The Global Employer TM - ADAPT · Vazquez case, the National Labor Court A recent en banc decision (called “ fallo plenario ” in Argentina) of the National Labor Court of Appeals

Volume XVI, No. 1

EmploymentGlobal

The Global EmployerBringing Light to Employment Law Changes and New Developments

TM

Contents

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Argentina Recent ruling on penalties due to unlawful intermediation of employment

Austria Closing the gap

Brazil Split of salary and contribution of employers to severance fund deposits (FGTS)Requirements and limitations provided under Brazilian laws concerning employeeinterviews within internal investigations

France Recent employment law developments

Hong Kong Special administrative region’s first minimum wage announced

Italy The new reform of Italian labour disputes: an attempt to alleviate the workload of Labor Courts

Malaysia The Malaysian Whistleblower Protection Act of 2010

Mexico New Employees Food Assistance Law

Spain Major Spanish employment and labor law reform package confirmed and passed into definitive legislation

Sweden Update on Swedish Legislation

United States The changing labor landscape: what every employer should know about the NLRB’s August decisions

From the Bookshelf

Baker Showcase

Locations Worldwide

Bringing light to employment law changes and new developments The Editors Baker & McKenzie’s Global Employment Practice Group is pleased to present its 46th

issue of The Global Employer™ entitled “Bringing Light to Employment Law Changesand New Developments.”

This issue contains a collection of articles on legal developments from 11 jurisdictionsthat examine changes to labour laws, employment practices, and benefits issues. Theglobal economy is still affecting change on the employment landscape with newlegislation being passed in many jurisdictions. The challenge for the multinationalemployer is to stay informed of these changes and the effects they will have on theworkplace and their employees.

We have several articles that deal with new employment legislation – the new law inAustria designed to reduce the pay gap between men and women; the ground-breakingMinimum Wage Ordinance in Hong Kong; the 2010 Malaysian WhistleblowerProtection Act; and the Employees Food Assistance Law in Mexico are all discussed inthis edition.

Other jurisdictions have reformed or amended existing employment laws such as thereform of the French retirement scheme; the reform of certain procedural aspectsgoverning Italian labour disputes; Spain’s major employment and labor law reformpackage; and amendments to current Swedish legislation.

Finally, we have articles from several jurisdictions that further clarify existing laws andpolicy, such as the recent ruling in Argentina concerning unlawful intermediation ofemployment; the requirements and limitations that must be observed during aninvestigative proceeding in Brazil; the required contributions by Brazilian employersinto severance fund deposits; and the effect that the NLRB’s August decisions will haveon U.S. employers.

Denise R. Gerdes (Chicago)Tel: +1 312 861 [email protected]

Jeffrey H. Kessler (Chicago)Tel: +1 312 861 [email protected]

For more information regarding the Global Employment PracticeGroup, please contact:

Paul Brown (Sydney)Tel: +02 9225 [email protected]

J. Richard Hammett (Houston)Tel: +1 713 427 [email protected]

Manuel Limon (Mexico City)Tel: +52 55 5279 [email protected]

Alex Valls (Barcelona)Tel: +34 93 206 [email protected]

Our Global Employment Practice includes more than 400 locally qualifiedpractitioners in 39 countries. We have more lawyers with mastery of the subtleintricacies of labor, employment, immigration and benefits issues in morejurisdictions around the world than any other leading law firm. Chambers Global2010 ranks both our Global Employment and Global Immigration practices as Tier 1. Baker & McKenzie is recognized by PLC Which lawyer? as one of the topGlobal 50 law firms with our Global Employment practice ranked in 23 countries in2010, and we are among the 10 firms US general counsel list most often as “go-to”advisors on employment matters.

Introduction

The Global Employer 4

Recent ruling on penalties due to unlawfulintermediation of employment

News from Argentina

Although this is not a binding decisionfor other judicial districts, it is a veryimportant precedent. This decision hassignificant relevance due to theeconomic impact on the Real Employer,because said user of the services mustacknowledge the employmentrelationship as a direct relationship, paythe severance along with the penalty,and may be liable for the social securitycontributions.

Intermediation Under ArgentineEmployment Contract Law(“ECL”)

Argentine ECL authorizes theoutsourcing of specific work or servicesrelated to the normal and habitualbusiness of a company with acontractor. Said contractor must directthe work or services and is responsiblefor the result of such work or service.

Intermediation of employment appearswhen the Formal Employer (the onethat registers the employee in itsrecords, pays salaries and social securitycontributions) provides the RealEmployer (the one that does notacknowledge a direct relationship withthe employee) with one or moreemployees that in fact render servicesfor the Real Employer, under thedirectives and supervision of said user,with the tools and materials of saiduser, etc.

The ECL only authorizes the lease of

employees through authorizedcompanies that must be registered astemporary agencies. The law requiresthat said lease of staff be justified withthe extraordinary need of the user, andfor said limited period. The law doesnot accept the mere intermediation ofpermanent staff through outsourcingentities or through lease of employees.

The ECL sets forth joint and severalliability in all these cases (outsourcingof a work or service, lease of staff, orunlawful intermediation). However, itwas not clear what additionalconsequence or sanction was applicableto the cases in which there wasunlawful intermediation, besides thepotential penalty from the laborauthority for infringement of the law.

Scope of the Decision inVazquez

Before the decision issued in theVazquez case, our courts have debatedwhether the sanction applicable to theemployers who failed to register theiremployees (thus failing to pay the socialsecurity contributions and otheremployer liabilities) was also applicableto the case of unlawful intermediation,in which the employment wasregistered and declared by a FormalEmployer.

The chambers of the National LaborCourt of Appeals were divided. Priorto the Vazquez ruling, some decided

that the sanctions due to lack ofregistration (a penalty in the form of anaggravated severance) should not applyto this kind of case because the employeewas duly registered by the FormalEmployer. However, other chambersdecided in the opposite way, arguing thatfor the Real Employer there was anunregistered employment relationship.

These opposite decisions are the basisfor the en banc ruling that we areanalyzing herein. According to theArgentine system, judicial precedentsare not binding for courts. In fact, acourt decision is only applicable to theparticular case it is deciding. However,when there are controversial andopposite decisions of the differentchambers of the National Labor Courtof Appeals, parties to a lawsuit areallowed to file a petition for achievingunified criteria on the issue inquestion. This petition gives rise to anen banc judgment, where the tenchambers of the National Labor Courtof Appeals vote to define and unify thelegal doctrine regarding the issue raisedto an en banc decision. The decisionderived from an en banc judgment issignificantly relevant since for futureand for similar cases such doctrine shallthen be applied by all lower courts andby all of the chambers of the Court ofAppeal. Such ruling may only bereplaced by a new en banc judgment.

By means of the en banc decision in theVazquez case, the National Labor Court

A recent en banc decision (called “fallo plenario” in Argentina) of the National Labor Court of Appeals (withjurisdiction in the Buenos Aires District) in the case Vazquez vs. Telefonica de Argentina S.A., held that unlawfulemployment intermediation through an intermediary (the “Formal Employer”) is to be defined as irregularemployment with the “user” of the services (the “Real Employer”) and subject to all the penalties of irregularemployment.

of Appeals ended the debate. Under theruling, the aggravated penalties applybecause the Real Employer failed toregister the employee (i.e., Ms.Vazquez) in its employment records,despite the fact that said employee waserroneously registered by the FormalEmployer.

Applicable Sanction Due toIntermediation

The National Employment Law No.24,013 and the Tax Evasion andPrevention Law No. 25,345 provide foradditional indemnification in caseemployers fail to register therelationship in the mandatory laborbooks.

Said special indemnification is grantedwhen: 1) the employee demands his orher registration to their employer priorto his or her termination; and 2) theemployee sends a copy of said demandto the AFIP (National Tax Authority)within 24 business hours after havingrequested it from the employer.Therefore, the fines set forth in Section8 of Law No. 24,013 (there are twoother possible fines described inSections 9 and 10 of the Law but theydo not apply in case of intermediation)may only be enforced whenever theemployee previously fulfills bothrequirements (the demand to theemployer and the notice to the AFIP).

According to Section 8, employers whofail to register the existence of theemployment relationship shall pay 25percent of all accrued remuneration.Under no circumstance shall thiscompensation be lower than three timesthe best regular and habitual monthlysalary of the employee.

In addition, Section 15 rules that if theemployee is being terminated for anyreason whatsoever two years after his orher demand of registration, theemployer would also have to pay theterminated employee an additional 100percent of the regular mandatory

severance pay based on seniority paidto the employee upon his or herdismissal without just cause.

Finally, in the case of employees whodo not demand their registrationduring the employment relationship,and whose employment relationshipsare not duly registered in the laborbooks at the time of their respectivedismissals, Law 25,323 sets forth aspecial indemnification equivalent toan additional 100 percent of theregular mandatory severance pay basedon seniority paid to employees upontheir dismissal without just cause.

Although it was not mentioned by theCourt in the Vazquez decision, it islikely that the additional compensationset forth by Law 25,323 that penalizesunregistered employment relationshipswill apply to intermediation cases.

Furthermore, there is an additionalindemnification equivalent to 50percent of the mandatory severancepay for those employees who file legalactions in order to collect the paymentof their severance. This additionalindemnification is typically part of thepackage claimed when the employeeterminates the relationship due to theReal Employer’s lack ofacknowledgement of said employment(constructive termination).

Vazquez Ruling Impact onSocial Security Obligations

The recognition of employment by theReal Employer implies registering theemployee in its payroll book andissuance of work certificates as a directemployee.

This acknowledgement of said directrelationship could trigger an additionalissue that was not discussed in theruling. This issue is related to the socialsecurity contributions that, pursuantto Argentine Law, all employers mustpay for each registered employee,along with the mandatory

withholdings. Therefore, this rulingwill trigger a new debate aboutwhether the Real Employer is obligedto pay social security contributions andwithholdings for that employee,despite the fact that the FormalEmployer already paid them.

Considering that the Vazquez ruling isvery recent, it is not clear whatcriteria the Tax Authority will followregarding this issue. However, it wouldbe reasonable to hold that thecontributions and withholdings weremade by the Formal Employer, so nodamage was produced to the socialsecurity system. Still, this is an issuethat would need to be defined by theTax Authority and the Courts, in lightof the current scenario following theVazquez ruling.

Conclusion

Foreign companies doing business in

Argentina must be aware that this en banc

decision in the Buenos Aires district

constitutes a serious threat to their model of

engagement of personnel through

contractors or temporary agencies due to

headcount restrictions. Furthermore, other

jurisdictions may follow the legal doctrine of

this case. This ruling has a significant

impact on said model of engagement, and

triggers uncertainty on the social security

contributions and withholdings.

Diego Bongiovanni (Buenos Aires)Tel: +54 11 5776 [email protected]

Daniel Orlansky (Buenos Aires)Tel: +54 11 4310 [email protected]

5January 2011

Paige Friddle

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Return to Table of Contents


Closing the gap

News from Austria

Within the member countries of theEuropean Union, Austria is one of thelast countries to address the issue ofequal pay. According to recentpublications, full-time female employeeshave to work approximately 70 daysmore per year in order to achieve thesame yearly income as that of their malecolleagues. In other words, women stillearn 18 to 23 percent less than theirmale colleagues in comparablepositions. In 2004, Austria implementedthe EU-Directive 2000/78/ECestablishing a new general frameworkfor equal treatment of men and womenin the workplace as stipulated in theAustrian Act on Equal Treatment, eventhough equal pay laws had already beenin effect for more than 30 years. Thus,the demand for equal pay is not new,but it has recently become a hot topicamong the public as well as thepoliticians. The Austrian Governmenthas listened to these demands and the

new law will take further steps toreduce the existing salary gap, since thecurrent law does not sufficientlyprotect women in this regard. Lack oftransparency has turned out to be oneof the crucial issues and Austria willnow follow the example of othercountries since greater transparency ofincome within a company is a vitalprerequisite for preventing incomediscrimination and closing the existingsalary gap.

Without apparent justification, womenentering the workforce are oftendirectly or indirectly discriminatedagainst through a job grade scale that isdifferent from that of male employees.Most employees are subject to acollective bargaining agreement whichsets forth a minimum salaryrequirement based on the initial gradingby the employer and men seem to beconsistently graded higher.Discrimination on the entry level oftenalso includes differing treatment,without reason, when it comes to theacknowledgement of seniority.Seniority is also an important factor inassigning job grades and in determiningthe salary. Throughout the continuedemployment relationship men tend toreceive more frequent and larger payraises, bonus payments and overtimepay than their women co-workers withsimilar seniority.

Still, court claims remain uncommon,largely because female employees arereluctant to take action that mightprejudice their jobs. Employeestypically prefer to seek advice andinformation from the Non-Discrimination Commission or from

the Equal Opportunities Lawyer. TheCommission has the power todetermine whether an act ofdiscrimination has occurred and canformally request that the employerremedy the breach. The Commissioncan also seek declaratory action, but ithas no power to impose a penalty onthe employer or to award compensationto an employee.

Discrimination claims can still bebrought in the labor courts by theemployee or the Federal Chamber ofEmployees. However, female employeessuing their employers as a result of theCommission’s report still face riskingtheir employment and they incur highcosts: Even though the burden of proofwas reversed by Austrian legislature in2004, it has not helped due to the lackof an inquisitorial system in suchproceedings. Therefore, as a first stepthe Non-Discrimination Commissionand the Equal Opportunities Lawyershall now be given the right to legallyobtain information from the Austriansocial security authorities with regardto the income data of comparableemployees.

Furthermore, the current draft for thenew law sets forth a new obligation forcompanies of a certain size to regularlyperform an internal salary study.Beginning in 2011, companies withmore than 1,000 employees will berequired to issue such a salary report.Companies with fewer than 1,000employees, but more than 150, will berequired to issue income reportsstarting in 2012. Companies with lessthan 150 employees will not be subjectto this new regulation in order to

In the next few weeks, a new law will come into force that is designed to improve income transparencywithin companies and reduce the pay gap between men and women.

7January 2011

protect individuals and take dataprotection rights into account. The newlaw will state in detail the properprocedures for completing these reportsand instructs that they must keepidentity information confidential.Whereas employers had to issue suchreports once a year in the first draft ofthe new law, the current draft requiresthat the reports be prepared every twoyears. Employers have to inform theworks council of the findings in thereport and the works council will beentitled to demand consultations withthe employer. If there is no workscouncil, the employer must publish thereport on an internal bulletin board orotherwise make it available to theemployees within the company. Thecontents of the report must remainconfidential and all informed personsare subject to this duty ofconfidentiality. Informed employeesbreaching this duty may be punished bya penalty amounting to a maximum ofEUR1,500. This penalty has recentlygiven rise to many complaints and is stillunder debate, as employers will not be

subject to any penalty in the event thatthey fail to prepare the salary report.

The new regulations will be integratedinto the existing Austrian Act on EqualTreatment. Further important changesaiming at minimizing the gender paygap shall be as follows:

Beginning in 2012, in jobadvertisements, employers mustpublish the statutory minimumsalary according to the applicablecollective bargaining agreement aswell as state their willingness to payamounts in excess of this minimum.After a first warning, employers canbe fined up to EUR360 if they fail todo so.

As to disabled persons, protectionagainst discrimination will beextended to other persons who havea close relationship with anypersons showing a protectedcharacteristic (“discriminationthrough association”). The protectionnot only covers relatives (siblings,

children, parents, spouses and lifepartners) but also other persons whohave a social or ethical duty to helpand assist disabled persons.

The minimum damages to beawarded in harassment cases will beraised from EUR720 to EUR1,000.

Thus far, politicians are still reluctant toimplement more rigorous laws to forceemployers to treat men and womenequally. It remains to be seen if thesecurrent steps, in particular a highertransparency of income within acompany, are a suitable means foreliminating income discrimination andclosing the existing gender pay gap.

Simone Liebmann-Slatin (Vienna)Tel: +43 1 24 [email protected]

Split of salary and contribution of employers toseverance fund deposits (FGTS)

News from Brazil

In Brazil, each month all employers are required to deposit, in a blocked bank account, eight percent of theiremployees’ compensation. This is the so-called Severance Fund Deposit (“FGTS”).

withdrawn by employees upon theirretirement, as well as in certain specialcases, such as buying a house orparticularly, termination of employment,without cause.

In July 2010, the Ministry of Labor andEmployment enacted NormativeInstruction No. 84, which provides

general guidance on the procedure to beadopted by the auditors of the Ministryof Labor and Employment wheninvestigating companies in relation to thecollection of the FGTS. The “news” isthat this Normative Instruction differsfrom the prior Normative Instruction(No. 20, December 20, 2001) that dealtwith the same matter and it contains a

In addition to the monthly contribution,in cases of termination without cause,companies are required to pay a fine of40 percent of all amounts existing in anemployee’s FGTS account on the day oftermination, plus another ten percentover the FGTS balance for the purposeof updating the FGTS funds. Theamounts deposited in this fund may be

Paige Friddle

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clause stating that the severance fundshall be collected over the portion of thesalary paid abroad to foreign employeesproviding services in Brazil under anemployment agreement.

In fact, although this issue is currentlybeing considered a “new” tendency ofthe Ministry of Labor and Employment,the truth is that this matter is not new atall. This is because since 2005 theMinistry of Labor and Employmentalready understood that the part of theremuneration paid abroad should beconsidered as salary for all purposes(including the collection of the FGTS)and such understanding wasconsolidated in a Technical Note(Technical Note No.02/CGIg/GM/MTE of the GeneralImmigration Coordination Office of theMinistry of Labor and Employment).However, the auditors of the Ministry ofLabor and Employment, for somereason, did not focus their investigationswith regard to this matter.

In view of the Technical Note mentionedabove and based on the fact that underBrazilian Labor Law, when the servicesare provided in Brazil, in principle, theemployment contract is being fulfilledin Brazil and therefore is subject toBrazilian legislation rules and toBrazilian labor rights (i.e., Christmas

bonus, vacation payment, severancefund deposits – “FGTS” etc). Employershave always been warned that the “splitof salary,” although relatively common,could ultimately be harmful.

Employers should also be warned onthe risks related to the payment ofsalaries abroad which basically are (i)labor claims filed by an employee,alleging that the amount that was paidoutside Brazil, must also be consideredfor purpose of calculating the BrazilianLabor rights, labor and terminationpayments, or (ii) inspections by theauditors of the Ministry of Labor andEmployment and of the Social SecurityInstitute, and consequently, issuance oftax assessments against the company fornon-payment of social securitycontributions and labor rights(including the FGTS) for the portion ofthe remuneration paid abroad.

In order to minimize (but noteliminate) the potential risks in cases ofsplit of salary, an employer shouldmaintain a relationship between theexpatriate and the company abroadpaying the portion of expatriate’scompensation in order for the company

to be able to argue that thecompensation received abroad relates tospecific services provided by theexpatriate to the foreign payer, and thatthere is no link with the work he or sheperforms in Brazil to the Brazilianemployer. This argument is not quitestrong, but may increase the chances ofsuccess for the company in the eventthat an assessment or labor claim isfiled.

As stated above, in reality, NormativeInstruction No 84 of July 13, 2010 onlyincluded a specific clause stating thatthe severance fund shall be collected onthe portion of the salary paid abroad toforeign employees providing services inBrazil under an employmentagreement. The understanding of theMinistry of Labor and Employment,even before the enactment of thisNormative Instruction, was that thiswas to be the case.

Although we have not noticed asignificant increase of investigations bythe auditors of the Ministry of Laborand Employment in this regard, webelieve that this may increase during theupcoming months. It is also valid tostress that under Brazilian Law, FGTScontribution is subject to a 30-yearstatute of limitations. This means thatLabor authorities have 30 years tocharge any employer that did not pay orhad paid less than the amount due asFGTS contributions to its employees.

Ana Paula Vizintini (Rio de Janeiro)Tel: +55 21 2206 4913 [email protected]

Camila Vieira (Rio de Janeiro)Tel: +55 21 2206 4936 [email protected]

Paige Friddle

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9January 2011

Requirements and limitations provided underBrazilian laws concerning employee interviewswithin internal investigations

News from Brazil

One measure that employers can adoptto clarify the facts in internalinvestigations is the interview of theinvolved or suspected employee(s). Inthis regard, the employee can be invitedto a confidential meeting for the purposeof providing the employer withclarification of the facts. The employee’sparticipation in interviews is, however,not mandatory by law even if providedfor under the company’s code of conductor other policies.

As further explained below, althoughemployee interviews in internalinvestigations are admissible, theinterviewed employee may refuse toattend the interview, to talk, to provideany kind of information, or to tell thetruth. As a general rule, and dependingon all of the circumstances of the specificcase, employees cannot be terminatedfor cause for refusing to cooperate. It is,however, important to note thatemployers may, under Brazilian laws,dismiss employees without cause bymaking the severance payments due to aterminated employee.

Another aspect that must be taken intoaccount is that the employer’sinvestigation is limited to the employee’s fundamental right tointimacy and privacy as set forth by theBrazilian Federal Constitution, asfollows:

Article 5 – All persons are equal beforethe law, without any distinctionwhatsoever, and Brazilians andforeigners resident in Brazil are assuredinviolability of the right to life, toliberty, to equality, to security and toproperty, on the following terms:(…)X: The intimacy, private life, honor andimage of persons are inviolable, and theright to compensation for material ormoral damages resulting from theirviolation is ensured.

With these considerations in mind, it ispossible to conduct employeeinterviews for the purpose of clarifyingfacts during an internal investigation.Nonetheless, in order to reduce therisks of claims from the employees(e.g., based on allegations of offense tothe rights of privacy, intimacy, or otherlabor rights), below are someobservations concerning internalinvestigation interviews, which, ifobserved, should help the companyminimize possible moral damage-related claims.

The interviews with employeesshould, to the extent possible, beperformed on a confidential basisin order to avoid allegations thatthe company exposed the employeeto judgment and falseinterpretation by his or her

colleagues. If appropriate,interviews should be conductedoutside of the company’s facilities.In this sense, a decision ruled bythe Regional Labor Court of SãoPaulo stated that as long as theinterviews were conducted withconfidentiality and there were noconstraints, bad treatment, oroffense to the honor and dignity ofthe employee, no indemnificationwas due.

The employee should, to theextent possible, be expresslyinformed that (i) all discussions inthe interview should be kept instrict confidence and the employeecannot discuss anything withothers, including his or hersuperiors; (ii) any attorneysconducting the interview for thecompany represent the company,not the interviewee, meaning thatany privilege protection belongs tothe company, not to theinterviewee, and because of that,only the company can decide tokeep or waive such privilege; and(iii) the company does not admitany form of retaliation againstother employees for reporting factsor suspicions to the company.

Whenever appropriate, it should bestressed to the employees that they

IntroductionBrazilian laws do not provide for legal requirements or limitations specifically related to the conducting ofinternal investigations of alleged misconduct. There are general principles in the law that result inrequirements and limitations – some of which are summarized below – that must be observed during aninvestigation proceeding.

1.

2.

3.

questions that would be generallyaccepted as reasonable in onecountry may be offensive whenmade to a Brazilian employee,simply because of language ortoning matters.

From a Brazilian law perspective, itis possible to record and tovideotape the interviews, but theemployees must first be aware ofthe recording/videotaping andmust have previously consented toit. However, in addition to the factthat recording naturally makesinterviewees feel less comfortable,other aspects must be taken intoaccount including, and especially,whether the investigation may haveany type of implication or berelevant for other jurisdictionswith different rules on discoveryand privilege matters (e.g., ForeignCorruption Practices Act – FCPA).

It is also possible to prepare asummary of employees’ answersduring the interview or minutes ofthe proceedings. From a Brazilianlaw perspective, there is noimpediment to prepare a transcriptof the interview and request theemployee to read and attest to theaccuracy of the statements made inthe interview, or signing thetranscript at the end of theinterview (although, as mentionedabove, the employee may refuse tosign it). On the other hand, andsimilarly to our comments aboveon the recording of the interview,preparing an exact transcript ofthe interview and requiring theinterviewee to sign it is notadvisable in all circumstances –especially because it may not beprotected under the attorney-client privilege doctrine – beingsubject to discovery duties in otherjurisdictions outside Brazil.

It is advisable to avoid directaccusations against the employeesof any wrongdoing, in order to

reduce the risks of moral damagesclaims from the employee. To theextent possible, questions shouldbe made in an objective manner,without showing prejudice by thecompany in the sense that theemployee has actually committedany wrongdoing. If the companywants to confront the employeewith documents or other type ofevidence collected and reviewedbefore the interview, thisconfrontation should be made in arespectful manner (for instance, byshowing the document to theemployee as additional help inorder for the employee torecollect the facts, avoiding directaccusations of lying or hiding thetruth).

The employees being interviewedmust be treated with respect andwithout pressure or any type ofaggression. The right of thecompany to perform internalinvestigations with respect to anyviolation of the laws or ethicalrules and policies must be properlyexercised, without any threats oraccusations. The company mustavoid any embarrassment to theinterviewee and always takecultural and language differencesinto account.

Conclusion

In view of the above, when conducting

internal investigations, the company must

take into account the fact that an employer’s

investigative powers are limited by the

employee’s fundamental rights which must

be respected at all times.

Maurício De Lion (São Paulo)Tel: +55 11 3048 [email protected]

André Fonseca (São Paulo)Tel: +55 11 3048 [email protected]

Camila von Ancken (São Paulo)Tel: +55 11 3048 [email protected]


are being invited to cooperate inthe context of a confidentialinternal investigation proceedingconducted by the company. In viewof that, the employee is beingrequested by the company toprovide complete and truthfulinformation. As mentioned above,employees may refuse to cooperateand to participate in the interview,and the company’s ability to takemeasures against the employee willbe determined on a case-by-caseanalysis. Depending on the specificsituation, it may be advisable forthe company to expressly informthe employee that he or she is freenot to participate in the interviewand can refuse to answer specificquestions in the interview.

The employee should be informedthat they can interrupt theinterview at any time and takeshort breaks.

Only a few people should bepresent during the interview inorder to make the employee feelmore comfortable.

Whenever possible, the interviewshould be conducted in the nativelanguage of the employee, because:(i) the interviewee will feel morecomfortable to answer thequestions; (ii) by speaking in theirnative language, an employee’sanswers tend to be more specific,complete, and clear, also allowinginterviewers to better evaluatebody language and other signs(e.g., nervousness, uncertainty,etc.); (iii) it will reduce the risk ofclaims from the employee in theevent that he or she did notunderstand the question well orthat the responses provided werenot exactly what he or she wantedto say.; and (iv) it will reduce therisk of claims from employees formoral damages alleging that theinterview was intended to shameor embarrass them. Indeed,

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Paige Friddle

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11January 2011

Recent employment law developments

News from France

The French retirement regime is basedon an allocation system (“répartition”),i.e., the contributions paid by theworking population to the retirementfunds are re-allocated to the retirees.Due to the increasing number of retireesand life expectancy compared to thenumber of working persons, the Frenchgovernment determined that a reform ofthe retirement scheme was long overduein order to be able to continue tofinance the pension benefits on amedium and long-term basis.

This reform has taken place in a contextwhere the French government needed totake appropriate measures in order toreduce the budgetary deficit, or at aminimum maintain it at an acceptablelevel. The reform of the Frenchretirement regime appears to be the first

step of various budgetary constrainingmeasures for employers and employees.

Another measure in the finance law forthe French social security scheme for2011 provides for a significantly lessfavorable regime for terminationindemnities.

The Reform of the FrenchRetirement Scheme

The main measures of the reform ofthe retirement scheme which met withthe most opposition concern (i) theretirement age and (ii) the age requiredto receive a pension at the full rate.

Retirement Age

Currently, employees can decide to

retire and receive their pension (paidby the French social security funds) at60. In accordance with to the new law,this minimum retirement age will beprogressively increased to 62.

The minimum retirement age will beincreased by four months per year until2018 at which time all employees bornon or after January 1, 1956, will thenbe able to retire at 62. This measurewill come into effect as of July 1, 2011,and apply to those born on or after July1, 1951. The following chartsummarizes the timeline of theimplementation of this particularmeasure:

Some exceptions are provided forcertain categories of employees, and inparticular employees who started

France has been in the headlines over the past few months, in particular in light of the numerous protestmovements against the reform of the French retirement scheme which took place in September and Octoberof 2010. Notwithstanding the demonstrations and strikes, the law reforming retirement in France wasdefinitively adopted on November 9, 2010, after validation by the French Constitutional Court.

Before July 1, 1951

Between July 1 andDecember 21, 1951

1952

1953

1954

1955

1956 and after

DATE OF BIRTH

none

4 months

8 months

1 year

1 year and 4 months

1 year and 8 months

2 years

POSTPONEMENT COMPARED TO THECURRENT RETIREMENT AGE

MINIMUM RETIREMENT AGE

60 years (no change)

60 years and 4 months


61 years



62 years


working at age 16 or earlier, employeesin particularly physically difficult jobs,partial incapacity of employees andhandicapped workers. Under certainconditions, those employees will still beable to receive their pension benefitsbefore they turn 62.

Consequences for the employer: As from2018, the statutory minimum retirementage being 62, an employee who decidesto terminate his or her employmentcontract will be considered as havingresigned and will not be able to claimfor the payment by the employer, of aretirement indemnity (except in the caseof a particularly difficult physical job).

Moreover in the case of a dismissal of anemployee who has not yet turned 62, inthe event of litigation, the employee willbe able to show an increased prejudicedue to the extended time untilretirement and will consequently claimfor higher damages.

Age at Which the Employee May Receive aPension at the Full Rate

Currently, any employee who turns 65can receive his or her pension at the fullrate irrespective of whether he or shehas accrued the minimum number ofquarters with the retirement funds.

The new law provides that the age to beable to receive a pension at the full ratewill be the retirement age (62) increasedby five years, i.e., 67 (since the newminimum retirement age is 62 as from2018). This measure will be applicable toemployees born on or after January 1,1956.

However, as for the change in theminimum retirement age, theimplementation of this measure will beprogressive, i.e., the age for pension at afull rate will be increased by four monthsper year between 2016 and 2023.

Consequences for the Employer

According to relatively recent French

law (article L. 1237-5 of the FrenchLabor code), the employer cannotunilaterally decide to put an employeeon retirement before he or she hasreached the age allowing them toreceive their pension at the full rate(unless the employee accepts to retireand the employer has complied with aspecific procedure required by law).Currently, the employer can onlyexpressly request if the employee isinterested in retiring three months inadvance of the employee’s birthday eachyear from age 65. As from 2023, theemployer will not be allowed topropose to the employees to be put onretirement before age 67.

Notwithstanding the above, the age onwhich the employee can be required toretire by the employer remains thesame, i.e., 70 years.

The New Social Treatment ofTermination Indemnities

In accordance with French law, variouscategories of amounts paid to theemployees upon the termination oftheir employment contract are exemptfrom most social security contributions.This is, for example, the case ofseverance indemnities paid to theemployees in the framework of anemployment protection plan(previously known as a “social plan”) ordamages granted by a Labor court foran unfair dismissal which are entirelyexempt from social charges.

A settlement indemnity paid in theframework of a settlement agreement isalso not subject to social charges (withthe exception of C.S.G. and C.R.D.S.,i.e., 8 percent of 97 percent of theamount of the settlement indemnityborne by the employee), to the extentthe indemnity can be qualified asdamages and when combined with thestatutory or collective bargainingagreement dismissal indemnity(settlement indemnity plus dismissalindemnity), the total amount does notexceed the lower of two years ofremuneration or €207,720 (for 2010).

The 2011 finance law for the Frenchsocial security scheme provides thatindemnities paid to employees upon thetermination of their employmentcontract are exempt from social chargeswithin the limit of three times the annualsocial security threshold. The socialsecurity threshold is determined eachyear by the French government. For2011, the annual threshold will be equalto €35,352; therefore, as from 2011, theportion of any termination indemnitypaid to employees exceeding €106,056will be fully subject to social charges(approximately 45 percent for theemployer and 25 percent for theemployee).

However, the law also provides for atransitional period during which the limitof exemption of such indemnities isincreased to six times the annual socialsecurity thresholds (i.e., €212,112) inthe following cases:

Indemnities paid in 2011 for atermination effective on or beforeDecember 31, 2010, at the latest.

Indemnities paid in 2011 for atermination carried out in theframework of an employmentprotection plan and notified to theLabor authorities’ on or beforeDecember 31, 2010, at the latest.

Indemnities paid in 2011 for atermination effective in 2011 withinthe limit of the amount of thedismissal indemnity provided by theapplicable collective bargainingagreement (or company agreement ifany) in force on December 31, 2010.

Denise Broussal (Paris)Tel: +33 1 44 17 53 [email protected]

Delphine Girodroux (Paris)Tel: +33 1 44 17 53 [email protected]

Paige Friddle

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13January 2011

requires that the soon-to-be-establishedMinimum Wage Commission submit areport to the Chief Executive at leastonce every two years. This report,however, would only contain theCommission’s recommended minimumwage. The power to adjust the SMWultimately rests with the ChiefExecutive. There have been calls for ayearly review of the SMW, but thepresent position remains that there is nofixed review mechanism in the MWO.

Implications That Go BeyondTake-Home Pay for the LowestPaid

While the SMW is estimated to have adirect impact on the take-home pay forapproximately 300,000 of Hong Kong’slowest-paid workers and theiremployers, the MWO introducesadditional requirements that have asignificantly broader impact. Beyond theintroduction of SMW, the three key newimplications from the MWO are:

New record keeping requirementswhich apply for any employeesearning less than HK$11,500 permonth. This would capture asignificantly larger number ofemployees and their employersbeyond those whose take-home paywill be affected by the SMW.

Special administrative region’s first minimumwage announced

News from Hong Kong

Once the SMW takes effect, it will be acriminal offense for an employer to payany employee covered by the MWO at arate which is less than HK$28 per hour.Upon conviction, an employer isexposed to a maximum fine ofHK$350,000 and three years’imprisonment per breach. Directors andother senior persons involved in thecontravention may be held personallyliable.

The announcement of the SMW comesafter months of deliberation by thestatutory body established for thepurpose of recommending the firstSMW to the Government, theProvisional Minimum Wage Commission

(“PMWC”). At the time ofdeliberations, there was heated debateamong business interests and local tradeunions as to whether the proposed levelwould be an adequate safety net for theSpecial Administrative Region’s mostvulnerable employees and whether itwould cause a significant reduction inemployment opportunities. The finalfigure recommended by the PMWC isroughly midway between the initialfigure proposed by the business interests(around HK$24 an hour) and the tradeunions (around HK$33 an hour).

Going forward, the MWO does notprescribe a fixed timetable foradjustments to the SMW. The MWO

Statutory Minimum WageIn an historical development for labour relations in Hong Kong, the Government recently passed theMinimum Wage Ordinance (“MWO”), the first piece of wage-fixing legislation in Hong Kong since earlycolonial days. The Government also announced that Hong Kong’s first statutory minimum wage (“SMW”)will be HK$28 per hour (approximately US$3.61). The SMW will take effect on May 1, 2011. Employerswith operations in Hong Kong have less than four months to ensure they are compliant with the MWO.

1.

The remuneration structures foremployees who have a low basesalary and derive a substantialportion of their income fromvariable pay will need to bereviewed.

The exceptions in the MWO willneed to be considered, such asstudent interns and workexperience students.

Record Keeping and Hours Worked

The MWO makes it mandatory foremployers to keep records of “hoursworked” for any employee who earnsless than HK$11,500 (approximatelyUS$1,484) per month. Failure to keepsuch records will be a criminal offense,punishable by a maximum fine ofHK$10,000 per count.

Hours worked is a new conceptintroduced by the MWO. The definitionof hours worked in the MWO capturestime that an employee:

Is at work in accordance with theemployment contract, or otherwise as directed by or agreed with theemployer; or

Is traveling in connection by reason of work.

Traveling time between the employee’shome and his or her usual place ofemployment is excluded from hoursworked. However, if the employee isrequired to travel between his or herhome and a place outside Hong Kong forwork, this will count as hours worked,unless the place of employment outsideHong Kong happens to be the usualplace of employment. The exceptionappears to cater for a growing number ofemployees in Hong Kong who commutedaily to Mainland China and Macau foremployment.

The definition of “hours worked” in theMWO does not give further guidance on

some issues that are likely to arise inpractice, such as how the usual place ofemployment should be defined foremployees whose job duties requirethem to travel extensively (for example,travelling salespersons). The LabourDepartment is expected to releasefurther guidance materials closer to May1, 2011 with examples of how theMWO should apply in practice.

Please note the new record keepingrequirements introduced by the MWOare in addition to the existing record-keeping requirements under theEmployment Ordinance (“EO”). It is astatutory requirement for employers tokeep records, for all employees(regardless of their monthly income)for, among other things, absences,starting and leaving dates, and wagespaid per payroll period.

Variable Income Employees

The statutory requirement under theMWO does not make any exception foremployees working in industries withlow base salaries and highly variableincome, such as commission-basedworkers in sales and real estate.Therefore, employers of such employeeswill need to assess whether changes tothe remuneration structure for suchemployees are necessary to ensure thatthey receive the minimum wage foreach wage period.

In this regard, the MWO expresslyprevents employers from countingadvance payment of wages and overpaidwages as wages payable for the purposeof assessing compliance with the MWO.In other words, an employer cannot paya portion of the employee’s wages fromnext month (such as commissions) inadvance to make up for the shortfall.The portion of wages paid in advancewould not be counted as wages until thenext month, when it is paid.

Furthermore, the MWO does not allowthe counting of any wages paid for “anytime which is not hours worked” for the

purpose of assessing compliance withthe MWO. Explanatory materials fromthe Labour Department have indicatedthat employers cannot count wages paidto employees on leave days, such asstatutory rest days, annual leave, sickleave, and maternity leave. Foremployees who are paid a monthlysalary and whose employment contractsdo not expressly explain which days ofthe month are considered unpaid days,the implication is that their wages forthe purpose of MWO compliance maybe lower than their take-home pay,which makes compliance morechallenging for the employer.

Exemptions

The MWO does not apply to:

Student interns;

Work experience students, but onlyfor the first 59 days of employmentin any calendar year;

Registered apprentices under theApprenticeship Ordinance;

Domestic workers who takeresidence in the household free ofcharge; and

Other categories of persons notcovered by the EO, such asemployees who are family membersworking in their own business andcertain ship crew.

For most businesses, the exemptions forstudent interns and work experiencestudents are likely to be the mostrelevant.

Student interns are students who areenrolled in an accredited programoffered by specified educationinstitutions in Hong Kong, such asuniversities and higher educationinstitutions or overseas educationinstitutions and undergoing a period ofwork as part of that program. There isno prescribed time limit under which


2.

3.

15January 2011

student interns are exempt from theMWO although it appears to be theassumption that their length ofemployment with the employer will beconstrained by their own accreditedprogram. This exemption will not beavailable once the student has graduated,however.

Work experience students must also beenrolled in an accredited program butthe key difference is that they need notbe working for an employer as part ofthe program. Because the workexperience is not part of a studyprogram and can continue indefinitely,the MWO has imposed a maximumexemption period of 59 days. Further, ifexemption is sought, the employer mustobtain a statutory declaration from thestudent to the effect that they have notundertaken work experience withanother employer in the same year. Thisis intended to prevent the workexperience student from being deniedthe SMW more than once every calendaryear.

Conclusion

Labor Department representatives have

stated in industry briefings that the MWO is

as much an employees relations issue as it is

a legal issue. As such, employers need to

assess, well ahead of the commencement of

the MWO, what they need to do and

whether their workforce needs to be

engaged to secure any consent to changes

in terms of employment, and if so, when the

engagement will take place. Some potential

items for action include:

It is likely that with the introduction of the

concept of “hours worked,” there will

need to be clear internal guidelines on

how “hours worked” is counted in a

particular workplace. For example, there

will need to be clear guidelines on when

the employee is authorized to remain at

work, given the legislative definition

depends largely on whether the

employee’s attendance is at the direction

of or the agreement with the employer.

The employer may also need to amend

employee contracts or introduce a new

policy so the “hours worked” is clearly

understood. This action item is most

pertinent for employers with employees

who earn less than HK$11,500 per

month, the record keeping threshold.

Likewise, there will need to be new

infrastructure in place so the hours

worked for employees earning less than

HK$11,500 per month can be properly

recorded. Keeping track of hours worked

is also critical for the employer to assess

whether they are complying with SMW.

Employers will need to consider the

mechanism for which employees record

their time.

For those employees whose variable pay

structures mean that there are wage

periods where their income may fall

below SMW, employers will need to

consider how to remedy the situation.

This may mean adjusting the base salary

upwards, or paying variable income in

installments to spread out the wages.

Changes to remuneration structures will

require employee consent. Therefore, a

communication strategy will need to be

developed and implemented.

Consider whether the exemptions under

the MWO will apply, and adjust the hiring

practices for student interns and work

experience students accordingly.

Jennifer VanDale (Hong Kong)Tel: +852 2846 [email protected]

Bernard Ng (Hong Kong)Registered foreign lawyerTel: +852 2846 [email protected]

The new reform of Italian labor disputes: anattempt to alleviate the workload of Labor Courts

News from Italy

On November 24, 2010 an important reform of certain procedural aspects governing Italian labor disputes cameinto force after more than two years of collaboration and heated discussions in Parliament and in the media.

This new reform is the most significantpart of the so called “Labor Attachment”– so named because it was originallyintended as an attachment to the Budget

Law for 2010; which also includesmeasures such as hard works,reorganization of certain public offices,incentives to employment, and new

sanctions against irregular work. Thisarticle concentrates particularly on thenew rules and procedures that will, atleast in the intention of the law, have a

Paige Friddle

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significant impact on labor disputes,making them quicker and simpler, if notat all avoidable.

Certification of EmploymentContracts

The Reform has significantlystrengthened the possibility for theparties to apply for certification of anykind of employment contract to aspecial Certification Board within locallabor offices, thus limiting judicialcontrol on the legal characterization ofthe contract. Besides, specificprovisions in the individual employmentcontract listing typical cases of dismissalfor cause or justified reasons shall alsobe possible and the Court shall have totake them into account in assessing thereasons for termination.

New (Voluntary) ConciliatoryProcedure

An attempt to conciliate a disputebefore filing a claim in Court is nolonger compulsory. In past years, thisrequirement had indeed failed to workas an effective tool to relieve LaborCourts from their workload and hadturned a great number of cases into alegal hurdle with the only result beingthe delayed filing of a judicial disputefor two months or more.

The Reform now contemplates avoluntary conciliatory procedure,which can be initiated by one party andmust be accepted by the other within20 days. Both parties are now alsorequired to file briefs outlining theirrespective claims and defenses; if theattempt to conciliate fails, the Boardhas the obligation to write down, in theminutes of the meeting, a proposal fora settlement that the Labor Court willhave to take into consideration.

An attempt to conciliate before filing alawsuit shall nonetheless continue to becompulsory only in the event that oneof the parties intends to challenge theemployment contract previouslycertified by a Certification Board.

Public and Private Arbitration

The parties can resolve any labourdispute before an arbitration panel setup before the Conciliatory Board orthe Certification Board or in front ofthe bodies and according to theprocedures that shall be introduced bynational collective agreements. Theymay also set up an arbitration panelprivately, whose chairman must beappointed from either universityprofessors or attorneys admitted to theCourt of Cassazione.

The arbitrators may be required todecide the dispute on equitablegrounds, but without prejudice for thegeneral principles of law and thefundamental provisions regulating thespecific subject matter, also originatingfrom the European Union.

Arbitration Clauses

In the future, the parties shall also havethe opportunity to include anarbitration clause in the individualemployment contract, whereby theyagree to remit to an arbitration panel,any future dispute arising from theemployment relationship, with the onlyexception being those regardingtermination of contract (which can stillbe submitted to an arbitration panelbut only by express agreement of theparties after the dispute has arisen).

The insertion of an arbitration clauseshall only be possible under thefollowing conditions:

The relevant collective agreementallows for this possibility (or,lacking collective regulation within12 months, arbitration is incompliance with the guidelinesthat shall be adopted by the LaborMinistry on experimental basis);

The arbitration clause is agreedupon after the probationary periodhas elapsed or after 30 daysfollowing commencement ofemployment;

The clause has been certified by aCertification Board.

Expiration Terms in LaborDisputes

The Reform also contemplates a triplelimitation barring remedies against anumber of decisions taken by theemployer (including dismissal andtermination of project-work contracts,posting of employees to different

i)

ii)

iii)

17January 2011

locations or a change of their duties,transfer of employees resulting fromthe transfer of a going concern, and fordisputes regarding nullity of a fixedterm or a different characterization ofthe working relationship):

Non-judicial objections must bebrought in writing, no later than60 days from the date of theemployer’s decision (or from theexpiration of a fixed-term contractor the termination of employment,if notified in writing. The termdoes not seem to apply in cases oforal dismissal);

No later than 270 days followingthe objections raised in writing, anemployee must file a claim beforethe Labor Court or attempt toconciliate or arbitrate the dispute;

Finally, in case the employer hasrejected the invitation to theconciliatory procedure or this hasotherwise failed, application toCourt shall have to be filed withinthe following 60 days.

Failure to comply with any of the aboveterms makes the remedies no longeradmissible.

Conversion of Fixed-TermContract

In a dispute regarding the nullity of afixed-term contract, the Labor Courtmust limit the sentence against theemployer to payment of an all-inclusive

indemnity to be assessed within 2.5and 12 months and calculated on thelatest global salary; an exception isprovided for conversion by effect ofcollective negotiation, in which case theindemnity is reduced by half.

According to the majority ofcommentators and the Labor Ministry,the monetary indemnity abovecummulates with automatic re-hiring ofthe employee in the same or equivalentduties and on a permanent contract.

This provision also applies to disputespending in Court at the time when thisprovision of law shall come into force.

Conclusion

In conclusion, the evident purpose of the

Italian legislator is to alleviate the workload of

Labor Courts and materially reduce (or

speed up) the number of judicial

proceedings, obliging both employer and

employee (or assimilated work providers) to

comply with a tighter and compulsory time-

frame to propose and resolve a labor

dispute.

In the intention of the Legislator, this should

be achieved particularly by:

Enlarging and reinforcing the scope of

certification of contract thus barring

(or at least substantially limiting)

subsequent disputes on their

interpretation and enforcement;

Introducing new conciliation and

arbitration procedures which, in spite of

certain cumbersome requirements of

law, should offer new and speedier

dispute resolution models alternative to

judicial ones;

Providing tighter terms to challenge

some decisions taken by the employer

(including most notably all types of

termination of contract, except for oral

dismissals), thus limiting uncertainties

and sometimes sheer speculation

(previously, the longer the employee

could wait to file certain disputes, up to

five years, the larger the claim that

would accrue during that time).

All in all, the scope of the reform seems

pretty ambitious and has, at least on paper,

an undeniable potential to achieve its

objective and alleviate the workload of Labor

Courts (the latest statistics count over one

million cases pending in 2010, with 400,000

new ones added every year). Its

effectiveness though, shall ultimately depend

on the approach that unions and lawyers

shall take towards the new conciliation and

arbitration procedures, which traditionally

has always been very timid in Italy.

Massimiliano Biolchini (Milan)Tel: +39 02 76231 [email protected]

Alessia Raimondo (Milan) Tel: +39 02 76231 [email protected]

i)

ii)

iii)

i)

ii)

iii)

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The Malaysian Whistleblower Protection Act of 2010

News from Malaysia

The Whistleblower Protection Act of2010 (“WPA”) which came into forceon December 15, 2010, is intended toprovide all-encompassing protection inboth the private and public sectors. Oneof the WPA’s key objectives is to fill inthe gaps left by the said sector-specificlegislation. The WPA is also a keylegislative initiative to combatcorruption by facilitating protecteddisclosures through immunity from civiland criminal actions, confidentiality ofinformation disclosed, and protectionfrom retaliatory action in theworkplace.

The WPA will, for the first time,introduce employment-specific criminalliability for retaliatory action in theworkplace. Employers in Malaysia shouldtherefore review and, if necessary,implement appropriate revisions to theirexisting whistleblower policies.

Improper Conduct

To qualify as a protected disclosure, thedisclosure must be made to a designatedenforcement agency with a reasonablebelief as to the improper conduct.“Improper conduct” is defined toinclude, among other things, conductconstituting a criminal offense or adisciplinary offense. The latter has inturn been phrased widely to include anyaction or omission which constitutes abreach of discipline in a public body or aprivate body as provided by law or in acode of conduct, a code of ethics, orcontract of employment. Disclosures may be made even where

the individual anticipates that someoneis presently or will in the future engagein improper conduct. Similarly,disclosures can still be made where theimproper conduct had occurred in thepast and the individual is not able toidentify the person to whom theconduct relates.

Although the WPA does not provide adefinition of what constitutes“reasonable belief,” the English case ofBabula v Waltham Forest College [2007]IRLR 346 (CA) may provide guidance. Ininterpreting similar whistleblowerprotection legislation, the Court ofAppeal confirmed that the “reasonablebelief ” that a wrongdoing has occurredmust be based on the facts asunderstood by the employee. It istherefore a subjective test.

Enforcement Agency

Only disclosures of improper conductto a designated enforcement agency(“Agency”) will fall under theprotective ambit of the WPA. TheMalaysian Deputy Minister who tabledthe Whistleblower Protection Billconfirmed, in response to the questionposed in Parliament as to whethercertain well-known political bloggerswould be protected by the WPA, thatany disclosure to the media willdisentitle the individual from WPAprotection. The premise for this lies inthe fact that any information divulgedby the whistleblower to the Agency willbe deemed confidential and anydisclosure to the media thereafter

constitutes a breach of this obligation.

The Agency is not altogether clear. TheWPA sets out a very broad definition ofwhat could constitute an Agency. Anyministry, department, agency, or otherbody set up by the Federal Governmentof Malaysia, State Governments, orlocal governments could be regarded tobe an Agency.

At this juncture, it is uncertain whetherthe designated Agency will be certainexisting agencies or a centralized agencyto be established in the future. Itappears that the latter is more likely.The centralized Agency will be inoverall control of all matters relating tothe protection of whistleblowers and itwill be empowered to conductinvestigations into improper conductand complaints of detrimental action.

Immunity from Civil and Criminal Action

Under the WPA, whistleblowers will beimmune from civil/criminal actions orliability as a consequence of thedisclosure of improper conduct. Thisshould include any potential defamationaction being brought against thewhistleblower.

Protection of Confidential Information

All information disclosed in relation tothe improper conduct, including anyinformation on the nature of theimproper conduct, the identity of theperson perpetuating the improperconduct, and the identity of the

Introduction In Malaysia, legislative protection of whistleblowers is not a new concept. Legislation mandating officers todisclose the existence of serious offenses involving fraud or dishonesty already exist in certain sectors.

19January 2011

whistleblower (including hisoccupation, residential address, workaddress, or his whereabouts) will bedeemed confidential. Contravention ofthis confidentiality obligation is anoffense and will result, on conviction,to a fine not exceeding RM50,000 orimprisonment for not more than 10years, or both.

Protection from Detrimental Action

The WPA stipulates that anydetrimental action taken against thewhistleblower in reprisal is an offenseattracting a fine not to exceedRM100,000 or to an imprisonment fora term not exceeding 15 years, or both.In the employment context,detrimental action taken in reprisal mayinclude: termination of employment;withholding of wages or any paymentdue and payable under contract; refusalto enter into a subsequent contract; or,any act of harassment or intimidationagainst the employee. Such protection isalso extended to include anydetrimental action committed againstany person related to or associated withthe whistleblower.

In the event any such detrimental actionoccurs, the affected persons may makea complaint to the Agency which willsubsequently investigate the veracity ofsuch an allegation. In situations of direneed, the whistleblower and personsrelated to him or her can also requestto be relocated to another place ofemployment.

Notably, the WPA also introduces civilliabilities against any individual whoperpetrates the acts of reprisal. In suchcircumstances, these individuals will bepersonally liable for damages andcompensation. This is contrasted withthe pre-WPA position where there wasno personal liability exposure and thewhistleblower must first exit theorganization and then claimconstructive dismissal against theformer employer in situations ofreprisal.

A whistleblower anticipating that anindividual will act in reprisal againsthim may also take pre-emptivemeasures by seeking an interiminjunction to restrain the person fromcommitting any detrimental acts. Thisprotection is also extended to anyperson related to, or associated with,the whistleblower.

Revocation of Protection

Similar to comparable laws of otherjurisdictions, the protection can berevoked where, for example, thewhistleblower himself participated inthe improper conduct disclosed or ifthe disclosure was motivated in badfaith. That said, the protectionconferred on the whistleblower will notbe limited or affected merely becausethe improper disclosures do not lead toany disciplinary action or prosecution.Any persons willfully making a falsematerial statement in his disclosure ofimproper conduct will be liable to afine not exceeding RM20,000 or toterm of imprisonment not exceedingfive years, or both.

Investigation by Enforcement Agency

The Agency, upon receiving a disclosureof improper conduct or a complaintthat a detrimental action has occurred,will conduct its own investigation afterwhich, a report of the finding must beprepared along with recommendationsfor further steps to be taken, if any. TheAgency is then obliged to inform thewhistleblower of the results of theinvestigations.

It is anticipated that a standardoperating procedure will be issued bythe Prime Minister’s Departmentconcurrent with various publicitycampaigns to better illustrate andeducate the public on the reportingprocedures to be adhered to whenmaking a disclosure or complaint.

Implications of the WPA

Similar to the law in other jurisdictions,the WPA does not obligate individualsto disclose the occurrence of improperconduct and merely seeks to facilitatesuch disclosures. It does, however,require that employers not stigmatizenor allow its employees to sufferreprisal where he or she does makesuch disclosures. Any employmentagreement or contractual term whichpurports to prevent its employees frommaking a protected disclosure, will notbe enforceable.

The WPA’s introduction providesorganizations with a greater impetus tointroduce internal whistleblowingpolicies. This could allow organizationsto take pre-emptive action in order toreduce the risk of investigations beingconducted by the Agency. As a matter ofgood practice, organizations shouldadopt a self-regulatory approachthrough the introduction of an effectivewhistleblowing policy and procedure tofacilitate the internal reporting ofwrongdoing, notwithstanding the lackof a statutory obligation to do so. Notonly would such matters be handledrelatively quickly, it may be possible toeffectively pre-empt any furtherliability.

Given that the WPA will be of auniversal application withoutconstraints as to the sector, this willhave broad implications on allemployers. Employers are thereforeadvised to introduce comprehensivewhistlebower protection policies,towards encouraging disclosure ofwrongdoing.

Serene Kan (Kuala Lumpur) Tel: +603 2298 [email protected]

Wei Kwang Woo (Kuala Lumpur)Tel: +603 2298 [email protected]

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New Employees Food Assistance Law

News from Mexico

Food Assistance is Not Mandatory

As per the terms of the EFA theemployer may elect, voluntarily orcontractually, to grant food assistance toits employees. It is understood that foodassistance is granted contractually whensuch benefits are included in theapplicable Collective BargainingAgreement (CBA). If the employerdecides to provide to its employees foodassistance and these benefits are notincorporated in the CBA regulations orthe employees are not unionized, thenthese benefits would be considered tobe granted voluntarily by the employer.

Schemes for Granting FoodAssistance

The EFA provides that employers mayestablish basic schemes to grant foodassistance to the employees throughcafeteria services, restaurants or anyother related establishment; and throughprinted or electronic food coupons.Both food coupons must comply withspecific regulations established by theEFA.

The EFA also regulates that the amountand quality of the food assistance to begranted to the employees, will beestablished by the Ministry of Health,through NOMs (Mexican OfficialRegulations)

Tax Implications

In all cases, any expenses incurred bythe employer in providing cafeteria

services and electronic or printed foodcoupons will be deductible as per theapplicable provisions of the Income Tax(ISR) and Company’s Single Rate Tax(IETU) Laws, providing that theemployees’ income will not becharacterized as a basis to determinethe social security dues payment as perthe Mexican Social Security Law.

This implies that even though theIncome Tax Law and the Social SecurityLaw contain applicable provisions thatmust be met in order to qualify forthese tax benefits, employers who aregranting these benefits or that willgrant them in the future, must not onlycomply with the tax laws regulations,but also the terms of the EFA.

Penalties

The Ministry of Labor, Ministry ofHealth and State authorities areresponsible for overseeing compliancewith the EFA provisions. Failing tocomply with the obligations containedin the EFA may result in administrativepenalties, such as fines, which may varydepending on the seriousness of theviolation, and which are calculated onthe basis of the Minimum Wage in forceat the time of assessment.

Currently many employers providefood coupons to their employeesand/or provide cafeteria services as a

way to enhance the employee’s overallbenefits and to keep compensationwithin the market. The EFA regulatesthe granting of these benefits which arealready in place in many work places.

It is important to mention that theSupreme Court and the Labor Courtshave issued several decisions in which ithas been determined that the grantingof this kind of benefit can become (i) avested right which cannot beeliminated, suspended or reducedunilaterally by the employer, and (ii) itis considered an integral part of thesalary for purposes of calculatingseverance in cases of termination and aportion of this benefit could also beconsidered “salary” for the calculation ofsocial security contributions.

Réne Pérez-Ruiz (Tijuana)Tel: +52 664 633 [email protected]

Carlos Martin del Campo (Tijuana)Tel: +52 664 633 [email protected]

On October 5th 2010, the Mexican Senate enacted the Employees Food Assistance Law (EFA). The EFAregulates schemes to promote and regulate food assistance for employees, with the main goal to enhancetheir nutritional health, as well as to prevent diseases related to a malnutrition and to protect their health at work.

Paige Friddle

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21January 2011

Major Spanish employment and labor law reformpackage confirmed and passed into definitivelegislation

News from Spain

Most of the legal provisions originallypassed in June have been maintainedand, as such, the new legislationconstitutes the most significantemployment and labor law reform inrecent years. To summarize, the newpackage of employment and laborlegislation includes an array ofamendments that aim to:

Increase flexibility and reduce costsof individual and collectiveredundancies;

Create a capitalization fund over thenext two years to help fundseverance costs for future dismissals;

Increase incentives for employers tohire employees with indefinite termcontracts, and restrict the use ofdefined term contracts;

De-regulate temporary employmentagencies and placement agencies andextend liability for the use oftemporary employment agencies;and

Substantially increase flexibility incollective negotiations and facilitatedecision-making on labor measures,such as collective redundancies andtemporary suspensions, temporaryreductions to works hours,modification of collective workconditions, agreements opting out ofcollective bargaining provisions, etc.

The amendments are numerous andsubstantially modify very different areasof employment and labor law. Beforeproceeding on any of a broad variety ofemployment or labor matters,companies should bear in mind thepossible amendments to employmentlaw which affect many basic aspects ofemployee contracting and terminations,including amendments to types ofcontracts that can be used and existingsocial security discounts, causes andprocedure for redundancy, limits toseverance compensation, futurepayment of severance compensation bymeans of a new fund, and use oftemporary employment and placementagencies. At the same time, thesignificant changes to the procedure andrules on collective consultations andnegotiations from a labor relationsstandpoint should also be considered, asthe changes affect fundamental aspectssuch as employee representationmatters, restrictions on the requiredlength of consultations, alternativedispute resolution mechanisms,provisions on modifications of workconditions and on opting out ofprovisions under the applicablecollective bargaining agreement.

Despite the lengthy and varied natureof the reform package, given thesignificance of the employment andlabor law reform, below we provide asummary of the most notable aspects ofthe diverse legal amendments and the

definitive new employment legislationas a whole, with reference to thechanges that the new law has made tothe original emergency legislation fromlast June.

More Flexible and Less CostlyRedundancies

The law substantially facilitates theprocess and somewhat reduces the costsfor companies that make employeesredundant as follows:

Less Demanding Definition of Good Causefor Redundancy

The law provides a new definition ofthe causes for dismissal that are basedon economic, technical, organization orproductive reasons. The new definition,which now applies to both individualand collective redundancies, is by nomeans clear, but it does seem toconstitute an attempt to lessen theburden of proof on companies in casesof redundancies.

Reduced Required Prior Notice forIndividual Redundancies and OtherObjective Dismissals

The prior notice required for individualobjective dismissals is reduced from 30days to 15 days. Any notice notprovided can still be substituted withpay.

On September 19, 2010, the new Law 35/2010 on Employment Law Reform came into effect. The lawsubstitutes the emergency employment legislation that was passed by the government last June in responseto financial pressures and Spain’s 20 percent unemployment rate.


Increased Flexibility Procedurally

In the past, failure to comply with theprocedural formalities of an individualobjective dismissal (including the failureto pay the employee the correct amountof severance compensation at the timeof termination) invalidated the dismissaland, as a general rule, required thecompany to reinstate the employee withback pay. Under the amendments,failure to follow the correct procedurewill result in the dismissal beingconsidered unfair and generally triggerthe severance compensation for unfairdismissal, but it will not automaticallyrender the dismissal null and void.

Wage Guarantee Fund and Partial Paymentof Severance Costs for New Contracts

The law provides that the Spanish WageGuarantee Fund (FOGASA) will bearpart of the cost of severancecompensation for employees who arehired as of June 18, 2010, and whosubsequently are made redundant byindividual or collective dismissal, solong as the employee has been workingfor at least one year. The amount thatthe Wage Guarantee will pay in thesecases (and which the Company will nothave to pay) is eight days of salary peryear worked, which constitutes asubstantial saving over the standard 20days of salary per year that is due forfair redundancies, or the 33 or 45 daysof salary per year that is due for unfairredundancies, as the case may be. Thispartial payment by the Wage GuaranteeFund will only apply until the newCapitalization Fund enters into effect,which should be January 1, 2012, asexplained below, and will not apply toany employment contracts entered intoprior to June 18, 2010.

Modification to Absenteeism as a Cause for Dismissal

In negotiations with employerassociations prior to the labor reform,the employer associations in Spainseriously argued in favor of simplifying

the rules on redundancy due togeneralized employee absenteeism. The government has refused to do so,however, and the employment reformhas simply reduced the percentage ofemployee absenteeism that wouldjustify an employer in making anemployee redundant. No changes havebeen made to help clarify how thepercentage should be established, andthe new law now simply provides thatinstead of requiring five percentabsenteeism at a company, the companycan make an employee redundant if thegeneral percentage of absenteeism is2.5 percent.

Additional Modifications for CollectiveRedundancies

Additional amendments affect thecollective redundancy procedure, asdiscussed below.

Creation of a New Capitalization Fund

The new definitive law confirms thetext of June provisions to provide thatwithin one year, the Government andthe most representative unions andtrade organizations should regulate thecreation of a so-called “CapitalizationFund” for employees, to be fundedapparently with company contributions,although the law provides that the Fundwill not entail an increase to theCompany’s social security contributions.The Fund should be operational onJanuary 1, 2012.

The contributions made on behalf ofemployees to the Capitalization Fundwill be available for employees in case ofdismissal, in case they change their workplace location, retirement, or for thedevelopment of certain trainingactivities. Once the Fund is operational,the severance compensation theemployer will need to pay employeesdismissed will be reduced by the samenumber of days of salary per yearworked as the amount of thecontributions made to create the Fund.

Measures that Aim to Reducethe Use of Defined TermContracts and PromoteEmployers to Hire Employees onan Indefinite Term Basis

New Maximum Length of Defined TermContracts for a Specific Task or Service

Defined term contacts that are basedon the limited duration of a particulartask or service are limited to a generalmaximum term of three years. Ifagreed in the industry level collectivebargaining agreement, the maximummay be up to four years. If themaximum term established by law orcollective bargaining agreement isexceeded, the employee will becomean indefinite term employee. Thesenew maximum limits will apply only tocontracts entered into as from the datethat the new employment law reformcame into effect.

New Limits on the Repeated Use of Defined Term Contracts

The prior legislation provided thatemployees who worked through two ormore contracts (either directly orthrough a temporary employmentagency) for a period of over 24 monthsin any 30 month period for the samejob position and at the same company,would become indefinite termemployees. The new legislation nowclarifies that employees who workthrough two or more defined termcontracts (either directly or through atemporary employment agency) for aperiod of over 24 months in any 30month period at the same company orwithin a group of companies, or as aresult of a transfer of undertakings, willbecome indefinite term employees,regardless of whether the job positionsunder the contracts are the same ornot.

23January 2011

Increases to Severance CompensationEstablished for Defined Term Contracts forExceptional Accumulation of Work or for aSpecific Task or Service

Severance compensation will continueto be eight days of salary per yearworked for these types of definedemployment contracts that wereentered into in the past and through theend of 2011. As of January 1, 2012,however, the severance compensationwill increase to nine days of salary peryear worked, and subsequently to tendays of salary per year worked as fromJanuary 1, 2013, to 11 days of salary peryear worked as from January 1, 2014,and to 12 days of salary per year workedas from January 1, 2015.

Social Security Subsidies for ContractingEmployees as Indefinite Term Employees Priorto December 31, 2011

Three new subsidies for social securitycontributions are established forindefinite term contracts entered intoon or before December 31, 2011. Thenew subsidies range from 800 to 1,400Euros per year and can last up to threeyears depending on the circumstances.

Extended Application of Indefinite TermContract to Encourage Companies to ContractEmployees on an Indefinite Term Basis

The law substantially extends the use ofthe so called “contract to promoteindefinite contracts” (or “contrato defomento”), which allows companies toterminate contracts for redundancy at acost of 33 days of salary per yearworked (capped at a maximum of 24months of salary) in the case of unfairredundancy that is due to economic,technical, productive or organizationreasons, instead of the standard 45 daysof salary per year worked that applies tounfair dismissal in general. Coupledwith the Wage Guarantee Fund’spayment of eight days of salary per yearworked, the law in essence reduces costsfor unfair redundancy to as low as 25days of salary per year worked. Given

the new lax requirements for the use ofthis special contract, companiescurrently considering hiring employeeswill most likely be able to takeadvantage of this contract in most casesof new hires.

Temporary EmploymentAgencies and PlacementAgencies

Temporary Employment Agencies

In general, the law increases the rightsof temporary employment agencyemployees and amends the Law onTemporary Employment Agencies toinclude provisions that had already beenestablished under court case law.Specifically, the new law (i) guaranteesemployees lent by temporaryemployment agencies not only the samesalary as employees in the same jobposition at the company where servicesare being provided, but the sameessential conditions of employment,such as works hours, night work,vacations, rest periods and holidays, andthe right to use common services suchas the company cafeteria, day carecenter, and other common services atthe company where such services areprovided, (ii) requires that adequatemeasures be taken to facilitate accesstraining programs for temporaryemployment agency employees at the

company where services are beingprovided, which is a new requirementintroduced by the new definitive law,(iii) establishes joint liability of thecompany where services are providednot only for salary and social securityliabilities of the temporary employmentagency employee, but also with respectto severance compensation, (iv)temporary agencies will be permittedto provide services in industries inwhich they were previously prohibitedfrom doing so (construction, mining,marine platforms, etc.), althoughlimitations should be established bycollective bargaining prior to March 31,2011, and (v) as of April 1, 2011,limitations and prohibitions on the useof temp agency contracts should beeliminated, including prohibitions in thepublic sector (without prejudice to therights of functionaries).

Placement Agencies

Until recently, only not-for-profitplacement agencies were legallypermitted. Private for-profit placementagencies will be permitted as a result ofthese amendments, although before theamendments are effective, they willneed to be implemented by regulations.For the time being, then, private for-profit placement agencies are still notpermitted. The law provides that for-profit placements activities will need to


be coordinated with employmentservices and will be subject to thecorresponding authorization from thepublic employment service.

Increased Flexibility in CollectiveNegotiations to FacilitateDecision-Making and LaborMeasures

The labor reform in the new lawaddresses a number of issues thattraditionally have complicated reachingcompany level agreements withemployee representatives on labormeasures. The amendments can bedivided into general amendments thataffect how consultations should behandled in most cases whereconsultations are required, and specificamendments that affect the procedurefor certain types of labor measures.Following, we limit our summary to thegeneral amendments, although beforeproceeding with specific procedures,companies should bear in mind possiblefurther amendments.

Alternative Means of Representing Employeesand Employer in the Absence of EmployeeRepresentatives

The new law responds to the issue ofhow to proceed when the law requiresconsultation with the works council orother employee representatives butwhen a company lacks any workscouncil or employee representatives.Under the new law, which has modifiedthe provisions of the June law,employees who lack a works council oremployee representatives can chooseother representatives when consultationis required for substantial modificationsof work conditions, collective dismissalsor collective suspensions ofemployment, collective relocations, opt-out procedures from salary minimumsunder the CBA or temporary reductionin work hours. This alternativeconstitutes one of the most novelaspects of the employment law reformand aims to foment collectivenegotiations.

Restrictions on Possible Bases to InvalidateCollective Agreements

In addition, the recent new law addsthat various collective agreementsreached by the company and employeerepresentatives will be presumed to bevalid and can only be considered invalidif the agreement was entered into onthe basis of fraud, bad intent, threat orabuse of influence, or abuse of law.

Limits to Length of Required Consultation

The period of negotiation andconsultation required in the procedurefor substantial modification of collectivework conditions or collectiverelocations is reduced to a maximum of15 days (instead of the previouslyexisting minimum of 15 days). Inconsultations on collectiveredundancies, the maximum term ofconsultation is established as 30 days (or15 days in companies with less than 50employees), such that consultationscannot exceed this term, whereasbefore it was the minimum term.

Mediation and Arbitration as Alternatives to Consultations

The law emphasizes alternatives in theevent negotiations within requiredconsultations come to a stand still, suchas mediation or arbitration, even innegotiations on the modification ofemployment conditions established inthe applicable collective bargainingagreement. In the case of collectiveredundancies and substantialmodification of collective employmentconditions, for example, the applicableconsultation period can be substitutedby agreement between the parties withany mediation or arbitration proceduresapplied at the company. The law alsorequires, for example, that industryagreements should establishmechanisms to resolve cases where the

parties cannot reach an agreement andthat binding arbitration must beincluded as a mechanism.

Other

In addition to the numerousmodifications outlined above, the newlaw establishes rules on salary in kind,which cannot be more than 30 percentof the employee’s fixed salary orsubstitute minimum wages. The newlaw also modifies the administrativerole of certain physicians in grantingsick leave, provides for a majorreform of the Labor Court ProcedureAct, establishes measures to train and“recycle” certain types of employees,and amends training contracts.

Conclusion

The numerous amendments clearly

constitute the most significant employment

and labor law reform package in years.

Many of the modifications introduced are

still pending development by additional

laws or regulations, such as the

Capitalization Fund, or through pending

collective bargaining, such as the de-

regularization of temporary employment

agencies. How the new general principles

will finally be structured and the impact

that the reform package will have on

Spain’s current approximate 20 percent

unemployment rate is yet to be seen.

Teresa Candel (Madrid)Tel: +34 91 391 [email protected]

Margarita Fernandez (Madrid)Tel: +34 91 230 [email protected]

Luisa Gomez (Madrid)Tel: +31 91 230 [email protected]

Paige Friddle

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25January 2011

Update on Swedish Legislation

News from Sweden

Concluding Remarks

The new legislation imposes stricterrequirements on employers to verifythird-country nationals’ right to stay andwork in Sweden. Moreover, thelegislation aims to prevent unreasonableemployment terms and conditions forsuch employees.

New Rules On WhistleblowerHotlines

As of November 1, 2010, the SwedishData Inspection Board (the “DIB”) hasdecided not to maintain the currentobligation for companies to requestpermission with the DIB to implement awhistleblower hotline in Sweden.Instead, the limitations that the DIB hasdeveloped over time regardingcompanies’ whistleblowerhotlines/policies and that werepreviously communicated through theapproval of an application, have beenadded to the DIB’s regulation on“providing an exemption from theprohibition preventing entities otherthan official authorities from processingpersonal data relating to offenses etc.”The changes are motivated by, inter alia,practical reasons, since almost allcompanies applying for permission weredeemed permitted to implement awhistleblower hotline.

Applicable Limitations for the Use of aWhistleblower Hotline

The following limitations apply whenimplementing and using a whistleblowerhotline:

Only severe matters may bereported, such as serious financialmisconduct;

Only managers and key employeesmay be reported and processed

in the system;

The whistleblower hotline shall bevoluntary to use and may only beused as a complement to theemployer’s ordinary reportingsystem (such as the usualmanagerial hierarchy); and

The employer shall comply with theSwedish Personal Data Act.

This fact that the Swedish Personal DataAct shall be complied with means thatthe employer, inter alia, must make surethat sensitive data is processed onlywhere it is absolutely necessary and thatadequate safeguards are provided forwhen transferring personal data to acountry located outside of the EuropeanEconomic Area. Moreover, undercertain circumstances, the employermay need to enter into a processoragreement and notify the DIB of itspersonal data processing.

Concluding Remarks

The removal of the obligation to applyfor a permission to implement awhistleblower hotline in Swedenfacilitates the implementation processfor employers. However, it should benoted that the removal of the obligationdoes not imply any changes to the ruleson whistleblower hotlines as such – thesame limitations as before apply. Themain difference is that these changeswill now be codified instead ofcommunicated after an application tothe DIB.

Sten Bauer (Stockholm)Tel: +46 8 566 177 [email protected]

Åsa Nelhans (Stockholm)Tel: +46 8 566 177 [email protected]

Hiring Third-Country Nationals

In order to harmonize Swedish legislationwith the Directive of the EuropeanParliament 2009/52/EG, amendments tocurrent Swedish legislation within theimmigration area have been suggested.The proposal provides for sanctions andmeasures against employers of third-country nationals who illegally stay inSweden.

Proposed New Regulation

If the proposed legislation is passed, anemployer that hires a third-countrynational (i.e., a person from outside theEU) will be obliged to keep a copy of thedocuments proving that the employee isallowed to stay and work in Sweden. Inother words, that the employee holdsboth valid work and resident permits. Thecopy of the documents should be kept bythe employer throughout theemployment period and for an additionalsix months after the employment periodhas ended. Furthermore, the employerwill be obliged to notify the Swedish TaxAgency of the employment of a third-country national. In addition, theproposed new legislation covers a widervariety of situations where an employercould potentially be exposed to payingdamages for employing third-countrynationals that do not have adequatepermits to work in Sweden. For example,if a contractor hires a sub-contractor thatuses illegal workers, both the contractorand the sub-contractor can be held jointlyliable and subject to penalty fees (inaddition to the obligation to pay salary tothe illegal workers). Furthermore, therewill be a presumption that an illegalworker has been employed for at leastthree months and that the agreed salary isat least as high as under the applicablecollective agreements. The newlegislation is suggested to come into forceon July 20, 2011.

i)

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Paige Friddle

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The changing labor landscape: what everyemployer should know about the NLRB’s August decisions

News from the United States

At the NLRB, unions can rely on havingmajority support as three of its fivemembers are former union lawyers, anda former NLRB attorney fills the role ofActing General Counsel. Moreover, afterannouncing that it would reconsidernearly 100 decisions pending in theappeals court in the wake of the U.S.Supreme Court’s decision in New ProcessSteel, the NLRB has begun to decidecases raising significant labor policyissues. In August alone, the Board issued118 decisions. While employers shouldcontinue to monitor legislativedevelopments, more rapid change islikely to take place at the NLRB in theform of new decisions and rulemakingfavorable to unions. Employers will needto revisit their labor strategies andpolicies in light of these decisions, whichimpact both union and non-unionemployers.

Composition of the NLRB

The composition of the National LaborRelations Board (NLRB) candramatically impact the labor landscapefor employers. Traditionally, the NLRBis comprised of five members – threemembers from the President’s politicalparty and two from the opposing party.However, from December 2007 toMarch 2010, only two of the five seatswere occupied – one by ChairmanWilma Liebman (D), and the other byMember Peter Schaumber (R). Theempty seats were due to expired termsand political wrangling that made itimpossible for either party to confirm

new candidates. Since the NLRB couldonly act if both members agreed, mostof the cases involving significant laborpolicy questions were deferred. Bypractice and tradition, the NLRBgenerally does not establish new law orreverse prior precedent without threeaffirmative votes and typically does soonly when there is a Board of four orfive members.

Over the next several months, theNLRB returned to its full complementof five members. In March 2010,President Obama exercised his power tomake recess appointments by appointingDemocrats Craig Becker and MarkPearce to the NLRB. The Senatesubsequently confirmed Member Pearceand, in June, a Republican, Brian Hayes.In the meantime, the U.S. SupremeCourt invalidated all of the decisionsissued by the two-member NLRB,finding that a quorum of at least threemembers is required for NLRBdecisions. The five-member NLRB thenhad to decide how to handle the severalhundred cases potentially affected byNew Process Steel and make a final push toissue decisions before MemberSchaumber’s term expired in August –which would require the NLRB toreassign all cases involving MemberSchaumber to a new three-memberpanel. As a result, the NLRB issued 118decisions during the month of August.These decisions have expanded laborlaw in ways favorable to unions,particularly when it comes to unionorganizing and election conduct. Some

of the most significant decisions arediscussed below.

The NLRB’s Decisions of August

Union Organizing and Election Conduct

The NLRB’s recent decisions reflectincreased scrutiny of employer conductduring union organizing campaigns. Inseveral cases, the NLRB overturned theresults of the election based on theunion’s objections and ordered a rerunelection. For example, in Mandalay Corp.d/b/a Mandalay Bay Resort & Casino, 355NLRB No. 92 (August 17, 2010), theNLRB held that the employer unlawfullysolicited grievances with the express orimplied promise to remedy thegrievances when it held a series of“focus meetings” with security officersshortly after the union filed a petition torepresent the officers. During thesemeetings, the employer discussed theunion campaign and asked officers aboutwork-related concerns. The employeralso reinstated overtime opportunitiesfor full-time officers after the officersraised concerns to the CEO during onemeeting. While the record was unclearwhether this occurred prior to theelection, the NLRB determined that theemployer’s conduct violated the Act anddirected a new election. The NLRBfurther found that there was noevidence that the employer had a pastpractice of soliciting grievances as it haddone before the union election. In doingso, the NLRB dismissed evidence thatthe employer had an established practice

While labor law legislation such as the Employee Free Choice Act has stalled in Congress, unions continue topush for labor law reform through the NLRB. In this forum, they may have found a receptive audience.

of holding regular shift meetings duringwhich employees raised employmentconcerns with management.

Practical Tip: Holding periodicmeetings with employees for thestated purpose of discussing work-related concerns can help employersmaintain open lines ofcommunication with employees andpossibly avoid union organizingcampaigns. Moreover, if a campaignis initiated, employers with a pastpractice of discussing work-relatedconcerns with employees cancontinue to meet with employeesand address their concerns in a legalmanner.

The NLRB similarly directed a secondelection in Stabilus, Inc., 355 NLRB No.161 (August 27, 2010), based in part onits finding that the company unlawfullyprohibited employees from wearing pro-union T-shirts during an electioncampaign. While the employer had apre-existing uniform policy, the NLRBdetermined that the company selectivelyenforced its policy against unionsupporters and applied it in a disparatemanner to Section 7 activity relative tocomparable, non-Section 7 activitybecause the employer had permittedisolated exceptions (i.e., allowingemployees to wear Carolina Panthers T-shirts before the Super Bowl, costumesduring the Halloween period).

Employer Property Rights

The NLRB also ordered a rerun electionin Research Foundation of the StateUniversity of New York at Buffalo, 355NLRB No. 170 (August 27, 2010),based on its holding that a SUNY officialacted unlawfully when he insisted that aunion representative meeting with anassociate in that associate’s office leavethe building or he would call the police.According to the NLRB, SUNY’sconduct, which occurred on stateproperty and was witnessed by apotentially determinative voter,reasonably tended to interfere with

employee free choice in the election forunion representation.

Practical Tip: Employers generallyhave the right to control access toproperty which they occupy;however, it is important foremployers, particularly governmentcontractors, to ensure they possess aproperty interest in the workspacebefore excluding a unionrepresentative.

Employee Discipline and Misconduct

The NLRB’s August decisions alsoreflect an increased scrutiny ofemployer discipline of employeesduring union organizing campaigns aswell as a more expansive view ofprotected activity. In Altercare ofWadsworth Center for Rehabilitation &Nursing Care, Inc., 355 NLRB No. 96(August 19, 2010), the NLRB held thatthe employer’s verbal warnings toemployees that they must refrain fromdiscussing union matters during workhours were unlawful because verbalwarnings were the first step in theemployer’s progressive disciplinarysystem. It did not matter that theemployer did not take adverse action ormemorialize the verbal warnings in theemployees’ personnel files. See alsoFaurecia Exhaust Systems, Inc. 355 NLRB

No. 124 (August 26, 2010) (employee’ssuspension for asking for unitemployees’ contact information inviolation of employer’s personnelprivacy policies was unlawful becausethe employee only asked for theinformation – he did not actuallyreceive it).

Practical Tip: Significantly, inAltercare, the NLRB held that theemployer’s verbal directions toemployees to remove pro-unionbuttons were not unlawful becausethe directions were not part of theprogressive disciplinary system anddid not lay a foundation for futuredisciplinary action against theemployee. The parties’ collective-bargaining agreement specificallyprovided that “verbal counseling andcoaching shall not count forpurposes of progressive discipline.”While a well-defined policy can helpemployers defend against NLRBcharges, employers should proceedcautiously when directing ordisciplining employees during anorganizing campaign.

In Plaza Auto Center, Inc., 355 NLRB No.85 (August 16, 2010), the NLRB heldthat the employer unlawfullyterminated an employee forcommunications in the course of

27January 2011


protected activity notwithstanding theemployee’s use of obscenities andthreatening language. In Plaza Auto, anemployee began questioning hisemployer’s policies concerning breaks,restroom facilities, and compensation.In response, his supervisor told him thathe did not need to work at Plaza if hedid not like the policies. The employeethen began calling the supervisorobscene names, stood up and pushed hischair aside, and said that, if he was fired,the employer would regret it.Following this outburst, Plaza Autoterminated the employee formisconduct. While the administrativelaw judge determined that theemployee’s conduct and profanity werephysically threatening, if not menacing,and thus not protected by the NLRA,the NLRB dismissed this finding.According to the NLRB, the employee’sconduct was not “so violent or of suchserious character as to render theemployee unfit for further service.” Seealso Kiewit Power Constructors Co., 355NLRB No. 150 (August 27, 2010)(employer unlawfully terminated twoemployees for misconduct; threats that“it was going to get ugly” if they wereterminated and that the supervisor“better bring his boxing gloves” wereprotected).

Union Conduct During An OrganizingCampaign

The NLRB’s recent decisions alsosuggest that it is less eager to sustainunfair labor practice charges againstunions or to overturn union electionvictories based on the employer’sobjections. In Affiliated Computer Services,Inc., 355 NLRB No. 163 (August 27,2010), the NLRB held that pro-unionletters sent from a U.S. Congressmanand a New York State Senator to theemployer’s employees did notimproperly interfere with the election.The NLRB dismissed the employer’sargument that the letters could haveimproperly led employees to believethat the government supported theunion’s bid for election.

Court Actions Challenging Employee Conduct

In DHL Express, Inc., 355 NLRB No. 144(August 27, 2010), the NLRB held thatboth DHL and its consultant unlawfullythreatened to sue an employee in courtfor defamation based on an article inthe Union’s newsletter.Notwithstanding the lack of a factualbasis for the employee’s claim that apartner consultant had admitted to“misrepresenting union members andlying to them about ‘stealing’ theirmoney,” the Board found that thestatement was protected. It furthernoted that while the consultantdiscussed the matter with more thanone attorney, no lawsuit was ever filed.

Bargaining and Unilateral Changes

An employer’s bargaining obligationsfrequently are the subject of litigation.In E.I. DuPont de Nemours and Company,355 NLRB No. 177 (August 27, 2010),the NLRB found that the employer’sunilateral changes to employee benefitplans after the expiration of thecollective bargaining agreement wereunlawful because it had failed tonegotiate with the union to impasse.According to the Board, while theemployer had established a past practiceof making unilateral changes, it had notdone so during the hiatus periodsbetween labor contracts.

In Stella D’oro Biscuit Company, Inc., 355NLRB No. 158 (August 27, 2010), theNLRB found an employer’s offer toallow a union to view an auditedfinancial statement was not a validaccommodation of a union’s lawfulinformation request. Instead, when anemployer claims an inability to pay, theemployer must provide an actual copyof the financial statement to the union(particularly if the union agrees to keepthe information confidential).

Union Conduct Against Third-Parties

In United Brotherhood of Carpenters andJoiners of America, Local Union No. 1506

(Eliason & Knuth of Arizona, Inc.), 355NLRB No. 159, (August 27, 2010), theNLRB found that the Union’s display oflarge stationary banners did not violatethe Act, which makes it an unfair laborpractice for unions or their agents “tothreaten, coerce, or restrain” personsor industries engaged in commercewith an object of “forcing or requiringany person to . . . cease doing businesswith any other person.” While thebanners announced a “labor dispute”and sought to elicit “shame on” theemployer or persuade customers not topatronize the employer, the NLRBfound that the display did not constitutepicketing or coercive nonpicketing.

Overruling Prior Precedent

Some of the most controversial caseshave yet to be decided. In August, theNLRB granted review and requestedpublic comment through the filing ofamicus curiae (“friend of the court”)briefs on whether the NLRB shouldmodify or overrule its decisions in twokey cases that address the issue of whena labor union’s support amongemployees can be challenged. In RiteAid Store #6473 and Lamons Gasket Co.,the Board will reconsider its 2007decision in Dana Corp., 351 NLRB 434,holding that when a union is voluntarilyrecognized, whether or not a card-check or neutrality agreement existed,no election bar will be imposed after acard-based recognition unless (1)employees in the bargaining unitreceive notice of the recognition and oftheir right, within 45 days of thenotice, to file a decertification petitionor to support the filing of a petition bya rival union, and (2) 45 days pass fromthe date of notice without the filing of avalid petition.

In UGL-UNICCO Service Company andGrocery Haulers, Inc., the Board willreview its 2002 decision in MVTransportation, 337 NLRB 770,concerning the duties of a successoremployer to an incumbent union.Before MV Transportation, under the

successor bar doctrine, if a successoremployed a majority of predecessoremployees represented by a union, thenthe union’s majority status could not bechallenged for a reasonable period toallow the new company and union aperiod to negotiate. MV Transportationoverruled the successor bar doctrineand instead made the presumption ofmajority status rebuttable and open tochallenge by the employer, employees,or a rival union.

Conclusion

As the above summaries demonstrate, the

NLRB is taking an active role in reshaping

labor law and issuing decisions that reverse

prior precedent and expand labor law in

ways favorable to unions. Both union and

non-union employers should carefully

monitor NLRB developments. Those who

don’t risk NLRB charges and the threat of a

re-run election in those cases where

employees rejected union representation.

Douglas Darch (Chicago)Tel: +1 312 861 8933 [email protected]

Ryan Vann (Chicago)Tel: +1 312 861 2588 [email protected]

29January 2011

From the Bookshelf

Baker & McKenzie’s Global EmploymentPractice is pleased to present the 2011edition of the Global Mobility Handbook.This handbook identifies the key globalmobility issues to consider regardless ofthe countries involved. Although theissues are inevitably intertwined, the

chapters separately deal withimmigration, employment, employeebenefits and taxation. The handbookprovides an executive summary,identifies key government agencies, andexplains current trends before goinginto detail on visas appropriate for

short-term business travel, training, andemployment assignments for 42jurisdictions. For a copy of thishandbook, please contact Denise Gerdesat [email protected]

Baker Showcase

Of particular note, Stewart Saxe of theToronto Office, was granted theprestigious award of “Fellow” fromthe Chairman of the Board ofDirectors and the President of theHuman Resources ProfessionalAssociation(“HRPA”). The HRPA isthe pre-eminent human resourcesprofessional association in Canada.Amongst its role, it is the statutory bodythat accredits and regulates humanresource professionals. The FellowAward is rarely awarded and is reservedfor those that have made an “exemplarycontribution to the human resourcesmanagement profession.” This is only thesixth time that the “Fellow” award hadbeen granted in the HRPA 75-yearhistory.

Corporate Compliance

Employer Corporate Compliance:A New Era of Global Enforcementand Liability: On September 28,2010, in San Diego, California, ourattorneys hosted a seminar whichdiscussed the legal, practical andcost effective strategies forresponding to complaints bywhistleblowers and others in theworkplace; how to conductdomestic and cross-borderinvestigations; and how toestablish a culture of compliance.Also covered at the event were newlaws such as Dodd-Frank andSarbanes-Oxley. Speakers includedBrian Arbetter, Sanjay Bhandari, Colin

Murray, and Howard Wisnia (SanDiego) and Cynthia Jackson (PaloAlto).

Employee Whistleblower andBounty Hunter Claims: How toManage, Investigate, and DefendHere and Abroad: The NorthAmerica Compensation andEmployment Law Practice Grouphosted this seminar on November 3,2010, in New York, New York. Ourattorneys discussed the legal,practical and cost effectivestrategies for responding tocomplaints by whistleblowers andothers in the workplace,conducting domestic and cross-border investigations and

Paige Friddle

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Paige Friddle

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establishing a culture ofcompliance. Speakers at the eventwere Cynthia Jackson (Palo Alto), RobLewis (New York), and Bob Mignin(Chicago), Also presenting at theseminar were Paul McNulty(Washington, D.C.) and Doug Tween(New York) from the Tax and Corporateand Securities practice groups.

How to Make WhistleblowingWork: On November 25, 2010, inKuala Lumpur, Malaysia, Wei KwangWoo (Kuala Lumpur) presented on thelegal aspects of whistleblowing inMalaysia at a conference organized bythe Malaysian Institute of Accountants.

Executive Compensation &Employee Benefits

What the Heck is a Form 3922 andWhat Do I Do With It?: In thisNovember 16, 2010 webinar, ourattorneys focused on employeecommunications to accompanythe Form 3922. Speakers included EdBurmeister and Alison Wright of the SanFrancisco Office.

Employment Counseling

Ute Krudewagen and Susan Eandi of thePalo Alto Office co-authored an articletitled, “Designing Employee Policiesfor an International Workforce”that was published in the June 2010issue of Workspan, a monthly magazinepublished by WorldatWork.

Jennifer Van Dale of the Hong KongOffice was quoted in an article entitled,“Beware of leaving ‘footprints’:Employers have a right to monitorthe use of their equipment withinlegal privacy guidelines,” whichappeared in the South China Morning Post,on June 5, 2010

Focus on Latin America: LegalDevelopments, Strategies andOpportunities for U.S. Companies:This seminar, which addressedU.S./Latin America cross-borderissues in employment, FCPA anti-corruption, corporate, and

intellectual property, was held onon September 1, 2010, in San Diego,California. Speakers included BrianArbetter (Chicago).

Focus on Spain & Eastern Europe:This seminar, the first in an on-goingseries of informal conversationswith employment attorneys fromaround the globe, was hosted by ourattorneys on October 6, 2010, in SanDiego, California. Each discussionallows the visiting attorney and theaudience to explore the latest laborand employment developmentsand workplace topics. Speakers atthis event included Brian Arbetter (SanDiego), Piotr Rawski (Warsaw), andAlex Valls (Barcelona).

Privacy in the Workplace: Thisbreakfast briefing, which is part of theSan Diego Office’s Breakfast BriefingSeries, was held on October 12, 2010.Our attorneys addressed thebalancing act that exists betweena company’s need and right toobtain information about itsemployees, both current andprospective, and the concern forthe employee’s individualprivacy. Speakers included BrianArbetter (San Diego).and LotharDetermann (Palo Alto).

Navigating Uncertain Waters:Effective Leadership in Today’sMarket: At the 2010 Mid-YearMeeting of the National Association ofProfessional Background Screeners inLaJolla, California on October 12,2010, Brian Arbetter (San Diego) andLothar Determann (Palo Alto)presented on the topic of“Background Checks and GlobalData Compliance.”

Transitioning Your HR FocusFrom Local to Global: On October15, 2010, HRMAC hosted this breakfastbriefing at Baker & McKenzie’s ChicagoOffice. Brian Arbetter (Chicago),moderated a panel which addressed anumber of legal, business, and HRissues that arise when a businessexpands into new territories.

Hong Kong Association ofSouthern California’sInternational Conference: OnOctober 19, 2010, in San Diego,California, our attorneys addressed thetopic of “Recent Employment andCompliance Developments inHong Kong and China.” Speakersat the event included Brian Arbetterand Collin Murray of the San DiegoOffice.

European Employment Law:Briefing and Update: OnNovember 30, 2010, Baker &McKenzie hosted this event in the NewYork Office with the Federation ofEuropean Employers and Clark SHerman Associates. Speakers at theevent included Denise Broussal (Paris)and Rob Lewis (New York).

Do’s and Don’ts for a SuccessfulEmployee Relationship: Thisseminar was held on December 9,2010 in San Diego, California. Ourattorneys discussed the contracts,handbooks and performancedocumentation needed for asuccessful employee relationship.Speakers included Brian Arbetter andColin Murray of the San Diego Office.

Annual California Employer Endof Year Update: This seminar washeld on December 14, 2010 in PaloAlto, California and providedparticipants with a year-end updateon California employment issuesand challenges for 2011. Speakersat the event were Susan Eandi, JenniField, Cynthia Jackson, UteKrudewagen, Matt Schulz, MichaelWestheimer and Alison Wright of thePalo Alto Office.

Global Equity Services

Wacky Grant Provisions: Thiswebinar, held on September 29, 2010,addressed the provisions that lurkin many plan documents andaward agreements that seemharmless enough but often canhave unintended (andunfavorable) consequences for

31January 2011

the plan sponsor. Speakers includedJune Ann Burke (New York) and AlisonWright (San Francisco).

Global Equity Training SeriesAdvanced Training: This webinarseries consisted of three sessions, the firstbeing “Tax and Compliance Issues in‘Top’ Countries,” on November 3,2010; discussed the tax andcompliance issues for offeringequity awards in key countrieswhere most companies grantawards or would like to grantawards, such as Australia, Canada,China, France, India and the U.K.The second session entitled, “Post-Grant Changes to Awards, GlobalRecharge Arrangements, and IFRS2,” held on November 10, 2010,examined the impact of differentcorporate transactions (such asmergers, reorganizations,acquisitions and spin-offs) oninternational equity awards. Thefinal session, “Globally MobileEmployees,” was held on November 17,2010, and reviewed the manychallenges posed by equity awardsheld by globally mobile employees.

An Overview of Filing/ReportingRequirements for Global EmployeeStock Plans: In this webinar, whichwas held on December 16, 2010, ourattorneys discussed year end planningissues for global equityprofessionals. Speakers includedJennifer Kirk (San Francisco) and BrianWydajewski (Chicago).

Global Immigration & Mobility

Tony Haque, of the London Office wasquoted in an article entitled “Citylawyers protest UK Gov’tproposed cap on immigration,”which appeared in the September 2,2010, issue of Legal Week.

Effective Strategies to ManageGlobal Workforce Mobility:Employment and Tax IssuesRelated to Transfers, Secondments,Rotations and Global EmploymentCompanies: On September 29, 2010,

in Houston, Texas, this webinarpresented practical advice for anycompany which is creating,expanding or contracting itsglobal workforce. Speakers includedDavid Ellis (Chicago) and Scott Nelson(Houston).

Immigration Enforcement andCompliance: This breakfast briefingwas held on October 6, 2010, PaloAlto, California. Our attorneysaddressed the immigration andemployment enforcement andcompliance issues and arise whenmoving employees around theworld. Speakers at the event includedJenni Field (Palo Alto), Betsy Morgan(Chicago), Matt Schulz (Palo Alto), andPaul Virtue (DC).

Global Changes to Immigration:This webinar, discussing globalcompliance trends, was held onDecember 9, 2010. Speakers includedAlan Diner (Toronto), Raul Lara-Maiz(Monterrey), Pamela Mafuz (Madrid),Ginger Partee (Chicago), and GraceShie (Hong Kong).

International Executive Mobility

One World International BenefitsGroup: On July 15, 2010, inChicago, Illinois, Kerry Weinger spokeon “International Assignment

Considerations for MultinationalEmployers.”

Essentials of InternationalAssignment Management-2010:This webinar sponsored by IOR GlobalServices addressed the hot topics ofEmployment Law and BenefitsConsiderations in InternationalAssignments was held on October13, 2010 and speakers included KerryWeinger (Chicago) and Brian Arbetter(Chicago).

Essentials of InternationalAssignment Management: Thiswebinar, sponsored by IOR GlobalServices, addressed the hot topic ofEmployment Law & BenefitsConsiderations in InternationalAssignments, on October 13, 2010.Speakers included Brian Arbetter (SanDiego) and Kerry Weinger (Chicago).

Labor Relations/Trade Unions

Andreas Lauffs of the Shanghai Office,was quoted in an article entitled,“Rising wages there may lead tohigher prices here” on the topic ofrising costs for Chinesemanufacturers getting passedalong to U.S. companies. Thearticle appeared in the June 17, 2010edition of USA Today. He was alsoquoted in an article entitled “Trainee


Workers at Issue in China” on thewidely used technique by foreigncompanies which hire largenumber of trainee workers at lessthan the legal minimum wage inan effort to keep costs down. Thearticle appeared in the June 16, 2010edition of the Wall Street Journal.

On June 16, 2010, the InternationalLabour Organization (ILO)announced that Kevin Coon of Baker &McKenzie’s Toronto Office wasappointed the Employers’ Delegateto the ILO Committee forHIV/AIDS.

Labor Management Relations:This conference, sponsored byAmerican Conference Institute (ACI),was held on October 28, 2010 in NewYork, New York. Our attorneysmoderated a panel consisting ofGeneral Counsels and VP’s of severalFortune 500 companies entitled, “In-House Counsel and HR OfficialsRoundtable on LaborManagement Relations: Adaptingto the New NLRB, ContainingCosts, and Managing WorkforcesThrough a Difficult Economy.”Brian Arbetter (Chicago) acted asModerator at the event.

US/UK Labor Law and Equal PayAct: This client roundtable programwas hosted by our attorneys in the

Chicago Office on November 1, 2010.Speakers included Brian Arbetter,Andrew Boling, Doug Darch, CaroleSpink (Chicago) and John Evason,Daniel Ellis, and Monica Kurnatowska,(London).

Mark Ellis of the Toronto Office washighlighted in an article entitled “BCLaw Society to Publish One MoreDiscipline,” which appeared in TheLawyers Weekly, on November 19, 2010.The article focused on his victory atthe Supreme Court of Canada onbehalf of our client Native Child andFamily Services of Canada, wherein theSCC dismissed the appeal of theCommunications, Energy andPaperworkers Union(“CEP”).

Pensions

Arron Slocombe of the London Officeauthored an article entitled, “Walkingthe Tightrope,” tackling the delicatebalancing act employers have toperform over member choice and

risk reduction, which appeared inthe October 2010 issue of PensionsWorld.

Pensions Breakfast Briefing: Thisbreakfast briefing was held onNovember, 23, 2010, in London,England. The briefing dealt with theissues of auto-enrollment,pensions tax relief and RPI/CPI.Speakers included Robert West, ArronSlocombe and Jonathan Sharp.

Trustee Governance Seminar: Thisseminar which addressed the topic oftrustee governance, was held onDecember 14, 2010, in London,England. Speakers at the eventincluded Chantal Thompson and SueTye of the London Office.

Paige Friddle

Text Box


Argentina - Buenos AiresAvenida Leandro N. Alem 1110Piso 13C1001AAT Buenos AiresTel: +54 11 4310 2200Fax: +54 11 4310 2299

Australia - MelbourneLevel 19 CBW181 William StreetMelbourne, Victoria 3000Tel: +61 3 9617 4200Fax: +61 3 9614 2103

Australia - SydneyLevel 27, AMP Centre50 Bridge StreetSydney NSW 2000Tel: +61 2 9225 0200Fax: +61 2 9225 1595

Austria - ViennaSchottenring 25 1010 Vienna Tel: +43 1 24 250 Fax: +43 1 24 250 600

Azerbaijan - BakuThe Landmark Building96 Nizami StreetBaku AZ1000, AzerbaijanTel: +994 12 497 18 01Fax: +994 12 497 18 05

Bahrain - Manama6th Floor, Al Salam Tower P.O. Box 11981, ManamaTel: +973 17 538 800Fax: +973 17 533 379

Belgium - AntwerpMeir 24, 2000 AntwerpTel: +32 3 213 40 40Fax: +32 3 213 40 45

Belgium - BrusselsAvenue Louise 149 Eighth Floor, 1050 BrusselsTel: +32 2 639 36 11Fax: +32 2 639 36 99

Belgium - ELC (Brussels)149 Avenue Louise, Eighth Floor1050 BrusselsTel: +32 2 639 37 66Fax: +32 2 538 77 26

Brazil - BrasiliaSAF/S Quadra 02, Lote 04, Sala 203Edificio Comercial Via EsplanadaBrasília - DF - 70070-600 Tel: +55 61 2012 5000Fax: +55 61 3323 3312

Brazil - Porto AlegreAvenida Borges de Medeiros2233, 4o andar, CentroPorto Alegre, RS, 90110-150 Tel: +55 51 3220 0900Fax: +55 51 3220 0901

Brazil - Rio de JaneiroAv. Rio Branco, 1, 19o andar, Setor B Rio de Janeiro, RJ, 20090-003Tel: +55 21 2206 4900Fax: +55 21 2206 4949; 2516 6422

Brazil - São PauloAv. Dr. Chucri Zaidan, 92013o andar, Market Place Tower 1São Paulo, SP, 04583-904 Tel: +55 11 3048 6800Fax: +55 11 5506 3455

Canada - TorontoBrookfield Place181 Bay Street, Suite 2100P.O. Box 874Toronto, Ontario M5J 2T3Tel: +1 416 863 1221Fax: +1 416 863 6275

Chile - SantiagoNueva Tajamar 481Torre Norte, Piso 21Las Condes SantiagoTel: +56 2 367 7000Fax: +56 2 362 9875

China - BeijingSuite 3401, China World Tower 2China World Trade Center1 Jianguomenwai DajieBeijing 100004, PRCTel: +86 10 6535 3800Fax: +86 10 6505 2309

China - Hong Kong - SAR14th Floor, Hutchinson House10 Harcourt Road, Hong KongTel: +852 2846 1888Fax: +852 2845 0476

China - ShanghaiUnit 1601, Jin Mao Tower88 Century Boulevard, Pudong,Shanghai 200121, PRCTel: +86 21 5047 8558Fax: +86 21 5047 0020

Colombia - BogotáAvenida 82 No. 10-62, piso 6Bogotá, D.C.Tel: +57 1 634 1500; 644 9595Fax: +57 1 376 2211

Czech Republic - PraguePraha City CenterKlimentská 46, 110 02 Prague 1Tel: +420 2 2185 5001Fax: +420 2 2185 5055

Egypt - CairoNile City BuildingNorth Tower, Twenty-first floor Cornich El Nil, Ramlet Beaulac, CairoTel: +20 2 461 9301Fax: +20 2 461 9302

France - Paris1 rue Paul Baudry75008 ParisTel: +33 1 44 17 53 00Fax: +33 1 44 17 45 75

Germany - BerlinFriedrichstrasse 79-8010117 BerlinTel: +49 30 20 38 7 600Fax: +49 30 20 38 7 699

Germany - DüsseldorfNeuer Zollhof 2D-40221 DüsseldorfTel: +49 211 31 11 6 0Fax: +49 211 31 11 6 199

Germany - FrankfurtBethmannstrasse 50-54D-60311 Frankfurt/MainTel: +49 69 29 90 8 0Telex: +414239Fax: +49 69 29 90 8 108

Locations Worldwide

33January 2011

Germany - MunichTheatinerstrasse 2380333 MunichTel: +49 89 55 23 8 0Fax: +49 89 55 23 8 199

Hungary - BudapestAndrássy-út 1021062 BudapestTel: +36 1 302 3330Fax: +36 1 302 3331

Indonesia - JakartaThe Indonesia Stock Exchange BldgTower II, 21st Floor Sudirman Central Business District Jl. Jendral Sudirman Kav. 52-53 Jakarta 12190Tel: +62 21 515 5090Fax: +62 21 515 4840

Italy - Milan3 Piazza Meda20121 MilanTel: +02 76231 1Fax: +39 02 76231 620

Italy - RomeViale di Villa Massimo, 5700161 RomeTel: +39 06 44 06 31Fax: +39 06 44 06 33 06

Japan - TokyoThe Prudential Tower, 11F13-10 Nagatacho 2-chomeChiyoda-ku, Tokyo 100-0014Tel: +813 5157 2700Fax: +813 5157 2900

Kazakhstan - AlmatySamal Towers, Samal-2, 8th Fl.97 Zholdasbekov StreetAlmaty 480099Tel: +7 727 250 99 45 Fax: +7 727 258 40 00

Luxembourg12 rue Eugène Ruppert 2453 Luxembourg Luxembourg Tel: +352 26 18 44 1 Fax: +352 26 18 44 99

Malaysia - Kuala LumpurLevel 21, Suite 21.01The Gardens South TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel: +603 2298 7888Fax: +603 2282 2669

Mexico - CancunEdificio Galerías Infinity, Piso 2Av. Nichupté 19, Mza 2 SM 1977500 Cancún, Q. RooTel: +52 998 881 1970Fax: +52 998 881 1989

Mexico - ChihuahuaEdificio Punto Alto 2, Piso 4Av. Valle Escondido 5500Fracc. Desarrollo El Saucito31125 Chihuahua, ChihuahuaTel: +52 614 180 1300 Fax: +52 614 180 1329

Mexico - GuadalajaraBlvd. Puerta de Hierro 5090Fracc. Puerta de Hierro45110 Zapopan, JaliscoTel: +52 33 3848 5300Fax: +52 33 3848 5399

Mexico - JuárezP.T. de la Republica 3304, Piso 132330 Cd. Juárez, ChihuahuaTel: +52 656 629 1300Fax: +52 656 629 1399

Mexico - Mexico CityEdificio Scotiabank Inverlat, Piso 12Blvd. M. Avila Camacho No. 111009 México, D.F.Tel: +52 55 5279 2900Fax: +52 55 5557 8829

Mexico - MonterreyOficinas en el Parque - Piso 10Blvd. Antonio L. Rodríguez1884 Pte.64650 Monterrey, Nuevo LeónTel: +52 81 8399 1300Fax: +52 81 8399 1399

Mexico - TijuanaBlvd. Agua Caliente 10611Piso 122420 Tijuana, B.C.Tel: +52 664 633 4300Fax: +52 664 633 4399

Netherlands - AmsterdamClaude Debussylaan 541082 MD Amsterdam1000 CS AmsterdamTel: +31 20 551 7555Fax: +31 20 626 7949

Phillippines - Manila12th Floor, Net One Center26th Street Corner 3rd AvenueCrescent Park WestBonifacio Global CityTaguig, Metro Manila 1634Tel: +63 2 819 4700Fax: +63 2 816 0080

Poland - WarsawRondo ONZ 100-124 WarsawTel: +48 22 445 31 00Fax: +48 22 445 32 00

Russia - MoscowSadovaya Plaza, 11th Floor7 Dolgorukovskaya StreetMoscow 127006Tel: +7 495 787 2700Fax: +7 495 787 2701

Russia - St. Petersburg57 Bolshaya Morskaya St. Petersburg 190000Tel: +7 812 303 90 00Fax: +7 812 325 60 13

Saudi Arabia - RiyadhOlayan Centre Tower IIAl-Ahsa RoadP.O. Box 4288Riyadh 11491Tel: +966 1 291 5561Fax: +966 1 291 5571

Singapore8 Marina Boulevard #05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 Tel: +65 6338 1888Fax: +65 6337 5100

Spain - BarcelonaAvda. Diagonal, 652Edif. D, 8th Floor08034 BarcelonaTel: +34 93 206 08 20Fax: +34 93 205 49 59

Spain - MadridPaseo de la Castellana, 9228046 MadridTel: +34 91 230 45 00Fax: +34 91 391 51 49


Sweden - StockholmAdvokatbyrå KBP.O. Box 5719SE-101 23 StockholmTel: +46 8 566 177 00Fax: +46 8 566 177 99

Switzerland - GenevaRue Pedro-Meylan 51208 GenevaTel: +41 22 707 98 00Fax: +41 22 707 98 01

Switzerland - ZurichHolbeinstrasse 30 P.O. Box, 8034 ZürichTel: +41 0 44 384 14 14 Fax: +41 0 44 384 12 84

Taiwan - Taipei15th Floor, Hung Tai CenterNo. 168, Tun Hwa North RoadTaipei 105Tel: +886 2 2712 6151Fax: +886 2 2716 9250

Thailand - Bangkok25th Floor, Abdulrahim Place990 Rama IV RoadBangkok, 10500Tel: +66 2636 2000Fax: +66 2636 2111

Ukraine - KyivRenaissance Business Center24 Vorovskoho St.Kyiv 01054Tel: +380 44 590 0101Fax: +380 44 590 0110

United Arab EmiratesVilla A12, Marina Office ParkBreakwater, P.O. Box 42325Abu Dhabi,Tel: +971 2 658 1911

United Kingdom - London100 New Bridge StreetLondon EC4V 6JATel: +44 20 7919 1000Fax: +44 20 7919 1999

United States - ChicagoOne Prudential Plaza130 East Randolph DriveChicago, Illinois 60601Tel: +1 312 861 8000Fax: +1 312 861 2899

United States - Dallas2300 Trammell Crow Center2001 Ross AvenueDallas, Texas 75201Tel: +1 214 978 3000Fax: +1 214 978 3099

United States - Houston711 Louisiana, Suite 3400Houston, Texas 77002-2716 Tel: +1 713 427 5000Fax: +1 713 427 5099

United States - MiamiMellon Financial Center1111 Brickell AvenueSuite 1700Miami, Florida 33131Tel: +1 305 789 8900Fax: +1 305 789 8953

United States - New York1114 Avenue of the AmericasNew York, New York 10036Tel: +1 212 626 4100Fax: +1 212 310 1600

United States - Palo Alto660 Hansen WayPalo Alto, California 94304-0309Tel: +1 650 856 2400Fax: +1 650 856 9299

United States - San Diego12544 High Bluff DriveThird FloorSan Diego, California 92130Tel: +1 858 523 6200Fax: +1 858 236 0429

United States - San FranciscoTwo Embarcadero CenterEleventh FloorSan Francisco, California 94111-3802Tel: +1 415 576 3000Fax: +1 415 576 3099; 576 3098

United States - Washington, DC815 Connecticut Avenue, NWWashington, DC 20006-4078Tel: +1 202 452 7000Fax: +1 202 452 7074

Venezuela - CaracasTorre Edicampo, P.H.Avenida Francisco de Mirandacruce con Avenida Del ParqueUrbanización Campo AlegreCaracas 1060Tel: +58 212 276 5111; 276 5112Fax: +58 212 264 1532

Venezuela - ValenciaEdificio Torre Venezuela, Piso No. 4Av. Bolivar cruce con Calle 154(Misael Delgado)Urbanización La AlegriaValencia, Estado CaraboboTel: +58 241 824 8711Fax: +58 241 824 6166

Vietnam - Hanoi13th Floor, Vietcombank Tower198 Tran Quang Khai StreetHoan Kiem DistrictHanoiSocialist Republic of VietnamTel: +84 4 825 1428Fax: +84 4 825 1432

Vietnam - Ho Chi Minh City12th Floor, Saigon Tower29 Le Duan Blvd.District 1, Ho Chi Minh CitySocialist Republic of VietnamTel: +84 8 829 5585Fax: +84 8 829 5618

35January 2011

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Documents

The Global Employer TM - ADAPT · Vazquez case, the National Labor Court A recent en banc decision (called “ fallo plenario ” in Argentina) of the National Labor Court of Appeals