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.
Prompted by criticisms from both employers and employees to its amendments to the Labor Standards Act (the “Act”) in December 2016 (the “first amendments”), the Taiwanese Government proposed further revisions to the Act (the “further amendments”), less than a year after the first amendments were implemented. These recent amendments will take effect from 1 March 2018 and relate to rest days, overtime work and overtime pay and are aimed at providing employers greater flexibility in conducting their businesses and in managing the work schedules of their employees.
The EAT has upheld first instance tribunal decisions that the calculation of statutory holiday pay (for the 4 weeks’ EU-derived holiday) should reflect voluntary overtime, voluntary standby and voluntary call out payments, provided that the work has been undertaken with sufficient regularity to have become part of the employee’s normal pay. The Working Time Regulations must be construed purposively to this effect.
Previous case law established that commission and certain supplementary payments had to be included in the calculation of “normal remuneration” because they were amounts for work which was “linked intrinsically to the performance of tasks which the worker is required to carry out under his contract of employment”.
On 5 June 2017, the committee deliberating on the proposal to cap overtime made a written submission to the Minister of Health, Labour and Welfare proposing to cap overtime to 45 hours a month, with an annual cap of 360 overtime hours. The proposal recommends sanctions against employers who breach this rule however, it sets out a number of exceptions.
Currently, employers are in principle prohibited from causing employees to work more than 8 hours a day or 40 hours a week. Subject to a Labour Management Agreement being entered into with a union consisting of more than half the employees in the company or with an employee representative representing more than half the employees, employers can cause employees to work overtime hours of up to 45 hours a month or 360 hours a year. However, employers can escape this rule if special provisions can be agreed.
A revised, final version of the non-statutory guidance by Acas and the Government Equalities Office was published on 3 April 2017, available here. Although the GEO had indicated that no substantive changes were expected to the original draft published a few days before formal approval of the final regulations, in fact there are a few significant changes helpfully addressing some of the grey areas highlighted by commentators. Employers currently preparing for the first data capture covering the pay reference period including 5 April 2017 should review the guidance urgently.
A recent trend in relation to overtime is for employers to grant time off in lieu instead of paying overtime. This can be confusing in Asia as the ability of employers to do so varies from jurisdiction to jurisdiction. This month we consider the position in Singapore, Malaysia, Indonesia, China, Japan, South Korea and Thailand.
Concerns in relation to “modern slavery” are increasingly important for businesses to recognise. This is especially so in Asia, where poor enforcement mechanisms and unfamiliarity with employee rights often result in exploitative working conditions. What can companies do to ensure that their business and supply chains are free from unethical labour practices?
A couple of first instance employment tribunal judgments have ruled that the calculation of statutory holiday pay (for the 4 weeks' EU-derived holiday) should include an element for voluntary overtime, voluntary standby and voluntary call out payments, provided that the work has been undertaken with sufficient regularity to have become part of the employee’s normal pay.
While the EAT has ruled that compulsory non-guaranteed overtime pay must be included, the issue of payment for voluntary overtime has so far only been considered at first instance in England (although these rulings are consistent with a decision of the Northern Irish Court of Appeal, reported here). The tribunal considered that overtime worked weekly or monthly over a number of years was sufficiently regular. (White v Dudley MC, Whitehead v EMH Housing)
In Patterson v Castlereagh BC the Northern Irish Court of Appeal has given its view that, in principle, voluntary overtime pay may need to be included in the calculation of holiday pay for the 4 weeks' EU statutory holiday. This builds on the EAT ruling in Bear Scotland v Fulton last year that “non-guaranteed” compulsory overtime pay (“non-guaranteed” in that the employer is not obliged to offer overtime, but it is compulsory for the worker to perform it if offered) should be taken into account. The point on extending this to completely voluntary overtime was conceded by the parties so detailed argument was not heard, but it does reflect a commonly held view. The ruling is only binding in Northern Ireland, but will be persuasive elsewhere in Britain in the absence of other case law on this point. Continue reading