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USA: Exemption to ACA Contraceptive Mandate Extended to For-Profit Entities and Individuals

Exemptions for Plan Sponsors For employers, the temporary and proposed regulations issued by the administration extend use of the religious exemption to for-profit, non-governmental plan sponsors of group health plans, including closely-held and publicly held for-profit entities, non-religious non-profit organizations, and institutions of higher education in their arrangements of student health insurance coverage.  The regulations also provide an exemption based upon sincerely held moral convictions to non-Federal governmental plan sponsors, including non-profit organizations, for-profit entities with no publicly traded ownership interests, and institutions of higher education in the arrangement of student health insurance coverage.

Exemptions for Health Insurance Issuers  Health insurance issuers offering group or individual insurance coverage (“issuers”) that object to providing coverage for certain contraceptive services are provided an exemption from offering coverage of mandated contraceptive services to the extent the exemption is based upon the issuer’s sincerely held religious beliefs or moral convictions.  An issuer is also exempt from providing coverage where the exemption is provided to a plan sponsor due to the sponsor’s religious or moral objection (regardless of whether the issuer has its own objection). The issuer exemption does not exempt a group health plan from providing mandated contraceptive services under the ACA. Therefore, unless the plan sponsor itself is exempt under the regulations, issuers that hold religious or moral objections should notify plan sponsors of any contraceptive services not covered due to the issuer’s exemption.  The issuer should also inform the plan sponsor that the group health plan remains obligated to provide mandated contraceptive services.

Exemptions for Individuals Individuals who object to coverage or payment of certain contraceptive services by a sponsoring employer are exempt to the degree that the plan sponsor and health insurance issuer agree to offer separate benefit package option, policy, or insurance certificate or contract omitting contraceptive coverage to the objecting individual. The individual exemption cannot be used to require a plan sponsor or insurance issuer to omit contraceptive coverage if the plan sponsor or issuer has no objection to providing such coverage, nor can it be used to prevent application of laws requiring contraceptive coverage under State law. The individual exemption may be recognized by private and governmental employers. A non-exempt governmental employer may choose to offer an individual participant coverage omitting contraceptive services that honors the individual’s objections.  Note, however, this exemption is limited to the ACA mandate for contraceptive services and is not applicable to state laws requiring contraceptive coverage.

Exemption Notification Requirements for Employers Plan sponsors are not required under the new rules to file an exemption notice or comply with a self-certification process to claim a religious or moral exemption from the ACA’s contraceptive mandate. Nevertheless, employer-provided group health plans remain subject to ERISA and its disclosure requirements.  Employers objecting to the provision of certain contraceptive services must make sure that any coverage exclusions are clearly identified in the plan document.   Any contraceptive services subsequently omitted from plan coverage must be adequately communicated to participants and beneficiaries through all applicable ERISA disclosures. 

Rules are available at: https://www.federalregister.gov/documents/2017/10/13/2017-21851/religious-exemptions-and-accommodations-for-coverage-of-certain-preventive-services-under-the and https://www.federalregister.gov/documents/2017/10/13/2017-21852/moral-exemptions-and-accommodations-for-coverage-of-certain-preventive-services-under-the-affordable

Although the interim final rule is effective immediately, HHS is requesting public comments on the rule (see http://www.regulations.gov). Written comments must be received by December 5, 2017.

For more information on these articles or any other issues involving labour and employment matters in United States, please contact John Sander, Partner at Jackson Lewis P.C. (www.jacksonlewis.com) at John.sander@jacksonLewis.com

Sweden: A termination due to redundancy related to employer’s decision to engage a staffing agency was considered valid

The employment of an employee was terminated due to redundancy. Instead, the employer planned to engage a staffing agency to perform the work. The employee claimed that the termination was in fact based on personal reasons, and not on redundancy as the employer claimed, and that the Labour Court therefore should declare the termination invalid due to the fact that the redundancy was fictitious.

The Labour Court initially stated that, according to the Swedish Employment Protection Act, it is up to the employer to determine how to organize and conduct its business operations. Thus, a court shall not conduct a business-related assessment of whether re-organization measures are justified. However, if the employee claims that the redundancy is fictitious and can present probable cause that the employer wanted to terminate the employee due to personal reasons, the employer must be able to present proof that the redundancy is real. The Labour Court found that the employer, due to business related reasons, had engaged a staffing agency to perform the work previously done by the terminated employee. Due to this, and the fact that there were no vacant positions within the company to offer the employee, the termination was considered to be based on objective grounds and therefore valid.

For more information on these articles or any other issues involving labour and employment matters in Sweden, please contact Robert Stromberg, Partner at Cederquist (www.cederquist.se) at robert.stromberg@cederquist.se

Sweden: A non-competition clause effective for 24 months was deemed as unreasonable

In connection with an employee taking on a position as regional manager at a company in early 2015, the employee signed an employment agreement with a non-competition clause. The clause was an undertaking not to start or run business in competition with the employer, during the employment and for 24 months after the termination of employment. The employment was terminated in December 2015 and one month later, the former manager started a business that was competing with his former employer. The employer brought an action before the court claiming that the former manager and his company should be prohibited to conduct business, since the manager was in breach of his non-competition clause.

The Labour Court initially stated that the term of the non-competition clause was long, but the term in itself did not make the clause unreasonable. The clause did not prohibit the manager to take up employment in a competing business, but the Court found that the clause imposed a restriction of the manager’s possibilities to continue working with professional activities given the manager’s old age and experience. The manager was not paid any compensation for the restriction during the term of the non-competition clause. Thus, based on an overall assessment, the Court found that the non-competition clause was unreasonable and therefore should be declared invalid. The employer’s action was dismissed.

For more information on these articles or any other issues involving labour and employment matters in Sweden, please contact Robert Stromberg, Partner at Cederquist (www.cederquist.se) at robert.stromberg@cederquist.se

Spain: Overtime hours should be recorded daily, even if the annual workday is not exceeded

An employee was working on company commercial tasks, Monday to Friday 8:30 to 20:30. Moreover, he had worked on Saturdays all year long from 6:00 until 13:00 pm. For some other employees, the company was compensating overtime with breaks. Collective agreement applicable to the company establishes work should be done between Monday and Friday. On top, the company does not record employees’ daily working time.

The worker files a claim in amount asking for the payment of worked Saturdays as overtime. The claim is estimated in first instance, since overtime is proven, and once it is proven, business failure of the obligation to register working day, as well. The company argues that no overtime is done, because although they exceed the weekly working hours limit, the annual is not exceeded at all and appeals to the HCJ.

The point to discuss is whether or not there had been overtime hours and, if so, if there was the obligation to register the time work day.

The HCJ states, applying the law of the Supreme Court, that overtime rises day by day because of longer working days than established, and, as a consequence, the obligation to record daily extra time worked. That means that there is no need to record working time if there is no overworked time each day.

In this case, although collective agreement bans it, workers provided services on Saturday, exceeding maximum weekly workdays agreed. This means that this time is considered extra hours and, therefore, there is an obligation to register the workday time. HCJ considers that overtime could be immediately classified as such on the same day they are worked, independently of the fact that, by means of break compensation, they do not produce any excess of annual working hours.

Therefore, if the company employees were working extra hours, it is mandatory to record the work hour’s day. As it was not recorded, there is a breach on the obligation to record that information. It is the company who has the obligation to demonstrate this overtime was not done (and the company was not able to demonstrate so) and, in addition, there are enough evidences which allows to count overtime worked. For all the explained, the HCJ dismissed the appeal and confirmed the sentence stated by the first instance court.

For more information on these articles or any other issues involving labour and employment matters in Spain, please contact Bufete Suárez de Vivero, S.L.

Romania: New fiscal regime for employers and employees

The Government issued an Ordinance in order to transfer all social contributions and income tax to the employees. The number of social contributions is reduced to two – a contribution to the pension system of 25% of the monthly wage and a contribution to the health system of 10% of the monthly wage. The income tax is reduced from 16% of the monthly wage to 10%. The contributions and income tax are to be held by the employer from the gross wage. Prior to these changes, the employers paid part of the social contributions and the income tax in addition of the gross wage and held the social contributions for the employees from the gross wage.

In addition the Government issued another Ordinance stating that between November 20th and December 20th 2017 collective negotiations are mandatory for all employers, regardless of the number of employees. Special rules on representation of employees will also apply during this period.

For more information on these articles or any other issues involving labour and employment matters in Romania, please contact Magda Volonciu and Associates

Poland: Court rules there is no deadline for termination with notice period

As per the Supreme Court (Case ID I PK 236/15) an employer is not limited by the date when the occurrence happened, if it is an employer’s will to terminate the contract of employment (with notice period) with an employee who acted in a way that the employer disapproved. Even if a date of occurrence matters, it is the date of the employer’s acknowledgement that is important, not the date of occurrence – as per the analogy with termination without a notice period. This judgement does not have an impact on judicature within the range of analyzing if the past occurrence is a justified cause of termination, taking into consideration the actual situation of the employment relationship.

For more information on these articles or any other issues involving labour and employment matters in Poland, please contact A. Sobczyk & Wspólpracownicy

Norway: Employer did not have to take into account length of service in the corporation when downsizing

Two employees had been terminated due to downsizing, and were unsuccessful with their claim that employment in foreign companies in the same corporation counted, when estimating length of service. The applicable collective bargaining agreement contained a provision stating that the length of service in the company counted when downsizing. The non-application of the length of service in the corporation constituted neither direct nor indirect discrimination of the employees, according to the EEA Agreement.

For more information on these articles or any other issues involving labour and employment matters in Norway, please contact Storeng, Beck & Due Lund (SBDL)

The Netherlands: Dutch Court rules on whether a non-compete clause remains in effect when the employment contract is terminated by the employee

The validity of non-compete clauses is a frequently occurring subject in Dutch case law. If a non-compete clause is judged to be valid, the court can still fully or partially annul the clause if it unreasonably affects the employee. Whether or not a non-compete clause unreasonably affects the employee, will be the outcome of a weighing of interests. This is why rulings on non-compete clauses always depend on the circumstances of the case. If a court considers a non-compete clause to be unreasonable, courts mostly annul the clause only partially.

Recently, the cantonal court had to rule if a non-compete clause remains in effect when the employment contract is terminated by the employee. Four days after the termination the employee started working for another company only 1 kilometer away from the former employer. The court ruled that a termination of the employment contract within the probation period does not effect the validity of the non-compete clause, since the employee can still gain sensitive company knowledge in that period. Additionally, it was the employee who terminated the contract and not the employer. After the court considered the clause to be valid, the court weighs the interests of both the employee and the employer to determine whether or not the clause should be annulled. The court points out that the fundamental right to free choice of employment can only be curtailed on valid grounds. The short period of the employment is a circumstance that has to be taken into consideration. Also, the employer took a risk when agreeing upon the probation period, knowing of the possibility that the employee would terminate the contract within the probation period while having gained sensitive company knowledge. The court eventually decides that the non-compete clause in reasonableness and fairness remains in effect for a period of three months – instead of the agreed one year – after the employment contract has been terminated.

For more information on these articles or any other issues involving labour and employment matters in Netherlands, please contact Christiaan Oberman, Partner at Palthe Oberman (www.paltheoberman.nl) at oberman@paltheoberman.nl

Italy: Court determines employer is not obligated to show employee the documentation on which charges are based

Through ruling no. 23408/2017, Court of Cassation held that – according to the disciplinary procedure pursuant to article 7 of Law no. 300/1970 – there is no obligation for the employer to show the employee the documentation on which the charges are based.

The principles of fairness and good faith concerning the employment relationship require that a potential access to documentation shall be allowed, only if it is absolutely necessary for the employee to provide his/her justifications.

The Italian disciplinary procedure provides that the company must promptly send the employee a letter of reprimand describing – in the most detailed and comprehensible way – the facts on which the sanction will be based, but does not involve the employer’s duty to show or recall the documentation proving the charge itself.

For more information on these articles or any other issues involving labour and employment matters in Italy, please contact LABLAW – Studio Legale

Germany: Significantly extending an employee’s notice period can be an unreasonable disadvantage for the employee and hence invalid

An employee and an employer had concluded a side letter to their existing employment contract, stipulating that the notice period both parties had to observe when terminating the contract shall be three years to the end of a calendar month. At the same time, the employee’s salary was increased, but the parties agreed that no further salary increase shall occur within the next three years. The employee terminated the employment relationship observing only the applicable statutory notice period of one month to the end of a calendar month. The employer requested the labour court to ascertain that the employment continued until the expiry of the three-year notice period.

The employer’s claim was rejected by the Federal Labour Court on 26 October 2017. The side letter to the employment contract was qualified as general terms and conditions (AGB), as the employer had pre-formulated the side letter. Under German law, AGB are subject to extensive court review. They are, in particular, deemed invalid if they constitute an unreasonable disadvantage for the employee. When the parties agree on a notice period in AGB, which is significantly longer than the applicable statutory notice period of maximum seven months to the end of a calendar month, it must be reviewed whether the extended notice period unreasonably limits the employee’s occupational freedom as guaranteed in the German constitution. The Federal Labour Court ruled that this was the case here, despite the fact that the employer would have had to observe the same extended notice period in case of a termination and the side letter provided for an increase in the employee’s remuneration. The court found that this did not balance the disadvantages for the employee, in particular because the parties agreed that no further salary increase shall occur within the next three years.

Due to the invalidity of the agreement on the extended notice period, the statutory notice periods applied, which depend on the employee’s length of service with the company and range from two weeks to seven months to the end of a calendar month. In the case before the court, the employee had observed the applicable statutory notice period of one month to the end of the calendar month. Therefore, the employer could not successfully claim a continuing employment relationship.

For more information on these articles or any other issues involving labour and employment matters in Germany, please contact Tobias Pusch, Partner at Pusch Wahlig Legal (www.pwlegal.net) at pusch@pwlegal.net