Introduction

When businesses expand through mergers and acquisitions (M&A), the focus often lands on financial alignment, brand consolidation, and operational integration. But across borders, it’s labour law compliance that often defines the pace and integrity of the transition. Overlooking jurisdictional requirements isn’t just risky – it can derail the entire deal.

At ThinkGlobal HR, we help organisations navigate the complex patchwork of international labour laws, so their mergers don’t just look good on paper, but hold up under legal and cultural scrutiny. As Davenports Solicitors note, employment law issues – from redundancies to litigation risks – must be addressed early to avoid post-merger fallout.

Quick Tips

• Conduct a country-by-country audit of employment laws and contracts

• Identify collective agreements, TUPE obligations, and local termination rules

• Flag ongoing disputes, tribunal claims, or litigation risks

• Align working time, leave entitlements, and employee classifications

• Consult with local legal experts to validate post-merger frameworks

Understanding the Legal Landscape: It’s Not One Size Fits All 

Employment law varies not only between continents but often within countries themselves. In the UK, TUPE regulations protect employee rights during a transfer. In the US, ‘at-will’ employment may allow more flexibility but brings its own risks. In the EU, extensive consultation requirements apply before redundancies or structural change.

As Davenports Solicitors emphasise, pending litigation, misclassification of contractors, and breaches of employment rights can expose the new entity to claims or reputational damage. That’s why legal due diligence needs to extend beyond compliance checklists – it must explore how day-to-day employment practices operate on the ground.

Avoiding Pitfalls: Redundancy, Consultation, and Union Impact 

Mergers often involve role consolidation or workforce resizing. But the ability to make changes varies widely. For example:

• In France and Germany, collective consultation is legally mandated well in advance of changes

• In Spain or Italy, union involvement may influence timelines and conditions

• In Canada or Australia, redundancies may require severance beyond what’s outlined in contracts

We worked with a client who acquired a firm in Belgium and hadn’t anticipated the role of the works council. Their restructuring plans had to be paused for formal negotiation, costing weeks in implementation. Once we brought in local legal expertise and aligned on a revised timeline, the transition progressed with confidence and compliance.

Contracts, Classification, and Continuity 

Each employment contract must be assessed for transferability and alignment with post-merger structures. Questions to ask:

• Are current job titles and descriptions legally recognised in the new country?

• Will compensation structures trigger reclassification (e.g. bonus-heavy roles seen as variable pay)?

• Can benefits and entitlements (like parental leave or pensions) be harmonised without breaching law?

Missed misclassifications can lead to significant penalties, especially in jurisdictions with aggressive enforcement. Working with global HR specialists ensures policies and contracts are translated – not just linguistically, but legally and culturally.

Final Thoughts 

Ensuring labour law compliance in international mergers is not just a legal necessity – it’s a signal to your employees, partners, and regulators that you operate with integrity. It lays the foundation for smoother integration, stronger retention, and lower litigation risk.

What’s next for your global people strategy? 

Book a labour law compliance audit or international due diligence review with ThinkGlobal HR. Our cross-border experts work hand-in-hand with legal partners to make sure your merger respects every regulation – and every person – from day one.