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The mobile workforce: Employment transfers

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I was speaking at the Ontario Bar Association’s Annual Institute 2010 program last week. The session was entitled “Navigating the International Assignment Maze” and I was asked to speak about employment law implications. Surprisingly, there are quite a few! Although we have heard less in the last few years about the mobile workforce or employees moving for work, as the recession passes, we will likely see a resurgence in the global demand for talent, and employees will once again be moving from office to office more routinely.

Some of the most significant issues which arise with the mobile workforce involve:
(a) confirming who the actual employer is, which can be unclear when an employee is moving between related companies;
(b) determining which law applies to the employment, depending on where the employee comes from and ultimately works; and
(c) establishing the specific law which will apply in the event of a dispute.

Some of these issues are less significant when employees move between offices in the same city, but you can imagine the complexity when they move between provinces or even between countries.

Certainty can be injected into the employment relationship by confirming the above in a written employment contract. The contract can also be very useful for preventing other disputes which often occur in the context of an employment transfer. The following are just some of the issues which arise:

• Does the employee have any obligation to accept a transfer?
• What is the employer’s obligation, if any, to assist with the necessary immigration documents?
• What expenses will the employer reimburse (associated with a move), and will these same expenses be reimbursed after the assignment ends?
• If the assignment ends, does the employee have a right to return to his/her former job and/or home base?
• Will any assistance be provided to the employee to assist with the tax implications of the new jurisdiction?
• Are any special terms of employment, like incentive plans, stock option agreements, restrictive covenants, enforceable in the employee’s new jurisdiction of employment?

As you can imagine, the legal issues which can arise in the context of an employment transfer can be very complex and difficult to resolve in the absence of a written agreement. As the economy begins to turn around, we encourage those employers looking to begin transferring employees to be mindful of the above-noted issues and to consider entering into written employment agreements before the transfer occurs.

Christine Thomlinson