Eversheds Sutherland: Employment Issues to Keep on the Radar
Ahead of the long-awaited summer holidays, we have asked Senior Associate Rebecca Farkhooy from our member and patron Eversheds Sutherland law firm to provide us with a few employment issues to keep on the radar as we step into the second half of the year.
Hybrid working is here to stay – but many employers are requiring office attendance again. What are your legal rights and internal policies for this as a business?
In the aftermath of the pandemic, employers have become much more flexible in terms of the workplace. Businesses across the country have implemented hybrid working policies that allow employees to work from home to different extents. However, an increasing number of employers are now requiring office attendance again. There could be many reasons for this, for example the current financial situation and employers wanting to ensure efficiency through office attendance. We generally recommend that businesses draw up clear, written policies that regulate the terms and conditions of hybrid working versus office attendance. The question of hybrid working versus office attendance also triggers several employment related questions; Does your business have a legal and/or contractual right to require office attendance again? Would the transition from hybrid working to increased office attendance have a negative impact on the productivity and employee relations perspective? What terms and conditions apply for employees who are nevertheless allowed to work from home?
Implementation of the EU Pay Transparency Directive; is your business prepared for increased transparency requirements?
The European Council adopted new rules on pay transparency on 24 April this year. The purpose of the EU Pay Transparency Directive is to promote equal pay for equal work between men and women throughout Europe. Swedish law already fulfills most of the requirements set forth in the EU Pay Transparency Directive. For example, employers in Sweden already have an obligation to conduct annual gender pay gap analysis to identify and mitigate any pay gaps between men and women performing equal or equivalent work. However, there are some additional requirements in the EU Pay Transparency Directive which we do not have in Sweden. For example, the directive states that candidates are entitled to receive information on the salary level of the position they are applying for during the recruitment process and that employers with more than 100 employees are required to provide employees with information on the criteria used when determining salary levels and policy for salary reviews.
We do not yet know what changes that will be made to Swedish law following the implementation of the EU Pay Transparency Directive. Ahead of any potential changes, businesses should ensure that they comply with the current legal requirements and prepare for an increased transparency obligation, for example by drawing up written policies on the criteria for salary determination.
In the aftermath of the pandemic and due to the current financial situation, many businesses prefer hiring consultants over employees. Be vary of the misclassification risk!
We are experiencing an increased number of consultants in many businesses where employers do not want to commit to the obligations of an employment relationship. If your business is considering hiring a consultant rather than an employee, you should be vary of the risks of misclassification, meaning that the consultant could be deemed an employee if legally challenged. The assessment is made on a case-by-case basis, considering for example factors such as the length of the contract and the level of independence for the consultant. The financial and legal exposure if a consultant is deemed an employee is both tax and employment law related and could be rather high if realized. Before hiring a consultant rather than employee, businesses should therefore assess whether an employment relationship is more appropriate in the individual case.
The focus on environmental, social and governance (ESG) has increased in many businesses. What does your business do to maintain these values?
We are looking at an increased importance of these values since the pandemic and with the financial and political situation in Europe today. Having an ESG mindset as a business is now not only something that consumers are demanding, but it is also important to attract and retain talent as an employer. Making ESG a part of your business strategy can unlock growth opportunities, reduce costs, and make your brand future-proof in the eyes of a public and make you an attractive employer for your employees. Questions that need to be asked are, for example, how the business treats its staff, how the business model is sustainable and what oversight the business has on top executives.
Rebecca Farkhooy |Senior Associate | Employment (Stockholm) |Eversheds Sutherland
Eversheds Sutherland Advokatbyrå AB