Many businesses operate across a number of countries and encourage their employees to spend time in their overseas offices. International assignments potentially raise a range of legal and practical issues, depending on the country in question, and to some extent the nationality of the secondee/assignee. When multinational companies decide to send employees to one of their overseas companies, planning ahead is critical so that the appropriate documentation can be put in place at the outset. Often this does not happen and if the assignment does not work out, the company may have to deal with unexpected liabilities.
Whenever an employee from an overseas office will be assigned to work in the UK, a primary consideration is immigration, and obtaining appropriate permission to work. Immigration requirements should be considered before drawing up any employment-related contracts.
Of course some employees will already have an inherent right to work in the UK, including European nationals. For everyone else who needs to apply for prior permission before arrival in the UK, it is tempting to shortcut the process and allow the employee to spend time in the UK as a business visitor. That approach should always be avoided as the simple starting position is that, aside from very limited exceptions, business visitors cannot work in the UK. There are risks to the employee including having a negative immigration history, refusal of entry to the UK and a potential banning order should they have been found to provide misleading information about their intentions. To the employer there are risks in terms of increased scrutiny of future applications, disgruntled employees, reputational risks and the potential for onsite audit checks by the UK authorities.
Appropriate permission to work should be sought early in the assignment process as it can take time to secure. Although there has been a tightening of the UK immigration system over the years, there are a number of options for an employer which should always enable an employee to come to the UK to work where there is a specific need or requirement.
Employment issues which arise with assignments into the UK can be tricky, not least because there are rules about which country’s law will apply in particular circumstances. When an employee is sent on an assignment to the UK, even if their contract has a clause which states that another country’s law applies exclusively to it, that law won’t override all UK laws, because certain UK laws are mandatory, so these will apply instead - such as rights on termination and working time, the right to the minimum wage and discrimination protection.
All employees in the UK are entitled to statutory maternity or adoption leave, irrespective of their continuity of employment. So, if an assignee is already pregnant when she comes to the UK, she will still be entitled to statutory maternity leave. However, they will only be entitled to statutory maternity or adoption pay if they meet the qualifying requirements, including in relation to continuous employment. If the assignee is a man whose partner subsequently has a baby, he may be entitled to statutory paternity or shared parental leave, provided he meets the qualifying requirements including continuity of employment.
In calculating whether an employee on assignment into the UK has two years’ continuous employment in order to bring an unfair dismissal claim here, their continuous employment abroad will count for continuity purposes.
However, the position is different for statutory redundancy payments. If an employee is dismissed for redundancy while ordinarily working in the UK, they may have a right to such a payment. The requirement for a minimum of two years’ continuous service for the purposes of calculating their statutory redundancy payment does not take into account their continuous employment abroad.
When selecting candidates for an assignment, you should be mindful of the risks of only considering applications from certain nationalities, such as EEA nationals, even if the reason for excluding non-EEA nationals is their immigration status. This policy was found to be race discriminatory in a case brought by an Indian national who had applied for a training contract with the law firm Osborne Clarke. The employer’s policy of rejecting applicants because of their immigration status was indirectly discriminatory on the grounds of nationality because the proportion of non-EEA nationals who could comply with this was considerably smaller than the proportion of people not in that group who could comply (i.e. EEA nationals), and this policy was not justifiable.
Note that the selection process should be based on merit, regardless of the applicant’s immigration status, and work permit issues should only be considered at the last stages of selection.
Protecting business interests
Discussions before an assignment starts are often friendly and relaxed and assignment agreements are often decided under time pressure with little thought to dealing with the end of the relationship. But what will happen if the assignment does not work out? The company will want to protect its business interests and have clarity on potential liabilities.
It is also common for no consideration to be given to whether the assignee’s restrictive covenants will be enforceable both in the assignment country as well as under the law specified in the contract. And it is important to think about this at the outset with assignments into the UK because here the rules on restraint of trade will override any foreign law specified in the contract.
Protecting confidential information is usually easier than enforcing covenants in different countries, although there are often variations between countries as to what information is protectable.