Vedder Thinking | Articles Going Global: How to Tackle International Assignments – A UK Focus
With experts predicting that the number of individuals taking on global assignments will increase dramatically in the next decade, employers would do well to note that a significant percentage of these assignments typically end in failure. Companies preparing to move forward with such a placement should take the necessary steps to ensure not only that the employee accepting an international assignment (the "assignee") is qualified for the position, but also that senior management understands the full range of legal issues that may affect the assignment. Beyond the obvious legal considerations surrounding immigration and work visas, employers should familiarize themselves with the protections that may be afforded to the assignee within the foreign jurisdiction.
Looking towards the United Kingdom, the fact that an assignee is working in Britain may be enough to give that individual a number of British statutory protections. The various protections afforded such a person may result in the employer's facing legal proceedings in two separate jurisdictions, with the associated costs (both legal and management) that come with such proceedings. For those employers evaluating an assignment to Britain, the British laws that are most likely to apply are (i) unfair-dismissal law,(ii) discrimination law and (iii) contract law.
Unfair dismissal protection
Protection from unfair dismissal arises from the Employment Rights Act 1996 (the ERA 1996). There are a number of factors to consider when determining whether an employee may seek a remedy under this law, including the nature of the particular employment arrangement and whether the employee was "working in Britain at the time of the dismissal." Essentially, employees working within Britain for two years or more may pursue a claim in the employment tribunal if their employer fails to ensure due process in relation to their dismissal. As such, employers will need to establish a fair reason for dismissal (there are five) and must have held a series of consultation meetings with the employee before moving forward with a decision to terminate the assignment contract.
The Equality Act 2010 (EqA 2010) protects individuals who suffer some detriment because of having a "protected characteristic" such as sex, race, disability, religion or belief, sexual orientation, age, gender reassignment or marriage or civil partnership. If an employer is found liable, the damages are unlimited in value and the reputational damage can be disastrous. The EqA, however, does not address territorial jurisdiction provisions and it is thus unclear what kind of "connection" is required to confer jurisdiction over assignees. A recent decision of the Employment Appeal Tribunal suggests that the "closest connection" test will be applied, meaning that while no qualifying period of employment is necessary, the employee need establish only that he or she was working in Britain at the time of the challenged action.
Consideration also needs to be given to the terms of the employee assignment contract and whether the parties agreed that the laws of a particular jurisdiction would apply. While most assignment agreements contain such a provision, they are not always determinative. In one case, the Court of Appeals decided to disregard the exclusive New York jurisdiction clause in a bonus plan agreed to before the dispute arose, concluding that a "multinational business must be expected to be subject to the employment laws applicable to those they employ in different jurisdictions." It is likely, however, the employee would need to show in any event a "close connection" to Britain to invoke the protections of its laws.
Conclusion of assignment
Many assignments fail because the assignee underestimated the impact the move would have on the individual and his/her family. When an assignment fails for personal reasons, it often results in the assignee returning to the home jurisdiction sooner than expected, making for a difficult reentry back home. To minimize such difficulties, employers should try to agree with the employee on the parameters of his or her return at the outset of the assignment and to include any agreements in this respect within the assignment documentation.
Businesses looking to expand their reach on the world stage must come to grips with the possibility that their employees may seek to avail themselves of both the legal protections afforded them in the country to which they are assigned as well as those in their home jurisdiction. The risks of liability in such assignments are significantly enhanced when the appropriate planning and agreements are not put in place at the outset. As a result, the traditional three- to four-year period of assignment may not be something that organizations may consider going forward. Shorter assignments or "international commuting" may be a more preferable alternative. Either way, employers with assignees in Britain should endeavor to treat the assigned employee in very much the same way as it would an employee who was, in fact, permanently based within Britain.
For more information, please contact Jonathan Maude at +44 (0)20 3667 2860 or any Vedder Price attorney with whom you have worked.
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