Global HR Hot Topic - February 2013: Threshold Dismissal Circumstances Overseas: Good Cause, Economic Necessity, Employee Rank and Status



Multinationals facing overseas dismissals too often skip ahead to check local laws on pre-termination notice, severance pay and dismissal procedures. But often, threshold circumstances override these rules.

A multinational dismissing an overseas executive or doing an international layoff needs to know exactly what local laws require as to pre-termination notice, severance pay and dismissal procedures. But too many multinationals facing overseas dismissals skip ahead and look into local laws regulating these topics without bothering to verify whether the default doctrines actually reach the particular dismissal at issue.

To understand any given jurisdiction’s employment dismissal rules, first determine whether the specific employee being fired triggers any exceptions. That is, never focus on how a foreign jurisdiction regulates “plain vanilla” dismissals without first ascertaining whether your particular dismissal actually is “plain vanilla,” not some other, more exotic flavor. Check whether any factors in the dismissal in question either suspend otherwise mandatory notice/severance pay/dismissal procedure obligations or impose extra obligations. Specifically, watch for three threshold dismissal circumstances: good cause; economic necessity; and employee rank/status. We discuss each.

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