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Anna Birtwistle, CM Murray LLP 17 May 2011

Anna Birtwistle, CM Murray LLP 17 May 2011. Key issues for Expatriate Assignments and UK employment rights. CM Murray LLP: Specialists in Employment and Partnership Law. CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law.

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Anna Birtwistle, CM Murray LLP 17 May 2011

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  1. Anna Birtwistle, CM Murray LLP17 May 2011 Key issues for Expatriate Assignments and UK employment rights CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  2. City of London is the world’s leading international banking sector • Currently 1,117 firms in the financial sector are majority foreign owned * * Source IMAS CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  3. Overview • Red flags in managing international employment arrangements • Which country’s laws apply? 3. Choosing the most suitable type of contract 4. Top 10 key provisions for expatriate assignments CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  4. The contracts rarely tie up No one has thought about the end of the secondment Not following procedures or allowing enough time Overseas line managers Red Flags in managing international employment arrangements CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  5. Red Flags in managing international employment arrangements • Cultural sensitivities • Religion • Business etiquette • Language • Pre-departure training CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  6. Which country’s laws apply Some Key Concepts: • Governing Law: the law to interpret the employment contract (choice of parties) • Mandatory Laws: compulsory employment laws (these generally cannot be chosen) • Jurisdiction: The question of whether or not the Court Tribunal can hear the claim CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  7. Rome I Regulation Article 3: Freedom of choice but no derogation from mandatory laws Article 8 governs individual employment contracts: Parties free to choose the law governing the contract BUT such choice may not result in depriving the employee of the protection of mandatory laws Where parties have not chosen the governing law, the contract will be governed by the law of the Country in which, or, failing that, from which the employee habitually carries out work. Article 21: The governing law may not be applied if it is manifestly incompatible with the law of the forum. Contractual Obligations: Rome convention-pre17 December 2009 Rome I Regulation-post 17 December 2009 Chunilal v Merrill Lynch [2010] EWHC 2720 Duarte v the Black and Decker Corporation [2007] EWHC 2720 Non-Contractual obligations: Rome II Regulation Governing Law (Applicable Law) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  8. What are mandatory laws? • Laws that cannot be derogated from e.g. in the UK: rights on termination, notice on dismissal, working time, discrimination protections and right to the minimum wage • How to determine which country’s mandatory laws will apply: • Where employee habitually carries out work; or • Country in which business through which employee was engaged is situated; or • Some other country if it is more “closely connected” with that country. • Posted Workers Directive CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  9. Contracts of employment: Employer can only sue in employee’s country of domicile Employee has choice of suing: In employer’s EU domicile/deemed domicile EU place where employee habitually carries out work; or If no such place, the EU place of hire Samengo – Turner V Marsh & McLennon (services) Limited [2007] EWCA Civ 723 Brussels I Regulation: Defendant domiciled in EU Civil or commercial matter UK: Civil Jurisdiction and Judgments Order 2001 Pre dispute “exclusive jurisdiction” clauses will not work! Jurisdiction: Where can claims be brought? CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  10. Domestic employment law ERA 1996 Lawson v Serco European derived law The “Bleuse” Principle: Construe territorial scope to give effect to directly effective EU rights Discrimination Pre EQA Test set out by statute However note application of Bleuse principle in MoD v Wallis and Grocott [2011] EWCA Civ 231 Post EQALawson v Serco, pre EQA test or apply Bleuse principle? Lawson v Serco 3 broad categories Standard cases – employee working within Great Britain Peripatetic employees e.g. pilots; and in exceptional circumstances, Expatriate employees in following categories: - British enclave - Posted abroad for purposes of a British business - “Equally strong” connections with Great Britain/British employment law (Serco Ltd v Lawson, Botham v Ministry of Defence and Crofts v Veta [2006] UKHL 3) Extra territorial reach of UK statutes CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  11. Ultimately tax, social security or immigration led Length of assignment Division of responsibilities between host and home country company Intercompany agreement on secondment? Options: Secondment Dual/multiple contracts Local employment contract International standardized contract tailored to local laws Choosing the most suitable type of contract • Secondment Host Country Company Home Company Intra Company agreement Employee CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  12. Top 10 key provisions for expatriate assignments Immigration Assignment and continued employment to be conditional upon obtaining and retaining appropriate immigration documentation Pay and BenefitsDo pay and benefits need to be suspended in employee’s “home” contract? In what currency/ies should employee be paid? Preserving pension issues Is a provision required in the expatriate agreement to preserve pension rights? Will the employer continue to make payments into the employee’s pension fund during the assignment? Tax Does tax equalisation or protection need to be considered (e.g. if the employee will be subject to a higher tax regime in the host country)? Are there any taxation issues that might arise at the end of the assignment? Relocation costs Should a cap be included in the agreement as to the cost of shipping/storing of belongings? CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  13. Top 10 key provisions for expatriate assignments AllowancesShould relocation, cost of living, disturbance (out of pocket) and/or hardship allowances be provided? AccommodationConsideration to be given to level of contribution towards rent.Is the company willing to pay for the services of a rental agency/make a contribution to temporary accommodation costs prior to the employee finding permanent accommodation? School feesSpecify the level of any contribution to schooling fees of the employee’s children. Length of secondment and period of noticeInclude a clause clearly defining the anticipated length of assignment but allowing termination on earlier notice.Will the company consider allowing the employee to be localised at the end of the assignment?Consideration to be given to the level of and circumstances in which repatriation costs will and will not be paid. Company handbookEnsure that the contract identifies the rules by which the individual will be governed when working abroad and make sure that any global handbooks which are stated to apply to the expatriate are consistent with local laws. CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  14. Speaker Details If you have any questions, please do not hesitate to contact: Anna Birtwistle CM Murray LLP 37th Floor One Canada Square Canary Wharf London E14 5AA United Kingdom Phone: 00 44 (0)207 718 0090 Email: anna.birtwistle@cm-murray.com Website: www.cm-murray.com CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

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