Employment law is the tool to implement,
control and execute Compliance rules.
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WE SOLVE THE CHALLENGES AND TASKS FOR HR

CHALLENGES AND TASKS FOR HR

In the wake of US laws such as the Foreign Corrupt Practices Act and Sarbanes-Oxley, Corporate Compliance in Germany has long been viewed as a “Legal Transplant” of US law. Meanwhile, German Courts have created a specific German system of requirements which must be addressed by a company’s management in order to avoid criminal and civil law liabilities. The implementation of a compliance system that meets the strict criteria defined by courts is typically a task for HR. HR must guarantee that binding rules are introduced for all employees in a legally effective way and that the co-determination rights of works councils are observed.

Once enacted, these binding rules have to be updated and both the existing staff and new recruits have to be informed, trained, and have to accept the obligations.
The task to have a compliance organisation that covers all areas of law is a huge challenge for HR. While HR regularly deals with employment law issues such as working time, discrimination and classification, compliance means much more. For example, compliance includes cartel law, criminal business law (i.e. anti-corruption, insider-trading and competition), data protection, environmental regulation and public offers. No HR expert would be able to have sufficient knowledge in all of these areas. Part of the task will therefore be to gather all relevant data, and translate them into a valid and enforceable document.

Another challenge for HR is the creation of an internal organisation that is able to identify risks, address important issues at the highest company level, create clear rules of delegation, and effectively deal with violations. Additionally, courts will ask about regular training measures and audits, as well as sufficient documentation of all efforts that have been taken to avoid compliance violations.

This overview is intended to inform about the requirements of German law and to give some guidance how your (client’s) German HR department may cope with this important task.