1. Presented by 1 © McGrigors LLP 2009 EMPLOYMENT LAW AND THE EXPAT Gary Freer, McGrigors LLP

2. 2 © 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

3. 3 © McGrigors LLP 2009 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

4. 4 © McGrigors LLP 2009 Global Employment Policies HR policies are governed by Employment lawHR policies are governed by Employment law Mandatory employment laws vary between jurisdictionsMandatory employment laws vary between jurisdictions Global employment policies may provide enhanced employee protectionGlobal employment policies may provide enhanced employee protection Global employment policies which provide lesser protection may be unenforceableGlobal employment policies which provide lesser protection may be unenforceable

5. 5 © McGrigors LLP 2009 Issues to consider on assignment to a joint venture Who owns intellectual property that is created?Who owns intellectual property that is created? To whom is the obligation of confidentiality owed?To whom is the obligation of confidentiality owed? Restrictive covenants in the contract of employment are unlikely to cover the joint ventureRestrictive covenants in the contract of employment are unlikely to cover the joint venture

6. 6 © McGrigors LLP 2009 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

7. 7 © McGrigors LLP 2009 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.

8. 8 © McGrigors LLP 2009 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.

9. 9 © McGrigors LLP 2009 TAKING CARE OF EXPATRIATE EMPLOYEES - MANAGING THE LEGAL RISKS Your worst nightmare – criminal prosecution by regulators. Who can be prosecuted? And where?

10. 10 © McGrigors LLP 2009 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.

11. 11 © McGrigors LLP 2009 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.

12. 12 © McGrigors LLP 2009 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.

13. 13 © McGrigors LLP 2009 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.

14. 14 © McGrigors LLP 2009 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;

15. 15 © McGrigors LLP 2009 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.

16. 16 © McGrigors LLP 2009 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.

17. 17 © McGrigors LLP 2009 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.

18. 18 © McGrigors LLP 2009 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.

19. 19 © McGrigors LLP 2009 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.

20. 20 © McGrigors LLP 2009 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?

21. 21 © McGrigors LLP 2009 CONTACT DETAILS Gary Freer Partner, Employment Law Direct tel : +44 (0)20 7054 2676 Mobile : +44 (9)7715 705275 Email: gary.freer@mcgrigors.comgary.freer@mcgrigors.com