Interlaw's Managing a Global Workforce report, seen exclusively by HR magazine, surveyed 300 lawyers. It found that two-thirds (69%) identified the requirements regarding contracts and documents and the termination of employment (65%) as areas businesses struggle with most.
More than a quarter (27%) said they had worked with clients who avoided hiring in Europe because of the complexity of the regulatory landscape.
More than four in five (83%) respondents reported that the most common mistake businesses make when employing staff in another country is providing employment contracts and documents that use the legal framework of the country in which the company’s headquarters are based, rather than the country where the new employee will work.
Two-thirds (75%) fail to consult with local counsel at an early stage, and 42% underestimate local or national culture.
The report's authors said that the most beneficial change to workplace rules in Europe would be a consistent approach to termination procedures, with two-thirds (67%) identifying this as the measure businesses would most welcome.
Annette Knoth, head of Interlaw’s employment, labour and pensions team, said that the findings highlight the complexity of the regulatory landscape in just one continent.
“For employers with staff all over the world these challenges are multiplied further,” she said. “Considering the differing political, social and religious contexts across individual European countries it is unsurprising that employers get tangled up by the cultural differences. With Brexit and more significant European elections looming, however, any move towards greater harmonisation across the entire continent looks less likely.
“Working with clients who operate across multiple jurisdictions, we have found that those companies who invest time in understanding both the legal and cultural aspects of each country in which they employ people can mitigate the risks of a costly and time-intensive legal challenge.”