In today’s business market, multinational transglobal entities are increasingly common. In such a global market businesses are not restricted to trading within their own country. Cross border international trade can account for a substantial portion of the business. As its international trade grows, it is likely that the business will have at least one office or hub outside of its country of origin.
In recent decades, Europe has been an attractive place for American businesses to thrive. With many European countries boasting a highly educated population, proficiency in the English language, and low taxes to encourage foreign direct investment, it has drawn many U.S. companies. Top American companies such as Google, Boston Scientific, Intel, Apple, and Facebook have bases in Ireland, and Microsoft, Cisco Systems, and American Express have offices in the UK. As American businesses open branches (and occasionally their headquarters) within Europe, this operation will be subject to European employment law. This law will operate and govern the employment relationship, from the hiring process through the employment contract and conditions of work to dismissal from employment. While there are certain similarities between European and American employment laws, it is of vital importance that the American employer or manager or indeed employee be aware of the employment laws that oversee and manage the employment relationship in Europe.
This guide is aimed at the American business student who may operate in some capacity within the European market and as such provides an overview of the key areas of European employment law. It is not a comprehensive or exhaustive text nor does it incorporate all of the laws governing employment law in Europe. It aims to give an overview of the key concepts, and the interested student is advised to further read the material referenced in the footnotes and bibliography for more in-depth analysis.
First, it is important to understand the sources of employment law within Europe. While they can derive from national law, regionally there are three sources of European Law that seek to harmonize law and practice within the region. While the European Union (EU) is the most assiduous in implementing and imposing employment laws and regulations, the European Social Charter (ESC) and the European Convention on Human Rights (ECHR) also play a role. The origin and scope of each of these three sources is discussed in Chapter 2. Chapter 3 examines the employment contract and sets out what each employee is entitled to in terms of that contract. Unlike America, the EU states that each employee must receive written terms of his or her employment. We consider how the employment contract is formed and what terms must be included in writing. Chapter 4, the lengthiest chapter in this publication, examines equality and nondiscrimination. This is a founding principle of EU employment law and determines that an employer will be in breach where a worker is discriminated against in hiring, working conditions, promotion, and pay on the grounds of sex, race, religion, sexual orientation, or age. The special protection given to pregnant women against discrimination is considered in Chapter 5. Another key aspect of EU law is the free movement of workers. In order to facilitate a free market and enhance productivity it was essential that member states be able to access skilled workers from their neighboring states within the EU. This was the beginning of free movement, which essentially removed any visa or permit requirements to travel and work in another member state. Chapter 6 looks at the evolution of this principle, including access to social welfare for migrating workers. The final chapter provides an example of where the EU does not provide a legislative framework and we look outside of the ESC and the ECHR for trade union rights and the right to bargain collectively.
Comparisons are drawn with American law where relevant and for illustration purposes. Overall, this guide should give the reader an insight into the key aspects of European employment law, including the employer’s responsibilities and the employee’s rights.