Managing an International Reduction in Force October 17, 2016

Introductions Jenny Deitloff – ConAgra Foods, Inc., Fmr Senior Counsel Darren Gardner – Seyfarth Shaw, Partner and International Chair Lori Middlehurst – VMWare, Director APJ Employment Law Nora Naylor – Symantec, Senior Corporate Counsel, Employment Law

Hypothetical scenario You are the Chief Employment Counsel at Important, Co., a large manufacturing company with operations in more than 60 countries.  You are meeting with the Chief Human Resources Officer, who just informed you that the CEO has directed her leadership team to identify significant cost cutting measures by the end of the fiscal year in June.  This will include a 25% reduction in global headcount.  The team wants to be in a position to notify all impacted employees within 90 days.  She wants to know whether you see any problems hitting this timeline. → How will you approach this? → What other information do you need from her?

Roadmap for today’s presentation ! Phase 1: Planning Phase 2: Implementation Phase 3: Post-restructuring issues

Planning Basis for termination/restructure Critical information Examine whether restructure will trigger mass-layoff rules Determine approach Selection issues Costs

Basis for termination / restructure Economic / business justification Need detailed justification Need objective business-related criteria Overall reduction? Removal of business units? Site closures? Offshoring or movement to lower cost locations?

Critical information Which countries? Are some locations/countries off limits? Are there timing/notice requirements? Have other cost-saving measures been considered? Are there inconsistencies that will need explanation?

Does restructure trigger local mass-layoff rules? Prior notifications in country? Analyze government notification requirements Determine what is your “site of employment” in U.S. * Note that this analysis may require a change in your approach!

Is restructure is a valid basis for termination? Are economic requirements met? Are threshold requirements met? Are there notice or other requirements that make a layoff undesirable in that country? *Note that this analysis may require a change in your approach! This varies from country to country

Determine approach Unilateral termination Mutually-agreed termination Early retirement or other voluntary incentive program Changes to employee roles / job duties Redeployment opportunities

Selection Issues Protected employees Last-in, first-out rules Selection based on work performance Non-discrimination principles – fair & objective criteria Employees on sick leave, maternity or other protected leaves Native preferences Employees who participate in collective employee representation Social selection criteria based on employee’s personal circumstances

Selection rules are governed by: National law Collective agreements Union / Works Council agreements or social plans negotiated during consultation period Policy and past practice

Selection issues – selection pools Which group of company employees can be pooled for selection? Ensure consistency (past practice and across jurisdictions) Think about timing, consultation, documentation and privilege issues

Practical selection issues Manager/HR training on selections Manager/HR training on notifications Timing on notification to other internal departments Security IT Communications Labor

Costs to consider Notice Required Payments to Employees Company plan/policy/ practice Social plans Admin costs Legal costs

Implementation Consultation and notification Communications to employees Manage implementation by location

Consultation & notification – who? Works councils - Local - Regional (e.g. EU Works Council) - Workplace level Government - Mass lay-off or other required notifications (if applicable) - Notification for dismissal of protected employees - Submission of redundancy plan Unions - National/ sectoral level/ trade unions - Workplace level unions - Bargaining obligation Health & safety committee/s Employee representatives/ delegates Individual employee notification - Potential problems or violence - Logistics

Consultation & notification – issues Timing requirements Could be specific timing to be followed → consultation period must be 30 days Could be process oriented → consultation continues until e.g. approval, required waiting period, or opinion is issued Employee elections If employee representatives need to be elected, may cause delays Information requirements -- If bargaining obligation with Union, could cause substantial delay

Consultation & notification – issues Impact on company decision making Avoid making final decisions under after consultation has ended Degree to which consultation must drive company decisions Social plan creation / negotiations Can cover items like employee selection, how to avoid redundancies, separation benefits, etc.

Communications to employees Careful consideration of messaging sent to employees and timing

Manage implementation by location

Post-restructuring issues !

Post-restructuring issues “Late” Notifications Re-employment obligations Dismissal / discrimination / other claims Damages / compensation / back-wages Fines Reinstatement

? Audience questions