By Philippe Thomas, Lovells
More than 90% of new graduates believe that they will be exposed to more geographic mobility than their parents. In a global world, international mobility and employment across borders will continue to increase, and in many cases the applicable legal terms are still evolving.
A successful international assignment should be in line with good business strategy. Drafting the appropriate legal documentation will fix the terms and help anticipate some unexpected issues.
The first question is which legal entity employs the individual for his new, peculiar, career step. For several years, the trend has been to have local contracts with the local entity subject to local law. However this is not always the best solution. For both parties, it may raise uncertainty about the real identity of the employer when instructions come from the head office. Maintaining the original employment contract may be easier and more flexible.
Is the immigration documentation ready upon the day of arrival ? Who is taking care of the immigration issues for the employee’s family and will the spouse benefit from a work permit?
Which legal rules will govern the employment relationship? In case of a mix between the law of the country of origin and local law, which rules will apply to issues of work time and safety and can the parties agree about which court will have jurisdiction in the case of a dispute?
Pensions and Coverage: Will it be possible to continue contributions to the social security regime of the country of origin and who will bear the cost? If there is no longer a contribution to the pension scheme of the country of origin, but an affiliation to the local pension scheme, will it be taken into account by application of an international treaty?
Which tax regime will apply and will there be assistance to ensure that the employee will be tax compliant in the jurisdiction he will be working in as well as in his home jurisdiction?
Is the compensation structure cost effective (special attention to specific benefits such as housing allowance, hardship allowance…)?
Is there an international assignment policy?
Is there a minimum and a maximum duration for the assignment? What are the conditions for early termination of the assignment and repatriation? Will there be any follow-up after repatriation?
Philippe Thomas is Partner at Lovells, in Employment, Pensions, Employee Share Incentives Practice. He is also the Managing Director of the Paris Office. Lovells is one of the largest international legal practices with offices in Europe, Asia and the United States.
