APAC Bulletin - January 2019
25 January 2019
Welcome to the January 2019 edition of our APAC Bulletin covering the latest employment and immigration updates across the region.
We are delighted to have won the Immigration Law Firm of the Year award at the Macallan ALB (Asian Legal Business) Hong Kong Awards 2018 and to have been nominated in the Employment Law Firm of the Year and Rising Law Firm of the Year categories.
In October 2018, we co-hosted two very well-attended APAC Employment Law Conferences in Singapore and Hong Kong with our Singapore affiliate firm, Rajah & Tann, which featured a panel discussion on the hot topics of equal pay, #MeToo and family leave rights across Asia Pacific.
We also recently held two HR Breakfast Club sessions. The first focused on workplace investigations, which was an interactive session discussing how to address and investigate potentially severe workplace allegations and concerns effectively. Our second, on 16 January, provided a round-up of the key cases and legislative developments from the last 12 months in Hong Kong and other APAC countries.
Please click here to find out details of our forthcoming events. If you would like the materials for any of our past events please contact us.
Our APAC Bulletin covers recent developments in Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, New Zealand, Philippines, South Korea, Thailand and Vietnam.
We hope you enjoy this edition!
Please click the links below to navigate around the bulletin
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‘Casual’ employees and ‘double-dipping’
The Full Court of the Federal Court confirmed a first instance decision that ‘casual’ employees may be awarded back payment for leave or termination entitlements, despite receiving the benefit of “casual loading” on hourly rates and not being labelled permanent workers. The case, decided by the Court in September 2018, which has sparked some controversy, concerned a ‘casual’ mine worker, Mr. Skene, who was employed by WorkPac Pty Ltd. He was employed under the WorkPac Pty Ltd (Coal) Industry Workplace Agreement 2007 as a casual worker. However, upon termination of employment, Mr. Skene claimed annual leave entitlements under the Fair Work Act 2009 on the grounds that, despite his label and the way he was paid, he was not a casual worker due to his working arrangements.
The court considered a number of factors in order to determine the real nature of the employment relationship. Mr. Skene was paid at an hourly rate and was required to submit timesheets. However, Mr. Skene’s work pattern was regular and predictable – his work shifts of 7 days on 7 days off were set a year in advance - and there was a clear expectation for Mr. Skene to undertake the work. It was determined he was not a ‘casual’ employee. On balance, that aspect of the decision was not so controversial. What was controversial was that this meant that Mr. Skene was entitled to receive backdated employee entitlements despite the fact that he had already received casual loading within his hourly rate.
There has been concern that this decision could make way for ‘casual’ employees to claim back-pay in relation to annual leave and other permanent employee entitlements, leaving employers open to 'double-dipping' as well as significant penalties for not paying their staff the correct entitlements and breaching the Fair Work Act 2009.
WorkPac has not appealed the Full Court decision. However, the Government has introduced a new regulation under the Fair Work Act 2009 to address this so-called ‘double-dipping’ which will allow employers to set off casual loading already paid to an employee against amounts claimed in claims for annual leave and other National Employment Standards (“NES”) entitlements. Employers will only be allowed to do this if the loading is clearly identifiable as an amount to compensate the employee for the relevant NES entitlements.
Flexible working arrangements under the new Modern Award Provisions
Employees employed for more than 12 months, including casual employees, have a right to make a flexible working arrangement request if they require flexibility for a prescribed reason (such as childcare, caring responsibilities, their own disability, if they are over 55, are experiencing domestic violence, or caring for a person experiencing domestic violence).
New provisions regarding flexible working arrangement requests affecting modern award employees came into effect from 1 December 2018. The key changes which these new provisions have brought about, which will require employers to be more careful when dealing with flexible working requests, include the following:
- Where an employer receives a request for flexible working arrangements, the employer is required to confer with and take genuine steps to reasonably accommodate an employee’s request for flexible working arrangements;
- This discussion of the request with the employee must take place before the employer provides their written response to the employee (which they must provide within 21 days of receiving the request); and
- Where no agreement can be reached and the employer decides to refuse a request it must set out comprehensively the reasons for the refusal and set out other flexible working arrangements it can offer the employee.
If any disputes arise, it should be dealt with under the dispute resolution procedure in the applicable award.
Family and domestic violence leave bill passed
The Fair Work Amendment (Family and Domestic Violence Leave) Bill 2018, which was passed on 6 December 2018, amended the Fair Work Act 2009 with effect from 12 December 2018. The amendment provides employees with a new entitlement of 5 days’ unpaid family and domestic violence leave per 12 month period of service, under the NES. Employees may utilise this type of leave where they experience family and domestic violence and it would be impracticable to deal with the impact of that outside their ordinary work hours. Previously, only certain modern award covered employees in Australia were entitled to this, or it was provided at the discretion of the employer, but this amendment extends this entitlement to all types of employees, both permanent and casual.
Further points for employers to be aware of include the following:
- This entitlement is available to all employees and it is not pro-rated for part timers;
- The 5 day entitlement will be available in full at the start of each 12 month period rather than accruing though the year;
- The leave will not accumulate from year to year;
- The leave can be taken in separate periods of one or more days – or shorter periods if agreed;
- Employers may enter into agreement with the employee to extend the leave to more than 5 days; and
- Employers must take steps to ensure that any information given by employees in relation to taking family or domestic leave is treated confidentially as far as possible.
Modern slavery reporting requirements
The Modern Slavery Bill seeks to minimise slavery and labour exploitation and will place reporting requirements onto large commercial organisations with annual revenues of over AUD100 million per financial year. Companies with smaller revenues may have reporting obligations under State laws.
The reporting requirements will commence within 6 months of the Bill receiving assent and becoming an Act of Parliament. Commercial organisations based in or carrying out business in Australia which are caught by the legislation will be required to provide a ‘modern slavery statement’ to the Minister for Home Affairs each financial year.
The modern slavery statement must include descriptions of the following:
- the structure, operations and supply chains of the entity;
- the risks of modern slavery practices within the entity’s operations and supply chains;
- actions taken to assess and address those risks; and
- the effectiveness of the actions and the process of consultation.
This new legislation, which is similar to the NSW legislation, will bring Australia into line with the UK where modern slavery legislation came into effect in 2015.
Payment of entitlements on termination of employment
The Four Yearly Review of modern awards inserted clauses into 89 modern awards relating to payments on termination of employment, which came into effect on 1 November 2018.
The model clauses require payment of an employee's statutory entitlements within seven days of termination. Some modern awards already contain shorter periods for payment of wages (and other amounts) on termination of employment and these are currently under consultation. Also, under the NES, payments in lieu of notice must be paid at the time of termination.
For convenience, many businesses may have paid these amounts in the next pay run after termination. However, depending on the timing, this could be a breach of the Fair Work Act risking penalties of up to AUD63,000 for the employer and up to AUD12,600 for those individuals who are personally involved.
In its last sitting week, the Senate passed the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Bill) in an amended form.
The Bill will strengthen and consolidate whistleblower protections and create a whistleblower protection regime for disclosures of information by individuals about breaches of tax laws or misconduct in relation to an entity's tax affairs. The reforms will, among other things:
- extend the number of eligible recipients. Currently, disclosures are only protected if made to a director, secretary or senior manager, or some other person authorised to receive disclosures. The proposed change will extend this to any 'officer or senior manager';
- provide a carve-out for disclosures about 'personal work-related grievances'. The examples listed in the Bill are broad and will, in most cases, mean the whistleblowing protections will not be available to an employee for a typical workplace complaint (e.g. bullying) assuming that the complaint does not have significant implications for the employer beyond the individual employee who makes the disclosure.;
- provide an avenue for 'public interest disclosures' to Parliament/journalists in some circumstances, based on a broad public interest test;
- extend the protection for whistleblowers who suffer detriment as a result of them making a disclosure;
- broaden the circumstances in which a Court can make orders against a body corporate; and
- remove the complete defense of due diligence to compensatory orders.
The next step is for the Bill, in its amended form, to pass through the House of Representatives. The first scheduled sitting for Parliament is in mid-February 2019.
Update on Hong Kong, Macao and Taiwan Residents working in mainland China
As mentioned in our previous bulletin, as of August 2018, China no longer requires residents of Hong Kong, Macau and Taiwan to obtain employment permits in order to work in mainland China. Further to this, from 1 September 2018, new measures were put in place to allow Hong Kong, Macau and Taiwan residents to apply for mainland residence permits, meaning they will be placed on a more equal footing with mainland residents in terms of being eligible to receive basic public benefits such as those in relation to education and housing. Applicants will generally need to have resided in mainland China for more than 6 months before they can apply for a residence permit. In addition, they will need to either have a stable job in mainland China; hold a legitimate and stable residence in mainland China; or attend a school in mainland China, in order to be eligible.
Whilst these changes mean that it is now considerably easier for any Hong Kong, Macao or Taiwan resident to work in mainland China, the lack of detailed supporting measures accompanying these changes has created some uncertainly for employers in terms of whether these residents should now be treated the same as mainland residents for employment purposes.
Proposed amendments to the PRC Civil Code regarding sexual harassment
The PRC National People’s Congress has proposed amendments to the PRC Civil Code which would potentially impose more onerous obligations on Chinese employers. The draft changes prescribe providing a definition of sexual harassment (which is currently not legally defined at the national level) to include unwelcome behaviour against another person by sexual language or actions or by sexual advances against a subordinate. Notably the definition would extend protections from sexual harassment to men, which are not covered under the current regime. The new laws would also require employers to take reasonable measures to prevent sexual harassment in the workplace, implement procedures for employees to file sexual harassment complaints, and put in place an internal company system for handling those complaints.
Public comment on the proposed amendments closed in November 2018. We will keep you updated on any changes.
New regulations on Labor Protection of Female Employees in the Jiangsu Province
Special Regulations on Labor Protection of Female Employees of Jiangsu Province, which took effect on 1 July 2018, establish comprehensive requirements for employers to satisfy on the issue of sexual harassment. This includes the requirement on employers in the Province to establish internal policies and systems to tackle workplace sexual harassment, to offer training to prevent it, and to provide a working environment free from sexual harassment. This includes the need, under Article 19, to set up robust investigation and complaint systems for when cases arise.
The risks of non-compliance under the Chinese Regulations and Law include liability to pay compensation, fines, and even criminal liability, depending on the offence. Equally as important, if perhaps not more so, are the potential risks to reputation should a high profile case become public, especially in the context of the growing popularity of the #MeToo movement in the Asia-Pacific region. Employers should therefore review their anti-sexual harassment policies and practices to make sure these are clear and effective in addressing complaints and preventing sexual harassment in the workplace.
Shenzhen regulations on the promotion of sex equality
The Shenzhen Municipal Human Resources and Social Security Bureau issued a Notice on 3 July 2018 regarding the implementation of penalties under Shenzhen’s existing sex equality regulations. According to the notice, an employer who has in place any sex-based hiring restrictions will attract a monetary fine of CNY 3,000 if that employer fails to remove those restrictions within the timeframe set by the labor bureau. Similarly, if during the recruitment process, an employer refuses to hire female candidates or stipulates higher job qualification standards based on an individual’s sex, marriage status or pregnancy status, that employer will attract fines in the region of CNY 10,000 to CNY 30,000 depending on the number of candidates affected by its biased hiring practices.
Changes to anti-discrimination laws
The first reading of the Discrimination Legislation (Miscellaneous Amendments) Bill 2018 and the commencement of the second reading debate took place on 12 December 2018.
This Bill proposes various changes to the Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance and the Race Discrimination Ordinance, with a view to enhancing protection against discrimination and harassment. Several recommendations from the Equal Opportunities Commission Report on the Discrimination Law Review are reflected in the Bill. Some key changes proposed are:
- Direct and indirect discrimination against women on the grounds of breastfeeding will be prohibited;
- Protection will be provided against direct and indirect racial discrimination and harassment by imputation. This will mean that a person will be protected against discrimination where a race has been attributed to that person whether or not they are in fact of that particular racial group;
- The scope of protection from sexual, disability and racial harassment between ‘workplace participants’ working in a common workplace will be extended so that even persons who are not employed by the same employer but who work in a common workplace will be protected;
- Direct discrimination and harassment of a person due to the race of that person’s ‘associate’ will be prohibited. ‘Associate’ will replace references to the narrower definition of “near relative” in the Race Discrimination Ordinance. “Associate” in this context includes an individual’s spouse, cohabitant, relative, carer and/or a person who is in business, sporting or recreational relationship with the individual;
- The territorial reach of the harassment provisions in the Disability Discrimination and Race Discrimination Ordinances will be extended to include disability and racial harassment against service providers which takes place outside Hong Kong but on Hong Kong registered aircrafts and ships;
- Respondents in discrimination claims will no longer be able to avoid an award of damages to victims of unlawful indirect discrimination where they are able to demonstrate that the indirectly discriminatory requirement or condition in question was not applied with the intention of treating the individual unfavourably.
Employers should make adjustments to their policies accordingly should this Bill be passed.
Extension to statutory paternity leave
Legislation which was gazetted at the beginning of November 2018 will extend statutory paternity leave from the current three days to five days. The Secretary for Labour and Welfare appointed 18 January 2019 as the date of commencement for this extension. Male employees who meet certain requirements and who have a child born on or after this date will be entitled to five days’ paid paternity leave. They may take those days consecutively or separately for each confinement of their spouse/partner and they may take the leave at any time during the period from four weeks before the expected date of delivery to ten weeks after the actual date of delivery of the child.
Employers should review their paternity leave policies and procedure accordingly to ensure compliance with this change.
The Chief Executive in Council has adopted the recommendation of the Minimum Wage Commission to raise the minimum wage rate from HK$34.5 to HK$37.5 per hour. Subject to approval by the Legislative Council, the revised rate will take effect from 1 May 2019.
Immigration Department policy change for same-sex partners
The Hong Kong Government announced that from 19 September 2018 their Immigration Department will, for the first time, recognise the nature of same-sex civil partnerships. This policy change means that the other party to a same-sex partnership will be able to apply to join their same-sex partner, who has been admitted into Hong Kong, for residence in Hong Kong as a dependant.
Such applications for admission of a dependant will be favourably considered by the Director of Immigration if the individuals meet the normal immigration requirements. As is the case with heterosexual marriages, there should be reasonable proof of a genuine relationship between the applicant and the sponsor; no known record to the detriment of the applicant; and the sponsor should be able to support the dependant’s living at a standard well above the subsistence level and be able to provide him/her with suitable accommodation in Hong Kong.
This revision to the Immigration Department’s policy, which previously only allowed the other party to heterosexual marriages to apply to join their spouse in the country as a dependant, follows the landmark ruling in the Court of Final Appeal in July 2018 regarding a British lesbian identified as QT. QT was initially denied entry into Hong Kong as a dependant of her same-sex partner, who had entered Hong Kong to take up employment, on the basis that their civil partnership was not recognised in Hong Kong. The highest court unanimously decided that the Director of Immigration was wrong to deny QT a dependant visa on that basis.
This policy change has been welcomed by advocates but the Government has been quick to clarify that this does not affect any other policies of the government or other rights under the existing law in Hong Kong.
Setting up and running crèches under the Maternity Benefit Act 2017
As part of the 2017 amendments to the Maternity Benefit Act 1961, the provision of a crèche facility was made a mandatory requirement for every establishment with 50 or more employees. Further to this, the Ministry of Women and Child Development has recently published National Minimum Guidelines for Setting Up and Running Crèches under the Maternity Benefit Act 2017 which provides further detail on certain aspects of the requirement to provide a crèche.
Under the Guidelines, all women employees are eligible to benefit, regardless of whether they are temporary or permanent employees and crèche facilities are required to be provided for all children aged between 6 months to 6 years. The Guidelines also provide that one crèche facility must be provided for every 30 children and the facility must be located either within the establishment itself, within the employees’ neighborhood or at a distance of 500 meters from either the establishment or the employees’ neighborhood. There are also provisions regarding the number of adults and helpers that should be made available for the children and the requirement to establish a crèche monitoring committee.
The intention is for these detailed Guidelines to be used by employers as a point of reference until States enact relevant rules but any rules that are enacted will need to take into account these Guidelines.
HIV and AIDS Act 2017 brought into force
The HIV and AIDS (Prevention and Control) Act 2017 came into force on 10 September 2018. Under the Act, discrimination or unfair treatment against persons with HIV or AIDS in matters of employment is prohibited. The requirement for HIV testing as a pre-requisite for obtaining employment is also prohibited.
A person who is living or has lived with a person who is HIV positive is also considered a ‘protected person’ and also benefits from protection against discrimination on that ground. It is also of note that every establishment which holds HIV-related records of a ‘protected person’ must adopt data protection measures to ensure that those records remain confidential.
Delhi amends the Minimum Wage Act
The proposed 2017 Minimum Wages (Delhi) Amendment Act received the Honourable President’s assent in July 2018. The amendments concern the 1948 Minimum Wages Act and have a significant impact on the National Capital Territory.
One notable change brought in by the Amendment is the introduction of stricter penalties for employers paying less than the minimum wage. This is an offence under Section 22 of the Minimum Wages Act. However, the Amendment has increased the term of punishment from six months to three years. It has also increased the maximum imposed fine for a breach to INR 50,000, ten times the previous maximum amount.
The Amendment details the considerations that the appropriate Government must take into account when fixing or revising minimum rates. These include the skill required for the role and the cost of living of the worker. Further, the Amendment now requires overtime rates to be no less than two times the normal rate of wages fixed under the Act or other Law. Prior to the Amendment, appropriate Governments could fix the rate of overtime.
The Amendment also requires the cashless payment of wages. However two exceptions are prescribed, given the dependence by certain workers on cash payments.
New whistleblower regulation
On 18 September 2018, the Government issued Government Regulation No. 43 of 2018 on Public Participation in the Prevention and Suppression of Corruption. This new Regulation, which revokes and supersedes the earlier Regulation No. 71 of 2000, aims to encourage more whistleblowers to come forward to help uncover schemes of corruption. According to Regulation No. 43 of 2018, a whistleblower whose report proves to be well-founded, as determined by a binding court decision, may be entitled to receive 2% of the total state losses that are recovered, up to a maximum of Rp 200 million (approx. USD 13,500). If the act of corruption involves a bribe, the whistleblower may be entitled to receive 2% of the value of the bribe and/or liquidated value of the seized goods that are disposed of at auction, up to a maximum of Rp 10 million.
Whilst the intention of the new regulation is to encourage more whistleblowers to come forward to help in the fight against corruption, it awaits to be seen whether this will happen in practice as the reward of 2% has remained the same as under the earlier regulation and further, the new regulation has introduced caps of Rp 200 million and Rp 10 million on any reward to be received by a whistleblower which did not feature in the old regulation.
Supreme Court decisions regarding Article 20 of the Labour Contract Act
The Supreme Court has held that differences in working conditions between employees who had been rehired after reaching mandatory retirement age and non-fixed-term employees were not unreasonable in principle. In Japan, companies follow a ‘lifetime employment system’ in which graduates who have been recruited from university are hired with the expectation they will continue working for the company in question until they retire. Such companies also determine a mandatory retirement age, which must be above 60 years as set out in the Act on the Stabilisation of Employment of Elderly Persons. As a way to combat Japan’s increasingly ageing population, the Act also introduced a number of measures employers must take if they set their mandatory retirement age below 65. This includes the option to introduce a system under which current employees are rehired after they reach the mandatory retirement age (if they still wish to be employed). This option and the extent to which employers can rehire such employees on different working conditions is the issue which was considered in this case.
The case concerned a number of tanker truck drivers who, after reaching the mandatory retirement age, were rehired as fixed-term employees. On being rehired, the drivers were given a number of different terms and conditions in relation to pay, bonuses and allowances – all of which differed to the terms and conditions imposed on non-fixed-term employees. As a result, they asserted their employer had breached Article 20 of the Labour Contracts Act which prohibits unreasonable differences in working conditions between fixed-term and non-fixed-term employees.
In this case, the Supreme Court held that it was not unreasonable to impose different terms and conditions on the rehired employees (other than in regards to overtime allowance and allowance for regular attendance) and that a distinction can be made in respect of the nature of rehired employees and non-fixed-term employment. Importantly, it stated that in the determination of whether differences in wages between the rehired employees and non-fixed-term employees are reasonable, comparing total wages is not sufficient and rather the purpose of the wages and other allowances should be taken into account. In reaching their decision, the Court also made reference to the fact that the rehired employees, on meeting certain conditions, were entitled to receive their pension and that an adjustment allowance was paid by the employer to the rehired employees due to collective bargaining between the employer and a labour union.
This case was brought by a fixed-term employee who argued that the differences in relation to several allowances paid to fixed-term and non-fixed-term employees were in breach of Article 20 of the Labour Contract Act. The employee sought a declaration that fixed-term employees were entitled to all the same allowances as non-fixed-term employees, as well as payment of the value of the difference in the allowances paid between the two types of employees.
The Supreme Court held that the employee’s claim for declaration and payment based on the employment contract had no grounds, but on reviewing the rationale behind each of the allowances in turn, held that the differences in relation to non-accident, work, meal, full attendance, commuting and family allowances were unreasonable. It did, however, consider that the difference in housing allowances was reasonable. This was because it considered that the housing costs incurred by non-fixed-term employees could be significant, as they would need to relocate their residence along with the relocation of their workplace during the term of their employment. This need was not the same for fixed-term employees as their workplace was not expected to change during their short term of employment.
New data protection rules in Japan
In the light of the GDPR, the EU and Japan have agreed to recognise each other’s data protection regime as providing adequate protections for personal data - marking the first reciprocal recognition of the adequate level of data protection between the EU and a third country. This agreement will allow data to move between companies in the EU and Japan without the need for stringent safety checks or specific transfer agreements.
It will be important, however, that those operating in Japan grasp the differences between the GDPR and Japan’s own data privacy law, namely the Act on Protection of Personal Information (APPI). Notable differences include the greater protection provided by the GDPR in regards to data subjects and also the stricter approach taken by the GDPR in relation to the processing of personal data. It is uncertain whether there are any planned amendments to the APPI to this effect.
Reinstatement remains the remedy for unfair dismissal
The Industrial Court in Malaysia has ruled that when an employee initiates an action against an employer for being dismissed without just cause and excuse, he must make a representation to be reinstated to his former employment. This will be the primary remedy sought for by the employee concerned as provided for in Section 20 of the Industrial Relations Act 1967 (“IRA”). Nevertheless, in the event reinstatement is not an appropriate remedy upon consideration of factors such as the current relationship between the parties, or, if the employee concerned has found other means of employment, then the Industrial Court can consider making an order for damages to be paid to the said employee instead of being reinstated to his former position. In such instances, the damages payable will be one month’s salary for each year of service (inclusive of all allowances payable). The Industrial Court can also order back wages to be paid of up to 24 months in the event it finds that the employee concerned has been unfairly dismissed. This is to compensate the said employee for the loss of income experienced during the months that he/she remained unemployed. It must be noted that the Industrial Court does not have any jurisdiction to decide on other claims for damages over and above what has been stated above. If the employee concerned is not prepared to accept reinstatement and is only looking to claim for damages to be paid by his/her ex-employer for the dismissal, then the Industrial Court does not have the jurisdiction to adjudge such matters. The employee concerned will have to seek these reliefs at the civil courts.
Draft Employment Compensation Law introduced
In an attempt to refine the existing Workmen’s Compensation Act, Myanmar introduced the Draft Employment Compensation Law 2018 (the "Draft Law") in August 2018. It sets out a number of proposals and guidelines in relation to injuries arising out of employment. It puts forward amendments to the existing Act, including in relation to employer responsibilities, employee’s rights and penalties for non-compliance. The Employment Compensation Supervisory Committee (the "Committee") will also be established.
In relation to employer responsibilities, the Draft Law states that if an employee is injured in the course of his or her employment, the employer will be liable for compensation. Furthermore, it gives employees the right to complain to the Committee if the employer fails to pay. Other amendments include the duty on the employer to notify the Committee of all incidents of this nature. In addition, the Draft Law also provides that, for certain specified types of businesses, where an employee contracts a form of disease within 6 months of working in that particular business, then such disease will be deemed as an employment-related disease.
Removing some burden from the employer, the Draft Law recommends that there should be no liability where the employee has sustained injuries during the course of employment but they were sustained under the influence of alcohol, as a result of a breach of safety regulations or where the employee has failed to take appropriate safety precautions.
Finally, in relation to penalties for failure to cooperate with the Committee, the Draft Law provides that, if an employer is found guilty of refusing to provide the necessary documents as required by the Committee, he may be sentenced to imprisonment for a term not exceeding 3 months or with a fine of up to 3,000,000 MMK or both (Section 36). If an employer is found guilty of hindering an investigation conducted by a member of the Committee, he/she may be liable to imprisonment for a term not exceeding 2 years (Section 37). Finally, if an employer is found guilty of failing to make compensation payments to his employees, he/she may be sentenced to imprisonment for a term not exceeding one year (Section 38).
Enhanced domestic violence protection
The Domestic Violence - Victims’ Protections Act 2018, which is due to come into force on 1 April 2019, will amend the Employment Relations Act 2000, the Holidays Act 2003 and the Human Rights Act 1993. This will mean that protection for persons affected by domestic violence will be enhanced in the workplace. Persons affected by domestic violence will be allowed to request flexible working arrangements for up to two months and employers will be required to provide up to ten days’ paid domestic violence leave on an annual basis. The intention of these changes is to lessen any financial impact of domestic violence suffered by individuals.
Equal pay claims
The Equal Pay Amendment Bill seeks to streamline the process for lodging equal pay claims for those who work in roles predominantly performed by women. If enacted, this would mean that certain obligations would be placed on employers who receive an equal pay claim from an employee.
Under this new law employers would be required to notify, within 20 days of receipt of the claim, all other employees who work in similar roles as the claimant that an equal pay claim has been filed. A claim will only be considered ‘resolved’ if the claimant and the employer reach agreement as to an appropriate level of remuneration which does not discriminate between male and female employees. Employers may also be subject to an auditing process following a claim to ensure that the agreed remuneration is maintained. It is not yet clear whether these provisions will apply to all employers or only certain employers who meet certain thresholds.
The intention of the new provisions is to eliminate and prevent discrimination on the basis of sex in the remuneration and employment terms and conditions for work. If the Bill continues to progress and is adopted, it is anticipated that these new laws will come into force in the second half of 2019.
New Mental Health Act
New legislation which was enacted on 20 June 2018 requires employers to prepare and implement appropriate policies and programmes on mental health in the workplace. The policies and programmes should: raise awareness on mental health issues; tackle the stigma and discrimination often associated with mental health conditions; identify individuals at risk and provide support to them; and facilitate access to treatment and support for individuals with mental health conditions.
Changes to allowable wage deductions
Generally, wage deductions by an employer are not allowed except in certain circumstances. For example, a deduction can be made with the employee’s written consent for payment to a third party provided that the employer does not receive any monetary benefit by doing so. The Department Order No. 195 of the Department of Labor and Employment, which was issued on 27 July 2018, now allows an employer to pay itself provided that written consent is obtained from the employee.
Entitlement of qualified employees with disability to labor standard and other statutory benefits
Department of Labor and Employment Labor Advisory No. 14, Series of 2018, was issued on 13 September 2018, and emphasised that all qualified employees with a disability shall be entitled to all the rights and benefits granted under the Labor Code of the Philippines, as amended, unless otherwise expressly provided. Employers are not prohibited from granting such other benefits above and beyond the minimum requirements of the law. In addition, all qualified employees with a disability shall be mandatorily covered under the Social Security System, PhilHealth, and Pag-IBIG. Finally, all qualified employees with a disability shall be entitled to statutory leave such as Service Incentive Leave, Maternity Leave, Paternity Leave, Solo Parent Leave, leave under the Anti-Violence Against Women and their Children Act of 2004, and Special Leave for Women.
Occupational safety and health standards compliance
New legislation was enacted on 17 August 2018 and its implementing rules and regulations were issued on 6 December 2018 reminding all establishments, projects, sites, and all other places where work is being undertaken in all branches of economic activity to comply with the appropriate standards of occupational safety and health based on the number of their employees, nature of operations, and the risks or hazards involved.
Overtime and holidays
The Supreme Court has held that eight hours or less of work undertaken whilst on holiday should not be considered overtime and therefore, overtime premiums are not payable in these circumstances (Supreme Court decision, No. 2011Da112391, rendered on June 21, 2018). It was held that the first eight hours are paid at the holiday rate only. This case considered employees who worked whilst on holiday and whether they should be receiving overtime payments (at a rate of 200%) on top of the holiday pay premium (at a rate of 150%) already payable. The Court clarified that only those hours in excess of 8 hours would attract the overtime rate.
Amendments to Occupational Safety and Health Act
The Korean Government has recently approved a bill which will substantially amend the Occupational Safety and Health Act and will extend employers’ health and safety obligations if the bill is enacted. Below are some key changes:
- Representative directors of certain companies will be responsible for obtaining board approval and putting into place a health and safety plan on an annual basis. Failure to do so will attract fines of up to KRW 10 million.
- Companies will be liable for their outside contractors’ health and safety both within the companies’ place of business as well as at other workplaces it provides or designates.
- Certain large franchise businesses will be required to prepare and implement health and safety programmes covering the employees of their franchisees.
- There will be a prohibition on companies contracting out of certain types of hazardous work.
- The amended Act will have a wider reach and will provide protection to ‘workers’ as well as ‘employees’.
- Workers will be entitled to a right to suspend work and evacuate when there is an urgent risk of an industrial accident.
- The Act will impose stronger penalties in the event an employee or contractor dies due to violation of health and safety rules.
New decree amending key labor issues
The Government in Vietnam recently issued Decree No. 148/2018/ND-CP which has amended one of the most important pieces of legislation on the implementation of the Labor Code. Decree No. 148, which took effect on 15 December 2018. This has brought about considerable changes which are highlighted below:
- Certain provisions in labour contracts are no longer mandatory, including those in relation to salary review and increase, working time and rest time, labour protection equipment and social and health insurance. The new legislation now allows the parties to refer to the employer’s internal labour regulations in relation to these provisions;
- Probation periods and job practice or apprenticeship periods have been removed from the definition of 'working period’ used for the calculation of severance allowance and job-loss allowance, whilst periods where an employee is off work for treatment/recovery after labour accidents or occupational diseases and periods where an employee is off work for paid citizen’s obligations as required by law have been added to the definition of ‘working period;
- Employers now have up to 30 calendar days from the date of termination to pay the final termination payments to its employees arising out of M&A transactions. Under previous provisions, employers were allowed only 7 working days to make the final termination payments;
- The new provisions have clarified that the following details must be included in any retrenchment notice to the provincial labour authority: name and address of the employer and its legal representative; total number of employees and the number of retrenched employees; the reason for retrenchment; the termination date; and the specific amount of job-loss allowance to be paid;
- The requirement to provide at least 3 invitations to a disciplinary hearing before an employer can conduct the hearing in the employee’s absence has been abolished. Employers are now required to send only one invitation to the disciplinary hearing to an employee;
- The new provisions have also clarified that as long as a minimum of 5 accrued working days of absence in a month is met or a minimum of 20 accrued working days of absence in a year is met in relation to employees who are absent from work without a legitimate reason, the employer may commence disciplinary procedures and there is no need to wait until a full month or full year from the first day of absence has passed in order to do so.
Changes to Labour Protection Act
Proposed amendments to the Labour Protection Act 1998 have been approved in draft but it is expected that these amendments will be finalised and enacted as law some time in 2019. Some key changes are listed below:
- Under the new regulations, employers will be required to obtain their employees’ consent to a change of employer. Examples of where this will be relevant is where an employer is changing its legal entity or transferring to or merging with another legal entity.
- The maximum cap for severance pay will be increased from 300 days at the latest wage rate for an employee with 10 or more years’ service to 400 days for an employee with 20 or more years’ service.
- Employees will be granted a minimum of 3 days’ paid personal business leave per year.
- Maternity leave will be increased from a minimum of 90 days to 98 days (14 weeks) per pregnancy and will extend to leave taken for pre-natal care such as for attendance at doctor’s appointments.
- A process will be introduced for employers to notify employees of the relocation of their business premises, either to a new location or to other existing premises, and there is provision for an employee to refuse to work at a different location.
Asia Pacific 亞太區
We have been operating in the Asia Pacific for many years, working with our clients as they expand and develop their businesses in the region, and as they seek to do business in Europe and the UK.