CROSS-BORDER EMPLOYMENT LAW

Transcription

1 CROSS-BORDER EMPLOYMENT LAW The Global Talent Market and Understanding the Employment law Challenges Presented by Trent Sutton June 6, 2013 Rochester, New York

2 TODAY S AGENDA The legal landscape - the 10 critical legal issues corporate human resources should know about recruiting and hiring in the global labor market The talent vacuum - innovative ways of sourcing talent for a business startup on relatively short notice despite legal obstacles Expanding and contracting the workforce - legal flexibility or nightmare? The interaction between human resources, internal legal and external legal - figuring out the legal maze and making it work effectively and efficiently

3 THE LEGAL LANDSCAPE - THE 10 CRITICAL EMPLOYMENT LAW ISSUES THAT CORPORATE HUMAN RESOURCES SHOULD KNOW ABOUT RECRUITING AND HIRING IN THE GLOBAL LABOR MARKET

4 CRITICAL CROSS-BORDER EMPLOYMENT LAW ISSUES (1 TO 6) Employment at-will does not apply outside the U.S. Application of mandatory local employment laws Extraterritorial application of certain employment laws Forget the Home-centric approach The employment contract dominates Quotas of local hires in some countries

5 CRITICAL CROSS-BORDER EMPLOYMENT LAW ISSUES (7 TO 10) Background checking restricted by local practice and especially comprehensive data privacy law Increasing anti-discrimination laws, so be careful what you ask Data privacy laws restrict what you can collect and send to corporate office in Home Country Restrictive covenants and non-competes may be severely restricted or unenforceable

6 RULE #1 LAW OF LOCAL COUNTRY APPLIES Law of place where work is habitually performed applies. Some host/local country laws may have a small employer exception. Germany s unfair dismissal law 10 employees or less. Some host/local country laws may have employee eligibility requirements. UK s unfair dismissal law 12 months continuous service.

7 RULE #2 EXTRATERRITORIAL APPLICATION OF U.S. FEDERAL LAW U.S. law follow expat to host country. Three U. S. federal anti-discrimination laws apply overseas: Title VII (race, national origin, religion, sex) ADEA (age 40 and over) ADA (disabilities) Conditions for extraterritorial application: U.S. citizens; and Employed abroad; and By U.S. companies or their subsidiaries (companies controlled by U.S. corporations)

8 RULE #3 EXTRATERRITORIAL APPLICATION OF HOME COUNTRY LAW TO EXPAT EMPLOYEE Brazilian and English law, as examples UK s unfair dismissal protections (Employment Rights Act 1996) extend outside UK when Employees posted abroad to work for a business conducted in Great Britain Employees working in a social or political enclave of Great Britain Other employees with equally strong connections with GB or British employment law Brazil s Expatriate Law

9 CHOICE-OF-LAW CLAUSES Choice-of-law clause in international assignment agreement is generally enforceable. But, on fundamental employee rights, choice-oflaw (e.g., NY) must grant employee same or better rights than law of place of work (e.g., Canada) Reason for termination Mandatory termination indemnities Result: Different law may apply to different aspects of the employment relationship. Host country law governs reasons and process for dismissal. New York state law governs terms of contract benefits.

10 GLOBAL GROWTH OF DATA PRIVACY LAWS /

11 LEGAL RIGIDITY & OPERATIONAL FLEXIBILITY

12 MARKET ENTRY Independent contractors v. employees Some foreign laws include an express statutory presumption that if any direction and control, it is an employment relationship In some countries, such as France, person should register as a consultant/independent contractor at government agency [URSSAF - Unions de Recouvrement des Cotisations de Sécurité Sociale et d'allocations Familiales] Agency employees Dual/joint employer issue Local legal restrictions; e.g., Brazil: temporary replacement of regular and permanent employees (for instance, to replace an employee on sick leave, maternity leave); or an unusual temporary increase in workload (for instance, to meet sales increases at Christmas time or Easter) Fixed-term employment contracts Some countries duration is expressly limited (ranging from 18 to 30 months, including rollovers/extensions) Other countries may use only in limited circumstances; e.g., seasonal work, projects with definite completion date etc.

13 MANAGING THE RELATIONSHIP Working hours Maximum working hours Mandatory time off Paid vacation Public holidays Separate categories paternity Employee communications Language requirements Information & consultation With employee reps.

14 THE TALENT VACUUM - INNOVATIVE WAYS OF SOURCING TALENT WITH BUSINESS START UP ON RELATIVELY SHORT NOTICE DESPITE LEGAL OBSTACLES

15 INNOVATIVE WAYS OF SOURCING TALENT Management exchange Secondment From customer From parent company Internships Universities (Individual, CEMS & Sife) Career Fairs

16 EXPANDING AND CONTRACTING THE WORKFORCE - LEGAL FLEXIBILITY OR NIGHTMARE?

17 QUICK EXPANSION AND CONTRACTING OF WORKFORCE Employment contracts and just cause descriptions Statute and court decisions prevail May require a careful examination of financials to justify lay offs Mandatory severance pay (indemnities in LATAM countries) Termination letter & articulated reason Procedural requirements process = substantive reason Mutual agreement is preferable to unilateral termination The minor technicalities notice by might not do Fixed-term contract and reasonable expectation of renewal/roll-over?

18 THE INTERACTION BETWEEN HUMAN RESOURCES, INTERNAL LEGAL AND EXTERNAL LEGAL - FIGURING OUT THE LEGAL MAZE AND MAKING IT WORK

19 RENDERING IHR SERVICES RELATIONSHIP WITH LEGAL Requires a trusting & collaborative relationship/partnership with internal, external and local counsel HR should propose strategy & tactics when possible and ask whether it would work Lawyers are paid to be conservative! Discount same appropriately and assess own risk Own it; Don t abdicate Get fee estimate up front

20 RENDERING IHR SERVICES HR S VALUE CONTRIBUTION Provide manager s guide on basic employment Balance legal risk with business necessities Be a Business Partner not an obstacle: solutions not problems Manage expectations and costs Do leg work before engaging counsel Global consistency whenever possible but one size will NOT fit all Shift from Home Country paradigms to Global

21 Trent Sutton, Esq. Littler Mendelson, P.C. Rochester, NY Office THANK YOU