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Newsletter: June 20, 2024

Welcome to the latest edition of our newsletter! Our goal is to ensure that you are well informed and equipped with the latest information.

Read on to stay ahead, stay compliant, and set the course for success.

Flexi-Amendment to the Czech Labour Code

The Ministry of Labour and Social Affairs of the Czech Republic has proposed amendments to the country’s Labour Code to make employment relationships more flexible. The new guidelines relate to employees’ probationary period, termination, and work-life balance, among other aspects.

One of the major changes proposed to the Labour Code is a potentially longer probationary period of up to 4 months for non-managerial positions and up to 8 months for managerial positions. The probationary period can be further extended through a written agreement by both parties.

The amendments also seek to promote work-life balance among employees who are parents of young children. Those returning from parental leave will be reinstated in their previous role if they return within 2 years of the child’s birth. Employees might also be able to schedule their working hours via a written agreement with the employer.

With regard to notice periods, the amendment proposes that the notice period begins on the day the termination notice is delivered to the employer, rather than first day of the following month, which is currently followed. This will lead to shorter notice periods and less time to fill vacant positions. For employees terminated due to their own fault, such as misconduct or poor performance, the notice period has been shortened to one month from the current two months.

Some of the other proposed changes to the Labour Code include:

  • The number of cases in which employers and employees can mutually agree on salary payments being made in currencies other than the Czech koruna or crown will be increased.
  • Minors aged 14 and above will be able to engage in “light work” during their summer holidays, without needing to complete their mandatory education.

The proposed amendment is still in its nascent stages and might see changes through 2024 before it comes into force in January 2025.

Luxembourg: New Law Implementing EU Provisions in Favour of Non-European Highly Qualified Employees

In May 2024, the Luxembourg Parliament adopted draft bill No. 8304, which transforms Directive (EU) 2021/1883 of October 20, 2021, into law. The new law sets forth guidelines for the entry and residence of third-country nationals for the purposes of “highly qualified employment.”

The law updates the EU’s Blue Card rules regarding the legal migration of highly qualified workers to address skill shortages. The new guidelines make the admission criteria more flexible for highly skilled third-country workers, while giving them more extensive rights.

  • The new law reduces the minimum duration of the work contract required for Blue Card applications from one year to at least 6 months.
  • Blue Card applicants will still need to prove their credentials regarding higher education or a minimum of 5 years of relevant experience.
  • EU Blue Card holders can now continue to live in Luxembourg during the renewal of their expired Blue Card.
  • Blue Card holders can now seek and accept new employment within 12 months of being unemployed within the EU. They must inform the relevant authorities regarding any professional changes within these 12 months.
  • EU Blue Card holders can now engage in “subsidiary self-employed activities,” to pursue further education and vocational training, and their diplomas and professional qualifications will be recognised.
  • Those with long-term resident status will have extended rights, considering their time spent as a student, researcher or international protection beneficiary.
  • The minimum annual salary thresholds have also been revised for highly qualified third-country workers.
  • With regard to enhanced mobility, the law allows EU Blue Card holders to visit another member state that is part of the Schengen area for up to 90 days within any 180-day period without the need for a visa or work permit if they are visiting the country for “business activities.”
  • Regarding family reunification, the law allows family members of the Blue Card holder to enter and live in Luxembourg before applying for a residence permit if they already hold a valid permit from another member state. With the new law, residence permits will be issued at the same time as the EU Blue Card, so that family members can join the Blue Card holder soon.

The new law seeks to enhance and streamline the EU Blue Card system to make it more responsive to Luxembourg’s labour market needs while simplifying entry and residence for highly qualified workers.

Ireland: Revenue Issues New Guidance on Determining Employment Status for Tax Purposes

The Revenue Commissioners of Ireland, commonly known as Revenue, has published new guidelines that differentiate between employees and self-employed individuals working as independent contractors for the purposes of determining their tax implications. This guidance comes against the backdrop of the Supreme Court judgement related to the “Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino’s Pizza” case.

As part of the lawsuit, the Supreme Court examined the distinction between employees and independent contractors in Ireland and held that the delivery drivers (like those of Domino’s Pizza) should be categorised as employees by Revenue, rather than as independent contractors. The Supreme Court also established a five-step framework for businesses to determine the employment status of an individual as an employee versus self-employed.

This framework consists of 5 questions that businesses will need to answer:

  1. Does the contract involve the exchange of a wage or other remuneration for work?
  2. If so, is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party, to the employer?
  3. If so, does the employer exercise sufficient control over the putative employee to render the agreement one that is capable of being an employment agreement?
  4. If the above requirements are met, the decision maker must then determine whether the terms of the contract between employer and worker and the related working arrangements are consistent with an employment contract, or with some other form of contract.
  5. Finally, it should be determined whether there is anything in the particular legislative regime under consideration that requires the court to adjust or supplement any of the foregoing.

So, the first 3 questions work as a “filter,” and if one or more is answered in the negative, there can be no contract of employment and the individual cannot be considered an employee.  Questions 4 and 5 are considered only when the first 3 questions are answered in the affirmative.

The new guidelines provide examples of how to apply this decision-making framework to various sectors, including construction, telecommunications, information technology, healthcare, courier and entertainment, as well as platform operators and part-time, casual and seasonal workers.

Finland: New EU Blue Card Rules Implemented

The Finnish government has implemented major changes to its EU Blue Card regulations, aligning its policy to the European Union’s 2021 Blue Card Directive. With these changes, Finland has made the process of obtaining an EU Blue Card more flexible and streamlined. Effective May 13, 2024, the new rules have relaxed the eligibility criteria while reducing the mandatory duration for employment contracts and minimum wages.

The new rules include the following changes:

  • Wider eligibility criteria for foreign nationals wanting to live and work in Finland. Applicants now need to prove either higher educational qualifications or at least 5 years of relevant professional experience to qualify for an EU Blue Card.
  • Employment contracts can now be for a minimum of 6 months, down from the previous requirement of a minimum contract duration of 12 months.
  • The minimum salary for an EU Blue Card is now the same as the minimum salary for a Finnish Specialist Permit, at €3,638 (approx. $3,958) gross per month. This is a 1.5x decrease from the previous minimum salary requirement.

In addition, an EU Blue Card can now be issued for a maximum of 2 years. Applicants can apply through a fast-track service in Finland and receive the permit within 2 weeks. Applicants can also apply for a D visa simultaneously with a residence permit, so that they can travel to Finland as soon as the residence permit and D visa are attached to their passport.

These changes are good news for employers too, since they can now access a much wider pool of highly skilled talent. Plus, employers have greater flexibility in crafting the terms of employment contracts. Moreover, hiring highly skilled third-country workers has become more affordable with the reduction in the minimum salary requirements.

Denmark: Work Rights Automatically Extended for Short-Term Workers Who Extend Their Stay

The Danish Parliament passed a bill on June 4, 2024, that amends the immigration rules for third-country workers living and working in Denmark on a Short-Term Fast Track permit. Effective Jully 1, 2024, foreign workers residing in the country under this permit can apply for an extension of their stay without needing to appear before one of the departments of the Danish Agency for International Recruitment and Integration (SIRI).

With this change, workers on a Short-Term Fast Track permit can continue to work as soon as they have submitted their application for an extension and paid the fee. The application must, however, be submitted before the work and residence permit expires. Also, their work-related stay in Denmark cannot exceed a period of 90 days within the last 365 days.

The rule extends to foreign workers who wish to change their work and residence scheme on which their residence in the country is based during an ongoing employment without needing to change their job or employer. Eligible applicants will need to submit their extension requests after the new rule comes into effect on July 1. Any application submitted prior to this date will be rejected.

Another significant change is that some categories of foreign workers are exempted from the requirement of their salary being paid to a Danish bank account. The deadline for opening a Danish bank account has also been extended from 90 days to 180 days for those still obligated to have their salary paid to a Danish bank account.

Finally, foreign workers with certain types of job-related experience who wish to return to Denmark for employment can bring their foreign family members, starting July 1.

With these changes, both workers and employers have gained greater flexibility regarding short-stay work.