Multinational corporations are increasingly using secondment and assignment arrangements to place employees in international offices. These arrangements can mean that the laws of a number of different countries apply to the employer-employee relationship. Issues arise particularly when sending employees to countries such as those in the Middle East, which often have very different laws from the United States and the United Kingdom in relation to, for example, homosexuality. If an employee suffers discrimination abroad, can he or she sue the company at home?
When Do UK Discrimination Laws Apply?
UK law gives employees protection against discrimination or harassment based on age, sex, race, sexual orientation, religion, belief or disability. These laws apply in relation to employment by an employer “at an establishment in Great Britain”. Employment is “at an establishment in Great Britain” if the employee does his or her work wholly or partly in Great Britain. In applying this test, the UK courts will look at the entire course of an employee’s relationship with his or her employer, rather than focussing on where any alleged act of discrimination occurs.
Many expatriate employees will have worked for a period, and therefore “partly”, in Great Britain over the course of their entire employment with a multinational corporation. If an employee has worked in Great Britain, then the fact that he or she worked in, e.g., the Gulf, at the time that an alleged act of discrimination occurred will be irrelevant when deciding whether or not the UK Employment Tribunal has jurisdiction to hear a discrimination claim. However, case law from mid-2008 holds that, to have protection, an employee must have worked in Great Britain, at least partly, before the date on which the discrimination occurred.
Even if the employee’s employment is wholly outside Great Britain, UK discrimination law will apply if: the employer has a place of business at an establishment in Great Britain, the employee has been ordinarily resident in Great Britain at any time during the course of employment and the work carried out by the employee was “for the purposes of the business carried on” at an establishment in Great Britain.
An employee (of any nationality) who has the protection of these laws and is discriminated against by a colleague or agent of the employer abroad can bring a claim in the UK Employment Tribunal for uncapped compensation. Compensation is based on the loss suffered by the individual as a result of the discrimination, plus an additional award for injury to feelings of between approximately £500 and £25,000.
When Do U.S. Federal and New York Discrimination Laws Apply?
U.S. federal law protects employees against discrimination based on race, colour, religion, sex, national origin, age or disability (employees may also have protection against sexual orientation discrimination if it can be argued as a claim based on sex stereotyping). These laws apply to U.S. citizens who are employed by U.S. companies operating internationally or non-U.S. companies controlled by U.S. companies. However, there are exemptions for employers subject to a binding treaty between the United States and the foreign country. Further, U.S. companies are not required to comply with federal discrimination laws if compliance would cause the company to violate the laws of the foreign country where the employee is working.
New York State law prohibits employers from discriminating against employees based on age, colour, religion, national origin, sex, sexual orientation, disability, genetic predisposition, HIV status or marital status. This law will apply if one of the following conditions is met: the act of discrimination was committed in New York State, the act was committed outside of New York State by a New York resident person or corporation, or the act was committed outside of New York State by a New York resident person or corporation against a New York resident.
An employee can be a New York State resident when he or she is employed abroad and intends to return to New York once a temporary assignment ends, and has no present intent to move out of New York upon return. The question of whether compliance with these laws is required if it causes a violation of the law in the country in which the employee is located is as yet untested. If, however, courts follow the federal law framework, New York law would likely not apply in situations of conflict with foreign laws.
Employers violating U.S. federal employment discrimination laws may be liable for front and back pay damages. For discrimination based on any of the protected categories other than age, employers may also be liable for punitive damages as well as compensatory damages for intangible injuries such as emotional damages, subject to statutory caps based on the size of the company. Punitive damages are not permitted under New York State law.
Difficulties in Practice
An example of the difficulties that employers face concerns Gulf countries’ prohibition of public displays of affection. In Saudi Arabia and the United Arab Emirates, sex between men is punishable by death. UK or New York employers sending their employees to these countries should be aware of these laws and require their employees to comply with them. However, to avoid unlawful discrimination they must also try to avoid treating these employees less favourably on the grounds of sex or sexual orientation. For example, an employee in a same-sex relationship in the United Kingdom or New York may want to take his or her partner to a country where such a relationship is prohibited. In such cases, the employer is likely to be able to defend a decision not to send the employee when doing so would put them in breach of local laws and at risk of personal harm or detention.
Colleagues in such countries may not have the same caution and sensitivity to conduct that could cause offence or suggest less favourable treatment as colleagues in the United Kingdom or the United States. Employers should remember that they will have liability for discriminatory actions by local staff towards secondees with the protection of UK and U.S. discrimination laws. Local management must be made aware that less favourable treatment on the grounds of, e.g., sex, sexual orientation or religious belief should not be condoned and should, where appropriate, be treated as a disciplinary issue.
Actions for Employers
In order to avoid a situation in which locally acceptable behaviour prompts a successful discrimination claim by an expatriate employee in the UK Employment Tribunal, a U.S. federal or state court, or before the New York State Division of Human Rights, employers should take the following actions:
- Consider the business rationale behind secondment and other arrangements for sending employees abroad.
- Explain local laws and customs to potential secondees and ensure that individuals are prepared to comply with such laws.
- Ensure that senior managers and human resources (HR) professionals worldwide have in-depth training on discrimination, dismissal and other employment laws with cross-border reach, and send country-specific briefings to managers and HR professionals when employees are seconded from abroad.
- Implement a worldwide equal opportunities policy covering all of the grounds that are afforded legal protection in countries where the employer has offices.
- Provide group-wide equal opportunities training which promotes best practice across all jurisdictions. Three questions that witnesses are often asked in discrimination claims are: does your employer have an equal opportunities policy, have you read it and have you had diversity training? When witnesses can answer yes to all three of these questions, the employer starts out on good footing.
- Take legal advice on the drafting of secondment/assignment letters and other contractual documents for those employees who work abroad, considering carefully which company will be the employing entity.