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Labour & Employment 2017: Trends & Conclusions

It may be that we remember 2016 as a year that generated significant new precedents in the world of employment law. Disputes over the status of workers in a fast-changing economy, a still-sluggish global economy and Brexit came together to challenge large chunks of the labour and employment rulebook. More than just the effects of globalisation, current events seemed ever-present in the changes affecting the field. For lawyers, this has meant a range of new challenges in their work, but plenty to be getting on with. 

Increasing specialisation

One of the noticeable trends this year was a desire among clients for increasingly specialised practices and advice. This has manifested in one of two ways: either the development of a fully equipped, end-to-end service as part of a full-service firm, or a boutique specialised in employment law with the flexibility that a small team affords.

Evidence of this can be seen in the firms that performed well in our research. Littler Mendelson, the law firm with the greatest number of nominations in our research this year, is a specialist employment and labour law firm with over 1,000 lawyers in over 70 offices worldwide, meaning it can provide clients with both breadth and depth. At Lewis Silkin, 42 per cent of the entire caseload involves its labour and employment practice; the firm acts in the whole gamut of matters including employment disputes, people moves, restructuring, immigration and advising senior executives. It comes fourth in our research. Claeys & Engels, long regarded by its peers as having one of Europe’s preeminent employment practice, also scores very highly.

However, employment boutiques such as CM Murray, GQ Employment Law and senior executive specialists Brahams Dutt Badrick French have also fared well. Clare Murray, Paul Quain and Gareth Brahams at each of these respective firms scored highly in terms of individual nominations. Employee-only law firm Slater + Gordon continues to dominate that side of the market. Nevertheless, the big players still do very well – Baker McKenzie, Paul Hastings and Freshfields all appear in our labour and employment top 10.

Global trends

Increasing employment regulation has continued unabated. This is partly due to an active desire by governments and supranational bodies to regulate and standardise procedure in jurisdictions and across the OECD more generally. But is also arguably an indirect result of the greater scrutiny that working practices have come under due to a succession of constructive legislation. In the UK, for instance, new regulations released by the country’s first Conservative-majority government in 19 years include: gender pay-gap reporting, new rules on public sector exit payments and updated rules on employing foreign workers via the Immigration Act. Italy’s Jobs Act saw new stricter provisions on self-employed workers classifying them as employees under certain circumstances from 1 January 2016. In Japan, an amendment to the Industrial Safety and Health Act now requires stress checks to be carried out by employers that hire more than 50 employees, and in Belgium talk has turned to defining the freedom to work and access to the workplace during labour strikes. Such regulations inevitably encompass a much greater field than employment law, reaching into immigration, taxation and a number of other areas. This represents one more reason as to why law firms need to be able to offer specialised and holistic practices in order to retain clients whose issues are becoming increasingly complex.

With the global economy still recovering from the effects of the banking crisis at the end of the decade, restructurings and workforce reduction schemes have formed a large part of lawyers’ inboxes lately. As of March 2017, the OECD unemployment rate fell by 0.1 per cent to 6.1 per cent after two consecutive months of stability. Across the OECD area, 38.3 million people were unemployed, which is 5.7 million more than in April 2008. In the eurozone unemployment remained stable at 9.6 per cent.

The “gig” or “sharing” economy also continues to generate work for lawyers. The growing flexibility of working hours and practices means that lawyers are not only required to provide counsel on conventional methods of employment but also new forms that constitute departures from the norm. Recent disputes over what constitutes an employed and a self-employed worker culminated in a landmark UK employment tribunal ruling stating Uber cannot classify its drivers as self-employed and therefore must pay them the minimum wage. Similarly, the case of plumber Gary Smith, who wanted to reduce the length of his working week following a heart attack, resulted in a ruling stating that, though self-employed, he was still entitled to basic workers’ rights.

One of the lawyers that we spoke to said that, moreover, “these issues are now boardroom issues” as they can potentially have a great impact on the reputation of a firm. Issues relating to the gender pay gap and how workers are treated and whether they are treated fairly has become an issue that is worthy of seminars and networking events at high-level firms across leading economies.

Brexit

Some lawyers were unconcerned about the impact of Brexit on UK employment law, arguably one of the most heavily EU-regulated areas of law. “We just won’t adopt EU regulations as quickly or not at all,” one lawyer said. At the time of writing, it has been stated by the UK government that all legislation currently derived from or enforced by European regulations, directives and decisions will initially remain in force after the UK leaves the EU, suggesting that for the time being the UK will not see significant changes to its employment law. However, the act of legislating on this, alongside any post-Brexit unpicking of the law, means that we will undoubtedly see law firms consulted on all manner of Brexit-related employment law issues for the foreseeable future.

Indeed, in recent years, it has been UK – not EU – legislation that has caused the biggest shift in employment work. A partner at one boutique firm said, “The Blair years were the boom years,” and while this was partly due to the influx of EU legislation, New Labour’s flagship policies – including the Equality Act 2010, the Data Protection Act 1998 and the Agency Workers Regulations 2010 – gave lawyers a decade of work updating themselves and their clients on the changing nature of employment law in the UK.

The Employment Bar

Meanwhile at the Bar, the introduction of employment tribunal fees has begun to bite. One lawyer at a leading UK firm said, “Firms that do a lot of employment tribunal work are finding life very hard post-fees.” In addition, for junior barristers, it has changed the makeup of their early work, making it harder for them to find small cases on which they can cut their teeth, due to plummeting applications since the fees were implemented.

While almost all barristers we spoke to agreed that the legislation had helped to weed out unworthy cases, particularly those that were highly unlikely to result in significant remedies, several expressed concerns that it had damaged the level playing field for all claimants and had made building a career in civil law as a barrister even trickier than before.

Pensions

Pension law continues to occupy varying positions in markets around the world. In places such as the US, the UK, France and Germany, complex and comprehensive pension legislation keeps lawyers busy. However, in other jurisdictions, streamlined pensions law forms part of employment law and can be treated much more as a part of wider employment legislation. The constant tension between pensionable age and the sizeable funds required to service the pensions of many international firms continues, making work for funds and corporate lawyers who are required by their clients to deliver detailed advice on pensions.

A recent report by Royal London summed up the disparity between pensions transparency thus: “Citizens of Australia, Sweden, the Netherlands and several other countries can do something that British citizens cannot – they can go to a single website and see all, or most, of their pension rights in one place.” In the face of further regulations on pensions, particularly in a green paper recently produced by the UK government proposing to force companies to gain clearance from the pensions regulator before doing corporate deals, detailed advice on pensions rights is bound to keep lawyers occupied in the coming years.

Conclusion

With the continuing sluggish global economy, companies have been forced to tighten their belts, resulting in mass layoffs, restructuring and general workforce reduction. This has meant a lot of work for lawyers, but of a different kind to that seen during the boom years. Globalisation has perhaps affected the labour market more acutely than any other area of business, and disputes relating to the gig economy, a more globalised workforce and the increasing transparency of employment practices have generated much conversation. In the UK, the scrapping of employment tribunal fees has turned the kind of work a fledgling employment lawyer can come to expect on its head, while Brexit means that where a raft of EU legislation pertaining to working hours and employment rights stood, there now exists a lacuna waiting to be filled. Suffice to say, lawyers are managing to stay busy.

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Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.

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W11 1QQ, UK