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Key employment issues to be aware of internationally

Key employment law developments and expected trends for 2024

When talent needs to move, we’re behind you Living in a highly connected world allows companies to hire and mobilise skilled and talented people almost anywhere – and locate business operations wherever they need to be. But when considering moving offices or employees, there are a range of factors to consider. These can include the political and economic consequences of COVID-19 or Brexit, the corporate and personal tax implications of relocation – even the impact of sanctions imposed on certain countries. Around the world our CMS Expat Desk teams are ready to help you manage the employment, tax, visa (immigration) and social security aspects of relocation. Drawing together specialists from the CMS Employment & Pensions Group and the CMS Tax Group, our teams are networked across locations in Europe, Asia, Africa and Latin America to offer you multi-jur­is­dic­tion­al support – whether you’re moving one employee or a whole office. Our emphasis is on understanding you and the specific needs of your business. By sharing our knowledge, networks and providing practical day-to-day support, we aim to help make any relocation process smooth, swift and fully-considered – with minimal disruption to your core business.

Key employment issues to be aware of internationally

A warm welcome... ... to the fourth edition of the GDPR Enforcement Tracker Report – the anniversary edition celebrating five years of GDPR. In the five years since the GDPR became applicable its powerful framework for imposing fines has certainly helped to raise awareness and encourage compliance efforts – just as the European legislator intended. At the same time, the risk of fines of up to EUR 20 million or 4% of a company’s global annual turnover can also lead to fear and reluctance or ignorance about compliance issues. We still believe that facts are better than fear. This is why we continuously update our list of publicly known fines in the GDPR  Enforcement Tracker and started the GDPR Enforcement Tracker Report as an annual deep dive approach to provide you with more insights into the world of GDPR fines. As in the three previous editions, the GDPR Enforcement Tracker Report starts with the Executive Summary (also available as a PDF version), followed by the “Numbers and Figures” section and the “Enforcement Insights per business sector” (also including the overarching employment category. The “Enforcement Insights per country” provide background on the specific enforcement framework under national law. Some remarks on our methodology can be found at the very end of the report.

Key employment issues to be aware of internationally

Incorporating ESG KPIs into directors’ remuneration The urgent need to place sustainability at the heart of company strategy is inextricably linked to incentives provided to its directors and employees. This Expert Guide aims to provide practical insights into key market practices and trends aimed at incorporating sustainability and/or Environmental, Social and Governance (“ESG”) KPIs into directors’ remuneration. The regulations and recommendations on ESG-related remuneration vary considerably from sector to sector and from country to country. The trend is, however, undoubtedly towards providing directors (and in some cases senior/mid-level managers) with an incentive to commit to ESG objectives designed to support and promote effective management of sustainability risks. We hope this guide provides the practical roadmap you need to further your business’s sound remuneration practices – wherever in the world you need to operate. For further legal support and advice, get in touch with your regular CMS contact or email us at em­ploy­ment@cmsleg­al. com.

With no clear end in sight, the devastating war in Ukraine threatens to divide Europe politically and economically. Countries in the Central, Eastern, and South-Eastern Europe (CESEE) region are right in the middle of this divide, but war on the easternmost fringes of Europe is not the only geopolitical issue multinationals across the region must be aware of. Among frequent flare ups of tensions on the Kosovo-Serbia border, peace and stability is once again far from assured in the Western Balkans (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia). With all these countries at some stage of EU accession, two regional integration initiatives (the “Berlin Process” and the “Open Balkan”) are in place to improve regional cooperation, including workforce mobility between Western Balkans countries, and prepare them for membership of the bloc. While Serbia, Albania and North Macedonia are full-fledged members of both initiatives, Bosnia and Herzegovina, Montenegro, and Kosovo are still reluctant to formally join, even though they participate in some summits. The agreements already signed within the Open Balkan initiative will unify the labour market for member countries, and remove the requirement for work permits or other formalities. The Open Balkan initiative is particularly supported by the US and its Chamber of Commerce offices in the region, as international companies with regional hubs in Serbia are looking forward to having easier access to labour from neighbouring countries. However, even though the framework agreements were signed more than a year ago, not much has been done to implement them. 2023 is expected to be the year that this is finalised. On the other hand, the EU has been slow to come to decisions on expansion. For example, North Macedonia has been a candidate country since 2005. According to analysis by the International Institute for Middle East and Balkan Studies, the indecisiveness of the EU has strategic consequences in the Western Balkans. In particular, there are real dangers that the uncertainty of the EU enlargement process, combined with local popular pressure, could, after many years of waiting, propel some countries to change their geopolitical orientation. This is particularly concerning at a time when Russia, China, Turkey, and other outside countries are seeking to increase their influence in the region.2023 may therefore be another politically turbulent year in the CESEE. This year’s parliamentary and/or presidential elections in Turkey, Greece, Poland, Montenegro, and Bulgaria could trigger further unrest or instability. And all of this could obviously affect the labour market in the region. Employment shortages driving wage inflation The inflation rate is forecast to remain elevated throughout 2023. Minimum wages have re­cently in­creased in most CESEE countries. However, these nominal wage increases do not match the pace of inflation, causing real wages to fall. A predicted economic recession in 2023 is not expected to cause high un­em­ploy­ment, given tight labour market conditions with high vacancy rates. Mass layoffs are expected in technology, media, and telecoms, but mostly impacting companies that over­hired dur­ing the pandemic. At the same time, deep shortages in particular jobs and professions are expected to drive up wages and stimulate the migration of labour – especially skilled labour – between com­pan­ies, and even sectors. For example, the Serbian Ministry of Electronic Communications estimates the country needs 30,000 software developers to meet the planned growth demands of many international companies with R&D hubs or service centres. Talent management is becoming a corporate priority as companies struggle to attract, retain and engage workers. Environmental, social, and governance (ESG) issues are taking centre stage in order to at­tract work­ers, even at a time when companies are navigating unprecedented energy costs and supply chain dis­rup­tions. That’s highly important when employees, especially the “Gen Z”, seek purpose and con­nec­tion with­in their work. Employees are becoming more and more interested in internal mobility and career pro­gres­sion op­por­tun­it­ies, as well as in diverse forms of work and mobile work possibilities. Also, it is important for employers to do some self-in­tro­spec­tion on whether the way they attract talent is truly inclusive, or if employees perceive their leadership style as empathetic. EU emigration continues to hit productivity Workforce shortages are one of the main barriers to growth in the CESEE region. A migration crisis, which has boosted labour supply in Poland and Czechia in particular, has not changed this.A significant part of the EU 2023 Work Programme is focused on facilitating workforce mobility within the bloc and enabling easier access by non-EU nationals to the EU labour market. Given that non-EU countries in the region have struggled for decades with the loss of highly skilled workers to the EU, continued emigration is certain to continue to impact the productivity of non-EU economies. Digital nomad working on the rise Another important trend post-pandemic, and in light of the need to attract skilled labour, is remote working from another country. According to the 2022 Special Eurobarometer on intra-EU labour mobility, almost one-in-five Europeans envisage working outside their own country, and half consider living and working abroad as an important experience with benefits beyond their professional life. Digital nomad visas – which enable foreign citizens to stay and work remotely in their host country for a certain period, usually one year, without paying income taxes or other social contributions in that jurisdiction – are becoming more popular. Several CESEE countries, including Romania, Croatia, Hungary, Czech Republic, Montenegro, and Albania, already issue digital nomad visas. Serbia is planning to adopt relevant regulations this year and North Macedonia is expected to follow soon. More workplace legislation in the pipeline As to other notable legislation in 2023, most EU countries within the CESEE region are planning to implement in full the EU directives on work-life balance and on predictable working conditions. Several countries are also finalising implementation of the Whistleblowing Directive – though Hungary is still falling behind, with no draft laws in place. One novel idea being discussed in Slovenia is a possible shortening of the working week to 30 hours. In Serbia, we finally expect a change in regulation that will introduce a combined residence and work permit and provide a proper legal framework for in­tern­ships. Art­icle first appeared in January 2023 issued by In­ter­na­tion­al Employment Lawyer 

Key employment issues to be aware of internationally

Key employment issues to be aware of internationally

Some leaks can’t be fixed “Confidential information is like an ice cube... give it to the party who has no refrigerator or will not agree to keep it in one, and by the time of the trial you have just a pool of water.” This, from the so-called Spycatcher case (1987), applies well to corporate assets: fail to store them correctly and all you might have left is an expensive mess. The consequences of even a minor exposure of a trade secret can be huge. As this report reveals, the protection of trade secrets is rightly recognised by most senior executives as a priority issue. But the research also reveals gaps that leave companies unnecessarily exposed to risks. The top named threats – cybersecurity attacks and employee leaks – resonate with what we see impacting our clients. Increased home and remote working is straining security measures and employee loyalty. Added to this, an ‘innovate or die’ attitude in highly-com­pet­it­ive sectors can motivate new joiners to arrive with questionable material from their previous employer, or worse: outright theft between competitors. But while it is easy to focus on the lurking threats from weakened cyber security and disgruntled employees – and they are important – there are more routine actions a company can take to safeguard its secrets than just updating its IT systems or the employee handbook. Commonly, those who most need our help already have a trade secrets policy but have not properly implemented it in relation to the secret in question. Or the policy has not been updated to reflect the intangible assets the business now owns. Or protection was taken for granted. With trade secrets – which for many businesses are strategically more important than a public patent portfolio – it is always costlier and messier to find solutions after a theft or a leak. Identifying the trade secrets and the threats posed to them, combined with rigorous internal processes and well-drafted contracts, can help prevent such problems from happening. Harder, but just as necessary, is engaging hearts and minds in corporate culture, to know why trade secrets are important, why we are all are responsible for protecting them, and what may happen if we do not (to both the company and the individual). In our experience, the businesses with the strongest defences have not only thought strategically about their intangible assets and how best to protect them but are also prepared for the worst. The trick to avoiding an asset becoming a crisis is to be wise before the event.

28 October 2022 The EU Directive 2019/1152 on transparent and predictable working conditions in the European Union substantially extends the obligations of employers to provide information on the essential aspects of their relationship with employees. Implementation of the relevant requirements into national law was due by 31 July 2022. As a result, changes in employment law practices are expected in the near future. The following is an overview of the status of im­ple­ment­a­tion in EU member states, which is being updated on an ongoing basis: