Europe: The big divide
Cultural and political issues highlight key differences between US and European employment law
December 13, 2006 at 07:03 PM
6 minute read
Why is it we are so different on each side of the pond when it comes to employment law? First of all, our systems are radically different. It goes beyond the traditional difference between the common law countries and the civil law ones. Most common law countries did amend their employment laws, introducing a range of protective laws. The US seems quite isolated with its 'employment at will' approach. Without an employment contract or collective bargaining agreement, either employer or employee may terminate the employment relationship at will. US employees are thus not protected by law against dismissal as such (but they are protected against discrimination in employment decisions, including dismissal, hence the number and scope of discrimination claims in the US compared to Europe). The 'employment law at will' approach goes beyond the dismissal issue and affects the way US employers look at the workplace and explains why they are surprised when they discover our rules and practices in Europe (especially our numerous information and consultation rules and the range of protection against dismissal). It is more than a legal clash. There is a cultural and political gap, especially with continental Western Europe, where the collective right approach (versus the individual right one) has been pushed so hard and where the unions can be so powerful.
There are many other examples, such as the difficulties surrounding whistle-blowing policies or the European Works Councils (EWC) (try to explain to a US employer the messy interaction between the EWC, the national works council and the financial authorities when it comes to announcing a merger).
We all need to be patient and pedagogic when dealing with each other, European lawyers and US companies. Some will say that US clients do not help the situation by always working to crazy deadlines. But the time you take to clear basic misunderstanding at the beginning of a case might prove to be an excellent investment. I know it does not help that the US is unique in its approach to employment law but it is still the biggest economy in the world and a significant source of business for European lawyers. Although differences remain, most of the employment lawyers, either in-house or external, are more aware of the different systems than before. And the next challenge is probably elsewhere: it is no longer about trying to reconcile the US way of dealing with employment law with the European vision (or the reverse), but it is about defining new solutions the global employers (that are often US or European-based but increasingly from other parts of the world) need, going beyond the local differences, as big as they are, and defining a new international employment law, made up of global codes and policies, of global agreements with workforce representatives, that will allow companies to go ahead with their project in an effective and responsible way.
It is not easy for European employment lawyers to advise US-based companies. If you were to ask the general counsel of a US multinational, they would tell you European employment laws can be a nightmare.
One of the first business restructuring cases I had to deal with as a young employment lawyer was the closing of a plant owned by a US-based company, in the early 1990s. The US management sent an executive to deal with the plant closure who believed he would only have to stay a couple of days in Belgium. Not only could he not speak a word of French, but we discovered he was sent to Belgium as a sort of 'punishment,' being excluded from the US top management circle, which showed that no-one in the US thought local employment laws could be an issue. This executive went before the unions to tell them about the closure, in English. The unions got a local court to appoint an external administrator on their reasoning that the company was missing the appropriate and duly mandated representative to deal with the closure and it took us weeks to regain the trust of the court and of the unions and to succeed in the negotiation and signing of a so-called 'social plan' (a collective bargaining agreement defining the compensation package and company assistance for the dismissed employees in case of restructuring or closure, another European special the US clients love). I remember the long conference calls at night, trying to explain to the US management why sending a guy to tell employees, in English, that they are all fired and, even worse, without him having any clear mandate to negotiate a social plan, was wrong.
I am sure most EU lawyers can tell similar tales. The problem lies not only in the US but also in Europe: employee training is key in the US, as part of the anti-discrimination and harassment laws. It is obvious and well accepted that as an employer, training programmes must be put in place. It is a good way to limit your liability should an employee introduce a discrimination claim against your company. European employers are, at least on paper, in a similar position, training being either imposed or strongly recommended by (because of) our recent EU and national anti-discrimination laws.
A couple of years ago, we considered offering discrimination and harassment prevention training on a much larger scale than we would usually do. We surveyed continental European companies and their reaction to such an offer was negative. Training was considered as a threat by these employers (their idea being that employees and/or trade unions would then be more aware of the new rules and start to claim damages from companies). The message was clear: 'do not speak about the new rules; let's wait for the first cases to come before taking action.' That is typical of some of us on the Continent. And so different from the US approach.
Jean-Francois Gerard is the executive director of ius laboris, the international employment law, pensions and benefits alliance.
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