Jean-Louis Mutte frequently traveled internationally from his home in France on business. Looking for ways to cut costs, his company required all travelers to fly economy class. It also canceled an annual membership for emergency medical services. After all, nothing had ever happened to its employees, who, like Mutte, were careful travelers. And nothing did happen—until Mutte suffered a heart attack and stroke midway through a flight from Shanghai to France.
Though he came through relatively unharmed, Mutte’s employer had received a wake-up call regarding duty of care—the concept that employers have legal and moral obligations to act prudently toward employees to avoid reasonably foreseeable injuries.
As I note in a 2009 International SOS white paper, Duty of Care of Employers for Protecting International Assignees, their Dependents and International Business Travelers, multinational corporations risk liability in their home countries where employees are permanent residents and risk breaching laws in countries where employees travel or live as expatriates.
Natural disasters and random attacks often pose risks to international assignees. For example, executives at one multinational corporation could not account for three expatriates and their families for days after the December 2004 tsunami. In another company, leaders were unable to locate an engineer during a November 2008 terrorist attack in Mumbai, India. The engineer had missed his flight and not arrived until the day after he planned to be there, and his supervisors could not track his itinerary. For more than a day, his employer presumed he was a victim.
Employees have been kidnapped, blackmailed, sexually assaulted or forced to withdraw money from ATMs, illustrating the broad scope of duty of care.
Most executives know they are responsible for their employees’ well-being and must take practical steps to mitigate foreseeable workplace dangers. But when employees work across borders, duty of care involves risk management beyond the usual health and safety requirements of a familiar environment. Having travelers and expatriates introduces greater security risks, and employers have legal and moral responsibilities that extend duty of care as far as the dependents of international assignees.
For example, when the wife of an assignee to Thailand developed an infection and arm pain after a dog bite, she worried about possible exposure to rabies. She had not been vaccinated, and rabies is almost always fatal for those who have not received the three-shot vaccination series.
In Papua New Guinea, an assignee’s child spilled powdered lime in her eyes while playing and was taken to the hospital. Despite considerable pain, the child was discharged, and her mother feared that she did not receive adequate care and could go blind.
And in Jakarta, Indonesia, the daughter of a French expatriate was diagnosed with dengue fever, a serious disease that affects children more often than adults. Again, each situation suggests the extent of duty of care.
Unexplored New Markets
Legally, compliance for multinational corporations is more complex than for domestic organizations. Multinationals may need to deal with extraterritorial scope of legislation and rules pertaining to jurisdictions and choices of law. In North America and Western Europe, several countries have developed duty-of-care legislation, as have Australia and New Zealand.
Companies also are branching into markets such as China, India and Brazil, where employer duty of care has not been addressed. However, it is not unusual for employers and employees and their lawyers to "forum shop" for the most advantageous countries, whose laws and jurisdictions benefit their legal cases. And in countries such as the United Kingdom, failure to uphold duty-of-care obligations can result in civil and criminal liabilities.
While specifics vary by country, how far duty-of-care obligations reach is expanding. With each case, the definition of duty of care widens, and more injuries and illnesses are considered work-related. This includes injuries that occur during non-work periods and injuries to the employee’s immediate family. In Germany, liabilities for sickness-related costs extend to family members who visit the assigned employee in countries outside Germany.
In the United States, corporations are subject to significant legal liability if they do not undertake emergency preparedness. They can be found legally liable if they do not institute a risk management plan and are not prepared to respond to an incident. This liability is known as "negligent failure to plan."
Although workers’ compensation laws generally do not apply outside the United States, some workers’ compensation statutes have provisions for international business travelers, and courts have interpreted workplace injuries and illnesses broadly when sustained on global business travel.
When an international situation occurs, there may be some guidance as to what country’s law applies, but a single rule does not exist. Many factors may determine the applicable laws and jurisdiction, including the location of headquarters, where the breach occurred, duration of the employee’s stay or the employee’s place of primary employment.
It can be challenging for employers to deal with duty-of-care standards in different countries. That said, preventing harm is less costly and more sustainable than dealing with the results of an undesirable situation. And the trend toward corporate social responsibility means that many employers are looking beyond just being legally compliant.
Tackling duty-of-care issues involves the employer and the employee. Employees hold a duty of loyalty and allegiance—a sometimes overlooked fact. Employees should be prudent, should avoid taking unnecessary risks, and should comply with policies and procedures. This is a personal responsibility taken by each employee to ensure the employer’s ability to hold up its end.
Employers are responsible for making sure employees have the education, knowledge and tools to protect themselves in remote and sometimes dangerous locations. To make sure obligations are covered, a rule of thumb is for the employer to standardize duty-of-care responsibilities.
For travel management, this includes the following steps:
- Develop policies and procedures for different work environments, including privacy policies and risk assessment education.
- Carefully plan travel to minimize risks. Have a complete schedule for employees and institute a procedure to follow in case of emergency. If employees travel internationally, registering with the appropriate embassy and understanding local medical practices may fall under the emergency preparedness plan.
- Communicate with and educate employees regarding travel issues, including political, security and health risks.
- Track, manage and assist employees at all times while they are on business travel.
Travel management alone is not sufficient for meeting employer duty-of-care responsibilities. Duty of care is far more encompassing, especially for organizations that have cross-border employees. Employers should be committed to the responsibilities of the different stakeholders in the organization and should seek the aid of experienced medical and security assistance teams or risk management experts to design a strategic risk management plan.
Costs and Benefits
This may seem like an expensive proposition, and indeed there are costs. These costs include hiring risk management professionals, training managers and international assignees, and acquiring additional insurance.
However, the alternative consequences are considerable. There could be physical and emotional damages to employees, and the organization could be responsible for outrageously high medical expenses, extensive litigation fees and high insurance premiums following an incident.
For a small organization, this could mean bankruptcy. For a larger organization that can withstand the financial blows, there could be disheartening loss of good will—both within and outside of the company—that could become a financial burden and result in lasting damage to the brand.
The maintenance of employee well-being is an opportunity to increase morale and productivity and to build a reputation for social responsibility.
Jim Bauer is vice president for administrative services at Willamette University, a small private school in the Pacific Northwest. Although Willamette has fewer than 1,000 employees, because of the time and resources invested in preparing for tough situations, employees traveling abroad were safeguarded in disasters such as the 2004 tsunami and 2008 Mumbai terrorist bombings.
Bauer says, "Effective preparatory efforts and good work by staff brought employees home safely and relatively unencumbered by the [tragedies] that unfolded." He says the entire community felt comforted by the organized approach the university had in place for such situations.
Bank of America also has benefited from a proactive approach to serving its substantial expatriate and business traveler population. There were more than 128,000 business trips made by its employees in 2008, and it has a presence in more than 40 countries, including nine identified as risky, such as Israel and Pakistan.
A core value of the company is "doing the right thing." Because of this, the company has a risk management and duty-of-care culture maintained by key players, including global HR managers. Effective communication, planning, tracking and monitoring has become important in a number of situations.
In May 2008, 16 Bank of America associates experienced the Chengdu earthquake in China. Because a strategic plan was in place, all associates were safely accounted for in less than a day.
During the Mumbai attacks, there was no significant impact to the bank despite having 22 associates in the area. Associates’ whereabouts were known, and they were in constant contact via cellular phones. Using a proactive rather than a reactive strategy, bank officials successfully negotiate the challenge of having thousands of employees working abroad.
The responsibility for developing an integrated risk management strategy cannot be outsourced or delegated but must come from deep within the corporate culture. With a cooperative approach, senior managers, risk managers and global HR professionals can be confident in sending employees overseas to tackle markets all over the world.
The author is a professor of global HR at the Atkinson Graduate School of Management of Willamette University in Salem, Ore.