Global HR Hot Topic - December 2012: Dismissing Staff Outside the United States


Firing an employee in the United States can be a challenge. Group firings - reductions-in force — can be a big challenge. And from the point of view of a multinational headquartered in the United States, overseas individual dismissals and “collective redundancies” can be an intractable challenge.

As is often noted, “[u]nlike many other…countries, the default presumption in the United States is that employment is ‘at will,’ meaning an employer or employee can terminate the employment relationship for any reason or no reason at all.” (Jason Schwartz & Andrea Lucas, “The Mobile Executive: US Employment Law,” 12 IBA Bus L. Int’l 263, 263 (2012).) The other side of that coin is that when an American employer emerges from its at-will cocoon and ventures out abroad, staff dismissals become more rigid and less hospitable. Yes, the United States itself imposes plenty of federal and state laws that regulate certain aspects of a domestic US dismissal—anti-discrimination and anti-retaliation laws, whistleblower protections, the WARN Act (29 USC § 2101 et seq.), unemployment compensation mandates. But other countries regulate firings much more intrusively, either by prohibiting no-cause dismissals entirely or by imposing expensive notice and severance pay obligations. And these restrictions apply more or less worldwide, not only in rich civil law jurisdictions like Continental Europe and Japan but also in common law jurisdictions like Australia, Canada and England as well as in developing countries like Chad, Indonesia and Paraguay.

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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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