The Employment Law Review: International Employment Challenges and Adaptations to the covid-19 pandemic
The covid-19 pandemic has altered the international workplace and international employee-employer relations in profound ways. As employees now work from home in significant numbers around the globe, multinational companies have been confronted with managing issues that they may not have previously prioritised. Matters such as outfitting employees' homes with the necessary technology to stay connected with clients and co-workers, and ensuring that employees receive sufficient ergonomics support and training to maintain a safe and healthy home office space, are part of the 'new normal' to sustain both employers' and employees' efficiencies and morale. These issues are especially challenging for multinational companies that may wish to implement uniform global policies and practices but may be prevented from doing so by the varying protocols and guidance of the different countries in which they operate.
I Employers' immediate considerations and responses
Initially, multinational employers reacted to the covid-19 pandemic by taking steps to maintain business continuity as citizens worldwide were asked or ordered to 'shelter in place'. Many employers explored measures to avoid lay-offs and to mitigate economic insecurity. Options included, for example, requiring employees to use accrued, unused paid leave; reducing salaries; deferring salary increases, bonuses and equity awards; and implementing furloughs. In many countries, however, actions such as these could not be undertaken without employee consent and consultation with employee representatives or works councils; further, these actions may bring with them risks of constructive or wrongful dismissal with the associated damages. And, as a last resort, many employers found it necessary to consider permanent lay-offs, which are highly regulated outside the United States and often require notice and severance, consultation with employees and works councils, government notifications and social plans. Implementing these approaches can be challenging for multinational employers because they must review and analyse any collective bargaining agreements that may be in effect – and which may apply by industry or position – and must follow mandatory procedures with respect to affected workers.
Multinational employers quickly learned that although country-specific statutory and regulatory requirements precluded a uniform, one-size-fits-all multinational solution, several important global themes have emerged during the crisis. For example, in response to the pandemic, many countries implemented legislation (including Brazil, the Netherlands and the United Kingdom) to socialise the idea that employers may seek to reduce employees' pay in exchange for greater job security. This legislation was widely publicised and employees in other countries were unlikely to be surprised that their employers considered similar measures outside the established statutory scheme.
II Governments act to protect employers and employees
As covid-19 spread during the early days of the pandemic, countries began enacting legislation and issuing guidance to support employers and employees as they confronted the global crisis.
Brazil issued federal provisional measures, including Provisional Measure No. 936 (MP-936) and Provisional Measure No. 927 (MP-927), to socialise the idea that employers may seek to reduce employees' pay in exchange for greater job security. MP-936 provided for an Emergency Employment and Income Maintenance Programme, including an Emergency Employment and Income Preservation Benefit, as well as policies for reducing salary and working hours and suspending employment agreements, and provisions for collective bargaining agreement meetings by virtual means. MP-927 provided for labour alternatives to allow employers and employees to cope with the realities of the pandemic. Changes that were provided in MP-927 included, but were not limited to, offering employees greater flexibility to (1) work remotely and (2) take vacation and holiday leave in advance, and for any reason acceptable by employers, during the pandemic. Note that as of 19 July 2020, MP-927 is no longer is valid.
India imposed even broader employee protections that required employers to bear the heavy economic burden to support employees during the national lockdown. In response to the pandemic, the Indian government invoked special provisions of the Disaster Management Act 2005 (DMA) to implement a series of orders under the DMA (Orders) to impose a 21-day nationwide lockdown. To counter the negative effects of the pandemic on India's workforce, the Orders included strict directives for employers. They prohibited employers from terminating agreements with any employees or contract labour during the lockdown, except for disciplinary reasons. In addition, the Orders barred employers from reducing employees' wages.
The United Kingdom also implemented measures to address the economic effects of the pandemic. It established the Coronavirus Job Retention Scheme (CJRS), designed to help employers retain their workforce. The CJRS provided partial subsidised wages to approximately 7.5 million UK employees across 935,000 employers. The CJRS was later updated to include an extension of partial wage replacement grants and a shift towards allowing part-time work. Under the CJRS, all UK employers with pay as you earn payroll schemes that were opened and in use on or before 28 February 2020 could apply for wage replacement grants to distribute to their furloughed employees. Under the CJRS, employers received a grant to subsidise the wages of both furloughed employees and employees who previously were placed on unpaid leave after 1 March 2020. The Job Support Scheme (JSS), which opened on 1 November 2020, when the CJRS ended, was designed to support viable jobs in businesses that still experienced lower demand because of the pandemic. The JSS was different from the CJRS because to qualify for JSS, employees must have carried out a minimum level of work for their employer. Essentially, the JSS was designed to top up wages to at least 77 per cent of normal earnings for employees who were unable to work their full hours but who were working a minimum of 33 per cent of their normal hours.
Luxembourg implemented short-time working in the event of force majeure in relation to covid-19 during the first few months of the pandemic. This short-time working scheme provided an accelerated procedure for all employers that had to completely or partially stop their activities because of the decisions taken by the government. During the short-time working period, the Luxembourg government covered the compensatory allowance up to 80 per cent of salaries.
Some nations, including Chile, enacted legislation for parents on parental leave and for parents and caregivers of children born in or after 2013. Specifically, the Chilean law (1) provided parents with an extension of up to 90 days of additional parental leave benefits and (2) allowed eligible parents and caregivers to suspend their employment contract with employers to provide childcare and receive unemployment benefits.
Other countries, including Argentina and Luxembourg, increased employee job protections, making terminations – even for serious underperformers – more difficult, if not impossible. As of 31 March 2020, employers in Argentina were prohibited from dismissing employees without cause, although the employment relationship still could be terminated by mutual agreement between the parties. In the case of termination with mutual consent, Argentine employers must take into account the country's mandated severance, which applies to employees who have completed a three-month trial period. Emergency Decree 34/2019, enacted on 13 December 2019, doubled the amount of required severance that must be paid to terminating employees. The decree expired on 25 December 2020 but is expected to be extended. Thus, at the time of writing, to accomplish a termination with mutual consent, employers should be prepared for employees to insist on double severance. Notably, the double severance requirement does not apply to employees hired after the enactment of the decree.
In Luxembourg, and even before the covid-19 pandemic began, employees absent from work because of incapacity are protected from dismissal for up to 26 weeks. During such a period of sickness, employers are prohibited from classifying the absence as 'unjustified' and from deducting the absences from an employee's annual holiday allowance, provided the employee has followed required notification and documentation procedures. The covid-19 pandemic expanded this protection, and employers were prohibited from counting sick time between 18 March 2020 and 24 June 2020 as part of the 26-week protected period. In addition, the law currently protects Luxembourg employees from dismissal beyond the 26th week until their sickness is over.
Another example of a creative approach to address the economic realities of the pandemic is Belgium, France, Germany and Luxembourg recognising that teleworking would be required to accommodate many cross-border workers and determining that applicable tax convention requirements must be relaxed in the covid-19 world. The four European governments agreed that, because the pandemic is a case of force majeure, days on which workers work remotely should not be taken into account for the purposes of taxing remuneration in their home country. Put differently, the governments agreed to avoid double taxation and to prevent fiscal evasion with respect to taxes on income and capital. In addition to double taxation concerns, working from home in a neighbouring country can affect workers' social security standing. To protect against this risk, Luxembourg entered into amicable agreements with Belgium, France and Germany regarding social security affiliation for cross-border workers who telework. Under the relevant agreements, days on which workers telework because of the covid-19 crisis were not taken into account when determining the social security legislation applicable to cross-border workers in these countries. Rather, for social security and tax purposes, employees were treated as though they were working in their normal place of work.
III Reopening the workplace and the Effect on the workplace safety-employee privacy relationship
After the shutdown stage of the covid-19 pandemic, some local governments around the globe began slowly to initiate progressive measures to revise and even rescind emergency legislation, orders and lockdowns. These governments began grappling with workplace-specific issues. As such, employers were compelled to determine how to maintain their duty of care to all employees and to protect employees' health and safety while safeguarding employees' privacy. This inevitable and inherent tension underlies the discussion surrounding several workplace issues, including requiring covid-19 testing, taking temperatures, requiring face coverings and disclosing covid-19 exposure in employee return-to-work questionnaires, among other things.
i Covid-19 testing
Assuming that covid-19 tests are available and can produce accurate results quickly, certain countries, including Australia and Brazil, began allowing employers to require employees to submit to covid-19 tests. In these countries, the principle of protecting employees' health was paramount in relation to employee privacy concerns. Employers may be required, however, to support such a request with a lawful and reasonable purpose. For example, employers must comply with privacy laws when requiring covid-19 testing of employees, and failure to do so may render such requests unlawful. In addition, prior to requiring a covid-19 test, employees may have to show or report covid-19 symptoms. Many countries also require employers to obtain employee consent in a certain form prior to mandating covid-19 testing. For example, in Luxembourg, Thailand and the United Kingdom, employee consent should be obtained in writing. That said, some countries, including France and Germany, did not allow employers to require covid-19 testing of employees because, for example, nasal swabs are invasive and employers likely are not able to justify that such a test is necessary and proportionate, except in very exceptional cases. Some other countries, including the Netherlands, did not allow employers to require covid-19 testing, and instead only company doctors or medical professionals could assess whether employees should take a covid-19 test.
ii Temperature screening
Across international jurisdictions, assuming that thermometers are adequately cleaned and sanitised, employers overwhelmingly are allowed to require employees to have their temperature checked prior to entering the workplace. Temperature screenings generally are considered the least drastic measure to maintain employees' health and safety at the workplace. Several countries, including China, Colombia, Indonesia and Malaysia, legally required employers to check employees' temperatures as part of a standard health measure. Other countries, including Japan, also allow employers to check employees' temperatures but, as a best practice, employee consent should be obtained in advance. Furthermore, in Belgium, prior to checking employees' temperatures, employers should consider obtaining the advice of the company doctor and health and safety committee.
Despite the international community's broad support for allowing employers to check employees' temperatures, some countries, including Luxembourg and the Netherlands, do not allow employers to screen employees prior to entering the workplace because temperature readings are considered employees' medical data that cannot be processed. In addition, although France does not ban temperature screening, it is not recommended. Instead, the French government recommends that all employees measure their temperature if they believe they may have a fever and self-monitor the appearance of symptoms suggestive of covid-19. Even in jurisdictions where temperature screening is not permitted, it is always possible to request employees to monitor their own temperature.
iii Face coverings
Generally, employers likely may require employees to wear face coverings in the workplace during the pandemic to protect all employees' health and safety and this has indeed been the case in Chile, China, Italy and Singapore, among others. This is true even in countries that are highly protective of employees' privacy rights, including France and Germany. Employers should consider who will provide the face coverings, and if employees must provide their own, who will cover the costs of the face covering.
iv Disclosure of covid-19 exposure in return-to-work questionnaires
Prior to returning to the workplace, employees in many jurisdictions, including Brazil, Germany and Singapore, were required to certify responses to questionnaires that enquired about covid-19 diagnosis, symptoms and close contacts with individuals who are or have been diagnosed with covid-19. Requiring employees to certify certain covid-19 information places a premium on workplace safety because collecting this kind of information allows employers and local authorities to carry out covid-19 response measures (e.g., contact tracing). If employees answered 'Yes' or refused to answer any such question, local law in China, Hong Kong, Japan and New Zealand, among other jurisdictions, allowed employers to prevent those employees from entering the workplace.
However, in other jurisdictions, employee privacy rights are paramount, even in the context of workplace safety. Note that employers always must comply with data protection laws when implementing protocols such as return-to-work questionnaires. In Singapore, for example, employers must comply with the Personal Data Protection Act and ensure that (1) reasonable security arrangements are in place for the protection of collected information, (2) collected information will not be used for purposes not connected to covid-19 response measures without employee consent or legal authorisation, and (3) collected information will no longer be retained as soon as it is reasonable to assume that the covid-19 response measures cease to exist. Indeed, in Ireland, employers also may be obliged to demonstrate a strong justification for requiring employees to certify this kind of information based on necessity and proportionality. In addition, in some countries, including the Netherlands, employers cannot process any medical data of employees. Rather, only a company doctor or other medical professional may ask these questions. Other jurisdictions, including France, completely ban employers from enquiring about covid-19 exposure in return-to-work questionnaires.
v Employees' refusal to return to work
Companies always should evaluate in each case those instances when employees refuse to return to the workplace. They should consider whether an employee's desire is based on personal preferences, government recommendations or information from healthcare providers. Companies also should assess whether an employee's essential job functions require working on-site. In addition, employers should be mindful that some employees may want to return to the workplace if they have experienced mental health problems brought on by the monotony and lack of social interaction when working remotely. As a best practice in most jurisdictions, if employees' jobs allow them to work remotely, employers should accommodate (or continue to accommodate) requests. Governments in countries such as South Korea, where shutdowns have not been made mandatory, encouraged this.
In some countries, such as Mexico, although accommodating remote working may be preferable, there is no legal obligation requiring employers to accommodate a desire to work remotely. There are certainly exceptions to this general rule, such as in New Zealand, where employers must accommodate only remote work requests that are fair and reasonable. In Germany, employers make decisions case by case because there is no entitlement allowing employees to work remotely.
Employers in all countries should consider disciplinary procedures if employees refuse to return to work. Depending on local law, as well as specific company culture, immediate termination is likely too harsh a response. Absent a medical condition or disability that may prevent people from returning to the office, progressive discipline, whereby employees first receive warnings followed by suspensions prior to dismissal, may be more suitable. Even in countries where governments have been more effective in containing the spread of covid-19, such as New Zealand and South Korea, employment termination should be a last resort. Terminating the employment relationship may lead to problems with employee relations if employees fear returning to the workplace when they can perform their work at home.
vi Travel considerations
Although numerous countries' reopening plans included loosening restrictions on local travel, many employees, particularly those who commute via mass transit, were wary of returning to the office. If employees were hesitant to return to the office, multinational employers had to be mindful of local regulations and guidance before requiring or recommending that employees should return to the workplace.
Some countries, such as New Zealand, were more successful in reducing the transmission of covid-19, such that employers could require employees to return to the office. Similarly, in South Korea, where, except in very limited circumstances, there were no legally mandated shutdowns, employees continued working in the office. In countries such as Brazil and India, where employers are generally allowed to require people to return to the workplace, regional or city-specific quarantine or lockdown rules could nonetheless restrict or limit the number of employees who may work in the office.
Further complicating matters, Mexico determined the covid-19 level of alert each week, which affected whether employees may come to work. In such cases, as a practical matter, where workable, it likely was best for employers to accommodate employees' desire to work remotely. In addition, several jurisdictions prohibited international visitors and required immediate covid-19 testing or quarantine on arrival. Hence, employers considered limiting employees' non-essential business travel. Although generally there was no clear definition of 'essential travel', employers considered restricting travel to countries that were deemed high-risk by in-country foreign affairs or health authorities.
vii Preparation of covid-19-specific health and safety plans
Generally, it was crucial that employers communicated effectively with employees when managing a return-to-the-workplace phase. To alleviate employees' fears when returning to the workplace, employers should provide employees with a Covid-19 Safety Policy or Covid-19 Return-to-Work Policy that sets out the precautionary and preventative measures and controls that employers have implemented to ensure all employees' health and safety. Ireland, Spain and the United Kingdom, for example, each required companies to prepare such a document. But even in jurisdictions that do not require a safety plan, such as France and Germany, it is a good idea to have such a plan. Although different nations require different measures and protocols as part of a safety plan, it generally should include the following:
- safety preventive measures, including social distancing, sanitary gel stations and recommendations (or requirements) to use face coverings;
- seating to observe social-distancing requirements;
- entry and exit routes specific to each office;
- capacity limits for elevators, stairs, restrooms and other public areas (meeting rooms, etc.);
- procedures to disinfect the workplace; and
- a protocol for handling employees who develop covid-19 symptoms.
Note that safety plans may refer to office buildings' general covid-19 guidelines, should such a document exist. It is likely that newer office buildings may be more progressive in preparing such guidelines and more active in communicating measures. Importantly, safety plans are not a tick-box exercise. Developing these plans should be a meaningful initiative to educate and protect both employees and employers.
viii Employer-sponsored contact tracing cellphone applications
Employers outside the United States also began considering whether they may require or request employees to download a covid-19 contact tracing application to their cellphones to track employees' movements and contacts to enable employers to alert employees if they have been exposed to a co-worker with covid-19.
Requiring or requesting employees to download a contact tracing application raises data privacy issues. To start, in the European Union and elsewhere, processing employee personal data, including location data, generally requires employers to obtain employee consent. As such, using an employer-sponsored covid-19 contact-tracing application must be voluntary. However, it is very difficult for employers in the European Union and in other countries to demonstrate that employees' use of the application actually is voluntary. This is because those jurisdictions view consent sceptically in the employment context because of the perceived unequal bargaining position between employers and employees.
There may be a way, however, to implement contact tracing through use of a cellphone application that is legally compliant with the General Data Protection Regulation (GDPR). Under the GDPR, EU employers may process an employee's personal data when necessary for employers' legitimate interests or the legitimate interests of a third party, unless there is an overriding reason to protect the individual's personal data. In addition, employers must comply with GDPR rules when processing special category (sensitive) data, which includes information about an individual's health. To ensure that their processing of special category data is lawful, employers must first identify an Article 6 basis for the processing, and then must meet one of the specific conditions in Article 9, which includes explicit consent. To establish explicit consent under the GDPR, the consent must (1) be a clear statement (oral or written), (2) specify the nature of the special category data, and (3) be separate from any other consent.
Prior to rolling out a covid-19 contact-tracing application, employers should analyse whether such an application is permissible in specific jurisdictions. Some countries, including Australia, India, Japan, Singapore, Spain and the United Kingdom, have state-sponsored applications but also allow employers to request employees to download a workplace contact-tracing application. Government applications are not necessarily widely used (as is the case in Spain and the United Kingdom); therefore, an employer-specific application, although arguably redundant, may actually provide better workplace contact tracing and, with it, better employee health safeguarding.
There are some countries, however, that ban contact tracing applications. In Luxembourg, for example, the National Commission for Data Protection has stated that employers should not use contact-tracing applications to process employee data. After a national debate, Luxembourg decided not to develop a national contact-tracing application. The decision applies to employers that, if they do not comply, may be subject to fines and criminal sanctions.
In other countries, including France, Germany and Ireland, where the government has rolled out a state-sponsored covid-19 contact-tracing application, employers likely face an uphill battle in demonstrating that a workplace application is necessary and proportionate in light of data privacy laws.
IV Opportunities for digital nomads
The covid-19 pandemic caused many employers to reconsider the need for employees to return to the office at all. In response, Barbados and Estonia took a dynamic approach to these changes and introduced 'digital nomad' visas that allow individuals to live in the country while they worked for foreign employers (where the foreign employer has no presence in the country).
Digital nomads are remote, location-independent individuals who either are employed by a foreign company or own their own foreign company. Digital nomads are not based in any one office or work site and instead rely on information and communications technology to complete their work remotely. They may work out of cafes, on beaches, or in hotel rooms – indeed, almost anywhere – because they have no set physical workplace.
The Barbados Welcome Stamp digital nomad visa costs US$2,000 for an individual and US$3,000 for a family (i.e., applicant, spouse or partner, and dependants), regardless of size. The visa allows remote workers to live in Barbados for one year and to travel in and out of the country freely. Applicants must earn more than US$50,000 annually and test negative for covid-19 within 72 hours of arrival. The government of Barbados hoped that the initiative would revitalise its tourism-dependent economy. Barbados derives 40 per cent of its gross domestic product from tourism, with approximately 30 per cent of the Bajan workforce engaged in tourism-related work. Various travel restrictions imposed in response to the pandemic all but halted international travel and tourism, affecting tourism-reliant economies, including Barbados. The government of Barbados hoped that digital nomad visas could draw visitors who otherwise would remain in their home countries.
In addition, Estonia offered its own digital nomad visa programme. Much like the Barbados Welcome Stamp, the Estonian digital nomad visa permits foreign workers to live in the country while legally working for their employer. The application fee is between €80 and €100, depending on the length of the remote worker's stay. The visa lasts up to one year and grants 90 days of travel across Europe's 26-country Schengen zone, depending on travel restrictions. Applicants must earn at least €3,504 per month, pass a background check and be location-independent. By easing travel restrictions, the country hoped to increase international collaboration and to encourage entrepreneurship.
With a digital nomad visa, workers can explore international destinations during the pandemic without competing with local people for jobs. Digital nomad visas also may initiate crucial economic recovery activity by heightening a country's international presence in the business and technology sectors and, in particular, moving smaller countries forward in those sectors.
V Looking ahead and future implications
As we entered a 'new normal' of doing business during the covid-19 pandemic, successful multinational employers laid the groundwork for employee 'buy-in' before implementing changes that their businesses needed to weather the covid-19 storm. Effective communications with employees and works councils help to ensure that (1) the proposed measure is implemented successfully, (2) the risk of subsequent legal action is reduced, and (3) employee morale issues are minimised. Straightforward and honest communications with employees can ease employee relations concerns. Employees inevitably will learn who will and will not be affected by a company's actions; however, open communications in advance can be a valuable tool in successful implementation of painful, but necessary, measures. And, of course, to the extent the employment actions being undertaken can be truthfully presented as temporary rather than final, the more likely employees will be willing to accept the changes, especially in the covid-19 business environment. These communications must come from the top ranks of the organisation so as to legitimise the effort to save as many jobs as possible.
The pandemic has ignored international borders and has created a worldwide health and financial crisis. The business response to the financial consequences wrought by covid-19, however, will be constrained, and must be informed, by the dynamic, fluid and rapidly changing workplace laws and practices that govern in different countries around the world.
1 Erika C Collins is a partner and Ryan H Hutzler is an associate at Faegre Drinker.