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But it is part of the reason these countries don't have startup cultures. In the US you can just try stuff out including hiring someone who may not be a perfect

But it is part of the reason these countries don't have startup cultures. In the US you can just try stuff out including hiring someone who may not be a perfect fit. In the US you can pivot your startup if something isn't working, roll off 20% of your staff and you don't have to talk to a govt tribunal or go through appeals. You can make your own management calls on who you want to work with - you don't have to justify things or provide the verbal -> written -> tribunal -> appeal cycles process. And founders are notoriously bad managers - while they should perhaps spend the time to do PIP's and training plans and being better managers, most of them are very focused on outcomes - so startups can be a very self managed area.

jlokier 6y ago
> In the US you can pivot your startup if something isn't working, roll off 20% of your staff and you don't have to talk to a govt tribunal or go through appeals. You can do this in the UK too, without a tribunal or appeals. What you've described is covered by "redundancy", and it's completely fine legally to make people redundant, in large numbers or small numbers.
- 0xfaded 6y ago
  But what's the notice period? 3-6 months may be enough to kill a pivoting company when otherwise IP and team could be packaged up and sold off. One of the things people seem complain about on HN is that founders of failed companies in SV seem to make off quite well. In fact I believe this mentality helped me take the leap with my startup. The only problem is that I moved to Europe to do it, and the prospects for failed founders are basically lost years.
  - jlokier 6y ago
    When I was last made redundant, in the UK, the notice period was 1 month and there was no redundancy payment. They let me go just before 2 years of employment, when a redundancy payout would have started. I don't think there would have been a longer notice period after 2 years, just a payout. It was legitimate redundancy because they let go of a number of people at the same time. So it wasn't personally targeted, though of course there was an element of deciding who to let go of.
    - 0xfaded 6y ago
      Wow, thanks for sharing. One month up until 2 years is surprisingly good for outside the US. Do you feel the decision to terminate you then may have been linked to your impending protections after two years?
      - jlokier 6y ago
        > Do you feel the decision to terminate you then may have been linked to your impending protections after two years? Yes I do because it was so close to the 2 years, and that did leave me feeling slightly cynical. But I wouldn't call it "protection", because the only benefit would have been a small cash payout, worth a lot to me, but small relative to the company's ongoing salary bill for people staying behind, so easily affordable to them. That led to financial hardship for a little while, but I recovered, set up as self-employed, and to be honest I was glad of the new freedoms to work on my own projects from then on.
- donor20 6y ago
  In france you these need to be pre-approved, you have to have an employment protection plan, and even then the court can overturn all this and make you hire everyone back. "Collective redundancies can be void by an administrative court, if the latter recognises shortfalls in the employment protection plan or if an administrative authority did not validate or approve the employment protection plan at all. In case the administrative authority validated or approved the employment protection plan without stating sufficient reasons, its decision might be invalidated by the court." In the UK (which is MUCH more liberal and I wasn't considering the UK part of the EU) there are still plenty of steps. For the UK "Non-compete clauses and restrictive covenants are highly enforceable in the UK in order to protect the business the employee is leaving." https://www.ms-solicitors.co.uk/employee/faqs-employees-guide-to-post-termination-restrictive-covenants/ https://www.ms-solicitors.co.uk/employee/faqs-employees-guid... Redundencies can be overturned if the selection criteria for them is "unfair" or discriminates. "You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another". Because often some type of group is affected more than others if you lay off new hires you get into a quagmire pretty quickly.
  - C1sc0cat 6y ago
    NC and restrictive covenants are not "highly enforceable" in the UK, I do not know where you got that idea from. Limited NC for v senior people for short periods possibly - and by v senior I mean board level.
    - peteri 6y ago
      They are relatively enforceable as part of a compromise agreement. However the last one I signed was quite restricted in that it was for 12 months and only listed 4 direct competitors. Normally the companies lawyer tries for more and your lawyer tells them to get real. If you don't sign the agreement I suspect a lot of the time you'll just have to do gardening leave for the rest of your contract. Also don't forget if you were a director you still have a fiducary duty to the company once you've left. What I'm slightly unclear about is how practical this is for sales folks where this is an expectation they will steal prospects or existing clients. I suspect you might only bother with lawyers if it looks like they are poaching from your existing clients. In the UK non-competes in my view for engineering staff are basically unenforcable, IP theft is much more likely to succeed (and I've been involved in a direct copyright theft case). 24/7 IP ownership is enforcable but my experience is that most places don't care if you're not going to be a direct competitor. I always feel it's worth getting that in writing though, my current contract limits this to areas of the companies business. Our corporate lawyer limited this when we had to sign a new contract post a takeover (it was a bit broad and could have covered things like photographs of your kids). Also I have in the past asked if I'm contributing to open source as part of my work as like things to be clear. IP rights is probably the one area I check in a new contract and usually it's fairly easy to get agreement for some minor changes.
donw 6y ago
The takeaway here is that businesses below a certain size should face less regulation. This makes sense, both because regulatory capture is a real problem, and because smaller businesses have far less legal and economic leverage. Modulo EBITDA per employee. Of course, those regulations should step in gradually -- sharp cliffs are pretty much always antipatterns when it comes to regulation, law, and government services. Yes, I know in France that companies try and get around this by splitting into lots of smaller firms, but that's an issue for the regulators and the specific legal framework. Nobody ever said these things are easy.

jlokier 6y ago

> In the US you can pivot your startup if something isn't working, roll off 20% of your staff and you don't have to talk to a govt tribunal or go through appeals. You can do this in the UK too, without a tribunal or appeals. What you've described is covered by "redundancy", and it's completely fine legally to make people redundant, in large numbers or small numbers.

0xfaded 6y ago
But what's the notice period? 3-6 months may be enough to kill a pivoting company when otherwise IP and team could be packaged up and sold off. One of the things people seem complain about on HN is that founders of failed companies in SV seem to make off quite well. In fact I believe this mentality helped me take the leap with my startup. The only problem is that I moved to Europe to do it, and the prospects for failed founders are basically lost years.
- jlokier 6y ago
  When I was last made redundant, in the UK, the notice period was 1 month and there was no redundancy payment. They let me go just before 2 years of employment, when a redundancy payout would have started. I don't think there would have been a longer notice period after 2 years, just a payout. It was legitimate redundancy because they let go of a number of people at the same time. So it wasn't personally targeted, though of course there was an element of deciding who to let go of.
  - 0xfaded 6y ago
    Wow, thanks for sharing. One month up until 2 years is surprisingly good for outside the US. Do you feel the decision to terminate you then may have been linked to your impending protections after two years?
    - jlokier 6y ago
      > Do you feel the decision to terminate you then may have been linked to your impending protections after two years? Yes I do because it was so close to the 2 years, and that did leave me feeling slightly cynical. But I wouldn't call it "protection", because the only benefit would have been a small cash payout, worth a lot to me, but small relative to the company's ongoing salary bill for people staying behind, so easily affordable to them. That led to financial hardship for a little while, but I recovered, set up as self-employed, and to be honest I was glad of the new freedoms to work on my own projects from then on.
donor20 6y ago
In france you these need to be pre-approved, you have to have an employment protection plan, and even then the court can overturn all this and make you hire everyone back. "Collective redundancies can be void by an administrative court, if the latter recognises shortfalls in the employment protection plan or if an administrative authority did not validate or approve the employment protection plan at all. In case the administrative authority validated or approved the employment protection plan without stating sufficient reasons, its decision might be invalidated by the court." In the UK (which is MUCH more liberal and I wasn't considering the UK part of the EU) there are still plenty of steps. For the UK "Non-compete clauses and restrictive covenants are highly enforceable in the UK in order to protect the business the employee is leaving." https://www.ms-solicitors.co.uk/employee/faqs-employees-guide-to-post-termination-restrictive-covenants/ https://www.ms-solicitors.co.uk/employee/faqs-employees-guid... Redundencies can be overturned if the selection criteria for them is "unfair" or discriminates. "You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another". Because often some type of group is affected more than others if you lay off new hires you get into a quagmire pretty quickly.
- C1sc0cat 6y ago
  NC and restrictive covenants are not "highly enforceable" in the UK, I do not know where you got that idea from. Limited NC for v senior people for short periods possibly - and by v senior I mean board level.
  - peteri 6y ago
    They are relatively enforceable as part of a compromise agreement. However the last one I signed was quite restricted in that it was for 12 months and only listed 4 direct competitors. Normally the companies lawyer tries for more and your lawyer tells them to get real. If you don't sign the agreement I suspect a lot of the time you'll just have to do gardening leave for the rest of your contract. Also don't forget if you were a director you still have a fiducary duty to the company once you've left. What I'm slightly unclear about is how practical this is for sales folks where this is an expectation they will steal prospects or existing clients. I suspect you might only bother with lawyers if it looks like they are poaching from your existing clients. In the UK non-competes in my view for engineering staff are basically unenforcable, IP theft is much more likely to succeed (and I've been involved in a direct copyright theft case). 24/7 IP ownership is enforcable but my experience is that most places don't care if you're not going to be a direct competitor. I always feel it's worth getting that in writing though, my current contract limits this to areas of the companies business. Our corporate lawyer limited this when we had to sign a new contract post a takeover (it was a bit broad and could have covered things like photographs of your kids). Also I have in the past asked if I'm contributing to open source as part of my work as like things to be clear. IP rights is probably the one area I check in a new contract and usually it's fairly easy to get agreement for some minor changes.

donw 6y ago

The takeaway here is that businesses below a certain size should face less regulation. This makes sense, both because regulatory capture is a real problem, and because smaller businesses have far less legal and economic leverage. Modulo EBITDA per employee. Of course, those regulations should step in gradually -- sharp cliffs are pretty much always antipatterns when it comes to regulation, law, and government services. Yes, I know in France that companies try and get around this by splitting into lots of smaller firms, but that's an issue for the regulators and the specific legal framework. Nobody ever said these things are easy.