Terminating employees is a part of business no one enjoys, and one that should not be handled lightly. While it might seem straightforward, giving a termination notice to employees can be a challenge, especially when dealing with international team members. Before deciding to terminate global employees, it is important for businesses to understand the proper protocol for giving termination notice to employees in foreign countries.
Terminating Without “At-Will” Employment
For U.S. companies, “at-will” employment is a common practice that allows them the freedom to terminate employees without having to worry about legal backlash. At-will is a double-edged sword, however, because while it makes it easier for companies to fire someone without proper cause or notice, it also allows employees to resign from their position without notice or reason as well.
That being said, it is uncommon for countries outside of the U.S. to utilize this practice, further complicating termination of global employees. If a company is based in the U.S. and in the process of adding global employees to their team, then they need to be aware of how the lack of at-will employment will affect their business practices overseas.
Writing Termination Clauses
Each country has different employment laws, all of which include unique provisions around termination notice requirements. In Switzerland, for example, if a company plans to terminate an employee, then they must observe the following termination notice periods:
- One month for employees who have been with the company for less than one year
- Two months for employees who have a two to nine-year tenure with a company
- Three months for any employee who has been with a company for more than nine years
Each country’s labor laws set out unique requirements surrounding termination, and failure to follow those regulations can put a company into legal trouble.
To ensure compliance when terminating global employees, companies need to put extra emphasis on writing termination clauses into their international employment contracts. These clauses should address notice periods, severance obligations, and acceptable grounds for termination based on a country’s requirements. Before planning to terminate employees, it is important for companies to ensure their employment contracts provide the right protection in the termination clauses.
Building a Case for Termination
In most countries, employees are protected from termination without cause through the country’s employment laws. For instance, if a company in Mexico is trying to terminate an employee, they must prove the employee did one or more of the following:
- Sexual harassment
- Lied about work qualifications
- Revealed company secrets
- Failure to comply with company procedures
- Four unexcused absences in less than 30 days
The company must then provide their reasoning to the employee and the company board in order to determine if there is just cause for termination.
Since each country has its own requirements for notifying employees of termination, it is important for companies to build a full case before attempting to terminate a global employee. This task needs to be done in congruence with the country’s labor requirements around termination cause.
For many companies, determining how to effectively end their employment arrangement with an employee can be a challenge, especially with the various requirements present in each foreign country. In this instance, it is advised for companies to seek the help of employment solutions experts, like an International PEO (Professional Employer Organization), to guide them through the requirements in their selected country, or countries. These Employer of Record solution providers help companies navigate local labor laws to ensure a company’s actions are compliant from onboarding through termination of any global employee.
No matter which side of the table you are on, termination is a tough part of a business. Ensure you handle it correctly in foreign markets with help from the experts. Reach out to Velocity Global today to learn how our innovative solutions can help you compliantly onboard and terminate global employees.