Last week we looked at the tax issues which arise when employees work from home when home is outside the UK. As we know, Covid-19 has resulted in an unprecedented amount of home working but requests from employees wanting to work from a base overseas is something that we are seeing a lot at the current time, and it gives rise to a whole raft of issues and, surprisingly perhaps, it has not received a lot of press attention. It arises when employees work from abroad either because that country happens to be their home nation or, because perhaps, their family is based there. If that situation does arise then you need to be aware of the various tax, immigration and employment law issues before you agree to the employee’s request. Last week we heard from Chris Thomas explaining the tax risks – so the tax liabilities arising under UK law obviously, but also potentially liabilities arising by virtue of the tax laws of the foreign country.Aside from the tax risk, there are also immigration and employment law issues to be aware of and, as we mentioned last week, whilst the HR press has flagged these in various articles they don’t really go into any detail. So back in May HR Magazine did look at the impact of coronavirus on workforces and global mobility but didn’t look much further than the obvious visa and work permit hurdles. The CIPD’s People Management asks: “How should HR deal with requests to ‘home work’ from overseas?but gives a relatively cursory answer to that question. So let’s take a look at the employment issues that can arise when someone works abroad on a temporary basis. Anne Sammon has been advising clients on this throughout the pandemic and earlier she joined me by video-link from her home:
Anne Sammon: "This is a really big issue for a number of clients and it’s one of those types of issues that catches people unawares. So we've seen a number of clients who have had employees who are working outside the UK, and kind of working remotely, and the client hasn't been aware that they're doing that until something's come up. So for example, in one case, an individual needed to go to the hospital and they were talking to their line manager about the particular hospital that they were going to and it became apparent that they weren't in the UK, they were in another location. It causes all sorts of issues from an employment law perspective because you might may be subject to mandatory laws in that particular jurisdiction. So you can end up in a scenario where the employee gets the benefit of all the UK employment laws that we have that protect employees, and that require employers to do certain things, but also the benefit and the obligations of that particular jurisdiction where they're working. The real challenge for employers, if you have employees working in multiple jurisdictions, is to work out how to navigate those different sets of laws and also just to be aware of what those laws say. So it's a logistical nightmare unless you really control the situation and ensure that you know where all your different employees are working and what mandatory laws they're subject to. There's also the issue of the Posted Workers Directive and, again, this becomes more of an issue when you look at local implementation, the way that the directive works. It shouldn't, in theory, be a problem where an individual is working temporarily from a home in another country but that will very much depend on the way in which each jurisdiction has implemented the Posted Workers Directive. So it goes to that point of needing to really understand what the local law framework provides. I've also seen examples where the intention was that somebody would work temporarily from a particular jurisdiction, and as a result of COVID, and the intention was that that would be maybe a week following the end of their holiday and actually as a result of travel restrictions they've ended up having to stay in that location for a much longer period and the longer that somebody is working in, in any location, it just increases the risk of all of these issues that we're talking about.”
Joe Glavina: “There are a couple of articles out there from the HR press which viewers might have seen Anne, and they give advice to employers along the lines of making sure you have a policy in place for dealing with these requests. They stress the need to be careful about treating employees differently?”
Anne Sammon: “Yes, so the issue that we have in terms of allowing some employees to work from different jurisdictions and not others is that you can potentially end up discriminating against people and that discrimination is not just, you know, you've let one employee who's male work from Spain, and not a female employee, or vice versa, but it can also be about the rationale for the particular jurisdiction. So if, for example, someone of Jamaican heritage wants to work from Jamaica and is denied that request, but someone of Spanish heritage wants to work from Spain and their request is allowed, you've got a potential kind of indirect discrimination risk there about why you're treating people differently, even though it looks like the policy kind of is consistent, so employers need to be really mindful of that. What we've seen a lot of organisations do in terms of policy is effectively say, no employees can work from any other jurisdiction, save in exceptional circumstances and then it's for a committee or an individual to assess whether the exceptional circumstances are such that it justifies the need for somebody to work outside the UK, and also whether or not they have the expertise in-house, or getting a reasonable amount of legal advice, to be able to understand what their obligations are if that employee works from that location.”
The other big news story from last week is of course the extension of the furlough scheme which the government has confirmed will run until the end of March. Anne has just written a detailed guide on that which should be of interest to HR professionals. You can find that on the Outlaw website.