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Global Workforce Podcast:

Strategies for integrating global workforces

June 25, 2024
Christopher Hitchins discusses the legal challenges and cultural nuances global businesses must navigate to thrive.

Show notes

Global Expansion

In an era where businesses are increasingly crossing borders, understanding the intricacies of international employment law is crucial. In this episode, Christopher Hitchins, Managing Partner, London of the law firm Katten Muchin Rosenman LLP and an experienced employment lawyer, discusses the legal challenges and cultural nuances that global businesses must navigate to thrive.

Key Takeaways:

(02:04) The importance of understanding and maintaining workplace culture across borders.

(02:52) The challenges of adopting a one-size-fits-all strategy in international employment. 

(04:07) The increasing trend of businesses hiring internationally early in their lifecycle. 

(06:27) The impact of Brexit on financial services companies setting up in mainland Europe. 

(08:44) The role of PEO solutions in large-scale multinational transactions. 

(10:34) Aligning corporate cultures during multinational transactions to mitigate legal risks. 

(14:09) The significance of ESG principles in shaping company identity and attracting investment.

(17:00) The complexities of employee equity schemes in an international context.

(23:24) Legal considerations for regulated financial services employees.

Resources Mentioned:

Katten Muchin Rosenman LLP website

Thanks for listening to the Global Workforce Podcast. If you enjoyed this episode, please leave a 5-star review. And be sure to subscribe so you never miss any insightful conversations.

Video shorts


My guest today is Chris Hitchens. Chris is an employment lawyer and also the managing partner of the London office of the law firm Catton. Chris advises clients across many industry sectors protecting their businesses, but also seeking to protect and enhance their workplace cultures and their reputations as employers.

As a result, he has a broad practice covering lots of different areas from employee incentivization and retention strategies, benefits, restructurings, and reorganizations, as well as advising clients on day to day issues.

I'm delighted to be welcoming Chris to the podcast today. Chris, great to have you on talking about the risks of, of, international employment and litigation.

Thank you. Great to be here.


So let's kick things off. Chris, I'd love to get some of your insight here. So what are some of the legal challenges that are typically facing borderless businesses or global businesses nowadays that you're seeing?

So from my perspective, I advise a lot about workplace culture.

And while I'm an employment lawyer and I advise on the laws and how you comply with those laws, to me, the bigger picture is the culture and what the employer is trying to achieve. So if you are an international business, you probably, have achieved a certain size and scale.

And you want to ensure that your culture is, is the same across borders, and that then becomes a bit of a challenge from a an HR perspective and an employment law perspective. So that that other thing is where I where I start is what sort of culture do you have and what sort of, what do you wanna be known for as an employer? And therefore, let's look at the employment terms, how you manage your employees, the types of benefits, the messaging, the columns, etcetera, around that. So that that's sort of my starting point.

But then, like, of course, the laws are different. The customers are different. And if you try to adopt a one size fits all strategy and you just have your template terms and they are you know, British or American or French or whatever, that may not aid the recruitment of candidates because it may it may put them off because they think that you don't understand the local market. And, it ultimately may lead to problems around, retention as well. So you have to while while you wanna maintain the same culture, you also have to take account of local customs and local laws and understand those and make make adjustments accordingly.

Yeah. That make that makes total sense. One one thing I wanted to get your take on actually is I mean, you talked about kind of, by definition, a global business or a borders business will will achieve a certain amount of scale. Now something that I've certainly seen in the last few years is that historically, to be a global business, you that was definitely true.

And you have to be you have to be a, like, a quite a fairly sizable business. You have to be doing doing doing pretty well at least in one market, then start to expand into other markets. But also nowadays, you're seeing much businesses earlier on in their life cycle starting to go borderless as well as starting to starting to hire internationally. Are you seeing the same thing or what pick on that?

Yeah. So so we do a lot of work with the US employers. And, typically, the first instruction that we will get in London from a US employer is in the employment field. And it will be we wanna hire somebody in the UK, and, these are the terms you wanna use, and make it happen.

So and, again, the first question is, well, what what's your what's your desired scale? Are you looking just to keep one person? Are you gonna go to two or three? Or is this a dip in the tone if it all if it all goes well, then you you're gonna scale it up a lot larger.

Because that will influence what you put in place because you don't want to change the Ts and Cs of the person that you've hired when you hire somebody else or when you hire ten more people.

So so, yes, we do see, onesies and and twosies. And questions then are around, whether they're an employee or whether they're a contractor or consultants, and then the the sort of the the misclassification concerns that you have. And more these days, I would offer up the PEO solution or the employer of record solution as something which, they may be interested in exploring. So we sort of generally do a, one, it's a simple instruction from a client's perspective. We just wanna hire one person, make it happen, and then you waffle on for hours and you say, What entity are you gonna have in that jurisdiction? Have you considered whether you have a permanent establishment and whether you have to pay tax there? Is are they an employee?

Are they a contractor?

Are you providing any benefits? Are you gonna scale up?

Then you they're starting to get a bit annoyed because you seem to be putting up a lot of barriers. But these are all things that I think are important from that scale perspective because there's no point on doing, what you set up because the setup costs are are funds that you don't get back again.

Yeah. The sunk cost fallacy.

But it's it's really interesting about the are you still seeing the UK, US dynamic being being the most common one of the most common requests you get? So US company trying to expand to UK, UK trying to expand to US.

We see more in US to UK, but, obviously, it does go the other way.

In the financial services sector, host Brexit, there was a drive to mainland Europe as well. So the proprietary trading sector moved, a lot of their business to Amsterdam.

Some of the other financial services institutions moved to Germany or moved to France, or move to Dublin. So it's it is quite common to to advise on singular employment issues where, the mother ship is just dipping a toe in the market and and generally wants to see, is there is there something worth doing? I don't wanna go the whole hog. I don't wanna set up an entity. I don't have to make findings.

I don't wanna pay tax. I just wanna say, give it twelve months, see how it works out, and and then we'll go from there. So, generally, if if it's a US to UK, generally, we would try to handle the the all of the international development because we feel that we, not that we understand the local law, but we understand how to interpret the local law for an audience in another market. So if it's a French company setting up in the UK or or a UK company setting up in Germany, the people that we work with understand that the laws are different in different jurisdictions in the way that you would hope that an international business would also do. And then you can therefore translate what the client is trying to achieve based on what they would want to achieve in their own jurisdiction and then set things up accordingly in the other jurisdictions so that they can achieve what they want to achieve, notwithstanding the law and the customer's different. That that's sort of the the key to it.

Yeah. Yeah. That makes a lot of sense. And certainly what you mentioned about Brexit, I can imagine that being a big trigger point for a lot of people setting up in in mainland Europe for sure.

It's it's quite interesting because I think in in the evolution of, Omnipresent and what we do, we've certainly and, you know, a few years ago, a few of the opportunity a lot of the opportunity we were seeing with the one d twosies hiring the first person in this country, hiring the first person in active entry, employees relocating from here to there, or we want to hire a support person. They offer twenty four seven support.

But more recently, I think we're seeing more of these larger scale transactions. Maybe it's, some kind of, multinational company going through an asset purchase or a or a multinational carve out some of these larger type of opportunities, which then creates not just one jurisdiction to kind of explore, but a multitude with each of them have a handful of employees in. Are you seeing similar things, and what kind of challenges?

Yes. Yeah.

So, I used to think that the professional employment organization, PEO, was, a US idea. But, when I because I because I only sort of heard about it in the last five years, in the context of the onesies and twosies.

And when I've spoken to my US colleagues about it, it doesn't seem to be necessarily a US idea. It's it's more, it's more sort of international or generic. So we do see it in the transaction space, and, we we do see it where there's a larger workforce than just a handful. And I sort of speculating why that is. I suppose it's better knowing now. It's more socialized.

It's it's a better worn path. It works.

And, from an administration perspective, it is a heck of a lot simpler. So if you're doing a transaction and you're acquiring businesses in ten countries and the company that's the purchaser has businesses in eight of those jurisdictions, but has to take on the other two, who's gonna run those businesses? Because you may not be taking on the country head. You may not be taking on local HR, or it may be that the seller business manages things in a shared services way from a central, location that you're not buying. So all of a sudden, the person who's running the deal is left scratching their head thinking, well, how how am I gonna offer a solution that delivers, the business on day one where and how people gonna get paid? When's payday?

How are we gonna ensure that the benefits are are the same if if I have to enter into new benefit plans? And then the PEO solution, Richton, may maybe we talk about essentially PEO and EOR, as well. But the PEO solution becomes extremely attractive in that situation where you can simply hand it over to somebody like yourselves and say, make this happen on day one. You know?

I do it. I hope really want I just wanna pay you a check, and it really needs to know how, how you've done it. I just want you to deliver x solution. So so absolutely, we we're seeing it more and more as a in the transactional field as a solution.

Yeah. Absolutely. I we've definitely had this to where it's been. You know, we're trying to we're trying to complete the transaction within a few weeks.

Please, can you do it? With within that time frame being being one of the biggest of, decision factors. But I guess back to back to kind of your speciality you mentioned at the start about, culture and and what the employer is trying to achieve and, aligning cultures across different borders. I guess when when you go through these multinational type type transactions, aligning corporate corporate cultures then then throws up a load of different potential legal risks.

And when you're thinking about integrating different workforce, workforce across different countries. Right?

Yeah. So, consultation with employees is, important in certain jurisdictions and in other jurisdictions less so.

Consultation before deals go ahead, consultation before changes can be made.

In some jurisdictions, they call them co determination rights, which means you have to reach agreement rather reach agreement with a with a an employee representative body like the works council or with the employees themselves. There may be filings associated, with with changes that you want to make, and there will be penalties if you fail to do so. So, and it's not just the legal risk. It's the tone that it sets.

If you are trying to, you know, if you're doing it in good faith and you're you're saying we're gonna harmonize terms and conditions. And, generally, everybody has gonna is gonna be better off. We've we've got slightly longer holiday. We've got more generous family friendly policies.

We have a range of benefits that you can opt into.

You've got to win the trust. And the the the workforce that's moving into that will will hear the headline, but if as soon as you start to deviate from that, they they may may start to, you may start to do some trust. So the the communications around what the terms and conditions are going to be and how you're gonna run the business is very important. Reporting lines may change, and and therefore, the integration is is is key. Reporting lines may be across borders. People may not, actually meet with their line managers face to face, and that can become problematic, particularly if they used to have somebody that they've reported into in the physical office.

So all of these things need to be sort of out and and planned out. Just try and sort of see it from the the employee's point of view or the individual employee's point of view. What are they expecting?

How what what fears can you allay, and how can you make it feel either business as usual if that's the effect that you're going for, or how can you make it feel like this is you're now working with us rather than working with your previous company, and this is how this is how it's better. And and this is this is this is how you can feel that, that your career can take off as a result of it. So subtle ways and means, around the culture and the integration.

Yeah. Yeah. I I really like that point about putting yourself in their shoes. I think that's the cornerstone of these kind of situations.

Right? Because any kind of transaction like that is gonna is gonna be have a degree of, anxiety for the for the employees who who are who are affected. And so thinking through thinking through everything from their perspective, I think, is is a really helpful point. But also, as you say, if you're gonna be even if it's just slightly increasing the offering that they get increasing the benefits, it's a much easier story to tell than, oh, you've got less holiday now than you used to.

But then you do it is sort of a big mapping exercise, and you have sort of twenty different things that are that are changing, and you you might intersperse the positive ones with the negative ones. And don't worry about don't worry about this. This is not, yeah, not such a big issue. But, generally, if you have economies of scale in a jurisdiction, you might have a better purchasing power to buy better benefits, or reduce the cost, and increase the scope. So, there there are those things to bear in mind.

Yeah. For sure. And do you ever see this kind of, bleeding into things like, ESG environmental, social, and government standards and and how they might be maybe effective with these different global workforces.

Yes. And that tends to be, we're supposed to be different buckets. Tends to be much larger organizations, where they have a an ESG reporting obligation. So it might form parts of their, modern slavery act statement from a UK perspective that that there are similar laws worldwide on that, where they have a an obligation to, put out on their website and in the public domain and in their financial statements exactly what they do do from the environmental, social, and governance perspective.

And, obviously, I would be more focused on the social side from an employment perspective. So workplace policies, benefits, mentor programs, how how you how you provide from a sort of hybrid working or flexible working perspective. Those sorts of things may feature quite highly in that. And, again, local laws and customs may be different, or it may be different in the context of an acquired company. They may be used to having a different working pattern that you'd be then now needs to try to harmonize.

So we we see it in that context. I think also in in maybe in the in the startup context where they are looking for investor capital, and they wanna set the right tone about the sort of entity that they are.

And and therefore, ESG principles, the thought processes might come to the fore.

There's a way of establishing their identity and why people should invest in them or why customers should should sign up. And, again, certainly in the startup environment, you're looking at where individuals have become owners of the business or they have they have an ownership stage, particularly the the early stage management. They may have an equity stage, but they can their careers can can grow and be fulfilled within the the confines of the growth of that organization. So the the employee's journey is intertwined with the with with with the startup company in in that regard. So so, yeah, we we see it in those in those context.

Yeah. Absolutely. And a few things you touched on there. Certainly, the, the climate tech space is something is one of the areas, especially in the start up community, that's still continuing to to grow as far as we can see. And and yeah. I was obviously, as you as you mentioned, when you're joining those early stage companies, people are typically expecting or employees are are looking for, like, an equity stake, and that becomes even more complex when you're trying to manage, the tax implications of that across half a dozen different.

I think it's it's quite interesting in the context of a of a PEO. So PEO like omnipresence, professional employment organization provides, more than just the employer of record service. So the employer of record being a co employment, if you like, relationship where for the purposes of the tax authorities in that jurisdiction, the EOR is the employer rather than the the parent company or a local subsidiary.

But the broader services that a PEO can offer, the benefits that providing the benefits and sourcing the benefits and administering the payroll, making the filings, etcetera.

When you come to the equity piece, that that becomes it's not something that PEO can can do, save for some of the administration, the parent group. It's not the equity of the of the PEO organization.

And then you start to muddy the water slightly because what you're saying to the tax authorities in New France or Germany or the UK is but the employer is is the PEO organization, and and we will deduct taxes and hand them over, to the authorities. But there's this overarching arrangement between the employee and the parent company where they can benefit from the shares in that entity. So the the tax obligation, if it relates to employment, is with the employer of record, but the money, and where it matters and the profits and the and the future success is is of the the business that they work for, albeit that they may not be employed by. So that starts to you can see how that starts to muddy the waters based on the tax perspective, but also from the the the limits of the what the PEO can do versus how do you ensure that the employee feels part of one culture while we're offering this, this administrative solution on the ground.

Yeah. Absolutely. And we've seen a huge different array of different types of employee share option schemes all originate from different countries with different setups and different different ways that they're they're managing it. So, yeah, definitely, that can definitely be, you know, a complicated area that's, that's worth getting advice on.

One of the other thing I wanted to touch on so, obviously, Qatar has a very broad range of of clients across lots of different sectors, but, I think also has has a lot of experience in financial services and and hospitality and leisure. And, you mentioned a bit earlier about how financial services companies that was the the trigger from Brexit was about then, basically setting up regulated entities, I I guess, in in mainland Europe. But I'm curious to see if there's any other, trends that you're seeing in those sectors, maybe around hospitality and leisure and and maybe perhaps, having more flexible parts of the workforce and and how they how they tend to be, be perceived.

Yeah. Well, I suppose it's, it's not two ends of the spectrum, but it is, chalk and cheese in terms of the, the way that people get paid and what have you. So, obviously, in the financial services sector, the compensation is it's structure and amounts are vastly different from the, say, the the hotel or restaurant sector. And and therefore, the way that people get paid is a key driver to, how they behave and what they're incentivized to do.

So you have your base salary, and your base salary may be modest amount or average amount, or it may be a significant amount, but not a fairly significant proportion of what you're hoping to get paid. And then you would have a bonus. The bonus may be deferred in in order to incentivize you to stay or stop you from leaving, depending which way you look at it. You may have an equity piece.

You may have, carried interest or promotes some sort of share in the success of the investment.

So that if somebody's leaving or joining, they're very focused on, this is my last ever move. How much money can I make? And then I'm out. So, and that that, of course, that that drives behaviors and drives fluidity in the market.

So the employment laws around termination and around that managing people are, the the nuts and bolts is in the contract that you've signed and how much you're gonna get paid. So that becomes the the the sort of the main driver. In the hospitality sector, you have a much more, maybe, fluid workforce where people may be working on a on an hourly rate. They may be working for multiple employers.

They may be, for so long as these are allowable in the UK have zero hours contracts so that you just have a an umbrella contract and you, pick and choose the amount of hours that you will provide. You have shift patterns. You may have a trunk system where you share in in tips, but the generally, the level of pay is a lot less. Maybe the level of loyalty is is a lot, is a lot less because there was a lot more fluidity.

So so so your concerns there are are different from a financial services organization that is concerned to protect its client relationships and to protect its confidential information slash trade secrets. So they don't want people to move on to a competitor, and and simply do what they're doing, for their competitor, what they're doing for them the day before. So you would have, maybe lengthy notice periods. You'd have, the ability to put people on garden leave. You'd have a non solicitation provision of of clients and of employees, and you who possibly also have a non compete. So you don't tend to have that in the in in the in in the services sectors, outside of financial services. You have them in in, c suite and management contracts in other sectors, maybe not to the same length.

And you you have them in the m and a context as well, Particularly if you're buying a business off, off management or or an owner or a series of owners again, you don't want them to to simply set up shops or else now the next day.

So it's, so there yeah. There's a lot there's a lot of differences.

I think the EOR model works well in in, in a lot of sectors.

You know, you may say all sectors. I think where we would see it less would be in the financial services sector where somebody needs to be regulated, because and if if they're in the proprietary trading sector and they're trading their own money, then if the regulation issue is is is is not required, then you do see EOL model. But if you need to be regulated, you have obligations to the regulator in that jurisdiction. And, generally, you may want to have as much control over that individual and their activities as possible.

You also want to have control over the intellectual property that they create to to ensure that that's watertight and it belongs to you. And you want to ensure that you have these post termination restrictions, non compete non solicitors, which I know are possible through an EOR. You have to do a little bit of legal gymnastics to work out to to ensure that if you have a contract in place between the the parent company and the individual to ensure that the individual doesn't go and compete with the parent company, that that parent company is not then deemed to be the employer and therefore have a tax obligation in the jurisdiction.

The the the whole idea of the EOR is designed to mitigate.

So it it it is possible, but it just, it it it's sort of work it out with the clients.

Yeah. Absolutely. There's a there's a few different, areas you touched on there, which I think I think are really interesting.

Definitely, it's it's really hard for, an EOR to, employ someone who is a who is licensed or a regulated individual where there's liability that that then sits with the employer because we're not a licensed well, in most countries, we're not a licensed legal entity.

So that's something that that's that's a that's a challenge. Also in some countries, it can be a challenge to, do things like provide, visas because certain types of visas require employee sponsor employer sponsored visas require kind of significant oversight and management of employees, for example, in the UK. So you can do things like get a technician visa so there's workarounds if the employee can get get access to these themselves, but to have an employer sponsored visa in the UK is quite difficult. But in other places like getting a blue card and employer sponsored visa in other places in in in Europe, it's much, much easier.

That's my local train that goes past.

Would cut that better.

Yes. I have to turn thirty six.

You you you you're right to mention the visas that, yeah, what we see a US to UK, and they have one individual and they want that individual to to have a visa. And if the if they have a UK subsidiary that they set up and then that entity sponsors the individual or who's gonna administer the license. You've only got one person in the UK, and that's the person who's on the visa. So that becomes a bit problematic, to square away.

In other jurisdictions, we have seen clients being the beneficiary of a of a PEO solution where it may be if you're buying if you're buying a group and you have employees who are employed in a jurisdiction, you may not be you may be buying the business rather rather than the shares. And that if you're buying the business, you're not buying the legal entity, but it may be the legal entity that's the sponsor of the employees in that jurisdiction.

And you need to be certain that on day one when you bought the business that these people are still allowed to work, where they're working, they don't get deported, or you don't get fined, or you're not banned from setting up there in the future. And we have been the beneficiaries of omnipresent in the particular instance I'm thinking about, having the ability to provide visas locally without the need for the company to set up its own entity.

Yeah. Absolutely. That, I mean and no also understanding the process, I think, is a really important thing. Like, it quite common practice to get visas in lots of different countries, but knowing that that you might have to advertise a role for a certain amount of time and and meet different requirements and then you factor in, well, actually in you know, we can employ these people straight away, but actually there's a few others that might take a few more weeks that we have to jump through a few different loopholes. I think that's a it's a really interesting thing, element to factor into some of these certainly some of these transactions there.

Okay. Great. There was one other thing I wanted to mention. Oh, yeah. So you talked about the financial services sector and, the the key things there. You're looking to oftentimes, they're looking to protect IP, non competes, all of those kind of things, and I think that makes that makes total sense.

One of the things that we've seen as you mentioned, like, the more flexible end of the workforce that might be in the, in the cheese section rather than the chalk section, to use your analogy.

The, we've certainly seen some some companies try try and use that kind of employment model in certain sectors where where it might not be kind of the most appropriate to try and to try and, for various reasons, they might do that. But then that often gets gets picked up in due diligence processes during a, during acquisition or or something like that. Do you have you come across that that this kind of instance yourself, in your line of work?

Where a business is providing a workforce to a nontraditional Exactly.


Through, like, a contractor setup, but, actually, it's someone who is economically dependent on the on on the client for, for their primary source of income and the business.

The the the classic is is contractors engaged around the world. So, you have a a core business in in Europe, and you've been dipping a toe in Asia and Africa, for years.

And you have a small remote workforce of one, two, or three people who you pay gross.

And, their job is to divert opportunities to you in Europe so that you can sign contracts with investors or or sign contracts with, clients or suppliers based in that jurisdiction where you don't have an entity. And, yes, we're it will be typical to flag, here's the workforce of the employees, but here are the contractor arrangements. Because when you're looking at the employment workforce, you're looking at potential, liability, known liabilities, non known liabilities, claims, when a bonus is paid, holiday accrual, recent redundancy rounds, grievances, etcetera, etcetera. If you're looking at contractors, you you can have a whole host of contracts very often in local language or local language and then, with English at all side.

You take it in good faith that that's that that is an accurate translation, but, of course, the local language, will prevail in case of dispute.

So one of the termination provisions, it could be five year contracts. They could be they could guarantee an amount. So you need to know how you can get out of them, but also you need to know have they been set up correctly and, are we exposed to a tax liability through the operations of this person here? Should they have been classified as an employee, in which case, we may be looking at fines and interest and Social Security contributions, that sort of thing.

And, also, they may have employment claims that you haven't, appreciated that they might have. But the fact that you may have been operating in a jurisdiction without the proper setup could, cause longer term problems such as a blacklisting. You've been had being allowed to to operate from that country for next year sort of thing. So it's very extreme, but, you shouldn't just take it, as read that just because it's being set up for some time, that it's been done in a lawful way. And then I think tax would be the biggest, red flag and and the cost of having to, pay take your medicine and and and pay the amounts in order to regularize those contracts.

Get the right to done.

Yeah. Absolutely. That can be that can be obviously a minefield. I think in my experience, there's a there's a couple of points in which this these kind of risks get get triggered. One might be an acquisition where the where the the new company comes through during a due diligence process. They say, actually, these people who are who you've said are contractors, we think that they should be moved to full time employment, and they try and they try and, you know, resolve that risk before the transaction goes through. The other example that we've seen is, some somebody set up as a contractor, but then for some reason falls out with the, with the company and then, you end up in a with a disgruntled employee in a Spanish court taking someone to, you know, to to a tribunal, and that can also be, be quite challenging as well.

Yeah. Then then there's a question, and that's where sort of the the EOR could potentially help because it's a question of which entity are they suing. Because if they're employed or engaged by a local entity, then they've got an entity that they can sue. And that entity may or may not have assets. So so, you know, they wanna win their case or they wanna bring the case in order to get a settlement because it's just easier to make it go away.

But, ultimately, if the entity they're suing doesn't have a presence in that jurisdiction, they have to then, you know, Spanish employee or contractor slash reclassified as an employee in that example, sues a UK company, the UK company doesn't otherwise have any business or assets in Spain, then if they win that claim, they have to then try and enforce that claim in the UK courts. And while that's legally possible to do, it's time consuming and really expensive. So, there are those considerations as well. So if you if you have employed someone through an employer of record, the hope is that the claim ought to be against the entity that employs you, which is the employer of record.

And then in your contract terms with the employer of record, you'll cover off what happens if the employer of record gets sued, but who pays for that, and how do we manage a settlement, and whose decision is it, and, you know, how much authority do you have rehab, etcetera, etcetera. But at least it's, you you've thought about those things upfront, which I think is important.

Yeah. Obviously, I think it's really important to also have a a good team of lawyers on your side for those instances.

You never know when, when something might arise.

You never know.

Excellent. So, last couple of questions for me, Chris. What in what instances would you recommend an employer of record?

You mentioned if you're into the I'm the time.

All the time. Well, I it it I think it's remiss of me to to not offer it up as a solution.

And I think in certain situations as I say, come back to the beginning. It's a question of scale. It's a question of what are you trying to achieve, to the client. And, there are certain situations where the employment record works very, very well.

It's administratively very easy. It's quick. It works. It's it's a well worn path and you know what you're dealing with.

And, somebody else is managing it for you. So there's a a lot of pros to that. So I would let's say almost always offer it up as a as a solution, but sort of have a pros and cons for this particular client in this particular situation.

The the the question that comes up a lot when a client is entering a jurisdiction for the first time is is the question of permanent establishment and tax.

And while that's outside of my particular practice area, I'd I see it a lot that a client thinks, well, if we engage another entity to employ this person for us, then we won't have a tax presence in that jurisdiction.

But while that might be the ultimate outcome, you do need tax advice on that because it depends entirely on what those people are doing, whether they're generating revenue for the mothership or another entity outside of that jurisdiction. And it's it will be very fact specific, and it's very costly to take a flyer on that. And no adviser will advise you to take a flyer, because they're not allowed to do so. So you have to go you have to go into that with your eyes open and ask the question about permanent establishment and and tax to ensure that if that's what you're trying to cover off, it does actually work from that perspective.

So that's that's something that's, would form part of the, the advice and the decision as to whether EOR or a a broader PEO solution is is right for the clients in this instance. But, now, as I say, I almost always will offer it up these days.

Yeah. Makes makes total sense. Definitely the point about just because you don't have an entity doesn't it doesn't mean that you don't necessarily have a tax liability. I think that's a really crucial point. My final question is, what would be the Chris Hitchens' top takeaways for, a global business embarking on any kind of major m and a transaction right now?

Top takeaways of M and A from an employment, perspective, culture, rolling that out internationally, integration, understanding local customs and norms, reporting lines, management of the employees, who's going to do that? Is it the same people?

Harmonization of terms and conditions and benefits.

One that's particularly, naughty if you're buying a business rather than buying the shares or stock, is do the post termination restrictions that you have over the employees, let's say it's the management, do they bite and apply once you've combined two businesses because they signed up agreeing not to solicit the customers of the business that they signed up to. When you combine them in a larger business, does it still cover the larger business? And and, generally, it does not.

So how are you going to manage that? And how are you gonna incentivize people to to work for the, for the sort of enhanced business and and the greater good. So things things like that. And I suppose from a defensive perspective when you're buying and you're looking at due diligence, you're looking at potential liabilities.

While it sounds very negative at the outset of an acquisition, you're looking at the cost of termination, and whether they want to do any reorganization, headcount reduction, change of roles. Do they wanna do that upfront? Does it better to get it out of the way? Or do they want to, do it at a time when everything is bedded down? Are they are they are they happy for natural nutrition? And what's it wanna what what's it wanna look like in twelve months' time? I think that's an important part of the consideration as well.

Yeah. So it sounds it sounds as if there's a lot there to take away and lots of considerations.

Yeah. Lots to think about, but but generally, people like people might not be that focused on it, and, somebody would have the task of of managing the workforce, integration.

And particular challenges can happen when you're negotiating with the people that you then have to manage. So, because they're getting paid out part of the deal. So, you know, you you you may or may not still be on speaking terms by the time you sign, and then you've got all worked together. Then you've you've promised some large earn out that would, make everybody rich in the future, but you've realized on day one that you can't stand each other from it.

Or that or that these people are the people that, they're gonna deliver the value post acquisition. You know? They've done a very good job up to closing, but, but, with the scale that comes from the acquisition, they're not necessarily people who are gonna take it forward. So, yeah, horses, of course, has different challenges.

Yeah. And a huge amount to consider there. I I think that's you made some really good points there.

Chris, that, that brings us to the end of the the conversation today. I've really enjoyed, speaking today. I've got a Likewise.

Thank you. Thank you.

Final question. What's the best way for people to get in touch, if they want to if they wanna speak to you?

I take so many WhatsApps these days, but I I would discourage that.

Buyers on the on the website, Christopher Hitchens of Catan email, and I will respond instantaneously, generally, which I like to, at least to say for when I can when I can get back. So, yes, through my website and through email, and my mobile number is on there too.

Fantastic. Thank you so much.

Pleasure. Well, thank you.

George Britton
Director of Sales

George Britton is the Director of Sales at Omnipresent, known for his rapid career advancement and leadership in sales across tech companies and is praised for his sales acumen and team guidance.

Christopher Hitchins
Managing Partner, London
Katten Muchin Rosenman LLP

Christopher values diversity, women in leadership, and offers cost-effective employment law services. He believes workplace culture and teamwork are key.

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