International Labor: Legal Guide to Employing Workers Around the World

According to the Organisation for Economic Co-operation and Development (OECD), in 2010 US corporations invested more than $350 billion in foreign direct investment projects across the globe: buying factories, setting up businesses, establishing joint ventures. For companies considering their own international investment, here’s a roundup of updates on labor laws in some common destinations of US FDI: 

Albania

“In Albania, the employment relationship is largely governed by the Labor Code, which covers most Albanian workers… Although there are other laws governing employment, the Labor Code is the primary source of employment law. Among other things, the Labor Code generally requires that employment terms be set out in a written agreement, to be signed by both the employer and employee. Failure to timely reduce the employment terms to writing could result in a fine of up to 30 times the minimum salary.” (Doing Business in Albania: What Every Employer Needs to Know by Fisher & Phillips LLP) 

Australia

“From the introduction of the Fair Work Act, there are two ways in which an employer can contract with the employees. The first is by way of common law contracts of employment. The other way is by way of collective bargaining. Whilst the Fair Work Act makes it much easier for employees to call upon union assistance in the process of collective bargaining, there is no requirement for union involvement. It is not compulsory.” (International Law Compendium 2011-2012 by Carlos Marcin Pallares) 

Brazil

“Brazil has very strict labor laws, embedded in its Constitution as nonnegotiable fundamental rights. As a result, Brazilian workers enjoy many legal protections that would be considered perks in other countries. Such laws give rise to voluminous litigation in Brazilian Labor Courts, with around 2 million complaints filed every year.” (Things to Consider Before Hiring Employees in Brazil by Michael Diaz Jr. – Diaz Reus International Law Firm) 

“Employers may discharge employees with or without just cause. Employees whose employment is terminated for just cause (e.g., misconduct, insubordination or habitual gambling at work) are not entitled to advance notice or severance from either the government fund or the employer. However, employees discharged without just cause are entitled to a 30-day prior notice and severance pay as established by Brazilian law.” (Brazil: Employment Law Basics for a Country with a Robust Labor Market by Fisher & Phillips LLP) 

Bulgaria

“Although a member of the European Union, Bulgaria has its own labor and employment laws, which derive primarily from the Labour Code, which was adopted in 1986 and subsequently modified, most recently in December 2008.” (An Introduction to Bulgarian Employment Law by Fisher & Phillips LLP) 

Canada

“The constant change associated with employment and labour law in Canada poses a significant challenge for employers doing business here. That challenge is compounded by the fact that employers with operations across Canada may be subject to differing employment laws in each province.” (Doing Business In Canada by Osler, Hoskin & Harcourt LLP) 

China

“To establish an employment relationship, a written employment contract shall be concluded by an employer and an employee. The employment relationship is established as of the date of employment. A written employment contract must be concluded within a month from the date of employment.” (A Summary of the Labor Contract Law of the People’s Republic of China by Fenwick & West LLP) 

“Every smart company in China now has a written employment contract, in Chinese, with their employees (both Chinese and foreign) and a written policy manual, also in Chinese, explicitly setting forth the basis for employee termination. The written contract is necessary to avoid potentially huge penalties and the policy manual setting forth grounds for termination is to avoid having lifetime employees.” (The Impact of China’s New Labor Contract Law by Daniel P. Harris) 

Germany

“Law in Germany prescribes no minimum wage. Minimum wages are, however, often fixed by collective bargaining agreements in different industries. Equal pay legislation exists on a federal level providing equal pay for men and women… The general legal maximum is 40 hours per week (based on a five-day working-week), which can be extended up to 50 hours provided, however, within approximately six months the average will not exceed 8 hours per day.” (International Law Compendium 2011-2012 by Carlos Marcin Pallares) 

Hungary

“Like most other European countries, Hungary requires that the employer and employee enter into a written contract at the beginning of the employment relationship. At a minimum, the contract must clearly identify the parties to the contract, provide a description of the employee’s job duties, set out the salary terms, and describe the location(s) where the work is to be performed.” (Hungarian Employment Law by Fisher & Phillips LLP) 

India

“Employees covered enjoy a benefit of Social Security in the form of an unattachable and unwithdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment. This sum is payable normally on retirement or death.” (Summary of Labor Laws in India by Vaibhav Pathare) 

Mexico

“… the employment and labor laws in Mexico are much different than those in the United States, with laws that provide, in numerous ways, greater employment, compensation, separation and data privacy rights for employees working in Mexico.” (What Multi-National Employers Need to Know About Mexican Labor and Employment Law by Fisher & Phillips LLP) 

Puerto Rico

“U. S. or multi-national employers who conduct business in Puerto Rico, or who plan to do so, should be aware that Puerto Rico’s local statutes provide far greater rights to its employees than do any of the laws of the 50 U. S. states. Employment matters are regulated in Puerto Rico both under federal U. S. law and local statutes, regulations, case law and provisions of Puerto Rico’s Constitution.” (Employment Law in Puerto Rico: Employees’ Rights and Employers’ Obligations by Fisher & Phillips LLP) 

Romania

“All employers in Romania must comply with Romanian labor law, whether they employ Romanian citizens or foreign nationals, and regardless of the size of business. The Romanian Labour Code (Codul Muncii), which was enacted in 2003, governs the relationship between employers and employees, and covers local employees working for Romanian employers in Romania and abroad, as well as foreign citizens working in Romania.” (Overview of Romanian Employment Law by Fisher & Phillips LLP) 

Spain

“In Spain the Labor Jurisdiction is quite protective for workers. It’s difficult to obtain a favorable ruling defending investor’s rights against the worker. Likewise, there are no court costs before the Labor Jurisdiction, so suing the employer is easy in Spain because no legal costs are incurred if the worker is defeated by the Company.” (International Law Compendium 2011-2012 by Carlos Marcin Pallares) 

Turkey

“The main legal instrument of labor law is the labor contracts which govern the rules between the employee and the employer. According to Turkish law, labor contract must encompass three necessary elements. These elements can be mentioned under the titles of technique, economic and legal.” (Basic Principles of Turkish Labor Law by Gokhan Cindemir) 

Ukraine

“Various employers, including wholly-owned foreign subsidiaries, joint ventures and even representative offices, employ so-called ‘labor contracts’ as their favorite form of labor agreements because only a ‘labor contract’ may contain provisions in addition to those contained in the Labor Code, including  employment period, rights, obligations and responsibilities of the parties.” (Getting Started in Ukraine by Frishberg & Partners F&P) 

United Kingdom

“For there to be a contract of employment there must be an obligation to personally perform the work, mutuality of obligations between employer and employee and sufficient control over the employee’s work. In establishing employment or worker status, employment tribunals will look at the substance of the relationship, rather than the legal form or any labels that the parties have given to the relationship.” (An introduction to UK employment law for Canadian Businesses by Philip Henson) 

“…key changes to UK employment law taking place from February 2012 [include] the increase in April in the minimum period of employment an employee must serve before being able to bring an unfair dismissal claim.” (UK Employment Law Changes for 2012 by Bryan Cave) 

“Radical reforms to the UK employment law system — possibly the most radical in decades — were outlined on 23 November [2011] by Vince Cable, the UK’s Business Secretary… The changes seek to retain key protections for employees, whilst ‘de-regulating to reduce the onerous and unnecessary demands on businesses’ [and] include … the merging, simplification, or scrapping of more than 70 employment regulations.” (Radical Reforms to UK’s Employment Laws by Morgan Lewis) 

Vietnam

“Employers, including multi-national employers with expatriate employees in Vietnam, should be aware that Vietnam employment laws provide strong protections for both local employees and expatriates… Many of the country’s statutory requirements, including those pertaining to leave and vacation, provide certain rights to employees who work under ‘normal’ conditions, and greater entitlement for employees who work under hazardous, strenuous, or dangerous conditions.” (Vietnam’s Employee-Friendly Labor Laws by Fisher & Phillips LLP) 

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Related Commentary

• 2011 Employment Law Review (Dechert LLP) 

Employment Termination and Reductions-in-Force Outside the United States, Part 1 (White & Case LLP) 

Employment Termination and Reductions-In-Force Outside the United States, Part 2 (White & Case LLP) 

To Write or not to Write? International Laws on Employment Agreements (Fisher & Phillips LLP) 

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