Work/Life - international employment news update

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Issue 127

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

In this edition we look at:

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France increases levy on mutual termination agreements

France's Social Security Financing Act 2026 has again increased the employer contribution on severance payments arising from mutual termination agreements from 30% to 40%. This form of contract termination remains particularly prevalent and continues to grow in France (128,000 terminations recorded in Q1 2025). But ending an employment relationship by mutual consent has become substantially more expensive for employers.

The Act represents a further measure by the French Government to curb perceived abuses. Mutual termination agreements provide employees with an alternative to resignation that avoids immediate financial hardship as, unlike resignation, they provide severance pay and access to unemployment benefits. As such, mutual termination agreements are frequently used to avoid resignations without a new job in sight or for early retirement.

UK postpones implementation of some enhanced worker protections

The UK Government has delayed the implementation of new worker protections against "fire and rehire" practices whilst softening the impact on employers. Under the updated timeline, the near ban has been pushed back from October 2026 to January 2027. The key measure will make it automatically unfair to dismiss employees to change core contractual terms including pay, performance targets, pensions, hours, or holiday. Employers must also agree changes to shifts between day and night work. Ministers aim to balance work protections with business flexibility, following concerns that new rights could drive unemployment.

We are hosting an in-person breakfast briefing on the key measures in the Employment Rights Act (ERA) 2025. This is taking place on 12 March 2026 at our London office – register your interest here. If you are unable to attend in person, we are also hosting a webinar on the ERA on 26 February 2026 – register here.

Dutch coalition government unveils four-year strategy

The Netherlands' incoming coalition government has published its policy programme for the next four years, with an administration that will require cross-party support to pass legislation through both houses of parliament. Ministers will need to negotiate with opposition parties on a case-by-case basis to secure sufficient backing for their proposals, marking a shift towards collaborative policymaking. Key employment and social security measures outlined in the programme include a reduction in unemployment benefit duration from two years to one year, continuation of the existing policy linking state pension age to life expectancy, and planned reforms to disability and incapacity benefits affecting individuals unable to work.

UK considers flexible cap for EU youth mobility scheme

The UK Government is considering a "balancing mechanism" to determine participant numbers for the proposed UK-EU youth mobility scheme, allowing periodic reviews to expand or contract the flow of young people between regions. Whilst Brussels is opposed to any hard cap on the number of Europeans admitted to the UK, British negotiators say that a numerical limit remains essential for London, in line with existing schemes. Current youth mobility visas allow 18- to 35-year-olds from countries including Australia, Canada and New Zealand, to live and work in the UK for two years. All have an annual cap on numbers, but the European Commission argues that such a measure would short-change its 27 member states. There are also disagreements over the proposed length of the visa, with the EU pushing for up to four years.

Gen Z lead sickness absence

According to analysis of 1.2 million employees by HR software provider BrightHR, four out of five UK Gen Z workers took sick leave during 2025, making them the most likely cohort to be absent from work. Mental health concerns ranked as the eighth most common reason for Gen Z absences, significantly higher than in older generations, reflecting a generational shift in attitudes towards workplace wellbeing. Specialists caution that Gen Z's over-representation in customer-facing and lower-paid roles, where illness exposure is higher and flexibility lower, may inflate these figures.

However, experts emphasise that employers should respond with better management rather than stricter policies. This approach becomes increasingly important as statutory sick pay becomes a day-one right in the UK from 6 April 2026.

US job cuts surge to highest January total since 2009

US employers slashed 108,435 jobs in January, the highest number for any start to a year since 2009. The figure more than doubled January 2025 levels and rose 205% from December 2025. Separate data showed US job openings fell to 6.5 million in December, their lowest level in over five years. Initial unemployment claims also jumped to 231,000 in late January, surpassing the forecast of 212,000. Reports suggest the labour market is weaker than anticipated, just a week after Fed Chair Jay Powell cited "evidence of stabilisation". Despite this, unemployment remains relatively low at 4.4%. AI was cited as the reason for 7,624 job reductions, whilst broader tech sector cuts totalled 22,291.

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