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2009/04 - Foreign transfers: your obligations as employer |
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Foreign transfers: your obligations as employer. Employers have obligations before, during and after the transfer in France of an employee. Do you now what they are?
For more information, contact L’ÉLAN: 01 43 27 50 93
In short:
- Transferring an employee to a foreign subsidiary is accompanied by obligations at every stage.
- Before the transfer: prior agreement and applicable law.
- During the transfer: social security coverage.
- After the transfer: mandatory repatriation and reintegration.
- BEFORE transferring an employee in France
- Verify the employee’s prior agreement
It is necessary to verify whether the employee’s agreement and work authorization are necessary.
If the employee’s prior agreement is necessary, the employer must provide his employee with:
- a temporary transfer letter,
- a contract amendment, which must specify:
- the signatories,
- the employee’s position,
- the length of the assignment,
- the salary and the currency,
- the cash and in-kind benefits,
- the repatriation conditions.
The employee’s prior agreement is not necessary in the following cases:
- The employee has been hired by the French company specifically to carry out missions in a foreign subsidiary or subsidiaries of the group in general.
- The contract contains a mobility clause. In this case, the position, compensation and work time must not change and the hierarchical relationship with the original employer must be maintained[1].
- Determining the applicable law
The employer is free to define the applicable law depending on the type of assignment. However, depending on the formula chosen, the law automatically applicable may vary.
- Simple temporary assignment letter or amendment drafted prior to the employee’s departure: the applicable law is the law of the country where the employee usually performs his or her work. However, you must comply with the “mandatory rules” of the host country.
- Long-term assignment: the local law will apply for long-term assignments and if a new contract with the subsidiary takes over from the initial contract. Warning: in this case, two contracts co-exist: one with the parent company and the other with the subsidiary. You must be able to manage these two contracts at the same time.
- DURING the transfer
The employer must make sure that the employee benefits from social security coverage. This coverage applies differently depending on the situation: expatriation or temporary transfer.
- Expatriates
In the absence of any international rules, expatriates benefit from the principle that all work performed in France is subject to the French social security system. If the work is performed abroad, it is subject to the laws of the host country. Pursuant to this principle and in the absence of any international rules, expatriates benefit from the social security coverage of the host country.
- Temporary transferees
When an employee is temporarily transferred by an employer established in France, he or she may be kept under the French social security system. However, it is necessary to check the bilateral agreements and the European rules that are applicable.
Warning: whether he or she is an expatriate or a temporary transferee, an employee transferred abroad remains part of the workforce of the parent company.
- AFTER the transfer
When the assignment ends, the employee must be repatriated and reintegrated in his or her parent company.
If the initial contract is terminated, the labor division of the French Cours de Cassation has found that repatriation must take place, even in the absence of any contract with the parent company[2]).
[1] Cour de cassation [French Supreme Court], labor division, March 15, 2005, No. 03-4.3711
[2] Cour de cassation, labor division, November 13, 2008, No. 07-4.7001. |
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Last Updated on Monday, 24 August 2009 13:46 |
