The Impact Of Labor Law On Foreign Investments
When a particular company decides to undertake an investment in a foreign state, it submits the project to an analysis of its feasibility from different perspectives.  It is a matter of exploring and concluding on how an organization will manage the risks and opportunities. The analysis is naturally focused on certain classic aspects such as the expected economic profitability, the tax conditions, the financing situation, the market, among others. However, we have all witnessed how, in recent years, the concept of ESG (Environmental, Social and Governance) has gained fundamental importance when conducting the analysis of a foreign investment project.
In this joint session of the Foreign Investment Commission and the Labor Law Commission, we will concentrate on the Social and Governance effects of a foreign investment. Furthermore, we will focus on analyzing the impact of labor law on foreign investments. We will examine how projects of this nature are affected by: labor law regulations; the legal and factual situation of workers' unions; the existence of collective labor agreements; the different alternatives in hiring conditions; the necessity and/or convenience of hiring local personnel or, on the contrary, sending expatriates, etc. In many jurisdictions, especially when dealing with developing countries, we encounter significant obstacles when trying to be creative in finding solutions to labor law-related aspects due to the inflexibility of existing regulations or the strong presence of unions.  We will explore from the labor law perspective: the liabilities involved in projects involving M&A transactions; the advantages and disadvantages of resorting to the acquisition of goodwill instead of purchasing the shares of a company; the effects of downsizing the number of employees if necessary; the different alternatives to solve disputes; how to create a friendly and collaborative atmosphere between the investing company and the local community; etc. In our session, we will learn from experts in this field about the situation in their respective jurisdictions. We are confident that a rich debate will arise in the exchange of opinions by sharing experiences we have all faced in our professional lives.