Netherlands – New Employment law from 1 January 2020

17 July 2019

  • Netherlands
  • Labor

The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

  • The subjects and minimum content that all EBP must have are listed exhaustively.
  • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
  • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
  • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

In particular, these new measures adopted in article 28 of the WS are:

  • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
  • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
  • The Salary Registry must be accessible to the legal representatives of the workers.
  • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

New cumulation ground for dismissal

The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

Severance: Transitional allowance

The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

Extending the scope of the chain of employment agreements

The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

Call agreement

A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

Payrolling

Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

Payroll employees are also entitled to an ‘adequate’ pension scheme.

Unemployment benefit premium differentiation

In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

Commencing date

The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

The author of this post is Regine de Wit.

10 practical aspects to consider for an adequate timing

Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

  1. In some cases notice needs to be given within a two-week period

In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

  1. Notice has to be given in writing

The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

  1. Ordinary dismissal may be prohibited by a collective bargaining agreement

Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

  1. Insufficient information of the works councils may lead to an invalid termination

The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

  1. General dismissal protection is related to seniority and size of the establishment

General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

  1. Some terminations may need prior permission

Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

  1. There is no general claim for severance payment in case of an unfair dismissal

Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

  1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

  1. Any termination agreement has to be in written form as well

Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

  1. The forfeiture clause of a termination agreement may not cover all claims 

Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

 

Tha author of this post is Alexander Lentz

We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

European and national rules pursue two main goals:

– to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

– to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

As far as the companies are concerned the following elements are deemed relevant:

  1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
  2. b) the place where posted workers are recruited and from which they are posted;
  3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
  4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
  5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

As far as the workers are concerned, the following elements should be taken into consideration:

  1. a) whether the work is carried out for a limited period of time in another Member State;
  2. b) the date on which the posting starts;
  3. c) whether the work is usually carried out in the country of origin;
  4. d) whether the posted worker will resume work in the Member State from where he has been posted;
  5. e) the nature of activities performed;
  6. f) whether travel, board and lodging costs are reimbursed by the employer;
  7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

– maximum work and minimum rest periods;

– minimum paid annual leave;

– minimum rates of pay;

– health, safety and hygiene at work;

– protective measures for mothers, children and young people;

– equal treatment of women and men and non-discrimination.

As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

France has for long been seen as a “social trap” by foreign investors… and it was often right.

The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

Below, a summary of what you need to know in 8 points.

1 – More flexibility in the motivation of dismissal letters

In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

  • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
  • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
  • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

2 – Some changes in redundancies

At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

3 – Damages scales

In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

These new provisions are applicable to any dismissal issued after the 25th of September.

The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

4 – Termination Indemnity

For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

  • 1/4 of gross salary per year of presence for the 10 first years of seniority,
  • 1/3 of gross salary per year of presence for more than 10 years of seniority.

Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

5 – Home Working

Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

6 – Merger of staff representatives in a unique Social and Economic Committee

Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

8 – Opening of company‘s negotiations to the small companies without staff representatives

In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

Salary Reduction: No.

Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

Stock Options: Not mandatory.

Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

13th Salary: Yes, but there is no 14th Salary.

Seniority Payment Fund: No.

Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

Internal Labor Regulations: Yes.

Trial Period when the Employment Relationship begins: 90 days.

Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

Types of Contract:

  1. Indefinite-Term Contracts:
    • Are the general rule in Argentinian Labor law.
    • No need to be drafted in written form, however it is normally used and convenient.
    • Subject to a trial period of three months.
  2. Fixed-Term Contracts
    • The end of the term is fixed
    • Requires existence of a just cause.
    • Minimum duration: One month.
    • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
    • No trial period is applicable and must be executed in writing.
  3. Contingent Work
    • For contingent work and the end of the term is uncertain
    • Requires existence of a just cause
    • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

Work Day and Work Week: Eight hours and 48 hours.

Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

Paid Weekly Rest Days and Holidays: Yes.

Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

Maternity Leave: 90 days of paid leave.

Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

Severance:

  • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
  • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
  • Accrued salary, proportional vacations, and proportional 13th salary.

Prior Notice of Dismissal:

15 days: during the trial period.

30 days: up to five worked years.

60 days: above five worked years.

Restrictions on hiring foreign employees: There are no limitations.

Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

Strike:

  • Only recognized trade unions can call for strikes.
  • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

Illegal Strike: This occurs when:

  • the trade union fails to comply with the settlement procedures, or
  • the strike does not respond to a labor cause, or
  • there is strike-related violence either on or off the employer’s property.

Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

Social Security Contributions / Income Tax:

The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

  • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
  • 23% for the rest of the employers.
  • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
  • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

The author of this post is Tomás García Navarro.

The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

  • Expected time of the transmission.
  • Reasons for the transmission.
  • Legal, economic and social consequences of the transmission to the employees.
  • Measures envisaged in relation to the employees.

If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

Occupational risk prevention

The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

Under Spanish law a labour contract may be suspended by the following causes:

  • Mutual agreement of the Parties.
  • The legitimate causes consigned in the contract.
  • Temporary incapacity of the employee.
  • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
  • Military service.
  • Holding a representative public charge.
  • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
  • Suspension from duties without pay for disciplinary reasons.
  • Temporary force majeure.
  • For economic, technical, organizational or production causes.
  • Forced leave of absence.
  • For exercising the right to strike.
  • Legal closing of the company.
  • For decision of the employee as a consequence of gender-based violence.

The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

Leaves

The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

The employees will have the right for a leave period for no more than three years to attend the care of every son.

The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

Germany – Termination of an employment relationship

2 May 2018

  • Germany
  • Labor

The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

  • The subjects and minimum content that all EBP must have are listed exhaustively.
  • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
  • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
  • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

In particular, these new measures adopted in article 28 of the WS are:

  • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
  • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
  • The Salary Registry must be accessible to the legal representatives of the workers.
  • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

New cumulation ground for dismissal

The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

Severance: Transitional allowance

The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

Extending the scope of the chain of employment agreements

The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

Call agreement

A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

Payrolling

Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

Payroll employees are also entitled to an ‘adequate’ pension scheme.

Unemployment benefit premium differentiation

In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

Commencing date

The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

The author of this post is Regine de Wit.

10 practical aspects to consider for an adequate timing

Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

  1. In some cases notice needs to be given within a two-week period

In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

  1. Notice has to be given in writing

The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

  1. Ordinary dismissal may be prohibited by a collective bargaining agreement

Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

  1. Insufficient information of the works councils may lead to an invalid termination

The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

  1. General dismissal protection is related to seniority and size of the establishment

General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

  1. Some terminations may need prior permission

Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

  1. There is no general claim for severance payment in case of an unfair dismissal

Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

  1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

  1. Any termination agreement has to be in written form as well

Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

  1. The forfeiture clause of a termination agreement may not cover all claims 

Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

 

Tha author of this post is Alexander Lentz

We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

European and national rules pursue two main goals:

– to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

– to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

As far as the companies are concerned the following elements are deemed relevant:

  1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
  2. b) the place where posted workers are recruited and from which they are posted;
  3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
  4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
  5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

As far as the workers are concerned, the following elements should be taken into consideration:

  1. a) whether the work is carried out for a limited period of time in another Member State;
  2. b) the date on which the posting starts;
  3. c) whether the work is usually carried out in the country of origin;
  4. d) whether the posted worker will resume work in the Member State from where he has been posted;
  5. e) the nature of activities performed;
  6. f) whether travel, board and lodging costs are reimbursed by the employer;
  7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

– maximum work and minimum rest periods;

– minimum paid annual leave;

– minimum rates of pay;

– health, safety and hygiene at work;

– protective measures for mothers, children and young people;

– equal treatment of women and men and non-discrimination.

As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

France has for long been seen as a “social trap” by foreign investors… and it was often right.

The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

Below, a summary of what you need to know in 8 points.

1 – More flexibility in the motivation of dismissal letters

In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

  • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
  • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
  • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

2 – Some changes in redundancies

At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

3 – Damages scales

In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

These new provisions are applicable to any dismissal issued after the 25th of September.

The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

4 – Termination Indemnity

For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

  • 1/4 of gross salary per year of presence for the 10 first years of seniority,
  • 1/3 of gross salary per year of presence for more than 10 years of seniority.

Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

5 – Home Working

Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

6 – Merger of staff representatives in a unique Social and Economic Committee

Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

8 – Opening of company‘s negotiations to the small companies without staff representatives

In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

Salary Reduction: No.

Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

Stock Options: Not mandatory.

Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

13th Salary: Yes, but there is no 14th Salary.

Seniority Payment Fund: No.

Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

Internal Labor Regulations: Yes.

Trial Period when the Employment Relationship begins: 90 days.

Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

Types of Contract:

  1. Indefinite-Term Contracts:
    • Are the general rule in Argentinian Labor law.
    • No need to be drafted in written form, however it is normally used and convenient.
    • Subject to a trial period of three months.
  2. Fixed-Term Contracts
    • The end of the term is fixed
    • Requires existence of a just cause.
    • Minimum duration: One month.
    • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
    • No trial period is applicable and must be executed in writing.
  3. Contingent Work
    • For contingent work and the end of the term is uncertain
    • Requires existence of a just cause
    • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

Work Day and Work Week: Eight hours and 48 hours.

Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

Paid Weekly Rest Days and Holidays: Yes.

Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

Maternity Leave: 90 days of paid leave.

Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

Severance:

  • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
  • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
  • Accrued salary, proportional vacations, and proportional 13th salary.

Prior Notice of Dismissal:

15 days: during the trial period.

30 days: up to five worked years.

60 days: above five worked years.

Restrictions on hiring foreign employees: There are no limitations.

Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

Strike:

  • Only recognized trade unions can call for strikes.
  • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

Illegal Strike: This occurs when:

  • the trade union fails to comply with the settlement procedures, or
  • the strike does not respond to a labor cause, or
  • there is strike-related violence either on or off the employer’s property.

Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

Social Security Contributions / Income Tax:

The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

  • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
  • 23% for the rest of the employers.
  • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
  • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

The author of this post is Tomás García Navarro.

The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

  • Expected time of the transmission.
  • Reasons for the transmission.
  • Legal, economic and social consequences of the transmission to the employees.
  • Measures envisaged in relation to the employees.

If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

Occupational risk prevention

The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

Under Spanish law a labour contract may be suspended by the following causes:

  • Mutual agreement of the Parties.
  • The legitimate causes consigned in the contract.
  • Temporary incapacity of the employee.
  • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
  • Military service.
  • Holding a representative public charge.
  • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
  • Suspension from duties without pay for disciplinary reasons.
  • Temporary force majeure.
  • For economic, technical, organizational or production causes.
  • Forced leave of absence.
  • For exercising the right to strike.
  • Legal closing of the company.
  • For decision of the employee as a consequence of gender-based violence.

The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

Leaves

The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

The employees will have the right for a leave period for no more than three years to attend the care of every son.

The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

Cross-border posting of workers in Europe

18 April 2018

  • Europe
  • Labor

The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

  • The subjects and minimum content that all EBP must have are listed exhaustively.
  • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
  • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
  • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

In particular, these new measures adopted in article 28 of the WS are:

  • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
  • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
  • The Salary Registry must be accessible to the legal representatives of the workers.
  • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

New cumulation ground for dismissal

The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

Severance: Transitional allowance

The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

Extending the scope of the chain of employment agreements

The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

Call agreement

A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

Payrolling

Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

Payroll employees are also entitled to an ‘adequate’ pension scheme.

Unemployment benefit premium differentiation

In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

Commencing date

The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

The author of this post is Regine de Wit.

10 practical aspects to consider for an adequate timing

Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

  1. In some cases notice needs to be given within a two-week period

In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

  1. Notice has to be given in writing

The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

  1. Ordinary dismissal may be prohibited by a collective bargaining agreement

Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

  1. Insufficient information of the works councils may lead to an invalid termination

The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

  1. General dismissal protection is related to seniority and size of the establishment

General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

  1. Some terminations may need prior permission

Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

  1. There is no general claim for severance payment in case of an unfair dismissal

Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

  1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

  1. Any termination agreement has to be in written form as well

Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

  1. The forfeiture clause of a termination agreement may not cover all claims 

Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

 

Tha author of this post is Alexander Lentz

We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

European and national rules pursue two main goals:

– to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

– to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

As far as the companies are concerned the following elements are deemed relevant:

  1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
  2. b) the place where posted workers are recruited and from which they are posted;
  3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
  4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
  5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

As far as the workers are concerned, the following elements should be taken into consideration:

  1. a) whether the work is carried out for a limited period of time in another Member State;
  2. b) the date on which the posting starts;
  3. c) whether the work is usually carried out in the country of origin;
  4. d) whether the posted worker will resume work in the Member State from where he has been posted;
  5. e) the nature of activities performed;
  6. f) whether travel, board and lodging costs are reimbursed by the employer;
  7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

– maximum work and minimum rest periods;

– minimum paid annual leave;

– minimum rates of pay;

– health, safety and hygiene at work;

– protective measures for mothers, children and young people;

– equal treatment of women and men and non-discrimination.

As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

France has for long been seen as a “social trap” by foreign investors… and it was often right.

The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

Below, a summary of what you need to know in 8 points.

1 – More flexibility in the motivation of dismissal letters

In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

  • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
  • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
  • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

2 – Some changes in redundancies

At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

3 – Damages scales

In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

These new provisions are applicable to any dismissal issued after the 25th of September.

The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

4 – Termination Indemnity

For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

  • 1/4 of gross salary per year of presence for the 10 first years of seniority,
  • 1/3 of gross salary per year of presence for more than 10 years of seniority.

Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

5 – Home Working

Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

6 – Merger of staff representatives in a unique Social and Economic Committee

Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

8 – Opening of company‘s negotiations to the small companies without staff representatives

In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

Salary Reduction: No.

Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

Stock Options: Not mandatory.

Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

13th Salary: Yes, but there is no 14th Salary.

Seniority Payment Fund: No.

Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

Internal Labor Regulations: Yes.

Trial Period when the Employment Relationship begins: 90 days.

Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

Types of Contract:

  1. Indefinite-Term Contracts:
    • Are the general rule in Argentinian Labor law.
    • No need to be drafted in written form, however it is normally used and convenient.
    • Subject to a trial period of three months.
  2. Fixed-Term Contracts
    • The end of the term is fixed
    • Requires existence of a just cause.
    • Minimum duration: One month.
    • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
    • No trial period is applicable and must be executed in writing.
  3. Contingent Work
    • For contingent work and the end of the term is uncertain
    • Requires existence of a just cause
    • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

Work Day and Work Week: Eight hours and 48 hours.

Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

Paid Weekly Rest Days and Holidays: Yes.

Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

Maternity Leave: 90 days of paid leave.

Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

Severance:

  • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
  • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
  • Accrued salary, proportional vacations, and proportional 13th salary.

Prior Notice of Dismissal:

15 days: during the trial period.

30 days: up to five worked years.

60 days: above five worked years.

Restrictions on hiring foreign employees: There are no limitations.

Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

Strike:

  • Only recognized trade unions can call for strikes.
  • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

Illegal Strike: This occurs when:

  • the trade union fails to comply with the settlement procedures, or
  • the strike does not respond to a labor cause, or
  • there is strike-related violence either on or off the employer’s property.

Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

Social Security Contributions / Income Tax:

The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

  • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
  • 23% for the rest of the employers.
  • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
  • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

The author of this post is Tomás García Navarro.

The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

  • Expected time of the transmission.
  • Reasons for the transmission.
  • Legal, economic and social consequences of the transmission to the employees.
  • Measures envisaged in relation to the employees.

If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

Occupational risk prevention

The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

Under Spanish law a labour contract may be suspended by the following causes:

  • Mutual agreement of the Parties.
  • The legitimate causes consigned in the contract.
  • Temporary incapacity of the employee.
  • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
  • Military service.
  • Holding a representative public charge.
  • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
  • Suspension from duties without pay for disciplinary reasons.
  • Temporary force majeure.
  • For economic, technical, organizational or production causes.
  • Forced leave of absence.
  • For exercising the right to strike.
  • Legal closing of the company.
  • For decision of the employee as a consequence of gender-based violence.

The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

Leaves

The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

The employees will have the right for a leave period for no more than three years to attend the care of every son.

The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

Giovanni Bertola

Practice areas

  • Labor
  • Contracts
  • Insolvency
  • Intellectual property
  • Litigation
Contact Giovanni

Contact Giovanni





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    France – The “Macron” decrees on labour

    6 March 2018

    • France
    • Labor

    The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

    The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

    Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

    • The subjects and minimum content that all EBP must have are listed exhaustively.
    • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
    • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
    • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

    On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

    In particular, these new measures adopted in article 28 of the WS are:

    • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
    • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
    • The Salary Registry must be accessible to the legal representatives of the workers.
    • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

    The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

    On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

    New cumulation ground for dismissal

    The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

    Severance: Transitional allowance

    The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

    The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

    There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

    Extending the scope of the chain of employment agreements

    The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

    It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

    An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

    Call agreement

    A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

    Payrolling

    Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

    Payroll employees are also entitled to an ‘adequate’ pension scheme.

    Unemployment benefit premium differentiation

    In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

    Commencing date

    The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

    The author of this post is Regine de Wit.

    10 practical aspects to consider for an adequate timing

    Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

    1. In some cases notice needs to be given within a two-week period

    In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

    1. Notice has to be given in writing

    The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

    1. Ordinary dismissal may be prohibited by a collective bargaining agreement

    Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

    1. Insufficient information of the works councils may lead to an invalid termination

    The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

    1. General dismissal protection is related to seniority and size of the establishment

    General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

    1. Some terminations may need prior permission

    Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

    1. There is no general claim for severance payment in case of an unfair dismissal

    Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

    1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

    A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

    1. Any termination agreement has to be in written form as well

    Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

    1. The forfeiture clause of a termination agreement may not cover all claims 

    Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

    Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

     

    Tha author of this post is Alexander Lentz

    We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

    The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

    Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

    Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

    In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

    European and national rules pursue two main goals:

    – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

    – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

    To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

    Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

    As far as the companies are concerned the following elements are deemed relevant:

    1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
    2. b) the place where posted workers are recruited and from which they are posted;
    3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
    4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
    5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

    As far as the workers are concerned, the following elements should be taken into consideration:

    1. a) whether the work is carried out for a limited period of time in another Member State;
    2. b) the date on which the posting starts;
    3. c) whether the work is usually carried out in the country of origin;
    4. d) whether the posted worker will resume work in the Member State from where he has been posted;
    5. e) the nature of activities performed;
    6. f) whether travel, board and lodging costs are reimbursed by the employer;
    7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

    None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

    If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

    Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

    To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

    – maximum work and minimum rest periods;

    – minimum paid annual leave;

    – minimum rates of pay;

    – health, safety and hygiene at work;

    – protective measures for mothers, children and young people;

    – equal treatment of women and men and non-discrimination.

    As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

    For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

    Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

    For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

    France has for long been seen as a “social trap” by foreign investors… and it was often right.

    The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

    On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

    Below, a summary of what you need to know in 8 points.

    1 – More flexibility in the motivation of dismissal letters

    In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

    • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
    • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
    • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

    The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

    2 – Some changes in redundancies

    At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

    It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

    Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

    3 – Damages scales

    In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

    These new provisions are applicable to any dismissal issued after the 25th of September.

    The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

    4 – Termination Indemnity

    For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

    • 1/4 of gross salary per year of presence for the 10 first years of seniority,
    • 1/3 of gross salary per year of presence for more than 10 years of seniority.

    Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

    5 – Home Working

    Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

    On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

    6 – Merger of staff representatives in a unique Social and Economic Committee

    Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

    This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

    Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

    A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

    7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

    The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

    A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

    Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

    8 – Opening of company‘s negotiations to the small companies without staff representatives

    In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

    An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

    Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

    This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

    Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

    Salary Reduction: No.

    Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

    Stock Options: Not mandatory.

    Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

    13th Salary: Yes, but there is no 14th Salary.

    Seniority Payment Fund: No.

    Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

    Internal Labor Regulations: Yes.

    Trial Period when the Employment Relationship begins: 90 days.

    Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

    Types of Contract:

    1. Indefinite-Term Contracts:
      • Are the general rule in Argentinian Labor law.
      • No need to be drafted in written form, however it is normally used and convenient.
      • Subject to a trial period of three months.
    2. Fixed-Term Contracts
      • The end of the term is fixed
      • Requires existence of a just cause.
      • Minimum duration: One month.
      • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
      • No trial period is applicable and must be executed in writing.
    3. Contingent Work
      • For contingent work and the end of the term is uncertain
      • Requires existence of a just cause
      • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

    Work Day and Work Week: Eight hours and 48 hours.

    Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

    Paid Weekly Rest Days and Holidays: Yes.

    Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

    Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

    Maternity Leave: 90 days of paid leave.

    Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

    Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

    Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

    Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

    Severance:

    • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
    • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
    • Accrued salary, proportional vacations, and proportional 13th salary.

    Prior Notice of Dismissal:

    15 days: during the trial period.

    30 days: up to five worked years.

    60 days: above five worked years.

    Restrictions on hiring foreign employees: There are no limitations.

    Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

    Strike:

    • Only recognized trade unions can call for strikes.
    • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

    Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

    Illegal Strike: This occurs when:

    • the trade union fails to comply with the settlement procedures, or
    • the strike does not respond to a labor cause, or
    • there is strike-related violence either on or off the employer’s property.

    Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

    Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

    Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

    Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

    Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

    Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

    Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

    Social Security Contributions / Income Tax:

    The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

    • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
    • 23% for the rest of the employers.
    • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
    • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

    Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

    The author of this post is Tomás García Navarro.

    The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

    Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

    The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

    The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

    • Expected time of the transmission.
    • Reasons for the transmission.
    • Legal, economic and social consequences of the transmission to the employees.
    • Measures envisaged in relation to the employees.

    If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

    Occupational risk prevention

    The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

    For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

    Under Spanish law a labour contract may be suspended by the following causes:

    • Mutual agreement of the Parties.
    • The legitimate causes consigned in the contract.
    • Temporary incapacity of the employee.
    • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
    • Military service.
    • Holding a representative public charge.
    • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
    • Suspension from duties without pay for disciplinary reasons.
    • Temporary force majeure.
    • For economic, technical, organizational or production causes.
    • Forced leave of absence.
    • For exercising the right to strike.
    • Legal closing of the company.
    • For decision of the employee as a consequence of gender-based violence.

    The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

    Leaves

    The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

    The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

    The employees will have the right for a leave period for no more than three years to attend the care of every son.

    The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

    Caroline Barbe

    Practice areas

    • Labor
    Contact Caroline

    Contact Caroline





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      Argentina – Labor rights

      18 May 2017

      • Argentina
      • Labor

      The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

      The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

      Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

      • The subjects and minimum content that all EBP must have are listed exhaustively.
      • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
      • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
      • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

      On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

      In particular, these new measures adopted in article 28 of the WS are:

      • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
      • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
      • The Salary Registry must be accessible to the legal representatives of the workers.
      • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

      The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

      On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

      New cumulation ground for dismissal

      The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

      Severance: Transitional allowance

      The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

      The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

      There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

      Extending the scope of the chain of employment agreements

      The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

      It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

      An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

      Call agreement

      A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

      Payrolling

      Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

      Payroll employees are also entitled to an ‘adequate’ pension scheme.

      Unemployment benefit premium differentiation

      In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

      Commencing date

      The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

      The author of this post is Regine de Wit.

      10 practical aspects to consider for an adequate timing

      Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

      1. In some cases notice needs to be given within a two-week period

      In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

      1. Notice has to be given in writing

      The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

      1. Ordinary dismissal may be prohibited by a collective bargaining agreement

      Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

      1. Insufficient information of the works councils may lead to an invalid termination

      The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

      1. General dismissal protection is related to seniority and size of the establishment

      General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

      1. Some terminations may need prior permission

      Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

      1. There is no general claim for severance payment in case of an unfair dismissal

      Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

      1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

      A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

      1. Any termination agreement has to be in written form as well

      Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

      1. The forfeiture clause of a termination agreement may not cover all claims 

      Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

      Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

       

      Tha author of this post is Alexander Lentz

      We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

      The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

      Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

      Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

      In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

      European and national rules pursue two main goals:

      – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

      – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

      To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

      Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

      As far as the companies are concerned the following elements are deemed relevant:

      1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
      2. b) the place where posted workers are recruited and from which they are posted;
      3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
      4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
      5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

      As far as the workers are concerned, the following elements should be taken into consideration:

      1. a) whether the work is carried out for a limited period of time in another Member State;
      2. b) the date on which the posting starts;
      3. c) whether the work is usually carried out in the country of origin;
      4. d) whether the posted worker will resume work in the Member State from where he has been posted;
      5. e) the nature of activities performed;
      6. f) whether travel, board and lodging costs are reimbursed by the employer;
      7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

      None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

      If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

      Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

      To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

      – maximum work and minimum rest periods;

      – minimum paid annual leave;

      – minimum rates of pay;

      – health, safety and hygiene at work;

      – protective measures for mothers, children and young people;

      – equal treatment of women and men and non-discrimination.

      As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

      For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

      Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

      For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

      France has for long been seen as a “social trap” by foreign investors… and it was often right.

      The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

      On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

      Below, a summary of what you need to know in 8 points.

      1 – More flexibility in the motivation of dismissal letters

      In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

      • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
      • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
      • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

      The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

      2 – Some changes in redundancies

      At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

      It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

      Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

      3 – Damages scales

      In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

      These new provisions are applicable to any dismissal issued after the 25th of September.

      The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

      4 – Termination Indemnity

      For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

      • 1/4 of gross salary per year of presence for the 10 first years of seniority,
      • 1/3 of gross salary per year of presence for more than 10 years of seniority.

      Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

      5 – Home Working

      Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

      On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

      6 – Merger of staff representatives in a unique Social and Economic Committee

      Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

      This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

      Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

      A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

      7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

      The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

      A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

      Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

      8 – Opening of company‘s negotiations to the small companies without staff representatives

      In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

      An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

      Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

      This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

      Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

      Salary Reduction: No.

      Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

      Stock Options: Not mandatory.

      Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

      13th Salary: Yes, but there is no 14th Salary.

      Seniority Payment Fund: No.

      Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

      Internal Labor Regulations: Yes.

      Trial Period when the Employment Relationship begins: 90 days.

      Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

      Types of Contract:

      1. Indefinite-Term Contracts:
        • Are the general rule in Argentinian Labor law.
        • No need to be drafted in written form, however it is normally used and convenient.
        • Subject to a trial period of three months.
      2. Fixed-Term Contracts
        • The end of the term is fixed
        • Requires existence of a just cause.
        • Minimum duration: One month.
        • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
        • No trial period is applicable and must be executed in writing.
      3. Contingent Work
        • For contingent work and the end of the term is uncertain
        • Requires existence of a just cause
        • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

      Work Day and Work Week: Eight hours and 48 hours.

      Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

      Paid Weekly Rest Days and Holidays: Yes.

      Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

      Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

      Maternity Leave: 90 days of paid leave.

      Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

      Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

      Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

      Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

      Severance:

      • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
      • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
      • Accrued salary, proportional vacations, and proportional 13th salary.

      Prior Notice of Dismissal:

      15 days: during the trial period.

      30 days: up to five worked years.

      60 days: above five worked years.

      Restrictions on hiring foreign employees: There are no limitations.

      Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

      Strike:

      • Only recognized trade unions can call for strikes.
      • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

      Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

      Illegal Strike: This occurs when:

      • the trade union fails to comply with the settlement procedures, or
      • the strike does not respond to a labor cause, or
      • there is strike-related violence either on or off the employer’s property.

      Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

      Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

      Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

      Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

      Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

      Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

      Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

      Social Security Contributions / Income Tax:

      The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

      • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
      • 23% for the rest of the employers.
      • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
      • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

      Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

      The author of this post is Tomás García Navarro.

      The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

      Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

      The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

      The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

      • Expected time of the transmission.
      • Reasons for the transmission.
      • Legal, economic and social consequences of the transmission to the employees.
      • Measures envisaged in relation to the employees.

      If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

      Occupational risk prevention

      The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

      For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

      Under Spanish law a labour contract may be suspended by the following causes:

      • Mutual agreement of the Parties.
      • The legitimate causes consigned in the contract.
      • Temporary incapacity of the employee.
      • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
      • Military service.
      • Holding a representative public charge.
      • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
      • Suspension from duties without pay for disciplinary reasons.
      • Temporary force majeure.
      • For economic, technical, organizational or production causes.
      • Forced leave of absence.
      • For exercising the right to strike.
      • Legal closing of the company.
      • For decision of the employee as a consequence of gender-based violence.

      The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

      Leaves

      The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

      The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

      The employees will have the right for a leave period for no more than three years to attend the care of every son.

      The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

      Spain: transfer of a business and occupational risk prevention

      16 February 2017

      • Spain
      • Labor

      The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

      The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

      Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

      • The subjects and minimum content that all EBP must have are listed exhaustively.
      • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
      • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
      • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

      On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

      In particular, these new measures adopted in article 28 of the WS are:

      • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
      • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
      • The Salary Registry must be accessible to the legal representatives of the workers.
      • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

      The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

      On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

      New cumulation ground for dismissal

      The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

      Severance: Transitional allowance

      The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

      The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

      There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

      Extending the scope of the chain of employment agreements

      The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

      It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

      An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

      Call agreement

      A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

      Payrolling

      Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

      Payroll employees are also entitled to an ‘adequate’ pension scheme.

      Unemployment benefit premium differentiation

      In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

      Commencing date

      The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

      The author of this post is Regine de Wit.

      10 practical aspects to consider for an adequate timing

      Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

      1. In some cases notice needs to be given within a two-week period

      In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

      1. Notice has to be given in writing

      The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

      1. Ordinary dismissal may be prohibited by a collective bargaining agreement

      Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

      1. Insufficient information of the works councils may lead to an invalid termination

      The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

      1. General dismissal protection is related to seniority and size of the establishment

      General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

      1. Some terminations may need prior permission

      Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

      1. There is no general claim for severance payment in case of an unfair dismissal

      Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

      1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

      A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

      1. Any termination agreement has to be in written form as well

      Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

      1. The forfeiture clause of a termination agreement may not cover all claims 

      Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

      Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

       

      Tha author of this post is Alexander Lentz

      We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

      The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

      Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

      Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

      In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

      European and national rules pursue two main goals:

      – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

      – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

      To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

      Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

      As far as the companies are concerned the following elements are deemed relevant:

      1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
      2. b) the place where posted workers are recruited and from which they are posted;
      3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
      4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
      5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

      As far as the workers are concerned, the following elements should be taken into consideration:

      1. a) whether the work is carried out for a limited period of time in another Member State;
      2. b) the date on which the posting starts;
      3. c) whether the work is usually carried out in the country of origin;
      4. d) whether the posted worker will resume work in the Member State from where he has been posted;
      5. e) the nature of activities performed;
      6. f) whether travel, board and lodging costs are reimbursed by the employer;
      7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

      None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

      If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

      Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

      To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

      – maximum work and minimum rest periods;

      – minimum paid annual leave;

      – minimum rates of pay;

      – health, safety and hygiene at work;

      – protective measures for mothers, children and young people;

      – equal treatment of women and men and non-discrimination.

      As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

      For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

      Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

      For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

      France has for long been seen as a “social trap” by foreign investors… and it was often right.

      The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

      On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

      Below, a summary of what you need to know in 8 points.

      1 – More flexibility in the motivation of dismissal letters

      In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

      • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
      • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
      • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

      The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

      2 – Some changes in redundancies

      At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

      It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

      Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

      3 – Damages scales

      In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

      These new provisions are applicable to any dismissal issued after the 25th of September.

      The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

      4 – Termination Indemnity

      For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

      • 1/4 of gross salary per year of presence for the 10 first years of seniority,
      • 1/3 of gross salary per year of presence for more than 10 years of seniority.

      Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

      5 – Home Working

      Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

      On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

      6 – Merger of staff representatives in a unique Social and Economic Committee

      Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

      This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

      Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

      A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

      7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

      The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

      A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

      Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

      8 – Opening of company‘s negotiations to the small companies without staff representatives

      In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

      An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

      Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

      This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

      Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

      Salary Reduction: No.

      Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

      Stock Options: Not mandatory.

      Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

      13th Salary: Yes, but there is no 14th Salary.

      Seniority Payment Fund: No.

      Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

      Internal Labor Regulations: Yes.

      Trial Period when the Employment Relationship begins: 90 days.

      Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

      Types of Contract:

      1. Indefinite-Term Contracts:
        • Are the general rule in Argentinian Labor law.
        • No need to be drafted in written form, however it is normally used and convenient.
        • Subject to a trial period of three months.
      2. Fixed-Term Contracts
        • The end of the term is fixed
        • Requires existence of a just cause.
        • Minimum duration: One month.
        • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
        • No trial period is applicable and must be executed in writing.
      3. Contingent Work
        • For contingent work and the end of the term is uncertain
        • Requires existence of a just cause
        • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

      Work Day and Work Week: Eight hours and 48 hours.

      Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

      Paid Weekly Rest Days and Holidays: Yes.

      Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

      Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

      Maternity Leave: 90 days of paid leave.

      Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

      Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

      Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

      Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

      Severance:

      • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
      • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
      • Accrued salary, proportional vacations, and proportional 13th salary.

      Prior Notice of Dismissal:

      15 days: during the trial period.

      30 days: up to five worked years.

      60 days: above five worked years.

      Restrictions on hiring foreign employees: There are no limitations.

      Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

      Strike:

      • Only recognized trade unions can call for strikes.
      • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

      Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

      Illegal Strike: This occurs when:

      • the trade union fails to comply with the settlement procedures, or
      • the strike does not respond to a labor cause, or
      • there is strike-related violence either on or off the employer’s property.

      Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

      Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

      Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

      Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

      Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

      Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

      Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

      Social Security Contributions / Income Tax:

      The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

      • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
      • 23% for the rest of the employers.
      • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
      • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

      Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

      The author of this post is Tomás García Navarro.

      The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

      Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

      The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

      The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

      • Expected time of the transmission.
      • Reasons for the transmission.
      • Legal, economic and social consequences of the transmission to the employees.
      • Measures envisaged in relation to the employees.

      If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

      Occupational risk prevention

      The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

      For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

      Under Spanish law a labour contract may be suspended by the following causes:

      • Mutual agreement of the Parties.
      • The legitimate causes consigned in the contract.
      • Temporary incapacity of the employee.
      • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
      • Military service.
      • Holding a representative public charge.
      • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
      • Suspension from duties without pay for disciplinary reasons.
      • Temporary force majeure.
      • For economic, technical, organizational or production causes.
      • Forced leave of absence.
      • For exercising the right to strike.
      • Legal closing of the company.
      • For decision of the employee as a consequence of gender-based violence.

      The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

      Leaves

      The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

      The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

      The employees will have the right for a leave period for no more than three years to attend the care of every son.

      The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

      Javier Gaspar

      Practice areas

      • Distribution
      • Arbitration
      • Franchising
      • Litigation
      • Sport
      Contact Javier

      Contact Javier





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        Spain – Employment suspension and leaves

        27 January 2017

        • Spain
        • Labor

        The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

        The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

        Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

        • The subjects and minimum content that all EBP must have are listed exhaustively.
        • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
        • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
        • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

        On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

        In particular, these new measures adopted in article 28 of the WS are:

        • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
        • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
        • The Salary Registry must be accessible to the legal representatives of the workers.
        • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

        The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

        On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

        New cumulation ground for dismissal

        The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

        Severance: Transitional allowance

        The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

        The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

        There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

        Extending the scope of the chain of employment agreements

        The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

        It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

        An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

        Call agreement

        A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

        Payrolling

        Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

        Payroll employees are also entitled to an ‘adequate’ pension scheme.

        Unemployment benefit premium differentiation

        In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

        Commencing date

        The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

        The author of this post is Regine de Wit.

        10 practical aspects to consider for an adequate timing

        Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

        1. In some cases notice needs to be given within a two-week period

        In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

        1. Notice has to be given in writing

        The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

        1. Ordinary dismissal may be prohibited by a collective bargaining agreement

        Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

        1. Insufficient information of the works councils may lead to an invalid termination

        The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

        1. General dismissal protection is related to seniority and size of the establishment

        General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

        1. Some terminations may need prior permission

        Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

        1. There is no general claim for severance payment in case of an unfair dismissal

        Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

        1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

        A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

        1. Any termination agreement has to be in written form as well

        Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

        1. The forfeiture clause of a termination agreement may not cover all claims 

        Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

        Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

         

        Tha author of this post is Alexander Lentz

        We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

        The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

        Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

        Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

        In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

        European and national rules pursue two main goals:

        – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

        – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

        To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

        Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

        As far as the companies are concerned the following elements are deemed relevant:

        1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
        2. b) the place where posted workers are recruited and from which they are posted;
        3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
        4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
        5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

        As far as the workers are concerned, the following elements should be taken into consideration:

        1. a) whether the work is carried out for a limited period of time in another Member State;
        2. b) the date on which the posting starts;
        3. c) whether the work is usually carried out in the country of origin;
        4. d) whether the posted worker will resume work in the Member State from where he has been posted;
        5. e) the nature of activities performed;
        6. f) whether travel, board and lodging costs are reimbursed by the employer;
        7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

        None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

        If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

        Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

        To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

        – maximum work and minimum rest periods;

        – minimum paid annual leave;

        – minimum rates of pay;

        – health, safety and hygiene at work;

        – protective measures for mothers, children and young people;

        – equal treatment of women and men and non-discrimination.

        As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

        For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

        Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

        For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

        France has for long been seen as a “social trap” by foreign investors… and it was often right.

        The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

        On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

        Below, a summary of what you need to know in 8 points.

        1 – More flexibility in the motivation of dismissal letters

        In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

        • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
        • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
        • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

        The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

        2 – Some changes in redundancies

        At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

        It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

        Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

        3 – Damages scales

        In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

        These new provisions are applicable to any dismissal issued after the 25th of September.

        The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

        4 – Termination Indemnity

        For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

        • 1/4 of gross salary per year of presence for the 10 first years of seniority,
        • 1/3 of gross salary per year of presence for more than 10 years of seniority.

        Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

        5 – Home Working

        Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

        On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

        6 – Merger of staff representatives in a unique Social and Economic Committee

        Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

        This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

        Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

        A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

        7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

        The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

        A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

        Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

        8 – Opening of company‘s negotiations to the small companies without staff representatives

        In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

        An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

        Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

        This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

        Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

        Salary Reduction: No.

        Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

        Stock Options: Not mandatory.

        Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

        13th Salary: Yes, but there is no 14th Salary.

        Seniority Payment Fund: No.

        Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

        Internal Labor Regulations: Yes.

        Trial Period when the Employment Relationship begins: 90 days.

        Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

        Types of Contract:

        1. Indefinite-Term Contracts:
          • Are the general rule in Argentinian Labor law.
          • No need to be drafted in written form, however it is normally used and convenient.
          • Subject to a trial period of three months.
        2. Fixed-Term Contracts
          • The end of the term is fixed
          • Requires existence of a just cause.
          • Minimum duration: One month.
          • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
          • No trial period is applicable and must be executed in writing.
        3. Contingent Work
          • For contingent work and the end of the term is uncertain
          • Requires existence of a just cause
          • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

        Work Day and Work Week: Eight hours and 48 hours.

        Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

        Paid Weekly Rest Days and Holidays: Yes.

        Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

        Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

        Maternity Leave: 90 days of paid leave.

        Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

        Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

        Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

        Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

        Severance:

        • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
        • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
        • Accrued salary, proportional vacations, and proportional 13th salary.

        Prior Notice of Dismissal:

        15 days: during the trial period.

        30 days: up to five worked years.

        60 days: above five worked years.

        Restrictions on hiring foreign employees: There are no limitations.

        Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

        Strike:

        • Only recognized trade unions can call for strikes.
        • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

        Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

        Illegal Strike: This occurs when:

        • the trade union fails to comply with the settlement procedures, or
        • the strike does not respond to a labor cause, or
        • there is strike-related violence either on or off the employer’s property.

        Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

        Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

        Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

        Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

        Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

        Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

        Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

        Social Security Contributions / Income Tax:

        The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

        • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
        • 23% for the rest of the employers.
        • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
        • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

        Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

        The author of this post is Tomás García Navarro.

        The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

        Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

        The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

        The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

        • Expected time of the transmission.
        • Reasons for the transmission.
        • Legal, economic and social consequences of the transmission to the employees.
        • Measures envisaged in relation to the employees.

        If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

        Occupational risk prevention

        The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

        For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

        Under Spanish law a labour contract may be suspended by the following causes:

        • Mutual agreement of the Parties.
        • The legitimate causes consigned in the contract.
        • Temporary incapacity of the employee.
        • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
        • Military service.
        • Holding a representative public charge.
        • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
        • Suspension from duties without pay for disciplinary reasons.
        • Temporary force majeure.
        • For economic, technical, organizational or production causes.
        • Forced leave of absence.
        • For exercising the right to strike.
        • Legal closing of the company.
        • For decision of the employee as a consequence of gender-based violence.

        The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

        Leaves

        The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

        The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

        The employees will have the right for a leave period for no more than three years to attend the care of every son.

        The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

        Javier Gaspar

        Practice areas

        • Distribution
        • Arbitration
        • Franchising
        • Litigation
        • Sport
        Contact Javier

        Contact Javier





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          Employment termination in Spain

          12 December 2016

          • Spain
          • Labor

          The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

          The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

          Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

          • The subjects and minimum content that all EBP must have are listed exhaustively.
          • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
          • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
          • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

          On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

          In particular, these new measures adopted in article 28 of the WS are:

          • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
          • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
          • The Salary Registry must be accessible to the legal representatives of the workers.
          • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

          The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

          On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

          New cumulation ground for dismissal

          The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

          Severance: Transitional allowance

          The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

          The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

          There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

          Extending the scope of the chain of employment agreements

          The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

          It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

          An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

          Call agreement

          A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

          Payrolling

          Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

          Payroll employees are also entitled to an ‘adequate’ pension scheme.

          Unemployment benefit premium differentiation

          In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

          Commencing date

          The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

          The author of this post is Regine de Wit.

          10 practical aspects to consider for an adequate timing

          Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

          1. In some cases notice needs to be given within a two-week period

          In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

          1. Notice has to be given in writing

          The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

          1. Ordinary dismissal may be prohibited by a collective bargaining agreement

          Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

          1. Insufficient information of the works councils may lead to an invalid termination

          The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

          1. General dismissal protection is related to seniority and size of the establishment

          General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

          1. Some terminations may need prior permission

          Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

          1. There is no general claim for severance payment in case of an unfair dismissal

          Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

          1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

          A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

          1. Any termination agreement has to be in written form as well

          Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

          1. The forfeiture clause of a termination agreement may not cover all claims 

          Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

          Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

           

          Tha author of this post is Alexander Lentz

          We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

          The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

          Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

          Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

          In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

          European and national rules pursue two main goals:

          – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

          – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

          To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

          Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

          As far as the companies are concerned the following elements are deemed relevant:

          1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
          2. b) the place where posted workers are recruited and from which they are posted;
          3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
          4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
          5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

          As far as the workers are concerned, the following elements should be taken into consideration:

          1. a) whether the work is carried out for a limited period of time in another Member State;
          2. b) the date on which the posting starts;
          3. c) whether the work is usually carried out in the country of origin;
          4. d) whether the posted worker will resume work in the Member State from where he has been posted;
          5. e) the nature of activities performed;
          6. f) whether travel, board and lodging costs are reimbursed by the employer;
          7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

          None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

          If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

          Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

          To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

          – maximum work and minimum rest periods;

          – minimum paid annual leave;

          – minimum rates of pay;

          – health, safety and hygiene at work;

          – protective measures for mothers, children and young people;

          – equal treatment of women and men and non-discrimination.

          As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

          For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

          Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

          For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

          France has for long been seen as a “social trap” by foreign investors… and it was often right.

          The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

          On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

          Below, a summary of what you need to know in 8 points.

          1 – More flexibility in the motivation of dismissal letters

          In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

          • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
          • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
          • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

          The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

          2 – Some changes in redundancies

          At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

          It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

          Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

          3 – Damages scales

          In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

          These new provisions are applicable to any dismissal issued after the 25th of September.

          The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

          4 – Termination Indemnity

          For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

          • 1/4 of gross salary per year of presence for the 10 first years of seniority,
          • 1/3 of gross salary per year of presence for more than 10 years of seniority.

          Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

          5 – Home Working

          Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

          On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

          6 – Merger of staff representatives in a unique Social and Economic Committee

          Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

          This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

          Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

          A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

          7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

          The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

          A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

          Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

          8 – Opening of company‘s negotiations to the small companies without staff representatives

          In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

          An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

          Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

          This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

          Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

          Salary Reduction: No.

          Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

          Stock Options: Not mandatory.

          Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

          13th Salary: Yes, but there is no 14th Salary.

          Seniority Payment Fund: No.

          Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

          Internal Labor Regulations: Yes.

          Trial Period when the Employment Relationship begins: 90 days.

          Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

          Types of Contract:

          1. Indefinite-Term Contracts:
            • Are the general rule in Argentinian Labor law.
            • No need to be drafted in written form, however it is normally used and convenient.
            • Subject to a trial period of three months.
          2. Fixed-Term Contracts
            • The end of the term is fixed
            • Requires existence of a just cause.
            • Minimum duration: One month.
            • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
            • No trial period is applicable and must be executed in writing.
          3. Contingent Work
            • For contingent work and the end of the term is uncertain
            • Requires existence of a just cause
            • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

          Work Day and Work Week: Eight hours and 48 hours.

          Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

          Paid Weekly Rest Days and Holidays: Yes.

          Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

          Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

          Maternity Leave: 90 days of paid leave.

          Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

          Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

          Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

          Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

          Severance:

          • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
          • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
          • Accrued salary, proportional vacations, and proportional 13th salary.

          Prior Notice of Dismissal:

          15 days: during the trial period.

          30 days: up to five worked years.

          60 days: above five worked years.

          Restrictions on hiring foreign employees: There are no limitations.

          Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

          Strike:

          • Only recognized trade unions can call for strikes.
          • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

          Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

          Illegal Strike: This occurs when:

          • the trade union fails to comply with the settlement procedures, or
          • the strike does not respond to a labor cause, or
          • there is strike-related violence either on or off the employer’s property.

          Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

          Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

          Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

          Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

          Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

          Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

          Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

          Social Security Contributions / Income Tax:

          The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

          • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
          • 23% for the rest of the employers.
          • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
          • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

          Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

          The author of this post is Tomás García Navarro.

          The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

          Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

          The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

          The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

          • Expected time of the transmission.
          • Reasons for the transmission.
          • Legal, economic and social consequences of the transmission to the employees.
          • Measures envisaged in relation to the employees.

          If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

          Occupational risk prevention

          The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

          For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

          Under Spanish law a labour contract may be suspended by the following causes:

          • Mutual agreement of the Parties.
          • The legitimate causes consigned in the contract.
          • Temporary incapacity of the employee.
          • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
          • Military service.
          • Holding a representative public charge.
          • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
          • Suspension from duties without pay for disciplinary reasons.
          • Temporary force majeure.
          • For economic, technical, organizational or production causes.
          • Forced leave of absence.
          • For exercising the right to strike.
          • Legal closing of the company.
          • For decision of the employee as a consequence of gender-based violence.

          The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

          Leaves

          The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

          The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

          The employees will have the right for a leave period for no more than three years to attend the care of every son.

          The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

          Javier Gaspar

          Practice areas

          • Distribution
          • Arbitration
          • Franchising
          • Litigation
          • Sport
          Contact Javier

          Contact Javier





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            Spain – Employees legal representation and changes in working conditions

            24 October 2016

            • Spain
            • Labor

            The object of this post is the analysis of the new obligations that RDL 6/2019 establishes, in terms of Gender Equality, for all types of companies (regardless the number of workers they have) and, specifically, for those companies that have 50 or more workers.

            The main novelty we find in this respect lies in the obligation, for companies with 50 or more workers, to implement an Equality in Business Plan (EBP), in accordance with the provisions of articles 45 and related of the LOIEMH.

            Regarding the content and the conditions of implementation of the EBP, we find the following novelties:

            • The subjects and minimum content that all EBP must have are listed exhaustively.
            • An analysis of the female underrepresentation in the Company is introduced, as a matter that the EBP must contain.
            • The diagnosis that the Company must make prior to the preparation of the EBP must be negotiated with the legal representative of the workers.
            • A Register of EBP for companies is created, in which all the EBP implemented in the Companies must be registered, regardless of the number of workers they have.

            On the other hand, RDL 6/2019 gives a new wording to Article 28 of the Workers’ Statute (WS), which includes the obligation of the Company to comply with the requirement of equal pay for men and women, establishing a series of measures and obligations in charge of the Companies, in order to ensure the effective fulfillment of the salary equality between genders.

            In particular, these new measures adopted in article 28 of the WS are:

            • What is to be considered as “work of equal value” is specified, in order to facilitate a single concept and eliminate any doubt in this regard.
            • Companies have the obligation to keep a Salary Register, with the average values ​​of salaries, salary supplements and extra-salary perceptions of their workforce, differentiated by sex and distributed by professional groups, professional categories or equal work positions value.
            • The Salary Registry must be accessible to the legal representatives of the workers.
            • In companies with 50 or more workers in which the average remuneration of workers of one sex is higher than the other by 25% or more, a justification for said difference must be included in the Salary Register, and must be certified that it is due to reasons unrelated to the sex of the workers.

            The breach, by the Companies, of the obligations in matters of Gender Equality and, in particular, those related to the EBP and equal payment between men and women, may entail the imposition of important sanctions by the Labor Inspector and the “Tesorería General de la Seguridad Social”.

            On 28 May 2019 the Dutch Parliament adopted new employment legislation: The Balanced Labour Market Act (‘Wet Arbeidsmarkt in Balans’), hereinafter the WAB. The most important changes are discussed below.

            New cumulation ground for dismissal

            The legislation introduces a new ground for dismissal. This makes it a bit easier for employers to dismiss employees. Dismissal will also be possible if there is a sum of circumstances, the so-called cumulation ground. Now the employer must fully comply with 1 of the 8 grounds for dismissal. This new ground gives the court the opportunity to combine circumstances. The employee can receive an extra half transitional allowance (on top of the current statutory transitional allowance) if the cumulation ground is used for the dismissal.

            Severance: Transitional allowance

            The new act arranges that employees will have the right to a transitional allowance immediately from the first start of the employment contract, instead of only after two years.

            The accrual of transitional allowance is reduced in case of long-term employment. The accrual for everyone, regardless of the age of the employee, is one third of a monthly salary.

            There will be a scheme for small employers to compensate the transitional allowance if they have to end their business due to retirement or illness.

            Extending the scope of the chain of employment agreements

            The current period after which successive fixed-term employment contracts legally change into an employment contract for an indefinite period is two years. The WAB broadens the succession of temporary contracts. Under the WAB it will still be possible to enter into a maximum of three temporary contracts. The maximum period of fixed-term contracts will be extended to three years. This chain of successive fixed-term employment contracts can be broken by an interruption period of six months.

            It is possible to shorten the interruption period between a chain of fixed-term contracts in a Collective Bargaining Agreement from six to three months if there is recurring temporary work that can be done for a maximum of nine months a year.

            An exception to the chain provision will be made for temporary workers in primary education who replace employees who became ill.

            Call agreement

            A new definition is introduced in Article 7: 628a paragraph 9 of the Dutch Civil Code: the ‘call agreement’. In call agreements the number of working hours per period and the salary are not established upfront but can vary depending on for example the amount of work available. Under the WAB an employee must be called by the employer at least four days in advance. If the employer does not follow this regulation, the employee is not obligated to come in for work. Call workers retain the right to wages for the period for which they were called if the work is cancelled less than four days in advance. The employer is obliged to offer the call worker an employment contract after a year for the average number of hours that he has worked in the previous twelve months. In Collective Bargaining Agreements alternative arrangements can be made under certain conditions.

            Payrolling

            Payroll employees will receive the same legal position and primary and secondary employment conditions as employees who are employed by the employer.

            Payroll employees are also entitled to an ‘adequate’ pension scheme.

            Unemployment benefit premium differentiation

            In order to make employment contracts for an indefinite period of time more attractive for employers, the WAB arranges for an unemployment benefit premium differentiation between permanent and temporary contracts. A lower premium will apply for employment contracts for an indefinite period of time and a higher premium for fixed-term employment contracts.

            Commencing date

            The intended commencing date of the WAB is 1 January 2020. The right to an adequate pension scheme for payrolling starts on 1 January 2021.

            The author of this post is Regine de Wit.

            10 practical aspects to consider for an adequate timing

            Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. The following ten aspects may be a first general guideline for the termination of an employment contract in Germany, in particular regarding its timing.

            1. In some cases notice needs to be given within a two-week period

            In case of gross misconduct an employer may be entitled to terminate an employment relationship forthwith. However, if notice of termination is not served to the employee within two weeks after acknowledgement of the respective facts, this right is forfeited.

            1. Notice has to be given in writing

            The notice has to be signed by the legal representative of the employer and delivered to the employee. Neither a transmission by facsimile nor an email with a scanned copy is sufficient. If the representative is not on site, timing may become an essential aspect of the termination process.

            1. Ordinary dismissal may be prohibited by a collective bargaining agreement

            Collective bargaining agreements often provide a ban on ordinary dismissal under certain circumstances (e.g. based on the age of the employee). A careful assessment of all applicable collective bargaining agreements before a termination is therefore indispensable.

            1. Insufficient information of the works councils may lead to an invalid termination

            The establishment of a works council is not mandatory in Germany. However, if it is established, it needs to be notified and heard before every termination of an employment contract. The notification must contain a sufficient description of the grounds for the termination, otherwise the termination may be deemed invalid. Having been notified, the works council has one week (in some cases: three days) to object. Any termination before such term without consent of the works council would be deemed invalid as well. Timing may therefore become again an essential aspect of the termination process.

            1. General dismissal protection is related to seniority and size of the establishment

            General dismissal protection is basically applicable in establishments with more than 10 employees. Exceptions may apply in favour of those employees whose employment relationships commenced already before 1st January 2004. In addition, the respective employee needs to have at least a seniority of six month. If these criteria are met, the termination has to be justified by operational reasons, misconduct or personal incapacity as set out in the Dismissal Protection Act.

            1. Some terminations may need prior permission

            Irrespective of the application of the afore mentioned Dismissal Protection Act some kind of terminations (e.g. employees on parental leave) may need a special permission of the works council, the Labour Court or the respective public authority as applicable. These procedures may last from some days up to two years.

            1. There is no general claim for severance payment in case of an unfair dismissal

            Aside from those agreed in termination agreements there is no general claim for severance payment in case of an unfair dismissal. In general, the statutory remedy will only be reinstatement and back pay. Only under certain circumstances each party may apply for the termination of the employment relationship and a severance payment in front of the Labour Court. However, in most of the cases parties end up in a voluntary termination agreement.

            1. Non-competes may lead to extensive payments and cannot be withdrawn forthwith unilaterally without cause

            A binding covenant to non-compete leads to a compensation payment of at least 50 % of the former salary for every month of its duration. Even in case of a justified termination it may only be terminated with a notice period of one year. However, both parties may agree upon its immediate suspension in a termination agreement.

            1. Any termination agreement has to be in written form as well

            Also a termination agreement needs to fulfil the same formal requirements as set out already above under point 2. Again, if the representative is not on site, timing may become an essential aspect of the bargaining process.

            1. The forfeiture clause of a termination agreement may not cover all claims 

            Termination agreements often contain general forfeiture clauses at their end, covering also those potential claims which have not been explicitly mentioned or identified by the parties. However, some claims (e.g. pension claims) may not be covered by such a (general) forfeiture clause.

            Please note that these ten aspects contain general information only. Further details as well as possible exceptions therefore need to be checked on a case-by-case basis by a professional advisor.

             

            Tha author of this post is Alexander Lentz

            We have cross-border posting of workers when an employer from a State provides its services in another State, sending there its employees.

            The phenomenon has been spreading out in Europe in the last 20 years, mostly since Eastern countries, with lower labour costs, joined the EU. Therefore various legislative measures have been discussed with regard to this subject at European and national level and it has been dealt with in some major decisions of the European Court of Justice too.

            Indeed, the cross-border posting of workers involves many fundamental rights recognised by the EU and requires a careful balancing of the interests at stake.

            Free movement of workers, capitals and goods and especially free provision of services (art. 56 TFEU) shall be granted, but also fair competition and workers’ protection are to be ensured.

            In 1996 the European Parliament and the Council adopted a first directive on the matter (Directive 96/71/EC, implemented in Italy with D. Lgs. 72/2000); in 2014 another directive was adopted (Directive 2014/67/EU, implemented in Italy with D. Lgs. 136/2016) in order to better enforce the principles set out in the first one.

            European and national rules pursue two main goals:

            – to prevent and combat fictitious postings through letterbox companies, ensuring a level playing field for the service providers in Europe;

            – to ensure uniform treatment and protection of posted workers, avoiding ‘social dumping’ phenomena.

            To achieve these goals the 1996 Directive laid down a nucleus of mandatory rules to provide a minimum protection for posted workers all over Europe. To enforce this protection, the 2014 Directive strengthened the cooperation system among national authorities and set out a series of factual elements to be considered in order to determine whether a posting is ‘genuine’ or not.

            Art. 4 of the 2014 Directive (transposed into art. 3 of Italian Law) details many of these elements concerning the companies involved and the posted workers.

            As far as the companies are concerned the following elements are deemed relevant:

            1. a) the place where the company has its registered office and its head office, where it uses premises, pays taxes and social security contributions and where it is registered with the Chamber of Commerce;
            2. b) the place where posted workers are recruited and from which they are posted;
            3. c) the law applicable to the contracts concluded both between the company and its workers and between the company and its customers;
            4. d) the place where the company carries out its main business activity and where its administrative staff is employed;
            5. e) the number of contracts performed and/or the turnover of the company in the Member State of establishment, taking into account the specific situation of newly established companies and of SMEs.

            As far as the workers are concerned, the following elements should be taken into consideration:

            1. a) whether the work is carried out for a limited period of time in another Member State;
            2. b) the date on which the posting starts;
            3. c) whether the work is usually carried out in the country of origin;
            4. d) whether the posted worker will resume work in the Member State from where he has been posted;
            5. e) the nature of activities performed;
            6. f) whether travel, board and lodging costs are reimbursed by the employer;
            7. g) any previous period during which the activities have been carried out by the same or by another posted worker.

            None of these elements shall be deemed final; it’s up to the national authorities to make an overall assessment of all factual elements and decide whether a posting is genuine or not.

            If it proves not to be genuine, financial administrative penalties and fines can be imposed both on the posting and on the host company; moreover both of them are held responsible for the workers’ credits.

            Italian law has also strengthened that provision, confirming its hostility towards any kind of labour brokering. If the Italian authorities assess that the posting is not genuine, the “posted worker is considered in all respects a direct employee of the company taking advantage of his work (art. 3 of Italian Law).

            To protect posted workers and ensure a level playing field, art. 3 of the 1996 Directive (art. 4 of Italian law) requires that each Member State grants posted workers employment conditions comparable to those granted to local workers, whatever the laws applicable to the working relationship are. In particular, posted workers shall be entitled to equality of treatment concerning the following matters:

            – maximum work and minimum rest periods;

            – minimum paid annual leave;

            – minimum rates of pay;

            – health, safety and hygiene at work;

            – protective measures for mothers, children and young people;

            – equal treatment of women and men and non-discrimination.

            As a matter of fact, the most challenging aspect is the ‘minimum rates of pay’. Actually, in each Member State wages are made up of many different entries, not always easy to be compared, and are defined from different sources (law / administrative provisions / collective agreements). By the way economic issues are obviously crucial to companies and workers when they have to decide whether the posting is worthwhile.

            For these reasons, the European Court of Justice set out that the rates of pay granted to posted workers shall be compared with those of the host country workers on an overall basis and not by comparing individual entries. Besides, the ECJ has specified that the only elements to be taken into consideration for such comparison shall be those strictly connected to the work performed, thus excluding bonuses or cost refund. European case-law has also   made clear that the pay items to be taken into account shall be transparent and available to posting employers.

            Lastly, European Provisions impose to the Member States to allow access to the legal protection instruments provided for local workers to the workers posted within their territory.

            For that purpose, art. 5 of Italian Law enables workers posted in Italy to call on the competent administrative authorities and to take judicial action to defend their rights.

            France has for long been seen as a “social trap” by foreign investors… and it was often right.

            The last few months have been dedicated to change this, in order to secure more employers, and allow more flexibility (in a negotiated framework) within companies.

            On the 14th of February, the Senate has ratified what we call the “Macron” decrees that were issued at the end of September.

            Below, a summary of what you need to know in 8 points.

            1 – More flexibility in the motivation of dismissal letters

            In France, dismissals must be justified. However, to reduce litigation and convictions of employers linked to lack of motives, it is now provided that:

            • Before referring to the Judge, employees might ask their employer for more explanation on what the allegations against them are, this to defuse conflict and promote dialogue.
            • If the employee did not ask for more explanations, the dismissal will not be judged unjustified for a lack of motives but only an irregularity of procedure might be retained (giving an entitlement to a maximum of 1 month salary as damages).
            • The employer might, if asked by their employee or at their own initiative, explain more into details the reason for termination, and this explanation will be taken into account by the Judges in case of litigation (when before, only what was written in the dismissal letter was taken into account without any possibility to give any further explanation).

            The time-limit to challenge a dismissal is moreover reduced to 12 months (vs 2 years before) with an aim to rapidly secure the situations.

            2 – Some changes in redundancies

            At last, a glimmer of hope for employers belonging to an International group: the perimeter of appreciation of the economic reason which is required to make someone redundant, is now restrained to the national territory (except for fraud).

            It means that an investor abroad who has financial difficulties on the French territory can, from now on, decide redundancies even if the other companies of the group abroad make profit.

            Also, the research for redeployment shall take place within the French territory only and not in the whole group outside France.

            3 – Damages scales

            In matter of dismissal without any substantial grounds, a compulsory statutory scale is included in the Labour Code.

            These new provisions are applicable to any dismissal issued after the 25th of September.

            The maximum allowance is set at 20 months of gross salary for someone having 29 years’ seniority or more when being unfairly dismissed.

            4 – Termination Indemnity

            For all the terminations decided by an employer or for any agreed termination concluded after the 25th of September, the legal indemnity is now:

            • 1/4 of gross salary per year of presence for the 10 first years of seniority,
            • 1/3 of gross salary per year of presence for more than 10 years of seniority.

            Moreover, the minimum seniority required is lowered, from one year to eight months continuous seniority to be able to benefit from this legal termination indemnity.

            5 – Home Working

            Companies who want to organize work from home (other than occasional) must implement it by a collective agreement or a company charter, specifying the eligible positions to this work mode, the working conditions, etc. If telework is refused, the employer shall explain the reasons for refusal to the employee.

            On the contrary, for an occasional work from home, only the parties’ agreement is required without any formality or financial compensation.

            6 – Merger of staff representatives in a unique Social and Economic Committee

            Until recently, French companies have had Workers’ Representatives (“Délégués du Personnel”), Work’s Council (“Comité d’Entreprise”), Health, Safety and Working Conditions Committee (“CHSCT”) depending on the company’s workforce. Sometimes, these Committees were linked one to another or sometimes just merged.

            This implied a complexity and often an obligation for the employer to officially hold several meetings on the same topic with different representatives (no matter if those meetings had the same elected members or not).

            Now this is simplified: as soon as companies reach the number of 11 employees on their payroll, they have to implement an Economic and Social Committee (CSE). Its missions and resources are more or less important depending if the threshold of 50 employees is reached or not.

            A Company’s agreement might as well enforce the fact that this CSE will also have the power to negotiate agreements (instead of the Unions) and will from now on be named Company Council (inspired by Germany).

            7 – Larger possibilities to negotiate Company’s own rules, even if these rules do not comply with Branch Agreements

            The announced revolution took place: the Company’s Collective Agreements now prevail over the branch agreements as a general rule (even if some clauses of the Branch Collective Agreements should still be respected).

            A brand new occasion for employers to grab this opportunity and to adapt and customize the rules of the game for the needs of their company and their employees, renegotiating for example bonuses (seniority bonus, vacation bonus, …) or some aspects of working time.

            Specific working conditions can also be negotiated if they are necessary to the well-functioning of the company.

            8 – Opening of company‘s negotiations to the small companies without staff representatives

            In companies with less than 50 employees, possibilities to negotiate are now on larger, to allow the managers to negotiate with staff representatives or with employees if there is no Union in the company.

            An agreement can be concluded directly with the employees who approve the agreement draft by referendum, especially, in companies with less than 20 employees and without any staff representatives.

            Wide possibilities are therefore now open to companies in France, no matter the size, the absence of unions, or the branch of activity, as long as they are willing to negotiate with their personnel.

            This post aims at giving an overview of some key issues about labor rights in Argentina, which foreign investors should know before entering in the Argentinian market.

            Minimum Salary: ARS 8,060 (ARS 40.40 per hour) or the amount established for the employee’s category in the collective bargaining agreement, whichever is higher.

            Salary Reduction: No.

            Profit Sharing: It is mandatory according to a constitutional clause, though it is not regulated by the labor law.

            Stock Options: Not mandatory.

            Integration of Benefits as part of the Salary: Unless specifically regulated by the labor law as a non- remunerative fringe benefit, its economic value is part of the remuneration and cannot be withdrawn.

            13th Salary: Yes, but there is no 14th Salary.

            Seniority Payment Fund: No.

            Employment Contract: It is not required for indefinite-term contracts, but it is mandatory for special hiring alternatives (e.g.: fixed term, seasonal, internship, etc.).

            Internal Labor Regulations: Yes.

            Trial Period when the Employment Relationship begins: 90 days.

            Employment Contract for a Stated Term: The minimum duration is of one month and the maximum of five years. It requires the existence of a just cause.

            Types of Contract:

            1. Indefinite-Term Contracts:
              • Are the general rule in Argentinian Labor law.
              • No need to be drafted in written form, however it is normally used and convenient.
              • Subject to a trial period of three months.
            2. Fixed-Term Contracts
              • The end of the term is fixed
              • Requires existence of a just cause.
              • Minimum duration: One month.
              • Maximum duration: Five years, severance payment upon termination when term exceeds one year.
              • No trial period is applicable and must be executed in writing.
            3. Contingent Work
              • For contingent work and the end of the term is uncertain
              • Requires existence of a just cause
              • When an employee is hired due to a production peak or market requirements, the maximum hiring period is six months per year and 12 months every three years.

            Work Day and Work Week: Eight hours and 48 hours.

            Overtime Surcharge: 50% weekly days and 100% on weekends (Saturdays after 1:00 p.m.) and holidays.

            Paid Weekly Rest Days and Holidays: Yes.

            Annual Paid Vacations: 14, 21, 28, and 35 calendar days after one, five, 10, and 20 years of accrued seniority.

            Annual Vacation Bonus: Yes. Annual paid leave: salary during vacation days is increased by 20% of its regular value.

            Maternity Leave: 90 days of paid leave.

            Statute of Limitations: Two years with possible extension up to three years and six months, when causes of suspension of statute of limitation term applies.

            Special bars against dismissal: Employers cannot discharge workers’ council’s representatives.

            Pregnant women, new mothers and newlyweds receive special severance in case of termination without just cause.

            Termination: No prior authorization is required to dismiss without just cause. Execution of termination agreement and approval (“homologación”) by a labor judicial or administrative authority is advisable.

            Severance:

            • Seniority: one month of salary per year of work or fraction exceeding three months, with limitations.
            • Lack of prior notice: one-half, one or two months of salary, if seniority is less than three months, more than three months and less than five years, or more than five years.
            • Accrued salary, proportional vacations, and proportional 13th salary.

            Prior Notice of Dismissal:

            15 days: during the trial period.

            30 days: up to five worked years.

            60 days: above five worked years.

            Restrictions on hiring foreign employees: There are no limitations.

            Unions: Membership in labor unions is voluntary and there may be different types of unions representing the same activity. Organization of unions requires compliance with several formalities.

            Strike:

            • Only recognized trade unions can call for strikes.
            • Employees are not obliged to adhere to a strike, but if they do, they are not entitled to their wages. Employers cannot suspend employees on grounds of the strike but they can ordinarily dismiss without just cause.

            Legal Strike: It is indispensable that a settlement period of no more than 15 days is observed, during which a settlement must be tried before the Labor Ministry. The settlement period may be extended for five additional days, after which – if no agreement is reached – the parties are free to start the action or agree on the voluntary extension of the settlement stage.

            Illegal Strike: This occurs when:

            • the trade union fails to comply with the settlement procedures, or
            • the strike does not respond to a labor cause, or
            • there is strike-related violence either on or off the employer’s property.

            Illegal strikes entitle employers to request employees to withdraw the strike, and eventually dismiss them with just cause. In addition, the union that called the illegal strike could be suspended or lose their official recognition.

            Provision of Food: It is not mandatory: if paid, the economic value may be considered part of the remuneration.

            Company Car: It is not mandatory: if the car is provided to the employee as a working tool, the economic value does not integrate the remuneration. If not, the economic value integrates the remuneration.

            Housing Benefit: It is not mandatory, but if provided to the employee, the economic value integrates the remuneration.

            Health Plan: It is not mandatory, as it is granted by Social Security System. Anyway, if it is provided to the employee, the economic value does not integrate the remuneration.

            Life Insurance: It is not mandatory. If the employer provides additional coverage, the economic value could be deemed as part of the remuneration.

            Performance Bonus/Commission: not mandatory; if granted at the employers’ sole discretion (i.e. without objective basis) it will generate an acquired right in favor of the employee. Thus, the bonus would be part of the remuneration and the average value would integrate the base to calculate severances.

            Social Security Contributions / Income Tax:

            The employers’ contributions are calculated over the employee’s total salary, depending on their activity and turnover amount:

            • 27% if the employer is engaged in the provision of services or in commercial activities and the invoiced amount exceeds ARS 111,900,000.
            • 23% for the rest of the employers.
            • Employees’ contributions: 17%. These contributions have a cap. No social security contributions would be due on employee’s monthly salary exceeding ARS 72.289,62.
            • Net salary after deducting employees’ social security contributions would be subject to income tax withholdings up to 35%.

            Labor agreements: Although labor agreements are not mandatory, and employees are not obligated to visit the labor authority to sign agreements, the execution of these kinds of agreements is convenient. Such waivers and/or releases executed between employees and their employers shall be valid and enforceable only if signed before the government officials of the labor authority (i.e. Ministry of Labor) and approved by such authority.

            The author of this post is Tomás García Navarro.

            The change in ownership of a company, of a working place or of an autonomous production unit will not extinguish by itself the employment relationship, and the new employer will be subrogated in the labour rights and obligations and in the Social Security obligations from the previous employer.

            Company Succession shall be considered to exist when the transmission affect to the economic entity which maintains his identity, understood as an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

            The transferor and the transferee shall be jointly and severally liable during three years for the labour obligations born beforehand the transmission and which had not been satisfied.

            The transferor and the transferee have to report to the legal representatives of the affected employees by the change in the ownership about the following:

            • Expected time of the transmission.
            • Reasons for the transmission.
            • Legal, economic and social consequences of the transmission to the employees.
            • Measures envisaged in relation to the employees.

            If there are no legal representatives of the employees the transferor and the transferee shall provide that information directly to the affected employees.

            Occupational risk prevention

            The law 31/1995 of Prevention of risks at the workplace has the objective of promote the security and the health of the employees’ through the application of measures and the development of the necessary activities to the prevention of risks derived from work.

            For that purpose, the Law establishes the general principles concerning the prevention of professional risks for the protection of the life and health.

            Under Spanish law a labour contract may be suspended by the following causes:

            • Mutual agreement of the Parties.
            • The legitimate causes consigned in the contract.
            • Temporary incapacity of the employee.
            • Maternity, paternity, risk during pregnancy, risk during breastfeeding, and adoption or family placement.
            • Military service.
            • Holding a representative public charge.
            • Deprivation of the liberty of the employee, as long as a condemnatory sentence does not exists.
            • Suspension from duties without pay for disciplinary reasons.
            • Temporary force majeure.
            • For economic, technical, organizational or production causes.
            • Forced leave of absence.
            • For exercising the right to strike.
            • Legal closing of the company.
            • For decision of the employee as a consequence of gender-based violence.

            The suspension of the contract exonerates the reciprocal obligations of working and remunerating the work.

            Leaves

            The leave can be voluntary or forced. The forced leave will give the right to return to the same workplace and to the computation of the seniority, this leave will be given cause by the designation or the election for a public charge which makes impossible to assist to the work. The readmission has to be applied on the following month since the cessation in the public charge.

            The employee with seniority in the company of one year has the right to ask and have the opportunity of having the voluntary leave for a period of time between four months and five years. This right is only possible if four years since the last leave have passed.

            The employees will have the right for a leave period for no more than three years to attend the care of every son.

            The employee in leave will keep only a preferential right to re-entry in a vacant in the same or similar category in relation with his position.

            Javier Gaspar

            Practice areas

            • Distribution
            • Arbitration
            • Franchising
            • Litigation
            • Sport
            Contact Javier

            Contact Javier





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