Work/Life - international employment news update

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Issue 121

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

In this edition we look at:

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UK pursues EU mobility deal for young workers

As the UK Government prepares for the upcoming Budget, Chancellor Rachel Reeves is championing a youth migration scheme between the UK and the European Union that could partially restore the mobility rights lost after Brexit. The proposed arrangement would facilitate greater mobility and employment opportunities for young people across the UK and member states, offering a pragmatic solution to one of the most contentious legacies of Britain's EU departure.

For businesses grappling with persistent skills shortages, the scheme represents a potential lifeline. Enhanced access to young EU talent could help address skills shortages in sectors that have struggled to recruit since freedom of movement ended, including hospitality, retail, and professional services. While details remain under discussion, the proposal signals a shift towards closer cooperation with Brussels on matters affecting the economy. For employers, the scheme could offer a competitive advantage in attracting young skilled workers at a time when Brexit-related restrictions have tightened the talent pool considerably.

China opens its doors to global tech talent

As the US Government raises fees for its H-1B visa programme, China has introduced a new K visa designed to attract international tech talent. Unlike previous visa categories, the K visa allows STEM graduates and early-career researchers to enter China without a formal job offer or employer sponsorship, requiring only relevant academic credentials. This streamlined approach significantly reduces bureaucratic barriers and costs, seeking to position China as a more attractive destination for highly skilled workers who might otherwise have targeted the US.

Germany courts Indian talent amidst H-1B uncertainty

In the wake of recent US visa uncertainty, Germany has issued a direct appeal to Indian skilled workers. Dr Philipp Ackermann, German ambassador to India, is pitching Europe's largest economy as a stable and predictable alternative to the United States. This open call comes at a timely moment for Germany as it grapples with a demographic crisis that threatens economic growth. Experts project that the country will require nearly 288,000 immigrants annually to offset the ageing population and maintain its workforce.

Spanish Supreme Court rejects extra compensation for unfair dismissal

The Spanish Supreme Court has ruled that workers dismissed unfairly are only entitled to the compensation set out in the Workers’ Statute, rejecting claims for additional damages such as lost earnings. In its decision, the Court dismissed an appeal that invoked the International Labour Organisation (ILO) Convention 158 and the European Social Charter, stressing that these instruments do not establish binding directions nor require Spanish law to go further. The Court also clarified that only the Spanish Parliament can change the current system of statutory compensation. Decisions or recommendations from European committees, unlike rulings of the ECtHR or CJEU, are not binding on Spanish courts.

German court upholds retirement age clauses

The German Federal Labour Court (BAG) has ruled that employment contracts terminating at the statutory retirement age do not constitute age discrimination. The case involved an employee in a surveillance group governed by a collective agreement. She argued that her contract's retirement age limitation amounted to age discrimination and that she should be entitled to the same hardship allowances as civil servants with unlimited contracts.

The court rejected this argument, drawing a distinction between fixed-term contracts and those limited by retirement age. While discrimination protections exist for fixed-term workers who typically face weaker negotiating positions, the same rationale does not apply to retirement age provisions. The BAG emphasised that contracts ending at statutory pension age often function similarly to permanent contracts, running for many years until the employee reaches the end of a career. The court concluded that employees under such arrangements are not treated less favourably than those on unlimited contracts.

UK employee claims: the return of tribunal fees?

The UK Government is considering reintroducing employment tribunal fees to combat budget pressures and ease the burden on a tribunals service struggling with mounting backlogs and a critical shortage of qualified judges. Originally introduced under David Cameron in 2013, tribunal fees were scrapped in 2017 after the Supreme Court ruled them incompatible with access to justice. Now, with businesses warning that proposals under the Employment Rights Bill could further overwhelm the system, the proposal has resurfaced as a potential solution.

Trade unions and campaigners have raised concerns that fees could deter workers from pursuing legitimate claims, while supporters argue they may help manage caseloads and discourage vexatious litigation. The Labour Party has emphasised that discussions remain ongoing as the Government weighs up the implications. Although exact details are yet to be finalised, the previous Conservative government floated a flat issue fee of £55 in their proposals on the matter.

UK Government prepares digital ID scheme

The Prime Minister has announced plans to roll out a new digital ID scheme aimed at tackling illegal working in the UK, igniting debate over privacy, enforcement, and the future of identity verification. While not mandatory for everyday use, a free digital ID will be required for all employment right-to-work checks by the end of the current Parliament, transforming how employers verify an individual's eligibility to work in Britain. Digital systems have been adopted by countries including Australia, Estonia, Denmark, and India, where similar schemes have reportedly streamlined services and reduced administrative burdens.

The announcement has sparked concern amongst civil liberties groups who warn that mandatory digital IDs for employment could create a surveillance infrastructure vulnerable to data breaches and potential misuse. Questions also arise about accessibility for vulnerable groups with limited digital literacy. While the scheme aims to simplify compliance and reduce administrative costs, businesses will need to invest in updating their HR systems. Implementation timelines and penalties for non-compliance are yet to be announced, leaving businesses waiting for clarity on how the scheme will operate in practice and the resources available to support the transition.

AI set to transform the London labour market

According to a report in the BBC, nearly a million jobs in London may undergo major change with AI becoming increasingly integrated into the workplace. Telemarketing, bookkeeping, and data entry roles are predicted to be the worst affected. Other vulnerable roles include cashiers, warehouse workers, paralegals, and proof readers, with women disproportionately affected because they hold a larger share of automatable positions. Research shows that adverts for roles with high AI exposure have dropped by 38% since 2022, prompting calls for businesses and employees to proactively adapt and upskill. Despite the risk of displacement, AI also fuels rapid productivity growth and helps create new opportunities in tech, healthcare, and emerging sectors. Recruitment advisers are encouraging open discussion between employers and staff about evolving responsibilities and retraining opportunities to close the growing skills gap.

Services and Groups Employment, pensions & mobility