One big happy family

We live in a global “village” – technology has conquered the world by overcoming vast geographical distances. This is especially true for many multinational companies that have offices all over the world. These companies often have teams whose members may be spread out among various international locations and might even be on different continents.

The DNA of the company

Many multinational companies aim to standardize their employment policies (such as IT use, code of conduct, prevention of sexual harassment and commission policies) to reflect the “DNA” of the business and its unique culture.  Companies may even wish to standardize the compensation structure in all territories as much as possible. The advantages of such an approach are apparent. However, one should be cautious about using standard documents without adjusting them to local laws and, not less important, to local culture.

You say tomato and I say tomaeto

We should all remember that despite the fact we are becoming closer and more familiar with other cultures (even if not geographically then by being exposed via the internet or television), at the end of the day we still belong to different societies. Employees are deeply influenced by their local culture, and policies should be made bearing in mind the local culture and norms.

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The territorial angle

An employer who wishes to implement employment policies and packages must remember that employment laws are usually territorial in their nature. Accordingly, an employer must verify that the adopted employment policies and employment terms do not contradict local laws. Sometimes the sanctions for contradicting local laws may even be criminal sanctions.

Below are some Israeli law examples:

  • Israeli law has specific requirements regarding a prevention of sexual harassment policy, a breach of which may subject the employer to severe sanctions.  Accordingly, an international prevention of sexual harassment policy cannot be implemented “as is”.
  • In Israel, monitoring of e-mails (even business e-mails sent through an office account) is problematic and can only be done in limited circumstances and subject to certain strict terms. A “common” U.S. sentiment that “employees should have no expectation of privacy when using company’s systems” is not relevant in Israel.
  • Even if the international commissions plan states that “commissions are not part of the employee’s salary”, one should be aware that in Israel, depending on the specific circumstances at hand, this may not be the case.
  • Moreover, a multinational employer must be aware that although in some international policies it is written that they “do not form a binding contract” or that “they can be changed or cancelled at any time” this may not be the case in Israel in all or certain circumstances or may have significant implications.

Same same …. BUT

To sum it up, despite the “we are all part of a global village” phrase, it is important to be aware of the territorial aspect of employment law and the labour market. Accordingly, every multinational company must find a delicate balance between standardization and local adaptation to fit its needs and company DNA, or in other words (often used on a Thai beach) – SAME SAME … BUT.