Changing dynamics of managing a global workforce: important legislative updates
Staying on top of the legislative and regulatory landscape is one of the key priorities for organisations that operate internationally.
With the end of the year approaching, we have summarised some of the most important global legislative updates in the past 2 years which have had significant impact in terms of business implications and effects on employers, to help you understand the latest dynamics of managing a global workforce.
Initiation of bargaining modifications to the Fair Work Act in Australia
The Fair Work Act 2022 amended the Fair Work Legislation (Secure Jobs, Better Pay) and implemented significant adjustments to the bargaining process, which went into effect on 6 June 2023.
The modifications introduced a fundamental shift in the dynamics of bargaining:
The ability of labour unions to compel employers to engage in negotiations
Amending the multi-employer bargaining regime substantially.
It gives employees (or rather, in most cases, the unions acting on their behalf) significantly expanded abilities to compel employers into the statutory bargaining scheme, including forcing competitors to engage in multi-employer bargaining against their will. It also empowers the Fair Work Commission to intervene in bargaining by imposing arbitrated outcomes on parties without their consent. This increases the risk of being in bargaining where you could end up with an outcome that undermines or fails to properly take account of the industrial realities of your operations. This is because it will be imposed by a third party with no accountability for the success of those operations.
Model Text for a System to Eliminate Sexual Harassment in the Workplace
The System for Eliminating Sexual Harassment in the Workplace (Model Text) was jointly issued on March 8, 2023, by the Ministry of Human Resources and Social Security, the National Health Care Commission, the Supreme People's Procuratorate, the All-China Federation of Trade Unions, the China Enterprise Confederation/China Entrepreneur Association, and the All-China Federation of Industry and Commerce. Its purpose is to assist employers in enhancing the existing framework for eradicating sexual harassment in the workplace.
Forbidden conduct in the work environment encompasses the following:
"(1) Engaging in unwelcome teasing language, relating foul jokes, disclosing personal sexual experiences, or calling unwelcome names;
(2) Intentionally touching, bumping, or kissing sensitive body parts of others; inappropriately displaying private body parts; or sexually touching or fondling oneself in the presence of others;
(3) Distributing or exhibiting pornographic or provocative images, videos, or text messages."
In the interim, model texts also guide employers regarding the confidentiality of the reporting complainant's identity, the investigation and handling process, the protection of personal privacy rights, and the avoidance of secondary harm to victims through actions such as job position adjustments.
Act of 2022 on Employment (Amendment) — One of the most significant and comprehensive changes to the Employment Act of 1955 to date in Malaysia.
The current Act is altered in a few significant ways by the modifications.
The following are some of the major changes:
paid maternity leave for 98 days (previously 60 days),
paid sick leave for up to 60 days (where hospitalization is necessary) plus an extra 14–22 days (where hospitalization is not necessary),
maximum working hours capped at 45 hours per week (previously 48 hours),
paid maternity leave for 7 consecutive days,
flexible work schedules,
new regulations against sexual harassment at work,
prohibitions against forced labour,
prohibitions against firing pregnant workers.
A Novel Progressive Wage mark to recognize & assist businesses giving workers progressive wages.
Customers and service purchasers can now more easily recognise and provide businesses that give their lower-paid employees Progressive Wages through the Progressive Wage (PW) Mark. The PW Logo is an accrediting program that acknowledges these businesses, which can then use the Mark to promote themselves as companies that advocate higher pay for workers making less money. This is a component of a societal endeavour to elevate workers at lower wages.
The Tripartite Workgroup recommended this plan in August 2021.
Furthermore, businesses that take it a step further and implement the Tripartite Lower-Wage Workers' Standard on Advancing Well-Being (TS-LWW) will be recognized by PW Mark Plus. Progressive techniques are described in the TS-LWW which offer lower-paid workers greater assistance in terms of workplace safety and health, instruction and professional growth, and the availability of rest areas.
PW Mark is necessary for qualified government vendors.
Thailand Provides New Tax Incentives for Depositary Receipts of Listed Foreign Securities
Thailand has announced tax exemptions for issuers and holders of depositary receipts (DRs) of listed foreign securities to encourage DR transactions, create more investment products in the Thai capital markets, and promote and offer opportunities for retail investors to invest in foreign securities. The exemptions are laid out in the Royal Decree under the Revenue Code B.E. 2481 (No. 775) B.E. 2566 (Royal Decree No. 775), which came into force on August 16, 2023.
DRs are certificates representing underlying foreign securities listed on a foreign exchange, but DRs are listed and traded on the Stock Exchange of Thailand (SET). Holders of a DR can receive the same benefits payable from the underlying listed foreign securities as direct holders of the listed foreign securities.
Corporate Income Tax Exemption
Under Royal Decree No. 775, companies or registered partnerships that issue a DR in accordance with the Securities and Exchange Act B.E. 2535 (1992) (SEA) are exempt from paying corporate income tax (CIT) for income received from holding foreign securities for the purpose of DR issuance, subject to two conditions: (1) the income must be, in turn, paid to any holders of the DR, and (2) the company or partnership cannot claim the income as a tax-deductible expense when calculating its net profits for CIT purposes.
Labour Reforms Set Out Flexible Work Arrangements
Recent amendments to the Labour Code allow employers to adopt a four-day workweek with employee consent; establish staggered work schedules in their work rules and enable job sharing (i.e., two employees jointly performing the same position) under certain conditions.
The "normal" workweek of up to 40 hours may be distributed over four days (up to 10 hours each day), when mutually agreed upon by the employer and employee, with the possibility to alternate with a five-day or a six-day workweek. The limit on overtime is 12 hours per month and 120 hours per year (in addition to the existing cap of two hours per day).
Employers are not required to introduce a four-day workweek or any of the other measures. The changes are intended only to offer more flexibility in employment for workers and companies. 62% of firms surveyed by WTW have flexible work schedules; 30% employ part-time workers. Employers may wish to review their current work arrangements to take advantage of the new measures, which took effect on July 1, 2023.
Understanding the employment laws and requirements as well as cultural nuances in different markets is never easy and requires an incredible amount of time and expertise. As your global EOR partner, Atlas has dedicated resources to help you stay on top of the latest legislative updates, so that you can stay assured and focus on your core business. Talk to us today to learn more about how we can help simplify your global expansion journey.
The information presented in this publication is solely for informational purposes and should not be considered as legal advice. The content is provided as of the date of publication and comes with no warranty, either expressed or implied. Atlas is not a law firm, and the material herein is not a substitute for professional legal advice. Readers are strongly advised to seek advice from a qualified attorney or legal expert to obtain guidance on any legal matters discussed in this publication. Atlas shall not be responsible for any damages or issues that may arise from the reliance on the information contained in this publication.