HSP’s mission is to offer our partners complete end-to-end global expansion guidance and support. As part of that work, we closely monitor and communicate to our clients any significant, active changes in legislation that can potentially impact business operations. Last month, we wrote about employment changes in Hong Kong, Ireland, and the UK. This month, we’re focusing on legislative employment changes in Australia and France.
Please see below for a summary of the changes in employment legislation for these two countries to understand how they may affect you and which actions you should consider taking.
Australia’s legislative employment changes
Australia has been undergoing a series of workplace reforms under the Closing Loopholes Bill. The primary areas covered by the latest employment legislation reforms will affect our clients. Please note that no dates have been announced for when these changes will commence. In addition, no further details on the changes have been officially published as of yet. We believe that there will likely be a lead-in time for implementation for many of these changes, so there are no actions for our clients to take at the moment.
Australian employees now have the “Right to disconnect”:
Employees will have the right to refuse contact or attempted contact outside their regular working hours unless their refusal is unreasonable. This is similar to the French ‘Right to Disconnect’ legislation.
A new definition of employer and employee in Australia:
There is a new definition of employment to ensure the difference between employee and independent contractor is clear and up-to-date.
Unfair contracts regime:
The Australian government has now given the Fair Work Commission (FWC) the power to amend, vary, or set aside unfair terms applied to independent contractors.
How HSP Can Support You
The employee/contractor test will reinforce the need for clients to review any current contractor relationships to ensure that they do not inadvertently have any ‘de facto employees’ working in Australia, which could pose Permanent Establishment (PE) and Commercial Agency risks in Australia. In addition, it emphasizes the importance of having a robust contractor agreement in place to mitigate any courts deeming it null and void.
HSP can help you review your contractor relationships to ensure they don’t put you at risk for PE and Commercial Agency risks. We can also ensure that you have a robust contractor agreement in place to comply with changes to Australia’s employment legislation.
Employers will likely be required to adopt a Right to Disconnect policy that specifically outlines the employee rights and employer obligations regarding the Right to Disconnect, similar to France. The legislation may also require employment contracts to be updated to contain wording regarding the Right to Disconnect.
Changes to fixed-term contracts in Australia:
New rules now apply to fixed-term employment in Australia. The employer must supply each employee engaged on a fixed-term contract with a Fixed-Term Contract Information Statement (FTCIS). Fixed-term contracts will be subject to a maximum term of two years and can only be extended or renewed once.
How HSP Can Support You
HSP can review your existing fixed-term contracts for customers, draft fixed-term employment contracts, and provide the FTCIS issued by the FWC.
France’s New Mandatory Profit-Sharing Legislation
Mandatory Profit-Sharing in France:
France’s new mandatory profit-sharing law will apply to employers with 11 employees or more from 1 January 2025. Since 2020, employers with 50 employees or more have had to coordinate profit-sharing schemes for their workforce. The proposals will extend this requirement to employers with 11 employees or more.
The Act sets a deadline of 1 January 2025 to implement a profit-sharing scheme if the company is profitable (has a pre-tax profit of at least 1% turnover for three consecutive years). The obligations under the Act will initially operate for a five-year period, after which the legislature will determine whether the requirements will remain in force.
Employers can satisfy the requirements in several ways. In addition to a standard profit-sharing arrangement (intéressement), an employer could satisfy the Act by operating one of these:
- company savings plan (PEE)
- pension plan (PER)
- value-sharing bonus (PPV).
How HSP Can Support You
HSP can help you ensure that you have a profit-sharing program in place by 2025. We can audit your existing programs to ensure they will comply with the new law. Our team can also help you create or adjust policies to ensure that compliance with France’s legislative employment changes. Employers with 11 or more employees should make plans now to ensure that schemes are in place before the deadline. Companies should audit what they have in place regarding Interessement, PEE, PER, or PPV or work to develop a legal requirements action plan.
