EMPLOYMENT LAW AND THE EXPAT
Presented by
Gary Freer, McGrigors LLP
1 © McGrigors LLP 2009
Which Law Applies: Why an Issue?
•It is not always clear which country’s law applies
•Multiple countries’ laws can apply
•Applicable law determines basic legal framework, possible causes of
action and available remedies – frames the “game plan”
 Unfair dismissal protection
 Notice and severance requirements
 Anti-discrimination laws
 Enforceability of restrictive covenants
 Health and Safety enforcement issues
© McGrigors LLP 2009
2
Rome Convention
•If contract contains a “choice of law” clause, that law will apply, unless
overridden by the “mandatory rules of law” of the host country
•If no choice of law clause, it will be the law of the country in which the
employee habitually carries out his work unless the contract is more closely
connected to another country
© McGrigors LLP 2009
3
Global Employment Policies
• HR policies are governed by Employment law
• Mandatory employment laws vary between jurisdictions
• Global employment policies may provide enhanced employee protection
• Global employment policies which provide lesser protection may be unenforceable
© McGrigors LLP 2009
4
Issues to consider on assignment to a
joint venture
• Who owns intellectual property that is created?
• To whom is the obligation of confidentiality owed?
• Restrictive covenants in the contract of employment are unlikely to cover the joint
venture
© McGrigors LLP 2009
5
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
WHAT COULD GO WRONG?
• Medical problems, e.g. malaria, AIDS/HIV
• Mental Illness – depression, anxiety
• Political Disasters – piracy, kidnapping, terrorism
• Natural Disasters – e.g. earthquake, plane crashes
© McGrigors LLP 2009
6
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
TYPES OF LEGAL RISKS
• Criminal prosecution of organisation and/or its directors, officers and
employees;
• Civil claims for damages;
• Employment claims, e.g. discrimination, and on termination.
© McGrigors LLP 2009
7
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Legal liabilities can arise from
– insufficient diligence, preparation and protection,
and/or
– inadequate handling of problems after they have arisen.
© McGrigors LLP 2009
8
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Your worst nightmare – criminal prosecution by regulators.
• Who can be prosecuted?
• And where?
© McGrigors LLP 2009
9
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
– There is no international, common criminal law in this field.
– You need to know the relevant regulatory requirements both in
your home base and in the host country.
– You need to know not only about the law but about how it is
policed and enforced.
© McGrigors LLP 2009
10
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Within the European Union:– Many directives aim to achieve harmonisation of the laws of
Member States; notably the Framework Directive, which sets out
general principles and minimum standards.
– There is a European Agency for Safety and Health at Work.
© McGrigors LLP 2009
11
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
BUT:Member states implement the directives in different ways (duplication)
or go further; and the European Agency has no enforcement powers:
– so the scope of the law, and
– the keenness of regulators to enforce it will vary widely.
– Beware of the effect on regulators of the “blame” culture and
media pressure.
© McGrigors LLP 2009
12
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
The Prosecution of Individuals
– Legal systems differ as to whether a Corporation can be
prosecuted at all (can a legal, not natural, person have a “guilty
mind”?)
– and as to the circumstances in which individual D+Os and
employees can be prosecuted. There is always some risk –
particularly to senior management.
© McGrigors LLP 2009
13
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
So what should I do?
– make sure your Health and Safety Policy takes account of
possible local requirements;
– find out what laws apply in the host country;
– establish contacts with Health and Safety authorities;
– conduct a written risk assessment and keep it on file: take any
steps identified;
– consult and work with your insurers;
© McGrigors LLP 2009
14
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
So what should I do?
– involve staff and representatives (may be compulsory);
– prepare a written disaster recovery plan and make sure there is a
core team (including a legal adviser) which knows what to do;
– audit yourself and keep written records ;
– make sure a member of senior management has clear
responsibility and is engaged.
© McGrigors LLP 2009
15
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Jurisdiction
Generally, national legislation applies if the harm resulting in death or
injury is sustained within its territory (even if the victim dies elsewhere);
BUT if a company fails to take a vital and legally required preventative
action, it might be prosecuted or sued in the country in which that
failure occurred.
© McGrigors LLP 2009
16
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Actions for Damages/Employment Claims
– Choice of law, and jurisdiction will usually be settled by
international treaties:
• Rome Convention:- choice of law clause in contract of
employment/assignment agreement will prevail.
• If no choice of law, the law of the country in which the
employee habitually carries out his work
BUT this cannot override any “mandatory” laws in the country in which
the work is performed. Health and Safety legislation will nearly always
be mandatory.
© McGrigors LLP 2009
17
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
Disability Discrimination Issues
– May arise if assignee becomes “disabled” in the legal sense.
– Typically there are legal requirements not to discriminate, and to
make reasonable adjustments in disabled person’s favour;
– Particular problems on termination of employment.
© McGrigors LLP 2009
18
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
US Federal Legislation – Americans with Disabilities Act
Will apply to
– US Citizens
– Employed abroad
– By US Companies or their subsidiaries
Possibly in addition to law in host country.
© McGrigors LLP 2009
19
TAKING CARE OF EXPATRIATE EMPLOYEES
- MANAGING THE LEGAL RISKS
CONCLUSION
– Don’t ignore the legal aspects – particularly when preparing for
the assignment, while it is in progress and when it comes to an
end.
– And, as a final thought, is a purely “risk management” approach
enough? Are you doing enough to make this assignment a
positive experience for assignee and the Company?
© McGrigors LLP 2009
20
CONTACT DETAILS
Gary Freer
Partner, Employment Law
Direct tel : +44 (0)20 7054 2676
Mobile : +44 (9)7715 705275
Email: gary.freer@mcgrigors.com
© McGrigors LLP 2009
21