Terminating an Expatriate Contract

Terminating an expatriate contract can be as complicated as creating it. A key inclusion in the expat contract concerns the grounds for termination and it is crucial that a section that defines the notice and termination terms is including in order to prevent any issues. If this is not included in the contract the laws of the host country may be applied, and this may have an impact on the notice period and the amount of severance pay that you are entitled to as an employee. Things that you should ensure are included in the contract are as follows:

  1. Notice period. How long after terminating an expatriate contract will the employee be expected to work? The notice period together with the employee’s obligations and requirements during this period should be defined.
  2. Severance. If the contract is ended early on request of the employer and not “for cause”, gross misconduct or embezzlement. Then the employee may be entitled to severance pay.
  3. Repatriation package: The contract should contain clear details of the employers post agreement obligations. All of the factors that were considered when the employee formulated the contract to move abroad should once again come into play and you may wish to ensure that equalization approach is once again applied. In addition to this all repatriation costs should be included in the contract.
  4. Other factors. If you have children who will be attending school in the host country you may wish to ensure that the contract contains provisions for their educational expenses until the end of the school year or term. You may also wish to request repatriation training after terminating an expatriate contract. This can help you to readjust to living back in your home country if you have spent a lengthily period of time overseas.

*Tips for contract negotiation*

In any contract, the “divorce” is just as important as the “marriage” and you should always ensure that you are adequately covered in the event that something goes wrong or the employment relationship breaks down. The last thing you want to do is find yourself in a foreign country without a visa and without employment facing a significant cost to relocate yourself and your family back to your home country. Although your immediate thoughts when negotiating your contract may be on the benefits, salary and relocation package, remember that the repatriation package, notice period and severance details are just as, if not more, important when terminating an expatriate contract.