mark s. askanas partner – san francisco, california
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The Evolving Asian Workplace Law Landscape – New Developments and HR Survival Strategies October 1, 2008 . Mark S. Askanas Partner – San Francisco, California Heath A. Havey Associate -- Sacramento, California. Asia’s Global Impact. Two countries in the BRIC economies - PowerPoint PPT PresentationTRANSCRIPT
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The Evolving Asian Workplace Law
Landscape – New Developments and HR
Survival StrategiesOctober 1, 2008
Mark S. AskanasPartner – San Francisco, California
Heath A. HaveyAssociate -- Sacramento, California
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Asia’s Global Impact Two countries in the BRIC economies In 2007, BRIC countries account 14% of
global GDP In 2008, 62 of Fortune 500 companies are
from emerging market countries, many BRICs (doubled from 31 in 2003!) and other Asian countries. Lenovo (China) regarded a model of an
integrated global enterprise Tata (India) an innovative global
industrial giant Bulk of growing global middle class
(US$6,000 – 30,000) is in Asia.
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Road Map To Avoiding Common Pitfalls
Update on recent employment law developments, primarily in China, India and Japan
Give guidance on some strategic HR decisions from hiring to firing, bearing in mind that as cultures differ, different legal considerations apply
Goal today: provide business solutions
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The Japanese Workplace
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THE STEREOTYPE
• The Japanese are non-litigious.• The Japanese work whatever
hours are needed to complete the job.
THE REALITY
• The Japanese know and enforce their employment rights. Why?
• Labor related disputes are on the rise
• Ministry enforcement is rising.• Stigmas follow Japanese who
work for foreign companies.
THE CHANGING LANDSCAPE
• Westernization• Rising generation of
discontent
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The Art of Hiring in Japan
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• Hiring is the most important step in an employment relationship in Japan…and the one most neglected.
• The prescreening process and freedom to hire (and whom not to hire) is generally more broad than in the U.S.
• The terms of the Probationary Period are key considerations in the hiring process.
• Carefully analyze the risks and benefits of using Fixed Term Contracts.
• The 2008 Labor Contract Act limits contractual freedoms for employment contracts.
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The Hierarchy of Employment Law in Japan
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Employment Contract
Registered Work Rules (shugyou
kisoku)Union
Contracts
Statutes and Laws
Employers cannot rely onfreedom of contract standards.
Employers cannot expect tomirror global policies.
“At will” employment violatesJapanese statute and public policy.
A standard of “fairness”will always apply.
CONSIDERATIONS:
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2008 Part-Time Workers Act Traditionally, part-time workers hedged
against layoffs and economic dismissals. Part-time workers were not equals to
“regular workers” (seishain). Now, part-time workers have more rights. And employers have more duties, such as:
Taking measures to promote part-timers to seishain.
Giving equal treatment to part-time workers.
The Act will affect wages, training, welfare services, and other areas where there has been a disparity of treatment.
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Strategies of Managing Employees in Japan
Do not overdraft the work rules. Do not inadvertently add benefits. Overtime, Annual Leave and Article
36 Agreements. (The McDonald’s decision.)
Use of dispatch employees, transfers and secondments.
Objective documentation of disciplinary and performance issues in a fair manner.
Government subsidies.8
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Dismissals in Japan THE THREE TYPES OF DISMISSAL Incompetency/Poor Performance
Dismissals During the Probationary Period During normal employment
Disciplinary Dismissals The “Capital Punishment” of
discipline
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Dismissals in Japan (cont.)
Economic Dismissal (seiri kaiko) Four Legal Prerequisites
1. Financial Need (2 years of distress)
2. Exhaustive Efforts to Avoid Dismissal
3. Application of Objective and Fair Standards in Selection Process
4. Procedural Due Process
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Risks and Liabilities of Dismissal
Provisional Disposition Order (injunction)
A voided dismissal and reinstatement
Damages and costs Investigations and audits by
administrative agencies Union involvement An unwanted “permanent” employee Defamation and trade secret risks
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Techniques for Terminating Employees in Japan
For Individual Dismissals Solicitation of Resignation Conciliation Procedure Labor Trial System (new as of 2006) Always get employee releases
For Mass Layoffs and Economic Dismissals Implementation of Early Retirement
Program Kata Tataki (tapping on the shoulder)
Secondments Solicitation of Resignation
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China’s Fast Changing Workplace Law
Landscape
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China – Manufacturing Home to one-
fifth of all humanity
China uses 40% of the world's concrete and 25% of its steel
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China – Anti-Discrimination
Protected categories: disabled persons (since 1991); race, ethnicity, sex, and religion (since at least 1995); HIV carriers, AIDS sufferers, and their family members (since 2006); and hepatitis B carriers (2007).
Employment Promotion Law, passed August 30, 2007 and effective January 1, 2008 Adds protected categories (carriers of any
infectious disease & equal labor rights to migrant workers)
Grants express right to bring suit for illegal discrimination in Peoples Court, but doesn’t state remedies
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China – Sexual Harassment
Law on the Protection of the Rights and Interests of Women, amended in 2005
Amendment to Shanghai Local Regulations (April 2007) Specify what constitutes harassing
conduct Employers must prevent harassment
and investigate complaints Creates right to civil suit for
harassment
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China – Employment Contracts
Employment Contract Law 2007, effective January 1, 2008
Employment contracts must be in writing Signed within 30 days, otherwise double
wages for month If unsigned after 12 months, indefinite term of
employment Limits fixed-term contracts
Two extensions/roll-overs Severance pay if not renew
Limits probationary period Depends on term of employment
Limits post-employment non-compete clauses Reduces restrictive period from 3 to 2 years Payment of wage during restrictive period
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China – New Regulations (September 2008)
Implementation Rules of the PRC Employment Contract Law , effective September 18, 2008 clarify a number of uncertainties of the earlier Contract law.
Employers can (fairly easily) terminate employees under the 14 conditions expressly stated in the Contract Law. The grounds include: Mutually agreed between employer and
employee after consultation Serious dereliction of duty and cause serious
loss to employer If terminated employee was under a training
agreement and resigns, employer cannot seek damages for training costs.
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India’s Archaic Employment Laws – Hurdle or Assest?
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India The booming tech
sector employs no more than one million of India's 1.1 billion people
Only 35 million people have formal jobs to pay taxes
Job hopping – high annual employee turnover (25%) in high tech industry in Bangalore
An inept system of public education leaves most Indians illiterate and unskilled
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India – employment law Statutory protection of “workman”. All other employees - basic
contractual arrangement. Longstanding affirmative action in
public employment for lower castes (dalits) and Other Backward Classes (OBCS) Efforts to extend affirmative action to
private employment Cultural and stereotypical
challenges.
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India – Sexual harassment
No express statutory provision or protection “Legally binding guidelines” issued by India
Supreme Court Employers’ duty to prevent and deter sexual
harassment and provide procedure for resolution of complaints
Preventative steps include• Publish policy• Improve working conditions to prevent harassment• Establish “complaints committee” consisting of female
chair, and at least 50% female members, including an independent party such a NGO
• If harassment, initiate criminal proceedings• Give victim option to transferVishaka v. State of Rajasthan & Others (1997)
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India – Non-competes Non-competes are problematic Section 27 of the Indian Contract Act 1872, any
agreement that restrains a party from exercising a lawful profession, trade or business is void, except where a party sells the goodwill of a business
In Percept D'Mark (p) Ltd v Zaheer Khan the India Supreme Court clarified the law as follows: A restrictive covenant extending beyond the term of the
contract is void and unenforceable; The doctrine of restraint of trade does not apply during
the continuance of the contract for employment and applies only when the contract ends; and
This doctrine is not confined only to contracts of employment, but is also applicable to all other contracts.
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PresenterMark S. AskanasPartner, Jackson Lewis LLP199 Fremont Street, 10th
FloorSan Francisco, CA 94105 Tel: (415) 536-6327
Fax: (415) 394-9401 E-mail:
Website: www. jacksonlewis.com
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PresenterHeath A. HaveyAttorney at LawJackson Lewis LLP801 K St., Suite 2300Sacramento, CA 95814
Tel: (916) 341-0404 Fax: (916) 341-0141
E-mail: [email protected]
Website: www. jacksonlewis.com
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jackson lewis National labor and employment law firm –
38 offices “from coast to coast”, including San Francisco, Sacramento, Los Angeles and Orange County
500+ employment lawyers Represent exclusively
companies/employers Advise U.S. corporations re cross-border
and expatriate employment issues. Advise foreign subsidiaries in U.S. re U.S.
employment and labor law issues.