Most businesses, when carrying out a redundancy exercise, will be aware of the duty to consider alternative employment for employees at risk of dismissal. However, when businesses are multi-nationals, with teams operating across several jurisdictions, the consideration of alternative employment cannot be limited to roles within the UK. The reality of complying with English employment law means that businesses with multi-national operations should consider the possibility of assigning employees, who are at risk of redundancy, to a vacant position abroad if necessary, either permanently or temporarily, when restructuring their workforce.
When assigning an employee to a role abroad a number of legal issues should be considered in advance. It may be tempting to make the new working arrangement subject to English laws and require disputes to be heard in the courts of England & Wales, with a view to make it easier to manage the dispute and contain costs. However, the likelihood is that such provisions will be of very little use for the employer. Although it is possible, as a starting point, to choose the law which should govern the employment contract, the Rome Regulations effectively ensures, within the European Union, that the choice of law cannot deprive the employee of mandatory local employment protection.
Equally, choosing the courts of England and Wales as the forum in which any dispute should be heard may not be successful given the employee’s rights under the Brussels Regulation to bring a claim against the employer in the courts of the country where he usually carries out his work. In contrast the employer can only sue the employee in the country where the employee is domiciled. The effect of this is that, unless the employee is posted abroad for only a short period of time, a clause in the contract giving the courts of England & Wales exclusive jurisdiction to hear disputes will provide no certainty for the employer.
Taking the above into consideration, businesses will be doing themselves a favour by taking legal advice locally when posting employees abroad. Doing so will be far more cost efficient in the long term and will provide the employer with certainty as to the employment protection rights the employee enjoys while abroad.
Sara Kennedy is Co-Editor of Workforce Restructuring in Europe, which publishes in September 2015.