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Putting Duty of Care on the Radar

RECENT NATURAL DISASTERS like the earthquakes in Haiti and Chile as well as man-made crises like the attacks in Mumbai highlight the risks facing companies with employees living or traveling abroad and the importance of corporate duty of care.

Many organizations are not fully aware of their obligations with regard to duty of care, said Lisbeth Claus, a professor of global human resources at the Atkinson Graduate School of Management of Willamette University, in a recent webinar hosted by International SOS, a company providing emergency medical assistance and other services for traveling staff of client companies.

“The most common reaction I get, whether it’s from large multinational organizations, from global NGOs, or even government agencies that are sending people abroad, is: ‘I had no idea about the extent of my responsibility,’” said Claus, who is the author of a 2009 white paper commissioned by International SOS.

The white paper, titled Duty of Care of Employers for Protecting International Assignees, their Dependents, and International Business Travelers, explores an employer’s responsibilities with a review of pertinent legislation in different countries around the world. It identifies the responsibilities of different business areas and roles, and considers the topic from a legal, ethical, and cost-benefit perspective.

Claus noted that the diversity of legislation worldwide makes it challenging to deal with the issue in different jurisdictions, “so we have to operate at a fairly high bar to be able to comply with all the legislation,” she said. “There’s lots of evidence that the rights of the employees, the rights of the people who travel as your assignees, are being enlarged by the courts and also by the general opinion that it is your responsibility as an employer to take care of them when they work for you,” she adds.

Most cases get settled before they end up in court, said Claus, but she pointed to 35 cases that did get litigated. Thirty-one of the cases were decided in the employee’s favor.

And while terrorism, natural disasters, and kidnappings are high-profile, high-impact incidents, Claus identified common illness and car accidents as the most common risks facing employees traveling or working abroad. Using case studies, she illustrated some of the duty of care issues that might arise for companies.

In one case, a woman who flew to London from San Francisco for a business meeting had an accident while driving a rental car to the meeting. The incident raised questions that all companies should consider in the abstract in advance of facing their own case, said Claus. Among the issues a company should address: What are our policies related to overnight flight and driving? What are our policies relating to rest periods? What is the insurance coverage?

In addition, the United Kingdom has stringent corporate manslaughter and homicide laws, which means if an employee is killed, or kills someone else while on duty, the employer has civil liability for the incident.

Claus cautioned, however, that legal issues are not the only challenges facing an organization. Companies must also contend with the emotional and financial costs associated with the disruption of the business.

In trying to determine what a company is responsible for when an employee is traveling for business, Claus said that a good rule of thumb is: if you pay for it as an organization, it’s a good sign that you’re responsible. “So if you give your international assignee a per diem or a payment while they are spending the weekend waiting somewhere, and they use that money to go swimming with the sharks,” she warned, “trust me, you’re responsible for it.”

She recommended that an organization develop an integrated risk management strategy by first assessing its organizational risk. An organization should consider a number of factors, including the kind of business, the size and type of organization, the countries that employees are most likely to travel on business to, and the type and number of employees traveling.

Companies should also ensure that policies and procedures are in place and that employees follow those policies. “If they don’t follow your procedures,” Claus said, “you shouldn’t reimburse for what you said you were going to reimburse them for.”

In addition, prior to each trip, the organization should inform the employee in writing of the risks associated with the trip and ensure that the employee has an opportunity to opt out without negative consequences to employment. Companies should continue to monitor the risk while the employee is traveling and send advice and assistance if necessary.

Claus also emphasized that organizations need to know how long it will take to locate an employee at any point in time. “If you can’t do that in 15 minutes, you do not have a good travel management system,” she said. Companies should also know how to contact employees wherever they are.

Finally, she said, successful organizations analyze their travel management data annually to look for patterns, identify where the risk is, and build solutions back into the system.