Labour & Employment 2018: Trends & Conclusions

Labour and employment lawyers have experienced another busy year owing to numerous factors. Several aspects of employment law have been turned on their head as a result of work generated by GDPR and data protection matters across Europe; the gig economy and tribunal fees in the UK; expanding labour infrastructure in developing economies; and on a global scale, the #metoo movement. Consequently, employers are now paying forensic levels of attention to these issues.

The future of data in the workplace

Across Europe, the General Data Protection Regulation (GDPR) was the first thing on lawyers’ lips. “It is a big issue – privacy matters in employment law,” one Danish partner told us. Protection of employee data is now crucial and human resources departments across Europe are keen to ensure that they do everything necessary to comply with the new regulations. This of course means instructing lawyers with expertise in data and technology. One firm admitted that such counsel is “somewhat outside the scope of usual legal advice” when it comes to employment law.

Such issues also encompass investigations in the employment space. For example, when businesses have an employment dispute, how do they deal with the data perspective and privacy issues? How best to accumulate big – and probably sensitive – data sets and analyse them? Here forensic consultants are stepping in to provide additional assistance, but the lawyers are still the first port of call.

With FaceTime, Skype and increasingly digitised methods of working, any issues relating to misconduct, recovery and analysis of information will always lead back to data issues.

New tricks

Lawyers we spoke to were keen to emphasise the seismic nature of the shift in advisory work caused by several high-profile sexual harassment scandals in 2017. There has been “a huge amount of work” relating to sexual harassment, with scandals emerging around the world, from Hollywood to the Norwegian media industry, meaning that employment lawyers have had to move fast in advising employers of their rights and obligations. The subsequent rise of the “#metoo" movement placed an already high-profile issue directly in the media spotlight. This has also helped to bring whistleblowing to the fore as its own area of employment law; sources have noted a significant uptick in the defence and prosecution of those who have outed poor employment practices or alleged reprehensible activities among employers. Legislators, on the other hand, have been slower to respond, although there have been some exceptions, such as the UK Parliament’s women and equalities committee, which recently opened an inquiry on sexual harassment in the workplace, including oral evidence from employment law experts.

In the UK, the Taylor review of modern working practices has also provided some recommendations which, if implemented, may signal a realignment of employment practices and provide a model to be used in other jurisdictions. One of the more significant recommendations was for a greater consistency in taxation of work for both the self-employed and employed (this policy was included in the UK government’s most recent budget and subsequently dropped) and the introduction of “dependent contractors” – those that are not employees per se but, due to the nature of their work, would qualify for worker rights such as sick pay and annual leave.

Such aspects add more fuel to the debate surrounding the gig economy, which remains a big issue. The case of Pimlico Plumbers v Smith – the ruling on which may determine a significant amount about what constitutes a self-employed worker – was heard in the Supreme Court in February 2018 and judgment was still awaited at the time of writing. A report by the consulting firm McKinsey recently found that up to 162 million people in Europe and the United States – or 20 to 30 per cent of the working-age population – engage in some form of independent work, suggesting that this area of employment law will only continue to grow into the future.

Practitioners we spoke to also had comments on the increasingly competitive nature of the employment legal market. “[Law firms] must have a USP these days,” one lawyer at a leading City firm said; more and more often, clients are looking for specific expertise that cannot always be offered – even by a leading corporate outfit. The rise of firms specialising in these areas has satisfied this requirement well. Some of the leading firms in our listings in England are employment and pensions boutiques. While this offers the opportunity of arguably more specialised advice for the client, it also offers the lawyers more flexibility and the possibility of fewer conflicts than they might encounter in larger full-service firms.

It’s not all innovation however – for English courts new grist has been added to a long-standing mill in the form of a renewed stream of smaller employment claims thanks to the abolition of tribunal fees in July 2017. The volume of claims has gone up, although not skyrocketed; and practitioners noted that the infrastructure designed to handle them has been pared back so significantly that it is now struggling to cope. As a result, the backlog of claims is huge.

Among other topics mentioned by lawyers we spoke to was equality of pay between genders, and parental rights, both of which are international hot topics. Peru and South Africa, among other jurisdictions, are set to enact legislation enforcing equal salaries between genders and relating to parental leave respectively. In developing economies, too, issues surrounding new technologies, trade unions and labour litigation remain top priorities, while the “#metoo” movement and the inevitable encroachment of data protection issues also loom large.

Old habits

Despite an array of changes in the market, traditional aspects of employment law are still busy and relevant to lawyers’ practices. Practitioners we spoke with talked of a consistent level of litigation, particularly surrounding team moves and those involving individuals with post-termination restrictions. Tillman v Egon Zehnder Limited, which was recently decided in the England and Wales Court of Appeal, is an example of a case in which a post-termination restrictive covenant represented a restraint of trade, clarifying the test for severance.

Across Europe, contractual issues also continue to loom large. Not only have they been highlighted by the discussion around the “gig economy” and what exactly constitutes a contractual employee, but with the UK’s exit from the European Union the constructive issues surrounding mobility clauses and movement of workers are now hot topics.

In pensions, the story of a traditional sector expanding into new forums is similar. Jurisdictions with complex pensions industries – primarily the UK, US and many western European countries – are now experiencing an increased need from clients for acute expertise and innovation. The era of final salary pension schemes is almost over, with a plethora of new models designed to improve yield and satisfy both investors and those hoping to collect a pension that will allow them to be comfortable in their retirement. Private equity and hedge funds continue to be major clients in the space, we were told.

In a position of strength are those firms that can demonstrate expertise in both employment and pensions law – of which there are few. A fissure has opened between those practices that specialise in corporate employment law and those that work on individual, more personal matters, but both complement each other in such an increasingly diversifying market.

Conclusion

Lawyers we spoke to are clear that employment law will not stand still, and will only continue to evolve and demand increasingly specialised expertise. One practitioner opined that “the future does not belong to employment as a huge standalone practice area”. With data privacy, technological changes and a greater focus on investigations and compliance issues, to name but a few, employment matters are no longer confined to one area of law. Moreover, pensions law, in jurisdictions in which it is developed, is growing in complexity as funds looks for innovative methods to boost their yield. Certainly, those practitioners that can carve out their niche here will be handling hefty workloads and earning commensurate rewards over the coming years.

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