Two years of upheaval have brought about new ways of working and new challenges for employers. Our Greater China employment team reflects on important themes that have emerged and which will continue to shape the year ahead for employers in China. Ranging from managing employee mental health and remote working to protecting teams and trade secrets in tight labour markets, for more detail, read on and join our webinar on 18 January 2022.
Health and safety in the new world of work
Employee health and safety continues to dominate headlines as employers, not only respond to new waves of COVID-19, but also engage with employee mental wellness and manage employee burnout. Understanding the legal protections to employees when they return to work from an extended absence can be tricky given the increased incidence of discrimination claims. Further, in Hong Kong, reforms to health and safety penalties are still on the agenda, so businesses should review their safety governance, especially in light of the potential personal liability for directors and officers in Hong Kong. Similarly, in the PRC, the Work Safety Law was amended following a serious workplace accident in 2021. The key amendments not only increase the safety responsibilities of employers, including as they relate to employees’ mental health, but also impose harsher penalties for a breach.
Can working from home become working from anywhere?
While working from home has become standard in many businesses, many managers and HR teams still struggle with onboarding employees, conducting performance management, and monitoring conduct remotely. Ineffective processes can cause disruption to teams and create legal risk.
Our Future of Work Report demonstrated that employers have an appetite to take advantage of the flexibility remote work offers, with 75% of respondents expecting their remote workforce to be located in more jurisdictions than before, permitting them to access more diverse labour markets. Employees too have become accustomed to the flexibility that remote working offers, and we have seen increased demand for employees to work outside their home jurisdiction, particularly where travel restrictions have prevented them from seeing family for an extended period. Despite the legal considerations that cross-border working involves, such as employee pension and insurance arrangements and tax, certain firms have seen international remote working as a tactical move to attract and retain employees. Some businesses in Hong Kong have also offered reimbursement for quarantine or travel expenses. However, employee mobility in the region will continue to be challenging, including in light of ongoing cross border movement restrictions due to COVID-19 for foreign employees in the PRC.
How to protect teams and trade secrets in the fight for talent
In addition to retention strategies, tight labour markets are causing employers to consider the legal and contractual tools they have available to protect teams and trade secrets as employees move to competitors. In Hong Kong, we saw a number of cases focused on employee non-compete covenants including the enforcement of a paid 6-month non-compete obligation against an employee who was critical in developing and managing his employer’s proprietary trading technology, as well as a reminder of the need for speed, as the employer’s delay of three weeks in seeking Court orders led to the Court declining to intervene. Meanwhile in the PRC, Courts have been more willing to uphold non-compete covenants including where employees have attempted to circumvent them by signing new employment contracts with non-competitive businesses, but provided services to a competing business. The highest court in China also awarded a record-breaking RMB160 million damages where an individual was found to infringe the ex-employer’s trade secrets along with his new employer.
As we look ahead to another busy year, employers can ensure they are on top of new challenges by joining our webinar on 18 January 2022.
For further information, please contact:
Tess Lumsdaine, Partner, Herbert Smith Freehills
Tess.Lumsdaine@hsf.com
