For some companies, opening offices abroad, forming partnerships in foreign countries and opening manufacturing plants in another country is a far-fetched dream. For other companies, it is the reality and, quite often, a necessity.
Venturing abroad can open up new markets, build stronger partnerships and reduce costs of manufacturing. The reasons are many.
That being said, companies that do venture abroad need to keep something in mind – different countries, different laws. This is especially true for labor laws which can be notoriously difficult to master and which can cause a heap of problems for the company, both operation-wise and reputation-wise.
A Few Labor Law Basics
The first mention of anything that resembles labor laws dates back to the 19th century and the start of the Industrial Revolution which brought with it gigantic factories where people worked inhumane hours in inhuman conditions. Another contributing fact to the development of labor laws was that children were often employed in the early days of the Industrial Revolution.
Over the years, labor laws around the globe developed into what we have today – sets of national and sometimes pan-national (in the case of European Union labor laws) laws that determine how the employer-employee relationship can and should look like.
Individual labor law prescribes the relationship between a single individual and their employer. These laws determine employment terms, minimum wage, work hours, basic health and safety regulations, discrimination policies and dismissal options.
Collective labor law deals with the relationship between an employer and the entire workforce that works for them. These collective labor laws mostly deal with unions and general rights of the employee pool in a company.
Most Interesting Labor Laws Around the World
Labor laws will differ greatly from country to country and while some countries are more pro-business, others are putting more emphasis on protecting the employees and ensuring their well-being.
For example, Brazil has one of the strictest sets of labor laws, protecting the workers in ways that are unimaginable in most other countries. This also leads to a huge pressure on the judicial system due to a high rate of employment litigation cases.
Canada is notoriously difficult to navigate when labor laws are in question. For one, their labor laws are constantly evolving, making it very difficult to stay on top of things. In addition to this, different provinces come with their own addendums to the national labor laws and it all becomes quite exhausting after a while, especially for foreign companies who wish to do business in Canada.
In Spain, the judicial system is extremely employee-friendly, meaning that companies rarely come out victorious if things go to court. In addition to this, the employee does not incur any legal costs even if their company wins in court which results in a large number of cases, relatively speaking.
Vietnam’s labor laws are also very protective of workers, including those who work for foreign companies. They are even more protected if they work in industries that involve hazardous or dangerous conditions of any kind.
Tips for Companies Venturing Abroad
Research is an absolute must for every company that is even considering moving all or a part of its operation abroad. Sometimes, foreign labor laws will make it so that this relocation or expansion will not even make any sense, financially speaking.
Companies should also be very careful when crafting their contracts and employee guidelines in foreign countries. In fact, this is all best done in consultation with local law firms that will provide all the necessary guidance in such cases.
In case an employee decides to go to court, it is also essential to have the help of a local legal firm that will ensure you get the representation you need. For example, if you decided to open up an office in Sydney and you are being taken to court by a disgruntled employee, you will go for a solicitor from Parramatta, for example, instead of someone from the U.S. (if you are an American company) who does not understand Australian labor laws.
In case you are looking to take your company international, labor laws are definitely not something you should ignore. You have to learn as much as you can about the rights of workers in your new destination and you need to make sure you are protecting your company legally.
The best way is to go local with your legal representation.