Work/Life: international employment news update

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Issue 21

Welcome to the latest edition of our international employment news update.

Non-competes: will employers have a price to pay?

The use of non-compete clauses, which restrict an individual's ability to join or establish a competing business for a period after termination of their employment, will be reviewed by the UK government.

Proposed options for reform include banning non-competes or introducing a mandatory compensation requirement for employers wishing to use them, with the aim of discouraging the use of these clauses. This would ensure workers receive a fair settlement for the post-employment period in which they are.

UK government consults on banning exclusivity contracts

The UK government has begun a consultation on a proposal to ban exclusivity clauses in employment contracts for low-income workers whose guaranteed income is below the Lower Earnings Limit (currently £120 a week). Such clauses – which prevent these workers from taking on additional work with other employers to boost their income – were banned for zero hours contracts in 2015.

Remote working adversely impacts employee mental health

Data published by NHS Digital shows almost four in 10 of all sick notes signed by doctors in England now result from mental health issues, an increase of 6% since the outbreak of the pandemic.

The Centre for Mental Health think tank predicts that 20% of all adults and 15% of all children in England will require support for mental illnesses such as anxiety and depression in the coming months and years due to the lasting effect of COVID-19.

Leading mental health researcher Paul Crawford warned employers who focus on the savings made from the shift to remote working may "condemn huge swathes of their workforces to…a desolate, unfulfilling existence" and suggests employees should be given the option of remote or office working when the pandemic subsides.

Ethnic pay disparity at major UK bank

Lloyds Banking Group, the first major UK lender to disclose its black pay gap, has revealed that black employees are paid 20% less than their colleagues, with the bonus gap at 38%. The Group cited a lack of black staff in senior positions (0.6%) as the reason. In response to Black Lives Matter protests in July, the bank vowed to bring this figure to 3% by 2024.

Lloyds reported equal pay for BAME employees and white colleagues in the same roles, however, the BAME pay gap stands at 15%.

Accord, the Lloyds staff union, has said the UK government should move to introduce mandatory ethnicity pay gap reporting and has called on other major banks to disclose ethnicity pay data.

US private equity firms back global diversity initiative

A global initiative launched by a Washington D.C.-based private equity association to improve diversity and inclusion has so far gained the signatures of 46 buyout firms and institutional investors. Women account for only a fifth of employees in the alternative asset management industry, which is attributed to white male control.

Participating firms and investors must embrace a public diversity and inclusion strategy or statement, monitor their statistics on hiring and promotion, supply data to investors and provide unconscious bias training for employees (among other action points).

Major Japanese firms fall short on boardroom gender diversity

The Yomiuri newspaper's survey of 111 major Japanese companies across a range of sectors shows 7.7% of executive positions were held by women as of October 2020. This figure – while an increase from 4.9% in 2016 – indicates that the Japanese government's target of 10% by the end of the year will not be hit. Only 9.9% of management positions are held by women, compared to the government target of 30% by year end.

Spain considers four-day work week

In a bid to boost employment and staff productivity in the current economic crisis, the Spanish government is examining a four-day working week. Deputy Prime Minister Pablo Iglesias made the announcement days after Unilever said it is trialling cutting staff hours by 20% without a reduction in pay in New Zealand for December 2020 to December 2021.

The government must present any proposal to change Spain's working week within the national social dialogue structure which comprises labour unions and industry groups.

AI will boost company revenue more than workers

Software company Citrix predicts that AI will be generating more revenue than human workers within the next eight years. This will result from a shift towards applying smart tech to increasing profitability, with employees instead focusing on creative and strategic work.

The study focused on detailed scenario planning and surveyed 1,200 business leaders in the UK, France, Germany and the Netherlands. Four in five said that every organisation will have a chief artificial intelligence officer by 2035 whom the CEO will confer with when making business decisions.

The Citrix UK & Ireland Vice President said, "as intelligent technologies automate the burden of repetitive, task-based work, uniquely human skills like creativity and the ability to learn will drive future value".

Staffing bottlenecks: temp employment agencies, regulation and hospitals during COVID-19

Many hospitals in Germany rely upon temporary employment agencies to supply staff. In Berlin, up to 20% of medical staff shifts are covered by temporary staff.

However, the agencies often refuse to place their workers on COVID wards or cancel the bookings at short notice due to fear of their workers contracting coronavirus. Additionally, permanent staff may switch to leasing companies, as it is more likely they can offer the desired hours with similar wages. The result: a shortage of medical staff during a health crisis.

There is concern that stricter regulation of employee leasing might be enforced in the healthcare sector, as this has been brought forward at policy level for certain industries during COVID-19.