Overview of Employment Issues in Fashion: North America, Asia, Europe, and Latin America
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Overview of Employment Issues in Fashion: North America, Asia, Europe, and Latin America 2012 Luxury & Fashion Industry Conference Harvard Club | New York, NY September 28, 2012 Douglas Darch (Chicago) Louise Firestone, SVP & GC, LVMH Joseph Deng (Shanghai) Gregor Dornbusch (Frankfurt)
Presenters
Doug Darch
Douglas.Darch@bakermckenzie.com Joseph Deng
+1 312 861 8933 Joseph.Deng@bakermckenzie.com
+86 21 6105 5988
Gregor Dornbusch
Gregor.Dronbusch@bakermckenzie.com Louise Firestone
+49 (0) 69 29 99 08-621 louise.firestone@lvmhny.com
© 2012 Baker & McKenzie LLP. All rights reserved. 2North America
3Controlling Employee Use of Social Media
– NLRB Oversight
– Standards (i) Protected and (ii) Concerted
– Costco decision
– e.g.
1.My employer sells shoddy goods
2.My superior sexually harasses my team members
3.My employer has cheated me out of my bonus
– Balancing, Monitoring, and Privacy Issues
– Impact of “lawful off-duty” conduct laws
– BOYD Policies
4Unions and Works Councils
– Micro Units
– Specialty Healthcare (NLRB)
– 5th Floor Women’s Luxury Shoe Department
– Corporate Campaigns: U.S. to Global
– Supply chain inference
– Cintas factory in Bangladesh
– Brand damage – “eyeon…”
5Curbing Wage and Hour Issue
– Upgrade time keeping system
– Value of legal opinions
– Mandatory arbitration agreements
– Mooting of claims when filed
6Employment Issues in Global Supply Chains
– DOL Wage Hour initiative in Southern California
– Use of Quiescent “Hot Goods” Provision in FLSA
– Child labor initiative DOL/OHSA
– Dodd Frank Conflict Minerals
– California Transparency in Supply Chain Act (2012)
7Asia
8Overview of Labor Relations in Asia – Significant state control – Individual actions often limited – Compliance challenges – No employment “at-will” (contracts required) – Labor unions matter – Grounds for termination / RIF – Separation / severance costs © 2012 Baker & McKenzie LLP. All rights reserved. 9
Type of Legal System
Common
Australia, Hong Kong, India, Singapore
Law
China, Japan, South Korea, Tiawan,
Civil Law
Vietnam
Mixed Indonesia, Philippines, Thailand
© 2012 Baker & McKenzie LLP. All rights reserved. 10Labor Unions
Australia
Philippines
Indonesia Independent, potentially strong
Thailand
South Korea
Singapore
Hong Kong Independent, but relatively weak
Japan
China
Vietnam
State-controlled
© 2012 Baker & McKenzie LLP. All rights reserved. 11Right To Strike
No Right China
to Strike Vietnam
Australia Singapore
Philippines Indonesia
Right to Strike
Thailand Japan
Hong Kong
© 2012 Baker & McKenzie LLP. All rights reserved. 12Reductions in Force
Japan Very difficult due to legal requirements:
Korea
China Only permitted in tightly-prescribed situations
Australia Possible but must be managed carefully:
Malaysia - Co-operation of government authorities (Vietnam)
Philippines - Co-operation of unions (Australia, China and
Thailand Vietnam)
Taiwan - Strong employee remedies (Australia, Malaysia,
Vietnam Philippines and Thailand)
Hong Kong
Relatively straightforward
Singapore
© 2012 Baker & McKenzie LLP. All rights reserved. 13Statutory Severance Pay
- Statutory severance scheme required
Most - China and Taiwan require one month’s wages per
Jurisdictions year of service
- Qualifying periods in Vietnam and Hong Kong
- Only if required in contract, award or collective
Australia
agreement
Japan - No statutory scheme in place
Singapore - But paid as a matter of practice in Japan
© 2012 Baker & McKenzie LLP. All rights reserved. 14Europe
15Controlling Employee Use of Social Media
– Distinguish business and private use
– Control of business use must be clearly reserved
– No control of private use freedom of speech vs. justified
interests of employer
16Unions and Works Councils
Three tiers of Employee Representation
Works council employee forums
Trade unions
Employee representatives on company boards
plus: EWC
17Unions and Works Councils
General Trend:
Trade unions push into companies
“traditional” industries’ employees more open
18Unions and Works Councils
Substantial Regional Differences
The Nordics • Clear emphasis on union rights
• No works councils
• Board representation of employees possible in many
companies
Eastern Europe • Union rights predominant
• Little role for works councils, if at all existent
• Board representation possible Slovakia, Hungary,
Slovenia and Czech Republic
Germany, • Predominantly works council rights
Luxemburg, • Union rights restricted to CBAs
Netherlands, • Board representation possible in Germany, Austria and
Austria, Luxemburg
Switzerland
19Unions and Works Councils
Substantial Regional Differences
France, • A mixed bag of union and works council rights with
Belgium, Italy, strong union positions (including widespread industrial
Spain, Portugal, action capabilities)
Greece • No board representation (Exception France: the works
council must be represented at the board of directors
(“conseil d’administration ou de surveillance”) and
members of the works council can attend shareholders
meetings)
UK • No works councils but TUPE representatives
• Limited union rights: Potential right to compel union
recognition
• No board representation
20Unions and Works Councils
Categories of Rights
– Information rights in most countries
• Most important: Economic matters (development of business,
strategic decisions, revenue figures, balance sheets, etc.)
– Consultation rights in most countries
• Most important: Mass redundancies, larger reorganizations,
substantial business transfers (“major operational changes”),
implementation of new technologies
• In Austria, France, Germany, Luxemburg and Netherlands also
economic matters – in countries without such rights consultation,
however, is often done practically in order to maintain good labor
relations
21Unions and Works Councils
Categories of Rights
– Substantive co-determination
• In most countries legally restricted to „social matters“ (i.e. working
conditions)
• In Austria, Belgium, Denmark, Germany, Netherlands also in certain
individual personnel matters (hirings and firings)
• No substantive co-determination rights in Estonia, Greece, Lithuania,
Spain, Sweden, Switzerland and UK
• Even in countries without legal rights to co-determination concessions
in major operational changes may often practically be needed to secure
staff co-operation (e.g. UK) or to get governmental approval (e.g.
Spain)
22Curbing Wage & Hours Issues
• Part-time and overtime
• Overtime pay usually mandatory
• Additional overtime pay
Contractual
CBAs
Industry standard
• Permanent overtime work as contract change
• Question of evidence
23Latin America
(emphasis on Argentina, Brazil, Chile, Mexico
and Venezuela)
24Controlling Employee Use of Social Media
– Largely unregulated, but subject to general principles
balancing the employer’s right to control the business and
the employees’ privacy.
– In general, the employer may prohibit the use of social
media with employer’s information technology devices,
and may also prohibit inappropriate use of social media in
and outside the workplace. Certain formalities may be
required.
– However, the issue is relatively new in the region and may
be subject to additional development through
administrative and/or judicial decisions in the future.
25Unions and Works Councils
– Generally there are no works councils in operation.
However, in Brazil there is a project in discussion that
would create them, and in Venezuela the recent new labor
legislation created them but they will not operate until a
special law is enacted.
– In some countries, the employer’s duty to bargain is easier
to obtain than in other countries.
26Curbing Wage and Hour Issues – Obligation to issue pay receipts (for example, in Venezuela if no pay receipts are issued, the employee’s allegations concerning his/her salary are presumed true in absence of evidence to the contrary). In other countries, the result might (though not necessarily) be similar via rules regarding burden of proof. – Obligation to sign written employment agreements in Chile and Venezuela (otherwise, the employee’s allegations concerning the contents of the agreement are presumed true in absence of evidence to the contrary). In other countries the result might (though not necessarily) be similar via rules regarding burden of proof. – Limits to the number of overtime hours and certain adverse consequences in the event of excess. 27
Employment Issues in Supply Chains – Whether certain types of outsourcing are prohibited, restricted or permitted (e.g.: certain countries prohibit or restrict outsourcing of core business activities) – Whether employees of independent contractors may request payment of the same benefits provided by the hiring company (e.g.: according to certain Supreme Court rulings, in Venezuela when the services are of the same nature as or intimately related with the client’s business) – Whether the hiring party or beneficiary of the services or work could in certain cases be jointly and severally liable for payment of the contractor and/or sub-contractor’s labor obligations regarding the employees working in the service or work. 28
General Hot Topics and New Trends
– There are several hot topics and new trends.
– Just as examples: (i) impact of exchange controls on
certain employee compensation issues in Argentina (e.g.:
stock based incentives); (ii) new Certificate of Liquidation
of Labor Obligations in Brazil; (iii) formula for monthly
variable compensation to be included in the employment
agreement and described in the monthly pay form in Chile;
(iv) approval of Free Trade Agreement with the United
States of America in Colombia and its incidence on
internal labor regulations; (v) labor reform in process of
analysis in Mexico; and (vi) new labor legislation recently
enacted and in effect in Venezuela (May 7, 2012).
29Overview of Employment Issues in
Fashion: North America, Asia, Europe,
and Latin America
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