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Safety of Work Contracts

 


The client is a consulting firm specializing in the development of industrial digital technologies. Its General Directors remained residents of their home countries for tax purposes but often traveled to all geographic regions. The assignment consisted of optimizing the work contracts in view of the formal legal aspects and improving the advantages of the provisions related to international compensation packages.

Two members of the executive committee asked for this study to be undertaken. It included:

▪ Analysis of legal compliance, update of specific clauses

▪ Analysis of the reality of the conditions offered in the contracts

▪ Personal interviews with each director involved

▪ Update the principles of the remuneration according to the policies in force


▪ Individual propositions for improvements, allowing for greater security and increased   competitiveness with regard to the standard contracts used by competitors

▪ Design “salary split” plans for the benefit of executives with stable duties in several countries.

▪ Modify existing contracts and draft contracts according to local laws applying “salary split”   schemes.

Brief multi-duty international executives on the new provisions, explaining the tax   consequences and clarifying the schemas for tax calculations in the new configuration.

▪ Together with the C.E.O., define the timetable to implement the new provisions.

▪ Integrate the KDB (Knowledge Data Base) of the typical contract formats for future situations

Legal and practical optimization restored a parallelism between contractual documents and the reality of the positions held, thereby providing greater security.

Tax optimization made it possible to improve the competitiveness of the executives.

In addition to improving net compensation levels, an added benefit was a perception that the company had an ongoing commitment to optimize international assignments by applying the most advantageous compensation policies, and adapting the framework of the company to each real situation with flexibility.




An investment bank requested that Intelfi draft an employment contract for a new partner. The new partner's domain was quite vast, requiring the partner to define the priorities, especially geographic ones, as part of his duties. Intelfi needed to find a sufficiently flexible formula to define the responsibilities during the first months, while at the same time maintaining a certain degree of freedom that would make it possible to update the contract after the first year.

A Managing Partner entrusted Intelfi with this assignment comprised of :

▪ An information-gathering interview with the Managing Partner.

▪ Analysis of contracts, covenants and annexes of other partners

Definition of the applicable remuneration rules

▪ Assisting the administrative assignment unit in choosing between the posting at company   headquarters or integration with the international management company that handles more than   50% of the partners' situations

▪ Determine applicable law and provide recommendations


▪ Design several schemes for tax optimization


▪ Propose a contract for the first year, including the principle of complementary covenants to be   signed on the 12th month, taking into consideration all of the variables affected by the choices   made during that period by the new partner.

▪ Prepare the presentation of this contract to the new partner and the reasoning behind it   supported by figures
.

▪ Explain and validate the choices made for the first year and drafting of the contract.

▪ Quarterly follow-up of the direction taken by the new partner.

The employment contract was validated and signed. It was possible to update the contractual covenants as of the ninth month because the directions taken by the new partner made it possible to define the decisive geographic zones for the assignment to an administrative unit and the applicable law.

This contract emphasized the partner's actual results and his performance of international duties. In an ultra-competitive work environment, the bank developed a reputation for its stability, excellent contractual terms, optimization over the long term, and the competitiveness of its contracts.

Even though reliable facts are difficult to obtain in this professional domain, this client was successful in decreasing its dismissals rate.




Intelfi complemented the expatriation of a manager to Canada. The company established as its priorities the control of costs for this relocation, while at the same time offering a motivating proposal for the duration of the transfer abroad. Moreover, the company was especially interested in benefiting from the experience gained abroad, deemed important in the years subsequent to the manager's return to the country of origin.

The corporate director of human resources made this request, which included :

▪ Interviews designed to gather information with the corporate HR director and the country   manager from Canada.

▪ Design an international relocation clause to the initial contract drafted according to French law.   The clause included a financial proposition strongly emphasizing the results achieved during the   assignment in Canada, a clause for tax equalization, a clause for a guaranteed professional   promotion at the time of the manager's return, accompanied by increased benefits upon   returning to the system and structure of French compensation.

▪ Budgetary, legal and formal validation of the draft contract.

▪ Propose the keys to dividing the costs for the work assignment and the international relocation.

▪ Determine the arguments to present the clause

▪ Meeting to present the terms, conditions, and clauses.

Agreeing to this covenant made it possible for the manager to know in advance (beyond the results clause) what terms he would benefit from over four years time. These terms and conditions are favorable taking into account the importance of the duties. They are compatible with Canadian employment practices, in view of their structure and value, contributing to their rapid integration.

It remains a complex issue to be able to capitalize on the manager's international experience in the years following his return. Therefore, the terms and conditions offered demonstrate the company's interest in this Manager and his experience, with guarantees over time.

Whatever the favorable character is of clauses regarding remuneration and promised promotions upon return, reaching these objectives is dependant on other factors, such as the quality of management, the capacity to maintain the relationship with France while geographically distant, and having a significant level of managerial autonomy.

Respectful of what the Canadian team does, the director of corporate human resources will meet with the manager on a yearly basis in Paris in order to “defuse” and determine if there are any adaptations that need to be made in the terms of the contract.
 
     
 
 
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