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Labor Relations News Update February 25, 2014

Today’s Labor Updates:

Cross-border employers must take care before implementing drug-and-alcohol-testing policies at non-U.S. operations

Quit Complaining About Meager Wages; Make $92,160 a Year Working Here

Goodyear to fully freeze pension plan for USW workers

 

Cross-border employers must take care before implementing drug-and-alcohol-testing policies at non-U.S. operations

Fisher & Phillips LLP Danielle Urban Canada, European Union, USA February 18 2014

Many U.S.-based employers perform pre-employment, post-accident, or random drug testing, and with some exceptions, are generally permitted wide latitude in deciding when to conduct such tests. The U.S. attitude toward drug testing does not necessarily translate to other countries, however, where there may be different attitudes toward employee privacy, in particular. U.S.-based employers can run into trouble when attempting to impose those same testing requirements on a foreign division or subsidiary.

In this article, the first in a series addressing employer considerations when beginning or acquiring cross-border operations, we’ll look at drug testing requirements in foreign jurisdictions and what employers need to know before attempting to replicate a U.S.-based drug-testing protocol outside of the U.S.

We’re not in Kansas anymore.

As we’ll discuss in this article and others in upcoming months, employers face a much different landscape once leaving U.S. borders. What works here may not necessarily work there, and in fact, could result in sanctions or legal action. Before beginning international operations, employers should consider that other countries may have a different perspective on the employment relationship itself.

In many other countries, for example, it is assumed that employers have a disproportionate share of the power and leverage in the employment relationship, necessitating that employees be provided with certain legal protections we do not find in the U.S. This assumption creates some fundamental differences in the ways that other countries approach the employment relationship. Let’s start with the fact that the United States is virtually alone in the developed world in permitting employment-at-will. What this means is that in most other countries, employers may terminate for cause only, or risk penalties and even lawsuits. Consider that in much of the rest of the developed world employment agreements are not only commonly used, they may even be desirable for employers. These two concepts alone can be a big surprise for employers who previously have not operated outside of U.S. borders.

Before we discuss drug-testing outside of the U.S., allow me to set the scene by describing what I have observed with clients just beginning to expand internationally. It is not uncommon for employers just beginning cross-border operations to import wholesale their U.S. policies and practices, including employee handbooks, EEO policies (including citing U.S. law!), hiring, firing, and leave policies.

In some ways, this makes sense. It saves money to use policies and procedures already in place, and using the same policies across divisions or among subsidiaries ensures consistency and perhaps easier administration. When it comes to drug-testing policies, however, employers should carefully consider the legal landscape of the countries in which they operate prior to implementing U.S.-based policies.

Random drug and alcohol testing may not be permissible in other jurisdictions.

Although our neighbor to the north, Canada, may appear to be very similar to the U.S., the Supreme Court of Canada recently held that the implementation of random alcohol testing for employees in safety-sensitive positions was an invasion of privacy and an invalid exercise of management rights. The Court held that without “evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace,” such testing was an “unjustified affront to the dignity and privacy of employees,” and therefore impermissible. In other words, just because the workplace might be inherently dangerous due to the nature of the work (for example, manufacturing or construction), this fact alone does not justify random testing. While “reasonable suspicion” testing may be permissible under certain circumstances, employers should be sure to carefully document unsafe behavior and verifiable examples of drug or alcohol-related incidents.

Drug and alcohol testing in Europe can also be tricky, where employees generally have greater privacy rights than in the U.S., and drug and alcohol testing may be seen as a violation of the employee’s basic right to privacy. Although employers and employees can generally set out the parameters of acceptable drug and alcohol testing through employment contracts, some countries, such as Belgium and Finland, prohibit the contracting away of basic privacy rights and may hold such contractual provisions to be invalid. In Poland and the Czech Republic drug and alcohol testing is generally prohibited.

Pre-employment screening is permissible in some countries (the United Kingdom), but is strictly limited in others. In France, for example, pre-employment drug-screening is generally prohibited unless an occupational physician recognizes and recommends such testing. In fact, drug and alcohol testing is strictly limited in most European countries, as well as many other countries around the world, including countries as diverse as Chile, Colombia, and South Africa. In other countries, such as India and China, drug and alcohol testing is generally not done, either because many of the substances that might be prohibited in the U.S. are widely and legally available, and/or substance abuse counselors and rehabilitation programs are scarce or non-existent.

Unjustified testing can result in fines, and even criminal sanctions in several European countries. In general, employers should always check the law in each particular jurisdiction in which they operate. Although drug and alcohol testing requirements vary by country, there are some common-sense protections for all employers to consider implementing:

·       Know the law in the country in which you plan to operate – do not assume that U.S. policies can be implemented in other jurisdictions;

·       Have written policies that set out testing parameters. Set out types of testing that will be conducted (where permitted), and levels of discipline associated with positive tests. Include information regarding prevention, counseling and treatment where appropriate;

·       Ensure that employees’ privacy is being respected and that all privacy controls are firmly in place;

·       Carefully consider drug and alcohol testing policies, and use only where necessary. Broadly applied testing may run afoul of many other countries’ privacy laws;

·       Ensure that the least-intrusive means of testing are being used;

·       Limit testing to those substances that are reasonably believed to have an effect on workplace safety;

·       Consider applicable disability discrimination laws prior to implementing policies or taking any disciplinary action. Keep in mind that unlike in the U.S., some countries consider current drug users to be protected under disability discrimination laws.

 

Quit Complaining About Meager Wages; Make $92,160 a Year Working Here

by Matt DiLallo, The Motley Fool Feb 23rd 2014 1:50PM

Updated Feb 23rd 2014 1:52PM

According to a study by Princeton, $75,000 is the annual household income the average family needs to earn to feel happiest. Making more money than that doesn’t add to happiness — remember: More money, more problems — though it does, of course, add to wealth. The problem is that the average annual household income in America is much less than that number. That’s why so many people are unhappy with their paycheck.

Dead-end job? Not here

According to data by Rigzone, the average annual salary of an oil and gas worker in North America was $92,160 last year. While that’s off by 3% from 2012, it’s still well above what most Americans make. Not only that, but average compensation for those starting at the bottom is much better than what most Americans make as well. Last year the average salary for those with less than a year of experience was up about 2% to $69,822 per year. Meanwhile, those with between two and five years of experience hit the happy number, as those workers earned an average of $78,769 last year.

While the overall trend in industry pay has been coming down over the past few years, much of that is due to low gas prices and a steady price of oil. That said, job seekers would still come out well ahead by pursuing the necessary education and experience needed to land a job in that industry.

Further, the industry has two major trends that play well into the hands of future job seekers. Shale-fueled growth has the potential to add more than a million jobs by the end of the decade to this already fast growing industry. On top of that, a large portion of the industry’s work force is nearing retirement, which will only add to its future job openings.

Where’s the growth?

A major change has been happening in the oil industry over the past few years. For years, major independent oil companies such as Apache and ConocoPhillips had focused on growth outside the United States. That all changed with the shale boom, as these companies are selling international assets to focus on growing oil and gas production right here in America.

Apache, for example, saw its North American liquids production jump by 34% last year. That’s quite impressive, considering that Apache’s overall oil production actually fell last year. It’s a similar story at ConocoPhillips. Its shale-focused drilling program grew by 31% last year.

What’s important for job seekers to note is that this growth isn’t slowing down. Instead, it’s expected to accelerate in the future. Apache has already grown its investment by sixfold since 2010 in Texas’ Permian Basin. While it drilled about 800 wells last year in that one oil basin, it believes it has another 34,000 known drilling locations left to drill. That’s on top of a similar number of future wells in its central area of operations in places such as Oklahoma.

ConocoPhillips sees similar upside in the U.S. Right now the company is focused on drilling in North Dakota and Texas; however, it sees new opportunities in Colorado as well. That’s on top of future growth in Alaska, Canada, and the Gulf of Mexico.

Final thoughts

These are just two of the literally hundreds of oil and gas companies investing to grow in North America. That growth is fueling a big boom in jobs. So, if that paycheck isn’t cutting it these days, take a closer look at what it would take to work in the oil and gas industry.

 

Published on February 18, 2014 @ 9:53am EST

Goodyear to fully freeze pension plan for USW workers

AKRON (Feb. 18, 2014) — Goodyear will freeze its defined benefit pension plan covering union employees on April 30.

The Akron-based tire manufacturer disclosed the plan Feb. 13 during a conference call with analysts, noting the freeze was agreed to as part of a four-year contract with the United Steelworkers (USW) that was ratified last August. Under that agreement, Goodyear could fully fund the plan any time during the four-year contract, with a freeze going into effect 90 days later.

Goodyear disclosed in its 10K report for 2013 — released Feb. 13 — that earlier this year it had fully funded the defined benefit plan with a $1.15 billion contribution, allowing the company to freeze it. Goodyear will set up a new defined contribution plan for affected employees.

“This is a major milestone in our history and will provide greater transparency to our underlying tire business while improving earnings and cash flow. Moving past these legacy obligations is a new beginning for our company,” Goodyear Chairman and CEO Richard Kramer said in a statement.

The April 30 pension plan freeze is the latest in a series of steps Goodyear has taken in recent years to reduce employee benefit obligations.

According to the terms of a 2009 contract, nearly all USW-represented employees hired since October 2006 were not offered coverage through the defined benefit plan. Instead, effective Jan. 1, 2010, Goodyear set up a new 401(k) plan.

Prior to that, Goodyear had frozen its defined benefit plan for salaried employees on Dec. 31, 2008, and beefed up their 401(k) plan.

In 2007, Goodyear took another step to rein in benefit obligations through an arrangement — also agreed to by the USW — in which the company contributed about $1 billion to a special tax-exempt healthcare trust that is providing benefits to USW-represented retirees.

In turn, Goodyear eliminated future obligations to provide retiree healthcare benefits, removing a projected $1.3 billion from its balance sheet and improving cash flow by $145 million a year.

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