Labor mobility is really low in Europe. In france you can be tied up in litigation (tribunel through appeals) for 10 years easily on an employment termination (my info is from 2016 time frame so may be dated). There is no such thing as at-will employment.
Also, noncompete's are weird. If someone is receiving full pay on gardening leave they can work for someone else. If you instead have them work till end of notice period you can usually pay some % of salary (ie, 50%) to totally block their ability to work for any competitor.
So you can't fire the horrible workers (without insane headaches) and you CAN block good workers from moving too quickly to competitors (ie, take a year or two out of their working life for a price - which is usually tied to cash salary and is low). All to say - not the fluid labor environment that startups would generally be at home in.
France != Europe. This sort of thing doesn't exist in the UK, for example.
As for firing people, perhaps France, but not UK. Most jobs have a 3-6 month probation period, with a week's notice either way, and in the first 2 years you can fire anyone for no reason (apart from reasons of race, gender, pregnancy, etc.).
After that, by which point it's obvious they can do the job, generally you have to give a progression of verbal, written, last chance warnings to an employee to change their behaviour before you can fire them.
UK is trying hard not to be a part of Europe it seems :)
Anyway I've seen similar laws in several countries in EU, but I talked to a lawyer friend and he said he looked into it (briefly) and couldn't find examples of it being enforced through court in my country (Croatia).
As for termination - probation periods exist for sure but passed that it's really hard to get rid of people, the two year thing exists if you give someone extended temporary contract but that really sucks for people because it messes with their credit score etc.
I remember working in a company where a woman got hired to work in office A she was then moved to office B because of a reorg (15km away from office A) she refused to accept this - got fired - sued - got pay for the time she was without work, times two in damages and got reinstated to previous position.
I can't imagine how toxic it is when person are being reinstated to position in court. What did she do afterwards? Did she happily work at the position or dismissed voluntarily right after reinstating?
Yep - I mean once the company is >500 employees and has mixed ownership (funds etc.) it's mainly just between her and management that got overturned and they know better than to keep pressing on it.
But this wasn't about relocation - there are regular bus lines between her previous place of work and new one (it was basically an office outside of city and she then got moved to office inside of city, distance is less than 15KM by car) - it's just that she was hired to work in place A and she wasn't willing to travel, also she's not exactly an agreeable personality. Court ruled that she got hired in position A and that was in her work description and they couldn't change that without good cause (and they were doing office rotations I don't know exactly why)
It's not just an amicable separation of bureaucracies.
If you're in the UK (as I am), the kinds of headlines coming up regularly make it really clear the UK government is trying to not be part of Europe in all sorts of bizarre ways.
For example the most recent big deal was the UK has formally decided to break international law by reneging on the UK-EU withdrawal treaty it signed up to less than a year ago.
That's a very unusual thing for the UK to do, and it has people up in arms because it means the UK will now not be taken as seriously when it makes future international commitments (including trade deals), and when it is finger-pointing to other nation-states breaking their international commitments in future.
It's keener than ever to trash human rights and civil rights enshrined into EU law and show that it wants to take them away from people in the UK, which is a curious turnaround because at one time the UK was a leading champion, drafting the legislation and putting them into place.
It is all very tribal and symbolic, and doesn't appear to be rooted in any kind of advantages for the UK or people and businesses within the UK. Costs to businesses are going up (new tariffs on import and export). Trade deals are defaulting to worse terms (there's no good trade deal with the EU). Cooperation on major scientific projects is breaking down. Financial institutions are starting to move headquarters out of London. UK citizens living abroad are losing rights (a UK passport is much less useful than it used to be), and the cost of travel for UK citzens is going up (need more visas, need to pay for medical treatment, can't retire in the EU any more, if you already did you may have to move back and be poor).
What it does appear to be rooted in is the UK Brexit leaders being able to see "we did it, as you can see we are visibly not part of Europe any more".
The European Union is a political and economic union. Europe is a continent. It seems strange to refer to wanting to leave the European Union as wanting to leave Europe.
Of course, I'm sure those who support the European Union are generally also very much in favour of it being treated as synonymous with Europe. But it sounds like nothing short of absurd rhetoric to me.
There's a long history of using "Europe" in news or political writing to refer to the continent (excluding the UK), and also to the various political and administrative entities such as the European Union, EEC, EC, ECHR, ECJ, etc. Also referring to "Europeans" as people in those countries.
Much as, say, "China" is use to refer to the political entity that is the Chinese government rather than the geopgraphy, and "America" is used to refer to the USA government, not the continent.
The way language is used, with "Europe" in the UK usually taken to mean "that landmass on the other side of the English Channel to the East of the UK, not us", might be a reason why a lot of people in the UK have such cognitive dissonance over it that most don't recognise they had "EU Citizenship", including some great citizenship rights, which they will now lose at the end of this year.
Because for many, "EU Citizen" conjures up images from other countries to the East, immigrants by definition it they are in the UK. Yet in reality all UK citizens have been EU citizens for decades.
Ireland is also in Europe and the EU yet people don't think of Ireland when thinking about "Europe", and sometimes not even when thinking of the EU, although the last few years of politics have raised the profile of the EU Irish border issues.
If you're thinking it's absurd rhetoric, fair enough, but you would be mistaken to think it's just language of those who support the EU, within the UK. It has a long history.
Only 27 out of 44 countries in Europe are part of the union. Governmentally speaking, Europe and the EU are not at all synonymous.
>Much as, say, "China" is use to refer to the political entity that is the Chinese government rather than the geopgraphy,
That's not at all a fair comparison. China is country, not a continent, and thus is pretty much defined as being the area under control of the PRC (and other Chinese regimes). Europe, being a continent, remains (in all relevant senses) constant in size, regardless of what happens to the European Union.
>and "America" is used to refer to the USA government, not the continent.
That's absurd rhetoric, too. I don't refer to the USA as America (well, sometimes I do, but I try not to). Besides, it would be strange to talk about California leaving America. One would say California left the USA.
It seems that whenever there's a substantial difference in practices between continental Europe and USA, it seems that the UK practice is somewhere in between but closer to USA than the rest of the Europe.
I honestly think something like this makes a lot more sense.
First year or so, you're in a probationary period. Unemployment benefits will kick in, but you and the company are still feeling each other out.
After that, you get certain protections, whereby firing you becomes a more lengthy (3-6 month) process with specific regulatory milestones.
Speaking from a management perspective, if I have had an employee that has been solidly meeting the bar for a year, I am better off to work with them to remedy performance problems afterwards, then I am to fire-and-replace.
Training costs are a thing, and there's also a real benefit to not having your workforce continuously worried about being fired on-the-spot.
It is fair for newcomers to "earn their stripes" as it were, to show that they can productively participate in and contribute to the organization, but people that have cleared that hurdle do deserve some protection from bad actors in their management chain.
As always, I like to hear from others where they think this doesn't work. :)
But it is part of the reason these countries don't have startup cultures. In the US you can just try stuff out including hiring someone who may not be a perfect fit.
In the US you can pivot your startup if something isn't working, roll off 20% of your staff and you don't have to talk to a govt tribunal or go through appeals.
You can make your own management calls on who you want to work with - you don't have to justify things or provide the verbal -> written -> tribunal -> appeal cycles process.
And founders are notoriously bad managers - while they should perhaps spend the time to do PIP's and training plans and being better managers, most of them are very focused on outcomes - so startups can be a very self managed area.
> In the US you can pivot your startup if something isn't working, roll off 20% of your staff and you don't have to talk to a govt tribunal or go through appeals.
You can do this in the UK too, without a tribunal or appeals.
What you've described is covered by "redundancy", and it's completely fine legally to make people redundant, in large numbers or small numbers.
In france you these need to be pre-approved, you have to have an employment protection plan, and even then the court can overturn all this and make you hire everyone back.
"Collective redundancies can be void by an administrative court, if the latter recognises shortfalls in the employment protection plan or if an administrative authority did not validate or approve the employment protection plan at all. In case the administrative authority validated or approved the employment protection plan without stating sufficient reasons, its decision might be invalidated by the court."
In the UK (which is MUCH more liberal and I wasn't considering the UK part of the EU) there are still plenty of steps.
For the UK "Non-compete clauses and restrictive covenants are highly enforceable in the UK in order to protect the business the employee is leaving."
Redundencies can be overturned if the selection criteria for them is "unfair" or discriminates.
"You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another".
Because often some type of group is affected more than others if you lay off new hires you get into a quagmire pretty quickly.
They are relatively enforceable as part of a compromise agreement. However the last one I signed was quite restricted in that it was for 12 months and only listed 4 direct competitors. Normally the companies lawyer tries for more and your lawyer tells them to get real.
If you don't sign the agreement I suspect a lot of the time you'll just have to do gardening leave for the rest of your contract. Also don't forget if you were a director you still have a fiducary duty to the company once you've left.
What I'm slightly unclear about is how practical this is for sales folks where this is an expectation they will steal prospects or existing clients. I suspect you might only bother with lawyers if it looks like they are poaching from your existing clients.
In the UK non-competes in my view for engineering staff are basically unenforcable, IP theft is much more likely to succeed (and I've been involved in a direct copyright theft case).
24/7 IP ownership is enforcable but my experience is that most places don't care if you're not going to be a direct competitor. I always feel it's worth getting that in writing though, my current contract limits this to areas of the companies business. Our corporate lawyer limited this when we had to sign a new contract post a takeover (it was a bit broad and could have covered things like photographs of your kids). Also I have in the past asked if I'm contributing to open source as part of my work as like things to be clear.
IP rights is probably the one area I check in a new contract and usually it's fairly easy to get agreement for some minor changes.
But what's the notice period? 3-6 months may be enough to kill a pivoting company when otherwise IP and team could be packaged up and sold off. One of the things people seem complain about on HN is that founders of failed companies in SV seem to make off quite well. In fact I believe this mentality helped me take the leap with my startup. The only problem is that I moved to Europe to do it, and the prospects for failed founders are basically lost years.
When I was last made redundant, in the UK, the notice period was 1 month and there was no redundancy payment.
They let me go just before 2 years of employment, when a redundancy payout would have started. I don't think there would have been a longer notice period after 2 years, just a payout.
It was legitimate redundancy because they let go of a number of people at the same time. So it wasn't personally targeted, though of course there was an element of deciding who to let go of.
Wow, thanks for sharing. One month up until 2 years is surprisingly good for outside the US. Do you feel the decision to terminate you then may have been linked to your impending protections after two years?
> Do you feel the decision to terminate you then may have been linked to your impending protections after two years?
Yes I do because it was so close to the 2 years, and that did leave me feeling slightly cynical.
But I wouldn't call it "protection", because the only benefit would have been a small cash payout, worth a lot to me, but small relative to the company's ongoing salary bill for people staying behind, so easily affordable to them.
That led to financial hardship for a little while, but I recovered, set up as self-employed, and to be honest I was glad of the new freedoms to work on my own projects from then on.
The takeaway here is that businesses below a certain size should face less regulation. This makes sense, both because regulatory capture is a real problem, and because smaller businesses have far less legal and economic leverage.
Modulo EBITDA per employee.
Of course, those regulations should step in gradually -- sharp cliffs are pretty much always antipatterns when it comes to regulation, law, and government services.
Yes, I know in France that companies try and get around this by splitting into lots of smaller firms, but that's an issue for the regulators and the specific legal framework.
Dilbert's pointy-haired boss resonates with a lot of office workers for a reason.
We've all had, or at least heard about, that boss who was utterly incompetent, who masked that incompetence in self-important blustering, and who were physically unable to listen to the rank-and-file.
Regulation is and should be there to deal with the abusers, and not with the companies that do, in fact, look out for the long-term welfare of both their employees and their customers.
In California you can - non-competes are basically unenforceable, and what you have in your head you can basically use. So you fire them by getting another job.
Like the other comment mentioned, this is a very France-centric description - in the Netherlands, for example, you can't block workers from leaving their company in this way.
In the netherlands you can have them sign a non-compete clause, generally for 1 to 2 years.
"This clause prevents them from working for your competitor or from starting a similar enterprise after resigning. A non-solicitation clause forbids your employee to contact your clients after resigning."
> Is there something I don't know about NL law (very possible!).
Not sure if it already happened, but they're moving towards having the (previous) company pay for the non-compete period. Meaning: if you hire someone on a non-compete and the person cannot find work in another field (or lower salary) the previous company has to make the employee "whole".
Non-competes are also meant to not be applied to everyone. Only certain employees should have these. This as having every employee on a non-compete is too restrictive for the employees.
All of this is/was mentioned on various Dutch sites. It's a bit weird it's not explained on this English one.
Exactly. If I read my contract carefully I'm sure it has clauses saying I can't compete for N months, and that everyting I create on weekends no matter how unrelated (A hobby piece of software, a novel, a pop song...) is immediately the IP of my employer no matter which equipment I use or if anyone asked me to create it.
Hmm I also have that in my Dutch contract. I really don't like the way my current employer handles their market and I'm eager to do it right myself (I feel that with the right technologies I could really build something nice myself.) This part of my contract has kept me from it (the "we own what you make at any time of the day"-clause). I do understand the clause though, it's just to easy to claim you made up some valuable IP outside of office hours. Maybe I should keep a log regarding the actual dev work...
With respect to the non-compete clause, it says in my contract that they can keep me from going to a competitor for a year, but they'll pay me for that year. I wonder if they'd ever enforce this.
If you want to go for it, have the company or zzp registered under your spouse's name. The spouse can employ you legally and even transfer ownership once the contractual time is up. This allows you to go ahead with your plans while saving you from all potential headache. Of course, never brag about this online.
Ok, thanx for the advice. They do pay me quite ok and offer me stability, so I would be very open about this to my boss. I was thinking about building something unrelated using the same tech first, for fun and possible profit. Then later I can decide what to do. I already did look for another position (at another company) specifically to have more freedom in this regard, and they (the boss) knows this.
Yeah, so this is mostly unenforceable. Dutch law prescribes that a non-compete can never block you from practicing your profession as a whole, so at most it can block you from working in a very specific, limited sector of the market (e.g. direct competitors). The burden of proof seems to be on the previous employer to show that you potentially could do damage by working at your new employer. In addition to that, non-competes added to a limited time contract are invalid by definition. Non-competes should also be limited in time to a reasonable duration (commonly understood to be 2 years)
It's much easier to instate a 'relationship'-clause in Dutch employment contracts, where you forbid ex-employees from contacting customers/suppliers at their new employer in a professional fashion. Those are much easier to enforce.
Indian government jobs are just something else altogether, there is literally no accountability, or reward/punishment for good/bad performance. Promotions are almost always based on seniority, nepotism and political influence. The whole system runs on insane levels of corruption at nearly every level. And on top of these are there cream pensions.
Its really like the stuff of the dreams/nightmares based on what you get.
Another way to describe "low labour mobility" is "high job stability". It's easy to sit in an ivory tower on a $200k+ silicon valley salary, with a healthy job market if you get the sack, and bemoan the fact that workers have rights and can't be fired because their employer feels like it.
Actually, FANG job stability is surprisingly high - the big corps have gobs of money and are big - so it takes a lot to actually push you fully out the door sometimes.
Entry level wages are perhaps $190K (right out of college / entry level) at google and others. There is definitely a job for you at $60K
Unless one is somehow inconvenient for the company e.g. involved in employee organization or tweeted some wrongthink. Then they get thrown out faster than they can say "is this legal?".
IANAL, but French, working in the hedge fund industry since a while, and had numerous non-compete clauses over time. Also have had some experience negotiating then from employee and employer perspective.
The French landscape is a bit more subtle that what you mention here.
The first thing to understand is that everything in your contract is not always 100% legally applicable, and companies play with this idea. The local laws often dictate the overall rationale that a non compete can address, and companies play with that interpretation in the contracts (more on this with examples later) . In practice though, if there was an occasion to defend it in a tribunal, the company's interpretation would definitely be discarded. 90% of the non compete clauses that I had to negociate, either to get out of it myself, or as an employer to hire a talent, revolve around this idea: the clause is legal, but its not possible to enforce really, because the interpretation would be trashed in a tribunal. This is especially true in France where tribunals (prud'hommes) are free, and very favorable to employees. This is also true for other countries though, I had cases in Hong Kong where the landscape is quite similar.
Now, it is true that France allows for unusually long non compete clauses compared to other countries. More than 12 month would likely be trashed by a tribunal though.
As for the compensation of the clause, I feel like France is actually quite good. If there is a non-compete, then it is mandatory that there is a compensation, and in practice you can expect the tribunal to require at least 40% of the salary.
Note that the employee definitely has a great negociation capability here, because the company has to choose whether to apply the non compete up to 2 weeks after the departure of the employee.
That means, if you plan on doing something unrelated to your previous job, you can bluff a bit for the clause to be applied, and enjoy a nice bonus of 40% of your old salary on top of your new job.
If you plan to work for a competitor, here are some examples of what to look for in your non compete clause:
The French non compete has to be limited in space, time, and focus.
Limited in space means than it cannot be worldwide, there has to be a list of regions where you are prevented to work, and this list cannot be too long. I had an example with a clause that listed 10 major financial places (US, UK, Germany, etc) and actually the end result was that more than 5 countries and the clause starts to be pretty much unenforceable.
For the time constraint, the general assumption is that 12M is the upper possible limit (18M for non poaching).
And for the focus, that basically mean that in case of litigation, the company would have to prove that:
1. You have market edge knowledge from the company that would result in an immediate and material advantage to the competitors (this one is very hard to prove for the company, and a lot of negociations revolve around debunking this argument)
2. You are going to work on the exact same subject in your new company, it cannot be just based on your field, it has to be very specific to your role in both companies.
Thanks, very helpful! The tribunals decisions (which have employees on them) can be appealed to courts can't they?
My point - in California this isn't even a question. There is no need to negotiate. It's a matter of both policy and law that you can get another job.
In Europe there is a lot more careful thinking, a great thing actually I think in areas of social safety net, public / govt function etc.
Startups with 2-3 folks are just not well equipped for the EU intricacies - look at GPDR, all the employment laws and keep on extrapolating.
I have NO idea how Tesla managed to get their factory going in germany so quickly - I'm serious - there is almost NO way france would issue permits as quickly as germany apparently did. So I def don't understand it all!
Also, noncompete's are weird. If someone is receiving full pay on gardening leave they can work for someone else. If you instead have them work till end of notice period you can usually pay some % of salary (ie, 50%) to totally block their ability to work for any competitor.
So you can't fire the horrible workers (without insane headaches) and you CAN block good workers from moving too quickly to competitors (ie, take a year or two out of their working life for a price - which is usually tied to cash salary and is low). All to say - not the fluid labor environment that startups would generally be at home in.