With business increasingly conducted internationally and many organisations deploying staff across the world, issues arising from the management of a global workforce are becoming more complex. For companies confronted with disparate national regulations, there are significant legal challenges. The law has not kept pace with the increasingly global business footprint and employers need to understand and comply with a plethora of issues in order to protect their business against risk when working in different regulatory environments. These range from immigration, tax and social security/pension regimes, to local mandatory laws and systems for dispute resolution.
Since the financial crisis, the “expat” model of overseas staffing has dwindled, with organisations increasingly using secondments or engaging peripatetic employees to spend time working abroad for them. Employers need to consider not only how to manage these arrangements in practice, but also how best to reflect them contractually. The challenges of catering for different legal systems that may apply means that a “one size fits all” solution can rarely be applied across a variety of local jurisdictions and it is usually advisable to use contracts specifically adapted for the relevant jurisdiction(s).
A particularly problematic area for multinational employers is how to ensure robust protection of the business by means of restrictive covenants for internationally mobile workers. Approaches to these types of business protections differ significantly between countries, with post-termination restrictions being completely unenforceable in some jurisdictions. At the outset of any international posting, the employer should consider where, in the event of a breach, it will want to enforce any restrictions and ensure that local employment laws are considered at that time.
It is also essential to assess the impact on an international secondment of the host country’s laws, which may grant minimum levels of statutory protection. At the same time, the territorial reach of domestic UK legislation has become increasingly expansive. While neither the Equality Act 2010 nor the Employment Rights Act 1996 - both cornerstones of the UK’s employment law regime - have express jurisdiction provisions, the “substantial connection” test developed by case law can sometimes seem like a relatively low hurdle to overcome for some overseas workers seeking the protection of UK employment law. To avoid creating undue risk, organisations need to ensure a strong understanding of both the mandatory laws of the host country and the application of UK legislation to their peripatetic or internationally mobile employees.
With many organisations operating across international borders, culture and language, the emphasis on greater cross-border understanding has intensified. A sense of shared purpose and culture will become ever more important in bringing together an increasingly flexible and geographically disparate workforce. Managers need to support and develop cross-border cohesion to attract and retain talent, and be equipped with the necessary skills to manage an increasingly fluid and global workforce. Multinational employers seeking to implement global diversity initiatives and policies straddling national boundaries face considerable challenges in striking the right balance. They should reflect the cultural sensitivities and local discrimination laws, which vary in each jurisdiction, while at the same time strive to achieve a consistent global position. Effective communication and training are essential to ensure successful adoption of the initiatives that are decided upon.