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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Australia | Publication | July 2020
On 1 May 2014, Broadlex Services Pty Ltd (Employer) hired Ms Brizitka Vrtkovski (Employee) as a full-time cleaner.
On 15 August 2017 the Employer informed the Employee that “due to consideration of work flow an operational requirement has been identified to reduce [her] status from full time to part time” and that her work hours would alter on and from 12 September 2017. The Employee’s hours were reduced from 38 hours a week to 20 hours a week, and her salary by about 40%. The Employee refused to sign a consent form to the change described as a “transfer from full time to part time” however; she began working the reduced hours from 12 September 2017.
United Voice (now the United Workers’ Union) (Union) brought proceedings against the Employer on behalf of the Employee in the Local Court seeking redundancy pay for her, and a declaration that the Employer had breached the National Employment Standards (NES) under section 119 of the Fair Work Act 2009 (Cth) (FW Act).
The Local Court upheld the Union’s claims, and awarded the Employee with redundancy pay (plus interests), because the employer no longer required the full-time job to be performed by anyone (Decision).
The Employer appealed the Decision, arguing the Employee would only be entitled to a redundancy payment under section 119 of the FW Act if the employment relationship ended, which did not happen in this case as the employment relationship continued when the Employee entered into the part-time employment relationship, thereby accepting the Employer’s repudiation of the contract.
Regarding these appeal arguments, the FCA held that [at 70]:
The FCA was satisfied that because the reason for the termination was that the employer no longer required the full-time job to be performed by anyone, the Employee was entitled to a redundancy payment under section 119 of the FW Act. Based on this, the Employer's appeal was dismissed.
The FCA also considered what is meant by the phrase “employment is terminated” in s 119(1) of the FW Act,2 and how the phrase interacts with the concepts of ‘employment relationship’ and ‘contract of employment’
In doing so, the FCA also discussed section 386(2)(c)(i) of the FW Act, which indicates that “a person has not been dismissed” if the person was demoted in employment, but the demotion does not involve a significant reduction in the employee’s remuneration or duties. Therefore, for contrary argument, the FCA held [at 85] that “a demotion in employment which involves a significant reduction in remuneration or duties is a termination of employment within the meaning of the FW Act”, as happened in the present case.
The FCA decision ultimately confirmed an employment relationship does not endure where:
This decision reminds us that employers cannot change the employees’ status from full time to part time without their written consent. If this change is done unilaterality, the employee is likely to be entitled to redundancy pay, even when the employee continues working for their employer.
The decision is also opportune, as many employers in the current COVID-19 pandemic environment have faced the need to reduce employees’ hours and pay, assign them to different roles, etc.
It is also worth noting that the Federal Government’s JobKeeper scheme allows eligible employers to give certain directions to eligible employees, requiring them to work reduced hours for a certain period. The decision is only relevant for those employers not covered by the JobKeeper scheme who are seeking to make changes in employment conditions of employees.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Publication
On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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