Labor Law Reforms: A Global Snapshot
Labor law is an important factor for multinational organizations as they optimize their workforce planning, decide where to expand and determine how to remain compliant with regulations on a global scale. It should come as no surprise that employers generally favor flexibility in labor laws when it comes to hiring, firing and employee benefits. The ability to terminate a woefully underperforming employee "for cause" may seem like a basic right in many places, but below are examples of nations around the world who prefer to maintain rigid labor laws that protect employees in almost all situations and remove any flexibility from employers.
France: Traditions Favoring Employees Remain, Despite Reform Efforts
France has long been a bastion of worker rights and powerful labor unions that can seriously influence the national economy. The New York Times notes that both the French culture and the French labor regulations seem to assume that businesses seek to exploit workers on behalf of the rich, which flies in the face of the French preference for equality. Under French law, the "right to work" is a basic human right, so it's exceedingly difficult to fire a full-time employee with a contract of employment. However, as the Library of Congress notes, businesses in France can can seek layoffs if they can prove they are firing someone because they're losing money due to economic hardship.
South Korea: Traditions Are Changing as Employers Gain More Flexibility
South Korea once had similar, pro-employee laws like France, but the nation has moved toward greater flexibility for employers. The current Korean government wants the nation to attract more multinational business, so it recently changed its labor regulations to allow firms to hire more "irregular" workers who are less expensive to hire and fire.
According to The Wall Street Journal (WSJ), "Unlike regular workers, irregular workers receive no insurance coverage from their jobs and no guaranteed personal days, and they may be terminated without cause." Employers have certainly taken advantage of this new flexibility, eagerly expanding their hiring of irregular workers. Indeed, one-third of the Korean workforce is now irregular, according to the WSJ, and more multinationals are moving in. The Korean government is now seeking to make it easier to terminate regular employees "for cause," which will offer even greater workforce planning flexibility for firms operating there. Opposition to these changes continues, but unlike France, Korea is becoming more flexible with its labor regulations.
Argentina: Macri's Reforms in Flux
Argentina's President Mauricio Macri has worked hard to change the least flexible labor system in the world, seeking to open up the South American nation to much-needed foreign investment, as noted by CNBC. Macri has negotiated deals with multinational energy firms, for example, promising to make it easier to operate in a nation with a long tradition of favoring employee rights.
But labor unions are powerful in Argentina and opposition to the president's labor reforms are growing. Although President Macri has promised to boost the economy by making it easier to do business in Argentina, the powerful public sector labor unions have fought him all the way and have begun to slow down his ongoing reform efforts, as Business Insider notes.
When It Comes to Compliance, Agility (in data, in HCM systems) Is Key
Labor laws can, and will, change, in the US and overseas, but having HCM systems that allow for agility and accurate data collection to meet those evolving compliance challenges is one of the best and least risky ways forward. In a world where change happens constantly, being flexible enough to accommodate those changes as they happen is what compliance is all about. When you empower your compliance teams with the know-how and tools they need, you'll succeed in closing global compliance gaps as they emerge.
Stay up-to-date on the latest workforce trends and insights for HR leaders: subscribe to our monthly e-newsletter.
