International Law and Employment Law: A Global perspective on dismissals and

disciplinary sanctionsJennifer Deitloff Senior Counsel

ConAgra Foods, Inc.

Ming HendersonPartner

Seyfarth Shaw (UK) LLP

Amy Loggins AGC – Global Labor & Employment Counsel

Harsco Corporation

Meredith StoneVice President General Counsel Americas

NACCO Materials Handling Group, Inc.

2

Audience Poll:

• New to In-House?• Experience in Employment Law?• In-House Labor/Employment Specialist? 5

years or more?• Generalist? 5 years or more?• Experience in International Employment Law?• None of the above – just wandered in

3

Audience Poll: What areas do you support?

• United States Only• Canada/Mexico• South/Latin America• Europe• Asia• Europe/Middle East/Africa • Global/Other Multi-jurisdictional• A bit of everything

4

Roadmap for our Session• General principles/concepts• Key distinctions from U.S.• Hypothetical scenario on a global RIF and

Changing Terms and Conditions• Disciplinary actions (various scenarios)• Practical considerations & questions throughout

the session

5

General Principles/ConceptsKey distinctions from U.S. model:• At-Will employment vs employment contracts• Works councils and other employee reps• Labour Codes and industry CBAs• Mandatory severance obligation• Data privacy • Attorney-Client Privilege

6 |

USA (non-union) Rest of WorldNo employment contract Employment contract

Individual negotiations Collectively agreed terms

At-will employmentUnfair dismissal/nullity of dismissal – when and how you can dismiss

Limited liability Extensive liability

Limited employee benefits Extensive employee benefits – state and company

7

USA RIF (federal law only) EMEA RIFTrigger: number of job losses over fixed period (30 days)

Trigger: number of job losses over fixed period (typically 30 to 90 days)

Federal and state WARN Acts impose minimum 60-day notice of termination

Minimum notice applies by law/collective agreement/contract for any termination.

WARN does not require consultation or negotiation

Where triggers met, consultation and in some cases negotiation/agreement required

In practice, can avoid WARN period by paying in lieu of notice

PILON not possible in all countries. Scope for individual settlement, but Works Council may still have a claim.

8

Hypothetical Scenarios – A case study

USGlobal, Inc., a U.S. based company, has just announced the acquisition of MultiCountry, Inc. USGlobal has operations in the US, Canada, Brazil, Mexico, Japan, Australia and the UK. MultiCountry, Inc. currently operates in the UK, France, China, Germany, Italy, the Netherlands, Argentina, Chile and Colombia. When the acquisition is complete, MultiCountry, Inc. will be merged into USGlobal, Inc.

Management wants to “right size” and reduce the total work force on a global basis by 10 – 15% as well as close redundant operations in Europe and Latin America. Additionally, the company wants to terminate all existing incentive compensation plans and institute a new incentive plan globally. The CHRO wants to understand if this plan poses any legal issues that would delay the plan.

Key questions to address:• Why? – The business reasoning.• How? - From preparation to implementation• When? – How soon can RIFs take place• How much? - Redundancy costs (direct and

indirect)• What if? – Implications of getting it wrong

(litigation, legal costs, business disruption and reputation, strikes)

11 |

Europe- Severance: notice

pay/ company policy/ mandatory pay

- Social plans/ Works Council

- Outplacement- Benefits

continuation- Contribution to

state funds

Middle East- Severance: notice

pay/ company policy/ mandatory pay

- Ex-pat costs (e.g. return flight back home)

Africa- Severance: notice

pay/ company policy

- Lack of support infrastructure

Overview of Restructuring Costs by Region

LATAM‐ Severance: notice

pay/ statutory pay/ holiday pay & 13th salary (bonus)

‐ Approval of labor authority/agency

‐ Penalties/fines‐ CBA requirements

12 |

Severance BudgetEurope

Notice paymentsCollectively negotiated packagesStatutory paymentsLitigation contingencyIndividual negotiations

13

Time to vote (there may be several right answers):

1. No Problem. As part of the acquisition, this can all be reconciled easily.

2. Works Councils will need to be consulted in certain countries.3. Works Councils and/or unions will need to approve before the

changes can be made.4. In the U.S. – all of this can be done, but not in any other

countries.5. Changes to T&Cs will not trigger any severance obligations as

long as employees agree to them.6. These changes will trigger severance obligations in Europe and

Latin America and may be unlawful due to the merger.

14

Changes to Terms and Conditions

• United States – Easier to implement– Generally – Employment at Will – Remember: ERISA and 409A issues

• Japan – employee consent is required to change terms and conditions of employment

• LATAM – Difficult to implement – Consider collective bargaining agreement– Statutory severance payments– Written employment agreements

15

• Canada– Statutory notice and severance– Common law severance– Employment Agreements

• UK/France– Collective consultation process– Trade union or Works council consultation– Government notification and approvals for collective

• Germany– Must obtain agreement from the works council or apply to a

conciliation board– Social plan

16

The new company learns that an employee in China has paid money to a government official to get product approval expedited. The Company learns that an employee in Brazil has falsely certified that a product which is actually manufactured in Japan was made in the U.S. The transaction involves a sale to a government agency in Israel which is being funded though a U.S. government program which requires that only U.S. origin products be supplied. Management in the U.S. wants to fire both employees immediately. How do you advise?

17

Time to vote:1. Both employees may be immediately terminated.2. If the employee in China is terminated, severance will

be required, but no severance will be required for the employee in Brazil.

3. If the employee in Brazil is terminated, severance will be required, but not for the employee in China.

4. Works councils and/or unions will need to be consulted before any change can be made.

5. None of the above.

18

Things to consider:• FCPA/UK Bribery Act/SEC requirements• US Government contractor disclosure

requirements• Process requirements for investigation and

disciplinary procedure.• Grievance or litigation from employee• Statutory Severance• Penalties and fines from the government

19

An employee has alleged a co-worker sexually harassed her. What steps do you take and can you take disciplinary action?

• UK• EU• LATAM• Asia-Pac region

20

An Employee is continually absent and late to work. What steps do you take and can you take disciplinary action?

• EU (UK, Germany, France as examples)• LATAM• Asia-Pac region

21

Attorney-Client Privilege:

• European Commission – No in-house privilege exists• Russia & India – No in-house privilege recognized• UK – in-house privilege recognized, but courts will distinguish between

“legal advice privilege” and “litigation privilege” • Netherlands & Germany - in-house privilege recognized, although the

law requires certain steps to be taken in order to guarantee the impartiality of the employed lawyer’s conduct.

• Belgium – in-house privilege recognized• China - in-house privilege recognized• Brazil - in-house privilege recognized• Australia – in-house privilege recognized• Canada - in-house privilege recognized• South Africa – in-house privilege recognized

22

Practical Considerations:

• Do not export the U.S.• Global vs. Country Specific policies• Use of local counsel• Complexities of non-U.S. jurisdictions• Right to privacy in Europe and some other countries• Time: Anticipate spending extra time educating management

and working through local hoops• Recognize employee rights• Resources – You do not have to be an expert in all jurisdictions!

Questions?

Thank you.