Technology has opened up opportunities for many businesses, particularly in the service sector, to expand into other countries. Brands are becoming increasingly niche and dependent on their employees and know how if they are to succeed. This puts the employment relationship and associated risks at the centre of the business. HR resources and legal budget are usually limited and it can be difficult to locate and engage local legal and HR support at a reasonable cost from high quality advisers.
An HR professional with responsibility for a number of jurisdictions will have varying degrees of HR support in each. This can lead to uncertainty about exposure to employment law risk, with the potential for claims and even prosecution. It can be difficult to achieve advice that is delivered to consistent criteria and to get a clear overview of where risks actually lie.
International employers often have to identify and instruct law firms when an HR issue has become a legal problem or claims have to be defended. This puts the employer on the back foot and can be a time consuming and expensive process. It can be difficult to acquire employment law knowledge, and develop international HR policies and procedures that put the employer in a stronger position to manage risks.
Greater movement of employees between countries brings additional HR challenges. It can be difficult to achieve a streamlined process for transfers that minimises disruption and provides comfort to both employer and employee.
Acquiring a business abroad is a complex process. Whether or not an external funder is involved, it is essential to analyse employment risks in the due diligence process. Employment rights arising during business transfers, together with potentially high rewards to employees in relation to failure to consult or transfer related dismissals, are key commercial/risk issues.
International businesses face particular challenges when it comes to protecting intellectual property. The risk of employees defecting to competitors and taking trade secrets and customers is a real risk that has to be addressed if commercial damage is to be avoided.