As employers are aware, most employees in the United States are covered by the employment at-will doctrine in some form. This rule generally provides that with the exception of employment contracts for a specific duration, employees may be terminated “at-will” by an employer at any time, for any or no reason, with or without cause (provided that such action does not violate the innumerable federal, state and local non-discrimination, public policy and other laws that protect employees in some fashion).
Employment At-Will Generally Not Recognized Abroad
Although heavily watered down over time, the employment at-will doctrine nonetheless remains law in the vast majority of U.S. jurisdictions. Despite this fact, utilization of the doctrine places the United States in a distinct minority. This is because most countries (including China, Hong Kong, Japan and most European nations) now have legislation requiring “just cause” dismissals or extended “notice of termination” periods.
These countries provide their employees substantially more protection, thus making it quite difficult to end employment relationships. U.S. companies employing individuals abroad may be surprised by the obstacles involved in terminating employees who have reached regular or permanent status. However, employers are not completely powerless.
Probationary Period Option
One way an employer can ensure it is hiring a quality workforce abroad is to: (1) establish a probationary period for new employees, and (2) closely monitor employee performance during such time. This is because most countries relax their “just cause” or burdensome “notice” laws for employees in a probationary period.
When instituting such new hire processes, employers should treat the probationary period as a “trial period,” during which they should carefully consider whether employees are able to meet the standards and expectations of the job and can perform well in that environment. Probationary periods, which can range from 14 days to six months depending on the country, give international employers the best possible chance for securing and retaining quality employees and releasing substandard employees without legal penalty.
Employers should use this time to help new hires achieve training goals and performance objectives, while giving them the tools to perform successfully. Employers should also use the probationary period as a focused time to foster a mutual understanding of expectations, performance objectives and the evaluation process.
Potential Implementation Steps
To make the most of a probationary period, employers should also consider the following steps:
- Ensure the probationary period complies with the laws of the country in which employees are hired and/or employed.
- Consistently apply probationary periods to all new hires.
- Ensure new hires are aware that they will be “on probation” for a specified period.
- Provide new hires with clear job descriptions or summaries of job responsibilities.
- Provide clear performance expectations and objectives, so that new hires understand what is expected and how they will be measured.
- Acquaint new hires with office procedures and practices.
- Monitor how well new hires execute assigned tasks, using quantitative measurements whenever possible.
- Monitor each new hire’s ability to get along with supervisors / managers.
- Monitor how well new hires interact with fellow staff and clients.
- Look for potential conduct problems, such as excessive absenteeism or tardiness.
- Determine whether new hires are “self-starters,” or need constant guidance.
- Provide new hires with feedback to help them shape performance to employer expectations.
- End the employment relationship during the probationary period if a new hire is unable to meet expectations or work effectively in the employment environment.
Conclusion
At the end of the probationary period, the employer should have confidence that the employee meets or exceeds performance expectations. An employee who performs poorly during a probationary period is rarely able to improve performance dramatically after the trial period ends. Moreover, if the employee performs poorly during a probationary period when he or she is fully aware that performance is being closely monitored, it is unlikely performance will improve after the “just cause” and extended notice requirements are activated. While the decision to terminate ultimately is up to the employer and may depend on other factors such as a company’s needs and resources, unsatisfactory performers and unsuitable employees should be released during the probationary period without delay.
For additional guidance on establishing probationary periods, please contact the authors or any member of the McGuireWoods Labor & Employment or Employee Benefits teams.