tag:blogger.com,1999:blog-62693612542639952092024-03-08T15:48:37.379-05:00The International Employment LawyerQuaterly newsletter published by the International Employment Law Committee under the American Bar Association, Section of International LawAnders Etgen Reitzhttp://www.blogger.com/profile/09720055795430444538noreply@blogger.comBlogger266125tag:blogger.com,1999:blog-6269361254263995209.post-2741541646560970852017-09-15T22:27:00.000-04:002017-09-15T22:27:04.031-04:00Summer EditionWelcome to the summer edition of the International Employment Law Committee newsletter. Thanks as always to our contributors, and please let me know if you are interested in submitting an article on recent developments in your jurisdiction.<br />
<br />
Helen Colquhoun<br />
Withers, Hong KongHelen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-69813304961187615322017-09-15T21:30:00.000-04:002017-09-15T21:30:07.031-04:00Canada - Clash of Principles Leads to Sea Change in Union Rights During Insolvency Proceedings<i>By Theodore Goloff, Robinson Sheppard Shapiro, and Brian Sherman (law student)</i><br />
<br />
<b>Introduction</b><br />
In law as in life, where one begins determines where one ends, particularly where one’s starting point for legal analysis depends upon one’s choice between competing principles to champion. In a federal system such as Canada, where insolvency law lies within federal jurisdiction but where provincial competence in labour relations law is presumptive (indeed less than 10% of Canada’s working population falls under the jurisdiction of federal labour and employment law), conflict arises where the two intersect, as they represent divergent objectives.<br />
<br />
Labour relations law provides employees the mechanism to advance their interests and redress the imbalance of economic power in their favour. Insolvency law is predicated upon the competing principle of maintaining the rights of all creditors within a predictable scheme and order, so that their claims are treated pari passu, and is designed to prohibit one group of aggressive creditors from gaining at the expense of others.<br />
<br />
Unless varied by the Supreme Court of Canada, the recent decision of the Court of Appeal for Ontario in Romspen Investment Corporation v. Courtice Auto Wreckers Limited, 2017 ONCA 301, may well represent a sea change in the relationship between labour relations law and insolvency. Romspen appears to be the first instance where a Canadian appellate court was asked to consider whether, on principle and/or on the facts of the case, a union should or should not be allowed to pursue a certification application during receivership/bankruptcy, by lifting a stay of proceedings resulting from a receiving order issued in accordance with the Bankruptcy and Insolvency Act [BIA]. Considering the different vantage points of the majority and the dissent, it is not surprising that their analysis and their disposition of the case are diametrically opposed.<br />
<br />
<b>Background</b><br />
<br />
As Justice Lauwers, in dissent, wrote:<br />
<br />
<i>[60] The insolvency regime in Canada is intricate and the way it addresses the interests of debtors, creditors and others is carefully calibrated.</i><br />
<br />
In the event of insolvency, legal structures are available in Canada for both restructuring and reorganization, i.e. the Companies’ Creditors Arrangement Act [CCAA], allowing companies to retain value as “going concerns”, while protecting against intangible losses, such as evaporation of the companies’ goodwill that, inter alia, result from liquidation. Reorganization serves the public interest by facilitating the survival of companies supplying goods or services crucial to the health of the economy while, hopefully, saving large numbers of jobs. As the CCAA does not specify what happens if reorganization fails, the BIA, supplies the backdrop for that unfortunate situation, i.e. the firms’ demise. The two statutes work in tandem, grouping all possible actions for recovery against the debtor into a single proceeding controlled in a single forum overseen by a single judicial officer, avoiding the chaos that would attend insolvency if each creditor initiated recovery proceedings individually in different forums, all the while placing all creditors on an equal footing, diminishing the risk that the most aggressive creditors would realize their claims against the debtor’s limited assets to the detriment of all the others.<br />
<br />
The insolvency regime proceeds from the premise of a statutory freeze and standstill to allow for judicially supervised reorganization and rebirth, if possible, with the pain of the “haircut” required being shared amongst creditors and stakeholders, and the orderly and schematic disposition of assets if bankruptcy ultimately ensues.<br />
<br />
The essential premise of labour relations law, in Canada, at least since the last Supreme Court pronouncements on Section 2(d) of the Canadian Charter of Rights and Freedoms [Charter], known as the “trilogy” of 2015, proceeds from a constitutionally recognized and protected right of the “working class” to better its economic position and redress the inequity of uneven bargaining power through (i) associational rights, i.e. certification; (ii) collective bargaining; and (iii) the use of the strike weapon. Clearly because its purpose is to redress imbalance through dynamic collective change, labour relations law challenges rather than preserves the status quo.<br />
<br />
The issue raised in Romspen is different from the more classic case of a simple employee unfair labour practice charge, e.g. termination, given that the outcome of such proceedings might involve liquidating the amount of back pay (lost wages and interest), if any, owed, providing, in that sense, the data required to allow the receiver or trustee in bankruptcy to determine whether there even is a “claim provable in bankruptcy”. There seems therefore, in that circumstance, to be a more cogent argument for allowing such proceedings to go forward, because the interests of both the complainant and the receiver or trustee are, in that sense, advanced in tandem. Such was, in fact, the view of the Quebec Superior Court in Re, Engrenage P.Y.G. (Faillite de), 2003 CanLII 27983 and Société de gestion ltée (Syndic de), J.E. 98-155.<br />
<br />
<b>Salient Facts</b><br />
<br />
In the Rompsen case, certification proceedings were filed almost two months after Courtice Auto Wreckers was put into receivership by Rompsen, one of Courtice’s secured creditors. A general stay of certification proceedings was imposed, pursuant to the provisions of the BIA by the receiver.<br />
<br />
The issue of whether or not the general order to stay proceedings applied so as to block the certification was canvassed by the Ontario Labour Relations Board, which held that, indeed, the general stay applied. The Board proceeded to stay the union’s certification application pending before it. The union sought an order to quash the Receiver’s stay, and by ricochet the Board’s order, from a judge of the Ontario Superior Court of Justice, without success. That decision was appealed by the union allegedly “de plano”, i.e. as of right, without leave being sought. Both the majority and dissenting judges agreed that leave was required but, because the central issue raised in the appeal, as the majority put it, was “the relationship between, and intersection of, federal bankruptcy law and general provincial labour relations law” [para 26], leave to appeal was exceptionally granted on public interest grounds.<br />
<br />
In the end, the majority allowed the appeal, set aside the order of the motion judge, and granted the union leave to proceed with its certification application.<br />
<br />
<b>A Clash of Principles – Dissent vs. Majority Decision: To Stay or not to Stay Certification Proceedings</b><br />
<br />
As noted by the dissent, “[w]hatever the applicable test, ‘lifting the automatic stay is far from a routine matter’” and that “lifting of a stay is exceptional in view of the expectation that most creditors’ claims will be resolved through the summary procedure, and not through ongoing court or administrative law proceedings” [para 78].<br />
<br />
Indeed, the lifting of a stay order is a matter that lies within the bankruptcy judge’s discretion. It has long been a tenet of higher courts that discretion given to trial court judges ought not to be disturbed or appeal, save on grounds of palpable error of law, or less than reasonable appreciation of the facts.<br />
<br />
Certainly a bankruptcy court judge, in any of Canada’s provinces, would per force have a specialized expertise akin to that of any administrative tribunal created by statute whose decisions, in Canada, even when not protected by a privative or preclusive clause, are reviewable only under extremely narrow parameters.<br />
<br />
In this regard, Justice Lauwers, in dissent, noted:<br />
<br />
<i>[84] As a commercial list judge with long experience in insolvency, the bankruptcy judge would be fully alive to the relevant and to the business realities faced by the debtor, the creditors and the receiver. Moreover, he would be intimately familiar with the particular facts of the case. That is why it is important for this court, from the viewpoint of the standard of review, to defer to the bankruptcy judge in the exercise of his discretion under s. 215 of the BIA or the terms of the receivership order: see e.g. Royal Crest Lifecare Group Inc. (Re) (2004) […] 181 O.A.C. 115 (C.A.), leave to appeal refused, [2004] S.C.C.A. No. 104, at para. 23; Grant Forest, at paras. 97–99.</i><br />
<br />
To be sure, the majority decision took issue with a number of findings of fact of the receiver, and/or of the bankruptcy judge, terming them inter alia “speculative” [paras 34 and 41] or adding: “The Receiver’s statement in its first report that it has ‘serious concerns’ that certification could negatively impact a sale amounts to little more than self-serving speculation”. In this respect, the dissent countered:<br />
<br />
<i>[116] In my view, the bankruptcy judge’s statement that certification could negatively impact the sale of the Harmony Road depot is self-evidently true and falls well within the margin of appreciation that is his due, given his knowledge of the commercial realities. I would be most reluctant to disparage the advice of the court-appointed receiver as mere “self-serving speculation”. Such an officer has no self-interest and owes duties to all the parties and to the court. In my view, it was open to the bankruptcy judge to accept the receiver’s advice.<br />
<br />
[117] If the union achieves certification and the Harmony Road depot is sold in such a way as to attract successor labour rights, then any prospective purchaser of the depot will be faced with the obligation to immediately embark on first collective agreement negotiations. This is not a small additional burden on what would otherwise be the terms and conditions of the depot’s sale. It will plainly discourage some potential bidders and therefore negatively affect the depot’s market price by reducing the number of buyers who would be willing to engage. Any cooling of the interests of potential purchasers in the debtor’s assets would reduce the proceeds of sale to the prejudice of all the creditors. With respect, this is more than a mere “inconvenience to the receivership process.”<br />
<br />
[118] If the court were to permit the post-receivership certification process to continue, it would effectively hand one interested group of creditors, the newly unionized employees, a tool with which to increase their leverage over the other creditors.” (emphasis added)<br />
At para 114, the dissent in Romspen referenced the “significant professional costs to the Receiver’s administration”, stating that “[t]he cost of a labour negotiation will, in effect, be a super-priority expense that will ultimately be absorbed by and materially prejudice other creditors through reduced realizations and distributions.”</i><br />
<br />
Most respectfully, it certainly lies within the role of any court to draw factual inferences from statutory language. Apparently, that is what the dissent understood the bankruptcy trial court judge to have done. While before the bankruptcy judge, the receiver is and was a party ad-litem, in law at least, the latter is and was rightly to be viewed as a court-appointed judicial officer who has no separate personal and self-serving interests but those of the collectivity of creditors and the proper administration of the BIA.<br />
<br />
In that respect, if the receiver’s “serious concerns” were speculative, in the absence of proof to the contrary aren’t they to be taken as having been raised in the best interests of the mass of creditors? Isn’t that the true role of the receiver?<br />
<b><br />
Was Federal Paramountcy Triggered?</b><br />
<br />
The next, more substantive, issue between the majority and dissent centered on how to reconcile federal insolvency and bankruptcy legislation with the provincial statutory labour relations scheme, itself a regime that is constitutionally grounded in human rights.<br />
<br />
As insolvency is within the exclusive competence of the Parliament of Canada, the paramountcy of federal legislation, while engaged, is tempered by Section 72(1) of the BIA providing:<br />
<br />
72(1) <i>The provisions of this Act shall not be deemed to abrogate or supersede the substantive provisions of any other law or statute relating to property and civil rights that are not in conflict with this Act</i>, and the trustee is entitled to avail himself of all rights and remedies provided by that law or statute as supplementary to and in addition to the rights and remedies provided by this Act. [Court’s emphasis]<br />
<br />
In Rompsen, there is between majority and dissent a fundamental disagreement as to when federal paramountcy is or is not triggered.<br />
<br />
The majority, on the basis of GMAC Commercial Credit Corporation – Canada v. T.C.T. Logistics Inc., [2006] 2 SCR 123 [GMAC], determined that for paramountcy to be triggered there must be an “operative conflict”, between one or more provisions of the statutes, defined in 407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), [2015] 3 SCR 397, as being an impossibility to comply with both the provincial law and the federal bankruptcy regime. For the dissent, this latter and more recent case suggested a second flexible more context- and fact-specific paramountcy trigger.<br />
<br />
Apparently, the majority did not consider the second portion of the “conflicts” test suggested by ETR Concession, which, in the dissent’s view, is “the latest word from the Supreme Court on paramountcy” [para 98]. This second test posits that federal insolvency paramountcy is triggered where, although it is possible to comply with both laws, the operation of the provincial law “frustrates” the purpose of the federal regime. In such an event, pursuant to ETR Concession, “the provincial law remains valid, but will be read down so as to not conflict with the federal law, though only for as long as the conflict exists” [para 101].<br />
The difference between the majority and dissent, in their approach, is telling. As the dissent put it:<br />
[103] The court’s task here is not to reconcile statutory language, but to reconcile different policies. This is a nuanced, difficult and delicate task informed by the bankruptcy judge’s knowledge both of the law and the operation of the marketplace in the context of the specific matter before him, drawing also on his experience and wisdom, and his sense of what is commercially reasonable. The bankruptcy judge brought just that perspective to this case.<br />
<br />
The dissent continued:<br />
<br />
<i>[107] In my view, the policy contest presented in this case is precisely the kind of conflict between provincial regulatory regime for labour relations and the federal insolvency regime that the paramountcy doctrine is intended to recognize and accommodate.<br />
<br />
[108] My colleague relies on the Supreme Court’s decision in GMAC. In that case the issue was whether leave should be granted to the union under s. 215 of the BIA so that the Labour Relations Board could determine “successor employer” status.<br />
<br />
[109] However, there is a crucial distinction between this case and GMAC. The union had long been certified in GMAC. By contrast, in this case, the certification effort followed the appointment of the receiver by several months. This distinction is important because it engages one of the fundamental policy principles in insolvency law, which is to preserve the status quo among the creditors as of the date the receiver was appointed. The bankruptcy judge accurately identified that this principle would be violated if the debtor could be forced to accept union certification post-bankruptcy. In my view, my colleague does not give due weight to this critical principle.</i><br />
<br />
<b>To Stay or Not To Stay – The Central Question</b><br />
<br />
The majority took issue with the suggestion that the certification “would in effect increase the rights of the members of the proposed bargaining unit relative to other creditors” [para 31], adding:<br />
<br />
<i>[32] […] A successful certification application does not guarantee employees better wages; it simply allows employees to combine their bargaining power and rely on the union’s assistance in negotiating their terms and conditions of employment. While it is true that upon certification certain rights and obligations crystallize that would not otherwise (e.g. the employer’s duty to recognize the union and bargain with it in good faith), certification does not have the effect of automatically increasing the rights employees have as creditors, thereby prejudicing other creditors. It is simply conjecture at this point to assume that the union will be successful in negotiating a more financially favourable contract for bargaining unit employees. Moreover, at this juncture, allowing the union’s certification application to proceed merely entitles the union to a representation vote, not to certification.<br />
<br />
[…]<br />
<br />
[34] In my view, this line of reasoning is speculative. While some purchasers may be dissuaded by recognition of the proposed bargaining unit, it may also be that a set collective agreement, with its clarity of terms, would be attractive to a prospective purchaser. The union, on behalf of its members, has an interest in the business being sold as a going concern and therefore has an incentive to act in a manner that would promote such an outcome.<br />
<br />
[35] More fundamentally, however, there is simply no concrete evidence that recognition of the proposed bargaining unit would negatively impact a sale.</i><br />
<br />
From this writer’s perspective, is the opinion regarding the supposed incentive to act “in a manner that would promote such an outcome” any less speculative than the conclusion reached by the receiver, which the bankruptcy judge saw no reason to vary?<br />
<br />
From this writer’s perspective, and with respect, the issue lies at the core of both (i) how one views the latitude of an appellate court to review the exercise of trial courts’ discretionary remedies and, more fundamentally, (ii) the validity of assumptions as to the harmony of the goals of labour and the mass of the creditors. Even if both see value in the sale of the business rather than its dismantling, it is certainly a more than reasonable and plausible, if not a more compelling assumption, that all things being equal, a prospective buyer would have to negatively factor the possibility, if not probability, of the cost of bargaining of first collective agreement into the mix. This would be doubly true in Quebec where first contract negotiation can lead to an agreement imposed by arbitrator, even without proving bad-faith bargaining.<br />
<br />
In any case, with the greatest respect for the majority opinion, with more than 45 years as a management side labour relations lawyer in Quebec behind me, I would suggest that first collective agreements that do not alter the employer’s economic landscape through improvements in wages, benefits or other non-monetary conditions of employment, are as rare as hen’s teeth. I would doubt that my colleagues at the Bar of Ontario on either side would see matters differently.<br />
<br />
In determining whether lifting a stay order is or is not appropriate, the bankruptcy court was required to weigh the relative “prejudices” that may result. <br />
With respect, fairly predictable and logical results of certification, even if they cannot be calculated with precision, nonetheless constitute far more than speculative prejudice. <br />
<br />
<b>The Charter’s Place in All of This</b><br />
<br />
While no direct mention is made of the Charter, this author clearly believes that the majority’s decision has as its leitmotif the constitutionalization of the right to certification. Clearly, the majority would have been influenced by the Union’s reference thereto writing:<br />
<br />
<i>[37] […] The right to form and join a union of one’s choosing is a fundamental right under the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A (the “LRA”). While flexibility is required to address the challenges in any particular insolvency proceedings against the legitimate exercise of labour rights simply because the assertion of those rights represents an inconvenience to the receivership process: GMAC, at paras. 50-51.<br />
<br />
[…]<br />
<br />
[44] […] I am simply not persuaded that allowing the union’s certification application to proceed would cause any more than de minimis prejudice to Ambrose Group creditors.<br />
<br />
[45] On the other hand, a lot is at stake for the union and the employees. Maintaining the stay prejudices the important objectives “quick votes” are designed to serve, unduly interferes with employees’ ability to exercise their statutory labour rights, and, particularly where employees have allegedly been dismissed for exercising those rights, undermines employee confidence in the efficacy of core labour rights and protections.<br />
<br />
[46] Labour rights do not end when insolvency proceedings begin.</i><br />
<br />
To be sure, as the majority points out, obliquely referring, I believe, the above-mentioned Supreme Court trilogy, “the right to form and join a union of one’s choice is a fundamental right” [para 37], it is the dissent that deals with this issue more directly.<br />
<br />
Justice Lauwers writes:<br />
<br />
<i>[88] The appellant’s factum simply asserts that: “Given the constitutional protection afforded to this process, the court should be wary of allowing the existence of a receivership to frustrate the certification application.” Fair enough, but the union had the entire life of the business before insolvency within which to pursue certification.<br />
<br />
[89] In oral argument, counsel for the union expanded on this brief allusion. He asserted that the MPAO decision constitutionalized bargaining rights, and argued that the right of employees to unionize should “supersede” any concern in relation to the sale of the business. He added that there is no empirical evidence that unionization will reduce the sale value of the asset, but even if that were to be the outcome of the employees’ exercise of their rights under the labour legislation: “So be it”.<br />
<br />
[90] However, counsel for the union did not take the position that the constitutionalization of labour rights takes away entirely the bankruptcy court’s discretion under s. 215 of the BIA or the order appointing the receiver to refuse to lift the stay where labour rights are in issue.</i><br />
<br />
<b>Conclusion</b><br />
<br />
Romspen represents a clash of principles and a significant shift in the law on many different levels, the fallout of which is as yet not fully known. And if my point of view differs from those of my betters, I differ with deference. <br />
<br />
In the end, given that there is an application for leave to appeal to the Supreme Court of Canada, pending it remains to be seen whether the dissent’s apocalyptic vision to the effect that:<br />
<i><br />
[93] In my view, giving unions carte blanche to begin certification efforts for insolvent enterprises after the date of the appointment of a trustee or receiver or the date of an order under the CCAA would effect a sea change in insolvency law; it would profoundly alter the economic dynamics of insolvency, and whether the CCAA route is preferable to outright bankruptcy.</i><br />
<br />
will be stillborn as a result of judicial scrutiny at a higher level and further clarification of the law on this issue by Canada’s highest court. Certainly, though, folks doing business in Canada on either side of the labour-management divide should be keenly interested in this case.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-20782670063804887542017-09-15T21:00:00.000-04:002017-09-15T21:00:00.172-04:00France - The Macron Labor Reform for France<i>By Roselyn Sands, EY Societe d'Avocats</i><br />
<br />
President Emmanuel Macron of France won the May 2017 election promising to significantly reform the French labor & employment laws as a priority by September 2017. As we stated in our article in May 2017, the purpose of this Reform is to increase flexibility and reduce unemployment. While the new legislation will not have the force of law until later in the Fall, below we summarize the key features of the Macron labor law reform. <br />
<br />
<b>Use of Special Procedures to Achieve Speed</b><br />
<br />
In order to achieve such accelerated timing, the French Government will enact the contemplated reform by way of ordinance (“ordonnance”). In French law, this statutory instrument allows the Council of Ministers (“Conseil des Ministres”) to enact laws in areas of law that are usually reserved for legislative enactment. In order to allow such abbreviated process, the Parliament adopted a law (“loi d ’habilitation”) on August 2, 2017 allowing this procedure. Draft ordinances were made public on August 31, 2017 and should be adopted by the Council of Ministers September 22, 2017. The legislative process, is targeted to end in October/November 2017, with the ratification of the ordinances by the Parliament which will give force of law to the Macron Labor Law Reform.<br />
<br />
A part of the French opposition to this reform is gaining some momentum and they are trying to slow this process down. Indeed, a demonstration on September 12 was the first and another one is planned in late September. However, it is not believed that the demonstrations or strikes will weigh heavily enough to change the current state of affairs.<br />
<br />
<b>General philosophy of the Macron labor law reform </b> <br />
<br />
There are 3 main general themes of paramount importance: <br />
<br />
• Ability to customize applicable labor rules within a company through negotiation<br />
• Streamlining of employee representatives<br />
• Predictability of damages and further simplification of the termination process<br />
<br />
<br />
<i>1) Ability to customize applicable labor rules within a company through negotiation</i><br />
<br />
The traditional architecture of French labor law is a pyramidal structure starting at the top with the French Labor Code, then the industry-wide collective bargaining agreements, and then the company-wide collective bargaining agreements. Each additional layer traditionally could only enhance employee protections, never taking any rights away. <br />
<br />
This new Macron Labor Law Reform reverses this hierarchy of norms and allows collective bargaining at the company-wide level to achieve greater flexibility even if employee protections are reduced. <br />
<br />
There are exceptions and many details on how to collectively bargain, but overall the important message of the reform is that companies are now more able to negotiate at the company level in order to create custom-made rules. <br />
<br />
<i>2) Streamlining of employee representatives</i><br />
<br />
One of the most important measures of the Reform is the merger of all employee representative bodies. As of January 1, 2019, all companies will only have one representative body replacing the existing Works council, “délégués du personnel”, and health & safety committees. The new Social and Economic Committee (“Comité Social et Economique”) will exist in all companies with 11 or more employees. The scope of the CSE will increase depending on the number of employees within a company. <br />
<br />
In certain circumstances, the new CSE will have the power to negotiate and collectively bargain with the employer, traditionally reserved to unions in the past. Under certain conditions, employee referendum will be required to confirm the agreement.<br />
<br />
<i>3) Predictability of damages and further simplification of the termination process</i><br />
<br />
As promised by Macron during the French election campaign, a minimum floor and maximum ceiling will be applicable in the award of damages for wrongful termination by the French Labor Courts. To illustrate, the maximum ceiling for damages for an employee with 10 years of service is 10 months; and for 30 years of service, 20 months of salary. (This is in addition to the legal termination indemnities, which do not change.) This will apply to unlawful terminations with the exception of matters involving the violation of fundamental rights like harassment or discrimination cases, for example.<br />
<br />
Moreover, to minimize the risk of form over substance, a “template” for termination letters will be available for employers, and the termination letter itself will no longer be the only proof possible to demonstrate the legal grounds for the termination. Both the employer and the employee will have the availability to give or ask for complementary information on the termination grounds, after formal notification of the termination letter. <br />
<br />
As to the substance itself of legal grounds, in economic redundancies, a significant effort has been made to simplify the legal economic grounds: only economic difficulties in France will be taken into account, not the economic situation of the group in the world. The redeployment offer process will be also be significantly simplified in the context of economic termination.<br />
<br />
*<br />
<br />
The key take-away is that we have a new ballgame in France on labor law with a fundamentally different philosophy! <br />
<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-34327564404768818532017-09-15T20:30:00.000-04:002017-09-15T20:30:01.395-04:00Germany - The 2018 Works Council Election is Approaching: Conducting the Election and Contesting an Election<i>By Bernd Weller and Dr Johan-Michel Menke, Heuking Kühn Lüer Wojtek PartGmbB</i><br />
<br />
<i>The upcoming works council election is approaching. In the first article (AuA 2017, 338), we made observations on preparations before the actual election. In this article, we want to discuss the conducting of the actual election, typical stumbling blocks, and possible contestation scenarios. In particular, due to the complexity of the regulations of the Works Constitution Act and the election rules adopted, the conducting of the election is prone to errors. Without optimal preparation (and monitoring during the election), the risk is therefore great that errors will occur during the election. But even in the event that errors should occur during the election, not every error leads to legal consequences.</i><br />
<br />
<b>1. TIME OF THE ELECTIONS</b><br />
<br />
The regular election of the works council is held every four years in accordance with Section 13(1) Works Constitution Act. Since works council elections have not occurred for the first time in every company in the same calendar year, the question arises why the vast majority of companies nevertheless conduct works council elections in 2018. This is due to the statutory provision in the Works Constitution Act (Section 13(3)), which transfers all works council elections as rapidly as possible into the four-year regular cycle. Only when the last works council election is held less than one year from the beginning of the regular date for elections within the meaning of Section 13(1) Works Constitution Act is the term of office of the works council extended so that it is moved to the usual 4-year cycle only in the next immediately following period for regular elections. By focusing the elections on individual years, it is supposed to make it easier for among others trade unions and courts to be prepared administratively for the elections and possible contestation proceedings. For soccer fans, this at least has the advantage that the regular date for elections can easily be determined – it always occurs in the year of the Soccer World Cup. <br />
<br />
Elections may be held outside of the 4-year time period only under the strict requirements of Section 13(2) Works Constitution Act. <br />
<br />
<b>2. Election preparation in the strict sense</b><br />
<br />
In principle, the works council can decide for itself with what lead time it initiates the election of the new works council. It is legally determined that the works council is obligated to undertake the initiation of the election by appointing the electoral board no later than ten weeks before the expiry of its term of office, Section 16(1) Works Constitution Act. In view of the fact that both the electoral board and the candidates enjoy the special protection against dismissal of Section 15 Protection Against Dismissal Act until the announcement of the election results, the possibility exists that works councils – in the case of imminent staff cutbacks – provide protection against dismissal for a large part of the work-force by initiating the election an as early as possible, since then suddenly everyone will stand as candidate for election. This special protection against dismissal is only excluded when the early appointment of the electoral board can be qualified as an abuse of legal rights. Abuse of legal rights is only accepted in absolutely exceptional cases. Thus, for example, the appointment of the electoral board 36 weeks before the start of the statutory election period was not deemed to be an abuse of legal rights (cf. Lower Saxony State Labor Court, October 13, 2010 – 17 Sa 569/10).<br />
<br />
<i>Practical tip: Companies should initiate personnel restructuring measures regardless of the particularities of Section 15(4) Protection Against Dismissal Act in the case of a plant closure significantly before the regular works council election, in order to avoid the special protection against dismissal of the electoral board and the electoral candidates.</i><br />
<br />
<b>3. THE RIGHT TO VOTE</b><br />
<br />
The active right to vote is accorded to all employees of the establishment, who have reached the age of 18. All employees who have been a member of the relevant establishment for six months are eligible to be candidates (passive voting right). The determination of the active and passive voting right is of decisive importance for the specific implementation of the election – and for avoiding later contestability. <br />
<br />
Misunderstandings can frequently easily arise in respect to the right to vote particularly in the case of the following groups of persons:<br />
<br />
• Executive staff have neither active nor passive voting rights.<br />
• Temporary workers already have active voting rights if they have been employed for longer than three months in the establishment. They only have passive voting rights if they gain employment with the hiring company subsequent to their temporary employment. In this case, the time spent working as part of the temporary employment counts towards the required minimum time working at the establishment of six months. <br />
• Parental leave: Employees on parental leave are entitled to the active and the passive right to vote during the entire parental leave period. <br />
• Laid-off employees: Until the expiry of the period of notice, they have active and passive voting rights. A properly laid-off employee is entitled to the active right to vote after expiry of the period of notice only when filing a protection against dismissal action and continuing to be employed during the protection against dismissal proceedings. An employee laid off without notice is entitled to the passive right to vote, if filing a protection against dismissal action (in due time). The reason for this is that the employer could otherwise effectively prevent the election of electoral candidates that the employer disagrees of by issuing (ineffective) extraordinary dismissals (cf. Federal Labor Court, November 10, 2004 – 7 ABR 12/04).<br />
• Employees who are ill or on leave and inactive work contracts: Employees who are ill, on leave or those whose work contract is temporarily inactive have active and passive voting rights. <br />
• Partial retirement: Employees who are in partial retirement have no voting rights, as soon as the release phase has begun.<br />
• Employees abroad / another establishment: Due to the ever-closer interconnection of work flows, more and more situations arise in which the assignment of employees is questionable, for example, if <br />
o an employee is temporarily sent abroad, <br />
o an employee (of another group company), who belongs to an establishment abroad, has authority to give orders to employees in the German establishment or <br />
o an employee, who – whether regularly working in several establishments on-site or whether entitled to issue instructions to employees in several establishments – could be assigned to several German establishments.<br />
<br />
In all of the aforementioned cases, the election participation depends on whether and in which establishment(s) the employee is "integrated." Integration in this sense means factual circumstances, according to which an employee is part of an operational organization and also chain of command. Thus, a supervisor is, for example, already integrated into an establishment (in which he is never physically present), when exercising leadership and management functions in respect to employees in this establishment and the leadership function serves the operational purpose of this establishment (cf. Baden-Württemberg State Labor Court, May 28, 2014 – 4 TaBV 7/13). Conversely, sales representatives in the field are also integrated into an establishment in that they are subject to the instructions of the organization there (in other words: supervisors):<br />
<br />
o In the case of posted workers, the integration into the "home establishment" is as a rule maintained if they are not integrated into an operational organization abroad (e.g., in the case of assembly workers). But even an integration into a foreign establishment is not contrary to the continued integration and thus eligibility to vote in the home establishment when the posting is only of a limited temporal nature. <br />
o According to recent case law, the supervisor of employees of a German establishment who is based abroad – frequently in the matrix structure – is also to be regarded as an employee of the German establishment. The question as to whether such supervisor is "executive staff," is thereby not to be assessed ac-cording to the supervisor’s role in the overall group, but rather only in respect to the respective company. It may therefore well be that a "big shot" from abroad is considered a normal employee in the German establishment – with full active and passive voting rights. <br />
o Finally, it is also conceivable that an employee belongs to several German establishments and thus has the right to vote in several German establishments. For this purpose, it must only be checked, according to the aforementioned criteria for each individual establishment, whether an "integration" into the respective establishment exists. <br />
<br />
<b>4. SPECIAL CASE: EXECUTIVE STAFF</b><br />
<br />
According to Section 5(3) Works Constitution Act, executive staff are employees who under their contract of employment and the status in the company/establishment <br />
• are entitled on their own responsibility to engage and dismiss employees employed in the establishment / operation department (Section 5(3)(1) Works Constitution Act) <br />
• have general authority or power of procuration and the power of procuration is also not unimportant in relation to the employer (Section 5(3)(2) Works Constitution Act) or <br />
• regularly carry out other duties, which are important for the existence and development of the company or an establishment and fulfilment of which requires particular experience and knowledge, if, in doing so, they either essentially make decisions on their own responsibility or substantially influence these decisions; this may also be the case with stipulated procedures, particularly those based on legal provisions, plans or guidelines and when cooperating with other executive staff (Section 5(3)(3) Works Constitution Act).<br />
<br />
Specifically, the first-mentioned criterion, the entitlement to engage and dismiss employees on one's own responsibility, is satisfied for employees in Germany only in the rarest cases. In contrast to Section 14(2) sentence 1 Protection Against Dismissal Act, both entitlements, therefore the right to engage and dismiss employees, must be met cumulatively (cf. Munich State Labor Court, June 06/2012 – 5 TaBV 51/10). Through the introduction of the dual control principle, an employee is only rarely authorized to engage and to dismiss employees on his own responsibility – without having to obtain the consent of a third party. Since a company will not be able to assert that the second signature is provided only "formally" without any decision-making power, this case group is almost never used.<br />
<br />
Also, the "formal" granting of general authority or power of procuration in relation to third parties does not automatically qualify an employee as executive staff within the meaning of Section 5(3)(2) Works Constitution Act. Rather, the general authority/power of procuration must also be designed in the internal relationship such that not only unessential du-ties to be executed on one's own authority are allocated to chief representatives/authorized representatives. The chief representative/authorized representative must – at least in his (not unimportant) area of responsibility – perform entrepreneurial duties. An employee furnished with power of attorney does not fall under this second group of the executive staff. He may meet the requirements of the third case group, however.<br />
<br />
Executive staff of the third group according to Section 5(3)(3) Works Constitution Act fulfil duties according to their contract of employment, which <br />
<br />
• have particular meaning for the company / the establishment, <br />
• require special knowledge and experience and <br />
• which the employee can essentially carry out himself without instructions. <br />
<br />
This covers therefore employees, who due to their position are particularly close to company management and are able to handle entrepreneurial duties at least in some areas. The employee must thereby not make the decisions on his own responsibility and alone. Rather, it suffices if he at least decisively influences decisions of company management (cf. Federal Labor Court, March 25, 2009 – 7 ABR 2/08). Thus, in particular "staff employees" for the third group are considered for these case groups.<br />
Section 5(4) Works Constitution Act also has some interpretative rules, the fulfillment of which is very relevant for the characterization of an employee as executive staff within the meaning of Section 5(3)(3) Works Constitution Act.<br />
<br />
<b>5. THE IMPLEMENTATION AND CONDUCT OF THE "NORMAL" WORKS COUNCIL ELECTION </b><br />
<br />
The normal election procedure can be divided into five main sections: <br />
• appointment of the electoral board, <br />
• drawing up the electoral list,<br />
• publication of the election notice,<br />
• submission, review and publication of the proposed lists, and <br />
• holding the actual election process as well as counting the votes and publication of the election result.<br />
<br />
When appointing the electoral board, as the central constitutional electoral body, it de-pends on whether a works council already exists or not. The works council has the statutory duty to appoint the electoral board, Section 16 Works Constitution Act. If the works council does not fulfil this duty or does not do so within the ten-week period, the electoral board may be appointed either by the general works council or the group works council or by the labor court. In establishments, in which a works council does not exist, the electoral board may be directly elected by the general works council or the group works council, alternatively in an establishment meeting, or may be appointed by the labor court, Section 17 Works Constitution Act. Once the electoral board has been elected or appointed, it has the duty to initiate the election immediately, to carry it out and to determine the election result. <br />
<br />
At the beginning of the works council election, the electoral board has to create a list of the eligible voters, the electoral list, Section 2 Election Regulations. The electoral list must be kept separately by gender and must contain last names, first names, and dates of birth in alphabetical order. Furthermore, it is necessary to identify who has only active voting rights, therefore, who lacks the passive right to vote (e.g., temporary workers). In the later election, only those employees are – actively as well as passively – eligible to vote, who are listed on the electoral list. Consequently, the accuracy of the list is of particular importance for the further progress of the election. After the electoral list has been drawn up, the electoral board has to display the electoral list from the day of the initiation of the election until the completion of the voting at a suitable place for inspection in the establishment. Alternatively or cumulatively, making it available for public display in the Intranet or by email is also considered. Opposition to the electoral list may be submitted in writing to the electoral board within two weeks after issuing the election notice. Every employee of the establishment is entitled to do so – not, however, the employer or a trade union represented in the establishment, Section 4 Election Regulations.<br />
<br />
<i>Practical tip: Election contestations are frequently successfully based on the inaccuracy of the electoral list. In case of doubt, the employer should therefore fully support the electoral board in drawing up the list.</i><br />
<br />
The electoral board then releases the election notice, which with a view to the extent of the minimum details in practice is very prone to error and therefore in practice frequently provides grounds for contesting the election. In particular, the information on the mini-mum seats for the minority gender in the establishment can frequently lead to errors. Section 15(2) Works Constitution Act requires that the gender, which is in the minority in the staff, must at least be represented in the works council according to its relative numerical strength, if the works council consists of three or more members. Therefore, the electoral board must determine how many employees belong to the respective gender at the time of issuing the election notice. <br />
The election notice must also contain the number of the supporting signatures necessary for the individual proposed lists. Each employee may only run as a candidate for a pro-posed list and also only support one proposed list. <br />
<br />
<i>Practical tip: In practice, it can make sense to offer the electoral board a final (legal) re-view of the electoral list and the election notice, in order to avoid contestable errors.</i><br />
<br />
As soon as the election notice is posted, proposed lists may be submitted, Section 6 Election Regulations. <br />
<br />
The mandatory contents of a proposed list are:<br />
<br />
• list of the individual candidates giving last names, first names, dates of birth and type of employment in the establishment, <br />
• designation of the candidates in a recognizable sequence with a consecutive number, <br />
• written consent of each individual candidate for inclusion in the proposed list, <br />
• designation of a list representative, who is entitled and obligated to submit and receive declarations to and from the electoral board, and<br />
• adding the necessary supporting signatures as specified in the election notice.<br />
If only one proposed list is submitted, a majority vote, therefore, a personal vote between the candidates of this list occurs. In the case of several competing proposed lists, however, a proportional voting takes place. <br />
<br />
In the subsequent (actual) casting of votes, it must be guaranteed that the voting rights principles are complied with. Each eligible voter must be able to decide freely whether and how he votes. Furthermore, the election must be secret. This can be guaranteed in particular by a privacy screen during the election (e.g., by polling booths) and a sealed ballot box. There must also be a guarantee that each eligible voter votes only once and that both the ballot as well as the election locality and voting time do not influence the election. <br />
<br />
The counting of the votes takes place in public. The seats in the works council must be determined, where the minimum quorum for the minority gender must be taken into consideration. The result of the election must then be recorded in an election register and be signed by the chairman of the electoral board and one further member of the board. Following this, those elected must be informed of their election, the election results must be announced, and the works council is to be invited to the inaugural meeting. <br />
<br />
<b>6. SIMPLIFIED ELECTORAL PROCEDURE</b><br />
<br />
The simplified electoral procedure may be carried out in one or two stages. Which procedure is used, depends decisively on how the works council election was initiated, Section 14a Works Constitution Act:<br />
<br />
• The electoral procedure is a one-stage procedure if the electoral board was appointed by the group, general or works council or the labor court.<br />
• The electoral procedure is a two-stage procedure if the election was initiated either by a trade union represented in the establishment or else by three employees of the establishment who are eligible to vote. <br />
<br />
The initiation of the two-stage election procedure takes place by invitation of the listed initiators. The invitation letter must be made public and contain information on who is invited to the election meeting, when and where the meeting will be held, that proposals must be submitted by the end of the election meeting and what number of supporting sig-natures is required. The election meeting may occur at the earliest seven days after the first day of the publication of the invitation. In the election meeting, the electoral board must then be elected, which must draw up the electoral list and has to issue the election notice. The actual casting of votes occurs only in the second election meeting. In the simplified procedure, only the majority, therefore personal vote, takes place. Vote counting occurs publicly immediately following the casting of votes. Subsequent voting must be requested by no later than three days before the election meeting. Otherwise, the principles of secrecy and freedom of choice already set out as part of the normal election procedure apply.<br />
<br />
In the one-stage election procedure, the electoral board has to draw up the electoral list after its appointment and to issue the election notice as well as to make both known. The law does not provide a minimum period for the time span between the appointment of the electoral board and conducting the election meeting. It is recommended, however, to observe the minimum period according to Section 28(1) sentence 2 Election Regulations, i.e., seven days, because otherwise hardly any time remains for the employees to submit the proposed lists. <br />
<br />
<b>7. CONTESTING AN ELECTION</b><br />
<br />
The representation of the implementation and course of the works council election shows that the procedure is prone to error in many areas. A distinction must thereby be drawn between errors, which are "only" contestable and those, which can lead to the nullification of the election. <br />
<br />
The contesting of an election is governed by Section 19 Works Constitution Act. <br />
<br />
(1) An election may be contested before the labor court, if any of the essential rules respecting the right to vote, eligibility or electoral procedure have been infringed and no subsequent correction has been made, unless the infringement could not have altered or influenced the election results.<br />
(2) Such contestation may be made by any three or more persons with voting rights, a trade union represented in the establishment or the employer. To be receivable the action must be brought within two weeks of the announcement of the election results.<br />
<br />
But what are the essential provisions with regard to the right to vote, eligibility or election procedures? And what violation can at least potentially influence the election result? Does any hypothetical possibility of an interference in an election suffice or must the election result actually have been influenced? <br />
<br />
An election provision, which is considered a "must" in contrast to a purely regulatory standard ("target") is essential. Violations of target provisions do not in principle justify the contestability of the election due to their clearly less binding nature than must provisions. An exception exists only if the target provision contains elementary basic principles of the works council election or supporting principles of the Works Constitution Act (cf. Federal Labor Court, October13/2004 – 7 ABR 5/04). <br />
<br />
The following violations have already led to the contestation of a works council election: <br />
<br />
• misjudgment of the concept of an establishment (cf. Bielefeld Labor Court, January 24, 2017 – 2 BV 128/16),<br />
• authorization of persons not eligible to vote or non-authorization of persons eligible to vote (cf. Federal Labor Court, June 25, 1974 – 1 ABR 68/73; Federal Labor Court, March 20, 1996 – 7 ABR 34/95).<br />
• incorrect determination of the number of members of the work council (cf. Federal Labor Court, March 13, 2013 – 7 ABR 69/11),<br />
• appointment of the electoral board by a works council no longer in office (cf. Federal Labor Court, March 01, 1976 – 1 ABR 19/54),<br />
• authorization of improper election proposals and non-authorization of proper election proposals (for example, due to lack of supporting signatures),<br />
• incorrect allocation of seats for the minority gender, <br />
• violations of the secrecy of the election (cf. Düsseldorf State Labor Court, December 13.12.2016 – 9 TaBV 85/16),<br />
• use of the simplified election procedure without the existence of the statutory requirements, <br />
• violation of the principle of free choice and equality of opportunity for the candidates (cf. Federal Labor Court, December 06, 2000 – 7 ABR 34/99),<br />
• non-public counting of the votes.<br />
<br />
<b>8. PITFALLS</b><br />
<br />
The successful contestation of a works council election requires an at least hypothetical impact of the error in the election procedure on the election result; consequently, the greatest pitfalls exist where the right to vote itself, the candidacy, and the casting of the vote/counting of the vote are affected. In this connection, attention should be paid in particular to the following aspects:<br />
<br />
• Foreign-language employees: According to Section 2(5) Election Regulations, the electoral board is obligated to inform foreign-language employees, who do not have (sufficient) command of the German language, in their foreign language (or at least a language sufficiently well understood by them) before the initiation of the works council election about the election procedure, drawing up of the electoral and proposed lists, election process and casting of votes in a suitable manner (Federal Labor Court, October 13, 2004 7 ABR 5/04). Here, for example, the trade unions are helping, which offer relevant explanations in a large number of languages for download on their websites free of charge. <br />
• Numbers, dates, addresses: The electoral board has to pay attention to a large number of deadlines, numbers, and calculations and must communicate dates and addresses (for example, for the election) unmistakably. All of this is error-prone – all the more so if the members of the electoral board do not have any-thing to do with such formalities in their professional everyday life.<br />
• Electoral list, candidates, supporting signatures: The precise review of the electoral list (active and passive eligibility to vote) as well as proposed lists is urgently advised. Here, employees are too easily forgotten, double-counted, or taken into consideration even though they no longer have the right to vote at all.<br />
• No incompatibility of offices: It is inconceivable that the leading candidates for the federal parliament are at the same time their election official. In an establishment, this is different – not least due to the scarce resources in small establishments: Here, members of the works council who are active and running as candidates can also be a member of the electoral board and thus make decisions about the eligibility to vote / proposed list of the "opposition." Not everyone can resist the associated temptation. In larger establishments, it has therefore proven to be a good idea, if one or two employees (also from the Human Resources Department) exercise the function of the electoral board – and only the latter – over several election periods. <br />
• Ballot box: The security of and the exclusion of opportunities for manipulation at the ballot box are a core area of election protection. Therefore, not only in elections in remote countries is there a focus on monitoring ballot boxes. In establishments, the elections are carried out too trustingly sometimes. An electoral board member may take the ballot box (alone) home, before the election is continued on the next day in another establishment site (branch of the establishment) or the ballot box is brought at night, before the count, into a room, to which many employees have unchecked access. It is necessary to consider not only these issues in advance, but rather also their monitoring afterwards.<br />
• Vote casting, postal voting and -counting: Finally, the vote casting itself is also subject to many errors. This pertains not only to the issue of how it is ensured that an employee only casts his vote once (not in an Excel list, Federal Labor Court, June 12, 2013 – 7 ABR 77/11). An electoral interference or violation of the election procedure provisions may also already exist when the electoral board – with the intention of increasing the voter participation in this way – is too generous in inviting postal voting (Frankfurt State Labor Court, April 17, 2009 – 9 TaBV 163/07). Finally, vote counting is also error-prone. Both the evaluation of the individual ballots (is a ballot filled with "dashes" still valid?) as well as place and time of the vote count (how freely accessible is the room for the vote counting?, cf. Federal Labor Court, February 15, 2006 – 7 ABN 75/05) involve risks.<br />
<br />
<b>9. ELECTION NULLIFICATION</b><br />
<br />
The nullification of the election must be strictly distinguished from the contestability of the election. Errors in the election, which lead to the nullification of the election, may still be challenged long after publication of the election result and by everyone. A works council election is nullified, if there is gross and obvious violation of essential principles of the statutory right to vote such that there is not even the appearance of an election corresponding to the law. The nullification of the election must be accepted in extremely exceptional situations and was accepted to date, for example, in the following cases:<br />
<br />
• works council election without electoral board (cf. Munich State Labor Court, June 16, 2002 – 11 TaBV 50/08),<br />
• falsification of postal vote documents,<br />
• terrorizing the workforce during voting (cf. State Labor Court, March 08, 1957 – 1 ABR 5/55),<br />
• holding a works council election in an establishment, which is obviously not subject to the Works Constitution Act (ct. State Labor Court, February 09, 1982 – 1 ABR 36/80).<br />
<br />
If there is a case of nullification of the works council election, this has far-reaching con-sequences. Decisions must then be made in all issues as if a works council had never existed.<br />
<br />
<b>10. CONCLUSION</b><br />
<br />
The statutory requirements for the conducting and course of the works council election are highly complex. Whether a standard or simplified election procedure: A "no brainer" will not suffice. Particularly due to the many small pitfalls and the risks resulting therefrom of an election contestation and expensive repetition of the works council election, often an active support of the electoral board – also by legal expertise – must be recommended to the employer. In any case, the employer has to bear the cost of the election, Section 20(3 Works Constitution Act. This does, of course, not include all "desired expenses" of the electoral board (such as certain office equipment, cf. Berlin Labor Court March 16, 2017 – 63 BV 11412/16), but all required cost. This includes, in addition to the actual election papers (ballots, ballot box, etc.,), also the cost of training of the electoral board, if necessary, its legal support during the election, and the expenditures associated with the election (for example, travel expenses to the branches of the establishment). Such cooperation of the employer and the electoral board during the election can save not only cost for the employer, but rather at the same time can build trust capital for the collaboration with the works council.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-13385216448492912052017-06-05T23:18:00.000-04:002017-06-08T23:19:16.671-04:00France - The Anticipated Labor & Employment Reforms of the New French President<i>By Roselyn Sands, EY Société d’Avocats</i><br />
<br />
Emmanuel Macron was elected President of the French Republic on May 7, 2017. <br />
His first order of business is reforming French labor & employment laws.<br />
<br />
He seeks to trim the Labor Code by taking out hurdles that help no one while protecting employee rights. This requires, in part, moving from a one-size-fits-all legislative architecture to a customized approach by strengthening collective bargaining within companies.<br />
Below are some of the key features of Mr. Macron’s reform:<br />
<br />
<b>A new manner of achieving flexibility</b><br />
<br />
The new President wants to ensure that decision are taken “on the ground” through company-wide collective agreements which would prevail over industry-wide collective agreements, or by employee referendum. Industry-wide sectors would be reduced from 100 to 50. Yet, fundamental safeguards would remain in the Labor Code. <br />
<br />
Simplification of a Staff representative bodies and strengthening of their role <br />
President Macron seeks the implementation of a single body which would replace the personal delegates, the works council and the Health and Safety committee, in all companies and groups regardless of headcount threshold. <br />
<br />
By exception, a company could negotiate an agreement with the unions whereby bodies would remain separated. <br />
<br />
Staff representatives would have access to training notably on labor law, and specific tasks on company management. The government would also encourage union involvement and employees presence at the Board of companies so that their involvement can be more useful and pragmatic.<br />
<br />
<b>Predictability of Labor Court judgements</b><br />
<br />
In case of litigation, President Macron would like the law to cap damages for wrongful termination. This would allow companies to better anticipate costs and risks of employee litigation. <br />
<br />
This rule would not be applicable to dismissals based on discrimination or harassment.<br />
All judgements would be immediately enforceable even pending appeal, subject to some exceptions, in order to prevent delaying tactics. <br />
<br />
<b>Tax-free incentive in particular tax free overtime compensation </b><br />
<br />
President Macron would like to reinstate tax free treatment for overtime work to encourage employees to work more: a deduction of 0.50€ per hour on employer contribution for company with less than 20 employees; and full tax exemption of employee contribution on overtime. <br />
Increased purchasing power for employees<br />
President Macron would also like to remove employee contributions for health and unemployment insurance. This measure would be financed by an increase of the generalized CSG contribution of 1.7 point (contribution not only paid by employees). Employer contributions to social security would also be reduced.<br />
<br />
<b>Unemployment insurance for everyone</b><br />
<br />
In order to encourage persons to take risks, change careers, try new ones, President Macron would like to make unemployment protection available to everyone, even those that resign.<br />
Employees would have the possibility to benefit from unemployment allowance in case of resignation, once every five years. <br />
<br />
<b>Training employees and unemployed </b><br />
<br />
Training will be reinforced by the conversion of employer training contributions to individual training rights for all workers. <br />
<br />
Unemployed people would have access to additional training measures but could lose unemployment protection if 2 “decent” job offers are refused or insufficient efforts to search for work. <br />
<br />
<b>Maternity leave for all women who work</b><br />
<br />
President Macron would like to create a universal maternity leave for all women whatever their status (employee, independent worker, non-employee…) to further create equality between men and women who work.<br />
<br />
<b>Improve access to the independent worker status (gig economy)</b><br />
<br />
President Macron wants to improve independent worker status by removing heavy barriers notably by substantial decrease of their social security contributions and tax, in particular for small businesses that are struggling to survive. <br />
<br />
<b>Fighting against social dumping </b><br />
<br />
President Macron would like France to influence Europe by the way of harmonization and creation of a European labor law common base notably by creating minimum standards on training, health and safety, unemployment insurance and minimum wage. Posting of workers in France would be limited to 1 year and European posting of workers rules would be redefined. <br />
<br />
*<br />
It will be interesting to see if these proposed reforms actually become legislation and how that might influence the French economy. <br />
<br />
<br />
<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-56970591297322986052017-06-05T18:00:00.000-04:002017-06-05T18:00:05.474-04:00Summer editionDear all<br />
<br />
Welcome to the Summer edition of the International Employment Committee Newsletter. Thanks as always to our contributors, and please let me know if you are interested in submitting an article for consideration for future editions.<br />
<br />
Helen Colquhoun<br />
Withers<br />
(qualified in England & Wales, New York, Hong Kong)Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-71412659936834894552017-06-05T17:30:00.000-04:002017-06-05T17:30:19.359-04:00Canada - New Developments in Federal Labour Relations and Labour Standards Legislation: Towards a 'Super' Federal Labour Tribunal<i>By Theodore Goloff, Robinson Sheppard Shapiro, Montreal</i><br />
<br />
Those who follow legislative developments regarding the Canada Labour Code, will remember that important changes came into effect in June 2015 – notably the “abandonment” of a purely “card counting” based system for federal union certification, and the requirement of a “certification election” to obtain union certification pursuant to that Code. Shortly after the election of the present Liberal government, in October 2015, the new administration tabled Bill C-4 whose purpose is to re-establish the old system without an obligatory certification vote. This Bill has not yet been adopted by the Parliament of Canada because of amendments by the Canadian Senate. This Bill is surely a matter to be closely followed!<br />
<br />
<b>INCREASED LEAVE</b><br />
<br />
Recently, following the Budget of March 22, 2017, the Federal Government tabled Bill C-44, very substantially changing the Canada Labour Code. Inter alia, the Bill amends Part III of the Code to increase parental leave from 37 to 63 weeks, allowing employees to take such leave within a period of 78 weeks following the birth or “due date”, instead of within 52 weeks as was the case previously. The changes allow as well for maternity leave to begin 13 weeks prior to the birth or “due date”, instead of 11 weeks as was the case previously. The Bill also provides for a new leave for an employee who is obliged to provide care to a gravely ill adult. Simple but significant changes in what may be their possible effects!<br />
<br />
<b>AN ENLARGED JURISDICTION FOR THE CANADA INDUSTRIAL RELATIONS BOARD</b><br />
<br />
However important, the above changes are simply the tip of the iceberg, as other sections of Bill C-44 radically transforms the labour relations landscape for all employers falling within the federal jurisdiction in Canada.<br />
<br />
In a nutshell, the Canada Industrial Relations Board [CIRB], now becomes the primary jurisdiction to hear all recourses under the Code whether pursuant to Part I, II and/or III that deal respectively with labour relations, health and safety and labour standards. There are, of course, clear parallels between the recent creation of the Quebec Administrative Labour Tribunal but as seen below, this proposed federal legislation goes further than its provincial counterpart.<br />
<br />
The CIRB, which previously had jurisdiction to hear only recourses provided for violation of Part I, would now inherit the responsibilities previously given over to “appeal officers” provided for in Part II, in matters of health and safety.<br />
<br />
With respect to Part III, the CIRB would now also have jurisdiction to hear complaints for alleged unjust dismissal filed pursuant to Section 240 – replacing outside arbitrators named by the Minister. It would still be possible for the CIRB to name an outside arbitrator to hear files both under Part II or Part III, depending upon the anticipated volume of complaints and the somewhat limited resources of the CIRB. This latter change could certainly impact on consistency of decisions. <br />
<br />
<b>NEW SANCTIONS – GREATER EFFICIENCY?</b><br />
<br />
A new and fundamental change introduced by this Bill is the creation of a regime of administrative fines for infractions of Parts II and III. It would now be the CIRB that would hear appeals from penalties imposed by the Ministerial order. Furthermore, alleged violations of Parts II and III would no longer be treated by the common law courts. While this may be the harbinger of a more efficient system of redress than recourse to penal complaints that have not been frequently used in the past, because decisions of the CIRB are without appeal, unlike decisions of the common law courts. This too represents a significant change.<br />
<br />
<b>NO TO REPRISALS</b><br />
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Another substantive modification to the Code is a new Section dealing with claims for “reprisal” – the equivalent of what Quebec practitioners know as complaints for illegal practices pursuant to Section 122 and the following of the Quebec Labour Standards Act. But there is a twist. The Bill, as tabled, prohibits the joinder of a claim of reprisal with a complaint for unjust dismissal pursuant to Section 240 of the Federal Code. This joinder is allowed under the equivalent provisions of the Quebec Labour Standards Act.<br />
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<b>GREATER POWERS TO INSPECTORS</b><br />
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Another substantive change to the Code deals with the recovery of sums allegedly due by an employer to an employee pursuant to Part III of the Code.<br />
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Firstly, the powers of inspectors are enlarged substantially because they now can decide whether or not a discharge has in fact taken place so as to bring into play Sections 230 and 235, that deal with notice of termination and severance. These same inspectors can order the end to practices that they deem violations of Part III, all this in addition to issuance of Ministerial (administrative) orders for investigation to assure compliance with the law.<br />
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In line with these changes, the CIRB (or an outside arbitrator that it assigns a case to) now may hear appeals from payment orders made by inspectors pursuant to Sections 251 et seq. of the Federal Code. The CIRB will as well now have the power to order costs in such cases, as well as extrajudicial costs incurred by the parties.<br />
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It is clear that the federal government’s intent is to reduce the number of violations of Part III, and to more effectively prosecute and penalize those who fail to respect the law, bearing in mind that these are minimum labour standards for employees falling under federal jurisdiction. In other words, legislation with teeth!<br />
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Will the creation of this “Super Tribunal”, with its attendant new powers, really shorten delays, lighten the load of common law courts and promote faster and better industrial justice? The federal government seems to think so! Effective or not, given this new landscape – employers beware!<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-52940822687961706922017-06-05T17:00:00.000-04:002017-06-05T17:00:30.478-04:00Canada - Canadian Labor Department Issues its First Report on Petition Filed Under the Canada-Colombia Agreement on Labour Cooperation<i>By Tequila J. Brooks</i><br />
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On January 27, 2017, Canada’s labor ministry Employment and Social Development Canada (ESDC) released its first report on a petition filed under the Canada-Colombia Agreement on Labour Cooperation (CCALC). The CCALC is the labor side accord to the Canada-Colombia Free Trade Agreement (CCOFTA) which was signed in November 2008 and went into effect on August 15, 2011. The underlying petition was filed by the Canadian Labour Congress (CLC) and five Colombian trade unions in May 2016. The Canadian National Administrative Office (NAO – the department within ESDC empowered to respond to petitions under labor side accords to Canada’s free trade agreements) accepted the petition for review on July 15, 2016. The petition was based on the same labor issues and events occurring in the petroleum and sugar producing and processing industries as those in a petition filed and accepted by the U.S. Department of Labor under the U.S.-Colombia Trade Promotion Agreement (TPA) in July 2016. USDOL issued its report on January 11, 2017. Based on their assessment of the allegations and evidence in the petitions, the labor departments of Canada and the U.S. both recommended ministerial consultations with the Government of Colombia to address serious shortcomings in its compliance with labor provisions of its free trade agreements (FTAs) with Canada and the U.S.<br />
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The main issues addressed by the Canadian NAO in its report were (1) the misuse of subcontracting arrangements by employers in the petroleum and sugar producing industries in Colombia to avoid compliance with labor laws; (2) shortcomings in administrative and legal processes for workplace inspections resulting in the failure to levy and collect fines and remedy labor law violations in a timely manner; and (3) ongoing failure by the Government of Colombia to protect trade unionists from violence and threats of violence. <br />
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Under Articles 1 and 3 of the CCALC, the Governments of Colombia and Canada committed to ensure protection of internationally recognized labor principles and rights including freedom of association and the right to collective bargaining. Based on its review of evidence and interviews with government officials, trade unions and employer representatives in Colombia, the Canadian NAO found that a number of subcontracting arrangements utilized by employers created situations where it was difficult for workers to effectively and freely exercise their rights to freedom of association and collective bargaining. As part of the process of improving labor standards to accede to FTAs with the U.S. and Canada, Colombia made it unlawful for employers to utilize “Associated Work Cooperatives” to subcontract out permanent core functions in order to avoid labor law compliance.<br />
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Lack of clarity in the law led to the utilization of subcontracting in different legal forms – Simplified Stock Companies (Sociedad por Acciones Simplificada or SAS) or “union contracts” (agreements whereby a union provides employees to employers and operates as a subcontracting entity – not to be confused with independently negotiated collective bargaining agreements) – with the same effect as work cooperatives. Acknowledging that subcontracting can be a legitimate business mechanism, the Canadian NAO observed a significant amount of interference by de facto employers in the management of subcontractors – an indication that labor intermediaries were being used to avoid compliance with labor law obligations. The Canadian NAO found that misuse of subcontracting by de facto employers chilled workers’ exercise of freedom of association due to the fear of non-renewal of short-term contracts and blacklisting as well as legal obstacles to recognition of representative trade unions by the primary employer. <br />
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Article 3 of the CCALC requires Canada and Colombia to effectively enforce labor laws through labor inspections and other mechanisms and to ensure that labor law violations are appropriately sanctioned in a timely manner. In its discussion of the adequacy of the operation of Colombia’s labor inspectorate, the Canadian NAO observed that labor inspectors are hired on a provisional basis subject to budgetary constraints. While noting that there have been improvements in the functioning of Colombia’s labor inspectorate in recent years, the Canadian NAO found that the labor inspectorate’s administrative processes are still burdensome and not completely effective – and that sufficient funding and resources are required to ensure that inspectors are adequately trained and experienced. Even in cases where inspectors find labor law violations and levy fines against employers, bureaucratic delays occur due to of lack of coordination between Colombia’s labor inspectorate and the government agency empowered to collect fines (Central de Inversiones S.A. or CISA). As a result, fines and remediation may not occur in an efficient and timely manner and thus do not have a sufficient deterrent effect.<br />
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The Canadian NAO observed that a climate of violence and anti-union culture have posed significant challenges to the advancement of trade unionism in Colombia. Between 1986 and 2014, more than 3,000 trade unionists were murdered, 230 disappeared and thousands of others suffered threats, kidnapping and other types of violence. Despite recent legislative and executive progress in recent years, there were 18 labor-related homicides in Colombia in 2015. Noting that the strengthening of Colombia’s National Protection Unit (NPU) in recent years is essential to tackling impunity and violence against trade unionists, the Canadian NAO observed that the progress achieved will be compromised if the Government of Colombia does not allocate sufficient resources to support the NPU’s work to protect trade unionists. Similarly, the Canadian NAO observed that the Office of the Attorney General of Colombia is critical to prosecuting perpetrators of violence and murder against trade unionists – but “note[d] with concern that no case of trial and subsequent conviction under Article 200 of the Criminal Code has been reported by the Colombian Government.” Other shortcomings highlighted by the Canadian NAO of Colombia’s procedures and lack of results in protection of trade unionists from violence and threats include: failure to respond to calls for investigation of excessive force by police authorities against trade unionists; the closing of files without criminal prosecution; and the number of files stuck at the pre-investigative phase. The Canadian NAO pointed specifically to the mandatory conciliation phase of the process for investigating and prosecuting violence against trade unionists as being a sticking point in the timeliness and efficiency of the process.<br />
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The Canadian NAO’s report contains a number of substantive, administrative and policy recommendations to the Government of Colombia to address shortcomings in its protection of the fundamental rights to freedom of association and collective bargaining. On the issue of the use of labor intermediaries to avoid compliance with labor laws, the Canadian NAO recommended the elimination of union contracts and collective pacts as well as the elimination of the misuse of short-term contracts. It also recommended the implementation of measures to reduce widespread and systemic misuse of subcontracting. The Canadian NAO noted that 2016 regulations issued by the Government of Colombia seem to make it lawful to use certain forms of subcontracting to avoid labor law compliance and that this may be in violation of the CCALC’s non-derogation provision.<br />
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On the issue of strengthening the enforcement of labor laws through the labor inspectorate, the Canadian NAO recommended a number of reforms, including: ensuring reinstatement or severance as remedies for labor law violations; streamlining administrative processes; improving coordination between government agencies to enhance collection of fines for labor law violations; and providing labor inspectors with adequate training and resources to perform preventive and proactive labor inspections.<br />
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Finally, the Canadian NAO recommended that the Government of Colombia strengthen its efforts to fight impunity and violence and bring perpetrators to justice by: evaluating the effectiveness of the mandatory conciliation phase; reviewing and acting on pending criminal investigations to ensure that justice is administered before legal time limits expire; providing the NPU with sufficient resources to effect its mandate; critically examining the actions of police authorities in cases where excess violence is alleged in actions involving trade unions; and effectively prosecuting acts of violence against trade unionists.<br />
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On April 27, 2017, the Minister of Labor of Colombia Clara López Obregón, and the Minister of Labor and Workforce Development of Canada Patty Hajdu agreed to negotiate a Work Plan to implement the Canadian NAO’s recommendations. On May 23, 2017, Minister Hajdu released a public statement indicating that she and López Obregón’s successor, Minister Griselda Janeth Restrepo, will continue ministerial consultations to develop a multi-year work plan to address issues raised by Colombian and Canadian trade unions under the CCALC. Under Article 12 of the CCALC, the Government of Colombia had 60 days to respond to Canada’s request in writing for ministerial consultations to address the issues raised in the Canadian NAO’s report. The parties are required to make every effort to reach a mutually satisfactory agreement on resolving the issues raised in the petition. Unlike similar provisions in NAFTA’s labor side agreement (North American Agreement on Labor Cooperation – NAALC), Article 12(5) requires that ministerial consultations shall conclude no later than 180 days after they are initiated.<br />
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If the Governments of Canada and Colombia are unable to reach agreement on resolution of the issues raised in the Canadian NAO’s report through ministerial consultations, the Government of Canada may call for the establishment of a Review Panel under Articles 13 and 14 of the CCALC. The matters in the report must be trade-related for the Review Panel to be established. The Review Panel would consist of three recognized experts in labor law matters and issue an independent report according to rules set forth in the CCALC. The states parties, members of the public and the petitioners are able to provide information to the Review Panel. If in its final report the Review Panel finds that Colombia is not in compliance with the CCALC, under Article 20 the Review Panel may levy monetary assessments against the Government of Colombia.<br />
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The existence of two simultaneous reviews of the same labor issues in Colombia by Canadian and U.S. labor authorities provides a unique opportunity for comparison of the U.S. and Canadian models for incorporating and implementing labor provisions in FTAs. This has not happened since the 2003 Puebla Garment Workers case was filed simultaneously with the Canadian and U.S. NAOs under the NAALC. While the procedures under the CCALC and Chapter 17 of the U.S.-Colombia Trade Promotion Agreement (TPA) are fairly similar at the beginning stages (acceptance and review of the petition, issuance of report, request for ministerial consultations), the rules diverge after the ministerial consultations phase. If ministerial consultations between the U.S. and Colombia fail to result in a satisfactory outcome, under Article 17.7.6 of the U.S.-Colombia TPA, the U.S. may call for formal dispute resolution under Chapter 21 of the agreement, leading to a potential request for the establishment of an Article 21.6 trade arbitration panel.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-52412412377330130122017-06-05T16:30:00.000-04:002017-06-05T16:30:22.945-04:00Germany - The 2018 Works Council Election is Getting Closer - what next?<i>By Bernd Weller, Frankfurt office of Heuking Kühn Lüer Wojtek PartGmbB<br />
Dr. Johan-Michel Menke Hamburg office of Heuking Kühn Lüer Wojtek PartGmbB</i><br />
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In 2017, Germany will be electing a new parliament. There is a lot of talk of political disenchantment and new political parties and movements. The composition of the German Bundestag could change dramatically.<br />
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The next important elections will be held in 2018 – the next regular works council elections. And here, too, there will be something new. According to the observations of the undersigned, there were already a lot of changes in the composition of works council bodies in the last elections in 2014; in 2018, this change is set to become stronger and more rapid.<br />
In addition to the change of generation, with many long-serving works council members taking (early) retirement during the last period of office and many others planning to do so during the upcoming period of office, it is above all social changes that will affect the works council bodies.<br />
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The rates of union membership have been decreasing for years; many younger employees no longer feel that the traditional unions (with their more traditional distinction between the “oppressed workers” and the “capitalist employers”) represent them. They do not want rules based on a “one size fits all” scheme, but rather, they want to express and implement their individual needs and wishes more strongly, independently and without a “muzzle.” The system of values has changed, company cars and salaries are no longer the main attractions of employment; equalizing and rigid working time systems are often considered a hindrance by younger employees. Many young employees – including works council members – want to focus on designing rather than preventing.<br />
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So, more candidates, more lists, and therefore also a fiercer election campaign are to be expected. All of this is more than enough reason for employers to prepare themselves for the elections. In this first article before the upcoming election, we therefore want to raise the following questions and give some recommendations:<br />
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• preparation for the elections themselves<br />
• cost and support of the election<br />
• tactical considerations on the employer’s side<br />
• sanctions for attempts to influence the elections<br />
• key points of the election <br />
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<b>1. Preparation for the elections themselves</b><br />
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The works council election is a vote by the staff; it is led by the election committee. The employer’s obligations are only supporting ones – it must provide information and offer time and money to support the elections.<br />
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So why should employers and company management consider the topic and prepare themselves in advance?<br />
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First of all, every election costs money. During the election meetings and the election itself, every employee has a claim to free time off work, costing time and productivity. In addition, the employer must finance the election preparations and must also accept that members of the election committee will have to meet, undergo training, and if necessary obtain consultation weeks or even months prior to the election, which will result in further expenses.<br />
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In addition, as a result of and during the election campaign, productivity will decrease. Employees are involved in organization and discussions. Discussions that are sometimes controversial will take place in the workplace. In addition to the short-term effects on productivity, this can also have a long-term effect on the mood of the workforce. Employers will and should be concerned if their staff disintegrates into “political fractions.” <br />
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Taking all of this into account, each company should consider working through or examining the following checklist:<br />
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• training of executive staff and managers on key issues<br />
• training of all other managers on dos and don’ts<br />
• definition of the employer’s role in the election (preparations) (see item 3.)<br />
• tactical considerations (see item 3.)<br />
• human resources planning (see item 3.)<br />
• handling of key topics (see item 3.)<br />
• preparation by the employer for the election process (see item 3.)<br />
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Executive staff and general managers should be trained on key topics before each election. This includes, in particular, being sensitive to the fact that your statements on the election and particularly about individual election candidates can easily exceed the threshold of impermissible influence on elections. In addition, you should develop a fundamental understanding of what the works council elections are and what the basic procedure is. This will prevent unnecessary disputes in case of impairments to company activity as a result of the works council election (preparations). Not least, the top management group should be committed to the shared company line about how the company/management views the election (deliberately distanced/neutral or rather deliberately supportive/neutral). Finally, the executive staff should be prepared for the fact that in works council elections (as a result of imminent thresholds for the size of the body or the number of releases from work duties), there may be repeated operational discussions or even court disputes about its status.<br />
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All other executives should also be trained prior to an election and before the beginning of preparations for it. They are not executive staff and therefore also participate in the works council elections like all other employees – as voters or candidates. At the same time, they also represent the employer’s side for the workforce – and often also for labor courts and unions – and therefore the employer’s intents. This means that executives have to make a strict distinction between their supervisor roles and the role as voter/candidate. They must always also ensure that they do not give the impression that they:<br />
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1) are speaking for the employer, <br />
2) are participating in the political discussion and election “as a representative” of the employer or<br />
3) would take advantage of their supervisor role in connection with the elections (promising advantages, threatening disadvantages for incorrect political attitudes).<br />
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Although this sounds easy in theory, it sometimes ends up being difficult in practice. Of course, a supervisor may not promote himself or herself or another candidate during team meetings that he/she has scheduled (as the supervisor) (and that are paid for as working time). But is any critical confrontation already considered use of the supervisor position? While in many cases the courts consider even a strongly polarizing or confrontational election campaign to be legal and promote the give and take of political discussion by each employee, they nevertheless often impose a higher level of restraint on executives than on “normal” employees during election campaigns. Executives should be prepared for the traditional election argument in particular from unions that they are “working undercover” for the employer’s side, simply because they have a supervisory role. <br />
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<b>2. Cost of the election</b><br />
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The law makes it very easy – the employer is responsible for the cost of the election, Section 20 German Works Constitution Act. <br />
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Traditional cost items of the Works Council Election are:<br />
- election documentation (ballot, if applicable also in other languages)<br />
- ballot box(es)<br />
- working time (for voters, candidates, election committee, human resources department (for researching information))<br />
- shipping (for postal votes)<br />
- journey/transportation cost (in case of multiple operating sites for the transportation of ballot boxes and journeys by the election committee, etc.)<br />
- equipment of the election committee (paper, etc.)<br />
- training cost (election committee, if applicable also record keepers)<br />
- consultant cost (election committee, if applicable also record keepers)<br />
- cost for election advertising (printers, paper, etc.)<br />
- cost for the removal of election advertising (cleaning, etc.)<br />
- any court cost (declaratory proceedings in accordance with Section 18a Works Constitution Act)<br />
space cost (meetings of the election committee, election meetings, election, determination of the election result)<br />
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Most stated cost factors will be expenses that are incurred “anyhow” in a works council election. The employer, however, does have a certain influence, for example, on expenses used for the election. The employer does not have to hold an (even extensive and colorful) election campaign. The employer is not obligated to finance:<br />
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• election gifts,<br />
• election materials (brochures, posters, stickers, etc.), or even<br />
• “election parties.”<br />
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The employer must do one thing above all before and during an election: it must treat all election candidates/lists equally. It must therefore not give support to one list and skimp on others. It the employee therefore prohibits – prior to the election – any use of its company resources (printers, paper, ink, etc.), this will mean of course that it saves cost. At the same time, this may also send a signal to the workforce that the employer is against the actual works council election. If, on the other hand, it grants all candidates/lists the right to use its resources (to a limited extent) for election advertising, the election unavoidably becomes more expensive. At the same time, it sends a signal to the workforce that the employer is supporting the election.<br />
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With regard to the training and consultant cost, the employer also – in any case effectively – to have an opportunity for influence. The employer can defend itself here traditionally because then many election committees can waive training and/or involvement of a consultant in case of doubt. At the same time, this increases the probability that the election procedure becomes more prone to error and there will have to be new (more expensive) elections – as a result of successful election challenges) or if the election committee comes to decisions that are based more on the result (exclusion of unwelcome applicant lists) than on a neutral election.<br />
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<b>3. Tactical considerations from the employer’s point of view</b><br />
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Even the brief statements about the cost of the works council election show clearly that employers would do better not to make decisions during the works council elections “off the hip,” but rather should consider them strategically in advance. This initially involves a status analysis:<br />
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• Is the works council about to reach certain threshold values (number of employees and releases from work duties)?<br />
• Is a “quiet” election emerging or is there a reason for the assumption that the election campaign will be harder than usual (change in generation, occurrence of a new group in the operation, participation of the union with own list, pending/completed/ongoing upheaval in the operation (redundancies, restructuring, new owners, etc.), division/polarization of the works council body, etc.)?<br />
• Are measures/changes pending, about which the works council body does not know/anticipate anything?<br />
• Does the works council doubt the status of the executive staff?<br />
• How is the relationship between the employer and the works council/majority fraction? Would the company prefer to preserve the body or a new composition? <br />
• How is the workforce expected to develop over the next few years?<br />
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On the basis of this status analysis, the employer should make a decision at an early stage:<br />
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3.1 Pending measures<br />
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In particular if the employer is considering drastic measures, i.e., there are signs of an operational change as defined under Section 111 Works Constitution Act, the employer has the potential to maneuver. Should it announce the measure during the election preparations and during an election campaign?<br />
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The result is then not infrequently a large number of employees who take advantage of promises of advantages under unfair dismissal law in accordance with Section 15(3) German Unfair Dismissal Act by becoming a candidate for the works council election. There is a threat of a collective glut of candidates. In addition, in such scenarios the struggle for the places in the future works council body is particularly fierce. Not least, the employer is then subject to the threat of having to negotiate again with new works council members (elected for the first time), who:<br />
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• have not found an internal balance of power yet and are therefore unpredictable,<br />
• are uncertain in their role and their options because of their lack of knowledge and experience and are therefore unpredictable, reluctant, and unreliable negotiation partners.<br />
In contrast, the negotiations with a “settled” and experienced body after an election can have many advantages with regard to the negotiations and implementation of the operational change.<br />
Of course, the aforementioned considerations will also apply if not the whole operation but an individual department is affected by the measure.<br />
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3.2 Human resources planning<br />
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On the contrary, a reduction in the staff after the election does not lead (directly) to a reduction in the size of the body; at most a reduction in the number of optional works council members takes place immediately when the number of members of the workforce decreases. If the employer is aware that operations will decrease significantly (shortly) after the election, this should be taken into account. The options here are as follows:<br />
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• not to say anything,<br />
• to announce the reduction before the election so that it can be taken into account in the election<br />
• or to perform the reduction in the first half of the period of office in order to force a new election ahead of schedule in accordance with Section 13 Works Constitution Act.<br />
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In the first case, the problems mentioned under 3.1 in the election campaign are avoided, but a body that is too large, i.e., that has too many members, will be accepted (at least for a term of 2 years).<br />
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In the second case, the topics mentioned under item 3.1 must of course be dealt with. <br />
In the last case, things may be peaceful prior to the election, but even just after the election and when the staff cuts are implemented, there will probably have to be another election. The staff cuts will often be a feature of this, the works council will be exposed to significant accusations (of not having negotiated hard enough, etc.). The fear of this may become apparent even during the negotiations on the reduction in staff.<br />
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Irrespective of these major topics, human resources planning must be performed before the election with a cool head. There are many questions to be answered:<br />
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• What number of employees should be indicated to the works council (and the likely members of the election committee)? Should the number of (likely) employees be kept below important threshold values in order to reduce the size of the body? Doing so would provoke critical questions among executive staff…<br />
• When do limited term contracts/trial periods expire? Are employees being given incentives to be a candidate unnecessarily as a result of this?<br />
• How many temporary agency workers are being included in the plans? These will also count (and vote). <br />
• Are there more female employees? This can influence the guarantee of the minimum representation of the minority sex in the works council body – there can be a significant influence on the chances of success of individual applicants and candidate lists.<br />
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3.3 Tactical considerations with regard to the election itself<br />
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In view of the significance of the works council body and its composition for operations and cooperation with the employer, it is appropriate for the employer to consider the election, the election campaign, and possible outcomes of the election. In this process, employers are rightly attempting – contrary to what is repeatedly conjectured by some employee representatives –to have their own "preferred candidate" in the election in rare cases only. This is not advisable in view of sanctions (see item 4).<br />
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Irrespective thereof, attempts of this kind are also not advisable for another reason: employers who wish to push “agreeable" works council members into the body are often not doing themselves any favors. Again and again, they look for "yes men" hoping to avoid conflicts with the works council body in this way. This has repeatedly turned out to be a big mistake. “Yes men” are extremely unsuited as members of works councils. Irrespective of the fact that they are often unable to attract any votes, they are also unable to perform the office. They lack the standing and presence in order to represent their own point of view to employers, the workforce, and other works council members. They regularly become less important in the body during the term of office and also usually vote along with the more ideological representatives in the body.<br />
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When employers consider the works council elections, other topics are often more important for them:<br />
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• cost savings,<br />
• proper election process (without election challenges),<br />
• avoidance of splits in the workforce,<br />
• avoiding becoming a victim of the election campaign (the works council shows its “muscles” and blocks important projects in order to gain votes) and<br />
• maintenance/creation of a good relationship with the works council body.<br />
Often, employers are therefore more interested in maintaining the status quo rather than putting it at risk by means of reckless maneuvers. If that is the case, the employer can and should be prepared:<br />
• The employer supports a “due and (predominantly) error-free election” by means of training and granting of external legal counsel for the election committee.<br />
• By training supervisors, the employer prevents them from trying to influence the election campaign in an uncoordinated and awkward (or even punishable) manner.<br />
• If the employer restricts the opportunities of the election campaign, it tends to support the status quo; the opening up of election campaign resources makes it possible, on the other hand, for an “opposition” to be formed.<br />
• The employer may be able to influence the mood in the workforce – to the advantage or disadvantage of the members of the works council in office by means of holding negotiations and through its demeanor during the term of office. <br />
• Finally, the employer can procure the most important election items itself – through its own purchasing – and in this way possibly achieve significant cost savings.<br />
• The analysis of the workforce (how many employees cannot speak German or cannot speak German sufficiently well and must be informed of the election and the election process in their native language or in another language?) can help to arrange the election process more smoothly later.<br />
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3.4 Handling of key topics<br />
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Another part of the tactical consideration is approaching important topics with the works council in a timely manner prior to the election so that they can be negotiated before the election and therefore before any risk of politicizing or the risk of a delay as a result of a lack of time by members of the works council when it comes to dealing with practical issues during the election campaign.<br />
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In this respect, too, company policy is not a lot different from governmental politics. When the election campaign is announced, only the most urgent factual issues will be processed. And in this process, the assessment of what is urgent can differ significantly between the employer and the works council …<br />
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<b>4. The threat of sanctions for attempts at influence</b><br />
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In everything that the employer does, it must be aware of the consequences of its actions:<br />
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4.1 Criminal liability <br />
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The employer – and each individual employee (including executive staff!) – may be subject to criminal liability or a fine in accordance with Sections 20, 119 Works Constitution Act.<br />
Each intervention in the democratic process of forming opinion is subject to punishment. While it is often said during disputes between employees that such disputes are part of a democratic process and have to be “put up with,” the situation is quite different regarding the (apparent) conduct of the employer. The sensitivity of labor courts, unions, public prosecutors, and above all the press is entirely different. <br />
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Each statement by an executive staff member is weighed up and can easily be understood as an (attempt at) influencing the election. Some courts go so far here as to accusing employers of the fact that a general information event about the election and the election process could only be associated with the intention to influence the election; otherwise, an employer would not hold such an event. The worldview of some judges imparted in this way sometimes leaves a deep impression.<br />
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With things as they are, it is a good idea to be careful. Under no circumstances should there be a risk of mixing the supervisor’s function with the function of a “normal” employee who is entitled to vote.<br />
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4.2 Disavowal of candidates<br />
<br />
In addition to the legal sanctions, there is a risk of another sanction – at the ballot box. If the employer/supervisor creates the impression that they would particularly prefer/fight against a candidate/candidate list, there is a risk of a sanction at the ballot box, a “protest or solidarizing vote.” In many companies – and to some extent, in society overall – it is still presumed that there are two diametrically opposed poles, the employer and the employees. Every employee representative, to whom too employer-friendly conduct and/or support from the employer is attributed, is vulnerable. Such candidates are easily disavowed. They lose authenticity, credibility, and therefore the support of parts of the workforce. Praising the employer for many employees is praising the wrong side. It does more harm than good.<br />
Employees could also get the impression (or such an impression could be imparted by competing candidates) that the employer wishes to influence the election and then consciously vote for the other side.<br />
<br />
Restraint is therefore also appropriate on the employer’s part from a tactical point of view with regard to elections.<br />
<br />
<b>5. Key points of the election</b><br />
<br />
Finally, we should mention a few more key points of the election, as a brief overview. A differentiation is made between:<br />
<br />
• normal election procedures (in companies with more than 100 employees entitled to vote) and<br />
• simplified election procedures (in companies with up to 50 employees entitled to vote). <br />
• In companies with 51-100 employees entitled to vote, employees and the election committee can agree on the simplified election procedure, but if one of the two does not agree, the normal procedure is to be applied.<br />
<br />
The normal election procedure can be divided into five main sections:<br />
<br />
a) appointment of the election committee, <br />
b) preparation of the list of voters, <br />
c) announcement of the election notice, <br />
d) submission, review, and announcement of the proposal lists, as well as <br />
e) performance of the actual election procedure, as well as the counting of votes and notification of the election result.<br />
<br />
The election committee is of central importance in the election procedure - it:<br />
<br />
• prepares the list of voters, so it decides who can vote and who can be elected,<br />
• checks and decides on the validity of candidate/list proposals submitted,<br />
• controls the entire election procedure (publishes the election notice and controls the scheduling).<br />
<br />
It is even more surprising at first glance that employees of the election committee are also allowed to be candidates. In a federal/state election this would (correctly) be unimaginable. In companies, this “propriety” can, however, not simply be granted because of a lack of people; elections would then only be possible in companies with significantly more than 5 employees.<br />
<br />
If only one candidate list is permitted in an election, the election of a person (majority vote) will take place; if there are several lists, the election will take place in accordance with the principles of proportional representation. The distribution according to d’Hondt will be applied here – with one modification. The election committee must state what proportion of each gender the workforce is composed of. The minority gender is guaranteed a minority share of the seats in the body – in legal breach of the principles of voting equality. Irrespective of the number of votes achieved – as long as there is a sufficient number of candidates of the minority gender.<br />
<br />
In contrast, the simplified procedure is significantly trimmed down and rapid. <br />
<br />
• After the election committee has been elected (by the works council in office),<br />
• it issues this election notice and voter list and issues an invitation to an election meeting,<br />
• during which the voting proposals (submitted in the meantime) are voted on.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-35262913205903443572017-06-05T16:00:00.000-04:002017-06-05T16:00:35.508-04:00KSA - Managing Employee Performance<i>By Sara Khoja, Clyde & Co</i><br />
<br />
Managing employee performance is a key concern for every employer. The measure of success and method for harnessing employee performance to align with business needs will vary from employer to employer as well as being dependant on industry sector. Whilst employers will seek to tailor their performance management systems to their own operations employers in KSA need to be mindful of the provisions in the Ministry of Labour and Social Affairs’ Model Work Regulations regarding performance management. The Model Work Regulations are available for employers to adopt wholesale or to adopt with modifications provided any amendments receive prior approval from the Ministry of Labour and Social Affairs. Extensive modification of the standard model is unlikely to be approved for use by an employer. Broadly the Model Work regulations provide for the following.<br />
<br />
<b>Appraisal System</b><br />
<br />
Every employee should be assessed formally and in writing at least once a year; with the appraisal covering the following:<br />
• The individual’s ability to perform work and their level of proficiency;<br />
• The employee’s conduct, cooperation with colleagues, customers, and managers; and<br />
• The individual’s punctuality.<br />
<br />
Each employee should be given a performance marketing or ranking based on five performance gradings which are not specified but would include categories along the lines of high performance, upper intermediate, intermediate, lower intermediate, and poor.<br />
<br />
<b>Reward and Promotion</b><br />
<br />
Perhaps surprisingly for many employers, the Model Work Regulations also seek to regulate the payment of bonus payments in that the regulations provide that an employee ranked as intermediate should be eligible for a bonus where an employer operates a bonus scheme. The amount and method for calculating any bonus is for the employer to determine and indeed, whether or not to provide any bonus scheme at all is at the employer’s discretion.<br />
<br />
Internal promotions are also regulated by the Model Work Regulations and linked to the performance management and assessment scheme. Where a role is vacant then an employee is able to apply for it on the basis that it is a higher ranking role for which he is appropriately qualified and has achieved a performance ranking in his last appraisal of ‘upper intermediate’ and the promotion is approved by the General Manager. If there are competing internal applications for the same role, the Model Work Regulations provide that the following factors should be taken into account: which employee has achieved a higher appraisal ranking, has higher educational qualifications, experience, seniority within the organisation and the authorised (i.e. line of report) manager’s view.<br />
<br />
<b>Employment Termination due to Performance</b><br />
<br />
Where an employee’s performance warrants review it is worth noting that the KSA Labour Law and the Model Work Regulations envisage the employer following the same process as that which applies for disciplinary matters. Whilst poor performance and misconduct are conceptually different, the procedure to document an employer’s steps to remedy them are the same under the KSA Labour Law and the Model Work Regulations. A three step process involving inviting an employee to a meeting in writing and outlining the concerns, meeting with the employee to give him an opportunity to explain the situation and make any representations he may have and finally confirming the employer’s decision in writing, should be followed. There are also time limits to take into account such as the requirement that any procedure is initiated within thirty days of the employer becoming aware of the employee’s poor performance. The Model Work Regulations contain a table providing guidance on the type of sanction applicable for various acts by an employee and, where poor performance is involved, an employer would be expected to issue written warnings identifying the skill gap and what needs to be done by the employee to address it. An employer would also be expected to provide training and support to an employee in order to improve his performance and where possible even consider moving him to a role more in line with his capabilities.<br />
<br />
Generally, prior to considering termination by reason of poor performance an employer would be expected (depending on the surrounding circumstances) to have issued at least two written warnings over a six month period. Where a warning or sanction is issued (of whatever nature), these are valid or ‘live’ for a period of one hundred and eighty days following which they can remain on an employee’s file but they are not ‘live’ warnings upon which further action can be based.<br />
<br />
Very often employers will wish to enter into discussions with employees to agree termination by mutual agreement and in accordance with article 74 of the KSA Labour Law. Care needs to be exercised when entering into these discussions as any conversation with an employee is ‘on the record’ and the concept of ‘without prejudice’ does not exist in KSA within the context of employee relations. Moreover, where a termination by mutual agreement is reached, this could have an impact on an employee’s ability to claim unemployment benefit from the General Organisation for Social Insurance (GOSI) under its Sanad program. GOSI will need to be notified by the employer that the employee is no longer in its employ and it will usually request a reason for the employment termination. Where the reason given is resignation or termination by mutual agreement this can potentially bar the employee from claiming unemployment benefit.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-85383225308656414982017-06-05T15:30:00.000-04:002017-06-05T15:30:29.747-04:00Mexico - Reform to Mexico's Labor Justice System<i>By Stefano Sandoval Malori, Pietro Straulino, Charles E. Engeman, Ogletree Deakins International, S.C.</i><br />
<br />
On February 24, 2017, Mexico’s Official Gazette of the Federation (known as the Diario Oficial de la Federación or DOF) published a decree that reformed and added several dispositions of Articles 107 and 123 of the Mexican Federal Constitution.<br />
<br />
The goal of the reform is to transform the labor justice system in Mexico. The reform aims to consolidate autonomy of the labor justice system, promote efficiency in the administration of justice, and increase labor productivity.<br />
<br />
The following highlights some of the most important aspects of the reform:<br />
<br />
1. The reform eliminates the local and federal Conciliation and Arbitration Labor Boards (las Juntas Locales y Federales de Conciliación y Arbitraje) as tripartite labor justice administration organs and creates local and federal labor courts dependent on the federation’s judicial branch or of the power of the states of the Mexican Republic.<br />
<br />
2. The reform creates a pre-judicial conciliatory stage. Employees and employers in conflict will be required to attend this stage of the proceedings before the commencement of a labor trial that would be processed before the courts. It is worth noting that this pre-judicial conciliatory stage will take place on a date and time expeditiously appointed by the conciliation centers (see below) in accordance with the applicable law.<br />
<br />
3. At the local level, specialized and impartial conciliation centers (Centros de Conciliación) will be established in the states of the Mexican Republic. Those centers will be in charge of conducting the compulsory pre-judicial conciliatory stage.<br />
<br />
4. The federal order provides for the integration of a decentralized agency (un Organismo Descentralizado) which, in addition to conducting the compulsory pre-judicial conciliatory stage described above, will be in charge of: (i) registering all the collective bargaining agreements applicable within the Mexican Republic; (ii) registering all the unionized organizations or labor unions of the country; and (iii) participating in and solving all administrative labor/collective matters.<br />
<br />
5. The following principles will be incorporated in the law: (i) representation of collective union organizations and (ii) certainty in the execution (signature), registration and storage of collective bargaining agreements.<br />
<br />
6. The ratification of the collegiate circuit courts as jurisdictional bodies in charge of reviewing and deciding appellate claims filed against resolutions issued by the lower courts.<br />
<br />
In order to implement the reform— which, along with its modifications, became effective on the day after it was published in the DOF, the following must take place to transition to the new justice system:<br />
<br />
1. The Mexican Congress and the legislatures of the states of the Mexican Republic must make the necessary changes to local and federal legal bodies within one year of the reform’s effective date. <br />
<br />
2. Until the courts, conciliation centers, and decentralized agency become operational, the labor boards and, as applicable, the Secretary of the Ministry of Labor and Social Welfare or the local labor authorities will continue to process the conflicts arising between employees and employers, as well as any other issues related to the registration of collective bargaining agreements and unionized organizations.<br />
<br />
3. All matters pending at the time the activities of the courts, conciliation centers, and/or decentralized agency begin will be solved in accordance with the legal dispositions in effect at the time of the matter’s commencement.<br />
<br />
4. The competent authorities and the labor boards must transfer all files and documents under their attention and shelter to the courts, the conciliation centers, and/or the decentralized agency.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-45151585345173472082017-06-05T14:30:00.000-04:002017-06-05T14:30:31.086-04:00UK/US - Bridging the Gap: Gender Pay Gap Initiatives<i>By Georgina McAdam Baker McKenzie London and Emily Harbison Baker McKenzie Houston</i><br />
<br />
Countries across the globe are looking to address the gender pay gap and are doing so in a variety of ways. Initially the UK introduced a scheme in 2011 for employers to publish their gender pay gap voluntarily. However, very few employers did so. Therefore, the UK recently enacted legislation that requires employers with at least 250 employees to publish details of their gender pay gap on a publicly accessible website on an annual basis.<br />
<br />
Although the UK legislation establishes how the gender pay gap should be calculated, which employers are required to publish this information and how it should be published, employers are facing various challenges when implementing the legislation.<br />
<br />
<b>How specifically should the gender pay gap be calculated?</b><br />
<br />
Legislation in the UK sets out specific metrics companies are to report and how to calculate them. The metrics are: <br />
<br />
• the difference in mean and median hourly pay between men and women,<br />
• the difference in mean and median bonuses between men and women over a 12-month period,<br />
• the proportion of men and women who receive bonus pay in a twelve-month period,<br />
• and the proportion of men and women in each pay quartile within the company.<br />
<br />
The rules are complex and not always clear. Being compliant may require employers to make judgment calls on tricky issues such as whether particular payments or employees are in scope. For example, bonuses paid in April may need to be included in both the hourly pay gap and bonus pay gap (depending on exactly when they are paid), and may exacerbate the hourly pay gap figures. In addition, there are some particular challenges around certain types of payment such as sign-on and retention bonuses which will require judgment calls. There are also some anomalies, for example, financial services employers who pay role-based allowances in April will need to include them in their hourly pay gap. The timing of payments can therefore have a distorting effect.<br />
<br />
<b>Which employers need to publish details of their gender pay gap?</b><br />
<br />
Employers with 250 or more employees on 5 April in any year must report their gender pay gap data for that year. Employees in this sense includes apprentices and anyone employed under a contract to personally do work, which includes workers and some contractors. In addition, employees can include ex pats posted overseas, if they retain a sufficient connection to Great Britain (Northern Ireland is currently excluded). Therefore, employers must consider their wider workforce and not just their employees in Great Britain. However, agency workers and individuals providing work though personal service companies are excluded. In addition, workers and contractors can be disregarded for the purposes of the gender pay gap metrics if the employer does not have the data for them and it is not reasonably practicable to obtain the data.<br />
<br />
In a group of companies, the obligation to report applies to each company separately, based on the number of employees in the company rather than in the group as a whole. Each group company with 250 or more employees must therefore produce its own report and upload its data to the government website, even if the group voluntarily produces a consolidated version. Equally, companies with fewer than 250 employees do not have to produce a report, even if they are part of a wider group with more than 250 employees.<br />
<br />
Depending on the group and organisational structure, this could have unintended consequences and mean peer comparisons are not entirely like for like. For example, in some groups the board may be out of scope of the calculations, if they are employed by a group company with fewer than 250 employees. Whilst we do not expect companies to change their group structure because of gender pay reporting, the rules may give an "advantage" to some groups with certain existing structures.<br />
<br />
<b>How must employers publish their gender pay gap?</b><br />
<br />
Employers must publish their data (i.e. the metrics described above) within 12 months of 5 April 2017 on a publicly accessible website. This means that the first reports will be due by 4 April 2018. Companies therefore have a degree of flexibility over the timing of the publication, as they can publish their data any time prior to the deadline.<br />
<br />
The guidance published by the government encourages early publication, which it says will enable employers to be seen as leaders in their sector. However, some employers will be concerned that early publishing could attract more media attention and, given that most in-scope employers will be publishing a gender pay gap, that the publicity will be negative. Employers will also need to manage multiple stakeholders and may want to ensure that their employees, senior management teams and relevant employee groups are briefed in advance of publication. In addition, the process of calculation and sign-off is not straightforward. Therefore, most companies are likely to wait to publish their data towards the end of the 12-month publication window.<br />
<br />
The information will need to remain on the website, accessible to employees and the public, for at least three years to enable trends to be identified.<br />
<br />
Employers must also upload their data to this national government website to enable easy comparison with other employers. At the time of writing, only 9 employers have uploaded their data.<br />
<br />
In addition to the metrics, companies have an option to publish a narrative alongside their data when publishing on their own website. For example, to explain their analysis of the gap, any measures they are taking to reduce the gap and to put their data in context alongside their diversity and inclusion initiatives. This will help to give context to any pay gap. Multinational employers will need to think about whether their narrative is, or needs to be, consistent with what they are saying elsewhere.<br />
<br />
Employers may also want to consider publishing additional or more detailed metrics, for example, the average hourly pay gap between employees at the same grade. This may show a much smaller pay gap, but a pay gap at this level may be more indicative of equal pay risks, so employers will need to consider this carefully. The Conservative Party manifesto states that, if they win the forthcoming general election, they will require employers to publish more data and (although the manifesto does not give any specifics) this could well involve a breakdown by grade, and possibly age.<br />
<br />
<b>Are there any sanctions for non-compliance?</b><br />
<br />
There are no civil or criminal penalties for employers that do not publish their gender pay gap data, although the Equality and Human Rights Commission could take enforcement action against non-compliant employers. The intention seems to be that employees, unions, the media, customers and shareholders will apply sufficient pressure to non-compliant organisations.<br />
<br />
<b>What steps are employers taking?</b><br />
<br />
Employers need to analyse their figures and their own demographics to understand the causes of any gender pay gap before developing action plans to close it. Some clients may want to do this under legal advice privilege as far as possible, and this needs careful planning. A key question is also whether there is an underlying equal pay issues and legal exposure. Where this is a concern, it should be explored on a privileged basis.<br />
<br />
Many organisations are starting to look beyond the immediate concern of compliance with the legislation. Some want to analyse their data to better understand the causes of the gender pay gap in their organisation and consider what measures they could take to narrow it. These organisations are likely to look at alternative or adjusted metrics in order to track their progress, whether or not they also publish those metrics. Any deep analysis of the gender pay gap or production of alternative or adjusted metrics may take considerable resources when compared to simple compliance, and measures to target the gap will also require investment.<br />
<br />
If a company is going to take measures to address the gender pay gap, it is important to be realistic and acknowledge what cannot be changed, at least in the short-term, as well as what can. There is a risk of an employer announcing a package of measures aimed at narrowing the gap and then finding that the gap remains the same in subsequent years. As explained above, employers need to display three years' worth of data on their websites. Some measures may be effective in the long-term but make the gender pay gap worse in the short-term. Companies should not just be thinking about a package of measures to announce in the first year of gender pay gap reporting; they need to be looking ahead to the longer-term, and monitoring the impact of measures.<br />
<br />
<b>What are other countries doing?</b><br />
<br />
The gender pay gap is a global issue, and other countries are taking a closer look at what can be done to improve it. For example, in the United States, there are new rules on gender pay reporting from the Equal Employment Opportunity Commission (EEOC), which is the federal agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, colour, religion, sex, national origin, age, disability or genetic information. For years, the EEOC and the Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) have collected data from certain private employers and federal contractors and subcontractors about their employees on the "Employer Information Report" or the EEO-1. The EEO-1 previously collected data about the number of employees by job category and by sex and race or ethnicity. On September 29, 2016, the EEOC announced approval of a revised EEO-1, starting with the 2017 report, to now also collect summary pay data from employers, including federal contractors and subcontractors, with 100 or more employees. The EEOC expects the revised report will "assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces." <br />
<br />
Using the revised EEO-1 report, covered employers will be required to report the total number of full and part-time employees they had during the “workforce snapshot period” in each of 12 pay bands listed for each EEO-1 job category. Notably, employers do not report individual pay or salaries. In addition, employers must tally and report the number of hours worked that year by all the employees accounted for in each pay band. Employers are required to submit EEO-1 reports annually. The EEO-1 deadline for the 2017 report is 31 March 2018. Employers will have a total of 18 months-from 30 September 2016 (2016 report deadline) to 31 March 2018 (2017 report deadline) to make the change to the revised form.<br />
<br />
There are no penalties or fines associated with the failure to file a EEO-1 report. However, the EEOC can compel a company to file the report. Moreover, if a federal contractor fails to submit a report, it may lose its current government contract and/or be prevented from receiving future contracts. <br />
<br />
It is worth noting that it is possible that the Trump Administration may reverse the course here. The new EEOC Acting Chair, Victoria Lipnic, previously voted against the revised EEO-1 report and recently reiterated her opinion that the purported benefits of collecting the pay data do not outweigh the costs of doing so. However, for now the new rules stand and employers should be prepared to report the new pay data information in their 2017 reports.<br />
<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-76475085850457243752017-02-10T20:00:00.000-05:002017-02-10T20:00:11.184-05:00Spring 2017 EditionDear all<br />
<br />
Belated happy new year (the Year of the Rooster in China)!<br />
<br />
Welcome to the Spring 2017 edition of the newsletter. Many thanks to all of our contributors, and please let me know if you are interested in submitting an article for a future edition.<br />
<br />
Helen Colquhoun<br />
Withers<br />
(qualified in Hong Kong, England & Wales, New York)Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-52538767271590356162017-02-10T19:30:00.000-05:002017-02-10T19:30:13.226-05:00Canada - Good Grief! Is that my Supervisor on the Picket Line?<i>By Theodore Goloff, Robinson Sheppard Shapiro </i><br />
<br />
A recent decision of the Tribunal administratif du travail in Quebec could usher in a whole new reality in Quebec labour law: first line supervisors having the right to collective bargaining and the right to strike!<br />
<br />
1. Tectonic changes have been occurring in the labour relations in the past twelve months with little or no attention being paid by employers in Quebec. In January 2015, the Supreme Court had reversed the position that it took thirty years ago, and declared that not only was substantive collective bargaining a Charter-protected right, but that the right to strike was equally Charter-protected. Those rights could only be restricted by legislation when there is an overarching and urgent societal interest to do so, provided that the means chosen was the least intrusive that could achieve the goal. <br />
<br />
2. These fundamental changes have recently been used by the Tribunal administratif du travail (“TAT”) to produce another tectonic change in one of the pillars of Quebec labour relations - the statutory exclusion of first-line supervisors from any possibility of unionization. Indeed, the December 7, 2016 declaration by the TAT in Association des cadres de la Société des Casinos du Québec et Société des casinos du Québec inc., 2016 QCTAT 6870, that Section 1(l)(1) of the Quebec Labour Code, defining an “employee” as excluding:<br />
“a person who, in the opinion of the Tribunal, is employed as manager, superintendent, foreman or representative of the employer in his relations with his employees…”;<br />
is inoperative, at least in that case, because it denies that employer’s first line supervisors of these fundamental Charter-protected rights as recognized by the Supreme Court, fogs the distinction between management and labour, and will, unless overturned, create rather than settle conflict. While the direct effect of the decision right now only applies to the employers involved, its application will, no doubt, be progressively widened to include all first-line supervisors who do not in fact exercise some degree of substantive managerial authority.<br />
<br />
<b>BACKGROUND</b><br />
<br />
3. Traditionally, first-line supervisors were considered representatives of management who could not be placed into situations of divided loyalties or potential conflicts of interest. Since they represented management themselves, they could not and should not be open to any possibility of unionization or collective bargaining, rights that were legislatively created. Until viewed as Charter-protected rights, the state would be free to limit such legislatively created rights exclusively to those to whom they were intended to apply. Given the responsibilities that a union member has towards his fellow union brothers it was felt from the inception of the first labour relations statute in 1941, right through to the latest amendments to the Labour Code in 2015, that allowing supervisors to organize would create impossible conflicts of interest. The landscape and environment has now changed!<br />
<br />
<b>WHY EMPLOYERS SHOULD TAKE NOTICE</b><br />
<br />
4. Fundamentally, if this decision is allowed to stand and is widely applied, serious questions will arise as to how small- and medium-size firms can operate efficiently. Think of the impact that decisions that first-line supervisors if they are truly management representatives, make or supposedly make every day, decisions that bind employers. These include evaluation of probationary employees, evaluation of employees to be laid off or let go in the event of downsizing, assignment of overtime, selection of employees for promotion, assignment to and balancing of shifts, evaluation of employees for periodic salary advancement, recognition, documentation and decision regarding conduct requiring discipline, evaluation and effective treatment of employee complaints and grievances quickly and effectively as they arise, and a host of other vital decisions that impact the bottom line. All of these form part of what should be part and parcel of the role of a first-line supervisor. Some have said that such supervisors are the lynchpin between executive-level management and the shop floor. Scripture recognizes the impossibility of having a foot in two opposing camps in the parable “He who is not for me is against me”. In a sense, the exclusion provided by Art. 1(l) of the Labour Code of foremen, supervisors and other representatives of managements in their dealings with employees mirror the parable.<br />
<br />
5. This basic tenet of Quebec labour relations has now been thrust aside ostensibly on the basis that unionization collective bargaining and the right to strike, now recognized as fundamental, human rights that are Charter-based and Charter-protected, at least for those that are really and truly “employees”, and not the true persona of the “employer”. How severely operations will be impacted remains to be seen. Much will depend in each case on whether and how effectively and completely first-line supervisors are true management decision makers. In very large organizations, such as la Société des casinos du Québec inc., first-line supervisors have seen their managerial role diluted, with decisions being made further up the line. Constant erosion of even minimally independent authority of first-line supervisors in the name of consolidation of power higher up the line and/or “standardization” in large organizations has blurred the boundaries between who is management and who is labour. The possible impact of the TAT’s decision on such large organizations is far less drastic than on small- and medium-sized employers because they, unlike small organizations, have multiple layers of supervisors. Small- or medium-sized employers simply don’t have that luxury! How successful will unionized supervisors be in protecting management rights and efficient operations without costly additional independent supervision present? Will they themselves, as the supervisors of the Société des Casinos, seek union certification?<br />
<br />
<b>EFFECTS ON CONTINUING OPERATIONS DURING A STRIKE</b><br />
<br />
6. Quebec’s “anti-scab” legislation (Sections 109.1 et al. of the Labour Code) provides that management employees hired before notice to bargain are about the only persons who might continue all operations during a lawful strike by unionized employees. Other unionized employees who are not themselves on strike, are allowed to continue working doing only their own jobs. Up to now, persons who were considered as being covered by Section 1(l)(1), as above, could do any and all work in the place and stead of striking employees. If the decision of the TAT is allowed to stand, what little opportunity management may have in carrying on business during a strike might disappear, effectively, only executives could be doing the work of the bargaining unit on strike. <br />
<br />
<b>CONCLUSIONS</b><br />
<br />
7. The TAT’s decision was based on the labour relations of a very complex large employer where the true managerial authority of the supervisors involved had been eroded over the years.<br />
<br />
8. The problematic effects of the decision might be reduced for an employer to truly empower first-line supervisors with real decisional authority so that their role as the embodiment of the employer is unmistakable. In any case, wouldn’t that lead to effective “hands on” management? Empowering such folks no doubt requires both training and their “buying into” managerial goals and procedures. It requires the confidence of their superiors that they will exercise discretion properly. Take for instance discipline. It’s not sufficient to tell supervisors that they have to document instances of problematic conduct. For them, to truly do so regularly and apply rules of conduct consistently and accurately and fully requires that they understand why all of this is necessary and the process of progressive and constructive discipline. They have to self-identify with the reasonability of all of this and its importance for running the business efficiently. Being a good line operator does not itself equate to being a good supervisor. <br />
<br />
9. If employers continue to dilute the responsibilities of first-line supervisors, they can expect results much like in Société des casinos. If they strengthen their supervisors’ authority and training, they will have a fair to middling shot at avoiding seeing these folks unionize, assuming of course that the TAT’s decision withstands the inevitable and likely appeals process.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-18074233728545736372017-02-10T19:00:00.000-05:002017-02-10T19:00:17.664-05:00France - The French Employee's 'Right to Disconnect'<i>By Roselyn Sands and Nicolas Etcheparre, EY Société d’avocats</i><br />
<br />
<br />
As usual, French labor and employment law continues to be at the heart of French legislative activity with numerous changes in the past months. Yet one topic has attracted the most media attention and has been one of the most recent trending subjects: the “right to disconnect” from mobile devices outside of working hours.<br />
<br />
This new “right to disconnect” is applicable since January 1, 2017. Essentially, it requires employers and employee unions to engage in collective bargaining to negotiate the conditions under which employees will be entitled to disconnect from their mobile devices outside of working.<br />
<br />
The main purpose of this law is to ensure that working hours are complied with, and to protect the health and safety of employees, by allowing them to actually rest in between work days, on weekends and during holidays.<br />
<br />
<b>What is the right to disconnect?</b><br />
<br />
One of the main issues brought by this law is that it does not specify what needs to be understood as the right to “disconnect”. When asked to provide a specific definition the Government explained that the right to disconnect was, for instance, “the right for an employee to not answer emails outside of working hours”, and that in fact, this new right would “allow companies to manage this issue and adapt to new and more modern way of working”. <br />
<br />
French legal doctrine has defined this right as the right for employees “to not always be reachable, for uninterrupted periods of time, for professional reasons. This right entitles employees to be temporarily disconnected from the digital tools that allow them to be reachable for professional reasons (e.g. smartphones, emails, internet)”<br />
<br />
To ensure that this new right is complied with, employers will have to implement measures allowing employees to be disconnected outside of working hours. Such measures could include technical limitations, such as smartphones that no longer receive emails after working hours, or managerial seminars, aiming to empower employees to not feel pressured to answer work related requests outside of working hours.<br />
<br />
Therefore, the right to disconnect needs to be understood as an obligation which is shared by both the employer, who needs to ensure that employees are afforded the right to disconnect, and by the employees, who must make use of the right they are afforded.<br />
<br />
<b>New obligations for employees: the “must dos”</b><br />
<br />
This new right appears in two different sections of the French labor code.<br />
It appears first as a subject that must be discussed by employers on a yearly basis with the employee unions elected in the company during the “Négociation Annuelle Obligatoire” (Yearly Mandatory Negotiation).<br />
<br />
The law specifies that the employer and the unions must discuss, in good faith, the conditions under which this new right will be afforded to employees and what measures will be taken to ensure that it is complied with. If both parties cannot find an agreement, employers must implement a unilateral plan aiming to train and sensitize employees to “reasonable use of digital tools”.<br />
<br />
The new law does not provide for a specific sanction if no agreement is reached and no plan is implemented. However, in cases where employees make claims for unpaid and unreported overtime related to their working after hours through digital tools, judges will be more likely to penalize an employer who has failed to implement such a plan.<br />
<br />
The right to disconnect appears second in the section related to employees working under a fixed number of days scheme (managers and above types) as they are the employees most likely to suffer from “hyper-connectivity”.<br />
<br />
Under the new law, the fixed number of days scheme must now specify the conditions under which employees will be entitled to disconnect from their work. Failure to do would render the scheme null, and such employees would therefore be considered to work only 35 hours per week, with overtime pay for each additional hour worked.<br />
<br />
<b>Some food for thought on “nice-to-haves” best practices</b><br />
<br />
There is no “one shoe fits all” solution regarding this new obligation/right. The manner in which employees are entitled to benefit from their right to disconnect will depend on several factors, such as the type, size and international exposure of the company. Good practices on this matter would therefore require a two stepped approach.<br />
<br />
First companies should run an internal diagnostic on the following issues that should be treated by a potential plan:<br />
<br />
- Does the company already have a policy on the use of digital tools? Has a plan already been implemented?<br />
- How are employees equipped (e.g. smartphone and / or laptop, Bring Your Own Device (BYOD))?<br />
- Do employees have a large autonomy in working time? Do they use their holidays or do they end the year with untaken holidays?<br />
- Does the company have special data protection needs (e.g. confidentiality, industrial secrets)?<br />
- Can the company cease all activity / electronic communications over a certain period of time? Are employees required to be constantly reachable?<br />
- Is the company’s activity oriented towards countries whose time zone is very different? <br />
<br />
Then, based on this initial diagnostic, employers may consider three approaches.<br />
<br />
- Radical and unilateral actions,: closing of email servers, blocking of emails during certain periods (nights and weekends for example);<br />
- Driving policy: internal regulations, policies enacted in the company authorizing employees not to respond to solicitations during certain periods<br />
- Culture change actions: trainings of employees, managers, good practices (e.g. avoid replying to all the recipients of an e-mail when it is not obligatory, affix a specific mention in the subject of the mail when the Response may be postponed).<br />
<br />
<b>Conclusion</b><br />
<br />
Although the right to disconnect seems like a strange topic for legislation, all the media has taken interest in this and appear to agree that it is a novel and very important measure to protect employees. <br />
<br />
This right to disconnect must be viewed as a means to lead a necessary dialogue on digital tools as they continue to invade employees’ lives and blur the line between working time and non-working time.<br />
<br />
Non-compliance with this legislation exposes companies to wage and hour risks, in particular with regards to overtime, but also to health and safety risks, in particular in cases where employees can prove that due to excessive connectivity they suffer from undue stress and emotional complications.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-52910598586139329432017-02-10T18:30:00.000-05:002017-02-10T18:30:23.196-05:00Ireland - Recent Developments in Whistleblowing Law<i>BY DEIRDRE LYNCH, SENIOR ASSOCIATE, BYRNEWALLACE, DUBLIN, IRELAND</i><br />
<i><br />
“The world is a dangerous place, not because of those who do evil, but<br />
because of those who look on and do nothing.” - Albert Einstein</i><br />
<br />
Ireland recently introduced significant statutory protections for workers who make protected disclosures in relation to perceived wrongdoing in the workplace. One of the protections available is protection from penalisation for making a protected disclosure. The concept of penalisation is defined very broadly in Irish law as “any act or omission that affects a worker to the worker’s detriment” and includes suspension, lay-off, dismissal, loss of opportunity for promotion, intimidation, harassment and a range of other forms of unfair treatment. A complaint of penalisation may be made to the relevant adjudicatory body within six months of the relevant act. A maximum of five years' gross remuneration may be awarded as compensation for penalisation, with a potential reduction of up to 25% where an investigation of a relevant wrongdoing was not the sole or main motivation for making the disclosure.<br />
<br />
An interesting decision was delivered by the Irish Labour Court late last year in the case of Aidan & Henrietta McGrath Partnership v Anna Monaghan. The case illustrates the circumstances in which an employer may be found to have penalised an employee for making a protected disclosure.<br />
<br />
Here, the complainant, Anna Monaghan, was employed by a nursing home as a care assistant from 17 August 2010 to 5 December 2014. Her daughter also worked as a care assistant in the same nursing home. Ms Monaghan claimed that she made a “protected disclosure”, as defined, in the legislation and that she was penalised for doing so, in the form of two periods of suspension, one paid and one unpaid. <br />
<br />
By way of factual background, on 30 March 2014, Ms Monaghan raised a number of issues with the matron of the nursing home, including difficulties with a named supervisor regarding her daughter’s working hours and concerns regarding the treatment of patients. She requested a meeting of care staff to discuss these matters which the matron agreed to. However, before this meeting could take place, Ms Monaghan organised a meeting of care assistants, without the matron’s knowledge, during which Ms Monaghan notified her colleagues that she had disclosed her concerns to the relevant regulatory body.<br />
<br />
In April 2014 Ms Monaghan was called to an appraisal meeting during which the issues she had raised with the matron were discussed as well as her concerns regarding the care of residents and alleged abuse by a supervisor. Following this meeting, she was asked to commit her concerns to writing, which she did by letter dated 5 May 2016. In accordance with the required protocol for receipt of complaints, the nursing home informed the regulator of the concerns raised and of the fact that they were being investigated. The named supervisor who was alleged to have abused patients was suspended. <br />
<br />
Following the investigation, a draft report issued which held that the allegations were unfounded. It was also noted that several staff members had alleged that Ms Monaghan was motivated by malice in making her complaints. The draft report stated that Ms Monaghan should be suspended and that the allegations of malice should be dealt with in a separate investigation. Ms Monaghan was suspended with pay.<br />
<br />
In August 2014, all employees of the nursing home were requested to complete regulatory forms. Ms Monaghan failed to complete the necessary forms and she was issued with two reminder letters. By November 2014, Ms Monaghan had still not completed the forms and as such, was placed on suspension pending the outcome of a disciplinary meeting to be held on 14 November. It is not clear from the judgment what unfolded after this, but the judgment does state that Ms Monaghan’s employment ended on 5 December 2014.<br />
<br />
Ms Monaghan claimed that she was subjected to penalisation in the form of intimidation, bullying, alienation, harassment, victimisation and suspension following the making of protected disclosures.<br />
<br />
The Labour Court was satisfied that the Complainant made a protected disclosure during the appraisal meeting in April 2014 when she raised her concerns in relation to patient safety. The Court further noted that under Irish legislation the motivation for making a disclosure is irrelevant to whether the disclosure is a protected disclosure.<br />
<br />
In view of the paucity of decided case law on what constitutes penalisation in this area, the Court considered case law from health and safety legislation which protects individuals from being penalised for raising health and safety concerns. The Court noted that in order to make out a complaint of penalisation it is necessary for a complainant to establish that the penalisation of which he or she complains was imposed “for” having made a protected disclosure. “Thus the penalisation must have been incurred because of, or in retaliation for, the making of a protected disclosure. This suggests that where there is more than one causal factor in the chain of events leading to the penalisation complained of the making of the protected disclosure must be an operative cause in the sense that “but for” the Complainant having made the protected disclosure he or she would not have suffered the penalisation. This involves a consideration of the motive or reasons which influenced the decision maker in imposing the action in question.”<br />
<br />
The Court held that there was insufficient evidence to support Ms Monaghan’s complaints that she was intimidated, bullied, alienated, harassed or victimised for making a protected disclosure. The Court then reviewed the two periods of suspension to assess whether penalisation had taken place. <br />
<br />
In respect of the first period of suspension, the Court had to consider whether or not Ms Monaghan would have been placed on suspension then had it not been for the protected disclosure made to her employer in April. It looked at the motives which influenced the employer in suspending the employee at that time and found that the suspension was influenced by the complaints made by the employee prior to and in the course of the investigation. It was also influenced by what it termed the “undue haste which the suspension was effected without giving the Complainant an opportunity to comment on the report (having been invited to do so) and before the final report was issued”.<br />
<br />
In relation to the second period of suspension, the Court found that this was wholly unrelated to the protected disclosure made and that in suspending her, the employer was not motivated by Ms Monaghan having made the protected disclosure. Rather this suspension was directly related to her continued failure to furnish the employer with various signed forms.<br />
<br />
The Court awarded Ms. Monaghan €17,500 compensation as a result of the detriment suffered for having made a protected disclosure.<br />
<br />
This case serves to remind employers that the workplace is a “dangerous place” at times; however, that said, it also makes clear that employees who blow the whistle on wrongdoing do not thereby immunise themselves from being subjected to investigation/disciplinary action for reasons unrelated to the making of the disclosure, albeit that it will be essential for employers to exercise caution in relation to any such action to reduce the risk of a successful claim of penalisation.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-19528164410832317832017-02-10T17:30:00.000-05:002017-02-10T17:30:18.442-05:00Netherlands - Independent Contractor Status<i>By Dennis G. Veldhuizen, CLINT Lawyers & Mediators, Amsterdam, the Netherlands </i><br />
<br />
<br />
<b>DBA Act </b><br />
<br />
On 1 May 2016 the Act on Deregulation Assessment Labour Relationships (in Dutch the ‘Wet deregulering beoordeling arbeidsrelaties’, the ´DBA Act´) came into force. This also meant the end of the good-old VAR declaration. The VAR-declaration (which was issued by the Dutch Tax Authorities) indemnified companies that hired self employed freelancers from any potential claims by the Dutch Tax Authorities for wages and social security premiums, should it (later) appear the relationship factually qualified as employment agreement. Before 1 May 2016, if a VAR-declaration had been issued and the relationship nonetheless qualified as employment agreement, no additional tax assessment would be imposed on the company in relation to that freelancer. <br />
<br />
<b>Independent contractor? </b><br />
<br />
Whether or not the relationship between the company and the freelancer qualifies as employment agreement depends mainly on whether the following three factors are present: (i) labour, (ii) wages and (iii) authority:<br />
<br />
• An employee should personally perform activities and substitution is only possible with the permission of the employer, whereas the freelancer does not have to personally perform labour;<br />
• Employees receives wages for the activities performed, whereas the freelancer receives a (management) fee;<br />
• The contact with a freelancer is aimed at bringing about a result and the contractor bears the responsibility in this respect;<br />
• A relationship of authority exists between the employee and employer, whereas a client has a limited right to give instructions to the freelancer. In fact only to the extent it regards the execution of the freelancer’s assignment. <br />
<br />
<b>DBA Act in practice </b><br />
<br />
The purpose of the DBA Act is to minimize the chances of ‘pseudo’ independent contractorship and as such to provide better protection to the self-employed. The DBA Act would also increase legal security, as the differences between employees and independent contractors are now much more defined.<br />
<br />
Clients and freelancers have to make use of three types of so-called ‘model contracts’ prior to engagement. These have been drawn up and issued by the Dutch Tax Authorities:<br />
<br />
• A general model contract: this model contract covers most business relationship where employment is not involved;<br />
• A sector or profession specific model contract: meant for everyone working according to certain sectoral or professional standards or conditions;<br />
• An individual model contract: a specific model contract that can be used by everyone working in the same sector or profession for which that model contract was drawn up specifically.<br />
<br />
Once the model contract is approved by the Dutch Tax Authorities, both parties are assured that there is no requirement to withhold taxes by the client. However, if the Dutch Tax Authorities judge at a later stage that the relation is one of employment rather than independent contracting, both client and contractor will be held liable to withhold payroll taxes and social security contributions with retroactive effect.<br />
<br />
The Dutch senate introduced a transitional period of one year, until 1 May 2017. During the transitional period, the Dutch Tax Authorities will not actively enforce the DBA Act, but will mainly focus on providing information. <br />
<br />
<b>Uncertainty</b><br />
<br />
Already before its entry date, the DBA Act led to uncertainty for both self employed contractors and their clients. Many self-employed became reluctant to take on new engagements and some of them are even considering ceasing their activities because of the uncertainty the DBA Act has caused. The same applies to clients: they are also reluctant to hire a self-employed contractor because of the risk of corrective tax assessments.<br />
<br />
The view on the manner in which the tax authorities are handling this is not so positive either: according to the media there is substantial delay in the procedure to approve the model contracts: it takes the tax authorities eleven weeks instead of the promised six weeks to assess whether a model contract meets the fiscal requirements. In addition, it seems that the tax authorities are fairly critical in their judgments: by 1 August 2016 about 370 model contracts had been approved and over 1,000 model contracts had been declined. Self-employed contractors and clients do not know on which grounds the tax authorities have declined the model contracts, since it often lacks clear justification. <br />
<br />
Last summer, the giant Dutch temp agency Randstad performed in-depth research on the topic and concluded that under the DBA Act a labour relationship is more often qualified as an employment relationship than it did under the VAR. One of the main reasons for this is the fact that in the model contract a detailed description of the work activities is required: this was not the case under the VAR and as such leads to a more strict qualification. Additionally, the contracts of self-employed contractors with one primary client will in most cases be qualified as having an employment relationship.<br />
<br />
On 19 September 2016, the Dutch State Secretary of Finance, Mr. Wiebes, confirmed that the ‘obvious’ independent contractor should not worry. The abolition of the VAR-declaration should not have any consequences for this group. Mr. Wiebes confirmed that it is not the intention of the Dutch Tax Authorities to punish well meaning entrepreneurs who just fall outside the scope of law. However, entrepreneurs who are considered to abuse the system would become subject to tax assessments and risk high penalties. <br />
<br />
<b>Will the DBA Act survive? </b><br />
<br />
The mass criticism of the DBA Act did not stop. On the recommendation of a special committee (the Boot Committee), which performed a study of the consequences of the act, the die was finally cast on 18 November 2016: Mr Wiebes decided to postpone the implementation of the DBA Act until 1 January 2018. <br />
<br />
This means that in principle, the Dutch Tax Authorities will not enforce the DBA Act during the extended implementation period, provided that the client or its contractor in question is deemed to be ‘well-intentioned’. A party is deemed to be well-intentioned if it is familiar with the DBA Act and in any event attempts to operate in accordance with the model contracts issued by the Dutch Tax Authorities. After January 2018 the Dutch Tax Authorities will furthermore issue warnings before imposing additional tax assessments and fines for breach of the act.<br />
<br />
The situation is different for ‘ill-intentioned parties’. As from 1 May 2017, the original end date of the implementation period of the DBA Act, the Dutch Tax Authorities will indeed take enforcement measures against such parties. It may furthermore do so retroactively to 1 May 2016. A client or contractor is ill intentioned if he intentionally creates sham arrangements and benefits or intends to benefit financially from such arrangements.<br />
<br />
One thing is clear: it is important to be classified as ‘well-intentioned’ by the Dutch Tax Authorities. State Secretary Wiebes confirmed on 24 November 2016 that all the ill-intentioned parties are ‘old known friends’ of the Dutch Tax Authorities. Mr. Wiebes also stated that a very small number is involved, of definitely no more than ten. Those ill-intentioned parties primarily operate at the lower end of the market. That significantly reduces the risk for other parties of being classified as ill-intentioned, even though a wait-and-see approach is ill-advised.<br />
<br />
<b>Next few months </b><br />
<br />
The Dutch government itself obviously still has a great deal of work to do in the coming period. On the recommendation of the Boot Committee, the terms ’employer-employee relationship’ and ‘substitution allowed’ will be modernised. State Secretary Wiebes has furthermore clarified that the implementation period will not end until those terms have been redefined, even if that takes longer than January 2018. The system of model contracts will furthermore be clarified or may even be cancelled.<br />
<br />
<b>Practice</b><br />
<br />
So while the pressure is off the self-employment sector to some extent, it remains unclear how the DBA Act will ultimately be applied as of 2018. For principals, it is important to continue to use (approved) model contracts in practice. A wait-and-see approach is definitely not an option. The VAR has been abolished and will not be reintroduced. <br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-64256986467393469002017-02-10T16:30:00.000-05:002017-02-10T16:30:16.427-05:00UAE - The Importance of Employment Contracts<i>By Jack Fletcher, Associate, Rebecca Ford, Partner and Sara Khoja, Partner, Clyde & Co LLP</i><br />
<br />
<br />
HR practitioners may be contemplating their "New Year To Do List". The start of the year is a good time to look at company contracts and policies and consider whether these need updating.<br />
Whilst many employers in the UAE will be required to issue standard form contracts (either those by the Ministry of Human Resources and Emiratization, or by a free zone authority), it remains common for companies to also require their staff to sign company-issued contracts.<br />
<br />
In this article we set out five key areas which employers in the UAE may wish to address in their company contracts to supplement any standard-form contract.<br />
<br />
<b>1 Duties, Obligations and Standards of Conduct and Performance</b><br />
<br />
It is significantly harder to deal with conduct or performance issues if the employee can legitimately argue that they were never informed what was expected of them. In particular, in the event of a dispute, the UAE courts will take into account written terms. Employers are therefore encouraged to expressly set out an employee's duties and obligations in the contract in full. <br />
<br />
<b>2 Confidentiality</b><br />
<br />
The duty of confidentiality features in a number of pieces of legislation relevant to the employment relationship, including the Labour Law, the Civil Code and the Penal Code. However, it is still important to highlight to the employee at the outset (i.e. in the contract) what exactly the employer considers to amount to confidential information.<br />
<br />
<b>3 Bonus/Commission Arrangements</b> <br />
<br />
Many disputes arise out of bonus or commission schemes that are not supported by clear contractual wording. Rules around how/when an employee qualifies for such payments, and in what circumstances any such payments with be withheld or even clawed back, are vital.<br />
<br />
<b>4 Termination </b><br />
<br />
Most contractual disputes in an employment context arise following its termination. The contract therefore needs to be clear about what is and what isn't payable following its termination (or after notice to terminate employment has been given). This is particularly so in the UAE where employees often enjoy a range of benefits e.g. housing or flight allowances.<br />
<br />
<b>5 Post termination Restrictions</b><br />
<br />
Under Article 127 of the Labour Law, restrictive covenants can be imposed on an employee if they are "limited with respect to the place, time and nature of work to the extent as is necessary to safeguard the lawful interest of business". This means they must be tailored to the specific employee and be reasonable and proportionate, otherwise they will not be enforceable. <br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-17097700716581663212016-09-27T23:58:00.000-04:002016-09-27T23:58:07.648-04:00Fall Edition - International Employment Committee NewsletterDear all<br />
<br />
Welcome to the Fall edition of the newsletter. Many thanks as always to our contributors, who have helped to ensure another edition of articles from around the world.<br />
<br />
Please let me know if you are interested in submitting an article for future editions.<br />
<br />
Helen Colquhoun<br />
Withers<br />
Hong KongHelen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-28493475624606945492016-09-27T23:00:00.000-04:002016-09-27T23:00:19.065-04:00Canada - Where the Rubber Hits the Road, Reflections on Supreme Court Decision in Wilson v Atomic Energy of Canada Ltd<i>By Theodore Goloff, Robinson Sheppard Shapiro, Montreal</i><br />
<br />
<b>Introduction</b><br />
<br />
Time was when it was thought that, as slavery had been abolished throughout the British Empire before 1850, therefore, no one could be made to work for another in perpetuity. The corollary was that no employer could be forced to keep another in its employ in perpetuity. Hence, there was a reluctance to enforce mandatory injunctions respecting employment contracts and to order reinstatement, in the event of termination, for to do so would seem to violate these norms.<br />
<br />
Within the British Parliamentary tradition followed in Canada, Parliament, being supreme, so long as it respected constitutional norms, could validly adopt legislation that departed from these principles and empower administrative bodies, when they found terminations of certain classes of employees to be unlawful or without just cause to be reinstated. That’s how Division XIV of Part III of the Canada Labour Code, empowering arbitrators duly seized of so-called “Section 240” complaints to determine whether a given contested termination was or was not just, and if the latter was the case, order reinstatement.<br />
<br />
It is trite law to posit that provisions set out in labour standards legislation are matters of public order from which no one may contract out. All labour jurisdictions in Canada reject the American doctrine of “employment at will”, and oblige employers who terminate employees without disciplinary or administrative “cause” to provide them with both statutory and common law notice or pay in lieu thereof. In their respective labour standards legislation, three jurisdictions in Canada — the federal jurisdiction, Quebec and Nova Scotia — provide employees satisfying certain threshold seniority levels the ability to contest their termination as being “unjust” and seek, from the appropriate administrative agency, an order of reinstatement and back pay if the employer is unsuccessful in proving “cause” that is “sufficient” to justify termination. What to do if one part of such legislation provides and allows an employer to terminate an employee without “cause”, on condition that it favour the employee with a specified notice or pay in lieu thereof, while another provides the possibility of contestation of the “justness” of the termination? Does the fact that “cause” is not alleged make such termination per se unjust?<br />
<br />
At the same time, non-statutory employment law, whether resulting from the common law of nine provinces and three territories of Canada or the civil law of the Province of Quebec, recognizes that an employer could, on providing “reasonable notice” or pay in lieu thereof to an employee, terminate any employment contract that was not for a definite term, at any time, the whole in line with the principles noted above. Indeed, the very provisions of Civil Code of Québec that recognize such reciprocal rights and obligations declare that the right thereto cannot be renounced to by the employee, in advance of its crystallization (Arts. 2091-2092 C.C.Q.).<br />
<br />
Because labour and employment law is a combination of both statute law and the general law that results from either the common law or the Civil Code, the question of how to conjugate both in a manner which does not offend one or the other becomes supremely relevant. Put succinctly, if the authority of an administrative body to reinstate an employee lies in its finding that a particular termination challenged before it was without “just and sufficient cause”, is a termination without “cause” but with “reasonable notice”, defined in its widest sense, hence “legal”, per se unjust and therefore amenable to any such compulsory reinstatement order?<br />
<br />
<b>The Issue Succinctly Stated</b><br />
<br />
Such was the issue that came before an arbitrator hearing the complaint of one Joseph Wilson, whose employment of four and a half years without discipline of any kind was terminated in November 2009 with what the employer termed “a generous dismissal package that well exceeded the statutory requirements”. Mr. Wilson claimed that his dismissal was unjust via a Section 240 complaint. A labour arbitrator was appointed to hear the complaint. Atomic Energy sought a preliminary ruling on whether a dismissal without cause but with a sizeable severance package was nonetheless “unjust”, or whether given the substantial package, the arbitrator’s jurisdiction or “vires” to rule on the justness or sufficiency of the grounding of the termination was therefore absent or removed. If a termination with a generous package was a) legal and b) not per se unjust, what was there left to litigate? The arbitrator held against Atomic Energy that however generous the severance payments he had jurisdiction to determine whether the dismissal was unjust. As no “cause”, either disciplinary or administrative had been alleged or proven, Mr. Wilson’s complaint was allowed.<br />
<br />
<b>Applicable Principles of Judicial Review</b><br />
<br />
Decisions of such administrative tribunal are immune from challenge otherwise than by way of judicial review. Therefore a review of the rules of this branch of administrative law is in order to understand the significance of the case.<br />
Back in the day, the prerogative writs of English common law provided a powerful tool to ensure that the “rule of law” and a full and fair application of the rules of “natural justice” were guaranteed before administrative tribunals. With the proliferation of statute law whose application and interpretation was largely given over to such administrative boards and tribunals, deemed to have “specialized knowledge” of the subject matter, coupled with the adoption of privative, preclusive and/or finality clauses in such enabling legislation, the scope of intervention of the common law superior courts were successively and effectively diminished. There developed a conscious and ever prevalent “deference” to the inferior tribunal’s decision provided it was “reasonable” i.e. one which the facts and law could rationally countenance and support. While the Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC 9, had said that the “function of judicial review is […] to ensure the legality, the reasonableness and the fairness of the administrative process and its outcomes” [par 28], it also noted that judicial review “seeks to address an underlying tension between the rule of law and the foundational democratic principle, which finds an expression in the initiatives of Parliament and legislatures to create various administrative bodies” [par 27].<br />
<br />
On the other hand, while recognizing that deference should be accorded and a reasonableness test should be applied (1) where the enabling statue contains a privative or preclusive clause, indicating therefore a statutory direction from the legislative authority indicating an inclination against intervention and (2) where a discrete and special administrative regime in which the decision maker has “special expertise” was set up — e.g. for instance in labour union certification where a labour relations board has particular, recognized and discreet expertise, the Court recognized exceptionally that where the issue concerns a question of law that is of central importance to the legal system and lies outside the specialized area of expertise of the administrative decision maker, such an issue would attract a “correctness” standard of review. A substantive error of law, or mixed fact and law, would therefore vitiate the decision. “Correctness” is a go/no go binary standard. A decision is either correct or incorrect, and cannot be halfway valid.<br />
<br />
Ostensibly, the “reasonableness” test is concerned with the intelligibility and transparency of the grounds upon which a judgement relies, and its consonance with the myriad of solutions that the facts and the laws might allow. By definition, even conflicting and contradictory positions might qualify as “reasonable”.<br />
<br />
Atomic Energy of Canada sought judicial review of the arbitral decision before the Federal Court — Trial Division and the Federal Court of Appeal. It won in both instances, the Trial Division holding that the standard of review was the “reasonableness” of the decision but that the arbitrator’s outcome was itself unreasonable. The Court of Appeal agreed on the merits of the case but, applying the standard of “correctness”, found that the decision of the arbitrator was flawed and inconsistent with a proper interpretation of the law. The Court quashed the decision and ruled that, provided the required level of notice or severance is paid to the employee, such a termination was not in and of itself unjust. Hence, Mr. Wilson’s referral of the case to the Supreme Court of Canada.<br />
<br />
<b>The Supreme Court’s Judgment and the Issues it Raises</b><br />
<br />
Applying the “reasonableness” standard means that once a court finds that a decision passes muster, anything else it finds is entirely obiter. From this author’s point of view, if the reviewing court ventures beyond, it begins to deal with the correctness of the decision which is not one strictu sensu before it.<br />
<br />
As the Supreme Court minority in Wilson pointed out, Atomic Energy of Canada was in the unenviable position of having come before two arbitrators with the identical issues raised i.e. whether a termination without “cause” but with a package was or was not per se unjust. These cases resulted in two contradictory decisions on the same issue from two different arbitrators involving the same employer.<br />
<br />
Apparently, in one case, because the arbitrator ruled that a termination without cause but with a generous package was not “unjust” and was legal, the Section 240 complaint was dismissed. In the other case, precisely the opposite resulted. If both positions are reasonably consonant with the statute what is a conscientious employer to do? Is predictability in the law one facet of the rule of law? If judicial review has as its object the preservation of the rule of law, does this affect the choice of standard of intervention i.e. “reasonableness” or “correctness”? While the Supreme Court opined in Domtar Inc. v. Québec (Commission d’appel en matière de lésions professionnelles), [1993] 2 SCR 756, without deciding the point definitively - that jurisprudential conflict did not constitute an “independent” basis for review - the question could it seemed, be revisited and was indeed by three of the judges.<br />
<br />
The Federal Court of Appeal and the minority in the Supreme Court found that because administrative decision makers are not bound by the principle of stare decisis and lack an institutional umbrella under which these issues can be debated openly for a consensus position to emerge where there are conflicting interpretations that go to the heart of the employment law regime i.e. is an employer ever permitted to dismiss a non-unionized employee without cause, finding that some arbitrators say yes and some say no, the minority ruled that:<br />
<br />
<i>“The rule of law and the promise of orderly governance suffer as a result. When reasonableness review insulates conflicting interpretations from judicial resolution, the identity of the decision-maker determines the outcome of individual complaints, not the law itself. And when this is the case, we allow the caprice of the administrative state to take precedence over the “general principal normative order”. [par 84]”</i><br />
<br />
In the minority’s view (Justices Côté, Brown and Moldaver), among the foundational principles of the rule of law are that (a) there is one law for all, whether prince or pauper and (b) what the law requires must be intelligible at the outset, not only after the game has been played. Indeed, the minority held that “the cardinal values of certainty and predictability — which are themselves core principles of the rule of law […] — are also compromised” [par 86]. Unless the Supreme Court determines the issue on the basis of correctness, federally regulated employers unpredictably determine when and how they can dismiss their employees so long as conflicting adjudicative jurisprudence could only be challenged on the basis of reasonableness. Indeed, the minority opinion held such a situation “creates the risk that the very same federally regulated employer might be subjected to conflicting legal interpretations, such that it may be told in one case that it can dismiss an employee without cause, while being told in another case that it cannot” [par 87]. Those judges pointed out that this was not mere conjecture — it had already happened to Atomic Energy of Canada. Finally, the minority reasoned that it makes little sense to defer to the interpretation of one decision maker when it is clear that other similarly situated decision makers whose decisions are equally entitled to deference have reached different results. Put differently “as long as there is one conflicting but reasonable decision, its very existence undermines the rule of law” [par 89].<br />
<br />
On the merits, the minority found that a dismissal without cause but with adequate notice and/or severance was not per se unjust. Other circumstances would have to be examined to sustain a Section 240 claim.<br />
<br />
<b>The Majority Opinion</b><br />
<br />
But what of the majority composed of the six remaining judges? Justice Abella, in obiter, first suggested a revision of the standard of review jurisprudence, something none of her colleagues would buy into. Justices Cromwell, Karakatsanis, Wagner, Gascon and Chief Justice McLachlin asserted that since the standard of reasonableness was appropriate and the arbitrator’s decision met that standard, Mr. Wilson’s appeal should be allowed with costs.<br />
While three separate majority opinions might have settled the litigation particular to the two litigants before the Court, in this author’s most respectful view, the more general question is not quite so settled: does termination with a package but without disciplinary or administrative cause, attract a Section 240 challenge ? Which school of thought should be preferred?<br />
<br />
To be sure, Madam Justice Abella put forward the position to the effect that “the foundational premise of the common law scheme — that there is a right to dismiss on reasonable notice without cause or reasons — has been completely replaced under the [Canada Labour] Code by a regime requiring reasons for dismissal“ [par 63] and the Chief Justice and Justices Karakatsanis, Wagner and Gascon together agreed “with her disposition of the appeal on the merits and with her analysis of the two conflicting interpretations of the Unjust Dismissal provisions of the Canada Labour Code […] proposed to the Court” [par 70]. Mr. Justice Cromwell, on the other hand, made no such endorsement of what is, at least in this author’s point of view, entirely obiter.<br />
<br />
<b>A Critique Thereof</b><br />
<br />
Parenthetically, when a court comes to the conclusion that a decision of an inferior tribunal is reasonable, and therefore immune from judicial review, does its analysis of competing and conflicting points of view amount to doing indirectly what a correctness standard would require? It is not without a good deal of circumspection that I am of the view that this is what in essence happened.<br />
<br />
With the greatest of respect for my betters, I ask the simple question as to whether having decided that (a) the standard of review was reasonableness and (b) that the arbitrator’s decision has passed muster, the analysis of the “two conflicting interpretations of the Unjust Dismissal provisions of the Canada Labour Code” [par 70] is tantamount to an end run, an attempt in effect to adjudge which of the two conflicting points of view is more reasonable. Mindful always of the great respect that the aforementioned judges are due, both personally and as respects their high office, their statements made with respect to Justice Abella’s efforts to stimulate a discussion on “how to clarify or simplify our standard of review jurisprudence to better promote certainty and predictability” [par 70] with respect to the “reasonableness standard” and to the effect that “it is unnecessary to do so in order to resolve this case” [Ibid] is equally apt and equally applicable to the analysis made by her of the two conflicting interpretations above mentioned.<br />
<br />
Having determined that the arbitrator’s decision in the case at Bar was reasonable, discussion should have ended at that point! It has always been understood that no court should decide more than required to dispose of the matter before it. Reasonableness, like a rose by any other name, smells as sweet. Declaring that an arbitrator’s decision is reasonable is not tantamount to deciding that another point of view is any less reasonable. Indeed, for a court, any court, eminent judges of the Supreme Court included, to so decide is to, most respectfully, cross the line into the standard of “correctness”.<br />
<br />
If there are two standards that determine judicial review — “reasonableness” on the one hand and “correctness” on the other — preferring one competing, contradictory but reasonable analysis over another competing, contradictory but no less reasonable analysis is to violate the rule that one cannot be just a wee bit pregnant.<br />
<br />
Either the standard is the “reasonableness” of the decision or it is the “correctness” of the decision. While recognizing that those judges may have sought to indirectly settle matters, I fear they may have provided grist for a new debate about the legitimacy of so doing, at least in the eyes of the legal “purist” that I might be accused of being.<br />
For this author then, the question of which point of view will ultimately triumph is yet to be decided. While a challenger of Madam Justice Abella’s analysis may have a tough row to hoe, in strict law it is still open to he or she who is brave and stout enough, at heart, to do so. A bit like pushing water uphill, perhaps, but doable – even necessary! Difficult maybe, but certainly not a Don Quijote situation! <br />
<br />
And if my views above differ with those of my betters then, most respectfully, I differ with deference.<br />
<br />
<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-1931132955283325232016-09-27T22:30:00.000-04:002016-09-27T22:30:19.456-04:00Canada - Electronic Travel Authorization ('eTA') Ushers New Passenger Screening Era<i>By Sergio R. Karas, B.A., J.D. </i><br />
<br />
A new era of airline passenger prescreening has begun in Canada following on the footsteps of the United States. Canada now requires that airline passengers provide personal and background information prior to travel, in an effort to minimize the number of visitors who may be inadmissible when appearing at a Port of Entry. <br />
<br />
Although authorities made electron travel authorizations (eTAs) available as of March 15, 2016, and visa-exempt foreign nationals who fly to or transit through Canada were expected to obtain them, the requirement was only made mandatory as of September 29, 2016, after a leniency period expired. Individuals who are not otherwise exempt from obtaining an eTA will face considerable difficulty when attempting to board a flight to Canada. <br />
<br />
Pursuant to Section 11 (1.01) of the Immigration and Refugee Protection Act (IRPA) the Federal government has created the requirement for visa-exempt foreign nationals to apply for an eTA. The section establishes the means by which that application must be made (i.e., through the electronic system). <br />
<br />
Section 7.1(1) of the Immigration and Refugee Protection Regulations (IRPR) creates the requirement for visa-exempt foreign nationals to obtain an eTA before entering Canada, unless they are otherwise exempt by the regulations. <br />
<br />
The eTA is a new entry requirement for visa-exempt, non-U.S. foreign nationals travelling to Canada by air. Travelers entering Canada by land, sea, and rail are not required to obtain an eTA. The purpose of the eTA program is to pre-screen travelers to ensure that they are admissible to Canada. The list of countries whose citizens require an eTA is found in Section 190 of the Immigration and Refugee Protection Regulations . Citizens of the United States and certain other small groups are exempt from obtaining an eTA. Specifically, Subsections 7.1(2) and 7.1(3) of the Immigration and Refugee Protection Regulations describe the individuals that are exempt from the eTA requirement. <br />
<br />
Individuals who are required to obtain a Temporary Resident Visa (TRV) by reason of their country of citizenship do not need to obtain an eTA, as they are prescreened at a visa post outside of Canada. <br />
<br />
To apply for an eTA, foreign nationals must submit an application online using the eTA form at www.Canada.ca/eTA.<br />
Applicants will need to provide the following information on their application form: <br />
<br />
• Passport details<br />
• Personal details<br />
• Occupation and previous travel<br />
• Responses to background questions (to assess for health, criminality and immigration-related concerns)<br />
• Contact information<br />
• A filing fee of CDN $7.00<br />
<br />
There is also a text area at the end of the application form which allows the applicant to briefly indicate if there are additional details that must be considered. The applicant may express an urgent need to travel to Canada, or to provide other relevant information in that area.<br />
<br />
No documents can be uploaded or added to the eTA application. If any additional documents are required, the applicant will be notified by email. That can delay the application process significantly. <br />
<br />
Once the applicant has successfully submitted the eTA application, he or she will receive an automated email confirming receipt by Immigration, Refugees, and Citizenship Canada (IRCC). This email will contain the application number, as well as a link to allow the applicant to check the status of their eTA application at any time.<br />
<br />
Section 12.05 of the Immigration and Refugee Protection Regulations stipulates that an eTA is valid for five years or until the applicant’s passport expires, whichever occurs sooner. <br />
<br />
An eTA can be cancelled by a designated officer pursuant to Section 12.06 of the Regulations. <br />
<br />
After the application is received by the system, it will create a “prospective” application and will then perform an identity search to determine if the applicant already exists in the databases, and will associate the application to any existing UCI (unique client identifier) where possible. If no adverse information is found, the system will automatically notify the applicant by email that the eTA has been approved.<br />
<br />
Occasionally, applications cannot be automatically approved. In that case, they are referred by the system for manual review in IRCC Operations Support Centre (OSC), where officers can request additional documents or a security screening, or both. If documents are required from the applicant, he or she will be directed to create a MyCIC account, to which they will link their eTA application. MyCIC offers a secure environment in which the applicant may communicate with IRCC and vice versa.<br />
<br />
When a decision cannot be made due to the need for an interview or other factors, the application will be referred to a visa office. Other circumstances will require assessment in an overseas mission, including applications that result in the need for a Permanent Resident Determination, a Temporary Resident Permit, etc.<br />
<br />
Cases referred to overseas missions will be processed in the same way that Temporary Resident Visa applications are currently processed. Officers may request an interview with the applicant if required.<br />
<br />
Applicants whose eTAs are refused will be notified by email of the reasons for the decision.<br />
<br />
eTAs are enforced using Canada Border Services Agency (CBSA) Interactive Advance Passenger Information (IAPI) system. Unlike a Temporary Resident Visa, no counterfoil will be provided to an applicant upon approval of an eTA. Therefore, there is no official physical proof of the presence or validity of an eTA. Air carriers will use the CBSA’s IAPI system to confirm that an IRCC authorization to travel (either a visa or eTA) is linked to the traveler’s passport subject to the exceptions noted above. IAPI is an enhancement of the previous Advanced Passenger Information (API) program. It automates a previously manual process and requires air carriers to submit traveler API earlier (at check-in instead of takeoff). Air carriers will conduct their usual check-in procedures, which will now initiate an automated query in IAPI using the traveler’s passport number and country of issuance. Before a boarding pass can be printed, IAPI must provide an “ok to board” message to the air carrier. <br />
<br />
Travelers must be careful to determine whether they require an eTA and, if they do, apply for it well in advance of their anticipated travel date to avoid any difficulties. <br />
<br />
The advent of eTAs raise several concerns. It is unclear whether there is sufficient legislative authority to make a determination that a traveler who is visa-exempt is inadmissible to Canada prior to appearing at a post of entry for a full examination, or if such determination runs afoul of basic principles of fairness. Yet, a traveler who requires an eTA and does not obtain it will be prevented from boarding a flight bound for Canada. Further, the eTA system implicitly deputizes airline personnel to enforce immigration legislation by denying boarding to a traveler who has been unable to obtain an eTA. These questions will no doubt be litigated in the future. <br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-25869573450564226452016-09-27T21:30:00.000-04:002016-09-27T21:30:11.949-04:00France - Recent Legal Developments<i>By Roselyn S. Sands, EY Société d’Avocats, Paris, France</i><br />
<br />
<b>Final adoption of the draft law (the “El Khomri” law) relating to “labor, improvement of social dialogue and safeguard of professional careers” </b><br />
<br />
The law on “labor, improvement of social dialogue and safeguard of professional careers” was passed by the French Parliament on July 21, 2016. The law is applicable since August 10, 2016, except for provisions requiring that specific decrees of application be published by the government. This law is the result of a tumultuous parliamentary process, which began in May 2016 and was marked by country wide strikes and demonstrations that continue today even after its passage into law.<br />
<br />
The law contains provisions that are aimed at clarifying the general principles of French employment law, strengthening collective bargaining in France, increasing flexibility by modifying rules on working time and leave and clarifying rules on economic redundancies.<br />
<br />
<b>I. Rewriting the French Labor Code and its general principles</b><br />
<br />
The new law profoundly reworks the general principles of the French Labor Code and modifies its general architecture. Indeed, under the new law company-level collective bargaining may result in greater flexibility for employers regarding working time, unless specified otherwise by law. This is a considerable philosophical change in French labor and employment law, where the historical hierarchy of norms principle ensured that company-level CBAs could further enhance employee rights but could not provide less protection.<br />
<br />
The general structure of the French Labor Code is henceforth as follows:<br />
<br />
i). Rules that must be enforced as they stand, now divided into three segments with no flexibility through company-level bargaining agreement<br />
ii). Rules that may be modified by a company-level bargaining agreement if agreed to by at least 50% of the representative unions, or 30% of the representative unions and 50% of the employees<br />
iii). Limits to which the rules in ii) can be modified<br />
<br />
Overtime is a good example of how the new architecture of the French Labor Code is designed. The new Labor Code provides that:<br />
<br />
i). Additional overtime pay must necessarily be paid to employees. This rule must be enforced as it stands <br />
ii). Today, overtime is paid at 25% extra for the first 8 hours, however, by a company-level bargaining agreement overtime can be paid less or more than the 25% provided by law<br />
iii). Yet, a company-level bargaining agreement cannot provide that overtime be paid at less than 10% more<br />
<br />
Whereas the detailed application of this architecture will take a couple of years to fine tune, by exception, this architecture is immediately applicable for issues relating to working time and employee leave.<br />
<br />
<b>II. Flexibility through collective bargaining</b><br />
<br />
The law strengthens the legally binding effect of company-level CBAs, and enables companies to achieve flexibility through collective bargaining. <br />
<br />
Under the new law, the validity of company-level CBAs will depend on a “two-tier” system, starting September 1, 2019. Company-level CBAs will be valid if the majority unions, who have gathered more than 50% of the employee votes during the most recent election, sign or if the signatories have gathered more than 30% of the employee votes during the most recent election and the agreement has been approved by the employees through referendum. <br />
<br />
In addition, the law provides for the following rules with respect to the company-level CBAs:<br />
<br />
- The limitation of their duration to 5 years, unless stated otherwise in the agreement (e.g. indefinite term)<br />
- Change of the rules pertaining to the review, modification and the termination of the agreements<br />
- Publication on a national online database of all company-level CBAs with provisions of anonymization<br />
- Possibility for companies with less than 50 employees to apply a special agreement provided by the national CBA.<br />
<br />
<b>III. Working time</b><br />
<br />
The new law includes a series of measures impacting working time in order to increase employer flexibility and freedom in organizing the company, while safeguarding employee rights, in particular with regard to work life balance and health and safety at work. <br />
<br />
As mentioned above, the new structure of the French Labor Code is currently applicable to working time related issues. Indeed, working time related issues such as the number of hours to be worked to trigger night work compensation, the maximum weekly time duration or the weekly and daily minimum rest period can now be set through collective bargaining, based on the above mentioned structure.<br />
<br />
In addition, the law provides for a right “to disconnect, in particular from electronic devices, after working hours. This measure aims to ensure a proper balance between workload and private life with the regulation of the use of digital tools. The specific implementation of this right will be decided on a company by company basis with the union representatives during the annual negotiation on “work life balance”.<br />
<br />
<br />
<b>IV. Greater flexibility in the justification for collective redundancies</b><br />
<br />
The law provides for new rules regarding collective redundancies, clarifying some of the reasons that can be used to justify a collective redundancy caused by economic difficulties. Indeed, the law provides that in addition to the already existing reasons (i.e. the company’s closure, or the safeguard of the company’s competitiveness, or considerable technological changes) two new reasons could be used, including a drop in the company’s turnover for a period of time depending on the size of the company (e.g. 4 consecutive quarters for companies with more than 300 employees).<br />
<br />
Together with the procedural changes from 2013, the combination of these modifications facilitates the collective redundancy process in France.<br />
<br />
<b>V. Conclusion </b><br />
<br />
French labor and employment law continues its path to creating a more employer friendly environment in order to fuel investment into France.<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-79524637875059531102016-09-27T20:30:00.000-04:002016-09-27T20:30:04.507-04:00Kingdom of Saudia Arabia - Vision 2030's Impact on Employment<i>By Sara Khoja, Clyde & Co, Dubai</i><br />
<br />
In late April 2015, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman, announced an ambitious and ground breaking programme to develop the Kingdom’s economy and society over the next fifteen years. How the programme will be implemented together with the immediate five year plan set out in the National Transformation Plan 2020 will be of key interest to businesses operating in the Kingdom. In this article, we examine the main likely employment implications of Vision 2030 and the introduction of ‘weighted Nitiqat.’<br />
<br />
<b>Context</b><br />
<br />
With the Ministry of Labour estimating that each year 250,000 new graduates enter the job market in KSA, the creation of employment opportunities is a social and economic imperative. Vision 2030 seeks to reduce the overall unemployment rate from 11.6 % to 7%, overhaul the education system and increase the female participation rate from 22% of the workforce to 30%. Remittances by foreign workers is also high with a plan to increase in country spending by the resident population from 2.9% to 6%. The National Transformation Plan aims to create 450,000 new jobs by 2020.<br />
<br />
Developing the local workforce will be a task spread across a number of Government authorities, including the National Labour Gateway (TAQAT) which will seek to establish sector councils to examine each socio-economic sector’s skills and knowledge requirements to promote vocational training and entrepreneurship. Apprenticeships will be promoted through the establishment of a centralised student database from which large private sector companies. <br />
Other stated goals are the increase of foreign direct investment from 3.8% to 5.7% and the proportion of GDP from the private sector from 40% to 65%. <br />
<br />
<b>Defence and Security</b><br />
<br />
KSA is currently the third largest global spender on military equipment. Under Vision 2030, the goal is to localise military spending and establish a local manufacturing capability (including the production of complex equipment such as military aircraft). There are currently seven local defence companies and two research centres in the Kingdom. Increasing capacity will require the development of a specialist and skilled Saudi Arabian workforce. <br />
<br />
<b>Tourism</b><br />
<br />
In 2015, the number of religious tourists to the Kingdom reached a high of eight million. By 2030, the goal is to have increased this to 30 million. The nurturing of a domestic tourist industry is also a stated aim with several historical and cultural sites (including the Red Sea coast) earmarked for development with a desire to double the Kingdom’s UNESCO registered sites which now include Jeddah’s old city; Al Balad. This expansion will create jobs but also challenges in training staff to a proper level to perform effectively in a service industry.<br />
<br />
<b>Retail</b><br />
<br />
Vision 2030 envisages an annual growth rate of 10% in retail, the workforce for which amounts to 1.5 million works, only 0.3 of which are KSA nationals. By 2020, the aim is to have 1 million more Saudi nationals working in retail by 2020.<br />
Civil Service and collaboration between the public and private sectors.<br />
<br />
By 2020, the Government aims to have trained 500,000 government employees and to create HR centres of excellent to promote best practices and provide training within every government agency. The King Salman Program for Human Capital Development will also be launched with a comprehensive programme to examine efficiency within the civil service and the development of strategic partnerships.<br />
<br />
<b>Privatisation</b><br />
<br />
As well as the headline announcement of a plan to publicly list 5% of Saudi Aramco, over the next five years, the Government plans to privatise eleven airports, and over the next fifteen years to privatise almost three hundred hospitals and over 2,200 health centres. <br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-7677703458604722032016-09-27T19:30:00.000-04:002016-09-27T19:30:04.745-04:00USA - Department of Labor Accepts First Labor Petition Under US-Colombia Trade Promotion Agreement<i>By Tequila J. Brooks</i><br />
<br />
On July 15, 2016, the U.S. Department of Labor accepted the first petition to be filed under Chapter 17 (Labor) of the U.S.-Colombia Trade Promotion Agreement (TPA). The petition was filed by the AFL-CIO and five major Colombian labor federations including the Central Unitaria de Trabajadores (Central United Workers – CUT), the Confederación de Trabajadores de Colombia (Workers Confederation of Colombia – CTC), the Corporación Colombiana para la Justicia y el Trabajo (Colombian Corporation for Justice and Work – COLJUSTICIA), the Sindicato Nacional de Trabajadores de la Industria Agropecuaria (National Union of Workers in Agroindustry – SINTRAINAGRO) and Unión Sindical Obrera (Workers Sindicated Union – USO).<br />
<br />
The petition, filed on May 16, 2016, alleged that the Government of Colombia violated a number of its labor-related commitments under U.S.-Colombia TPA Chapter 17 in a manner directly affecting trade and investment. These labor-related commitments include: (1) failure to effectively enforce labor laws; (2) waiver or derogation of existing labor statutes and regulations to incentivize trade; (3) failure to adopt or maintain statutes and regulations consistent with the 1998 ILO Declaration on Fundamental Principles and Rights at Work; (4) failure to ensure that dispute resolution proceedings in labor, administrative and judicial tribunals are transparent and without unwarranted delays; and (5) failure to ensure that final decisions in labor-related adjudications are made available without unnecessary delay. Among the allegations made by the AFL-CIO and its Colombian counterparts was that the Government of Colombia had failed to meet its commitments under the Colombian Action Plan Related to Labor Rights (LAP) of April 7, 2011.<br />
<br />
The U.S.-Colombia TPA went into force on May 15, 2012 only after U.S. authorities felt that the Government of Colombia had made significant progress in meeting the requirements outlined in the April 2011 LAP. These requirements included reforms to both the labor and criminal justice systems as well as substantive changes to various Colombian labor laws. The LAP required Colombia’s Labor Ministry to hire and train 100 new labor inspectors in 2011 and total of 480 over a 4-year period – and for the Finance Ministry to approve a budget allocation to pay for the new labor inspectors. The Colombian Labor Ministry was also required to improve complaint and dispute resolution mechanisms and to conduct outreach to the public, employers and workers.<br />
<br />
To address concerns expressed by the U.S. Congress, trade unions and human rights advocates, the 2011 LAP negotiated between the U.S. and Colombia required specific reforms to Colombia’s Criminal Code to address two main issues: (1) employers’ use of intermediaries to avoid labor law compliance and (2) the need for investigation and punishment of threats and violence against trade unionists. Colombia has been described as the most dangerous country in the world for trade unionists. Over 2,500 trade unionists have been murdered in Colombia since the 1980s. Under the LAP, the President of Colombia committed to issuing a directive to the National Police assigning 95 full-time judicial police and prosecutors to investigate criminal cases involving union members and labor activists. The LAP also required Colombia’s Ministry of Interior and Justice to issue a Ministerial Resolution expanding the scope of persons entitled to special protection to include labor activists, persons engaged in active efforts to form a union and former trade unionists. The LAP specifically requires that a budget be allocated for special protection of trade unionists and labor activists from threats and violence.<br />
<br />
The substantive changes required by the LAP to Colombia’s labor laws centered on employers’ use of cooperatives, temporary agencies and collective pacts to avoid compliance with fundamental labor rights. The essence of these legal reforms was that employers may not utilize third parties as intermediaries with employees performing “permanent core functions” of their operation. Export sectors of particular concern in Colombia include the palm oil, sugar, mines, ports and flower sectors.<br />
<br />
In their May 15.2016 labor petition under Chapter 17 of the U.S.-Colombia TPA, Colombian and U.S. trade unions point out that Colombia’s conformity with its 2011 LAP commitments has been superficial and incomplete – and that the U.S. government did not require effective implementation of LAP commitments before the TPA entered into force. Petitioners observe that while the Government of Colombia agreed to establish and fund a 95-person police force dedicated to investigating and punish threats against trade unionists, cases are still not meaningfully investigated and prosecuted. Over 1,466 threats and acts of violence against trade unionists have taken place since the TPA went into force, including 99 assassinations, 6 kidnappings and 955 death threats – with an 87% rate of impunity for murder of trade unionists. The National Protection Unit has been accused of diverting funds intended for protection of at risk individuals. Although Colombian trade unions have filed 1,146 criminal complaints since 2012, no employer has been convicted under the new labor and criminal regimes. In addition, while additional labor inspectors were indeed hired by Colombia’s Ministry of Labor, they were hired on a temporary basis. <br />
<br />
On the topic of new legislation banning employer use of work cooperatives as an intermediary to avoid unionization of workers and compliance with other labor and social security requirements, petitioners observe that while the use of “work cooperatives” has declined, use of a new form of labor intermediation called contratos sindicales (syndical contracts or employer-friendly unions) has arisen. These contratos sindicales do not reflect collective bargaining. Their number has increased form 50 in 2010 to 1,925 in 2014. Petitioners cite research studies from 2015 and 2016 (including a January 2016 OECD report) for the proposition that 73% of the workforce in Colombia is informally employed with no access to social security.<br />
<br />
Petitioners outline specific cases in the oil and sugar sectors to show how the Government of Colombia has failed to meet its commitments under the 2011 LAP and Chapter 17 of the U.S.-Colombia TPA. In one of these cases, 1,100 oil workers began to unionize with the support of Unión Sindical Obrera (USO) at the Canadian-owned Pacific Rubiales Energy Montajes site in February 2011. Their grievances included excessive use of labor intermediaries, excessive hours, health and safety problems and failure to provide adequate equipment and food. A member of the Colombian National Police was part of the employer’s negotiating team. On July 18, 2011, 4,000 workers held an assembly at the Montajes site. 150 police entered labor camps using rubber bullets and percussion bombs and spraying tear gas into tents. Petitioners observed coordination between the Colombian Army and Police to inhibit communication between trade unionists and physical attacks against workers.<br />
<br />
In September 2011, 1,000 of 3,493 workers who joined the union were fired and replaced by other workers. After the Colombian Labor Ministry pressed the employer to engage in collective bargaining with USO, the employer signed a Labor Normalization Agreement with an organization called the National Union of Energy Workers (UTEN) which had no relationship with the workers. Five years later, UTEN has still not negotiated a collective bargaining agreement on behalf of the workers. A database was established to exclude USO members from the work site and a check point was put in place at the work site to make sure they did not enter.<br />
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In February 2012, USO filed an administrative complaint with Colombia’s Ministry of Labor about the employer’s actions (including mass firings and blacklists) at the Montajes site. In April 2013 - over a year and 3 months later - the complaint was dismissed, as were subsequent motions to reconsider and appeals. The reason given for dismissal was the lack of a direct employment relationship with the employer since workers were employed by a number of intermediaries. The Government of Colombia did not initiate criminal action against the employer for failing to comply with new labor and criminal provisions. In fact, arrest orders were issued against two USO trade union members who testified against the company.<br />
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Petitioners’ arguments challenge both the substance and application of Colombian labor laws and the new criminal regime established to protect trade unions. They point out that the ILO’s Committee on Freedom of Association (CFA) issued a report observing failure on the part of the Government of Colombia to protect freedom of association and the right to collective bargaining. One of the arguments made by petitioners is that the Government of Colombia failed to effectively enforce Article 63 of its labor intermediation law which makes it unlawful to utilize intermediaries to contract workers performing core permanent functions of a company. Petitioners note that excessive focus by Colombian labor authorities on the particular legal form “work cooperative” has allowed the similar forms of the same phenomenon to arise with different names and legal forms.<br />
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The primary innovation in the May 2016 petition is the argument made by U.S. and Colombian unions that the Government of Colombia has not complied with Chapter 17 of the U.S.-Colombia TPA because it failed to effectively enforce certain provisions of its Criminal Code. In particular, petitioners argue that Articles 200 and 347 of Colombia’s Criminal Code – which impose both fines and jail time as penalties for violations for labor laws and threatening or intimidating trade unionists – are labor laws within the meaning of Chapter 17 of the U.S.-Colombia TPA. Article 200 is directly related to the internationally recognized right of freedom of association and Article 347 was specifically adopted to bring Colombia into compliance with the 1998 ILO Declaration. <br />
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While U.S. DOL has declined in the past to consider criminal matters (including threats against and murder of trade unionists and worker rights advocates) to be within the scope of the NAFTA labor side agreement (NAALC) in Mexico and Chapter 16 (Labor) of the CAFTA-DR in Guatemala, petitioners’ argument under the U.S.-Colombia TPA is likely to be accepted in this case since a good portion of the 2011 U.S.-Colombia LAP requires specific changes to Colombia’s Criminal Code and practice to better protect trade unionists from threats and violence. A similar basis was arguably not present under the NAALC or CAFTA-DR Chapter 16. A successful outcome under the U.S.-Colombia TPA may set a precedent for stronger protection of trade unions and worker rights advocates from violence by U.S. authorities in future cases, however.<br />
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Under regulations governing petitions under FTA labor provisions, U.S. DOL is required to issue a report in response to the May 15, 2016 petition by January 15, 2017 unless it determines that more time is required.<br />
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Petitioners have laid the groundwork for this case to go to international arbitration under Chapter 21 (Dispute Resolution) of the U.S.-Colombia TPA by arguing that failure by the Government of Colombia to effectively enforce labor laws in the oil and sugar sectors directly affects trade between the two countries. Thus far, the only case to go to the international arbitration phase under U.S. FTA labor provisions is the 2008 Guatemala case under the CAFTA-DR. After several delays, the arbitration decision in that case is scheduled to be released in early September 2016.<br />
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Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.comtag:blogger.com,1999:blog-6269361254263995209.post-12586978355282579202016-06-11T17:00:00.000-04:002016-06-11T17:00:19.204-04:00International Employment Committee Newsletter - Summer 2016Dear all<br />
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Welcome to the Summer edition of the newsletter. Many thanks as always to those who contributed an article for inclusion in this edition. We have our first article on Malaysia, together with articles on Saudia Arabia, the Netherlands, Ireland and Canada - so the newsletter is becoming increasingly international!<br />
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Helen Colquhoun<br />
Withers<br />
Helen Colquhounhttp://www.blogger.com/profile/03405503792971997678noreply@blogger.com