General
- If there are employees employed on a UK contract but working in another EU country, you have to look at both UK employment law and the local employment laws
- UK company still responsible for deducting taxes at sourcing and paying over the relevant taxes to the local authorities
Australia
- No legal requirement that an employer needs to be an Australian company; UK company could be the employer
- Major risk is "permanent establishment risk" - if your UK entity is is considered to a business in Australia but could be have tax implications. Test is whether the people working in Australia write contracts for the UK company
Three options to minimise risk
- Curtail and stop the Australian staff to write contracts
- Setup an employment subsidiary in Australia
- Engage the Australian staff as contractors - this still has some structural issues. They are sitting as individuals and providing services to you. Motivation issues. Not part of the team.
Notice
- Seller will give notice of termination. 1-5 weeks of years of service and age. PILON can be made. Accrued annual leave just keeps rolling. Also paid on termination.
- After 10 year continuous service, 2 months annual leave. They are based at the state level.
Redundancy
- Sliding scale of redundancy pay
- 1-2 years - 4 weeks way
- 9-10 years - 16 weeks away
- 10+ years - 12 weeks away + the 2 months annual leave
- 15+ years -
- Companies can agree to something enhanced.
Mismatched employees
- If you as Purchaser offers the same terms AND the employee does not accept it, the Seller than make the staff redundant
- If a purchaser offers the same conditions and recognises their continuous service, the employee is no worse off.
- If the respective employee says "NO", they should not get any redundancy payment. They however still get paid for their long service outstanding holidays
- Redundancy is not payable. However, accrued holidays and notice pay is still payable by the
Germany
- There is no statutory severance as such in Germany.
- Employees are only entitled to severance payments under a social plan with the works council or under a collective bargaining agreement
- In practice though many employers / employees will agree on severance pay provisions to avoid lengthy court proceedings.
- Employees have the ability to challenge the termination justification in court and the burden of proof is on the employer.
- Common practice suggests severance is often 50% of the monthly salary per year of service, but it does depend on the strength of our termination reason and any precedents we have set before in Germany.
- Even if the employee’s contract has one month’s notice, German statutory provision would override.
- e.g. if length of service is 9 years, which would currently equate to 3 months’ notice.
- There is no PILON, the employee must stay on the books receiving their remuneration for the full period. Could be garden leave for 3 month at full salary & bens.
Ireland
Redundancy Law in The Republic of Ireland:
- The Redundancy Payments Acts 1967–2014 provides a minimum entitlement to a redundancy payment for employees who have a set period of service with the employer
- NOT all employees are entitled to the statutory redundancy payment. Those who are eligible for redundancy include:
- Those aged 16 or over
- Those in employment that are insurable under the Social Welfare Acts
- Those that have worked continuously for at least 104 weeks over the age of 16.
- Those that have been made redundant
- Continuous employment during the 104 weeks includes maternity and paternity leave, sick leave, being reemployed within 4 weeks of dismissal, voluntarily transfer to another employer, and being back in employment under unfair dismissals legislation
- Part time employees who have been employed for at least 104 weeks over the age of 16
- Statutory redundancy only applies to employees with two years' service. However, an employer might agree to pay a lump sum to employees with less than two years' service. This payment arises through agreement and not through a statutory entitlement
- The statutory redundancy payment is a lump-sum payment based on the pay of the employee. All eligible employees are entitled to:
- Two weeks' pay for every year of service they have since they were 16 and,
- One further week's pay
- The amount of statutory redundancy is subject to a maximum earnings limit of €600 per week (€31,200 per year).
- In the first instance it is up to the employer to pay the statutory redundancy lump sum to all eligible employees. However, where the employer is unable to pay or refuses or fails to pay, the employee can apply for direct payment from the Social Insurance Fund
Sweden
Redundancy / Severance Payments in Sweden:
- There are no statutory rights to severance payments. The employee is entitled to normal wages during the notice period
- However, individual agreements can stipulate a right to a severance payment. Collective agreements can also provide for supplementary unemployment benefit (AGE) to employees dismissed due to redundancy. This compensation (referred to as severance compensation) is provided by an insurance system which is collectively financed by the employer community and, therefore, not paid directly by the employer
- In addition, employers pay 0.3% of their total payroll into the job security councils, like an insurance policy against layoffs. During the good times, the money builds up; then, when there is a need to restructure or downsize, the councils are there to soften the blow. Job security councils are tasked with finding new jobs for workers who have lost their jobs for economic reasons
- Workers also have access to their services wherever trade unions have an agreement with employers – which in Sweden includes the overwhelming majority of workplaces, large and small, since 90% of employees work in unionised workplaces
The statutory notice periods to be observed by the employer vary in accordance with the employee's length of service and range from one to six months as follows:
- Employed for less than two years: one month's notice period
- Employed for at least two years but less than four years: two months' notice period
- Employed for at least four years but less than six years: three months' notice period
- Employed for at least six years but less than eight years: four months' notice period
- Employed for at least eight years but less than ten years: five months' notice period
- Employed for at least ten years: six months' notice period
- However, individual employment agreements or collective agreements may provide for longer notice periods. In general, employees adhere to notice periods of one to three months