Managing an internationally mobile workforce can be challenging, particularly as  home country and host country laws can be vastly different. Whilst a multinational  employer may wish to centralise its employment policies and administration as far  as possible, nevertheless, legal compliance with local laws in the host country may  mean that it is not possible to impose global policies on the workforce. Taking the UAE  as an example of a host country, the following is a useful checklist of the issues which  HR and legal departments have to consider.

What contractual documents do you need? Many organisations prefer to maintain home country  contracts for their mobile staff, in order to provide some  comfort to the employees that their accrued service will  continue to be recognised, benefits supplied to an employee  will be maintained, and rights and obligations will be  familiar to the employee. Ideally, internationally mobile  staff will not be inundated with paperwork and a simple  letter confirming the international status of the employee  is preferred. 

However, it is not always possible to approach the  contractual documentation with a light touch and the  immigration requirements of the host country can often  drive the employment documentation process. Expatriates  working in the UAE, for example, must have a residence  visa and work permit which enables them to live and  work in the country. As part of the application process,  an employee will be required to enter into a standard  form local contract (supplied by the Ministry of Labour or  relevant free zone authority).

What law applies to the international assignment?

Where there is a requirement for a local contract, such as  in the UAE, the local laws will apply to the employment –  in the UAE, in most cases, this will be Federal Law No. 8 of  1980, as amended (the Labour Law).

This means that a company must consider how the host  country laws will dovetail with the home country, in cases  where a home country contract is maintained.

For example, in the UAE, the Labour Law sets out certain  minimum standards, covering issues such as annual leave,  sick leave, and end of service gratuity, which cannot be  contracted out of. This means that a company will have  to look at its usual policies and consider whether these  need to be enhanced in order to ensure host country law  compliance. Equally, a company will want to ensure that  an employee does not receive two sets of entitlements  and that any leave, for example, runs concurrently in  both jurisdictions. In addition, local statutory rights may  increase the value of benefits offered to an employee in  the host country. In order to ensure parity with employees  across the globe, it may be necessary to offset statutory  benefits in the host country against contractual benefits in  the home country. For example, in the UAE, an employee  who achieves one year’s service is entitled to an end of  service gratuity payment on termination of employment  (unless they are dismissed for gross misconduct, or are  instead in receipt of a pension provided in lieu of gratuity).  A multinational employer may therefore wish to agree that  any statutory end of service gratuity paid to the employee  in the UAE is offset against a contractual redundancy  payment offered in the home country. 

Who is the employer?

As noted above, in many cases, the immigration  requirements of the host country mean that an employee  is obliged to enter into an employment contract with a  local entity in the host country. The host country employer  may therefore be a branch or other group company of the  home country entity, however, it could be a joint venture  partner or local sponsor An employee may therefore acquire an ability to bring a  claim both against the host country entity and the home  country entity in the event of a dispute. It is important,  then, that the home and host entities are aligned in their  management of employee relations and in particular,  who is the disciplining and dismissing party. Whilst the  host company would usually deal with the day to day  management of the employee (including disciplinary  matters), nevertheless the home company will want to  maintain some control over this, or at the very least, be  consulted with prior to any disciplinary or dismissal action.  This can be dealt with by way of an agreement between the  two employing entities.

Taxation When moving employees from one jurisdiction to another,  the multinational employer must consider both the tax  implications for the employee (for example, in what  circumstances is income tax payable in the home or host  country, or both), as well as the tax implications for the  employer – for example, is a permanent establishment  created when one or more employees are sent to a  particular location?

In the UAE, for example, there is no income or corporation  tax, however, certain employees (for example, American  nationals), may still be obliged to account for tax in their  home jurisdiction.

Medical requirements

Immigration requirements can pose specific problems to  multinational companies seeking to transition employees  smoothly to the host jurisdiction. For example, in some  jurisdictions, it is illegal to require an employee to take  an HIV test. However, in others, such as the UAE, the  immigration process includes a medical test which checks  for communicable diseases, such as HIV.

The employer will need to explain to the employee that  the medical examination is imposed by the authorities  and obtain the employee’s cooperation. The employer may  also want to consider how it will deal with the employee  if things go wrong – for example, what happens if the  employee fails the medical test, either at the outset or  during the course of employment when the employee’s  visa is renewed? Will the company continue to employ  the individual in the home jurisdiction? Will the company  supply counselling (particularly if the failure of the medical  examination comes as a surprise to the employee)?

Policies: can one size fit all?

In most cases, although a multinational can maintain  similar employment policies globally, it is unlikely that  they will all be the same. For example, a policy providing  accommodation and other benefits to an unmarried couple  would not be appropriate in jurisdictions such as the UAE,  where to live together would be illegal; a drug rehabilitation  policy would equally be inappropriate in the UAE.

In other cases, a policy may be able to be maintained but  some parts of it amended – for example, a whistleblowing  policy cannot promise protection for the whistleblower  where there is no statutory whistleblowing policy and  where the publishing of certain allegations may in fact  lead to a criminal complaint of defamation against the  whistleblower.

Policies should therefore be looked at from a host  jurisdiction perspective, in order to ensure local law  compliance.

Health & safety and company beliefs

In a large multinational where employees are disbursed  across the globe, it can be difficult to maintain consistent  standards. For example, different nationalities may  have different views as to what is and is not appropriate  behaviour in a workplace. Equally, certain policies may  be so important to a company – for example, health &  safety policies – that these must be consistently applied  and observed across the globe. This may require the  multinational employer to provide training and education  to its workforce, both to introduce the required behaviours  and to maintain an awareness of them during the course of  employment.

Nationalisation requirements

Multinational companies need to be cognisant of local  nationalisation laws in the host jurisdiction; for example,  is there a limit to the number of expatriates who may  be employed by the company in the host location?  Alternatively, are the constituent nationalities which  make up the workforce regulated (for example, in the UAE,  additional fees are charged by the Ministry of Labour to  companies who do not adequately employ UAE nationals  or whose workforce is not diversified)?

Unions

Whilst it may be appropriate to work with trade unions  in certain jurisdictions (and even to have an international  framework agreement in place), the multinational  employer should bear in mind that it may not be able to  promise the recognition and activity of a union in certain  jurisdictions. For example, in the UAE, there is no right  to freedom of association and collective action such as  striking is expressly prohibited by the criminal code.

Public relations

Multinational companies are usually concerned to  maintain best practice employment standards, not least  because a failure to do so can attract criticism in the  world’s press. Even where a jurisdiction does not require  compliance with certain standards – for example, there  are no anti-discrimination provisions in the UAE Labour  Law – nevertheless, from the viewpoint of an international  workforce, the integrity of a company and its policies  should be consistent throughout the globe. 

Conclusion

As companies and their employees become more globally  mobile, in part as a response to economic challenges  in home jurisdictions, the issues identified above will  need to be considered on a more regular basis. The most  appropriate time to consider the issues is at the outset,  before an employee embarks on a role in a host location, in  order that the correct legal and immigration policies and  structures can be put in place in order to best serve the  company and its employees.