FedEE Global

In a European HR context we usually have to face M&As head on when dealing with the protection of employees during a business transfer (or change of service provider). In the UK alone there are over 30,000 such transfers each year. In the European Union, back in the early days of the Acquired Rights Directive (ARD), it did not matter what kind of M&A was taking place, employers were effectively banned from making any redundancies at the time of the deal and were always required to inform and consult employees. Gradually, however, the chains loosened. Canny lawyers discovered the ETO loophole. This states that an ARD-related dismissal will be automatically unfair unless there is an economic, technical or oganisational (ETO) reason for making a redundancy. Under this banner employers have committed a multitude of sins, virtually making the ARD a toothless instrument.

Yet there is still more. Now it is becoming easier than ever in the EU to classify a business transfer as not subject to information and consultation at all. Although ARD looks like it is all encompassing – and can even be applied to transfers within the same corporate Group – the only companies that apply it are those who fail to take effective prior legal advice, are saddled with a highly restrictive collective agreement or a works council able to exercise codetermination rights. Ironically, although for the ARD to apply, the resulting entity after the M&A must be effectively the same as before – it is also necessary for the identity of the employer to change. Thus, an ARD transfer will not take place where there is just a transfer of shares.

The “only shares transfer” exemption arose in the early days of ARD where there was an attempt to remove the necessity to consider a transfer had taken place every time a significant amount of shares changed hands on the stock market. Eventually, however, all takeovers of one entity by another involving a share purchase, swap or other transfer mechanism were classified as exempt, provided the operations of the business being taken over remained unchanged up to the point of the transfer. This exemption has proven, however, to be directly against the spirit of the ARD – as the new controlling entity will be in a position to do what it wants with the new acquisition once the transfer day has passed.

Africa / Middle East

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Although industrial espionage is the stuff of Hollywood thrillers, it is also a fairly common phenomenon in everyday life. The reason we seldom know about it is because most employers are unaware it is happening to them and, if they do, it is hardly something they wish to allow into the public domain.

After the second world war the attention of intelligence agencies widened to assist the development of domestic companies in both manufacturing and services – as they could penetrate walls of secrecy that enterprises could not breach. Such activities have been widely documented in such fascinating accounts as “Friendly Spies” by the US investigative journalist Peter Schweizer – who also charts the more disturbing trend of corporate theft by agents of individual foreign rival firms.

A competitor company can so easily access a rival’s secrets by ensuring that it hires senior staff whose loyalties lie with their old (or an associated) firm. So, the company that feels they have made a coup by enticing an employee away from a rival (often through an expensive head hunter) may actually just be paying for an enemy in its midst. Ironically too the EU Directive on the Protection of Trade Secrets contains a wonderful exception clause that exempts from its limitations any data given to employee representatives under statutory information and consultation obligations. Hence, the easiest way to penetrate a company’s privacy shield is simply to find a disgruntled works council member willing to asks some penetrating and sensitive questions.

The Americas 

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There will be several important trends in the field of employment law over the next 3-5 years – and they will have a profound impact on employment levels and employability.

Litigation will be going underground as an increasing number of employment contracts contain mandatory arbitration clauses. There will therefore be less case law upon which to base legal opinion. It will also become lawful to include clauses prohibiting participation in “class action” law suits – this is already the case in the USA because of the recent case Epic Systems Corp. v. Lewis – although there will be more laws preventing “gagging orders”.

There is already a great concern, particularly in Europe, for gender pay gap reporting. However, a new equal pay law in New Jersey has extended equal pay requirements to other protected characteristics – such as race, religion, sexual orientation and disability, as well as gender. This has huge consequences, particularly if the concept is taken up more generally by other jurisdictions. Another feature of both the New Jersey and recent Massachusetts Acts is the requirement for all companies to rate their jobs using a factor-based job evaluation scheme.

Company codes of practice already have a major part to play in corporate governance, but they are gradually taking over from HR policies as the basis for containing whistleblowing actions and terminating senior company executives.

How far travelling to a client is working time is still not settled law, even in the European Union where the European Court of Justice ruling in Tyco (C-266/14) seemed to have resolved the question. But two more recent French court cases have run counter to the ruling and the possibility that other work-related time – like commuting or staying away from home on a business trip – might have to be fully remunerated and counted against weekly working time limits could massively endanger company profitability.

Asia / Pacific

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Can you practice law as an HR Professional?

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The programme operates on a distance learning basis, although every participant has at their service the support of a personal tutor.

The prgramme is designed specifically for busy HR people, with a facility to take modules when time allows. There are 25 modules in the entire programme, broken down into 4 courses. Each course represents a credit that, once completed, can be carried over to obtain a Diploma or Advanced Diploma in Multijurisdictional Employment Law.

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Europe 

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FedEE-Consult

We now provide a wide range of customised employment law and HR-related services to member and non-member organisations. These are offered at highly competitive rates and can draw on FedEE’s vast range of in-house expertise, data and services.

FedEE-Consult helps HR departments around the world become and remain successfully multinational. Although we specialise in assisting  ….read more…

The Employment Standards Institute (E–SI)

The Institute has been established by The Federation to undertake research into, and training about, a wide variety of employment-related topics – including the implementation of ISO HR standards, the growth of ADR mechanisms in the light of mandatory arbitration clauses (Epic Systems), the extension of equal pay to cover all protected categories (the New Jersey Law)… read more…