Employment and immigration law in CEE – challenges to Chinese investors

As Chinese businesses expand into central and eastern Europe (CEE), they will encounter unfamiliar legal systems and business environments. One of the major challenges they will face will be to work effectively within the labour law regimes of the various CEE jurisdictions, which can differ significantly from PRC labour laws and regulations. Failure to do so is a costly mistake, causing unnecessary friction between management and employees. It is therefore essential for Chinese investors to have a sound understanding of relevant labour law. Each of the countries in the region has its own labour regulations, but as most of them have joined the European Union, employment law concepts are often similar.

Similarly, immigration regulations can have a big effect on the ability of Chinese businesses to bring their senior management personnel into the CEE.

Employment contracts

Employers can freely decide whom they wish to hire, provided that the criteria applied are not discriminatory (e.g. age, sex, nationality, race, religion). Employment contracts are more normally used but civil law agreements are sometimes entered into. The latter offer less protection to the contractors (e.g. no paid vacations). Civil law agreements are sometimes regarded by state authorities as a circumvention of labour law guarantees. As a consequence, courts can sometimes rule that employment contracts should replace civil law agreements.

Iain Batty is a partner at CMS Cameron McKenna in Poland and head of the firm’s international commercial, regulatory and disputes practice. He may be contacted on +48 22 5205505 or by email at iain.batty@cms-cmck.com

Katarzyna Dulewicz is a partner at CMS Cameron McKenna in Poland and head of the firm’s employment law practice in central and eastern Europe. She may be contacted on +48 22 5205519 or by email at katarzyna.dulewicz@cms-cmck.com