Canadian HR Reporter

Canadian HR RepoRteR September 8, 2014 FeaTURes 15 CPASource.com CPAs are Canada's most knowledgeable, skilled and respected accounting and business professionals. And this is where to find them. HIRE A PRO. teRMINatIONS Avoiding a long and costly journey Know all the rules before terminating an expat By Julie Lessard e xpatriation contracts have become a complex legal issue, with a wide array of contract types that vary based on an employer's internal poli- cies and jurisdiction. e tripar- tite relationship between a for- eign employer, local employer and expatriating employee can become difficult to understand and manage. In the event of an expat termina- tion, employers could be exposed to civil liability in more than one jurisdiction; this could sometimes involve substantial monetary compensation to the terminated expat. It's important to under- stand the potential dangers and identify ways to minimize risks when terminating an expat. To illustrate the complexity of such a termination, reference is often made to the L'Oréal decision (Cass. soc. 13 nov. 2008, no 07- 41700, Bull. civ. V, no 214) where a French national was initially hired in France as a salaried employee of L'Oréal for the successive roles of assistant (in December 1998) and assistant/logistics for the Asia market (in September 2000). As of March 2002, the employ- ee agreed, in a written document, to end her employment contract with L'Oréal in order to accept employment with L'Oréal China, a subsidiary under a local contract for the role of project manager/ operations — a position she was to occupy as of Oct. 1, 2002. In September 2002, she disclosed her pregnancy to L'Oréal and L'Oréal China. ree weeks after she failed to report to her new office in Shang- hai, L'Oréal China said her em- ployment contract was null and void following her complete disre- gard of the engagement. e expat turned back to L'Oréal, which re- fused to rehire her, citing a written agreement that stipulated the end of employment with the parent company when taking employ- ment with a foreign subsidiary. e case was brought to court in France and L'Oréal was found liable of a violation of the French labour code when terminating the employee and ordered to rehire the woman in a role similar to the one she held before termination. e ruling was pronounced by the local chamber of the French Cour de Cassation, France's su- preme court. Interestingly, despite the written agreement between the parties, the court applied a larger legal protection overruling the termination of an employment contract even in the presence of appearing mutual consent. e court held L'Oréal was in breach of the labour code, which states: "Whereas a salaried employee hired by the parent company was furnished to a foreign affiliate and where a labour contract was con- cluded with the latter, the parent company ensures his repatriation in a case of termination by the af- filiate, and procures him a new employment comparable in im- portance to his previous role within the parent company. "Notwithstanding the parent company's intent to terminate this salaried employee, the provi- sions of the present paragraph are KNow > pg. 18 Credit: Arseniy Krasnevsky/Shutterstock L'Oreal was ordered by a French court to reinstate a pregnant worker who didn't show up for an international assignment at its Chinese subsidiary.

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