1. Managing an International Reduction in Force
October 17, 2016

2. 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

3. 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?

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

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

6. 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?

7. 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?

8. 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!

9. 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

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

11. 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

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

13. 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

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

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

16. Implementation Consultation and notification
Communications to employees
Manage implementation by location

17. 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

18. 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

19. 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.

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

21. Manage implementation by location

22. Post-restructuring issues!

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

24. ?
Audience questions