As UK businesses look to tiger economies to drive growth, employers Kathleen Healy, Employment Partner Holly Insley, Senior Associate (Hong Kong) at Freshfields Bruckhaus Deringer examine two key legislative themes that global players need to consider.
For HR directors with responsibilities across the world, keeping up with differences and the latest developments can be challenging. Within a region as large and diverse as Asia Pacific, it would be tempting to assume that identifying legal trends is impossible. However, whilst it is true that every jurisdiction raises its own particular challenges, there are common themes emerging on certain aspects of the employer/employee relationship. Two key themes for 2013 that employers need on their radar are: a material tightening up of the laws around use of agency workers and contract labourers; and the introduction of new data privacy laws to reflect the inexorable march of email, internet and social media into the working lives of employees.
Despite many ups and downs, off-shore agency work continues to prove to be a useful source of labour to satisfy, for example, seasonal demand, cover short-term absences or – if one takes the more cynical view apparently held by some governments within the Asia Pacific region – avoid having to offer workers permanent employment status and the benefits that this entails. Several countries have made moves to crack down on excessive use of agency workers, and to require equal rights to be offered where they are used. In China, an amendment to the PRC Employment Contract Law was passed at the end of 2012, increasing restrictions on the use of labour dispatch arrangements. The amendment, which comes into effect on 1 July 2013, will severely restrict the common practice of foreign invested enterprises sourcing labour from third party providers. In the limited circumstances where it is possible to use agency workers, the amended law will require equal terms to be offered.
Recent court decisions and statutory amendments in South Korea have also narrowed companies’ ability to use contract workers. A 2012 amendment to the Dispatched Worker Protection Act requires employers to hire dispatched workers directly, if courts find the dispatch to be unlawful. In recent cases, the South Korean courts have found in favour of workers in circumstances that have taken some legal practitioners by surprise. Employers operating in this country may be wise to consider a compliance review of their employment arrangements. In India, the alleged excessive use of contractors has been routinely in the news. The use of contract labour by Indian employers has steadily increased in recent years, in an apparent attempt to reduce labour costs. With contract labourers performing the same work for less pay and less social security benefits than their permanent counterparts, discontent amongst this population has been brewing and conflicts have arisen. The Indian Government is therefore considering an amendment to the law to safeguard the interests of contract workers. This may include a requirement that contract labourers, performing the same or similar kind of work as workers directly appointed by the principal employer, shall be entitled to the same wage rates, holidays, hours of work and social security provisions. There is also a proposal to amend the minimum wage legislation to make “National Floor Level Minimum Wage” applicable to all “other” employments, which will include contract labourers).
With the prevalence of smart phones, and growing memberships of Facebook and Twitter, details of individuals’ daily lives, including working lives, are now shared instantly with the world. Employees who are expected to be available at all times and in all places no longer see work as confined to the boundaries of a desk or an office PC. In this environment, employers have had to re-think their policies around the use of IT systems, acceptable behaviour and the scope of disciplinary action where, e.g. a tweet about a workplace has caused reputational damage by being splashed across the internet. Every company should have in place a social media policy and should keep that policy under review. Disputes centred around the use of social media continue to increase and this will be an interesting area to watch in 2013.
