Global Trends Regulating the Employment Life Cycle
People + Culture Strategies recently hosted the Innangard Global Employment Law Conference in Sydney, during which we were privileged to hear from members of the Innangard International
Employment Law Alliance including representatives from Ireland, France, Germany, Spain, Italy, the Netherlands and the United Kingdom. In the first session, we heard from a selection of legal expert panelists from across the globe on key employment law issues that arise in the employment lifecycle. Some of the global trends emerging provided the audience with key insights into how Australian employment and industrial regulation may soon evolve.
Discrimination can arise at any stage of the employment lifecycle, but it is particularly important to be cognisant of its potential occurrence during the recruitment phase.
In Australia, while the grounds of unlawful discrimination do differ between Federal and State jurisdictions, they cover fairly well-settled protected characteristics such as age, gender, sexual preference, pregnancy status, race and disability. Some European countries have taken a step further in protecting certain characteristics or attributes that Australians may not think of when it comes to discrimination in the employment context. For example, in the United Kingdom, a recent finding confirmed that a person who is an “ethical vegan” is protected from discrimination on the grounds of “philosophical belief” under the Equality Act 2010 (UK). In Ireland, those who suffer from alcoholism, which is classed as a medical illness, cannot be discriminated against in the employment context.
Further protections from discrimination come in the form of prohibited questions asked during the recruitment stage. In Spain and Italy, employers are generally prohibited from asking prospective employees whether they have a criminal record. In the Australian context, while there is no such prohibition, the recent introduction of the Australian Human Rights Commission Regulations 2019 has amended the criminal record ground, to now make it unlawful to discriminate against prospective employees if they have an irrelevant criminal record. In the Netherlands, for certain jobs, employers can request that a “Certificate of Good Behaviour” (which would usually disclose whether a person has a criminal record) is provided for the prospective employee, the absence of which can be a legitimate reason not to hire that person. In Germany, while many of the same protections apply, special rules exist for employers associated with the various churches that occupy a special status under the German Constitution. These employers are subject to specific exemptions which can allow them to discriminate on protected grounds such as marital status, however we understand this law is currently under review.
A common ground for protection against discrimination is that of pregnancy, with each country represented by the panelists having protections against discrimination on the ground of pregnancy, with some countries also expressly prohibiting questions about a prospective employee’s marital status. Italy has gone a step further by prohibiting employers from dismissing a female employee for marriage, covering the period from the date of publication of marriage “banns” (which is a publication that notifies the public of the couple’s intention to marry) to the first anniversary of the wedding date.
It would be fair to say that some employees do “stretch” the truth when it comes to certain aspects of their employment, particularly in pre-employment screening questions. From an Australian employment law perspective, this kind of deliberate dishonesty would generally be viewed as misconduct and may constitute grounds for dismissal. Not so in France, with the French Supreme Court having ruled that employees can lie to a certain degree on their curriculum vitae, for example, by lengthening the periods of internships they have undertaken.
This “special French relationship with the truth” as one of the panelists described it even extended to France’s government, notably in the case of a senior minister who was allowed to stay in her job despite lying about having completed a Masters degree!
Employers in Australia would likely be aware of the new whistleblower protections in the Corporations Act 2001 (Cth) and the taxation legislation, which require certain employers to enact whistleblower policies. This area of law is comparatively more established in Europe, where there appear to be stronger protections and more onerous remedies for breaches of the protections owed to whistleblowers. In France for example, it is mandatory for employers with over 50 employees to enact a whistleblower policy. In Ireland, the penalties for dismissing an employee for whistleblowing can amount to five years’ worth of salary as compensation, and in the United Kingdom, restraining injunctions can be ordered against employers.
Privacy and Data Protection
A significant legislative development that European jurisdictions have been dealing with in recent years has been the data and privacy protections under the European Union’s General Data Protection Regulation (EU) 2016/679 (“GDPR”). Australian businesses with EU operations will likely be familiar with the GDPR.
Under the GDPR, employers are restricted in the types of personal data that they can collect and the circumstances in which they are collected and the GDPR contains enhanced rights for individuals in respect of their data, such as the “right to be forgotten’’ and the “right to object’’ to the processing of their personal data. One of the grounds on which an employer can collect data is if they have a “legitimate interest”, however this must not affect the fundamental rights and freedoms of the employee.
In Ireland, employees have the right to request any data that is collected about them at any stage during the recruitment process, which includes any recorded comments made during that process and can extend to data collected by recruitment agencies. Such requests must be responded to within 30 days, and all such data is discoverable, with heavy financial sanctions on employers who do not comply. In France, protections and concerns over employee privacy have persisted even before the introduction of the GDPR, which has resulted in much longer employment agreements compared to twenty years ago. Part of those protections include how employers deal with data that is stored by employees on their devices, whether or not they are personal or provided by the employer.
In France, as there is no concept of discovery, employers have to be clear that data which is stored on employer-provided devices is employer data which they can access.
While privacy laws are well-established in Australia, this continues to be a developing area, which will likely be influenced by emerging cybersecurity threats and will no doubt become a more prevalent issue as employers respond to growing concerns over privacy and data security.
Regulation of Employment Agreements
Although unions in Australia can represent employees in the realm of enterprise bargaining and modern awards, the Australian employment landscape appears to exist in stark contrast to the high level of collectivisation and apparent worker influence prevalent in European systems. A common theme amongst all the panelists, was the existence of collective bargaining agreements which are usually industry-based and works councils, particularly in Spain and Germany. It is unclear, however, which approach lends itself towards enhanced benefits for employees.
The terms and conditions of collective bargaining agreements that apply in these European countries cover employee entitlements such as pay, annual leave and hours of work, whereas terms relating to non-compete, confidentiality and privacy are up to individual employers to negotiate with employees. In Ireland, there is an added layer of complexity due to the rights enshrined in the Irish Constitution, which permeate through to the level of control that employers can have. For example, the Irish Constitution contains protections over “bodily integrity” which prevent most cases of employer mandated drug and alcohol testing. There are also enshrined protections over privacy, fair procedures and the right to form associations and unions, all of which have an impact on employee rights and the corresponding rights of employers to manage their employees.
In contrast, as Australia does not have any comparable constitutional rights other than those few implied rights evinced through the common law, such as the implied right to freedom of political communication (which the common law has established as not being a personal right but rather a limit on legislative power), the regulation of the employment relationship primarily occurs through legislation (most notably the Fair Work Act 2009 (Cth)) and the common law.
From listening to the panelists, it also appears that as collective agreements are more established, there is a more-streamlined approach in collective bargaining, compared to the more defined and comprehensive collective bargaining approach required in Australia, which is evident in the high levels of collective agreements and corresponding obligations placed upon employers. Statistics show that approximately 60% of employees in Europe are covered by collective agreements, in comparison to Australia where approximately 38% of employees are covered by enterprise agreements.
Legal Rights in Cases of Termination
While the general grounds of termination are more or less consistent across the various European jurisdictions represented at the conference, there are a few notable differences in certain aspects of the termination process and the legal rights of employees and employers.
In France for example, employees can be terminated for misconduct or performance reasons, much the same as in Australia.
However, when it comes to terminations for economic reasons, employers are only able to terminate employment on the basis of the business having “financial shortcomings” or competitive difficulties, which is limited to “safeguarding competitiveness” rather than simply the employer wanting to achieve more profit. By contrast, while Germany does allow for redundancies, as the panelist explained, employers usually have to be “creative” in order to mitigate against the risk of legal challenges. The Netherlands has a similar system to Germany, however it has the added “preventative review” requirement, where employers must obtain prior approval from either the court or the relevant authority before they can terminate a person’s employment.
Additionally, it is a requirement that employees receive severance pay even where the dismissal is due to misconduct, unless it is very serious.
The Netherlands has also recently introduced a new ground of termination for “accumulation” which allows an employer to essentially terminate an employee’s employment for more than one ground. In Ireland, there is also an apparent “catch-all” ground allowing employers to terminate an employee’s employment where there are “other substantial reasons”, such as bringing the company into disrepute or the employee being involved in an altercation. In contrast, Italian employers can only dismiss employees for gross misconduct, economic reasons, or “non-fulfilment of the obligations of their employment” which makes it very difficult to terminate an employee’s employment for poor performance or non-fulfilment of their obligations. Italian employers are also more exposed as reinstatement is the primary remedy, or for those hired after March 2015, the risk of being ordered to pay up to 36 months’ salary.
Potential Impact on Australian Employers
For Australian employers with operations in these European countries, they should already be well aware of the laws regulating the employment relationship. For others, the panelists provided a thought-provoking flavour of how their country’s laws impact on the employment lifecycle. As a common law jurisdiction, where our courts often look to these other jurisdictions for precedent, it is possible that our legislators may be influenced by these constantly evolving laws and trends in the years to come, especially as the world becomes increasingly globalised.