APAC has the most stringent conditions on length of notice before firing employees

Managing underperforming employees is a challenge for many businesses – and comes with numerous potential pitfalls. However, terminating the contract of individuals whose work is substandard is equally important to protecting a business’s productivity, as well as the morale of other employees.

Having said that, a new report by TMF Group suggests that APAC is the most difficult region in which to manage termination processes. This is because in a majority of jurisdictions (46%), employees must be given 5-8 weeks of notice before being fired.

For example, TMF's experts in Indonesia report that multinationals often give workers short-term contracts of six months to a year because it is so costly to fire permanent staff.

Meanwhile, in the United States, same-day firing is permitted in 52% of jurisdictions. Further, employers are required to cite a reason for the termination in only 46% of jurisdictions in the US - compared to two-thirds globally.

In the EMEA region, a majority of jurisdictions typically require employees to be given 3-4 weeks of notice (29%), 5-8 weeks of notice (26%), and 9-12 weeks of notice (20%) respectively, according to the report, Building a workforce: The Global Business Complexity Index 2019.

This data is summed up below:

Managing payroll across geographies

As multinationals expand into new jurisdictions and build new workforces, they must get to grips with local payroll practices and reporting requirements. In some jurisdictions, different regions operate different payroll practices, adding complexity.

Globally, governments require companies to submit their payroll data at least once a month in 76% of jurisdictions. In France, where reporting requirements are particularly stringent, businesses must submit monthly reports detailing the pay and hours of individual employees, along with demographic data including the gender pay gap.

The introduction of electronic systems to automate and standardise reporting procedures can reduce this reporting burden. For example, the Brazilian government has introduced eSocial, a system that unifies the electronic submission of employer and employee data.

Anne Clifford, Global Head of HR & Payroll, TMF Group, commented: "Ensuring HR and payroll compliance and mitigating risk for multinational companies requires global and local expertise.

"Companies need the flexibility and agility to accommodate rapidly changing employment legislation for every territory they operate in - whether they employ thousands of workers or just one. Technology is essential but it is a tool – to ensure better outcomes, businesses need to know how to use it."

Photos / TMF Group