Hybrid working: can employees work from abroad?
During the course of the pandemic, both employers and employees adapted and innovated to enable employees to work more flexibly, including the ability for some to work from overseas. Inevitably, some of the changes introduced are likely to be long-term, but that begs the question, can employees work from abroad, and if so, what needs to be done to ensure both legal compliance and the welfare of the employee?
Can an employee work overseas?
There is no definitive answer to this, and each situation will depend on the individual circumstances that exist. The decision-making process should be fair and transparent, and take into account the following:
Existing policies and practices
Employers should have a clear policy in place that sets out homeworking expectations (including location) and allows for each case to be decided individually depending on the circumstances. If your policies don’t deal with this issue, now may be the time to revise them.
The nature of the work and visas
Clearly the nature of the work to be undertaken will be relevant in terms of how feasible it is to work from abroad, as well as how feasible it is to carry out any appropriate supervision. What is more, every country is likely to have its own rules about what work is permitted by a visitor and depending on the nature of the work, and length of time in the country, a work visa may be required.
Depending on the country in question, it is possible that an employee who works abroad may acquire local employment rights, even if they are only temporarily working there. These could include holiday, minimum pay and employment termination entitlements. These rights may be greater than those provided by UK law and the employee may be entitled to bring a claim against employers who fail to comply with those rights.
There may also be questions about which country has jurisdiction when it comes to resolving any disputes, particularly if the contract of employment is silent on this subject.
Health and Safety
UK employers have a duty to protect the health, safety and welfare of their employees. This applies whether they are working from the UK or overseas, and employers will need to consider how they can ensure the employee’s health and safety. A thorough risk assessment will often be necessary.
Once again, different countries have different legal requirements and employers will need to ensure they are familiar with and comply with these too.
Employers will need to review any relevant insurance policies to ensure that they cover the employee, and that the policy has not been invalidated by reason of the overseas working. Additional insurance may also be necessary.
There may also be data protection issues if the employee is processing personal data, particularly if this data is being transferred to them overseas. Employers will need to check both their data protection policy and practices and specialist advice may be needed.
Tax and National Insurance
There may be tax and National Insurance implications for employees working overseas depending on how long they work abroad and the country in which they will be working.
The starting point is normally that the employer should carry on deducting tax and NI under PAYE. However, employers will need to consider whether they are at risk of creating a permanent base in the country where the employee is working for tax purposes. Both parties will also need to ascertain whether the employee has created a tax liability in the country in which they are working. That in turn may depend on whether there is a tax treaty in place between the two countries (as well as the length of time worked there). Employees who work for more than 183 days overseas will need to consider the impact this has on their deemed tax residency.
In respect of National Insurance, the starting point is that social security obligations such as National Insurance arise in the country in which the employee is physically working. Prior to Brexit, parties could fairly routinely apply for a certificate that allowed them to carry on paying National Insurance in the UK. The position is slightly less clear post Brexit, and the procedure to be followed will depend on the country concerned and any inter-country agreements.
Covid and quarantine
Many countries now have different vaccination and quarantine requirements, particularly for those travelling. This may include the need to isolate, as well as the costs of private testing and quarantine hotels. Employees must of course comply with these requirements and therefore consideration needs to be given to time away from work and the cost involved.
Early advice essential
It is absolutely essential for employers to ensure that their employment practices do not breach local employment requirements whilst still remaining compliant with UK law. Although more flexible working is to be welcomed, great care and careful research and planning is going to be needed where an employer is considering agreeing to an employee working overseas. We would recommend employers take professional advice as early as possible in order to avoid future difficulties. Please get in touch for further assistance.
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