UK: first Court of Appeal ruling on territorial scope of collective redundancy consultation duty

The Court of Appeal has ruled on the territorial scope of the duty to inform and consult on collective redundancies at an establishment. The duty applies where the relevant establishment has a sufficiently close connection with Great Britain, and not simply where the employees have sufficient connection. In this case the Court considered that the ships of a fleet operating mostly outside UK territorial waters were each a single establishment (such that the duty would apply only if 20 redundancies were proposed on one ship) and the fact that some administrative functions were performed in Surrey was insufficient connection for the duty to apply. (Seahorse Maritime Limited v Nautilus International)

China: How to Approach Employee Dismissals

Under PRC law, an employment contract can be terminated in three main ways, namely resignation by the employee, unilateral termination by the employer, or mutual separation. While resignation by the employee is generally straightforward, while other paths to termination must be manged carefully to mitigate risk. We recap the key points to consider with each approach to termination.

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France: The Loi Travail – Briefing 4

This briefing summarises the Macron reforms in relation to the introduction of a new codified right to make collective terminations by agreement (outside of a social plan).

This is a change from the current situation, permitted by case law, where an employer can ask for volunteers for redundancy, but only within the scope of voluntary redundancy plan (plan de departs volontaires), which generally accompanies a social plan.

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France: The Loi Travail – Briefing 3

This briefing summarises the Macron reforms in relation to the simplification of redundancy processes:

  • limiting the economic difficulties test to the business sector in France exclusively;
  • refining what is a business sector;
  • reducing the redeployment obligations – limiting these to France;
  • for companies making less than 10 redundancies in 30 days : simplifying the scope of employees within the pool for selection – to those employees within the same “employment zone”;
  • reducing time limits for claims; and
  • reducing minimum damages payments where a social plan is held to be null and void .

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UK: Compensation awards could increase following change in calculation of a week’s pay

The EAT in University of Sunderland v Drossou has decided that, contrary to previous practice, employer pension contributions should be included in the calculation of a week’s pay. This will increase the value of awards, in particular where the full value of a week’s pay is used (ie, it is not capped), such as the unfair dismissal compensatory award and compensation for failure to inform and consult on TUPE transfers or collective redundancies. The impact could be particularly significant for employees in DB schemes.

China: Guidance on what a “major change in objective circumstances” means

A recent judicial interpretation (Interpretation) issued jointly by the Supreme People’s Court and the Labour Dispute Arbitration Committee in Beijing provides timely clarification (among other things) of what is meant by the term “major change of objective circumstances” in the context of redundancy for corporations with operations in Beijing (and, potentially, other parts of China).

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