In this issue of Bird & Bird’s APAC Frontline, we will look back at the significant changes that came into effect in the last quarter across Australia, Hong Kong, the People’s Republic of China (PRC) and Singapore.
In our Case Updates, we look at an Australian ruling which determines whether an individual is an employee or merely an independent contractor under a gig economy business model.
Our Legal Updates include changes to statutory entitlements and benefits across the APAC region. In Australia, such updates include the changes to modern awards, introduction of family and domestic violence leave, the intention to introduce an anti-religious discrimination bill and the repealing the Labour Hire Licensing Act 2017. In Singapore, we set out details regarding the Amendments to the Singapore Employment Act, and the increase of the minimum qualifying salary for an S Pass. In Hong Kong, the Employment (Amendment) (No. 2) Ordinance 2018 commenced and the statutory minimum wage will be increased from May 2019. The Hong Kong government also announced its plans to extend parental leave. In the PRC, we see greater joint effort between government departments to enforce social insurance laws and the introduction of measures to maintain a stable employment environment.
What Does the Fair work Commission’s decision that a foodora rider was an employee mean for the ‘gig economy’?
On 16 November 2018, the Fair Work Commission (FWC) found that Joshua Klooger, a Foodora delivery rider, was an employee of Foodora. Foodora’s business model, like many Gig-economy businesses, relies on the riders not being employees.
For those reasons this decision is important, even though the FWC has done no more than apply long standing principles around the employee/contractor distinction. This article looks at the key take-aways from the decision surrounding the true nature of the relationship between Klooger and Foodora.
Changes to modern awards
The Fair Work Commission has updated all Modern Awards to include new rules regarding employee requests for flexible work arrangements. The new rules, which came into effect on December 1 2018, impose greater consultation obligations on employers. If an eligible employee makes a request for flexible working arrangements, the employer must discuss the request with the employee with the intention of reaching a genuine agreement. The employer may only refuse a request on reasonable business grounds. Where a request is refused, the employer must provide a written response detailing the reasons for the refusal, and setting out any alternative changes to working arrangements that can be offered.
The Fair Work Commission has also varied the termination of employment rules in a number of Modern Awards from 1 November 2018. 89 Modern Awards were varied to require that employers pay an employee’s final pay and other entitlements within 7 days of employment ending. The variation also limits employers to withholding 1 week’s wages from an employee under the age of 18 in situations where the employee did not give sufficient notice of termination.
Family and domestic violence leave introduced
The Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 (the Act) took effect on 12 December 2018. The Act has amended the Fair Work Act 2009 to include an entitlement to unpaid domestic and family violence leave under the National Employment Standards.
All employees, whether full time, part-time, or casual, will now be entitled to 5 days of family and domestic violence leave per annum. This follows the Fair Work Commission’s earlier decision to update all Modern Awards (effective from 1 August 2018) to include a family and domestic leave entitlement.
Family and domestic violence is defined as “violent, threatening or other abusive behaviour by an employee’s family member that seeks to coerce or control the employee, or causes them fear or harm”.
This leave can be taken where an employee needs to take time in their ordinary work hours to deal with the impact of family and domestic violence.
Anti-Religious Discrimination Act
The Australian Federal Government has flagged its intention to introduce a dedicated anti-religious discrimination bill to Parliament. The announcement follows the public release of the report of the Religious Freedom Review’s Expert Panel on 13 December 2018.
The Fair Work Act 2009 currently protects employees against adverse action taken against them because of discriminatory reasons (which could include their religious beliefs). However, this protection only applies where there is a separate anti-discrimination law that makes religious discrimination unlawful in the location where the action is taken. The Fair Work Act 2009 therefore does not protect employees against religious discrimination in Australian states and territories where anti-discrimination legislation does not outlaw religious discrimination.
In contrast, the Federal Government’s proposed bill will afford all Australian employees protection against discrimination on the basis of their religion, or alternatively their choice not to have a religion.
The bill is expected to be presented to parliament in early 2019.
South Australian labour hire repeal
On 29 November 2018, the South Australian (SA) Government introduced legislation aimed at repealing the Labour Hire Licensing Act 2017.
The Act established the Labour Hire Licensing Scheme (Scheme), and was introduced by the former Labour government in 2017. Under the Scheme, labour hire companies (or companies that otherwise engage in labour hire activities) are required to be licenced, with strict penalties for companies that do not comply with the conditions of their licence.
Enforcement of the Scheme was previously delayed until 1 February 2019. However, since the SA Government’s announcement of the intention to repeal the legislation, Consumer and Business Services have ceased accepting applications for new labour hire licences.
The repeal of the Act follows a review into the labour hire sector by a taskforce established by the SA Government. The taskforce, which included Consumer and Business Services, the Small Business Commissioner, Return to Work SA and Revenue SA, determined that existing laws are capable of dealing with labour hire issues.
Commencement of the Employment (Amendment) (No. 2) Ordinance 2018 (Amendment Ordinance)
Effective from 19 October 2018, the Amendment Ordinance empowers the Labour Tribunal to make an order of reinstatement or re-engagement for unreasonable and unlawful dismissal.
An order can be made without the employer’s agreement if the Labour Tribunal considers it appropriate and practicable.
If the employer fails to reinstate or re-engage the employee, the employer will need to pay a further sum of three times the employee’s average monthly wages, subject to cap of HK$72,500. It will be a criminal offence if the employer fails to pay this further sum wilfully and without reasonable excuse.
Extension of parental leave
The Chief Executive’s policy address in October 2018 proposed to extend the statutory maternity leave to 14 weeks. Currently, it is expected that the bill would only be tabled in late 2019 and would be passed before July 2020.
In October 2018, the Employment (Amendment) Bill 2018 was passed by the Legislative Council to extend statutory paternity leave to 5 days. This is expected to be implemented before Lunar New Year in February 2019.
Increase of minimum wage
On 8 January 2019, the Executive Council approved the proposal to increase Hong Kong’s statutory minimum wage from the current level of HK$34.50 to HK$37.50 per hour.
The new minimum wage would take effect on 1 May 2019.
Serious Dishonest Enterprises in Social Insurance Sector Will Face Joint Punitive Measures Imposed by 28 Government Departments
On 22 November 2018, the National Development and Reform Commission, the People’s Bank of China, the Ministry of Human Resource and Social Insurance and the other 25 central government departments jointly issued the Memorandum of Understanding on Joint Punitive Measures against Serious Dishonest Enterprises and Related Personnel in the Social Insurance Sector (“Memo“). Such step showed that the Chinese authorities are taking the enforcement of social insurance laws more seriously.
The Memo defines nine sorts of violations as ‘Serous dishonest employer/employee behaviour’, the key ones being:
- failing to participate in social insurance in accordance with laws and refusing to rectify the situation;
- failing to truthfully declare the social insurance contribution base and refusing to rectify the situation;
- failing to pay social insurance premium;
- illegally obtaining, selling or disguising trading of data relating to social insurance personal rights and interests;
- refusing to assist the social insurance administrative departmentin its efforts to investigate and verify accidents and problems; and
- refusing to accept or assist tax department in its efforts to supervise and inspect social insurance implementation.
In accordance with the Memo, employers or relevant personnel determined to be dishonest due to any of the above behaviour will face a number of adverse consequences imposed by 28 different departments. For example, the dishonest employer may face restrictions on participating in social insurance cooperation projects, social insurance supportive funds and other governmental financial subsidies, or the government procurement process as a supplier. Furthermore, government departments will take into account the dishonest behaviour of the employer, and its legal representative and relevant person-in-charge when granting certain approvals or licenses.
Information regarding employers which violate social insurance laws will also be shared and circulated among 28 departments to facilitate joint supervision and punishment. Such information will also be published to the public via Credit China, National Enterprise Credit Information Publicity System and the official websites of relevant government departments.
State Council Issued a Paper aimed to Keep China’s Employment Market Stable
The Several Opinions on Stabilizing and Promoting Employment in the Present and Future Period (“Opinion“) was promulgated by the State Council on 5 December 2018. This Opinion is issued as a result of the increasing pressure coming from the declining economic situation of Mainland China, which causes public concerns about its negative influence on the human resource market and social employment rate.
To achieve the national employment goal and maintain a stable employment environment, the State Council puts forward a package of 15 measures in this Opinion, mainly focusing on promoting the employment rate, supporting small businesses’ operation and business start-ups, providing professional trainings and helping laid-off workers. The following measures deserve the attention of multinational companies:
- in relation to promoting stable employment, the Opinion stipulates that employers which do not lay off any employee or keep the redundancies to a minimum level will be granted a refund of 50% of the unemployment insurance premium that the employer contributed over the last year;
- for employers facing temporary business difficulties but with fewer layoffs or even no layoffs, the refund amount can reach up to 6 times the number of employees that are covered by the employer’s social insurance scheme multiplying the local monthly unemployment allowance standard;
- to support the development of small business and encouraging new business setups to ease social employment pressure, the Opinion specifies that small enterprises can apply for governmental loans of up to RMB 3 million to be injected into their businesses; and
- employers with business difficulties can receive government funding support to provide professional trainings to their employees.
From 1 April 2019, the Employment Act (EA) will be expanded to cover all employees. The amendments will lead to a more regulated dismissal regime, enhanced statutory benefits and protections for all employees, and a more flexible approach towards salary deductions. We set out a brief discussion on the salient points in this update.
Minimum qualifying salary for an S Pass
From 1 January 2019, the minimum qualifying monthly salary for an S Pass (the work pass usually issued for mid-level skilled foreigners working in Singapore) will be raised (from S$2,200 currently) to S$2,300. This will further be increased from S$2,300 to S$2,400 on 1 January 2020.