What happens if I am dismissed during my assignment?
This article highlights some of the challenges you might face if you are dismissed whilst abroad, and suggests some steps you might take to protect yourself and your family.
Can I use the employment documents to protect myself before I go?
The short answer is ‘yes’. For example, you could agree on a long notice period; that your employer will offer you alternative employment or a severance payment; and/or that your employer will meet specific repatriation expenses. If your employer does not initially offer you an appropriate package, you may decide to ask for better terms. What you are able to achieve will partly depend on your negotiating power. How valuable is this assignment to the employer? Are you the only person who could go? Your ability to secure improved terms is also likely to be constrained by technical things such as immigration, tax and social security rules, and by the strength of your employer’s views on the need for consistency between assignees. It can help if you understand these constraints before you start to negotiate.
Would we have to go home straight away?
Your (and your family’s) immigration permission may depend on you remaining in the job. There may, for example, be a time limit for leaving the host country running from the date your employment ends. This can be checked with an immigration adviser. It is sometimes possible to take steps to allow you to lawfully remain in the host country for longer. For example, you may be able to apply for alternative immigration permission or take a period of garden leave in your host country.
What about my children’s schooling?
Termination of employment does not usually coincide neatly with the end of the school year and a mid-year transfer can be very disruptive, particularly for children taking exams. If it is important that your children remain at school till the end of term or the end of the school year, make sure your employer understands the problem. For example, if rent on your home and school fees have been paid in advance, and garden leave would resolve the problem with immigration permission, it may be possible for your employer to help you relatively cheaply.
Would I receive a severance payment?
Expatriates are usually offered severance pay if they are dismissed whilst on assignment. The amount offered is likely to be based on:
- the terms of your contract (What is your notice period? Does the contract specify a severance payment? Will you lose bonus?);
- company policy (home or host company policies do not always apply but you may still be able to push for equivalent payments);
- home and host country mandatory laws (either, neither or both home and host country employment laws can apply during an assignment);
- your negotiating power.
In practice, the employer will usually offer a figure in excess of your minimum legal entitlements at the outset. More cash or better benefits may be available, particularly if you are able to save the employer trouble and expense by agreeing to severance terms.
Should I accept the deal offered?
Find a good adviser and ask for a recommendation. In practice, expatriates rarely take their employers to court but it is usually possible to improve the severance package through negotiation. If you seek advice before negotiations begin you will have a better understanding of your options and will be able to prioritise your objectives.
What about tax?
You should understand your tax and social security position before making decisions and, particularly, before signing any severance agreement. For example, an early return to your home country could prejudice tax planning objectives; tax relief may only be available on your severance pay if it is given in a particular way; and you may want to want to understand how any tax equalisation promise will apply. Your employer is likely to be concerned about these things too and may be able to help, for example by paying for advice.
What if I can’t work any more?
An assignment can end for all sorts of reasons. Death and severe ill health may be unlikely but are still worth planning for. There are steps you can take to make things easier on your dependents. For example, have you updated your will (and your partner’s)? Have you checked life assurance and medical arrangements? Have you made sure that relevant documents can be found easily? Remember too that the ill health, death or pregnancy of a family member could also affect your ability to do your job in the host country.
If I need advice where should I go?
To understand the full picture you would need advice from a number of home and host country specialists. If you want to keep fees down pick your first point of call carefully. Advice on new assignments usually starts with tax and immigration. On termination it is usually best to start with an employment lawyer in either your home or host country. You should choose someone who is familiar with international work and who has appropriate language skills. Personal recommendations can be invaluable.
by Juliet Carp, English Solicitor and international employment specialist, Speechly Bircham LLP
Author of ‘Drafting Employment Documents for Expatriates’.