Terminating employees overseas is an ever changing target that you as a business owner or manger have to constantly be tracking. For instance here are two details about how terminating employees overseas in Belgium and Colombia can be tricky:
In January, Belgium issued new termination guidelines for employers that effectively requires companies to give reasonable and timely cause for the dismissal – regardless of whether the employee is classified as white collar or blue collar. Most US businesses have become classically conditioned to provide such notice domestically, and all should consider doing the same in international matters.
While providing timely and reasonable cause for dismissal is good practice, it may not preclude the employer from labor disputes in certain countries/regions. Latin America immediately comes to mind. For example, in Colombia every employment relationship allows the parties to terminate the labor agreement unilaterally without cause and prior notice. However, if an employer unilaterally terminates an employment agreement, they must begin a disciplinary action to guarantee the employee’s right of defense and due process. If this process is not performed, it can be concluded that the contract was terminated without just cause and that the employer must pay the corresponding compensation. Of course, severance payments are determined based on the type of employment contract and years of service.
What are the financial risks? If an employee is dismissed and the employer does not pay the employee the salary or benefit sums owed in due time, the employer must pay an indemnity which corresponds to one day’s pay for every day of delayed payment (for a period of two years from the day on which the right accrued).
The moral of the story is to familiarize yourself with local labor law considerations when considering a termination (voluntary or involuntary) and be sure to give appropriate notice/cause. Work with either local counsel in-country or an organization like Velocity Global to minimize your risk.
Please feel free to pass this along to friends/colleagues who may be dealing with such issues, and hopefully, this is helpful.
– Ben Wright