Covid-19 transformed the world of work overnight but, while the pandemic may be officially over, the impact for in-house lawyers is going to be felt for some time to come, as In-House Perspective reports.

The Covid-19 pandemic had a devastating impact across all global employment sectors, with the after-effects expected to continue being felt for some time to come. Indeed, in its Eleventh Annual Global Report, the IBA Global Employment Institute (the ‘GEI’) identified a number of Covid-inspired changes in the workplace that’ll be key priorities for human resources (HR) departments in the year ahead. These follow the mass global move to remote and flexible working, which led many countries to pass legislation aimed at formalising arrangements.

‘The progressive spread of flexible working in the labour market appears to be continuing’, states the GEI’s report, which surveyed lawyers in 55 countries to identify international trends in HR law. ‘The benefits of flexible working are something that employees in most participating countries do not want to miss, regardless of the current status of the Covid-19 pandemic’, says the report. ‘Accordingly, it is not surprising that an increasing number of countries are further regulating flexible working by law, on the one hand to meet employees’ expectations, but also to take sufficient account of the individual interests of employers when organising their businesses’.

Among the countries to introduce new regulations are Columbia, Ireland and Malaysia, with the former passing both a Work From Home Law and a Remote Work Law. In Ireland, the government introduced a bill that’ll not only implement the EU’s 2019 Work–Life Balance Directive but will also build upon its provisions, introducing a right to request flexible working, as well as a right for employees to take up to five days unpaid leave a year to provide medical care for family members. In Malaysia, meanwhile, plans are in motion to amend the country’s 1955 Employment Act to introduce some flexible working arrangements.

HR meets counsel

Perhaps unsurprisingly, the changes are expected to create greater scope for collaboration between HR professionals and in-house counsel. ‘Cooperation between in-house and corporate counsel with HR is going to be more than key for the future’, says Valeria Morosini, Vice-Chair for Knowledge Management in the GEI and a partner at Italian HR law firm Toffoletto De Luca Tamajo. ‘That’s not necessarily the case today. I advise legal counsel in groups and HR people and, as a matter of fact, these have been perceived as distinct areas. Everyone has their own competencies […] but they need to be able to work more closely together.’

Todd Solomon, Co-Chair of the GEI and Head of the Benefits, Compensation and Employment practice group at McDermott, Will & Emery in Chicago, agrees. ‘It was always best practice for HR and legal to be woven together’, he says. ‘There are times when HR is front and centre and times when it’s more in the background. Because of Covid, HR is front and centre now more than it has been for the past ten to 15 years, maybe longer. During Covid, HR was at the centre of everything – are we going to come in, are we going to test, are we going to require people to get vaccines, are we going to put people on furlough. There are still issues around remote working and mandating a return to the office and some companies are thinking about how they stay ahead of these issues.’

Vikram Shroff, Co-Chair of the IBA Employment and Industrial Relations Law Committee and Head of the HR law team at Indian firm Nishith Desai Associates, highlights that the pandemic has altered how the workplace operates to such a degree that it’s more than just traditional employment issues that in-house counsel and HR are going to have to collaborate on. ‘The whole Covid experience has definitely fast-tracked the process of creating the new world of work’, he says. ‘Some issues, like mental health, ESG [environmental, social and corporate governance] and the return to the office are areas that we didn’t come across that often pre-Covid. The whole Covid phase and the new word of work that we are in are definitely creating issues that HR is grappling with at this point in time. I’ve seen some HR heads be more proactive in trying to see how their organisation needs to be ready to face issues as and when they come up. In-house counsel will play a critical role making sure organisations are pro-active in their approach.’

Some of the issues currently in the spotlight relate to the way in which huge numbers of employees are still being empowered to manage their own time, Shroff says. Starbucks, Twitter and KPMG are among the large-scale organisations that have demanded more in-person days from staff, while Goldman Sachs began implementing a return-to-office policy at the start of 2022. But many different permutations of flexible, remote and hybrid working still exist, with Shroff noting that, in India in particular, it’s an area that requires HR and legal to collaborate because the law is still trying to catch up with the realities of modern life.

‘Pre-Covid, if I had asked my clients if they were ready to shift to remote working 100 per cent they would have said no’, he says. ‘Suddenly Covid came and it was like being pushed into a pond and learning to swim. Organisations learned that quite quickly and realised that productivity wasn’t as badly affected as they would have thought. There were some challenges but they did it in no time.’

Shroff explains that, initially, the issues around remote working were generally connected to how organisations managed communication, how they handled employees returning to the office and how they helped staff juggle between work responsibilities and personal responsibilities. In India, however, some of the issues organisations faced in India were related to labour law compliance. ‘Labour law says that employees have to be in the office for a certain amount of time and there are regulations around things like how long they have been in the office and overtime – that has to be tracked’, he explains. ‘That became a challenge because the laws had never envisaged a remote-working scenario. Some of our laws are 90 years old. They were drafted in the industrial era but India now has been transformed into a service economy. Those laws became a challenge because they have no reference to remote working.’

Mental health matters

For Anne O’Donoghue, Vice-Chair for Diversity and Inclusion on the GEI and principal lawyer of Sydney-based Immigration Solutions Lawyers, the impact Covid-19 had on mental health has also become a significant priority for employers, with the need to support employees while also looking after the interests of their business meaning there’s often a fine HR-legal line to be walked.

‘I’m dealing with a couple of in-house counsel on corporate matters and they’re going to have to be very much aware of the wellbeing of the people employed,’ she says. ‘I’ve had a look at some of the government websites and they talk about hazards at work but that includes a situation where an employee feels isolated and is not getting support. Not being aware of how the team is coping [is a work hazard].’

O’Donoghue explains that her practice has Zoom meetings almost every day and during the pandemic hosted a health and wellbeing meeting, which looked at workloads. ‘How people are coping is a big issue, looking at things like whether people are doing enough exercise if they’re working at home and whether they have a structure. If you don’t look after the mental health and wellbeing of staff, especially if they’re working remotely, they could become isolated. Covid brought this into sharper focus,’ she says.

For O’Donoghue, the pandemic ‘changed so many things’. She believes that previously, people were more likely to ‘just put up with stuff’ but now they’re paying much more attention to their wellbeing and how it’s going to affect them or their productivity. ‘Mental health is a very, very important aspect of people’s work-life balance’, she says. ‘Corporate counsel and HR managers need to be very much aware of this. If they’re not, they’ll be aware of it at their peril because they will start getting [workplace injury] claims.’

Tribunal claims are an obvious concern for any business, but Abhijit Mukhopadhyay, Website Officer of the IBA Corporate Counsel Forum and President (Legal) and General Counsel of the Hinduja Group, says the reason HR currently needs greater support from legal counsel is that some of the emerging issues are not particularly well defined in law. Something that may have been relatively easy to solve by following established HR principles in the past may now require significant legal input.

‘People are becoming very vocal whenever there are issues’, he says. ‘There used to be a lot of hesitation – should I tell, should I not tell – but after Covid everybody’s life has changed. Organisations are putting in a lot of effort to address these issues, but the problem that I see is that it’s not really well defined. This is really a problem. I just finished a meeting with one of our group companies and people have gone to an employment tribunal over mental health issues they felt the company was not addressing. What is needed is a very strong policy.’

Part of that, O’Donoghue believes, should involve ensuring that resilience training is made available to all staff. ‘Employers have got to know the person they are dealing with and where they’re coming from, and you’ll generally know where they’re coming from by their age’, she says. ‘In-house counsel need to balance compassion for mental health with some degree of resilience so there needs to be some resilience training in the workplace. Lawyers are dealing with people in stressful situations all the time. In my area – immigration – an employee’s visa could be cancelled and they could be kicked out of the country. That’s pretty dramatic stuff. Employers have got to lead by example to give their younger staff some resilience for when they are confronted with the next difficult situation.’

While such policymaking may traditionally have been seen as purely HR related, Shroff says the fact that boundaries between the work and home have been so blurred in recent years means it’s imperative that employers are working within the confines of the law. Yet even in areas where specific laws don’t exist, the input of in-house counsel is required to ensure employers are not encroaching on their staff’s personal lives. ‘We often advise in-house counsel on how to deal with employees who have mental health issues and in India we had a new law come into force in 2018 – the Mental Health Care Act – that safeguards the rights of people with mental illness’, he says. ‘It’s not just mental health, though. Another area is helping employees who have been subjected to domestic violence and abuse. Some progressive companies and their in-house counsel are trying to figure out how they can truly help their employees in these situations while at the same time not getting too involved because it’s personal. They have to really balance it.’

More than ticking a box

While businesses are having to adapt their practices to younger generations being more in tune with the need to look after their mental health than older employees might be, they’re also having to be cognisant that those younger staff members are more likely to hold their employers accountable on wider ESG commitments. Morosini says this will lead to significant crossover between HR and legal departments, in part because for companies based in the EU the proposed Corporate Sustainability Due Diligence Directive is set to impose mandatory human rights and environmental due diligence requirements on businesses.

‘We are already working a lot in this area knowing that we need to work together because it’s a huge area for employment and HR’, she says. ‘It will cover everything concerning the workforce and diversity and working conditions in general, and it goes together with environmental concerns. Corporate governance is not employment at all but at the same time it’s all the same thing – there are different angles. It’s not a case of there being an environmental aspect, a social aspect and a corporate aspect – unions are [increasingly] embracing environmental issues and there’s more of a mix between industrial relations and employment with environmental concerns.’ She adds that lawyers and a business’ HR function need to be able to work more closely together. Legal counsel can no longer only be concerned with corporate governance issues – they need to start dealing with environmental issues too.

Mukhopadhyay says the role of in-house counsel is particularly important in this respect because, while there are laws covering diversity and climate targets, for example, many organisations still treat ESG as a tick-box exercise rather than taking their responsibilities seriously. ‘From a corporate point of view, the problem that I see is that it’s not really well developed. With [workplace] diversity, it’s very well defined with policies and laws, and companies have to comply with those […] ESG remains a tick-box kind of thing’ for many companies, he says.

Joining forces

As general counsel, Mukhopadhyay works closely with all departments in the organisations in his group. He makes the point that HR is also driven by law and there’s further legislation on the horizon, on everything from discrimination to modern slavery. HR and legal departments, therefore, need to work together – and there are benefits to doing so for both departments.

Ultimately, with the world of work and the needs of employees changing so much in the wake of the pandemic – and with some legislation yet to catch up with the specific changes – the lines around what’s HR and what’s legal are more blurred than ever before. For Shroff, rather than trying to fit issues into neat HR or legal boxes, departments must instead join forces to create solutions that work for employers and employees alike.

‘We call ourselves HR lawyers, not employment or labour lawyers, and there are times when we talk to clients more on HR than on law, but I don’t claim to be an HR expert’, he says. ‘What we are seeing is that today a lot of the advice we are giving is not just in terms of what the law says but in terms of finding a solution. There are obvious divisions and things that will be done by one of the two departments, but today there are huge areas of overlap and the organisations that think ahead and are proactive about that will have a better performance given the new world of work we are living in.’