As the United States is transitioning to a new administration led by Donald Trump who will serve as the 45th President of the United States, much of the international community is struggling to come to grips with the global implications of a Trump presidency. Whereas President-elect Trump is currently the focus of global politics, he was—not so long ago—best known for his television show, The Apprentice, and his tagline, “you’re fired!” Generally, contestants were fired for poor performance or failing to meet expectations. These reasons are consistent with U.S. at-will employment law; if the employee is not up to the task, “you’re fired!” works. Indeed, employers are able to discharge an employee without giving notice or pay severance (unless it’s contractually provided for) as long as the employee’s discharge is not for a discriminatory or otherwise unlawful reason.
And yet, throughout most of the world, the notion of at-will employment is completely alien. That is because in most countries, an employer may only terminate employment with “just cause” to do so. Just cause is statutorily or judicially defined, and those definitions generally do not include poor performance.
For example, in Austria, while performance improvement plans are permitted, a failure to improve under such a plan is not grounds to terminate without providing notice to the employee. Similarly, in Japan, terminating employment for any reason is very challenging, and continued performance problems do not survive that challenge unless the employer provides the employee with tremendous opportunities and tools to improve and the employee still fails to so improve his or her performance. Mexico’s Federal Labor Law does not include poor performance as grounds to terminate, although the 2012 amendments to that law do emphasize the importance of employee training. As a result, there is a slow movement towards including performance as a ground to terminate with cause, but it’s still a risky proposition that requires an employer to invest significant amounts of time and energy to effectuate—often so much that simply terminating employment without cause and paying severance makes more sense than going through the effort. In Canada, “willful misconduct, disobedience or willful neglect of duty” is generally required and unsatisfactory performance does not fall within that definition. Failing that, a termination will require the payment of statutory notice, common law notice, and severance in certain circumstances. Further, in many countries, if the termination of employment is undertaken improperly, an employer can be opening itself up to unfair dismissal damages. Put simply, in many countries around the world, “you’re fired” for performance reasons simply does not work.
As the above examples demonstrate, the rest of the world views the right to continued employment very differently than the U.S. employment law paradigm does.