Lawyer Monthly - December 2024

40 LAWYER MONTHLY DECEMBER 2024 in Africa often contend with multiple unions per workplace and government intervention, while Mexico’s recent labor reforms have empowered independent unions and enhanced collective bargaining rights. Establishing clear global principles while allowing for tailored local approaches ensures that policies align with diverse regulatory landscapes. Effective frameworks should include: • Detailed protocols for union engagement across jurisdictions; • Robust compliance monitoring systems to pre-empt legal risks; • Flexibility to accommodate various negotiation models and respond swiftly to labor actions within legal boundaries; • Cross-border strategies to unify efforts and maintain stability; and • Reputational risk management to safeguard the company’s image in multiple markets. Together, these measures foster resilient and compliant labor relations strategies on a global scale. What are common compliance pitfalls that multinational companies encounter when expanding into new international markets? Common pitfalls include failure to comply with labor law regulations and employment contracts, mishandling of employee data, ignoring cultural differences, and misclassifying independent or platform workers as employees. It is essential to have a labor relations expert at the table to provide guidance in advance of market entry. Without proper due diligence, a company may fail to comply with country-specific regulations regarding employment contracts, notice periods, and termination procedures. For example, France, Italy, and Germany generally mandate that certain key aspects of employment contracts, particularly fixed term or probationary periods, be in writing. In Germany, labor unions and works councils play a major role in workplace decisions, especially concerning performance management, layoffs or restructuring. In October 2024, the UK’s labor government shared an Employee Rights Bill package that will have significant impacts to employers. For example, unfair dismissal protections will apply from day one of employment, subject to a statutory probationary period. This will require a significant change on how employers handle short-tenured employees and document the reasons for termination. Included in the changes, trade unions will have easier access to employees and to call for industrial action. Most of the UK provisions will take effect in 2026, giving time for companies to plan for compliance. The EU is increasingly scrutinizing gig workers and contractors. For example, under new labor regulations like Spain’s “Rider Law,” which establishes a presumption of employment for workers on digital delivery platforms, classifying them as employees rather than independent contractors, which entitles them to benefits like social security, health insurance and potential backpay claims. Employers must review the Rider Law and similar legislation to avoid misclassification claims and related tax liability. Under the GDPR, companies must obtain consent from employees to process personal data and ensure proper data storage, processing, and transfer. What emerging trends in labor and employment law should global HR teams be aware of to stay ahead of regulatory changes and maintain compliance? I think the key trends for global HR teams are: • The growing use of AI in recruitment, performance monitoring, and workplace decision-making has attracted significant regulatory scrutiny, with a focus on fairness, anti-discrimination, and data privacy. Compliance teams must stay informed about legislative developments such as the EU AI Act, which sets transparency and risk management standards, and the U.S. Algorithmic Accountability Act, aimed at preventing algorithmic biases. • Regulations concerning human rights in supply chains are intensifying, creating reporting obligations and potential causes of action for failure to adequately disclose risks. Laws like Germany’s Supply Chain Due Diligence Act and the UK Modern Slavery Act mandate that companies ensure ethical labor practices not only within

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