HR:INT

Magnusson International HR Newsletter

June 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in  Denmark, Sweden, Norway, Poland and Belarus.

Denmark

Employee lost right to restricted stock units upon resignation

An employee resigned from his job and lost the right to some restricted stock units as the Danish High Court found that these stock units were subject to the Stock Option Act and not the Danish Salaried Employees Act.

On 1 October 2001 the employee was appointed sales manager in a company that made use of incentive programs which included the granting of stock options as well as restricted stock units.

As to the restricted stock units, the employee only obtains the ownership of the stock units after one or more period of maturity provided that the employee is still employed with the company at the time of the maturity. At this point, the employee obtains the ownership of the restricted stock units. Hence, no acquisition or subscription for stocks take place.

In this case, the employee was granted 149 restricted stock units in 2006 and 165 in 2007. With the employee’s resignation as of 25 May 2007, the employee lost the right to the restricted stock units, pursuant to the incentive program, as he was not employed with the company at the time of maturity.

According to the agreed contract on the restricted stock units, the company kept the right to settle the difference, so that the settlement after the maturity could be carried out by paying the employee in cash. However, the general idea was that the employee was to receive stocks.

As the scheme differed from traditional schemes regarding options, the question was whether the granted restricted stock units were subject to the Stock Option Act or the Salaried Employees Act. Pursuant to the company’s right to settle the difference when conferring the restricted stock units, the employee claimed that the stock units were subject to section 17a in the Salaried Employees Act as the employee’s right to acquire stocks was actually conditioned by which method the company decided to settle the stocks. Furthermore, the employee stated that the scheme neither gave the employee the possibility to acquire nor subscribe for stocks. Hence the employee was of the opinion that the restricted stock units were subject to the Salaried Employees Act whereupon the employee, at his resignation, could not be deprived the restricted stock units.

If the court should reach the conclusion that the scheme was subject to the Stock Option Act, the employee contented that he, in that case, was eligible to a compensation according to the provisions of the Stock Option Act, as the company did not fulfil the requirements of the previously mentioned act regarding the provision that the employee must be given a separate written declaration in Danish on the conditions of the restricted stocks.

The company stated that the stocks were subject to the Stock Option Act, hence the right to the stock units would cease upon the employee’s resignation. The company was of the opinion that the stock units, according to the legislative history of the Stock Option Act, were subject to the latter as the ownership could only be confirmed if the employee was still employed at the time of maturity. In this way, the granting of the stocks contained an incentive for retaining the employees, as required in the legislative history of the Stock Option Act.

Regarding the claim pursuant to the Stock Option Act of the employee, the company accepted that the requirement, cf. the Stock Option Act, regarding a separate written declaration in Danish had not been met, but a declaration in English ought to be sufficient as the corporate language was English.

The Danish High Court declared that the restricted stock units were subject to the Stock Option Act, but did not specifically take a stand regarding whether the restricted stock units could be acquired or subscribes for which, in general, is required in order for the Stock Option Act to be applicable.

As to the company’s possibility of settlement in cash, the Danish High Court merely declared that the right to employ such a settlement method could not be regarded as a prejudice of the employer’s rights when resigning.

However, the Danish High Court held in favour of the employee as to his claim for compensation pursuant to the Stock Option Act as the company failed to give the employee a separate written declaration, cf. the Stock Option Act. Given that the neglect of the company was considered to be minor and of less significance to the employee, the compensation was determined to DKK 3,000, corresponding to DKK 1,000 for each contravention.

Conclusion

With this judgment, it has for the first time been stated that the above-mentioned restricted stock units are subject to the Stock Option Act.

The granted compensation for the missing written declaration in Danish is, as far as we are concerned, the first of its kind. The level of compensation is said to be rather modest.

(Judgment of The Eastern Division of the Danish High Court, 5^th division, case no B-1166-09 of 15 January 2010).

New regulations on social security have come into force

With effect from 1 May 2010, Regulation No 883/2004 and Implementing Regulation No 987/2009 on social security systems have come into force. These regulations supersede the former regulations in this field.

In order to simplify and make the EU provisions on the member states’ coordination of social security systems clearer, the European Parliament and the Council have adopted Regulation No 883/2004. The new regulation will make it easier for the EU citizens to exercise their rights to free movement within the European Union. As the new Regulation will only include EU citizens, it will not extend to the EEA countries and Switzerland unless a specific agreement has been made. The former Regulation No 1408/71 will remain in full force and effect for third country citizens who work within the EU.

Persons covered

This Regulation shall apply to nationals of a Member State, stateless persons and refugees residing in a Member State who are or have been subject to the legislation of one or more Member States, as well as to the members of their families and to their survivors. It shall also apply to the survivors of persons who have been subject to the legislation of one or more Member States, irrespective of the nationality of such persons, where their survivors are nationals of a Member State or stateless persons or refugees residing in one of the Member States.

Transitional provisions

The new Regulation EC 883/2004 contains a transitional provision applicable for ten years whereupon people who are already subject to the social security scheme in Denmark, in accordance with the rules of Regulation EEC 1408/71, will continue to be subject to the former Regulation as long as no substantial changes occur. However, the persons concerned can request that he/she be subject to the rules of the new Regulation.

Employees who are posted can, pursuant to the new Regulation, apply for inclusion in the social security scheme of the home country up to 24 months (contrary to 12 months pursuant to Directive 1407/71).

Substantial changes

In accordance with the former Regulation, posted employees who work in more countries in the event that the employee work regularly in the country of residence, are covered by the social security scheme in that country. In order to sustain the social security coverage in the country of residence, at least 25 % of the work must be carried out in the concerned country. The consequence hereof is that more employees will be covered by the social security scheme of the country in which the work is carried out.

So far, international transport employees have been covered by the legislation of the country in which the employer resides, unless the employee mainly worked in the country of residence, which typically accounts for 50 % of the employees. As Regulation No 883/2004 removes the particular regulation regarding transport employees, the concerned employees will be subject to the ordinary provisions, including the 25 % requirement.

The common practice that the country of residence and the country in which the work is carried out can make an agreement on whether the employee remain covered by the social security scheme of the country of residence up to five years, is expected to sustain. However, it is notably that Danish practice hitherto only has approved coverage by the Danish social scheme system up to three years.

In the future, it will not be possible for employees to be covered by the social security scheme in different countries which, in particular, will imply changes for people who are both self-employed and employed. In the future, the EU Member States will have access to collect welfare benefits and debt from the employee and the employer on behalf of another Member State.

Conclusion

The new rules on social security systems have, among others, impact on the companies that have employees working in Denmark but reside in another Member State or companies that have posted employees in other EU countries.

Sweden

Obvious competition

An IT consultant signed a non-competition clause when he was hired by an IT company. Shortly after his leaving the company, he set up his own competing company and sent his new contact information to customers that were covered by the non-competition clause informing the companies that he had started his own company. (Ruling from the Swedish Court of Labour case no. B44/09).

Employer’s unilateral decision of changing a collective pension scheme accepted by the Norwegian Supreme Court

In a case between Fokus Bank and a group of employees (Judgment of 2010-04-07 in case HR-2010-571-A), the Norwegian Supreme Court has recently ruled that the bank by unilateral decision could terminate a performance based pension scheme and transfer the employees to a contribution based pension scheme.

Until 2003 Fokus Bank had a performance based pension scheme for all employees which, in short, implied that the employees upon retirement would receive approximately 70 % of their annual salary (including pension payments from the social security), provided full contribution time to the scheme. In 2003 Fokus Bank established a new contribution based pension scheme, according to which a fixed contribution from the employees (a portion of their salary) is paid to the scheme and credited to each employee’s bank account. Future benefits are calculated on the basis of the account balance at the time of retirement and the length of period of payment.

The performance based pension scheme was in 2003 closed for new employees and existing employees were asked to choose between continued membership of the performance based pension scheme or transfer to the contribution based pension scheme. It was made clear for the employees that once the choice was made, it could not be reversed. In the form used for collecting the employees’ decisions regarding this matter, the employees were asked to mark the preferred alternative with a cross and sign and return “this agreement”.

In 2005 the board of the bank had a renewed look at the pension schemes of the enterprise. As it would imply considerable savings for the bank, the board decided that the performance based pension scheme was to be phased out and that the employees who in 2003 had chosen to remain with this pension scheme were to be transferred to the contribution based scheme. For those employees, however, the change implied a far less beneficial pension scheme, with a discounted economic loss between approximately NOK 140,000 and NOK 300,000.

A group of the employees in question brought legal action against Fokus Bank and claimed to be put in the same economic position as if they were still members of the performance based pension scheme. They argued that the bank’s unilateral decision to transfer them to another pension scheme was contrary to their individually agreed rights and thus not valid.

Fokus Bank won the case in the court of first instance, but lost in the appeal court (Frostating Appeal Court 2009-08-10 in case LF-2008-184179).

The Supreme Court based its arguments and conclusions on previous case law relating to employers right to make unilateral changes to collective pension schemes (Rt. 2002 page 1576 (Hakon judgment) and Rt. 2008 page 1246, Statoil judgment). In previous judgments the Supreme Court has emphasised that pension schemes typically will be of long duration and that it, in general, must be expected that the need for changes may occur in the prevailing schemes. For this reason, it has been assumed that it can normally be presumed that the employer has not meant to waive any rights to make changes in pension schemes by individual employment agreements.

With reference to relevant case law, the Supreme Court now stated that an employer as a legal principle in the outset may change the prevailing pension schemes and that factual circumstances indicating that such change is in conflict with individually agreed rights, must be of a certain weight in order for this principle to be deviated from.

In this case the performance based pension scheme was neither specifically determined in the employees’ individual employment contracts, nor in collective agreements. Regardless of the employer is bound to maintain specific pension obligations on an individual basis, should therefore be assessed on a broad overall evaluation.

The Supreme Court found that no individual right for the employees to maintain a performance based pension scheme was obtained by the employees in connection with the establishment of the new contribution based scheme in 2003 with the employees right to choose between the to different pension schemes. The Supreme Court agreed with the employees that the choice they were given by the bank in 2003 in combination with their response by signing and returning the specific form used for this matter, did indeed represent an agreement between the employee and the employer. However, the Supreme Court found that the employees had accepted to stay in the pension scheme in force at the time of agreement, thus with the employer’s inherent possibilities to implement changes to the plan.

The performance based pension scheme had been in force in the bank since 1987 and the good pension scheme had for some employees played a part in their choice of employment. The Supreme Courts expressed that the employees for these reasons, and also because of the choice they were given in 2003, obviously expected their pension payments at the time of retirement to be in accordance with the contribution based scheme. This was however not enough to constitute any individual right to such pension.

To substantiate the ruling that the pension scheme could be changed, the Supreme Court emphasised that the pension scheme was unilaterally implemented and fully paid by the bank. Furthermore it was argued that the articles of association of the pension fund contained clauses regarding future changes. Although it had not been communicated to the bank’s employees, the Supreme Court mentioned that the employee representatives of the board were familiar with the fact that the board’s resolution in 2003 opened up to further changes in the contribution based pension scheme. 

Conclusion

The Supreme Court’s judgment in the Fokus Bank-case is the third judgment regarding an employer’s right to unilaterally implement changes in the pension schemes. Based on case law it should now be clear that employers are granted wide reaching rights in this respect. Specifically, the judgment makes it clear that it in the outset is possible for an employer to transfer employees from a performance based to a contribution based pension scheme.

However, the judgment should not be taken as a go-ahead signal for all employers who are considering implementing equivalent changes. The Supreme Court presupposes that the validity of such changes will depend on an overall assessment in which many factors may be relevant.

Poland

 
New rules on posting of employees

The new regulations on posting of employees to other EU Member States have been in force since May 2010. The regulations in question are Regulation No. 987/2009 and 988/2009 dated 16 September 2009 and also Decision of the Administrative Commission No. A2 dated 12 June 2009. The new regulations maintain the general rule according to which the employees are subject to the social security scheme of the country in which they have actually been working.

However, there are some exceptions to this rule. Firstly, the relationship between an employer and employee and secondly, fulfilling the terms of posting are the legal conditions under which the posted employee shall be subject to the social security scheme of the country of the place of employment. Pursuant to the new regulations, if the employer wants to benefit from the Polish social security scheme, he/she has to conduct the business activity in Poland. When it comes to the place of conducting the activity, the most important issues include, inter alia: the place where the company is registered, the recruitment process of the posted employees, conclusion of the contracts with clients and the governing law of these contracts. What is also important is the company’s turnover in the country to which the employees were posted. Furthermore, the employer is also obliged to conduct the business activity for at least two months before posting the employee. According to the EU regulations, whether or not the business activity is conducting is judged from the basis of whether a given company has been paying taxes or has been registered in a specific register.

Regulation No 987/2009 introduced a new rule according to which the posted employee shall, directly before the posting, be subject to the law of the country from which he/she will be posted. This means that the employee of the Polish company may be posted only if he/she is subject to the Polish social insurance scheme. In Decision No. A2, the Administrative Commission stated that the employee must have been subject to the Polish social insurance scheme at least one month before the posting.

Moreover, the posting period has also changed. Currently, the posting period may last 24 months (previously it was only 12 months). Due to the fact that the new regulations do not consider the possibility of extending the posting period, the E 102 form (which has to be filled out when the posting period is to be extended) will cease to exist. In Decision No. A2, the Administrative Commission has also stated that the next posting period cannot commence until two months have passed after the last day of the previous posting period.

Conclusion

The new regulation provides an easier posting procedure for the employer as well as for the employee. Firstly, the posting period has been significantly extended and, secondly, the employer may once again post the same employee to the same job only after two months which in some cases, gives the employee stability of employment.



Belarus

Belarusian labour law imposing a new minimum notice period

Until recently, Belarusian labour law imposed a minimum two-week notice period before the expiry of the labour contract for notifying the parties’ intentions of terminating or renewing the contract. The new amendments to Belarusian labour law introduce the new minimum notice period.

According to the general rule, the parties may, upon the expiry of the labour contract, either terminate or renew the contract. At the same time, if either party does not wish to continue their relationship, the contract is subject to termination upon its expiry.

Until April 2010, the law imposed the obligation on the parties to notify each other about their intentions of either terminating or continuing the labour relation no later than two weeks prior to the expiry of the employment agreement. However, the respective notice period has been replaced by a one month period by the Decree of the President of the Republic of Belarus which came into force as of April 13, 2010. Therefore, starting from mid-April 2010 the notice regarding the termination or renewal of a labour contract in Belarus shall be given by each party no later than one month in advance. It should be noted that this rule does not apply to the government employees (workers).

Conclusion

Belarusian law prescribes the statutory minimum of one month prior notice period assuring the legal protection against unfair dismissal, as well as the possibility of the parties to find a new job or a new employee in case of the parties’ failure to renew the labour contract.

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Magnusson International HR Newsletter

HR:INT

Magnusson International HR Newsletter

May 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in Denmark, Sweden, Poland and Belarus.

Denmark

The Consequences of the Ash Cloud for Employees on Holiday and on a Business Trip

Many Danes on holiday or on a business trip are or have been stranded abroad as a consequence of the ash cloud’s influence on air traffic. Whether the employee or the employer bears the risk, depends on whether the employee is on holiday or on a business trip.

Holiday

It follows from case law that the employee is responsible for returning from holiday. That means that employees on holiday who are stranded abroad as a consequence of the ash cloud are not entitled to pay from the time when the employee should have returned from holiday. Further, the employee is obliged to find other reasonable ways of returning. Failure to turn up for work as a consequence of natural disasters including the ash cloud is, however, not considered unlawful non-appearance and may therefore not constitute grounds for termination or summary dismissal.

Employees who had planned a holiday abroad, but who could not leave because of the ash cloud, are not entitled to holiday at another time. Consequently, it is up to the employer to decide whether an employee may postpone his holiday or not.

Business Trip

In case an employee cannot return from a business trip as a consequence of the ash cloud, the employer bears the risk. Consequently, the employee is entitled to full pay and the employer is responsible for covering the costs in connection with the extended stay abroad.

 

Sweden

Theft Dismissals Require Evidential Proof to be Valid

A heating and plumbing company dismissed a plumber. The reason for the dismissal was an allegation that the plumber had illicitly and voluntarily taken a thermometer from a wholesaler regularly contracted by the company. (Ruling from the Swedish Court of Labor case no. A74/09)
 

The employer´s organization (“VVS-företagen”) claimed that the plumber had stolen a thermometer at a wholesaler used by the company. The theft was recorded by a surveillance camera. The plumber was later dismissed after the employer had viewed the surveillance video together with two people representing the wholesaler. All three persons were later witnesses during the trial. The recording itself had been deleted.

The union representing the plumber stressed that the dismissal was unlawful as the plumber was not guilty of the theft. The union also stressed that even if the theft had occurred it was a matter of a one-off incident and that the stolen object in question had a negligible value (approx. 350 SEK ex. VAT).

The court started off by stating that the theft very well could constitute a legitimate reason for dismissal. This notion is supported by case law. According to the court, a theft by an employee constitutes a breach of both trust and loyalty. However, it is up to the employer to prove that the theft actually took place. Pursuant to case law, the evidential burden may not be lower than in a corresponding criminal trial. Hence, the court had to decide whether the actual theft had occurred or not.

The plumber maintained that even though the surveillance camera showed him taking the thermometer from the shelf and himself putting it inside his pocket; he had later removed the thermometer from his pocket and placed it on another shelf while walking towards the exit. The way the surveillance camera monitored the premises and the positions of the witnesses could not exclude that this might have been the case. Pursuant to the court there were deficiencies to the witnesses’ stories as to the possibilities for the plumber to place the object in question on another shelf as stated.   

The court therefore stated that it is not shown that the plumber exited the store carrying the thermometer. Therefore, there was no legal ground to terminate the plumber´s employment.

The court deemed the company to pay full compensation of damages amounting to 60 000 SEK to the dismissed plumber and costs of litigation.

Conclusion

The case shows once again that also a theft of a little value committed by an employee may be a legitimate ground for dismissal. The employer must however show that the employee is guilty of the crime relying on evidence no less than for a criminal trial.

  


Poland

Increasing Employee’s Professional Qualifications

On 9th April 2010, amendments to the Polish Labour Code concerning increasing employee’s professional qualifications were introduced which will soon come into force.

Pursuant to the new regulations, employees can increase their professional qualifications by broadening their knowledge and skills, which can take place at an employer’s initiative or after obtaining his/her consent.

The employer is obliged to conclude the training agreement in writing with a worker intending to raise his/her qualifications. In the agreement, the employer may precisely stipulate the training’s time and its costs and, what is the most important, he/she may also introduce the three-years time employment guarantee. In practice, this means that if the employer pays for the employee’s professional training and afterwards the employee terminates the employment contract (during the training or within three years after its end), the employee will be obliged to reimburse the employer the costs of the training. This regulation is not binding when the employee terminates the employment contract due to family reasons, when work is harmful to his/her health or when the employer breaches his/her general duties towards the employee.

The amendments provide the employee wishing to increase his/her professional qualifications with a training holiday and free day (or part of it) so that he/she can participate in lectures. What is more, the employee shall retain his/her right to remuneration for the free days.

Introduction of the six-day training holiday for the workers who have to confirm their qualifications has stirred up numerous controversies among the employers. They point out that employers cannot afford such long absence of their employees; therefore, the workers will probably have to confirm their qualifications on their own.
What is also interesting in the new regulation is the fact that employees will have to participate only in the compulsory trainings, such as OHS training, and not as it was planned, in all training organized by the employer.

Pursuant to the new Article 1033, the employer may cover additional costs borne by the employees that are connected with studying (e.g. fees, costs of books and tickets). These costs will be exempted from the income tax even though they constitute the employee’s income.

Conclusion

The fact that the amendments concerning raising the professional qualifications of the employees will be now regulated by the Polish Labour Code may increase popularity of these regulations and provide easier access to them. Apart from that, the amendments are good both for the employers, whose employees will be better qualified, and employees who can extend their knowledge without worrying about their work place.

Belarus

 
As in most Countries of the World Belarusian Labor Law along with a Standard Working Day Permits the Employers to Impose Working in Shifts. However, Belarusian Working Shifts Have their own Peculiarities.

It is generally accepted that shift work is an employment practice designed to make use of the 24 hours of the clock, rather than a standard working day. Belarus is no exception. At the same time, the implementation of the shift work in Belarus is possible if certain requirements are met.

Pursuant to the Labour Code of the Republic of Belarus, a working schedule in two or more shifts is considered to be shift work. Shift work could be implemented by the employer only in cases when the duration of the industrial process (work) exceeds the duration of the normal working day or in order to more efficiently use the equipment or increase the employer’s production capacity.

For many decades, Belarusian labor law did not have any specific restrictions with respect to the maximum duration of the shift, and the limit was 24 hours, as the general cap under the labor law. However, rather recently laws of Belarus limited the duration of the shift by 12 hours, as well as imposed the prohibition to work for two shifts in a row.

The exception to the 12-hour cap for the shift work is prescribed with respect to certain categories of jobs, approved by the Council of Ministers of the Republic of Belarus. It is fair to state that these jobs are of a special social importance, and include, among others: military, security, healthcare, customs, rescue and emergency services. With respect to the aforementioned jobs, the shift may be longer then 12 hours, but may not exceed 24 hours. 

Conclusion

In Belarus, if due to the peculiarity of the employer’s type of business it is necessary to run continuous operational process, the employer may impose shift work for its employees. Nevertheless, with certain exceptions, the duration of a shift may not exceed 12 hours, and it is prohibited to schedule for one employee two shifts in a row.  


   

Magnusson International HR Newsletter

HR:INT

Magnusson International HR Newsletter

April 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in Denmark, Sweden, Poland and Belarus.

Denmark

The EU Court of Justice Ratified the Implementation of Directive through Collective Agreement

EU Court of Justice ruled that an implementation of Directive 2002/14/EC could take place through a collective agreement and that the Directive should be interpreted as a minimum protection of employees in connection with dismissal. An employee did therefore not succeed in his claim that Article 7 of the Directive implies an enhanced protection against termination of employees’ representatives.

In January 2006, claimant was dismissed on the grounds of staff reductions. Subsequently, claimant filed a claim against the employer for compensation for unfair dismissal.

The employer’s company had a collective agreement with a trade union by which the company was bound by The Cooperation Agreement between The Danish Employers Confederation (DA) and The Danish Confederation of Trade Unions (LO). The employee himself was a member of The Danish Society of Engineers (IDA), with whom the company did not have a collective agreement.

In spite of the fact that claimant was not a member of LO, claimant was elected member of the works council of the company in 2001. In 2003, DA and LO implemented EU Directive 2002/14/EC, which concerns the right of information and consulting of employees, through an amendment of their then collective agreement.

Claimant submitted that he was entitled to enhanced protection against dismissal according to Article 7 of the Directive.

In connection with the claim filed by claimant, the high court asked a number of preliminary questions to The EU Court of Justice. The questions concerned, among others, the implementation of the Directive into Danish law and the protection force of the Directive towards employees’ representatives.

The EU Court of Justice established in the response that an implementation of the Directive may take place through a collective agreement. This applies, even if a number of employees who are not members of the trade union become covered by the collective agreement.

On the basis of this response, claimant is covered by The Cooperation Agreement between DA and LO, even though claimant is not a member of LO.

Additionally, The EU Court of Justice stated that Article 7 of the Directive should be interpreted as a minimum protection of employees’ representatives in case of dismissal and thus not as an enhanced protection.

Consequently, the decisive factor is whether The Cooperation Agreement between DA and LO complies with the minimum protection, what the high court will probably establish.

Conclusion

The implication of the response from The EU Court of Justice is that collective agreements may cover employees outside the trade union. The employees covered by the collective agreement are therefore bound by the implementation of the stipulations by the collective agreement instead of the implementation of the stipulations by the act on information and consulting.

No enhanced protection of members of works councils may be established on the basis of the EU Directive on information and consulting.

Duty of Notification of Foreign Service Providers in Connection with Posting of Workers Extended

On 1 May 2008, a duty for foreign service providers who post employees in Denmark to register a number of details with The Danish Commerce and Companies’ Agency for registration in The Register of Foreign Service Providers (the RUT Register) created simultaneously was introduced. The object of the bill is to extend this duty of notification in connection with the delivery of services to Denmark. Additionally, the bill should ensure that the labour market parties and authorities obtain easier contact to foreign service providers.

The bill is a result of an agreement between the government, the Social Democrats, the Socialist Peoples’ Party and the Danish Social-Liberal Party on the extension of the RUT Register.

It is believed that the register of foreign companies and employees posted in Denmark does not give an accurate picture of the extent of the employees posted in Denmark, since it is assumed that the registered number is below the actual number.

The grounds for establishing RUT Register was to achieve a better overview of the increasing number of employees and companies in Denmark in order to monitor the compliance with the tax legislation and working environment legislation and to enable the labour market parties to maintain the interests in a better way. The parties agree that a better enforcement of the duty to notify the RUT Register will meet these challenges and simultaneously ensure the compliance of the existing rules on the Danish labour market.

According to the existing rules, foreign companies who post employees in Denmark must register a number of details on the registrable company in connection with the provision of services, cf. 5a (1) of the Danish Act on Posting of Workers. This stipulation does not apply to independent contractors who do not post employees, but who exercise business activities in Denmark. The bill proposes to extend the application of the law to cover stipulations on the duty of notification for these independent contractors.

According to the existing rules, only the foreign service provider who posts employees has the duty of notification of information to the RUT Register, whereas the bill proposes the introduction of a duty for the service provider to present documentation for the registration with the Danish Commerce and Companies’ Agency to the contracting party. If this documentation is not provided within 3 days from the initiation of the delivery of the service, the contracting party is – according to the bill – obliged to notify the Danish Working Environment Authority.

Additionally, the bill proposes to extend the obligations as to the contact person of the registrable company so that the contact person in future is to be named among the persons working in Denmark in connection with the delivery of the service.

Further, it is proposed to give public access to information on place of delivery of the service, e.g. to the labour market parties, in the same way as public access to information on the name, business address, contact details, contact person and trade code of the company, may be given according to the existing rules.

The bill proposes to extend the penalty provisions for failure to comply with the duty of notification to the RUT Register to the abovementioned extensions of the duty of notification to the RUT Register, and it is proposed that the Danish Working Environment Authority monitor the duty of notification to the RUT Register and act as the Danish authority in future.

Conclusion

The bill extends the duty of notification of the Danish Act on Posting of Workers to cover foreign businesses without employees, including among others consultants. Additionally, the bill entails an obligation of the contracting party of certain trades to ensure that the foreign service provider has submitted information to the RUT Register. So far, this duty only applied to the foreign service provider. Further, the information required on contact persons is extended so that the future contact person must be named among the persons working in Denmark in connection with the delivery of the service. Finally, the penalty has been increased from DKK 5,000 to DKK 10,000.

The Danish Working Environment Authority is assigned the responsibility of enforcing the duty of notification of the foreign service providers.

In case the bill is passed, the recipient or poster of posted workers should take note of the extended stipulations.

 

Sweden

An Employer had not Discriminated Against a Visually Disabled Job Applicant When Not Offering the Applicant the Vacant Position With Reference to Her Functional Limitation

A severely visually disabled person applied for a vacant job position as a sickness allowance and sickness compensation administrative official at the Swedish Social Insurance Administration (Sw. Försäkringskassan). She was denied employment with reference to her functional limitation. The Labor Court had to decide whether the Swedish Social Insurance Administration had acted with immediate discrimination due to functional limitation by not taking any reasonable supporting and adoptive measures to create a situation for the visually disabled person, which could be comparable to a situation for a person without such disablement. (Ruling from the Swedish Labor Court, case no. AD 2010:13)
 

Initially, the Court made reference to applicable legislation in which it stated that an employer may not disfavor a job applicant or an employee who suffers a functional limitation against how the employer treats or would treat persons without such a functional in a comparable situation, provided that the employer can show that the disfavor is not related to the functional limitation. To create such a comparable situation, an employer must take reasonable supporting and adoptive measures in order to limit or reduce the functional limitation’s impact on the disabled person’s working capacity.

The job that the job applicant applied for included working tasks such as navigating on a computer system and reading hand written documents. The Court concluded that a re-organization of the Swedish Social Insurance Administration’s computer system on behalf of the visually disabled job applicant would not have enabled her to navigate in the system on her own. Even so, it would still have been necessary with complementary supporting measures to help her assimilate the information in the computer system because the information would not by help of any technical aids be readable for her directly from the computer screen. In addition, she would have been in need of a job assistant to assimilate information from hand written documents.

To summarize, the Court concluded that the measures that would have been necessary for the Swedish Social Insurance Administration to take were far too time consuming and not reasonable enough. Therefore, the Court found that the Swedish Social Insurance Administration had not discriminated the visually disabled job applicant by denying her the vacant position with reference to her functional limitation.

Conclusion

An employer is obligated to take supporting and adoptive measures in order to compare with a person without a functional limitation only to the extent such measures are reasonable. Whether such measures are reasonable or not has to be decided on a case to case basis. Generally, such measures shall not constitute an un-proportional burden for the employer. Factors that shall be considered includes the employer’s economical possibility of bearing such measures, what factual possibilities there are to take such measures, and what actual effect such measures can have on a disabled person.

  


Poland

Law Changes Regarding Temporary Workers

On 24th January 2010, changes in the Labour Law concerning employment of the temporary workers came into force. The changes seem to be beneficial both for employers and temporary employment agencies.

So far, the temporary employment agencies did not have to issue employment certificates provided that there was continuity between the contracts of employment, which means that there was not even a single day of interval between them. In practice, it very often happened that between the contracts appeared a few days break. Consequently, at the end of each contract the agency had to issue the employment certificates.

From 24th January, this onerous obligation has been abrogated. Regardless of whether there would be a break between the successive contracts, the employment certificate will be issued after 12 months of the employment. The exception would be a situation when the termination or expiration of the contract will fall after the 12 months’ period. Then, an agency will be obliged to issue the employment certificate after termination of the contract.

The abovementioned rules will apply when the temporary employee does not request the employment certificate. The agency will always have to issue the employment certificate on the employee’s request after termination or expiration of the contract.

The change has also repealed a provision under which an employer could make use of the temporary workers if during the 6 months’ period preceding the expected commencement date of the temporary employee’s work, he served the employees a notice about termination of the employment or terminated the employment relationships due to reasons not attributable to the employees, within the collective redundancy.

A last important change concerns a period of the temporary employment of the employee by one employer which has been extended to 18 months within the subsequent 36 months (before the change come into force the maximum length of the working period was 12 months).

Conclusion

The changes that came into force in January improved the situation of the temporary employment agencies, as well as the employers who make use of the temporary workers’ services. Under the new regulations, there is less bureaucracy and the flexibility of law regulating employment of the temporary workers increased significantly. However, one should still remember that the agencies are obliged to issue the employment certificate at the employee’s request.

Belarus

 
Along with the Cap over the Duration of the Regular Working Hours per Week, Belarusian Labour Legislation Prescribes Irregular Working Day Regime.

Under the general rule, the maximum duration of a regular working time is 40 hours per week.

However, Belarusian legislation prescribes the possibility of using irregular working day regime. According to the Labour code of the Republic of Belarus, an irregular working day is a special working regime when an employee may be required when necessary to occasionally work beyond the normal 40 hour weekly limit upon an oral or written request of the employer or at his/her own initiative, but with the employer’s approval.

At the same time, the law determines the list of the employees with respect to whom the irregular working day regime may not be applied. Among which are: employees at the age between 14 and 16; students at the age between 14 and 18; handicapped; employees working in the radio-contaminated areas; part-time employees; some other types of employees.

The peculiarity of the irregular working day regime is that such additional working time is not considered as overtime, and is not subject to payment neither as overtime, nor as a regular working time. The only legislatively prescribed compensation for the employee’s performance of the labour obligations in excess of his/her working hours under the irregular working day regime is the additional annual vacation for up to 7 calendar days. Usually the condition that an employee shall be working according to the irregular working day regime is stated in the employment contract.

Conclusion

Therefore, irregular working day regime is one of the legally determined beneficial ways for the employer in the Republic of Belarus to optimize the salaries expenses.


   

Magnusson International HR Newsletter

HR:INT

Magnusson International HR Newsletter

March 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in Denmark, Sweden, Norway, Poland, Russia and Belarus.

Denmark

Summary Dismissal and Subsequent Termination of Manager Were Unjustified

Complainant was of the opinion that his summary dismissal and subsequent termination were unjustified. The respondent company claimed that the complainant had violated the company’s code of conduct. The Tribunal for Managers and Executives found that the summary dismissal and subsequent termination were unjustified and awarded the employee an amount of DKK 1,750,000.

The complainant was summarily dismissed on 19 January 2009. The complainant held the position of Support Service Director with the respondent company. At the time of the summary dismissal, the complainant had a seniority of 36 years.

The grounds for the dismissal were that the complainant, in the opinion of the respondent company, had acted in violation of the company’s code of conduct in connection with a contract with a ministry in Lithuania. The company felt that the complainant should have known or should have had cause for suspicion of illegal payments in connection with works in Lithuania.

It appears from the letter of termination to the complainant that it had been established, on the basis of an internal investigation on the circumstances in connection with the complainant’s contract with the ministry in Lithuania, documentation and examination of witnesses, including an interview with the complainant in August 2008 that the complainant had been involved in the case in such a manner that it had been damaging to the interest of the company. Further, it appeared from the internal investigation that the complainant by his handling of the matter had acted in violation of the code of conduct of the company and that the complainant knew about this. Consequently, the respondent company felt that the complainant was in material breach of his terms of employment.

Neither the report elaborated as a consequence of the internal investigation nor the minutes of the respondent’s interview with the complainant in the matter were presented during the proceedings.

In the opinion of the complainant, there was neither cause for summary dismissal nor termination, since the complainant, in his own opinion, had not violated any obligations deriving from the employment relationship. Consequently, the complainant claimed that the respondent should pay him approx. DKK 2,100,000 deducting a monthly pay of DKK 47,000 from another job during the last three months of the six months’ notice.

The respondent submitted that the complainant was in material breach of his terms of employment by violating the company’s code of conduct, why the respondent felt that the termination and the summary dismissal were justified. Consequently, the respondent denied liability, or in the alternative pleaded payment of DKK 1,050,000.

On the basis of the evidence, the Tribunal for Managers and Executives found that there were no grounds for assuming that the complainant should have known or had cause for suspicion of illegal payments in connection with the project in Lithuania. Nor did The Tribunal find that it could be considered, against the complainant’s denial hereof, solely on the basis of one of the persons contributing to the interview in August 2008 that the complainant had supposedly admitted that he knew about the illegal payments. Further, The Tribunal noted that the company in the affirmative only reacted five months after the admission of such a serious nature.

Consequently, The Tribunal of Managers and Executives found that the summary dismissal was unjustified and that the termination could not properly be considered justified by the conduct of the complainant or the respondent company.
 
In consideration of the high seniority of the complainant and the termination process, The Tribunal ruled that the company pay to the complainant the amount of DKK 1,750,000.

Conclusion

The Tribunal’s decision shows that if a company feels that an employee violates the company’s code of conduct, the company should react and confront the employee right away. If a company chooses to dismiss an employee summarily or to terminate the employee on these grounds, it should be noted that the company should make sure that the general conditions for dismissing and terminating an employee are fulfilled.

Termination Did Not Constitute a Violation of the Danish Equal Treatment Act

The termination of an employee whilst she was in fertility treatment did not constitute a violation of section 9 of the Danish Equal Treatment Act.

On 2 June 2009, the claimant was terminated as of 30 November 2009. At the end of May 2009, the defendant terminated a total of four employees of the company. During the period leading up to her termination, the claimant went through several fertility treatments.

Considering the claimant’s fertility treatment, the defendant entered into an agreement in 2008 with the claimant’s local authority on the repayment of sickness benefit/salary during sickness absence according to the Daily Cash Benefit Act.

It appears from section 9 of the Danish Equal Treatment Act that an employer cannot terminate an employee on the grounds of pregnancy, maternity leave or adoption. In the Danish weekly law reports U 2003 603 H, it was established that the stipulation also applies to the termination on the grounds of the employee trying to become pregnant by way of measures enhancing pregnancy.

Consequently, the question was whether the termination was due to the claimant’s fertility treatment and the risk of a subsequent pregnancy.

The claimant submitted that the defendant did not demonstrate an actual decline in the workload. Additionally, the claimant presented two e-mails of January 2009 and April 2009 respectively in substantiation of the need for manpower in her specific field.

The claimant claimed that she had not received any complaints as to her work. Therefore, she did not understand why the defendant did not offer her employment in another department of the company.

Further, the claimant claimed that the reason why she had been terminated at the beginning of July in spite of the wage cost involved was that the defendant was afraid of a possible pregnancy before the end of July.

The defendant submitted that the termination was due to a general assessment of the company’s effectiveness. The department in which the claimant was employed had the worst revenue because of lack of tasks.

Additionally, the defendant pleaded that the company’s future tasks were not dedicated to the claimant’s department why it would become a problem to keep the claimant occupied.

Furthermore, the defendant submitted that the time of termination was caused by the fact that the claimant was on holiday on 26 May 2009, when the other three employees were terminated. The reason why the defendant waited until the end of June was to avoid creating unrest among the company’s employees by carrying out terminations two months in a row.

In connection with the claimant’s fertility treatment, the defendant further stated that the company and the employee were in a continued dialogue and that the company helped by moving client visits and allowing the claimant the necessary days off.

On the basis of the evidence, the Board of Equal Treatment found that there had been no violation of section 9 of the Danish Equal Treatment Act.

The Board emphasised that the claimant did not substantiate particular facts suggesting that the termination was effected on the grounds of discrimination.

Additionally, the Board ruled that there was no coherence between the time when the claimant started her fertility treatment and the time of the termination in June 2009. Here, it was submitted that the agreement between the company and the claimant’s local authority shows that the company already at an early stage knew that the employee was in treatment.

Further, the Board left the time of termination out of account and emphasised that three other employees were terminated as well.

Conclusion

The Board’s ruling shows that the termination of an employee must be justified. Additionally, it is emphasises that claimant is required to establish particular facts suggesting discrimination. If this requirement is not fulfilled, section 16a of the Danish Equal Treatment Act on reversed burden of proof is not applicable. See ruling in the Danish weekly law reports U 2009.323.V where this requirement was fulfilled.

The decision does not change the legal practice, since other factors than the fertility treatment were emphasised as grounds for the termination of the employee. U 2003 603 H (cf. 2001 192 V) of the Danish weekly law reports shows that the decisive factor of the legal practice is whether the termination is wholly of partly due to the employer’s expectation that the employee has become pregnant or will become pregnant in the near future.

Sweden

Deliberate actions taken by an employee was just cause for dismissal

An IT worker employed at the Swedish Tax Authority (Sw. Skatteverket) was terminated from his employment because he had caused damage to the Tax Authority’s computer system. The Labor court had to decide whether the employee had acted deliberately and if it was a just cause for dismissal. (Ruling from the Swedish Labor Court, case no. AD 2009:95)
 

The Tax Authority argued that the employee had been unwilling to complete his working tasks and that he had caused damage to the Tax Authority’s computer system by moving and erasing a couple of files connected to the computer system’s alarming network.
The employee argued that he had erased one file, but in the course of his working tasks and that he had restored it within the next couple of days.

It was proven in the case, through logging, that one of the files had been erased by the employee. It was further very likely that he had erased a second one too. It could not be proven that any files were restored in the following days.

With respect to that the employee was an experienced IT worker he had to have been well aware of the consequences of his actions and therefore, the Court concluded that the actions were deliberate and meant to harm the Tax Authority.  Further, the actions were found to be grossly severe. In respect to this, the Court concluded that there was just cause for dismissal.

Conclusion

In this case, the determining factors when forming the conclusion that there was just cause for dismissal, were that the employee had taken severe and deliberate actions that were meant to harm the employer. On such grounds an employer has a just cause for dismissal of an employee.

 


 Norway

An Apprentice’s Protection Against Dismissal

A Norwegian Court of Appeal has by judgement of 1 February 2010 (LF-2009-137181) ruled that the provisions regarding employment protection in the Norwegian Working Environment Act of 2005 (WEA), is not applicable to the discharge of an employment contract between an apprentice and the employer. Discharge of such contracts is governed by the Norwegian Education Act of 1998 (EA).

A former apprentice of “Byggmester B AS” claimed that he was entitled to compensation as he considered his dismissal to be unlawful. The employer won the case in first instance and the decision was recently upheld by the Court of Appeal.

According to the WEA section 15-7, employees may not be dismissed unless this is objectively justified on the basis of circumstances relating to the undertaking, the employer or the employee. The EA, on the other hand, establish a weaker protection for the employee.

It was not disputed that the dismissal would be lawful according to the provisions in the EA, and that it would be unlawful according to the WEA section 15-7. The main question for the Court of Appeal was thus to decide whether the WEA chapter 15 was applicable for the employment contract entered into by the apprentice and the construction company. 

The Court of Appeal stated that discharge of an employment contract between an apprentice and the employer is governed by the EA, and not the WEA section 15.

Conclusion

The legal bases regarding an employer’s opportunity to discharge an apprentice is governed by the EA. Consequently, an apprentice has a weaker employment protection compared to an employee in general.



The Distinction Between An Employee and A Freelancer

 A Norwegian court of first instance has by judgement of 25 February 2010 ruled that a journalist working as a freelancer for the same newspaper from 2004-2009 was entitled to permanent work in the company.

A journalist claimed that she had a right to permanent work in “Adresseavisen”, the newspaper for which she had been working for the last five years.

The journalist had performed several different jobs in the company, and had been connected with the company partly as a freelancer, and partly as an employee in a temporary position.

The main question for the District Court was to decide whether the journalist should have been employed as an employee.

According to the Norwegian Environment Act of 2005 (WEA) section 1-8 (1), an employee shall mean anyone who performs work in the service of another.

The District Court stated that the journalist evidently had performed work for “Adresseavisen”. However, the question was whether the work was performed “in the service of another”. According to the preamble of the WEA, the terms in section 1-8 (1), shall be determined by an overall evaluation.

The journalist’s work regarding editing was subject to the employer’s authority to issue instructions and control. Thus, the legal term “employee” was applicable.

Writing articles as a freelancer, however, is in principle not considered to be within the wording “employee”.

The main reason why the District Court found that the journalist was entitled to permanent employment, was that the company had entered into an oral agreement with the journalist making her entitled to commission for produced articles equivalent to a full time job for one year.

Conclusion

A journalist working as a freelancer is in principle not regarded as an “employee” pursuant to the WEA.   
 


Poland

What The Employer Can Ask and Know About An Employee?

During a job interview, employers want to learn as much as possible about their potential employees. It would be perfect if they could ask about anything they want, unfortunately in the Polish legislation there are numerous restrictions which are imposed to protect employees’ privacy.

The fundamental meaning in this situation has Article 22 1 § 1 of the Polish Labour Code, which stipulates the information about which the employees can be asked during the job interview. This includes, inter alia, a name and surname, parents’ names, date of birth, place of residence, education and employment history. Apart from that, the employer can ask about other personal data. First of them are dates of birth, as well as the names and surnames of their children, as long as these are necessary for the employee to execute his or her rights following from the Labour Law, and the second one is the national personal identification number generated by the General Electronic System of Population Records. All the information should be included in a declaration made by the employee. If the employer demands documentation of these data from the employee, the employee is obliged to meet this requirement. If required by other regulations, the employer may ask for other personal data. With respect to the personal data which are not regulated in the abovementioned Article, the legislator sends us to the Act on Personal Data Protection.

Please note, however, that the employers should be really careful while collecting personal data from their employees because the sanction for breaking the employees’ rights can be even a fine of PLN 2,000 imposed by a Labour Inspector or, what is worse, a court may adjudicate a penalty in the amount of PLN 30,000.

The aforementioned situation is currently binding; however, we may observe the tendency leading to changes. In the middle of January 2010, the Inspector General for the Protection of Personal Data delivered to the Ministry of Labour and Social Policy propositions on changes in the Polish Labour Law with respect to what scope of personal data the employer shall be entitled to demand from the employee and in what manner. These propositions include legalization of applying a polygraph (lie detector) during the job interview. Nowadays, application of the lie detector is possible only after receiving prior consent from the employee. What is more, it will be possible to create CV data bases which will be available both for previous and future employers. The employers will also have the right to demand from the employee a certificate of non-criminal record. Moreover, they will gain a permission to conduct during the recruitment process a psychological test.

Conclusion

Pursuant to the binding regulations, the current situation is quite simple; however, the abovementioned far-reaching reforms will create a wide range of opportunities for the employers to obtain more information about the employees. Therefore, it is necessary to follow the changes immerging in the applicable law; however, the employers should also pay attention to obey the Labour Law and avoid making the mistakes that may subject them to the aforementioned responsibility.

Russia

The Right of Employer to Dismiss Employee Due To His Insufficient Qualification Does Not Contradict the Russian Constitution

The Russian Constitutional Court confirmed that the employee who does not meet the requirements associated with his position or job due to his insufficient qualification can be dismissed by the employer after the failure to pass the professional attestation.

The Russian Constitutional Court ruled that the provision of the Russian Labour Code, according to which employers have the right to dismiss their employees due to their insufficient qualification, does not contradict the Russian Constitution.

According to the Russian Labour Code, the employer has the right to terminate the employment contract with his employee in case such employee fails to meet the requirements associated with his position or job due to insufficient qualification as confirmed by the results of his professional attestation (paragraph 3 of part 1 of Article 81 of the Russian Labour Code).

This provision was challenged in the Russian Constitutional Court on the grounds that it violates the constitutional right to free labour guaranteed by the Russian Constitution (part 1 of Article 37 of the Russian Constitution).

The Russian Constitutional Court pointed out that the employer for the purposes of effective management of his business can, at his own discretion and at his own risk, take any decisions relating to his employees as he may deem necessary while fulfilling all corresponding requirements stipulated by the Russian labour legislation.

Among such requirements targeted against voluntary dismissal of employees and against breach of their rights, there is an obligation of the employer to conduct professional attestation of the employee prior to his possible dismissal in the manner established by the law, as well as an obligation to offer such employee another job that the employer has (either a vacant position meeting the qualification of the employee or a vacant lower position or a lower-paid job).

The Russian Constitutional Court ruled that the provision of the Russian Labour Code, according to which employers are entitled to terminate employment contracts with their employees due to their failure to meet the requirements associated with their position or job due to insufficient qualification as confirmed by the results of his professional attestation, does not contradict the Russian Constitution.

Besides, the corresponding decision of the employer to dismiss his employee for the above reason can be examined in court and the court will not be bound by the conclusions of the attestation commission.

Conclusion

The described provision of the Russian labour legislation relating to the dismissal of employees upon the results of the professional attestation does not violate constitutional rights of such employees but ensures the right of the employer to manage his employment relations with his staff for the purposes of effective business development.
 

Belarus

 
The Current Labour Law of the Republic of Belarus Requires the Employer To Notify State Occupation Service About Coming Up Redundancy of The Employee Only In Case of Mass Suspension of The Employees. 

For a substantial period of time, Belarusian labour law required the employer to notify the state occupation service about up-coming redundancy of its workers notwithstanding their quantity no less than two months prior to their dismissal.

The consequences of the failure to duly notify the state occupation service about up-coming redundancy even of one worker entailed the re-employment of the respective workers, as well as the administrative fine imposed on the employer. 

Now, the aforementioned rule has changed and the employer is obligated to notify the state occupation service only in case of a mass suspension of its workers. At the same time, the criterion of “mass suspension” is determined by the respective act of the Ministry of Labour and Social Security of the Republic of Belarus and mainly depends on the total number of the employees employed by the company and the percentage of the redundant employees. In any case, the dismissal of less than 25 workers is not considered to be a mass suspension.

Conclusion

If the employer decides to dismiss less than 25 redundant workers, he shall not have the obligation to notify the state occupation service. If the number of the redundant workers is 25 or greater, the employer must determine whether such dismissal is a mass suspension of workers or not. In case the redundancy is a mass suspension of workers, the employer must notify the respective state occupation service in order to avoid negative consequences. 
 

Magnusson International HR Newsletter

HR:INT

Magnusson International HR Newsletter

February 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in Denmark, Sweden, Norway, Poland, Russia and Belarus.

Denmark

Abuse of Fixed-Term Employment Contracts

If an employer wishes to prolong a fixed-term employment relationship, this must be substantiated objectively according to the Danish Act on Fixed-Term Employment Contracts.

A trainee estate agent was offered a fixed-term employment upon finalisation of the trainee days in the shape of a fixed-term employment position. When the fixed-term employment was about to expire, the employer offered a new fixed-term employment.

The office clerk pleaded before the court that since the contract was about to expire, the employer offered a new fixed-term employment contract without giving any detailed explanation of why it was to be another fixed-term employment position. Nor did any detailed explanation appear from the contract entered into between the parties.

During the second fixed-term employment, the office clerk broke down psychologically at working in the company and was consequently given a sick note.

The employer explained before the court that the first prolongation of two months was due to the fact that the employed trainee had not learned everything during the trainee days, why a prolongation was considered necessary. The employer explained the subsequent employment with the fact that amongst others a maternity leave had made it possible and necessary that the trainee could continue for another fixed term.

Contrary to the employer, however, the office clerk did not find the renewal of the employment objectively substantiated by objective criteria such as expiry date, completion of a specific task or the occurrence of a specific incident in accordance with the Act on Fixed-Term Employment Contracts, s. 3, subsection 2, why the employer had abused his right to employ on a fixed term. Simultaneously, the office clerk pleaded that the statement of the employment terms suffered from severe lack of conformity with the Danish Act on Employer’s Duty to Notify Employees of Employment Terms by not mentioning length of service and notice.

In its ruling, the court stated that if the office clerk should act as maternity cover, it would have been obvious to state this in the contract entered into between the parties. The lack of objective substantiation of the new fixed-term employment implied, according to the court that the employer had violated the Act on Fixed-Term Employment Contracts, s. 5, subsection 1, why the office clerk was awarded severance pay according to s. 8, subsection 1, of the Act. As to the question of notice, the court submitted that the trainee term before the fixed-term employment should be included in the calculation of the length of service which, at the time of the notice was thus more than 6 months, why the actual notice should be of three months cf. s. 2 of the Salaried Employees Act. Upon an overall assessment of the employment relationship, the court came to the conclusion that the office clerk was to be awarded a total severance pay of DKK 50,000 according to the Act on Fixed-Term Employment Contracts and the Act on Employer’s Duty to Notify Employees of Employment Terms.

Conclusion

With this judgment, the court affirms the current legal practice, according to which it is left to the employer to prove that a prolongation of a fixed-term employment relationship may be justified objectively. In case the employer is unable to present sufficient proof hereof, the employee may be protected by the Danish Salaried Employees Act and its pertaining statutory provisions which entail a longer notice and further severance pay.

Sweden

Proposition of the Introduction of an Act of Law on Protection of Personal Privacy in Working Life

An introduction of an act of law on protection of personal privacy in working life has been proposed in the Swedish Government Official Report SOU 2009:44 - Protection of personal privacy in working life (Sw. Integritetsskydd i arbetslivet). The proposed legislation regulates certain measures such as monitoring of private email and internet use, surveillance through other computer aided means, e.g. logging, monitoring of employees and job applicants via health and drug tests, and establish the conditions under which employers would be entitled to view extracts from criminal records etc.  
 

According to the Government Official Report, the existing regulatory framework intended to protect the personal privacy of employees in the workplace is elaborate and difficult to overview. It comprises a disparity of regulations and legislative enactments. Protection is only partially regulated by law and the meaning of certain statutory provisions must be regarded as unclear. Moreover, protection for employees in the private sector differs to some extent from that afforded to public sector employees. In addition, job applicants have no means of taking effective action against privacy invading background checks conducted by an employer for whom they wish to work. Given the deficiencies in the existing regulatory framework, the Government Official Report states that protection of personal privacy in working life needs to be clarified and strengthened through appropriate legislation. This is proposed to be done through the introduction of a single, self-contained act. The regulations are proposed to be generally applicable to all areas of working life.

The purpose of the proposed act is to protect the personal privacy of employees in working life. The act only concerns measures implemented by employers and directed at employees. The term employee also embraces certain other categories, namely job applicants, people seeking or undertaking work experience placements and those who perform work as hired or borrowed labor. A party guilty of breaching the provisions in the proposed act will be liable for damages.

The proposed legislation mainly entails the following five changes:

Processing of Personal Data

As regards surveillance and background checks involving the processing of personal data, the provisions in the Personal Data Act should continue to apply in all but three areas, where changes are proposed that are meant to strengthen employee protection. These changes are made by an inclusion in the proposed act of a provision modifying the Personal Data Act in cases where an employer’s purpose in processing an employee’s personal data is to check up on or monitor the employee. In the first place, the misuse rule in Section 5 a of the Personal Data Act would not be applicable; instead all the provisions of the act are to be applied. In the second place, an employer would not be permitted to process an employee’s personal data solely on the basis of consent; under the act, some other ground for action would need to exist for processing to be admissible. Finally, processing by an employer of an employee’s personal data should only be admissible under the act if it is stated, when the data has been collected, that the purpose of the processing was to check up on or monitor employees in some specific respect. Thus the act explicitly guards against purpose drift. However, under the proposed act, exceptions may be made where exceptional grounds exist and provided that the employer promptly informs employees affected by the processing about its new purpose.

Prohibition Against Obtaining Certain Data Extracts

Special provisions are proposed that govern some of the surveillance and background checks, namely concerning certain record checks. As a result, employers would - without legal sanction - be prohibited from requiring job applicants to produce criminal record extracts about themselves or produce extracts from data registers kept by the Social Insurance Agency if the extract contains information to which the employer has no right of access under the Secrecy Act. However, the proposed new act does not contain specific provisions prohibiting employers from obtaining a prospective employee’s credit rating from a credit rating agency or from requiring a job applicant to produce an extract from the Swedish Enforcement Authority’s data register. This information is normally in the public domain.

Medical Tests

The proposed act would permit an employer to request a medical test only if the test was for an authorized purpose within the meaning of the law, and if the test could be said to be an admissible invasion of an employee’s personal privacy. Purposes for which a medical test would be deemed appropriate include tests that are conducted for security reasons, tests formed as a part of a rehabilitation plan for the employee, or if it was conducted to assess the state of health of an employee and if said test was of critical importance to the operation of the entity concerned owing to its special character.

Prohibiting Privacy Invading Measures In General

A blanket provision is proposed prohibiting surveillance and background checks in general where these are deemed to have an obvious effect on personal privacy. Examples of measures which would constitute a clear case of privacy invasion – and which in effect are prohibited unless properly justified and proportional – include wiretapping employees’ telephone calls, subjecting employees to bag and other searches when leaving work premises, going through lockers, drawers or other spaces an employee normally has sole use of, and analogue camera surveillance in toilet areas.

Obligation to Negotiate

The obligation to negotiate under the Co-Determination at Work Act (1976:580) is already applicable in many cases where an employer is considering the introduction of surveillance and background checks that will involve significant changes in the entity’s operations, or will have a specific bearing on working conditions or terms of employment. In order to make it clear that the primary obligation to enter into negotiations applies whenever an employer intends to decide on the introduction of surveillance and background checks liable to constitute a manifest infringement of the personal privacy of one or more employees,  an introduction is proposed of an explicit provision enjoining the employer to negotiate beforehand with the relevant employees’ organization in the manner prescribed in Sections 11–14 of the Co-Determination at Work Act.
 

Norway

Employee’s Right to Compensation For Overtime Work

A Norwegian Court of Appeal has by the judgement of 22 December 2009 (LE-2009-100120) ruled that a shop manager possesses a senior post. Thus, the shop manager was not entitled to compensation for working additional hours.

A former employee at Kiwi, a chain-store for groceries, claimed that he was entitled to compensation for overtime work, which the employer contested. The employer won the case in the court of first instance and the decision was recently upheld by the Court of Appeal.

According to the Norwegian Environment Act of 2005 (WEA) section 10-6, an employee shall for overtime hours be paid a supplement of at least 40 %, in addition to the pay received for corresponding work during normal working hours.

However, this main rule does not apply to employees in senior posts, cf. WEA section 10-12. The main question for the Court of Appeal was thus to decide whether the shop manager held a senior post.

The Court of Appeal stated that the question whether the managers’ work legally is regarded as a senior post, shall be determined by an overall evaluation of assigned responsibilities and function of the work.

According to the court, the job-description “shop manager” indicates that the job is a senior post. Still, the most important argument was the job description for shop managers employed by Kiwi. The job description for the shop manager states that he or she has total responsibility for managing the store, the financial performance and the staff.

On the other hand, the owners of the chain-store, Kiwi, distributed several instruction manuals which, in detail, described how the Kiwi stores should be run.  Furthermore, the shop manager in question also worked most of the time in the store, doing the same job as general employees. However, these arguments were not decisive.

The shop manager in question clearly appeared as the store chief, and he also had the opportunity to plan his own work and work schedule. For these reasons, the Court of Appeal held that the position as shop manager should be regarded as a senior post.
 
The Appeal Court compared the case with a former case by the Norwegian Labour Inspection Authority where a shop manager in the chain-store “Lindex” was found entitled to overtime payment. The main reason for why the Appeal Court came to the opposite result in this case was that the shop managers in “Lindex” were obliged to register normal working hours, as well as overtime hours and any time off had to be reported. The shop manager employed by Kiwi, on the other hand, could decide for himself when he wanted to perform his work.

Conclusion

Shop managers constitute borderline cases as to whether or not the entitlement to overtime supplement applies. In such cases, emphasis will be put on the fact that the employee is free to organize the work and that he may decide for himself when the work is to be done.



New Legislation Regarding Health Security and Environment – Working For Themselves

The WEA already govern requirements regarding the psychosocial working environment. Section 4-3 states that;

“(3) Employees shall not be subjected to harassment or other improper conduct.

(4) Employees shall, as far as possible, be protected against violence, threats and undesirable strain as a result of contract with other persons”.

Nonetheless, the WEA has been amended for employees working for themselves (i.e. not in the same physical location with others). Several employees, such as taxi drivers and home helpers, deal with clients and customers alone on a daily basis, which involves a greater risk of threats and violence.

The new rules became effective as of 1 of January 2010. The employer shall consider whether a particular risk exists by performing work by oneself. Furthermore, the employers are obliged to implement measures for the prevention of such risks to occur.

Conclusion

Employers who have employees working for themselves are obliged to consider the risk related to the work in question, and if possible take measures to prevent or mitigate the risk.

 


Poland

Changes In Maternity Leave

As we observe, the Polish legislation aims at leveling the legal situation of both male and female employees at work. Until 1st January 2010, women could take paid holiday as a maternity leave which was something normal and now, since the beginning of 2010, a father has the same right. What is more - Polish legislation aims at significantly prolonging the maternity leave from which both mother and father can benefit.

According to Polish Labor Code, since the 1st January 2010, the father has a right to take one week as a paternal leave for one child. He can do the same in 2011, however, in 2012 this period will be extended to two weeks. This right can be used by every father who has a child not older than twelve months. A working father should submit an appropriate application in writing to his employer at least seven days before the planned leave and the employer is obligated to accept the application. The paternal leave is fully paid similarly as the maternity one. 

What is more, the employee should not be afraid of being fired during this period because, according to Article 177 of Labor Code, he is under the same protection as the mother during the maternity leave. We have to remember that such solution is intended for the father who actually raises a child, therefore, it is impossible for this right to be taken by a father who has limited parental rights. This is a clear step to equality of both sexes at work. The legislator withdraws from the old stereotypes which assumed that a woman is a person who has to bring up a child and a man can stay at work because his contact with a newborn baby can be limited due to the fact that this contact is not indispensable.

The changes can also be noticed in the women’s situation, since in accordance with new legislation, apart from the standard maternal leave, they have the right to take the additional maternity leave. In 2010 and 2011, this shall amount two weeks if the woman gave birth to one child during one parturition and three weeks in case of numerous parturitions. In 2012 and 2013 those periods will be extended to four and six weeks, respectively, and in 2014 and further to six and eight weeks, respectively. As a rule, it must be assumed that woman is a person who has a right to take such leave, however, as an exception; the father will be able to take it too in two situations. In the first case, the father can take the additional part to take care of the baby if the woman renounces her right to the leave after fourteen weeks. In the second situation, the father can take the additional leave if the working mother made use of the standard maternity leave and she is not going to take the additional part. The additional maternity leave is given one time, just after the standard maternity leave and assessment in weeks. One week corresponds to seven calendar days. A working father should provide the final date of maternity leave taken by the woman in his leave application.

Conclusion

The employers have an obligation to accept the paternal leave similarly as the maternity leave and respect the special kind of protection guaranteed by the Labour Code. For the next two years, the fathers will have an opportunity to take a week leave for one child; however, the employers should remember that this will change in 2012.

Russia

Russian Federal Migration Service Proposes to Introduce Work Patents for Some Categories of Foreign Citizens

Russian Federal Migration Service proposes measures for legalization of labour of foreign citizens who arrived in the Russian Federation on a visa-free basis and who are employed with Russian individual entrepreneurs or hired by individuals.

Russian Federal Migration Service introduced the bill on amending the Russian legislation on the legal position of foreign citizens in Russia indented for improving the regulation of external labour migration in Russia.

In compliance with the general requirements of the Federal Law “On the legal position of foreign citizens in the Russian Federation”, foreign citizens are entitled to carry out labour activities in Russia only if they have obtained corresponding work permits.

Unlike companies, which often obtain necessary work permits and pay taxes for their foreign employees, individual entrepreneurs and individuals are less law-abiding in Russia. According to some estimates, there were 4 million foreign employees in Russia in 2009, which were employed with individual entrepreneurs or hired by individuals. Most of such foreign employees neither have any permits, nor pay taxes or have medical insurance.

The bill proposed by the Russian Federal Migration Service provides for foreign employees who arrived in the Russian Federation on a visa-free basis and who are employed with individual entrepreneurs or hired by individuals to obtain work patents instead of work permits. Such patents will be issued for a period of one year and will cost 1,000 rubles (approximately 23 euro) per month. After the expiration, all patents can be prolonged for the same period of time.

Conclusion

Introduction of work patents instead of work permits for that category of foreign employees is expected to control employment of foreigners with individual entrepreneurs and individuals as well as to ensure labour and medical protection for such employees. However, it’s not quite clear why those foreigners, who work now with individual entrepreneurs or individuals without any permits, will stick to the new regulations and obtain patents on a regular basis?
 

Belarus

 
Determination of the Minimum and Maximum Term of the Employment Contract 

Under the general rule, the term of the employment contract (a fixed-term agreement, which differs from the unfixed-term employment agreement) between the employer and the employee is subject to mutual agreement between the parties, but could not be less than one calendar year and not exceed five calendar years from the date of executing the respective contract.

However, there are two main exceptions to the aforementioned general rule, which applies to:

1) Women, who are on maternity leave, and women (men or other guardians, who are actually taking care of a child), who are on child-care leave until a child reaches the age of 3 years; hereinafter collectively referred to as the “Child care-takers”;

2)  Employees of the preretirement age (women: 53-54 years of age, men: 58-59 years of age); hereinafter collectively referred to as the “Preretirement age employee”.

According to Belarusian law, the term of the employment contract with the Child care-takers could not be less than the term of the respective leave. Furthermore, upon termination of the leave in question and provided that the Child care-taker does not object, the employer must conclude the new employment contract (or extend the existing one) until the child reaches the age of 5 years.  

As for the term of the employment contract with an employee of the Preretirement age (provided that he/she duly performs his/her labour duties), it could not be less than the term necessary for the  respective employee reach the retirement age (women - 55 years, men - 60 years).   

Conclusion

In Belarus, the term of the employment contract is determined by the agreement of the parties and could be between 1 and 5 years from the date of concluding the respective contract, except for the employment contract with a Child care-taker and an employee of the Preretirement age. 
 

Magnusson International HR Newsletter

HR:INT

Magnusson International HR Newsletter

January 2010

Welcome to HR:INT, Magnusson’s monthly newsletter with news within labour and employment law in Denmark, Sweden, Norway, Poland, Russia and Belarus.

Denmark

Employer's Obligations in Relation to New Multimedia Tax

From January 1st, 2010, employees are subject to taxation of DKK 3000 for multimedia provided by the employer for private use. The new law obliges the employer to deduct A-tax and labour market contribution from the employee's income of the taxable value of the multimedia, available for private use. If a portable multimedia provided by the employer is not to be used privately by the employee, the new law furthermore obliges the employer to make certain control measures to ensure that the portable multimedia is in fact not used privately.

The background for the new multimedia tax is that all earnings have to be taxed – irrespective of the salary is paid in cash or in kind, such as multimedia for private use.

In consequence of the new multimedia tax, the employee is taxed on internet connection, computer, and free telephone provided by the employer for private use. The employee is subject to taxation of DKK 3.000 per year (2010-level), regardless if the employee is provided with, one, two or all three of the multimedia for private use.

If the employer has provided the employee with a multimedia available for private use at the employee's residence, such as Internet, a desktop computer or a home telephone, the employer must report to the SKAT that the employee is liable to pay multimedia tax and deduct A-tax and labour market contribution from the employee's income of the taxable value of the multimedia.

If the employee is provided with portable multimedia by the employer, which is not intended for private use, and the employer has not reported the employee to SKAT for taxation, the employer must be aware that the employer has to make certain control measures regarding the employee and the multimedia. Furthermore the employer is obliged to document these control measures regarding the use of the portable multimedia to SKAT.

Therefore the employer must ensure that its obligations regarding the control measures are fulfilled. The employers’ obligations depend on what kind of multimedia the employer has made available for the employee.

When SKAT makes a visit of inspection at the employer the employer must verify that the following obligations are fulfilled:

Portable multimedia for use at the employee’s workplace only

When SKAT makes a visit of inspection at the employer the employer must, as mentioned, verify that the portable multimedia are not used for private use by the employee. In situations where the employee is provided with portable multimedia at the employee’s workplace, the employer’s obligations regarding the taxation of the multimedia will, according to SKAT, be fulfilled if the following procedure is followed:

• The employer has to make a list of the portable multimedia available for the individual  employee  at the workplace, and whether the portable multimedia is available for private use or not and,

• the employer has to make a multimedia policy, including how the multimedia policy is put into practice and checked up on, and

• the dates of accomplished spot checks regarding the private use of a portable multimedia including a specification of the results of the spot checks must be registered by the employer. A 5 % spot check will be adequate if there are no errors in the spot checks. When making e.g. spot checks, the employer must be aware that the Danish Act on Processing of Personal Data is observed.

Regarding mobile phones, some additional requirements must be met, see below:

Mobile phones:

If an employee is provided with a mobile phone which is only to be used commercially and not privately, the employer has, in addition to the obligations mentioned above, further obligations. Therefore, in addition to the obligations mentioned above, the following documents must be provided by the employer:

 • A sworn declaration, and

• the examined phone bills/lists of dialled numbers including the comments the examination has led to. If it is clearly marked on the lists by whom and when – and if possible with signature and date – the examination have been made, it would be sufficient prove to demonstrate that the necessary examinations have taken place. The Danish Act on Processing of Personal Data must be observed.

As for mobile phones the employer must also, as mentioned, meet the general obligations for portable multimedia for use at the employee’s workplace only, see above. Therefore the employer also has to make a multimedia policy regarding mobile phones, and an overview of which employees are provided with which portable multimedia. Furthermore, the dates of the check spots must be registered.

Other portable multimedia

The employer must be aware that there are different obligations regarding the documentation for the use of laptops with special software available for private use, and for computers which are to be used in relation to education.

The coming into force of the Act

The rules of taxation on multimedia enter into force on January 1st 2010. Consequently the employer should therefore now conclude the necessary multimedia policy, sworn declarations etc. and moreover prepare themselves and the employees for the act coming into force. 

Amendment of Employment Agreement To Be Equated with a Dismissal combined with an Agreement on Re-Engagement

The monthly wage of an employee was reduced from DKK 50,000 to DKK 42,000 with immediate effect. This amendment was considered such a radical change of the employment conditions that it should be equated with a dismissal combined with an agreement on re-engagement. Consequently, the wage cut could only be implemented with the notice applicable according to the Danish Salaried Employees Act.

An employee of a firm of auditors was met with a change of his employment conditions in August 2007. The new employment conditions entailed a reduction of the employee’s salary from DKK 50,000 to DKK 42,000 a month. Simultaneously, a covenant was agreed so that the employee in case of a possible dismissal was entitled to deal with clients acquired by the employee through his private network or brought by the employee as he joined the company. The employment conditions of the employee were not to be changed, except that he could no longer participate in the board meetings.

Subsequently, the employee filed a claim against his employer claiming payment of the difference in salary including holiday pay for three months corresponding to the notice.

It appeared from the statements of the employee that his attention had not been drawn to the fact that the amended conditions would take effect immediately in the meetings during which the amendments were discussed. When the employee received his first payslip, he did not react to the wage cut, since he assumed that his employer had looked into the legality of the wage being cut with immediate effect. After the employee had learned that the immediate effect of the wage cut was unlawful, the employee raised the question with his employer on 29 November 2007, which enraged the employer a lot.

During the case, the employer explained that it appeared from the discussions in August 2007 that the wage cut would take effect immediately. Further, the employer acknowledged that the employee had claimed on 29 November 2007 that the wage cut should not have taken effect immediately.

Since the employer had explained that it appeared from the discussions in August 2007 that the payslip was with immediate effect and since the employee did not react when he saw his payslip, the court found that the employee had accepted as part of the agreement on wage cut that the wage cut was to have immediate effect.

However, the parties agreed that the agreed covenant was unlawful. The covenant did not constitute a benefit to the employee which could counterbalance the wage cut. Consequently, the agreement on the wage cut was solely to the disadvantage of the employee.

A change of the employment conditions as radical as the wage cut agreed between the parties may be equated with a dismissal combined with an agreement on re-engagement. Consequently, the wage cut could only be effected with the notice applying to dismissal according to the Danish Salaried Employees Act. It appears from § 21 of the Danish Salaried Employees Act that this notice may not be derogated from to the disadvantage of the employee.

Since the employee had objected to the wage cut on 29 November 2007, which was before his employment ended, the court found that the employee had not forfeited his claim on account of inactivity.

Consequently, the court found that the employee had a claim for payment of the wage difference including holiday pay for three months corresponding to the notice.

Conclusion

Important deterioration of the employment conditions of a salaried employee may not be effected to the disadvantage of the salaried employee, even if the salaried employee has accepted the agreement on deterioration of his employment conditions, in this particular case a wage cut. Even with the acceptance of the salaried employee, the wage may not be cut without giving the notice applying to the salaried employee according to the Danish Salaried Employees Act. The overall agreement should be evaluated in order to establish whether an overall deterioration of the employment conditions of the salaried employee has taken place, since there may be parts of the overall agreement that counterbalance the particular deterioration. 
 
 

Sweden

Comments on the New Swedish Annual Leave Act

On 1 April 2010 a new Swedish Annual Leave Act will enter into force, which will revoke the previous Annual Leave Act of 1977. The main aims of the new Act have been to simplify the current Act in particular as regards the calculation of annual leave and annual leave pay. 
 

An employee is entitled to annual leave benefits in accordance with the Annual Leave Act. Such benefits include annual leave, holiday pay and compensation in lieu of annual leave. The new Annual Leave Act is intended to have a simple language and format. There is a new rule for calculation of annual leave payment, the so called principle of equal payment for employees with a fixed salary. The percent rule which applies to calculation of annual leave payment is however also kept and simplified. The rules for the period during which annual leave is earned during absence/leave, so called holiday grounded, leave are slightly changed. Leave due to sickness and work injury will not be holiday grounded if the leave lasts for more than one earning year instead of two years, which also will cut down the amount of days that employees with long periods of sickness have the right to holiday pay. The rules for the period during which annual leave is earned through parental leave are simplified. The rules for the period during which employees on a fixed employment earn annual leave are also altered. The special rules applicable to home workers and uncontrolled employees are opted out.

Conclusion

While the purpose of the new law has been to simplify and clarify the current rules, some of the changes will have a negative impact on the employees. As an example it can be mentioned that the change on leave due to sickness will in effect mean that employees that are sick during the whole year will get less with holiday pay than what the previous system offered.

Norway

Employer’s Decision to Change Work Hours Found Void

The Norwegian Supreme Court has recently ruled that a municipality’s unilateral decision to change the work schedule for two nurses from night shifts only to a combination of day and night shifts was unlawful.

The nurses were employed with the municipality in 2002. Both nurses had prior to the employment emphasized their wish to only work nights. This was reflected in the job offer sent to both of them, which they accepted. In 2006 the municipality wanted to change the work schedule so that none of the nurses would only work night shifts. This was discussed with the employee representatives and the nurses that would be affected by the change, but no agreement was reached. Nevertheless, the municipality implemented a work schedule according to which the nurses in question would work both day and night shifts. They did not accept the new work schedule and claimed the right to continue to only work at night.

The municipality argued that the job offers presented to the nurses only determined that they would be able to work only night shifts for the time being, and that the change of work schedule was within the employer’s right to manage.

According to the Norwegian Working Environment Act section 14-6 the minimum requirements for employment contracts are that such contracts shall state “factors of major significance for the employment relationship, including: (…) j) duration and disposition of the agreed daily and weekly working hours, “

The Supreme Court expressed that the requirements in section 14-6 are supposed to ensure the employee’s need for information, and that not any provision in the individual employment contract will curtail the employer’s managerial prerogative.  If the employment contract can not be interpreted so that the employer has accepted limitations in its freedom to manage, it must be assessed whether or not the provisions in the contract as such represents such a limitation for the employer.

In this case, the Supreme Court found that the municipality had accepted that the nurses were to work night shifts only, and expressed that the municipality as the professional party should have reserved it self the right to change this arrangement. Furthermore, the Supreme Court found that the change of work hours represented a significant change to the employment conditions which could only be implemented unilaterally if the criteria for termination of the employment contract are fulfilled (i.e. the change is regarded as a termination of the employment relationship combined with an offer of a new position) and the procedural rules for such cases are complied with.

Conclusion

Change of work hours will as a main rule not be regarded  as something the employer can decide unilaterally, unless otherwise specifically stated in the employment contracts.

Obligation for Helicopter Pilots to Retire at the Age of 60 Not Found to be Discriminatory

According to collective agreements, the helicopter pilots have a clear obligation to retire at the age of 60 years although the age limit for keeping the pilot's license is 65 years. The system had been practiced on the basis of collective agreements for over 40 years.

Ten pilots who were getting close to the mandatory retirement age sued their employer and argued that the collective agreement was in violation with the prohibition of age discrimination in the Norwegian Working Environment Act and Council Directive 2000/78/EC of 27 November 2000.

The employer won the case in the court of first instance and the decision was recently upheld by the court of appeal.

Based on the evidence presented, the appeal court did not find it substantiated that the risk for accidents due to human error is greater when one of the crew members is over 60 years of age. Nevertheless, the court was of the opinion that a younger crew member would be superior to the older pilots when it comes to physical strength and vision, and that a younger crew member probably would be able to deal with a critical situation or an accident in a better way.  However, the security aspect was not sufficient to give grounds for an obligation to retire before the age limit for the license.

The reason why the court did not find the mandatory retirement age to be in conflict with the prohibition of age discrimination was that this rule was one of many elements in the collective agreement. The court expressed that collective agreement necessarily will be the result of a balancing of different interests and that changes to the agreement could shift this balance. The older pilots who had an obligation to retire would themselves benefit from the attractive pension plan and at an earlier stage because of the fact that an early retirement age makes the career ladder shorter for younger pilots. It would therefore be unreasonable if the older pilots were to be granted further rights than laid down in the collective agreements at the age of 60 years.

Conclusion

Agreements that have been entered into based on negotiations between the employer and the employee representatives are to a great extent accepted by Norwegian courts.

Poland

Differences Between Bylaws Bonus and Discretionary Bonus

When reviewing companies’ documentation (e.g. remuneration bylaws, bonus bylaws) with respect to the incentive bonuses and discretionary bonuses, it is often discovered that employers confuse the discretionary bonus with the bonus regulated by bylaws. It should be underlined here that such a situation may lead to various disputes with employees.

A common mistake made by the employers when introducing bonus bylaws for the employees is that the employers stipulate for the bonus certain measurable conditions that have to be met by the employees in order to receive the bonus. However, the employers introduce an additional provision that although all conditions were met by the employee, granting of the bonus will eventually depend on the discretionary decision of the employer. Furthermore, although the bonus bylaws introduce certain conditions in order for the employee to receive the bonus, the premium is also termed discretionary.

It should be underlined here that in the light of the judgments of the Polish Supreme Court, such provisions concerning the bonus are not effective. Namely, if the employee fulfills all the measurable conditions which were mentioned in the bylaws, the employee will be entitled to the bonus regardless of whether such premium was granted to him or her by the employer’s decision. Such understanding of the legal provisions results from various judgments of the Polish Supreme Court, e.g. judgment No. III PK 11/05., No. II PK 13/06., in which it was stated that granting the bonus to the employee does not depend on employer’s decision, but on meeting all conditions provided in the bylaws. The bonus can only be considered as discretionary when its conditions are too general or there are no conditions to granting the premium.

Conclusion

The employer should be more aware of applicable legal regulations when introducing certain bonuses into the company’s documentation. The fact that they introduced into the bylaws the measurable conditions on granting the bonus and the additional provision that granting the bonus depends on their final decision may be ineffective and lead to disputes with the employees.

Russia

Why Does an Employee in Russia Have No Obligation to Compensate Court Costs to His Employer?

An employee has no obligation to compensate court costs to his employer even if he loses an action in court against his employer.

The Russian Constitutional Court ruled that the provision of the Russian Labour Code, according to which employees shall be exempted from payment of fees and court costs when filing applications to the courts based on claims arising from labour relations, does not contradict the Russian Constitution.

A Russian company challenged the constitutionality of Article 393 of the Russian Labour Code, according to which employees shall be exempted from payment of fees and court costs when filing applications to the courts based on claims arising from labour relations, including those concerning non-compliance or improper compliance with the civil-law terms of employment contract. In its complaint, this company stated that such provision of the Labour Code contravenes the Russian Constitution and prevents the employer from recovering court costs regarding remuneration of employer’s representative in court in case the employee loses the case.

The Constitutional Court of the Russian Federation ruled that the Russian Constitution provides for the obligation of the state to ensure proper protection of rights and interests of employees as a weaker party to labour relations (decision dated October 13, 2009, No. 1320-O-O). In this relation, the exemption of employees from payment of fees and court costs when suing against their employers does not contradict the constitutional principle of equity.

Conclusion

The abovementioned exemption establishes interests of employees, who are always financially and organizationally dependant on their employers. Such exemption serves as a procedural guarantee for employees when resolving labour disputes in Russian courts.
 

Belarus

 
Under the General Rule, a Belarusian Company is Required to Obtain a License in order to Hire a Foreign Citizen. 

Under the general rule, a company which wishes to employ a foreign citizen must first obtain a license from the Ministry of Internal Affairs of the Republic of Belarus for employing foreign citizens, and the respective citizen must obtain a work permit.

However, a Belarusian corporation with a status of company with foreign investments (i.e. a company, in which a foreign share is not less than USD 20 000) does not have to obtain the aforementioned license in order to hire its chief executive director, being a foreign citizen, and such director does not have to obtain a work permit (just a permit for temporary residency in the Republic of Belarus). The same rule also applies to the founders of a Belarusian company with foreign investments who are private persons and who wish to be employed by the respective company.

Obtaining a license and work permit is also not required with respect to the citizens of the Russian Federation.

It takes approximately 2-3 months to obtain the license in question and work permit upon the due submission of the documents to the competent authority.

Conclusion

Prior to employing a foreign citizen (except for the citizens of the Russian Federation), a Belarusian company should obtain the license for employing foreign citizens, unless it has a status of a company with foreign investments and wants to employ a foreign CEO or its foreign founder. 
 

Magnusson International HR Newsletter