In today’s evolving work landscape, where remote work has become more prevalent, and physical office spaces are being reimagined, the concept of working from anywhere in the world has shifted from a mere aspiration to a tangible reality. Employees are increasingly seeking the freedom and flexibility to work from different locations, driven by a desire for a better work-life balance. Coupled with advancements in technology such as cloud-based collaboration tools and seamless connectivity, it’s easier than ever to stay connected and productive from virtually anywhere in the world.
As holiday season approaches, at esphr, we’ve noticed our clients are facing a rising tide of enquiries from employees who are eager to work from abroad for whatever reason; whether an extended holiday, wanting to stay with family or just fancying a change of scenery. While some employers have already embraced the ‘work from anywhere’ flexibility, this does pose some unique challenges for organisations; it’s important that employers and HR professionals familiarise themselves with the employment law considerations surrounding requests to work from anywhere in the world.
Before introducing a work from anywhere policy, several key factors must be considered:
1. Employment Law Rights
When it comes to governing an employment contract, employers may choose the law of England and Wales. However, regardless of this choice, if an employee works in an overseas jurisdiction, even temporarily, they may be entitled to certain mandatory local laws – for example working time, redundancy, maternity leave and pay, minimum pay rates, annual leave issues, etc. To understand the potential duties and obligations owed to an employee, employers should seek advice from a lawyer in the jurisdiction where the employee will be working. Additionally, before taking any action against an employee (such as disciplinary measures or redundancy) while they are in the overseas jurisdiction, it is important to seek local legal advice to ensure compliance with local laws and determine if the employee can bring claims in local courts. It is important to note that many European countries provide employees with greater rights and protections compared to the UK. A short stay abroad doing some occasional work while there is less likely to trigger these risks, but if the overseas working was more regular, frequent, or prolonged, it could lead to legal complications.
2. Right to Work
Employers should consider whether employees have the right to work in the country they propose to work from. Generally, it is the responsibility of the individual employee to seek immigration advice to determine their ability to work lawfully from the chosen location, unless it is the employer seeking to post the individual abroad. It is essential to consider immigration laws and any visa requirements that may be applicable. Additionally, employers must be mindful of how working abroad may impact the employees’ right to work in the UK upon their return. It is advisable to seek immigration advice to ensure compliance with the relevant regulations.
3. Regulatory Requirements
Certain roles may have specific regulatory limitations imposed by authorities such as the Financial Conduct Authority (FCA). Employers must ensure that employees working from abroad adhere to these regulatory requirements and that remote work does not violate any industry regulations.
4. Pension and Employment-Related Benefits
Employers should review employee pension schemes and other employment-related benefits, such as medical insurance. It is necessary to assess if these benefits can be continued while the employee is living and working abroad, considering scheme rules, legal requirements, and practical feasibility. If any covers would or could be invalidated by the employee working abroad this should be discussed with the employee.
5. Expenses
The question of who will bear the expenses for flights, accommodation, and other costs associated with the employee’s travel to the UK office needs to be addressed and agreed upon. Additionally, employers should consider reimbursement for normal home working expenses, such as internet access and phone line usage.
6. Data Protection
Depending on the nature of the employee’s role, they may handle personal data. Employers must evaluate the legality of transferring personal data to the country where the employee will work and ensure compliance with data protection regulations. Additional data security measures may be necessary to safeguard the confidentiality and security of personal data.
7. IT Support
Despite the availability of advanced technology, technical issues can still arise. Employers should have processes in place to effectively address IT problems for remote employees. This includes providing adequate IT support to troubleshoot and resolve any digital issues promptly and efficiently.
8. Health and Safety
Employers have an obligation to ensure the health and safety of employees regardless of whether they work in the UK or abroad. The employee’s presence working overseas will likely mean that the employer would also need to also ensure compliance with local health and safety laws, carry out risk assessments and comply with any specific local health and safety requirements imposed by the jurisdiction. From an insurance perspective, employers should thoroughly understand their insurance policies to determine if they cover employees working abroad, in the event that they have an accident whilst homeworking for example.
9. Pay, Tax and Social Security
How will employees be paid, and in which currency? Are there any tax or Social Security implications if working in another country? For example, is there a requirement to pay tax and national insurance contributions in the UK, the country in which an employee proposes to reside, or both? The complex matter of tax residency status should be carefully considered as there may be liability for additional income taxes that would need to be taken into account. Specialist tax advice should be sought as a preliminary consideration. The employee will also need to make their own separate checks on their situation in regard to any requirements for tax returns. Employers may also need to consider their corporate tax situation and whether there is a risk that the employer could be deemed to have a permanent establishment in the overseas jurisdiction meaning local corporate taxes could be applicable.
10. Contractual Provisions
Employers may want to consider their contracts and policies and take local advice on their ability to enforce provisions on matters including confidential information, trade secrets, intellectual property and suitability of existing restrictive covenants. The employee’s time spent working abroad may mean that the employer may not have the same protections in this regard as would have otherwise applied.
Ensure your stance is clear to avoid confusion
Whatever your position on working from abroad, whether temporary or permanent relocation, it is important to make your stance clear to avoid confusion and misunderstandings. Any organisation that allows homeworking or hybrid working should have a suitable policy in place. Such policies may be silent on working abroad – perhaps for fear of ‘encouraging’ requests – or could include a short explanation that separate approval will be required from HR or relevant senior management. Be aware that granting a request for one employee could establish a precedent, making it more challenging to deny similar requests in the future. Inconsistency in approach can lead to disputes and put employers in a difficult position.
While each request should be assessed on its merits, it is important to consider the potential impact on colleagues if others are already working remotely abroad and if their arrangement has been successful. This can create an expectation among employees that the business reasons for refusing similar requests may not be applicable.
While enabling employees to work from anywhere in the world can offer recruitment, retention, and engagement benefits, all things which are incredibly valuable in the current climate, it’s important to consider requests from all angles to avoid making rash decisions that can’t be easily undone.
