Latest updates

EU member states must require employers to record working time systematically
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 22 May 2019

The European Court of Justice recently ruled that EU member states must require employers to establish an objective, reliable and accessible system for measuring their employees' daily working times. Without such a system, the hours and overtime actually worked cannot be reliably measured and employees' ability to enforce their rights cannot be guaranteed.

EUR wrong: when sterling means euros
Allen & Overy LLP
  • Banking
  • United Kingdom
  • 18 January 2019

The High Court recently used interpretation rather than rectification to fix an unhappily drafted loan agreement for "Seven Million Five Hundred Pounds [sic] (£7,500,000) to be drawn down in Euros". The dispute concerned whether the amount owed was in sterling or euros.

Three strikes and you're out – bank's duty to make inquiries of suspicious transactions
Allen & Overy LLP
  • Banking
  • United Kingdom
  • 07 December 2018

A first-instance court recently considered the extent to which a bank's duty of care owed to its customers, co-existing in contract and tort, requires the bank to make inquiries of suspicious transactions in their bank accounts. The court found in favour of the bank on the basis of expiry of the relevant limitation period. This article focuses on the court's discussion, by way of obiter, of the bank's duty of care owed to its customers where suspicious transactions occur.

Correct implementation of employment contracts: favourability assessment in case of dispute
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 05 December 2018

With respect to employers with a multi-jurisdictional presence in the European Union, where a dispute arises between them and an employee concerning the law applicable to cross-border employment contracts, it is first necessary to assess whether the objectively applicable law was deviated from by way of a choice-of-law clause. If so, it is then necessary to determine whether this affects the objectively applicable law's mandatory provisions and whether these are more favourable to the employee than the law chosen.

Correct implementation of employment contracts: choice of law and applicable law
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 28 November 2018

In employment contracts with a cross-border reach, it is always necessary to determine the objective law to which the contract is to be subject and to what extent this may be deviated from by way of a choice-of-law clause. While the primary deciding factor in this context is the place in which employees generally perform their work, a number of problems may be encountered when determining where this is.

Cross-border reorganisation – transfers of foreign units to domestic companies
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 21 November 2018

Foreign companies planning to transfer local business units to a domestic company must first resolve a number of issues. Since the cross-border spin-off is currently not regarded as a feasible option, the transfer of assets and liabilities must be effected by way of an asset deal. In Europe, this generally triggers a business transfer under local law whereby the employment contracts of the staff within the unit in question are transferred to the domestic company.

Cross-border reorganisation – foreign companies with a local branch
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 14 November 2018

Many international companies run their domestic operations via a branch of a foreign parent, rather than a locally established company. While cross-border spin-offs are theoretically permitted under European law, they do not represent a feasible option due to inadequate domestic regulations. Whether such reorganisations will affect workers' employment status and works councils' co-determination rights, particularly following a change in operations, must be assessed on a case-by-case basis.

European Commission proposes directive to protect whistleblowers – scandals necessitate reform
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 31 October 2018

The European Commission recently proposed to implement an internal and external whistleblowing reporting process which gives employees and external persons the opportunity to report breaches of EU law and ensures that such reports will be followed up. The scope of the proposal is broad, but such protection should be reasonable, taking into account the interests of not only the whistleblower, but also the companies in question and the public.

Social security contributions – applicable security law
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 24 October 2018

Companies should always clarify which social security laws apply to employees who are deployed in other countries. For such employees, it is often important to know whether they can remain in the social security system of their home country in order to avoid losing their existing social security accruals. Where the cross-border deployment of staff relates to non-EU countries, it is necessary to determine whether a social security treaty with the country in question has been concluded.

Redressing the balance: banks owe no contractual duty to customers in respect of regulator-mandated reviews
Allen & Overy LLP
  • Banking
  • United Kingdom
  • 19 October 2018

A recent decision gave Court of Appeal endorsement to a raft of similar first-instance decisions regarding banks' contractual duties to customers in respect of regulator-mandated reviews. The decision provides helpful comfort for banks when agreeing remedial action with the Financial Conduct Authority that they ought not to be exposing themselves to private actions from customers in respect of their review, provided that third-party rights are excluded.

Secondment – preparing contracts
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 17 October 2018

Sending employees on secondments to company sites in other countries is a major issue in cross-border employment law. It is often a popular way of deepening cross-border cooperation, particularly in terms of transferring know-how and securing closer contact with foreign branches. Employers increasingly wish to fall back on instruments of this kind, especially in preparation for Brexit. In legal terms, particular focus should be placed on drafting contracts.

Cross-border employment law – place of work
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 10 October 2018

When drafting employment agreements which relate to several EU jurisdictions, it is advisable to determine the applicable law in advance. The decisive feature in this context is the jurisdiction to which the employment contract objectively belongs. The place of work principle dictates that employment contracts and relationships are primarily subject to the law of the country in which or from which the employee habitually carries out work in the performance of their employment contract.

Cross-border employment law – freedom of choice principle under EU law
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 03 October 2018

In today's globally interconnected world of work, cross-border issues play an increasingly prominent role – particularly for corporates with a multi-jurisdictional presence in the European Union. When drafting employment agreements which relate to several EU jurisdictions, it is therefore advisable to determine the applicable law in advance. The possibility of selecting which legal context should apply offers parties a certain level of autonomy; however, this is not unlimited.

Pensions Directive Now in Effect
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 10 December 2003

The EU Pensions Directive, first proposed over 10 years ago, finally came into effect in September 2003. The directive aims to pave the way for pension schemes to operate, and be managed, across EU borders - an attractive proposition to multinational companies due to the potential for cost savings and simplified administration.

Transfer of Undertakings: Contracting out of Services
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 10 December 2003

The decisive factor in determining whether the Acquired Rights Directive results in a 'relevant transfer' of employees on a contracting-out is whether there is a stable economic entity which retains its identity. In considering whether an entity retains its identity, a distinction is made between 'asset-reliant' and 'labour-intensive' entities.

Social Partner Text on 'Socially Intelligent' Restructuring
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 29 October 2003

In June 2003 the EU-level social partners agreed a joint text on socially intelligent restructuring, which provides companies with a set of guidelines to follow in order to ensure successful change management. Key recommendations include good-quality, timely and open communications, and developing workers' skills and qualifications.

Working Time: ECJ Rules on Status of On-Call Working
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 29 October 2003

The European Court of Justice has ruled that all on-call duty performed by a doctor required to be present in a hospital constitutes 'working time' for the purposes of the Working Time Directive. This will be the case even where the doctor sleeps at the hospital when his services are not required, and periods of sleep or inactivity do not amount to rest periods.

Commission Consultation on Data Protection in the Workplace
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 15 October 2003

The European Commission is planning a draft directive on data protection in the workplace in 2004 or 2005. Its proposals include a general European framework on the processing of medical data, and limits on the use of data resulting from drug and genetic testing.

Council Fails to Agree on Temporary Agency Workers Directive
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 23 July 2003

The EU Council of Ministers has failed to reach political agreement on the proposed directive regulating the working conditions of temporary agency workers. A key area of disagreement is the length of the qualifying period before protection applies.

Report on Sustainability and Security of National Pension Systems
Allen & Overy LLP
  • Employment & Benefits
  • European Union
  • 14 May 2003

The European Commission has published a report as part of an EU initiative to promote the sustainability and security of national pension systems. Key among the findings is that the ratio of people over 65 to people of working age is expected to double between now and 2050, with pensions expenditure in most member states rising significantly from about 2015 onwards.