A daily briefing on European HR, labour law and compliance developments for SME HR teams across the EU, UK, Switzerland and the Nordics.
Top story: EU defers AI Act employment obligations to December 2027
The Council of the EU gave its final approval on 29 June 2026 to the “Digital Omnibus VII” simplification package, formally pushing back the compliance deadline for high-risk AI systems under Annex III of the EU AI Act from 2 August 2026 to 2 December 2027. The European Parliament had endorsed the package on 16 June. The deferral directly affects employers using AI tools for recruitment, candidate screening, performance evaluation, task allocation and worker monitoring, all of which are classified as high-risk under the Act. The original obligations, including mandatory risk assessments, bias testing, human oversight, transparency disclosures and continuous monitoring, remain unchanged in substance; only the enforcement timeline has moved. Penalties for non-compliance remain significant: up to EUR 15 million or 3% of global annual turnover, whichever is higher.
What to do: Use the additional time to audit which AI tools in your HR and recruitment workflows fall within the high-risk classification. Begin documenting risk assessments, establishing human-oversight procedures and preparing transparency notices for candidates and employees. The obligations have not been weakened, only delayed, so treat December 2027 as a firm deadline rather than a reason to pause.
Also developing
Ireland: The Workplace Relations Commission has been applying the Supreme Court’s Karshan five-step test rigorously, including “piercing the corporate veil” to look through limited-company structures and find employment relationships underneath. In Lingard v Randridge International Ltd, the WRC examined the day-to-day reality of a working arrangement where services were provided through a limited company, held it to be one of employment and awarded EUR 8,500 in unpaid wages. Separately, a Law Society webinar heard that whistleblower complaints to the WRC rose by 249% last year, driven largely by penalisation claims under the Protected Disclosures Act. What to do: If you engage contractors in Ireland who invoice through personal limited companies, review each arrangement against the Karshan test and the 2024 code of practice. Ensure your protected-disclosures procedures are up to date, as the WRC is seeing a significant rise in complaints.
UK: Employees hired from 1 July 2026 onwards now qualify for unfair dismissal protection after six months of continuous service, down from the previous two-year qualifying period under the Employment Rights Act 2025. The change applies only to new hires from that date; existing employees retain the previous qualifying period until 1 January 2027, when the six-month rule extends to all employees. Employers should also note that Statutory Sick Pay eligibility has been expanded, removing both the earnings threshold and the three-day waiting period, and that Paternity Leave and Unpaid Parental Leave are now available from day one. What to do: Update probationary period policies so they do not exceed five months, retrain line managers on performance-management procedures and ensure payroll systems reflect the SSP changes.
Netherlands: The government submitted a bill reforming non-compete clauses to the Council of State for advice on 26 June 2026. Under the proposed rules, non-compete clauses would be capped at 12 months, must specify a geographic scope and trigger mandatory compensation payable by the employer when invoked. The reform is part of a broader effort to increase labour-market mobility. What to do: Review existing non-compete clauses in Dutch employment contracts. While the bill has not yet been enacted, it signals the direction of policy, and contracts drafted now should anticipate the likely restrictions.
Sweden: The Labour Court (AD 2026 no. 29) declared invalid the summary dismissal of a civilian employee of the Police Authority who had been convicted of aggravated drunk driving in an off-duty incident. The court held that although the criminal conduct was serious, the employee was a civilian case officer without police powers or duties involving public authority and therefore was not bound by the same strict integrity requirements as sworn police officers. The court also weighed the employee’s cooperation with rehabilitation measures. What to do: Before dismissing an employee for off-duty conduct, assess whether the conduct has a genuine and direct connection to the role and the employer’s operations. Document any rehabilitation efforts and consider whether lesser sanctions are proportionate.
On the radar
Belgium, 1 August notice period change (previously covered): From 1 August, a uniform one-week notice period applies during the first six months of employment for contracts concluded on or after that date.
UK, zero-hours contracts consultation (previously covered): The government consultation on reforms to zero-hours and similar contracts closes on 25 August 2026.
Ireland, Pay Transparency Directive transposition pending: Ireland missed the 7 June transposition deadline. The Pay Transparency Bill has not yet been published. IBEC is lobbying for no obligations beyond pre-employment disclosures to commence before June 2027.
EU Platform Workers Directive (previously covered): Member states must transpose by 2 December 2026.
Sources
- Council of the EU: Artificial Intelligence, Council gives final green light to simplify and streamline rules (29 June 2026)
- Crowell and Moring: Artificial Intelligence and Human Resources in the EU, a 2026 legal overview
- DLA Piper: The Digital AI Omnibus, proposed deferral of high-risk AI obligations under the AI Act
- Law Society Gazette Ireland: WRC pierces corporate veil on worker status (3 July 2026)
- RSM UK: Employment Rights Act, unfair dismissal rights will apply to all new recruits from 1 July 2026
- Baker McKenzie: The unfair dismissal countdown is on (July 2026)
- A and O Shearman: Quarterly Insights Q2 2026, Netherlands employment law
- L and E Global: Sweden, the Labour Court sets aside summary dismissal of civil employee of the Police Authority (29 May 2026)
- DLA Piper: Nordic Employment Law Bulletin, July 2026
Europe HR Compliance Pulse is an informational summary of publicly reported legal and regulatory developments. It is not legal advice. Always confirm obligations for your specific situation and market with a qualified adviser.
