Employment Termination and Reductions-In-Force Outside The United States, Part 2


We have been discussing overseas terminations against the backdrop of a fired employee asserting rights in local labor court, but in actual practice most firing disputes get resolved out of court. Of course, settlements are grounded in the parties’ predictions of what a labor court would award on the facts.

Account for settlement-specific issues. Often employment separations get structured as resignations in exchange for severance payments, and perhaps also in exchange for a release, waiver, or (in the UK) a “compromise agreement.” Employment context releases raise issues of: enforceability under local law, ideal local boilerplate text, execution formalities and consideration. Jurisdictions like Brazil will not enforce employment-context releases except to the limited extent they act as receipts proving amounts already paid (for a full release, those jurisdictions require a court dismissal with prejudice disposing of a court-filed lawsuit). Many jurisdictions, including Mexico and much of Central America, require that a binding employment-context release be ratified/“rubber stamped” by a local government labor agency, labor court or notary. A UK “compromise agreement” must be co-signed by the employee’s solicitor.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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