to a given population; how effective are the vaccines likely to be and for how long; will taking a vaccine remove the need for other infection protection measures including social distancing; what public health approach is likely to be taken in a given country; will some countries require inoculation as a condition of border entry, or for access to certain facilities or services (which could mean that an employee needs to be vaccinated if their job depends on accessing those facilities or services)?
In the absence of more information and public health guidance, it will be challenging for an employer to conduct a comprehensive risk assessment on whether there is a compelling reason to mandate employee vaccination (risk assessments are likely to be required in most countries from an employment and privacy perspective).
Aside from the significant employment and data privacy risks involved in mandating the vaccine, doing so could also give rise to discrimination claims in countries that protect against discrimination on the grounds of religious or philosophical belief (e.g. across the EU) (it is untested whether being an anti-vaxxer is a philosophical belief) or on the grounds of disability (where for instance having a disability impacts on the risks of vaccination for that individual). In the US, the Equal Employment Opportunity Commission released guidance in December answering questions about the applicability of various federal anti-discrimination laws, including those prohibiting discrimination on the basis of disability, religion, genetic information and pregnancy in relation to COVID-19 vaccinations.
Given the numbers of people reported to be ready to refuse a vaccine, this is likely to be a controversial issue for months to come. For employers considering the issue now, it would be sensible to explore a range of options when the vaccines do start to become available on a mass scale, including: rolling out positive information campaigns to provide clear facts and address misinformation, boost confidence and engage employees to take the vaccine; and support and make it easy for employees to get the vaccine when it is available by offering for instance, unpaid time off. As pro- and anti-vaccine positions tend to be strongly held, there is also the scope for conflict around this issue within the workplace, as between colleagues as well as between employees and employers, whatever position is taken. It may well be worth anticipating and preparing to manage that well in advance.
Health and wellbeing
For most companies, protecting the health, safety and mental wellbeing of the workforce has been the number one priority in recent months. Even before the pandemic, employee health and wellbeing was rising up the business agenda but the current crisis has raised the stakes dramatically, as employers have not only had to keep workplaces COVID free, but also support employees’ mental wellbeing as they experience unprecedented levels of isolation, stress, anxiety and depression.
In response, employers are considering how they can better support employee health and well-being. More employers are offering employee assistance programs or other counselling services, providing access to mindfulness or resilience courses, communicating regularly with the workforce about available resources, and exploring ways to create a more supportive work environment. Others are reviewing the feasibility of providing additional benefits (e.g., expanded leave options, caregiving and childcare resources, tuition reimbursement, financial wellness programs) to help employees meet personal and work challenges. Some larger employers – even outside the healthcare sector - are looking to appoint Chief Medical Officers for the first time to steer the company’s wellbeing strategy.
While the pressure on employers builds, legislative progress in this area has been slow and inconsistent. In some countries there are no legal obligations; in others, there are specific mental health duties on employers; and elsewhere laws which apply for other purposes have been expanded or moulded to encompass mental health considerations. A legislative theme which is becoming increasingly common is the introduction of rights to disconnect from the work computer, calls and emails during non-working hours. This right is fairly new to the legal landscape, having first been introduced in France in 2017. Since then, other countries, including Italy and Spain, have introduced a similar right and Canada is now pushing ahead with this as part of its governmental response to the mental health aspects of COVID-19. The EU is now paving the way for a proper EU-level right to disconnect; on 1 December, the Employment Committee of the European Parliament ('the Committee') adopted a proposal for a resolution on the right to disconnect. Our Mental Health Matters report looked at rights to disconnect and the wider regulatory framework in 16 countries.
The focus on the health and wellbeing of the workforce is only set to continue and intensify in the coming months.
Equality, gender pay, harassment
Workplace equality issues were already high on the business agenda as we entered 2020, as the reverberations of the #MeToo movement continued to be felt and gender pay legislation was being rolled out in a number of countries. When the pandemic was declared and the world went into lockdown, the focus turned away from diversity to the economy and job retention. However, after George Floyd’s death in May sparked worldwide protests and social unrest, inequality inside and outside the workplace took centre stage, with employees the world over looking to their organisations to speak up – and speak out – against racism and to drive real and meaningful change.
We have seen businesses take a variety of steps these past months including: periods of education and reflection at senior levels; revisiting policies and practices; implementing zero tolerance policies; monitoring and addressing employee behaviour; undertaking root and branch reviews; setting more ambitious targets.
The starting point for many organisations – and something that many businesses are looking to do at the moment - is to undertake an analysis of the makeup of the workforce. From a legal perspective this is not as simple as it may sound, as global privacy laws limit the personal data that can be collected and processed about employees. Generally speaking, data about personal characteristics (race, ethnicity, religion, gender, sexual orientation, etc.) can only be collected where there is a prescribed reason to do so under the relevant privacy laws e.g.: because it’s essential for performance of the contract (this is pretty limited), the employer has a legitimate business aim; there’s public interest; or a legal requirement (also limited – e.g. in South Africa employers have to monitor race to comply with employment equity laws, but this is not common elsewhere, particularly for race / gender / sexual orientation monitoring).
In some countries, for instance in the UK, equality monitoring is generally encouraged by equality bodies, but it is not necessarily common or encouraged elsewhere and privacy considerations will often trump the diversity objective (see e.g. Ireland, France, Italy and Spain). There are ways to navigate this (e.g. by using consent or anonymising data) although the alternative options come with significant limitations. The best starting point when considering any equality monitoring is to think carefully about why the data is required, what the business will do with it and whether there are other ways of achieving the diversity objective by other means. If the business does go ahead, it is imperative that safeguards are put in place to protect the data when it is being collected and stored.
Many businesses who have identified inequalities have been keen to take swift action this year to redress the inequality, to demonstrate their commitment to diversity objectives. However, the extent to which action is permitted by the law is a vexed area. Most countries permit positive or affirmative action to address inequality (e.g. the UK, the US, South Africa, Japan), but such measures tend to be limited in scope and prohibit unconditional preferential treatment. For instance, diverse interview slates have become a popular mechanism to ensure that there is at least one person from the relevant underrepresented group in the running for every interview. In the UK, while affirmative action is permitted, the rules around recruitment are very limited and - while there is little law or guidance on this - arguably a diverse slate would not be allowed where candidates are specifically sought on the basis of protected characteristics. While employers can take steps to increase the pool from which candidates are drawn – as long as there is sufficient evidence of disadvantage to the underrepresented group and the steps to increase representation are proportionate – that is not a quick fix. This can be very frustrating for businesses, when the law does not allow them to move as quickly as they would like.
While the focus on gender pay has diminished this year, with some countries relaxing reporting requirements, we expect that pay equity – and wider equality issues - will return to the agenda during 2021. New rules in Spain come into force in April requiring all companies to maintain a pay register, and employers with 50 or more employees must develop an equality plan and pay audit to address gender equality. Ireland’s gender pay bill was halted due to the pandemic and Brexit, but is likely to progress during 2021. The UAE introduced equal pay legislation this year, and further gender equality laws are expected there during 2021 as the UAE continues to advance its status on the global gender equality index. In March 2020, the EU released its Gender Equality Strategy and has committed to tabling binding measures on pay transparency across the EU by the end of 2020 and improve gender balance on corporate boards. In the US, states and localities continued to enact laws to address equal pay issues, including banning salary history inquiries, prohibiting retaliation against an employee for discussing wages or compensation with another employee and requiring certain posting and/or compensation disclosures. Employers could see changes targeting the gender pay gap at the federal level under the incoming Biden administration. Also in the US, on December 1, 2020, Nasdaq filed a proposal with the SEC seeking approval of new listing rules that would require most Nasdaq-listed companies to 1) publicly annual disclose annually, to the extent permitted by law, diversity statistics regarding their boards of directors and 2) have, or explain why they do not have, at least two “Diverse” directors, including one who self-identifies as Female and one who self-identifies as either an Underrepresented Minority or LGBTQ+.
Going into 2020, sexual harassment, and the use of non-disclosure agreements was one of the most significant employment law issues across the globe. While legislative developments slowed this year, there are changes coming up. In January 2021, the new Chinese Civil Code comes into effect requiring all employers in China to implement measures to prevent and address sexual harassment in the workplace, which is likely to require – at the very least - new or updated policies and procedures for handling complaints. Denmark has seen a real focus on sexual harassment following a number of high profile cases during 2020 and this is likely to continue into 2021. In the US, new state laws addressing workplace discrimination and harassment took effect in 2020 (or are scheduled to take effect in 2021), including laws that mandate sexual harassment training; expand the coverage of existing laws to include smaller companies, independent contractors, apprentices and/or interns; limit or prohibit non-disclosure, non-disparagement and no-rehire provisions for settlements and/or employment agreements; and require reporting of adverse judgments and administrative rulings.
Diversity is likely to be one of the biggest issues on all global businesses’ agendas going into 2021.
Environmental, Social and Governance (ESG)
In August 2019, over 180 CEOs of the Business Roundtable overturned a 22-year-old policy statement that defined a corporation’s principal purpose as maximizing shareholder return and embraced a more stakeholder-driven approach to governance. The new Statement on the Purpose of a Corporation declares that companies should serve not only their shareholders, but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate. A cornerstone of this new “stakeholder capitalism” model is Environmental, Social and Governance (ESG) investing, which has become a standard for top-tier institutional and public institutions, private lenders and other stakeholders.
With all the signs pointing toward the continued growth of ESG and reporting and disclosure requirements, ESG considerations are likely to be at the top of many businesses’ agendas as we enter into 2021.
Many of the issues that we have already discussed here will be relevant to a company’s ESG strategy: diversity, gender pay and wellbeing are likely to be the main focus of most ESG initiatives, making it increasingly important for companies to make real and impactful change here. ESG will also place a sharper focus on human rights issues including legislation on slavery in supply chains which already exists, or is in the pipeline in a number of countries (including the UK, California, France, Australia, Canada, and the Netherlands). We also expect to see employees – as well as stakeholders, customers and others – deploy ESG standards to exert pressure on businesses to take action on environmental / climate issues, as well as a stand on social justice issues.
Going into 2021, we expect the focus on ESG to increase. While this will undoubtedly add to the significant pressure that businesses are already under, there is likely to be a workforce dividend in taking ESG seriously; businesses with higher ESG ratings are likely to gain a competitive advantage, making it easier to retain staff and attract talent.
Disputes and whistleblowing
Employment litigation slowed in 2020 as courts the world over temporarily shut down due to the pandemic, trials and hearings were suspended, and employees went remote. We expect this trend to reverse in 2021, as layoffs – and therefore terminations - increase and more COVID-19 related claims emerge, related to leave, discrimination, and unlawful termination, as well as (in the US) class action claims for wage and hour law violations. Employers - and insurers – are also braced for a wave of health and safety litigation related to exposure to COVID-19 in the workplace.
Whistleblowing is also likely to be in focus this year. EU countries have until 17 December 2021 to implement the EU Whistleblowing Directive (extended to December 2023 for small entities with 50 to 250 employees), which aims to establish channels for reporting concerns about breaches of EU law within workplaces (as well as to public authorities). Companies operating in the EU with 50 or more employees will have to set up secure reporting channels and provide protection for whistleblowers against dismissal, demotion and other forms of retaliation. This may require new or updated policies and systems to meet the Directive requirements, although the detail of what is required will depend on how each country implements the Directive. For some countries, where currently there is little or no comprehensive whistleblowing protection (e.g. Germany, Belgium), this represents a significant change.
Working time
The regulation of working hours was a big issue for employers operating in the EU in 2019 after the European Court of Justice made a decision (CCOO v Deutsche Bank) that required EU Member States to ensure that employers operate systems to set up objective, reliable and accessible systems to measure the duration of daily working time. Some countries acted quickly to update their laws to reflect the ECJ decision (Spain introduced its new law in May 2019), and elsewhere, including in Germany, legislation was prepared to implement the ruling. While legislative progress has been slow since then with few legal changes, we have seen that - while the ECJ decision does not impose a direct requirement on businesses - many are using the decision as a catalyst for reviewing working time recording practices anyway. The widescale move to remote working – coupled with the focus on supporting worker mental health - has only strengthened the focus on time recording this year and this is a trend that is set to continue into 2021. For more information on the legal position across the EU, read our Recording Working Hours report.
In other local working hours developments, this year in Japan, we saw important new restrictions on overtime become effective for small and medium sized companies (they became effective for large companies in 2019) and South Korea reduced the maximum working hours per week and introduced new obligations in relation to flexible working schedules and rest periods. As mentioned under our Health and Wellbeing section above, we also expect to see more laws coming in during 2021 relating to the right to disconnect, with new rules currently under discussion in various countries including Luxembourg, India and the US.
More widely, the pandemic may ultimately change the way that businesses and lawmakers think about working time and working arrangements, as many of the current national models on working time arrangements make little sense when employees are working predominantly from their homes and not commuting into workplaces for fixed hours. We expect to see many working hours developments in the coming year.
Worker mobility
While most global mobility came to a swift halt in 2020, there have been important legal developments this year which will have an important impact when work travel returns at scale. While the way in which we travel is unlikely to return to pre-pandemic levels (research suggests corporate travel is unlikely to rebound until late 2023 or 2024), travel will remain essential for many workers.
During 2020, many EU countries implemented the revised EU Posted Workers Directive which governs the treatment of workers posted from one EU state to another. The revised rules, among other things, increase rights of posted workers to receive all core elements of remuneration in the host country, and confer additional rights on workers posted longer-term (longer than 12 or 18 months). The new rules apply in addition to the existing rules, including notification and other administrative requirements (e.g. to register the posting in advance with the relevant authorities, appointing a liaison person for the authorities, carrying an A1 social security form, etc.). These rules apply whenever a worker is “working” in another EU country, regardless of the length of the posting, so even a trip of a couple of weeks could trigger the rights if work is carried out during that time (vs attendance at business meetings / pitches / conferences, which is generally excluded).
The other major development in relation to mobility (among other things) going into 2021 is, of course, Brexit. At the time of writing the UK is still negotiating a trade deal with the EU and the final arrangements following the transition period, which ends on 31 December 2020, are currently unknown. However, what is known is that freedom of movement for UK nationals into the EU and vice versa, is about to end. For immigration into the UK, the deadline for EU citizens to make an application under the Settled Status Scheme (which opened in 2019) is 30 June 2021. The UK government has also published details of the new skills-based immigration rules which came into force on 1 December 2020 and will be used for new EU national recruits from 1 January 2021. Organisations wishing to hire workers without pre-settled/settled status will need a sponsor licence. UK nationals going to the EU for business or personal reasons will be subject to a 90 day cap in an 180 day rolling period, so businesses will need to monitor employee time spent abroad to ensure that the limitations are not exceeded.
Digital transformation and privacy
Even before the pandemic, employers and employees were experiencing the impacts of new technologies in workplace, from privacy and data security risks to skills gaps and talent shortages. Evidence suggests that the pandemic has accelerated companies’ use of digital and automation. A study by Deloitte found that 68% of business leaders globally used automation to respond to impacts from COVID-19, with three in four organizations worldwide now using automation technologies such as robotics, machine learning and natural language processing.
Many jobs that have been the worst affected by the pandemic are at the highest risk of automation. Technology adoption undoubtedly will lead to shifts in the size, composition and location of workforce. According to a recent World Economic Forum report, by 2025, 85 million jobs may be eliminated due to automation. Whether automation can create a greater number of new jobs at pace remains to be seen. It is certain, however, that emerging technologies will continue to transform the workplace, requiring employers to retool their processes, account for new risks, and reassess workforce needs, including reskilling and upskilling.
While the pressure on employers is greater than ever and 2021 will be incredibly challenging for many sectors and businesses, this extraordinary year has revealed opportunities for businesses – and workplaces - to transform in ways that were previously unimaginable. Those that use this time to leverage the appetite for change and reconsider the future of their workplaces, are likely to come out on top.
For information on what’s happening at a country level, read our country by country reviews of 2020 and previews of 2021 for over 35 countries across EMEA, APAC and the Americas.
