Whether you're hiring in Canada, Australia, or anywhere else in the world, understanding global termination policies could save you from hefty fines and potential legal action.
Inevitably, the day will come when you need to terminate an employee. It’s a complex and delicate process, and the challenges multiply when dealing with international employees—because each country has its own unique set of laws and regulations.
In this guide, we'll outline the key considerations employers should know about terminating international employees before hiring.
1. Familiarize yourself with local employment laws
When terminating international employees, it is vital to be well-versed in the employment laws of their respective countries. Employment laws vary significantly across different countries and regions, and the specifics can change over time. The following are especially relevant to terminations:
- Employment contracts. Many countries have laws that require employment contracts to outline termination procedures (as well as wages, working hours, leave entitlements, non-discrimination policies, and more).
- Termination procedures and severance. Laws often dictate the procedures and grounds for terminating employment contracts, including notice periods, severance pay, and redundancy protection.
- Anti-discrimination and equal opportunity. Laws aim to prevent discrimination based on factors such as gender, race, religion, age, disability, or sexual orientation. They promote equal opportunity throughout the employee lifecycle.
Specific labor laws can differ significantly between countries, so it’s crucial for employers to consult local labor laws and seek legal advice to ensure compliance with the regulations applicable to their jurisdiction.
2. Understand employee rights and protections
Employee rights and protections vary across different countries and legal systems. In some countries, such as France and Brazil, employees are entitled to severance pay that is based on their length of service. In others, like Mexico, very substantial severance packages—including proportional profit share and a prorated Christmas bonus—are set out by law. Meanwhile, most US states consider employment to be at-will, meaning employees can be dismissed for any reason and often without severance pay.
However, employees worldwide typically have some legal protections against unfair or wrongful dismissal. While the specific rights can differ by country, laws may require employers to provide valid reasons for termination and follow fair procedures in the dismissal process.
You should also familiarize yourself with the country’s specific rights and protections in the workplace, such as:
- Right to rest and leave, such as annual leave, sick leave, maternity/paternity leave, and bereavement leave.
- Right to information and representation, such as employment contracts, terms, and conditions.
- Freedom of association and collective bargaining. Employees have the right to join trade unions, engage in collective bargaining, and participate in activities to protect their rights and interests. These rights are protected under international labor standards.
- Protection against discrimination. Employees are protected against discrimination based on factors such as gender, race, religion, age, disability, sexual orientation, or nationality. Discrimination in recruitment, hiring, promotion, and termination is generally prohibited.
- Protection of whistleblowers. Whistleblower protection laws may exist to safeguard employees who report wrongdoing, unethical practices, or illegal activities within their organizations.
3. Embrace due process and documentation
In the termination process, it’s important that you follow the right steps and keep things well-documented. For example, in many countries (including Spain, Poland, and Germany), employers need to provide written notice of termination and specify the reasons for dismissal. If you don’t do this, the termination could be considered void, or it could entitle the employee to compensation.
While due process and documentation requirements for terminations vary across countries, there are common themes and best practices that exist internationally. Here are some key elements often associated with due process and documentation in terminations:
- Notice or severance period. Many jurisdictions require employers to provide advance notice of termination or pay in lieu of notice. The duration of notice or severance period often depends on factors such as the length of employment, seniority, or local labor laws.
- Just cause and valid grounds. Employers typically need valid grounds, such as poor performance, misconduct, redundancy, or a legitimate business reason, to terminate an employee. There should be a reasonable and justifiable basis for the termination.
- Investigation and documentation. Employers are advised to conduct a thorough investigation, especially in cases of alleged misconduct or poor performance, to gather evidence and document the reasons for termination. This documentation serves as a record of the decision-making process and can support the employer's position if the termination is challenged.
- Communication and consultation. As the employer, you should communicate with your employee about the termination decision, explaining the reasons clearly and allowing the employee an opportunity to provide their perspective or raise any concerns. Consultation can help ensure transparency and fairness in the termination process.
- Consistency and non-discrimination. As the employer, you should apply termination procedures consistently and avoid any form of discrimination or bias based on protected characteristics. Terminations should not be based on factors such as race, gender, religion, disability, or other protected attributes.
- Right to defend or appeal. In some jurisdictions, employees have the right to defend themselves or appeal the termination decision. Providing an opportunity for employees to present their case or appeal the decision promotes procedural fairness.
- Documentation of termination decision. As the employer, you are typically advised to document the termination decision, including the reasons for termination, any performance or conduct issues, warnings or disciplinary actions taken, and any supporting evidence. This documentation helps demonstrate compliance with due process and may be useful in case of legal challenges.
- Compliance with employment contracts and legal requirements. Employers should review and ensure compliance with any contractual obligations or legal requirements related to terminations, such as notice periods, severance pay, or specific procedures outlined in employment agreements or local labor laws.
4. Consider cultural and ethical factors
Terminating international employees requires sensitivity to cultural and ethical considerations. In the Philippines, for example, personal relationships and the concept of pakikisama (harmonious relationship) play a significant role in employment relationships. When conducting terminations internationally, it is essential to consider cultural and ethical factors to ensure that the process respects local norms and values. Here are some key considerations:
- Face-saving and dignity. In some cultures, measures to preserve an individual's dignity are paramount. Terminations should be handled discreetly and respectfully, taking into account the potential impact on the employee's personal and professional reputation.
- Communication style. Employers should adapt their communication approach to be clear, considerate, and culturally appropriate. Sensitivity to language, tone, and non-verbal cues is crucial in conveying the termination decision and any supporting information.
- Collective harmony. Some cultures prioritize collective harmony and interpersonal relationships. Employers should be mindful of the impact of terminations on team dynamics and seek to minimize disruption. This may involve providing support to affected employees and maintaining open lines of communication with remaining team members.
- Legal and ethical standards. Adhering to local legal requirements and ethical standards is fundamental in conducting terminations internationally. Employers should ensure compliance with labor laws, human rights principles, and anti-discrimination regulations applicable in the specific jurisdiction.
- Support and transition assistance. Providing support to terminated employees can be particularly important in some cultures. Offering career counseling, job placement assistance, or outplacement services can demonstrate a commitment to employee well-being and aid in their transition to new employment.
- Consultation and employee input. In certain cultures, involving employees in decision-making processes and seeking their input or feedback may be valued. Employers should assess the cultural context and consider appropriate levels of consultation or involvement in the termination process.
- Ethical treatment and fairness. Treating employees with fairness, honesty, and respect is universally important. Employers should ensure that terminations are carried out transparently, without favoritism or discrimination.
When operating internationally, employers should seek cultural awareness training, consult with local experts or legal advisors, and take into account the specific cultural and ethical contexts in which terminations occur. Understanding and respecting these factors can help foster positive employer-employee relationships, mitigate potential negative impacts, and maintain the organization's reputation.
Compliance with global termination laws might sound like a never-ending puzzle, but you can make sense of it by consulting expert legal professionals who are familiar with the requirements applicable in their jurisdictions. You can also support your understanding with our resources: browse our Global Hiring Hub to get started.
Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.