Question:
What are the steps a customer needs to follow, and what are any other considerations if the customer (unfortunately) decides to terminate their MSPA with WorkMotion?
Answer:
The notice period for terminating the MSPA with WorkMotion is 3 calendar months. Since terminating the MSPA with WorkMotion also means ending WorkMotion's employment relationship with each individual talent, this time is required to enable a frictionless and transparent process. If there is a way to offboard all talents before the end of the termination notice period of the MSPA, WorkMotion will certainly try to accommodate this.
Termination notice for the MSPA has to be given via a formal letter by post - an email is not sufficient. This is needed, since the termination of the MSPA directly affects employment relationships, and is therefore considered as a highly sensitive action.
To get an overview of the process for each talent employed via WorkMotion, we strongly recommend a call with the customer to go over each talent's situation. The process depends on the customer's plans for their talents:
A) The customer wants to continue working with each talent, and will be using a different way of employing each talent in the future, e.g. by having established their own legal entity, or by moving to a different EOR solution
In this case, the customer should inform WorkMotion, and align on a plan date for the transfer. The required processing time for such transfer depends on each talent's employment contract, the country, and the preferred way of ending each employment relationship. This can be done via tripartite agreements, mutual termination agreements, resignations, as well as termination letters.
The easiest way of ending WorkMotion's employment relationship with each talent is by the talents handing in their formal resignations with their EOR - this could be either a WorkMotion entity or one of our local EOR partners. The resignation letters need to adhere to local employment law requirements (e.g. wet ink signature) - WorkMotion and it's local partners are happy to help with getting these right. The last day of employment should be the plan date which was aligned with WorkMotion. Note: we recommend to our customers to share new employment contracts with their talents beforehand.
In the last month of employment, WorkMotion will confirm PTO / leave balances to correctly process the final payroll.
No further costs can be expected for the customer.
Example: It is mid-December and a customer asks to terminate the MSPA, as they have successfully set up their own legal entity. They plan to transfer all their talents to their own entity starting 1st February. The talents have been employed via WorkMotion for 8 months, and have each passed their probation period. A termination by the employer would not be possible without severance payment, and is not needed in this case. Instead, the customer asks the talents to hand in their resignation with WorkMotion's EOR partner with their last day of employment being 31st January. WorkMotion's EOR partner confirms the receipt of all resignation letters, and the transfer is complete.
B) The customer does not want to continue working with some (or all) talents
In this case, the affected talents will need to be officially terminated. The process for this strongly depends on local employment law regulation, and should be carefully discussed with the WorkMotion team.
In general, we strongly recommend the customer not to inform their talents about this decision before the process has been clearly laid out with WorkMotion.
Each planned termination needs to be discussed individually with the WorkMotion team, as it depends on the applicable termination notice period, and passing of the probation period. In many countries, an immediate termination is not possible, and would need to be negotiated with the talent by offering a severance payment. WorkMotion can assist in this process by sharing typical amounts for such severance payments to the talents.
This severance payment needs to be paid by the customer, as well as any potential litigation costs arising from a dispute with a talent challenging the termination. For a detailed overview of potential termination costs, a customer should review the corresponding section of the signed MSPA.
Source: MSPA, GHRO experience
Submitter: Felix Steffens