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: Germany plans historic flexibilisation of employment law

Germany’s federal coalition committee announced on 3 July 2026 what may be the most significant loosening of German employment law in decades. The proposals, which still require parliamentary approval, cover four areas that will matter to every employer operating in Germany.

First, fixed-term contracts without objective grounds would be permitted for up to four years (currently two) with up to six extensions (currently three), for employees hired before 31 December 2030. Second, employers would gain a new right to terminate “high earners” (annual income above roughly €180,000) in exchange for a court-determined severance payment, even where a court finds the dismissal socially unjustified. Third, medical certificates would be required from the first day of illness, and telephone-issued sick notes would be abolished. Fourth, the introduction and updating of software in companies with a works council would be streamlined, a significant change for firms deploying AI tools.

The plans are the product of coalition negotiations, which increases the likelihood of parliamentary passage, though amendments remain possible. If enacted, several provisions are targeted for 1 January 2027.

What to do: HR teams in Germany and at European headquarters should begin modelling the impact on fixed-term hiring strategies and termination processes. Monitor the parliamentary timeline closely; early preparation will pay off if the measures proceed as planned.

Also developing

Belgium: A sweeping package of labour market reforms took effect on 1 July 2026. Night work (previously prohibited between 20:00 and 06:00) can now be introduced through company-level collective agreements. Statutory notice periods upon employer-initiated dismissal are capped at 52 weeks for contracts entered into from 1 July onwards, meaning the notice period no longer increases beyond 17 years of seniority. Flexi-jobs are now permitted across all sectors, both private and public. The minimum threshold for part-time contracts has been lowered from one-third to one-tenth of a full-time equivalent. Employers hiring their first employee also see the target-group reduction fall from €3,100 to €2,000 per quarter. SMEs in Belgium should review employment contracts, scheduling policies and payroll calculations to reflect these changes.

United Kingdom: Any employee hired from 1 July 2026 will become eligible for unfair dismissal protection after six months of continuous service, down from the current two-year qualifying period. While the broader reforms under the Employment Rights Act 2025 take effect in January 2027, the practical impact begins now: every new hire’s clock has started ticking at the shorter threshold. Separately, a government consultation on reforms to zero-hours and similar contracts is open until 25 August 2026. UK employers should update probationary-period processes and manager guidance immediately.

France: A new paid birth leave of up to two months per parent took effect on 1 July 2026 for children born or adopted from 1 January 2026. Compensation is degressive: the first month at 70% of net salary, the second at 60%. Parents of children born between January and May 2026 may take the leave before the end of 2026. Employers should update leave policies and payroll systems. Separately, the deadline for transposing the EU Pay Transparency Directive into French law was 7 June 2026; France has not yet completed transposition, though legislative work is under way.

Netherlands: The Wet VBAR (Assessment of Employment Relationships Act) is expected to take effect in July 2026, codifying Dutch case law and introducing a legal presumption of employee status for workers earning less than €36 per hour. Enforcement of worker misclassification rules will intensify once the law is in force. Separately, organisations with 10 or more employees are expected to be required to adopt a formal code of conduct against undesirable behaviour as of 1 July. Employers using freelancers and temporary workers should review their arrangements urgently.

EU: The Council of the EU gave final approval on 29 June 2026 to the AI Act simplification package, which defers the compliance deadline for high-risk AI systems (including those used in recruitment, selection and performance monitoring) from 2 August 2026 to 2 December 2027. The legislation will be published in the Official Journal shortly and enters into force on the third day after publication. While this gives employers more time, it does not reduce the obligations themselves: risk assessments, bias testing, human oversight and transparency disclosures will all still be required. HR teams using AI in hiring should use the extra runway to prepare properly.

Op de radar

EU Pay Transparency Directive: The 7 June 2026 transposition deadline has passed. Only four member states (Slovakia, Italy, Lithuania and Malta) met it. The European Commission has confirmed there will be no extension and no simplification carve-out; infringement proceedings under Article 258 TFEU are expected later in 2026. Germany, France, the Netherlands, Denmark and Sweden are among those still legislating. Employers with 100 or more workers in any single EU member state should be preparing pay-gap reporting structures, pay-range disclosure processes and recruitment compliance now, regardless of local transposition status.

Nordics: Finland’s new rules allowing fixed-term contracts of up to 12 months without objective grounds took effect on 1 June, though with significant conditions (the contract must be the first with that employee in five years and cannot be extended). In Sweden, the government has instructed the Equality Ombudsman to continue preparations for the Pay Transparency Directive despite having no transposition timeline. Norway’s automotive industry became the tenth sector covered by a generally applicable collective agreement, with minimum wages of NOK 208–237 per hour depending on experience, effective 15 June.

Switzerland: Gender pay-gap reporting is mandatory for employers with 100 or more employees. Companies with 150 or more employees must begin their first reporting cycle in June 2027, based on 2026 data. A new cross-border teleworking agreement with France now permits up to 40% remote work from France while keeping taxation in Switzerland.

Ireland: The transposition of the EU Pay Transparency Directive remains pending. Minimum salary thresholds for employment permits increased in phases from 1 March 2026, with general permits rising to €36,605 and critical-skills permits to €40,904.

Bronnen

• Baker McKenzie: Germany, planned significant changes to German employment law (3 July 2026)
• Moore Belgium: employment law update, key changes since 1 July 2026
• MBM Commercial: UK employment law change from 1 July 2026
• UK Government: Plan to Make Work Pay and Employment Rights Act timeline
• KMH Benefits: French social law in 2026, key reforms
• Houthoff: Netherlands employment law changes 2026
• Lewis Silkin: EU Pay Transparency Directive 2026, employer compliance update (1 July 2026)
• Morgan Lewis: EU Pay Transparency Directive, the deadline has passed (June 2026)
• DLA Piper: Nordic Employment Law Bulletin, July 2026
• DLA Piper: AI Act simplification package, deferral of high-risk obligations
• Global Legal Insights: Switzerland employment and labour law 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.