Is your business thinking of moving out of London post Brexit? Are you considering France, Germany or Ireland? What are the challenges of hiring, firing and managing staff in cities such as Paris, Frankfurt and Dublin?
Specialist employment lawyers from all three cities provide you with a wealth of information to allow you to compare and contrast.
Employment law won't be your only consideration, but it should be one of them.
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Jonathan Chamberlain: Well good morning or good afternoon wherever you are, people are linking in from both sides of the Atlantic for this webinar, I am delighted to welcome you on the one hand and also really very sorry. My name is Jonathan Chamberlain, I am a partner the Labour Employment and Equalities Team of Gowling WLG, I am joined by colleagues Dublin, Paris and Frankfurt who I will introduce in a moment and we're going to be talking about life after Brexit. You have joined us because you or your organisation are regrettably thinking that you might have to move, leave probably London and it's a question of where you're going to land. Now we imagine that you have already asked Google some basic questions about what's it going to be like employing people in any of these cities, how easy is it going to be to hire people to manage them and the aim of this webinar is to put you in touch with people who know, so that you can go beyond and behind the Google answer, in a real sense, a real flavour of the comparative employment law environment in each of those great cities. So what I want to do now is introduce you to today's speakers and indeed I will ask them to introduce themselves. In Paris we have my friend and partner Valérie Blandeau.Transcript
Valérie Blandeau: Hi everyone as Jonathan said I'm Valérie Blandeau here in the employment team of Gowling WLG in Paris and I have an extensive experience of working with international companies who try to either build a business in France or leave France because they think it's now not possible or viable so happy to discuss around the various things in this webinar.
Jonathan: Thanks Valérie and over to Frankfurt, Annette.
Annette Knoth: Thank you Jonathan, hello everybody. Yes, my name is Annette Knoth I'm head in the employment team at Arnecke Siebold and I am actually also really local from Frankfurt the city of the European Central Bank, but we have also offices in Munich and Berlin and I try to do my very best to convince you that German employment law is not as bad its reputation. Thank you.
Jonathan: Thanks Annette and then over to Dublin for Melanie and Ian.
Ian O'Herlihy: Hi Jonathan, this is Ian O'Herlihy and Melanie Crowley, I'm partner and chairman of the employment law benefits team at Mason Hayes and Curran and Melanie beside me here is head of our team. We have the largest employment and benefits team in Ireland and we deal very frequently with UK HR managers who manage their operations in Ireland from the UK.
Jonathan: Thank you very much Ian and if I can eco and repeat that for all of our speakers today, you are all people with whom we have worked closely and I know from my own experience just how good you are at explaining on and advising on the various issues that our clients face in your cities. So what we are going to do is we are going to look at three topics over the course of the next 55 minutes or so. The topics that all of you in our experience are needing to know more about. We're going to look at how easy it is to employ people on the terms that you want to employ them. Particularly senior executives, what are the constraints, what are the opportunities. We're then going to turn to ending the relationship and how easy is it to let people go. Particularly in the context of do you have too many of them or are they not performing quite up to scratch. And then finally, and this is probably the one we'll spend the least time on, but it has come up as we've had conversations about this, we're going to look at outsourcing. As the UK listeners will know it as TUPE and of course there are equivalent local manifestations in each of our cities and it works itself out surprisingly differently. So that's we're going to be covering, we're not going to be talking specifically about immigration, although I hasten to add that all my colleagues can ask those questions, or they have colleagues, sorry who can answer those questions for you if that's what particularly relevant. We're assuming that you are going to be able to get the people into the country that you need to get and it's a questions of what you do once they're there. So let's kick off. How easy is it to employ people particularly senior executives on the terms that we want to employ them. Now I could slightly cheat here by going over to Dublin because of the similarities there that you'll hear about in a moment, but I'm not, I'm going to start off as Monty Python would say, with something completely different, and ask Valérie, how easy is it to employ people in Paris.
Valérie: Yes, it is totally, well it's not totally, but it is slightly different from a French perspective to employ people and specifically when it comes to the terms on which we want to employ those employees. So to make a long long story short because Labour Code is about 2,000 pages and very small font so I'm not able to summarise that in the couple of minutes I have. In short terms, the things that you have to keep in mind when you want to employ someone is (a) you don't have necessarily to have written employment contract, this is not mandatory so this is something that is very different from what I see with my UK colleagues. Also it is still highlight recommended because everything is not in the Labour Code, some of the provisions that you need to have to make sure that the relationship is going to be as comfortable as you want is included in collective bargaining agreements or in terms of regulation within the company or company level agreement signed with union. So it is recommended to have this employment contract written to include some specific clause as non-compete or trial period or specific requirement as regards security or confidentiality or working timeframe. As I said it has to be compliant with European regulations nothing specifically new in this respect for you, French labour though and collective bargaining agreement. There is about 500 collective bargaining agreements in France, I don't know all of them by heart, but a couple of them [unclear 07:34], but it is something, it's the first question that someone will ask you if you want to hire someone in France, what is your activity in France and what is your collective bargaining agreement because that will put the frame for everything specifically about working time. Remuneration is something that you will have to think about, we have a minimum wage in France which is €1,580 gross per month and above that there is some scale in various collective bargaining agreements with minimum wages for every category of employee, so this is something that the employment contract will actively comply with. Executive is something kind of special specifically in terms of working time because we have something very innovative and special in France about this possibility of counting working time for executive with days of work instead of hours and seconds, which is something that is only implemented in France since 2001 which is a great new thing still innovative and still work in progress to be honest, but this is something really interesting and really flexible for every company, but very interesting for international company who are not suppose and not very happy to be obliged to count hours and overtime on every day on every week, but this kind of frame has to be in collective bargaining agreement or union side company agreement to be implemented in employment contract. So this is in a nutshell why you have to know when you want to hire someone in France, just a quick comment on gross and net because this is a question you might have with your correspondent in France. We are social contribution to be paid on top of the salary, 40% for the employer and 20% for the employee which means that basically for a €1,500 gross monthly salary the net for the employee in this pocket, before tax, will be €1,200 and the cost for the company, social contribution included, will be €2,100, so that's the major difference that comes to discussion sometimes when you want to hire someone and this is basically the very short summary of hiring people in France.
Jonathan: Thanks Valérie. So if I could make that even shorter and looking at this from the UK perspective, what's really interesting for us there is how relatively unimportant in one sense contracted employment are they or of the course the key document in the UK, not nearly so important in France to actually have them but your senior people you probably will want to have them to cover what we would consider to be some quite important stuff. So note that the working time rules do apply to senior executives which of course in the UK almost everybody opts out, but that they are measured in a relatively flexible way and certainly in my experience and I don't know if it of course of yours, there isn't any problem with senior executives having to work short hours is there?
Valérie: Definitely not. You're right.
Jonathan: So if that's the situation in Paris, what does it look like in Frankfurt Annette?
Annette: Thanks Jonathan. Well to answer your question how easy it is to employ people I would say it's very easy but that might be because I'm a German employment lawyer. Well there are some similarities with France also we have many written laws, we don't have hone labour court but various laws and that's also the reason why compared to the UK our employment agreements are rather short. They sometimes only refer to the respective legal provision and we also don't do you know like the definitions as I know from many UK contracts just because the definitions are in the law. There is no obligation to have a written employment agreement although it's very expected by executive employees in particular because many times I mean you do also a bonus agreement and this is not regulated by the law so that's also an important part of a German employment agreement. There is no need to get any approval to start an employment or from any governmental organisation also so you just fix the terms and conditions with your employee, hopefully they are within the law, and then you do the contract. All employment rules are applied to executive employees there are not many special rules for executive employees unless they are really really highly ranked in the management like having the power to hire and fire so all rules regarding working time, location and so on would apply to these employees. Different to France or one of the major differences is that collective bargaining agreements do not play such a major role in particularly for executive employees they would not apply, so you are basically free to negotiate the terms and conditions for the employee. The minimum wage is lower than in France. We have it by the way since 18 months now so it's pretty new to us, it's eight hour €8.84 per hour and also the social security contributions are lower, they reach a maximum amount for the employer of €13,000 a year which comes to maximum of 20% of the gross salary of an employee up to a maximum annual salary, so that makes it to €13,000 per year. So basically it sounds like being a little cheaper in Germany, once again no need for any approval from governmental organisations but now the big bat is coming. We have one finance body in Germany and maybe some of you have heard about it, it's the Works Council. I don't want to start talking about Works Council now, just to let you know there is no obligation to have a Works Council, the employees have the right to elect for a Works Council and once they do so you have to respect the right of the Works Council and in coming back to the hiring process, if the company hire the Works Council you need the approval and the okay from the Works Council to employ somebody. So that might be from time to time an issue but to let you know it's very easy with a very standardised application through the Court to replace the missing agreement of the Works Council if this happens. That's it from my side.
Jonathan: Thank you Annette. So, again we learn that the written employment agreement isn't nearly so important in Germany as it is in the UK although you rely less on collective bargaining agreements to underpin the employment relationship than you do in France. Something that Valérie mentioned, Annette, which I'd be interested in your take on, what about things like confidentiality and non-competes, where would they fit in?
Annette: Well, you can have confidentiality agreements and also non-compete clauses in the contract but many of these are also included in the law already so there is a statutory obligation to keep everything confidential during the employment in the law so a company is free to include such a clause in the contract but not necessarily is such a clause is needed. There is also an obligation in the law to not compete during the employment. It's a difference if we talk about once the contract came to an end, then of course only we know post contract or non-compete clauses but then you need specific wording in the agreement and very basic information on that, the maximum duration is two years and there is a mandatory compensation of 50% of the last remuneration so it's really expensive and we only recommend to have such a post contract or non-compete clause to really very important employees because it is expensive at the end.
Jonathan: Thanks Annette. Now, I know already but I'm looking forward to hearing more about how completely different the situation is in Dublin. Melanie and Ian.
Melanie Crowley: Oh we'll be very brief Jonathan because I mean there are huge similarities between Ireland and the UK when it comes to hiring and particularly in relation to senior executives. We are English speaking, we have a common law jurisdiction so the same as yours, we don't have a labour code like that French one and we don't have the same system of collective agreements so it is all about the contract. Now we do have legislation as you do in the UK which sets out the very basic minimal terms that have to go into a contract, name and address and salary and notice, those kind of very basic things but after that the parties to the contract have freedom to negotiate and our contracts actually look and feel very very similar. We have a minimum wage, it's €9.25 per hour but obviously if we are talking about senior executives that's neither here nor there and our contracts would typically include the kind of confidentiality provisions, intellectual property provisions and post-termination restrictive covenants that you would be familiar with in the UK and in fact our law around all of those issues is to a large extent based on UK precedent so very very similar. When it comes to recruitment the only real kind of statutory obligation is to make sure that you don't discriminate on the grounds, again something you would be familiar with in the UK. In terms of global mobility it's quite easy to secure permission to work here, in fact if somebody's earning over €65,000 it's very straightforward and our applications are actually not as expensive as yours, I think the usual fee is €1,000, sometimes it's €1,500 so quite cheap and those permits last a couple of years and after five years the needs to have a permit actually falls away. I suppose in comparison to kind of France and Germany our social security rate is quite low, it's about 10.75% employer contribution on top of the cost of an individual salary but that's the only additional cost over and above the gross salary rate so actually it could potentially end up being more expensive than Germany but nowhere near where the French is. And then the only other thing that I would say which is one of those issues that we all have to talk to UK based employers about and one of the significant differences is that we don't have the opt out from our working time regulations that you have in the UK. So the cap of 48 hours per week applies to senior executives. Now, if I told you that every professional therapist firm and every tech company in Dublin was limiting their hours of work of their senior executives to 48 hours I would be lying through my teeth so while it's there and while there is that stick in the legislation that an organisation is prosecuted or if somebody makes a complaint it tends to be honoured for senior executives more in the breach than it is in the observer. So that's about it from an Irish perspective. Unless you have any questions.
Jonathan: Thank you very much. I feel very at home particularly with the quote there from Hamlet which my son is just studying for A levels just as I did before him.
Melanie: And me too!
Jonathan: Thank you very much for that. Let's move on then to the next question which is how easy or expensive is it to let people go. And the situation that I would like us to focus on if possible are the cases of poor performance or redundancy as we would say in the UK, we just don't need somebody to do the job. No doubt there will be procedures, processes to follow, prices to pay if you are firing somebody for gross misconduct and each of us will have slightly different views on that gross misconduct will be but actually it is not a situation what in my experience companies come across every day whereas poor performance and surplus capacity are so I they are the ones I think that we are going to focus on and lets start this time, if we may, Annette with you in Frankfurt
Annette: Ok, I was quite happy to answer your first question with a clear yes it is easy to employ somebody, I don't want to say it is easy to fire somebody but it is possible and so he certainly can manage it for the two reasons you mentioned, poor performance and redundancy. None of this is recognised in German law. I mean I understand what redundancy means, I also understand what poor performance means but just to let you know the law does not reflect it. How do we deal with that, and as I said we can deal with it. The law only accepts three reasons for termination, one is conduct related and the other one is what we call business related so although we don't have poor performance or redundancy in the law we use these reasons. There are no special rules for executives, as I said earlier, not even for senior executives once again only if the person has the right to hire or fire other employees then they are some few additional rules but let's focus on the majority of the employees so also for a senior executive employees you need a reason to justify a termination and if it is for poor performance you definitely need a warning letter in advance which means you must let the employee know this is what we expect and you do not reflect this expectation right now. Business relating reason, that is the closest what you call in the UK redundancy is well we inherited this from our socialist past that means such a termination is only valid if the job is done. So if there is no way to offer the employee any further employment. There is also one thing that is really particular, I believe in Europe, that is that there are no statutory severance rules in German law and also a termination is either valid or not valid and if it is valid the employee leaves without any additional payment you just pay the notice period but if you lose and let me say the employees are very well protected so quite difficult to justify a termination but if you lose them the employee has the right to return and we are serious by this so that means the judge does not have option to say ok I understand that the poor performer termination is not really valid but I oblige the company to pay a certain amount of money and then the employment comes to an end, no, this option does not exist so that means it is either black or white, you win or lose or, and that if very often the case, you negotiate something with the employee. That is, of course, possible at all stages that is a very easy process but that means on the other side the company have to pay a certain severance indemnity. I already mentioned that you have to pay the notice period, I mean it is common to have notice periods, we have mandatory notice periods in the law, they start with one month and go up to seven months at the end. Germany knows the principle of garden leave so it is possible to send the employee home. It is not really usual or it is not usual at all payment in lieu of notice so to shorten the notice period and pay the employee the remaining amount that is completely unknown in German and I mentioned earlier our famous works council and said that you need their approval to hire somebody now to end my little speech with a palliative point you don't need the approval of the works council to fire somebody, sound strange but it is like it is, you only must inform the works council.
Jonathan: Thanks Annette. So again if I am hearing this in the UK then what I am learning that is very different is that there is not anything like the hoops that you have to jump through in the UK in terms of process but that actually employees are quite well protected, are quite well dug in despite this and although we cannot provide any sort of formula as we can in the UK for calculating how much compensation we might have to pay to an employee to get them to agree to leave or to drop any claim against them it is possible to have that negotiation. Now in the UK I would say that you could solve, and I go so far as to say 95-99% of employment terminations by paying between 3-12 months remuneration to the employee. Do you have a similar range in German is it more or less generous than that when you are negotiating these settlements.
Annette: There are standard formulas around, yes. I am a little bit hesitant to say that we can solve 95% but we can, I would say, between 80-90% yes of the cases are solved by a settlement. We use usually a formula that is between half monthly up to one monthly salary per year or employment with no limit. Still depending how long the employee has been with the company the amount goes up so there is no limit, as I said, by 12 months but assuming, you know, many employees do not work like 20-25 years for one company we come close to your number. One thing I did not mention earlier is that it is quite popular to fight against the termination in German but the employees only have three weeks to go to court so that gives companies some certainty that after three weeks they know if the employee went to court.
Jonathan: Thank you. So a very different way of looking at things but it is still very obviously more than possible to get things done. Valérie what is the story in Paris.
Valérie: I'm afraid it is going to be slightly different in terms of money in France as you would have expected, of course. Let's begin with two differences that we have that I have always been asked by my international contacts about termination is in France we do not have this garden leave concept which means that sometimes if not always my contacts outside of France are very surprised when I say to them that if you release someone from his notice period after his termination A is okay to be at home and paid because it is very common, well it is difference from the German perspective, it is very common to release someone from his notice period and ask him to stay at home but the major difference is we do not oblige the employee to do something in the garden in other terms they can work for another company during this period of time which seems kind of weird if not scary for non-French businesses. So that is the first major difference I would say and the second one is during negotiation rounds there is no without prejudice concept under French law as well so it is kind of complicated to discuss a settlement in France when you are not between lawyers because of this non-without prejudice discussion meaning that anything that you say between employee and company can be revealed before an employment tribunal later on if no discussion has been finalised. So that is, I would say, the two major difference in terms of process. So back to how we do to terminate people. It is possible to terminate an employee in France as long as you know the majority of the rules of the game that you are about the play because otherwise you are probably 100% sure that you are going to lose the game and probably ultimately lose a bunch of money and a zero on the cheque so what are the rules in this funny game, there are three ways of terminating an employee in France. One for personal reasons which is related to performance or disciplinary problems, one other reason is for what we call economic reasons which is not linked to any personal behaviour but the situation of the company and the group and the activity and the sector where the company is located. So that is for the two major termination ways. We have a third one in 208 which is what we call Rupture Conventionnelle mutual termination which is the kind of agreed divorce between company and employee where there is no letters with no grievance that has to put in the letter it is basically a discussion held between gentlemen, let's put it that way, between company and employee about the fact that they both agree to leaving the business and both agree about the final consequences. So this is the main three and the only three way of terminating someone apart from resignation, of course, but resignation is not very common in France because, well specifically since 208 because we have this mutual termination. The process is kind of straight forward invitation to preliminary meeting where you discuss the fact that you want to discuss with the employee the fact that you are not happy with his performance or the fact that you have economic reasons that triggers you to implement a redundancy process either individual or collective at this stage and it is very important that this thing is compliant. At this stage the company is supposed to not having taken any definitive decision so at this stage we only thinking about and contemplating so we are not deciding anything so that is for the process. For the payment that has to be made in respect of termination this is quite straight forward as well and quite common in the three different ways of terminating people which is trial periods, either you ask them to work the trial period or you release the employee to work the, not trial sorry, notice period and that agree a minimum severance subject to as well collective bargaining agreement the average I would say is between 20% of monthly salary for each year of seniority to 30/40% of monthly salaries per year of seniority depending on the collectively bargaining agreement. The minimum is 20% and it is in the labour code and then of course you have to pay the outstanding paid location that still in the books or any employee. So when, once you have followed the procedures, once you have agreed or not agreed like decided to terminate the employee you have to know that probably if you did not reach any agreement before or if you did not make the mutual termination I would say 95% of the termination goes to employment tribunal actually. So this is the kind of same statistics but not for the same resulting outcome. The employment process in France before the employment tribunal is very straight forward, very quick, it is nothing compared to anything you might have heard about in the UK in terms of length and complexity of the process, we are taking about roughly two hearings, the first one is a conciliation and last about 10 minutes, basically asking you name, company, seniority and asking the employing company if they want to agree on something and then the real one which is for us a long one and it last for about two hours which is very different from a UK kind of process. So if you do not agree on settlement agreement before the end of the process it is very very highly likely that you would go before the employment tribunal so what goes then, what kind of damages you might expect if (a) you have not documented enough the poor performance and this is something really important when you contemplate to go that route, documents saying annual review individual review with rating and everything to be sure that we have something to discuss before the judge and it is the same with the economic reason, everything has to be documents and how everything has to be put specifically, clearly and precisely in the termination letter. In terms of damages we have a minimum for employee with more than two year seniority in company of more than 11 employees which is a six month damages if the termination is not justified or not done in the correct way in terms of demonstration of the fact. We do not have a formula that you are familiar with in the UK although since last November we have indicative table for conciliation agreement and for damages. It is only indicative with are expecting to have new as you might know in the following weeks and months with our new president and government but still as we speak it is still indicative and it goes from basically two months to 24 months damages if you decide to conciliate meaning that you go up for the second round before one year of seniority it is just two months but it goes to 24 months if you are more than three years of seniority so that is the kind of indicative scale that we have and if we flight for it meaning that we do not finalise an agreement then the company and the employee can agree on the fact that the judge will apply the indicative scale and it goes from roughly one month to 22 months in terms of damages if you fight for it but it is still indicative so back to and to summarise my couple of minutes on termination under French law I would say that we managed to negotiate probably not 95% of the termination we made but I would say between 50% and 60-64% and definitely not between three and 12 months, I would say it is between six and 24 months so yet it is maybe not more complicated, the employment tribunal process might be easier and not as time consuming as it can be in the UK but I am afraid it is still boring in France.
Jonathan: Thank you Valérie, yes there is no getting away from that in terms of number. I think the lesson is it can be done, I think there is a myth that terminations are not possible in France and they clearly are but that it is going to cost more money, although in practice query how much more money in real terms than we would spend for senior executives in the UK in any event. Melanie and Ian, how does it work in Dublin?
Ian: Thanks Jonathan. I mean I suppose the first thing to say in Dublin is that our position is like we said before very similar to the UK so there is going to be a lot of kind of familiar concepts and practices that I am going to outline to you but there are some important differences. One quick clarification, in Ireland we do not have works councils, they don't come up for discussion. Looking at your question Jonathan I am going to kind of divide my answer into redundancy which is very similar to the UK and exit or dismissal. On redundancy first of all we have statutory definitions very similar but not the same but very similar to UK so no point in wasting time on those. Just in practice there is very little challenge upheld by employment tribunals at courts in Ireland to an employer's decision that an employee is redundant. That is seen as really something that the courts and tribunals tend not to second guess. Yes there can be challenges, for example, around fair selection for redundancy but it is very very seldom that there is a challenge to the actual decision to make redundant. We have, you know, a clear division, as you do have in other jurisdictions between individual redundancies and collective redundancies and I just want to say a word about each of those. First of all around confrontation, there is no statutory requirement to consult on non-collective redundancies in Ireland but while there is not a statutory requirement it is something that we would always advise an employer to do because it does not look good if an employer just imposes an individual redundancy without some consultation. As regards the kind of type of consultation the kind of stepped approach that you would use in the UK is exactly the same as the one that we would recommend and use in Ireland. I don't really need to give the details around that because UK HR people would be very familiar with that. On the collective redundancy there is a statutory requirement to consult but at only 30 days which I think is significantly less than in the UK. There are similar provisions around appointment of staff representatives. If you do have an entitlement to a redundancy the qualifying period is two years' service for a statutory redundancy entitlement, statutory payment to and the amount is two weeks' pay per year of service plus a bonus week but that is capped at €600 per week so two weeks per year plus a bonus week capped at €600 a week. Now when you are dealing with and we are looking at senior executives it is very usual that if you are dealing with the exit of a senior executive whether that is for redundancy or for you know dismissal or exit that that statutory entitlement is enhanced with what we would call it an ex gratia payment and that, if you are paying over and above the statutory entitlement it is always the practice to get what we would call it severance agreement signed to get rid of any possible claims and I will talk of it in a few moment just before I finish in relation to some provisions in Ireland around severance agreements because they are important. A few comments about exit, which is not redundancy and again an awful lot round the table will be very familiar to people listeners from the UK we have unfair dismissal legislation and our qualifying period is what used to the position in the UK one year what you had before you moved to two years, one year in Ireland there are limited exceptions around dismissal pregnancy, pregnancy dismissals and trade union memberships. Basically essentially it is one year qualifying period. The redress that you can get if you have been unfairly dismissed, again is similar to the UK, in theory there is the probably of reinstatement but it is incredibly rare, the much more common redress is compensation and the maximum compensation is two years financial package technically you are compensated for your loss and that has to be proven in a claim and that is past loss, that is from loss from the date of your dismissal up to the date of your hearing, your claim is heard and an estimated sum for future loss. There is no cap on the two years remuneration. Now just in practice there has been a fall in the last couple of years with awards and therefore with settlements because settlements tend to follow the kind of roof that an award would take and that fall is really related to the fact that the Irish economy has improved a lot in recent years and therefore there is an expectation that people are going to be able to pick up alterative employment so their future loss is not seen as so significant. There are three stated reasons in the legislation for trying to justify dismissals. Again, probably similar to the UK conduct, competence and capacity are our fitness. Just in relation to competence you know it is absolutely necessary in Ireland on a competency dismissal to go through procedure. It is procedure, procedure, procedure, pips, performance improvement plans, review of performance improvement plans. Melanie and I were just saying that neither of us has ever come across a case where a competency dismissal was justified without going through process. Around conduct we have stringent requirements in practice, they are not set down in legislation but in practice around fair procedures and natural justice. We have a concept called constitutional justice because we have a written constitution in Ireland so very stringent requirements around fair procedures and natural justice. A couple of things we have obviously, whistle blowing legislation with five years maximum compensation. We do have garden leave because I was hearing that doesn't exist as a concept in some jurisdictions, we do have garden leave, very frequently this applies to executives. One important thing is that we do not have, like Valérie was saying in France, we do not have any recognition of the so called protective discussion so all discussions technically are on the record but they take place all the time, obviously there is a risk that you are going to end up being quoted in a subsequent claim but nonetheless they take place, it's just that they have to take place, we have to do them very carefully. I said a few minutes ago I would say one final word in relation to what we call severance agreements if you are exiting a senior executive and you have actually reached an agreement with them, we do not have a statutory form like you do under the ACAS provisions, it is basically just plain contract law. But our severance agreements look extremely like your severance agreements in the UK, same terms and conditions and they are enforced by the courts pretty rigidly if you sign an agreement but if you have got independent advice there is really no going back for an employee. So that is the situation in Ireland.
Jonathan: Thank you very much Ian, there is one really important take away for me from that, and I think for our audience but before I come back to that the sort of rule of thumb in the UK that I proposed the you can get 95-99% away for three to 12 months money can you make any similar sweeping proposition in Ireland.
Ian: I would think, we were just chatting while you were talking about that, I would think it is largely the same.
Melanie: It might be closer to the 12 months end of the scale simply because our legislation provides for larger compensation than yours does and we do not have the £70,000 cap. So it is a mechanism that is available and useful to the senior executives and significant and substantial remuneration packages so largely actually it is not unusual to do a deal for three months but likewise it is not that unusual to pay 9 or 12 months and for senior people it would probably be closer to the 9/12 maybe even a little bit more in the market.
Ian: I mean obviously Jonathan if there is any fault, whether that is conduct or competence on the employee's part that tends to have an important impact on the size of the settlement.
Melanie: And likewise if an employer wants to plough on in complete breach of process or any observance of the right to natural justice and fair procedures they will pay handsomely for that privilege.
Ian: Also known as the US employers.
Jonathan: Yes, quite so and we have all seen examples where our general caps have been absolutely busted by that sort of behaviour but the really interesting take away for me from that and from Valérie's talk was the absence of without prejudice or protected conversations and you, of course, can still get the same result in both countries but clearly there is a new skill to be acquired for line managers and HR managers in having those conversations in the right way.
Jonathan: And that is I think a big bear trap in both countries for anybody moving there from the UK but if we could now move on and we did say we would be touching on this briefly and we do have a couple of questions from the audience which have come up which I would like us to have time for is how easy is it to outsource part of our business, how does TUPE work technically in each of you countries and here I would like to start with Ireland if I may because I think in the words of the great American philosopher, Yogi Berra, it is the same but different.
Melanie: Exactly, it is, I have written it down the exact works same and different. We have implemented the acquired rights directive as all of the European countries have, we used the acronym TUPE to describe our regulations as you do in the UK, and when it comes to general obligation to elect employee representatives go through an information and confrontation exercise, protection from dismissal, protection around changes terms and conditions of employment all of that is the exact same in Ireland to the UK. Where we differ and we differ quite significantly is when it comes to outsourcing and when I talk about outsourcing, you talk about outsourcing, we mean outsourcing, insourcing, change of contractors and we are in Ireland much closer to the European position than we are to the UK position. The TUPE regulations and the acquired rights directive in the other European countries do not automatically apply when part of a business is being outsourced or where there is a change in contractors and the application of the TUPE regulations has to be triggered and the question for us as lawyers and advisers and I expect Valérie and Annette will say something similar is does TUPE apply or does it not. The test, and it's a European Court of Justice test as to whether or not TUPE applies when a function is being outsourced or insourced or whatever the changing factors is whether there is a transfer of significant tangible or intangible assets or a transfer of the major part of the workforce in terms of skills and numbers. Now that has led to kind of two avenues, two school, not two schools at all [unclear 54:08] school at all but two kind of case law lines if you like. One is a line of case law that looks at what we call asset reliant functions or asset reliant services and by asset reliance we mean a function or a service that exactly as it says on the tin is asset reliant, so something like distribution, so you need lorries to distribute a product or a bus service, you need buses to carry people and to provide a bus service and when a function or a service or a business is asset reliant in order for TUPE to apply or the acquired rights directive to apply the assets that form the basis for that function or that service have to transfer from one entity to another and in the absence of the transfer of the assets and the absence of the transfer of the buses or the lorries or the trucks then even if there is a transfer of some of the employees TUPE does not apply. So in short, for TUPE to apply in a business that is reliant on a physical asset even if that is an intangible asset the assets itself has to transfer or the assets have to transfer to work. That is not the same when it comes to a business which is or a service or function which is labour intensive and by labour intensive the common examples are cleaning, security, and actually for us in business it is more often than not something like call centre or its assistance or business process thing, administration, so when organisations change their contractors or when the decide to outsource those functions or insource them then in order for TUPE to apply there has to be a transfer of the major part of the employees in terms of skills and numbers so even if ancillary assets are minor assets are being transferred if the majority of the employees do not go then TUPE does not apply.
Melanie: And I think that is the best way of explaining the difference between how we apply TUPE and how I believe and I understand you apply it in the UK and Valérie and Annette, I'm hoping will agree with me I think it is probably much closer to how they operate than to how you operation.
Jonathan: Well I am hoping they will agree with you too because we are running quite tight on time and just in the way of these things we have got another couple of questions which the people who are listening in have asked which I would really like to move to so can I be really tricky and ask first Valérie is outsourcing in your country closer to the UK or to Ireland would you say having listened to that?
Valérie: Yes very much actually the only question is do we have a business, well we call economy anti g that is transferred as well as the outsourcing process if the answer is yes then the employee will be transferred with terms and conditions on a mandatory basis if the answer is no they will stay within the company and not being transferred to the service provider but it is never a black or white question as always in France it is always a difference of grey but basically this is the same kind of concept although we don't call it TUPE we have our own labour call out stating implementing the EU Regulation in this respect.
Jonathan: Thank you and Annette, similar perspective for you?
Annette: Very short I fully agree with what Melanie said, I sometimes thought she is talking about Germany, so I just wanted to add that [unclear 58:21] is not involved in this process so.
Jonathan: Thank you. Now we might just overrun by a couple of minutes but as I say there are two or three questions which I think it would be really interesting if we could ask, a question for Valérie and for Annette, is it possible for a UK entity to employ someone directly in each of your countries or do you need a local branch or subsidiary?
Valérie: No you don't necessarily need a local branch or subsidiary to employ someone under a UK employment contract actually but as regards France the only think that you will have to be careful about is (a) if the employer is going to be a French resident and working in France because in this situation you may have to have a Bureau de Liaison, as we call it, which is not a branch, not a subsidiary but just an office to be sure that you are properly registered in social contribution so that is the major thing. The second thing would be that under the Rome Convention you have to apply specific mandatory provision of French employment law if some of the work is performed in French which is basically minimum wage working term regulation, paid vacation and to a certain extent termination provision but in short the answer is yes, it is not mandatory to have a subsidiary or branch to employ someone under UK contract.
Jonathan: Annette what about Germany?
Annette: Very brief again, no need to have a branch or anything you can employ people directly by the UK entity.
Jonathan: Thank you. The same question to both of you, are there any further restrictions on hiring and firing in the financial services sector, Annette with Frankfurt bidding to take over, as it were, from London what is your view?
Annette: We hope that we, as I said I have a locker from Frankfurt so we hope to take many of the bankers I may say back to Frankfurt, as I said capital of the European Central Bank and I know Frankfurt is not as attractive as Dublin or Paris might be but I mean Frankfurt is the heart of the German, I might even say continental European banking market so the city is all about banks.
Jonathan: Any restrictions, any additional restrictions on hiring or firing in financial services?
Annette: We love them.
Valérie: For France I would say no, except deeper investigation allowed in some of criminal records and that kind of thing but this is a kind of detail as regards the French employment laws so I would say no it applies to everyone including financial services.
Jonathan: Ok, there is a question here which I'm not sure I fully understand but let me have a go, how easy is it or difficult to move people from one entity to another in each of your countries? So I'm guessing transferring people between companies in groups. Let's start off in Dublin for this one, Melanie and Ian how simple is that?
Melanie: Very, there you go is that short enough for you?
Jonathan: Yes that will do. That's perfectly short enough thank you. Valérie?
Valérie: Depending on what you have in your employment contract, meaning if you have mobility clause or not, if there is a mobility clause then it is kind of easy because that means that the employee is aware in advance to the fact that he might be asked to move to another company of the group provided that at the time you signed your employment contract and this clause he knows exactly where he can be transferred, if there is no mobility clause then you touch a substantial part of the employment contract which has to be agreed with the employee so in short if the employee agrees it's a go if he refuses it's a no go.
Jonathan: And Annette?
Annette: Same answer as in France for Germany. We do it the same way if there is a mobility clause in the contract easy, if there is not mobility clause well you are stuck to one employer.
Jonathan: Very clear indeed, thank you very much. Well it just remains for me to thank each of Valérie, Annette, Melanie and Ian for taking part. You will see all their contact details up on the side in front of you now and there are links to their bios also in the webinar if you have any follow up with each of them. This webinar will be available on the Gowling WLG website if you want to refer back to it or forward it on to any of your colleagues you would be welcome to do so and we will be sending you a feedback form if we may so that we can learn from this presentation and on how to do better for future topics. As I say it is very sad for me to be even having to present this webinar but if you are going to leave us I am delighted that you will be in such good hands wherever it is that you chose to land.
Thank you very much indeed.