The Hong Kong Competition Commission (the “Commission“) recently released an advisory bulletin indicating that it has encountered a number of situations where businesses have engaged in employment-related practices which may give rise to competition concerns. Our employment and competition teams consider the key issues identified in the advisory bulletin and suggest strategies which organisations may adopt to minimize the risk of competition concerns arising.
UK: no direct discrimination in failure to enhance shared parental leave pay to match maternity pay; indirect discrimination claim to be reheard
Many employers who enhance maternity pay have chosen not to mirror this for shared parental leave, pending clarity as to whether this could be direct or indirect sex discrimination. The EAT has now given its first rulings on the issue. In Capita v Ali, the EAT ruled that a failure to mirror enhanced maternity pay was not direct discrimination, at least where the enhancement is only for the first part of maternity leave (at least the first 14 weeks, possibly 26 weeks). In its view, the purpose of this part of maternity leave is to protect the health and wellbeing of the mother during pregnancy and following childbirth, and therefore this leave is not comparable to shared parental leave, the purpose of which is to care for the child. Continue reading
UK: Supreme Court implies term that notice only starts to run once employee has received and had an opportunity to read it
The Supreme Court has ruled that, in the absence of an express contractual provision to the contrary, notice of dismissal by post starts to run when the letter comes to the attention of the employee and they have either read it or had a reasonable opportunity of doing so.
Employers should ensure that the employment contract specifies when notice is deemed to be given or, if it does not, that they hand over notice in person to the individual if the date on which notice is given is critical. The Supreme Court upheld the Court of Appeal in Newcastle upon Tyne NHS Foundation Trust v Haywood ruling that, where an employment contract was silent on when notice was deemed to be given, notice sent by letter to the individual’s house while she was on holiday did not take effect until her personal receipt of the letter on her return home and she had had a reasonable opportunity to read it. As a result, her termination date was pushed back to after her 50th birthday, entitling her to a much more generous pension.
Filed under Jurisdiction: UK, Termination of employment
UK: employers should update template termination agreements in light of April tax changes and developments on NDAs
The tax treatment of payments for termination of employment has changed for terminations taking place on or after 6 April (see our earlier blog post here). The effect of the changes is to fully tax as earnings such part of a termination payment as is deemed to be in respect of unworked notice (the post-employment notice pay or “PENP”); the balance can then benefit from the £30,000 tax exemption. PENP is calculated using ‘basic pay’, which includes pay that would have been received had it not been salary sacrificed, but excludes overtime pay, bonuses, commission, allowances, benefits in kind etc. HMRC has now updated its Employment Income Manual to confirm that the calculation must be done even where the employment is terminated without notice by making a contractual payment in lieu; in the rare cases where the statutory PENP exceeds the contractual payment, the excess will be fully taxed. Although not expressly covered by the Manual, the HMRC may well take the view that the PENP calculation should also be applied in cases where compensation is paid following termination without notice for alleged gross misconduct or constructive dismissal.
EU: Commission publishes draft whistleblowing directive
The European Commission has published a new draft directive to strengthen whistleblower protection across the EU. The proposal is to provide EU-wide protection for blowing the whistle on breaches of specified types of EU legislation (for example, legislation on financial services, public health and safety, data protection and competition rules), although Member States are encouraged to go beyond this minimum standard and establish comprehensive frameworks for whistleblower protection.
All companies with more than 50 employees or with an annual turnover of over €10 million will have to set up an internal procedure to handle whistleblowers’ reports, including from non-employees such as NEDs, shareholders, the self-employed and volunteers.
The proposal will need agreement from both the European Parliament and the Council; in the meantime, the Commission has invited feedback on the proposal via its Have Your Say website.
Asia: Using Incentives to Effectively Retain Key Employees
Effective remuneration and incentive models are crucial to ensuring that management teams and key personnel are incentivised to stay with the business and contribute to its on-going success. This is a particular concern for investors following an acquisition.
There are many different ways in which incentives can be designed to achieve this. We discuss the advantages of certain incentive models and some key considerations when applying them to employees based in Asia.
APAC: Dismissal for Poor Performance
This month we consider some common questions when considering the dismissal of poor performing employees. First off we look at the position in key jurisdictions in North Asia.
Filed under Jurisdiction: Asia, Termination of employment
China: Implementation Measures for Foreign Talent Visas (R Visas)
On 28 November 2017, the State Administration of Foreign Experts Affairs (SAFEA), the Ministry of Foreign Affairs (MFA) and the Ministry of Public Security (MPS) jointly issued the Implementation Measures for Foreign Talent Visas (Measures). The Measures provide the standards and procedures for applying the foreign talent visa (also known as “R visa”) which was initially defined under the PRC Administrative Regulations on Entry and Exit of Foreigners in 2013. The Measures first took effect in 9 pilot cities, including Beijing, Shanghai and Guangzhou and have been implemented across China since 1 March 2018.
Japan: Differing Conditions Between Permanent and Fixed Term Employees
On 14 September 2017, the Tokyo District Court interpreted and applied the meaning of “unreasonable differences” to the benefits enjoyed by permanent and fixed term employees at Japan Post. The decision provides guidance on which benefits are exclusively available to permanent employees and which benefits, when not provided to both categories of employees equally, will result in a breach of the Labour Contract Act. This decision is of particular significance at the moment as employers are currently expecting many long term fixed term employees applying to become permanent employees. This ruling, however, stipulates that companies will no longer be able to provide fewer benefits to fixed term employees.