The expatriation of managers. The expatriation letter
In a globalized world, it is increasingly common to find the expatriate figure among managers, undoubtedly a turning point in the career professional, but at the same time it implies a sea of doubts in relation to the legal implications that this entails, especially from the point of view of labor law.
We must be aware that expatriation on many occasions not only implies mobility on the part of the manager, but also the entire family and/or are affected by it. or relatives, being able on many occasions to travel together.
All of this, together with the need for companies to open new markets in countries with greater political instability and/or greater insecurity, makes the expatriation agreement or letter be a contractual figure of capital relevance.
When we are facing an expatriation
First of all, we must be clear that an expatriation implies a transfer of the job outside the Spanish borders, so it is no longer just Spanish legislation will apply, but the law of the country of destination will also apply.
Any other type of transfer within Spain will imply mobility of a geographical nature that will be subject to subsequent entries being directly regulated by the Workers Statute.</ p>
As a general rule, it is common for expatriation to occur by mutual agreement between the manager and the company, which undoubtedly provides great bargaining power to the parties, since It is not usually easy to find highly qualified profiles who are willing to move their residence for long periods of time.
There are rare occasions in which a company decides to unilaterally transfer a manager beyond its borders without previously having their acceptance, but if necessary, it is best to go to a Labor lawyer who will advise you on all your options, since in many of the situations and depending on the contract previously signed between the parties, it is very possible that you can end the employment relationship with the right to compensation.
Differences between an expatriation or local plus (location at destination)
Since the economic crisis, companies that have projects outside of Spain are changing the way their managers travel abroad, so it is becoming more and more common for we find ourselves with a local plus instead of an expatriate. But how are they different?
- An expatriation implies a long-term temporary displacement to a certain country, while a location at destination or local plus from a point From a legal point of view, it implies a permanent contract at the destination, without prejudice to the fact that the parties can agree on the period of time.
- An expatriation means that for all purposes the employment relationship is maintained in Spain, that is, fully subject to Spanish law without prejudice to the fact that the regulations of another country may also apply, while in the case of location at the destination or local plus, the manager becomes governed by the regulations own country of destination for all purposes, being hired directly there.
Both figures are used interchangeably to transfer managers to carry out their functions outside Spanish territory, although the local plus supposes a level of protection and much less legal certainty for the manager at a lower cost for the company. Regardless of the figure we are facing, the intervention of the labor lawyer seems especially necessary in order to protect the interests of the parties and, where appropriate, to be able to negotiate the conditions.
Aspects to take into account when expatriating
If you are considering an expatriation, whether you are a company or a manager, the first thing you have to be clear about is that you must have an expatriation letter or transfer letter, in which all the characteristics and conditions that will govern the temporary displacement will be established during the period that it lasts.
For practical purposes, we can say that an expatriation letter is like a contract, since it binds the parties for the duration of the letter. Therefore, ultimately, it will be the part that must be the subject of negotiation and above all, it must be written in sufficiently clear terms so that they cannot be subject to subjective interpretation in the future by any of the parties.</p >
Relevant aspects of an expatriation letter
Among the most relevant aspects that an expatriation letter must contain and that must receive our full attention are the following:
- Period of expatriation: The time in which you are going to provide services as an expatriate must be clearly stated. Likewise, it is recommended that you also include the consequences that will be applied in the event that said period is not respected.
- Salary to be received during expatriation: It is quite common for expatriate managers to earn more than what they usually received for their position at origin. It must be taken into account that this higher salary tries to alleviate the disorders that a displacement of this type has in the personal sphere.
- Benefits to which you are entitled : This section will include all those benefits to which you will be entitled during the expatriation period. By way of example, it is usual for the company to provide accommodation to live, a car, medical insurance, etc. In short, cover all those needs that were covered at origin and that are not at destination.
- Benefits for their relatives: Sometimes, the expatriation of an Executive implies that the relatives also leave. Due to the disruption that this causes in the normal course of a family, it is usually the subject of prior negotiation with the company that the same pay or facilitate the adaptation of all family members or relatives in the new country. By way of example, you can agree to pay for the children’s school, if applicable, health insurance for the whole family, language teachers, a job for the spouse, travel expenses between the country of origin and destination, etc. .
In addition, there are another series of clauses that also deserve attention, such as those that regulate the possible compensations to which one will be entitled in the event of completion of the hiring or dismissal, bonuses linked to expatriation, etc.
The importance of Social Security in an expatriation
One of the most important aspects and that sometimes hardly receives the attention it deserves in the context of an expatriation, is Social Security.< /p>
Based on the personal characteristics of the manager, sometimes there is much more money at stake in these aspects than in the compensation clause.
In this sense, it is necessary to take into account that to the extent that a person is displaced to another country, in principle the company does not have to continue contributing for him in Spain and yes in the place of destination, with what that implies for working life and possible future benefits, be it the right to retirement or unemployment.
Therefore, it is essential that we know the country of destination, since depending on the type of country to which we are going to be expatriates, several things can happen:
- That the company can continue to be listed in Spain for us without losing any type of future right.
- That there are bilateral agreements between countries and that although it is allowed to continue quoting in Spain, it will be necessary to fill in these contributions in some way to prevent them and/or the rights of the manager from being diminished
- That there is no bilateral agreement, in which case if you do not want to lose any rights in the future in relation to social security benefits, it will be necessary to make contributions to the system through other procedures or, failing that, agree with the company to alleviate this loss of rights.
Conclusions on the expatriation of managers
Without a doubt, when a manager finds himself before an expatriation, in the vast majority of cases it represents an important opportunity from a professional point of view.
However, from the personal side it implies a serious disorder, so in order to try to alleviate this situation in the best possible way and with maximum security, it is essential to have an expatriation letter that covers all the aspects that are necessary and that it is correctly written.
Having a labor lawyer specializing in expatriations to advise you, as well as negotiate or instruct you in the steps to take, will make things easier for you and It will allow you to assume the expatriation with a large dose of tranquility.