How to Avoid Risks of Terminating Overseas Employees
Expanding your business globally is a huge undertaking with infinite moving parts. Hiring, onboarding, and compensating a global workforce is a complex process, and terminating employees can be even more challenging. Every country has its own laws governing procedures for firing or laying off employees locally, and failure to comply can result in harsh penalties for your company.
To further complicate things, the global pandemic has impacted the way companies conduct business, both at home and abroad. Regulations have been imposed on both employers and workers that restrict and redefine employer-employee relations. In many cases, new laws introduced by global governments favor employees over employers, to protect them from unfair termination and overly restrictive policy changes.
As a Global Employer of Record service provider, Acumen International assumes responsibility for all stages of engaging international employees on your company’s behalf, from onboarding to dismissal. Our solution is designed to help you avoid legal troubles associated with employee termination around the world, saving you time and money, and preserving your company’s global image.
Following are some facts about employee termination in some of the world’s leading economies.
Employment Termination in the United Kingdom
The UK’s Coronavirus Job Retention Scheme (CJRS) was announced in March 2020 as a furlough program designed to subsidize the wages of 9.6 million UK employees, amounting to nearly a third of the UK’s workforce. The subsidies covered 80 percent of workers’ monthly wages and employment costs, capped at 2,500 Euros per month per worker. As furloughed employees, workers were guaranteed to retain their jobs at the end of the furlough period.
Initially intended to last from March-October 2020, the Scheme has since undergone multiple modifications and extensions, with government contributions being reduced to 70% in July 2021 and dropping to 60% in August, with employers contributing 10% and 20% respectively. The Scheme finally reached its terminus on September 30, 2021, preserving its after-effect.
Since then, the UK government has released a COVID-19 plan for the fall and winter that includes a work-from-home policy, along with mandates for wearing face coverings and proof of compliance with vaccine mandates.
Employment Termination in Canada
In March 2020, Canada’s federal government passed the Employment Standards Amendment Act to provide job-protected leave for employees impacted by COVID-19. The law is meant to prevent employers from terminating their employees for reasons related to COVID-19, such as employee quarantine or caregiving for a family member with the virus.
In general, a Canadian employer cannot force an employee to get a vaccine unless a law states otherwise. For example, first responders and law enforcement are required to be vaccinated. An employer may terminate an employee if they refuse to get vaccinated without a valid reason protected under the Human Rights Code.
Employment Termination in China
Despite being the country hit first and hardest by the pandemic, China implemented an effective strategy to stabilize its economy as much as possible. Before the pandemic, China already had strict termination laws in place. These laws became even more stringent, requiring employers to seek permission from legal authorities to submit a termination letter to an employee. In addition, employers in China are required to give 30 days notice of termination or alternatively, to provide one month’s salary prior to letting the employee go.
Employment Termination in Australia
In Australia, workplace laws are established to ensure that employees are lawfully and fairly terminated. They outline what compensation employees are entitled to upon termination, and provide guidelines for termination due to redundancy. Laws for terminating employment are regulated by the Fair Work Ombudsman and the Fair Work Commission.
- a worker is dismissed
- the dismissal was harsh, unjust, or unreasonable
- the dismissal was not due to redundancy
- a small business dismissed the employee without adhering to the Small Business Fair Dismissal Code.
Every year, approximately 15,000 unfair dismissal cases are filed in Australia. Any terminated employee can file a case against you, provided they:
- are covered by an award or employment agreement
- earn less than $158,500 per year
- apply within 21 days of the dismissal
Once filed, it is up to the Fair Work Commission to determine whether the employee’s termination was justified and lawful.
Australian employees impacted by the coronavirus have additional protections under a special workplace health and safety law to provide for sickness, quarantine, and lockdowns.
The law addresses the following:
- Extended periods of sick leave
- Protections in the workplace
- Protection from workplace discrimination
- Unfair dismissal
The onus of proof of fair and lawful termination falls on the shoulders of the employer, and an accusation can result in costly legal and court fees, even if the case is ruled in the employer’s favor.
Tips on Terminating Overseas Employees
Terminating a foreign employee doesn’t have to be a nightmare. You can take several steps to ensure everything goes smoothly — and legally — when you end the employment relationship. If you’re an employer with employees working abroad, here are some practical tips on avoiding the risks of terminating these workers.
- Understand the laws in your employee’s country.
- Use an experienced international employment law attorney to help you navigate these laws and any other challenges that might arise during the termination process.
- Retain an employment law expert who can help you navigate the unique challenges of termination in a foreign jurisdiction.
- Understand how the termination will affect your company’s reputation, ability to recruit top talent, and ability to do business in that country going forward (for instance, if you must rehire your former employee).
How Acumen’s Global PEO Solution Can Help Avoid Termination Risks
International laws regulating employer-employee relations vary significantly from country to country, and even more so with additional pandemic-imposed restrictions in place. An unpredictable pandemic can bring about rapid changes affecting businesses and workers.
Hiring and terminating employees in multiple countries can be challenging, even in a relatively stable business landscape. In more turbulent times, the difficulties are magnified as labor laws evolve to keep pace with current events.
In today’s world, events caused by the pandemic can disrupt your business operations to the extent that you need to lay off or dismiss a large portion of your workforce, exposing your company to accusations of wrongful termination. Employee termination can result in fines and penalties amounting to thousands of dollars if found unlawful or unfair.
Acumen’s Global Employer of Record solution can help to protect your company from compliance violations when downsizing your global workforce. As the legal employer for your overseas personnel, Acumen can help smooth the process of terminating your workforce – locals and ex-pats – without the risk of penalties.
As your global PEO partner, Acumen can onboard, compensate, and terminate your employees on your behalf, ensuring that your company is fully compliant with local labor laws. As part of our service, we provide our clients with expert advice and assistance when it becomes necessary to terminate an employee.
As global employment experts, our team stays abreast of changing laws and mandates in 190 countries worldwide to ensure that our clients always remain legally compliant with local labor laws and regulations.
Benefits of Acumen’s Global Employer of Record Solution
- All-stage processing and handling of your global HR needs.
- Accurate information about employee records and severance package requirements.
- Up-to-date information about regulatory changes in countries where you do business.
- Assistance with termination procedures and appropriate documentation.
- Reduced risk of fines and penalties when downsizing your workforce.
- Around-the-clock assistance, regardless of time zone.
For cost-effective assistance in weathering the global pandemic and other challenges that force you to downsize your global workforce, contact Acumen’s team of global employment experts today. We are available around the clock to help you navigate today’s ever-changing international business regulations and remain compliant in the countries where you do business.