Science of Compliance
FedEE Speed: Our country-by-country legal and economic data is designed especially for the busy HR professional and is available 24/7. Our helpline resolves 90% of problems raised within 4 working hours of us receiving them. You are never kept waiting to receive a reply if you contact us.
FedEE Practicality: We ask our members regularly what support and information they need to operate in their daily or occasional tasks and we deliver what they want in layman’s language. Almost half of our users have English as their second language and we constantly examine the words we use to minimise mistranslation and misinterpretation. We look for the practical outcomes of all developments and give steer arounds where we can find them.
FedEE Accuracy: We seek to verify all our data from multiple sources and edit our material three times before publication. We may still get it wrong, but such instances are rare.
FedEE Predicts: The future is an ever more uncertain place and FedEE is forever identifying trends and forecasting what HR should expect. We were right about the 2008-9 economic collapse and even moved our own administrative operations to stay in the EU before the Brexit vote in June 2016. We predicted the outcome by one percentage point. Predictions are always the best estimates of future outcomes based on an intelligent reading of trends. Nothing is predetermined, but probabilities must not be ignored.
The Multinational Paradox
Multinationals now account for
- Over one third of world production,
- More than half of world exports, and
- 25% of world employment.
They are also, on average, more efficient than domestic companies, spend a much higher proportion of their income on research and development than other companies and generally operate as “good employers” in the formal economy. They are thus strategically very important for the world, provide a huge proportion of government tax revenue and are the principal reason why living standards are sustained at such a high level throughout the developed world – and increasingly in the developing world.
The irony, however, is that multinationals are frequently the focus for public criticism, tax and legal constraint. They are easy targets for anti-globalisation and environment movements, their transnational reach exposes the parochial weakness of national governments, and new taxes – such as the French digital tax – are designed to eat into their financial power base.
Above all, however, multinationals are subject to a multitude of laws that are either specifically designed for them – like the EU’s EWC rules, or US-China trade tariffs – or coincidentally affect multinationals more than other companies – like ante-trust and M&A rules. FedEE also regularly identifies laws which have been poorly implemented or transposed and court rulings that are clearly unjust. Many national labour courts also operate in such a biased way that an employer has little chance of winning their case.
HR professionals in multinational companies have to face a torrent of new legislation on a daily basis. This is especially the case in common law countries like the USA, UK and India because here the courts are constantly redefining what employers can or cannot do. Their reputational risks and perceived ability to pay also makes them especially vulnerable to challenges from even legally dismissed employees, #Me Too claimants, malware and union strike threats.
Although legal news sources report the basic facts, few lawyers or legal information services – apart from FedEE – highlight the legal or practical problems at the heart of a new law or legal precedent. Even less predict the outcomes of legal changes. For this reason most multinationals are steering blind through the choppy waters of an increasingly hostile world.
FedEE was founded in June 1988 at a meeting of HR Directors at BP PLC’s Head Office in London.
FedEE offers a range of “must have” services to the individual Multinational employer.
Key predictions for 2020
Economy: There are strong signs of overheating in developed economies and the OECD’s composite longer leading indicator is now below its lowest point since 2009. We are currently experiencing the longest period of a sustained upswing in the world economy since GDP figures were first published and unless there is a step change in the laws of economics we can expect a significant downswing by Q3 2020. This might take place even sooner if triggered by a significant world event such as conflict with Iran or further escalation of the US-China trade war.
Pay: We predict that there will be a surge in average earnings in many developed countries during the second half of 2019, but that this trend will be quickly reversed with the onset of a recession. Real earnings are already flat or reduced in many countries such as Japan and the UK and only in Norway and eastern Europe has there been a surge in real earnings over recent years. This will come quickly to an end by Q4 2019 and unless eastern European countries substantially reduce corporate and personal taxation (including social security) there will be a sharp fall in real earnings as unemployment rates climb.
Employee relations: We predict that the long-term decline in union membership across much of the world will be reversed in 2020. This will only take place, however, if unions undertake some serious reforms of their internal structures and political affiliations. The driving force for change will be “labour displacing technologies” with unions carrying the brunt of opposition to consequent job losses. The poorly sustained yellow vest movement in France has illustrated the importance of organisation and how right wing political movements fragment easily over time. Although the prevailing trend across the world has been towards nationalism this may only be the fore-runner of a new political ideology that will not be identifiable in conventional right-left terms. One of the driving forces will be a lifestyle-led independent approach to work that will be very different from the current “gig working relationships”. Companies must be ready for this change as it will have major implications for the future of employee relations and talent management.
Income tax: Governments like income tax because it is so easy to collect. As the total revenue from income tax falls due to declining employment levels (brought about by first a recession and secondly the progressive automation of all areas of activity) then the tax rates on the remaining employees will have to either increase, corporate tax rates rise or other forms of taxation will have to emerge. The aging populations of the developed world will also make public health systems become increasingly expensive, unless medical services can be successfully automated. It thus appear inescapable that 2020 will see a further rise in the “tax take” which in Europe could exceed. on average, 40% of GDP and begin to look like the burdensome levels currently suffered by Belgian taxpayers.
New laws: Employment laws, like taxes, grow faster than ever they are repealed. We have already seen a huge growth in needless bureaucracy develop in Europe as a consequence of GDPR. This is now spreading across the global through a series of look-alike laws. There is also a rapid rise in the number of practically difficult laws in the USA that are likely to spread both between US States and across the rest of the world. One prominent example is the New Jersey Equal Pay law that applies the principle of equivalent worth to a string of protected characteristics other than gender. Numerous court cases are also spreading unjust practices – such as the UK EAT ruling on holiday entitlements for part-time workers and the recent Sullivan v. Sleepy’s LLC case in Massachusetts that entitles commission-only retail employees an entitlement to overtime pay.
How prepared is your organisation even if just one of these predictions is realised? How do you stay in touch with changes in the probability of outcomes unless you are part of FedEE? No other organisation offers insights based on a deep understanding of underlying forces and is prepared to share them – however uncomfortable many potential outcomes may be.
Labour cost increases include average wages and salaries and social security charges and are annual rates for the year to Q4 2018. Labour shares are the percentage of value added (VA) produced by an enterprise paid out through the total remuneration, in cash or in kind, to an employee in return for work done. There is no “correct” figure for either statistic, but companies can only afford to pay out a high proportion of compensation per unit of VA if they have achieved a high level of productivity.
|Country/Region (Selected)||% Labour Costs 4Q 2018||% Labour Shares 2018|
There is a wide variation in labour shares and no clear correlation with labour cost changes – although those countries with the highest labour cost increases have labour shares well below the EU average. It is also not clear why the Irish Republic has such a low labour share. Back in 1998 the share was 44.9%.
The FedEE HR Counsel Programme
Now there is an opportunity for HR professionals in multinational organisations to obtain a legal qualification that prepares them for a role as the departmental expert in employment law. FedEE’s Advanced Diploma in Multijurisdictional Employment Law (Adv Dip MELL) is a one-year part-time programme undertaken primarily through distance learning.
If you are a University graduate with at least three years relevant HR experience you may join the programme at any time. You do not have to possess a first degree in law and the programme will begin by preparing you to understand legal concepts and basic principles of law.
The programme focuses on ten principal jurisdictions – China, France, Germany, India, Italy, Japan, The Netherlands, UAE, UK and the USA. However, participants may also choose other jurisdictions for their personal research. There are a total of 24 modules to complete (two per month) and, as a graduate, you will possess greater knowledge of trans-border legal requirements than most conventional legal professionals.
The course is designed to fit in with a busy work schedule and if not completed within the year it may be extended for a further six months. The programme not only ends with a valuable qualification, but you will also be able to use the job title “HR Counsel” – as FedEE owns the term as a trade mark.
For further information please download the programme brochure and, if you wish, contact FedEE’s Legal Counsel, a qualified Barrister who heads up our team of Tutors, or click here to sign up today to participate in the course.
Press Releases and Newswires
Join FedEE Today
Many of the world’s largest multinational companies already belong to The Federation of International Employers (FedEE®). We have a Worldwide membership – with particular concentrations in North America, Western Europe, India, Japan and China. A high proportion of our members have been part of FedEE for many years and tell us we provide a both unique and excellent service with great value for money.
If your company has over 200 employees in two or more countries, has its own in-house HR department, and has been operating for two or more years then you really cannot afford to operate without being part of the Federation. The approval process takes less than a day and for immediate access to our services we have an online credit card payment facility. Membership costs as little as €895 a year. Sign up now.
Why not take a short tour of our knowledge-base before joining FedEE® to see the nature and extent of the employment law, HR data and support that we offer? Please contact our Membership Secretary on firstname.lastname@example.org to arrange for a one-to-one webinar for you and your colleagues, arranged without obligation and entirely at your own convenience.