What UK employers and employees should consider

In the new flexible working world, where working from home is now the normal, what is the limit of where people can call ‘home’? A number of UK-based employees, who pre-Covid resided here too, have taken the opportunity that working from home has presented to return to and work from their home countries, either to be closer to family or simply to avoid being alone during the UK lockdown. Others have decided to work from a holiday home or in a country they have always wanted to live, writes Richard Devall, partner, IBB Law.

While most employers would sympathise with the ethos, GDPR, tax and other statutory and regulatory obligations mean that they may have to cut this trend short and order all those employed in the UK to return here.

Employment rights

As an employer, there are a number of issues raised by an employee working remotely abroad, one of which is the additional rights an employee can attract simply by working in another country. Despite having a UK-compliant employment contract, by working in another country that employee could attract increased holiday, sick and enhanced maternity/paternity pay, among other benefits, that a UK employer may have to honour.

Language and post-termination

While some employment contracts could be effectively amended to include additional rights, others could be voided completely if they are not written in the local language of the country in which the employee is working; employers will therefore need to check whether a dual-language contract is required.

Most post-termination provisions in UK employment contracts will (logically) focus only on either the UK or an even smaller area, but employers may need to reconsider these provisions for more senior staff, to take account of the law in the country in which they intend to work remotely.

Reimbursement

Outside of the employment contract itself, employers may be liable to reimburse their employees for their costs of working from home: France and Germany require employers to reimburse their employees for the costs of home office set-up and maintenance (desks; tools; internet access; for example), whereas Switzerland also mandates contributions to an employee’s housing costs.

Immigration and tax

Immigration could pose a problem for an employee looking to work remotely in another country: they must ensure that they do not require special permission (such as a visa) or are a citizen of said country in order to work there and, following Brexit bringing an end to freedom of movement, EU citizens must be clear that a return to their home country or to another country will not affect their UK settled or pre-settled status; Non-EU citizens need to be clear whether an absence from the UK would affect their current UK visa or future ability to achieve permanent residency.

Carol Le Page, corporate tax partner, BDO, Reading, said: “We are seeing an increasing number of businesses that either have employees who are asking to work from their overseas homes or find that they have some employees who are already doing this. These arrangements can create employment tax issues for the employer, particularly in terms of potential overseas payroll tax requirements and social security implications. In addition, corporate tax costs and filing obligations can also arise for the employer company in the country in which the employee is working. It is therefore crucial that businesses have policies and procedures in place that provide visibility and control over the extent to which employees are working from overseas, so that they can manage their tax position accordingly.”

Health and safety and insurance

All UK employers have a duty to do all that is reasonably practicable to protect the health, safety and welfare of their employees, but some may not be aware they these duties extend to those employees working remotely overseas – and when they do, local laws will also have to be observed.

It is strongly recommended that employers speak with their insurance or benefits broker to confirm that cover including death in service, travel insurance and private medical cover is not invalidated by employees working remotely abroad.

Data protection and IP

Although our GDPR laws mirror the EU’s at the time of writing, our legal sovereignty means that ours and the EU’s rules could change at a later date and no longer marry up. If an employee will be handling personal data as part of their role, employers will need to ensure that the legal requirements of both the UK and the employee’s remote working location are met, or risk severe consequences.

Just as the local employment rights may well impose themselves on any UK contract, so could any local intellectual property laws. Where employees may or regularly create IP in their usual course of work, employers will want to ensure that they have in place arrangements which provide adequate IP protection under the laws of the country that the employee is working from.

Develop a working strategy and plan

It is important that you clearly communicate to employees what is and what isn’t acceptable in terms of overseas remote working. Putting in place clear policies should help ensure that employees understand what is expected of them and should ensure a consistent approach across your business to overseas remote working requests.

If handled correctly, an arrangement like this could be beneficial for both parties and reduce some of the stresses coronavirus has caused. But both individuals and their employers should be very mindful of the implications of a cross-border working relationship.

Richard Devall

Call or email our employment and immigration team to discuss any issues or concerns you may have in regard to this topic.

Richard Devall

immigrationteam@ibblaw.co.uk

0345 638 1381

 

ibblaw.co.uk