In an increasingly flexible world of work, the distinction between home and workplace has become blurred and can often present significant challenges for employers. This is further exacerbated when an employee relocates or works from abroad without informing their employer or seeking express permission to do so.
While some may view this as a natural extension of remote working, the reality is far more complex and presents multiple risks for employers. Depending on the individual circumstances and the employer’s policies, it could be considered misconduct or even gross misconduct and potentially expose the business to legal, tax, and operational risks.
Consider this scenario: an employee moves to another country or begins working remotely from abroad without notifying anyone in the organisation. There is no formal flexible working request or risk assessment carried out, and the employer has no evidence of the employee’s right to work in the host country or ability to monitor how their work is being conducted there.
We have encountered situations where employees have permanently relocated overseas and only notified their organisation after the move had taken place. If there is no policy in place requiring employees to obtain prior consent before working abroad, employers may face significant challenges when disciplining employees for working overseas without permission. Employees may claim they were unaware of the need to inform their employer, particularly if they were not explicitly advised of this requirement.
Risks to employers
There are several complex legal and compliance issues to consider when an employee is based overseas – even temporarily – and these will vary by jurisdiction. Key risks include tax exposure in the foreign country, immigration compliance, data protection obligations, and monitoring of working hours.
Where an employee relocates permanently or works regularly from the same country, further issues may arise. These include the potential application of local labour laws alongside those of England and Wales, as well as obligations relating to social security, health and safety, and insurance coverage. It is advisable to seek advice on the applicable regulations for the country in question when an employee seeks a longer-term arrangement.
If overseas working arrangements are not properly managed, employers may also face data security vulnerabilities, particularly where systems are accessed from unsecured networks, and reputational damage if non-compliance becomes public or affects client relationships.
What should employers do?
Employers should consider adopting the following measures to minimise risk.
- Introduce a working abroad policy: Clearly state the business’s position on whether employees are allowed to work remotely overseas and, if so, when and how employees must seek approval. This should provide clear guidance to employees (and managers) on the process to follow. If employees are not allowed to work remotely overseas, consider including a section in any working-from-home policies outlining the risks of unauthorised remote work.
- Set expectations: Consider setting parameters for the circumstances when you may approve remote work (e.g., if the employee has the right to work from that country, with permission, and for a limited period).
- Educate managers: Ensure managers understand the business’s policy on remote work, the rules that apply, and the reasons behind them, including the importance of regulatory compliance. In our experience, managers sometimes allow employees to work remotely abroad without understanding the potential legal complexities.
- Train HR teams and line managers: Ensure HR teams and line managers are fully trained on handling these situations appropriately, including identifying when employees may be working remotely abroad without permission and the circumstances when disciplinary action might be appropriate.
- Review contracts: include clear and unambiguous clauses in employment contracts on work locations and any remote working requirements or restrictions. Contracts should require express agreement from the employer to any permanent change in working location.
- Monitor access: In appropriate cases, and with appropriate policies and safeguards in place, consider monitoring access to systems in order to ascertain if an employee has moved abroad without notifying the employer.
- Disciplinary policy: Include a reference in disciplinary policies to the potential consequences if an employee works abroad without permission and explain why an employer may refuse such requests. Employers should exercise caution before dismissing an employee for working abroad, particularly if their policies are not explicit on this point.
Most importantly, employers need to ensure they set clear expectations and parameters for their employees regarding working remotely from abroad to avoid unintended consequences.
Rebecca She joined Birketts in July 2021, bringing a wealth of knowledge and expertise in employment law. She loves advising on complex Employment Tribunal claims and has expertise in assisting clients in managing and defending claims in both the Employment Tribunal and the Employment Appeal Tribunal.
She is particularly skilled in handling intricate legal areas such as holiday pay issues, TUPE, and the Working Time Regulations 1998. Additionally, Rebecca assists with collective redundancy exercises, restructures, and employer-led bulk COT3 agreements.
Rebecca provides comprehensive advice to employers on a wide range of contentious and non-contentious issues. She offers strategic, tailored solutions, from drafting employment contracts to managing complex disputes. Whether for a small start-up or a large corporation, Rebecca provides personalised solutions to protect the business interests and minimise legal risks. Her experience with clients who recognise trade unions gives her valuable insight into the complexities of unionised workplaces.
