Employment law is the tool to implement,
control and execute Compliance rules.
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Typical content of german compliance regulations

It is not possible to list all of the potential subjects of compliance regulations. Most importantly it depends on the company’s business and structure to determine those areas which are most vulnerable to compliance problems. From an HR perspective – however – three general areas can be differentiated.

1. Employment Law

HR will likely feel most comfortable in this area. However, there are numerous employment and social security law regulations which need to be observed. Below are only a few of the most liability prone:

  • Working time regulation
  • Classification employee / freelancer / temp worker
  • Discrimination law
  • IT and social media policies
  • Car policies
  • Post-contractual non-covenants / secrecy clauses
  • Whistleblowing

2. Other areas of law

While it seems likely that experienced HR employees have dealt with most labour and employment law issues, and may feel ready to implement updates to the respective policies, this is not true for all other areas of law relevant to employees, such as:

  • Cartel law
  • Anti-bribery regulations
  • Insider trading restriction
  • Tax and accountancy laws
  • Public procurement
  • Environmental protection laws
  • Data protection

3. Foreign Laws

To make matters worse, some foreign countries have enacted laws which apply to global companies with relations to the foreign jurisdiction and those listed on a foreign stock exchange. The Sarbanes Oxley Act, the Foreign Corrupt Practices Act, and the UK Bribery Act create the need for information, training, and constant monitoring even for employees who never travel to those foreign countries.

Requirements of an effective Compliance Organisation

Apart from the necessary risk analysis and the subsequent implementation of all relevant policies, German courts also require further elements of a compliance organization. This level of scrutiny is necessary because some organisations may try to avoid being liable for violations of relevant laws by employees or for organisational faults of the management.

Typical elements of an effective compliance organisation are the following:

  • Statement of the highest level of the management demonstrating its commitment to compliance
  • Clear organisational system of delegation
  • Appointment of a compliance officer
  • Regular training of competent officers and of all employees concerned in person
  • Regular compliance audits
  • Documentation of all steps