Lexology GTDT Market Intelligence provides a unique perspective on evolving legal and regulatory landscapes. This interview is taken from the Remote Working volume discussing topics including post-covid 19 work policies, remote working trends, employer's tax obligations and more, within key jurisdictions worldwide.

1 What are the most consequential issues that an employer should consider when determining its post-covid-19 remote work policies?

There are certain consequential issues that employers should consider when determining remote work policies. The main issue to bear in mind is that, if a home-office arrangement is agreed upon, and the decision is not related to covid-19, Law No. 25,777 and Decree No. 27/2021 will apply to the employment relationship. Those regulations constitute the ‘home-office regime’.

One of the main aspects of the home-office regime for employers to take into account is that employees’ consent is required in writing when shifting from the company’s workplace to home office working, except for force majeure cases. In addition, the working day must be previously agreed in writing in the employment contract, according to the current legal standards. Also, platforms or software used by the employer specifically for the home working must be developed taking into account the working day, barring any interaction during time off. In addition, in cases where the home-office regime is agreed at the beginning of the relationship, it must be implemented after consultation with the union.

Another important aspect is ‘reversibility’, which implies that consent to employees’ home-office setups may be withdrawn at any time, and the employer will be obliged to assign employees tasks in the office again. In this situation, the employees’ right and the fulfillment of the resulting obligation by the employer must comply with the principles of good faith, abuse of rights, collaboration and solidarity. However, employees who have agreed on home-office working from the beginning of the labour relationship are not entitled to this right, except as provided in a collective bargaining agreement (CBA) or in individual contracts. Moreover, once the employer receives the employee’s request, if justified, the obligation must be complied with in a period not exceeding 30 days, and in the event of an unjustified refusal, employees may consider themselves constructively dismissed and claim the corresponding severance compensations (which is currently doubled until 31 December 2021 – except for individuals hired as from 13 December 2019).

According to the aforementioned, employers may not unilaterally decide to implement a home-office regime because such a change is considered to be unreasonable, resulting in material or moral damage to the employee involved. The employee can then can either file an injunction to restore the original conditions of his or her employment or consider him or herself as constructively dismissed on the grounds that the unilateral change constitutes an abuse of the employer’s power to modify his or her labour conditions.

Regarding health and safety, it is important to bear in mind that employers must notify the corresponding labour risk insurer (ART) about employees who render services remotely to ensure that in the case of an accident or illness the ART will cover the matter. ARTs must determine new policies addressing remote working to control and verify the conditions under which remote work is rendered and to duly cover remote workers.

Finally, another important aspect is that employers are limited in making changes to their organisations, because due to the covid-19 outbreak, terminations without cause (regular terminations) and terminations or suspensions based on lack of work and due to force majeure were forbidden up to 31 December 2021. Any termination or suspension in violation of the prohibitions will be of no effect, and the existing labour relationship will remain valid, as well as its current conditions. Consequently, the reinstatement of the employees may be ordered, as well as the payment of accrued salaries and compliance with the withholdings and contributions to the social security system. Moreover, the referred prohibitions will not be applied to employees hired after 13 December 2019.

2 Pragmatically speaking, is there a threshold to determine when working remotely (from home or otherwise) requires local rules to apply?

To determine when a home-office regime applies, the rendering of services must be under an employment contract in which work assignments are carried out either in whole or in part at the worker’s domicile or in any place other than the employer’s offices, through the use of technology and communication tools. In addition, depending on the nature of the activity, it may be done via remote working. In this sense, the specific regulation related to each activity will be determined by the particular CBA governing such activity.

Moreover, the regime applies to employees who have a formal home-office employment agreement and not as a result of measures taken to prevent the spread of covid-19. Therefore, such a regime will not apply to employees who are not physically attending in the workplace due to the government regulation on waiving the duty of assistance in an attempt to minimise the spread of the pandemic and the measures taken by employers to comply with hygiene and safety regulations for the same purpose.

However, the regime will not be applicable when the labour relationship: (1) is carried out in the premises, dependencies or branches of clients to whom the employer provides services regularly; or (2) is carried out sporadically in the employer’s home, either at his or her request or due to some exceptional circumstance.

In this sense, the applicable regulations do not establish a fixed threshold, they only set out that the provision of services must be carried out ‘in whole or in part’ at the worker’s domicile or in any place other than the employer’s offices.

3 If employees voluntarily move away from their main work location, can employers unilaterally impose locally appropriate compensation packages?

No, if employees voluntarily move away from their main work location, employers cannot unilaterally impose locally appropriate compensation packages, due to certain provisions of local labour regulation, described below.

In the first place, the national Constitution establishes the principle of equal remuneration for equal tasks. Therefore, employers are allowed to treat employees differently (in this case, related to their salaries) as long as the reason for the treatment is based on objective criteria, such as productivity. In this sense, if employers decide to unilaterally impose locally appropriate compensation packages, employees who receive different treatment or compensation packages may consider this as a discriminatory act and demand the cessation of the discriminatory situation, and if the company refuses they may consider themselves constructively dismissed and claim severance compensation for dismissal without cause (which is currently double until 31 December 2021 – except for those individuals hired as from 13 December 2019).

Moreover, if the employer decides to unilaterally reduce the employees’ compensation package, those employees may consider themselves constructively dismissed on the grounds that the unilateral change to essential terms and conditions of their employment relationship constitutes an abuse of the employer’s right to modify the employment conditions, which also generates material or moral damage, together with a claim for severance compensation (which is currently double until 31 December 2021 – except for those individuals hired as from 13 December 2019).

In addition, according to the home-office regime, employees working under home-office setup have the same rights and duties as those working at the employers’ establishment, and their salary must not be less than what they would receive if they rendered services at the employer’s offices. Therefore, once employees are assigned to render services remotely, their compensation cannot be reduced due to the modification of their working place.

4 Do you anticipate a rising trend of employers hiring remote workers as opposed to managing office-based employees who subsequently go remote? What practical issues should employers bear in mind when considering remote hiring?

Yes. The covid-19 pandemic took the world by surprise in every area, changing our lives dramatically. Within this sudden modification, the world of work was shaken up. One of the main aspects that the pandemic triggered is the acceleration of digital development to adapt tasks to a home office. Therefore, the home office has been proven to be an effective way of working, and there is a rising trend for employers hiring remote workers, as opposed to managing office-based employees who subsequently go remote.

In addition, within the home-office regime employers must incur certain costs (such as equipment, working tools, installation, maintenance and repair costs, or reimbursement of expenses related to the use of the employee’s equipment). However, despite this, employers tend to prefer to pay those costs rather than incur the expenses related to their facilities and offices, because the latter are usually cheaper.

Moreover, employers must comply with protocols of its activity, approved by the health authority of the jurisdiction in which their offices are located. Therefore, it is likely that employers will need to recondition their offices.

In fact, this decision depends on each employer’s economic situation and what work is required.

In relation to the aforementioned, practical issues employers should bear in mind when considering remote hiring are the following.

  • Employers must provide employees with the equipment, working tools and necessary support for performing assigned duties.
  • Employers must incur all the installation, maintenance and repair costs, or reimbursement of the expenses related to the use of the employee’s own tools.
  • If employees incur higher expenses related to the connectivity required to perform the tasks, those expenses must be reimbursed by employers, and they will not be considered remunerative.
  • The provision of working tools is not considered compensaory in nature and, therefore, they are not included in the calculation for any severance calculation nor union or social security contributions. Furthermore, the guidelines for this provision may be agreed upon by both parties if the labour relationship is not under a CBA.
  • Employers must guarantee employees’ training regarding the use of technologies, via of courses or support tools, and this training cannot constitute a greater workload.

5 Do local laws provide remote employees with more generous leave entitlements, such as sick leave? Can employees avail themselves of leave entitlements in both the primary work location and the remote work location?

No. Employees working under a home-office setup have the same rights as those working at the employer’s establishment. Therefore, local laws provide the same leave entitlements at both the primary work location and the remote work location. Otherwise, employers would be facing possible discrimination claims.

However, it is important to bear in mind certain aspects applying to home-office employees: they are entitled to to disconnect during time off and leave periods. Also, employers are not permitted to request employees to perform any tasks or to send communications during their time off. According to the home office regime, the sending of communications outside working hours may be accepted as long as the activity of the company is to be executed in different time zones or in those cases in which it is essential for any objective reason. In all cases, the worker will not be obliged to respond until the beginning of the following day, except in cases of danger or accident occurred or imminent of force majeure, or due to an exceptional demand of the national economy or of the company.

In addition, employees living with or taking care of children under 13, disabled people or elderly adults with special needs, duly evidenced, have the right to perform their tasks during compatible hours with their care tasks or to interrupt their working day. Employees who interrupt their tasks for care-giving reasons must communicate virtually and accurately when the inactivity begins and when it ends. In those cases where the care-giving tasks are not compatible with the employee’s working day or tasks, these may be reduced according to the conditions established in the applicable CBA. Additionally, care-giving tasks should be fair, in terms of gender, promoting the participation of men in such duties.

Moreover, incentives may not be established subject to the non-exercise of the right to disconnect in order to prevent employees from performing care-giving tasks. In this sense, salary increases related to supplementary hours will not be considered as incentives. Any act, conduct, decision, retaliation or obstruction made by the employer that violates this right will be considered discriminatory.

6 What are some best practices for protecting confidential and proprietary information in a remote work environment?

A home-office regime only establishes that regarding any monitoring system designed to protect an employer’s goods and data, union participation is required to protect employees’ right to privacy. This participation will be guaranteed through joint audits that include professionals selected by the union and the company.

In addition, the confidentiality of the data processing of the employees involved must be guaranteed. Therefore, union participation will be limited to preserving employees’ rights under the home office framework.

In this sense, the employer must take corresponding measures, especially regarding the software used, to protect any data used and processed by employees who are under the home office framework. Moreover, using surveillance software that violates employee privacy is forbidden.

According to the aforementioned, a recommended practice to protect employers’ confidential information is to sign an intellectual property and confidentiality agreement, considering the following aspects:

  • The implied duty of loyalty under article 85 of Law No. 20744 covers a prohibition on employees from disclosing or using their employer’s confidential information or trade secrets other than for their employer’s business purposes.
  • Law No. 24766 prohibits persons ‘who by reason of their work, employment, position, professional or business relationship, had access to confidential information should refrain from using or disclosing without just cause or without the consent of the ‘information keeper/user’.
  • However, once the employment relationship comes to an end, the employee’s duty of confidentiality ceases to apply unless he or she has signed an agreement that provides otherwise (as recommended above).
  • The agreement can extend the employee’s duty of loyalty for a reasonable period of time after employment has ended, which, according to leading Argentine case law, this extension should not exceed two years.
  • In principle, these kinds of agreements may be enforceable in the country provided that they do not go beyond what is reasonably to protect the employer’s legitimate business interests (eg, confidential information and trade secrets, customer connections and goodwill).
  • In addition, the agreement should not affect or limit the employee’s constitutional right to work. If it does, not only will the restriction need to be shorter but also, for the agreement to be enforceable, the employee will have to be financially compensated between 80 and 100 per cent of the monthly salary that the employee was receiving and must be paid each month for the entire time the restriction is enforceable.
  • The following information is exempt from protection under a confidentiality restraint: (1) information already in the public domain; (2) information related to the commission of a crime; (3) information that forms part of the employee’s skills and expertise learnt while working for the employer; and (4) information, the disclosure of which may benefit the public interest – although the public interest is narrowly applied.
  • Due to the protective nature of local labour law, it is recommended that the agreement be executed in Spanish or in a double-column format to avoid its challenge before the courts.

7 How does a remote employee affect the employer’s tax obligations? Do the employee’s activities render the employer to be ‘doing business’ in the remote location? Will these activities create a taxable presence for the foreign employer in the local jurisdiction?

According to income tax regulations, a remote employee may create a permanent establishment of his or her foreign employer if the employee renders services in Argentina for more than six months in a 12-month period. In such a case, the Argentine tax authorities may claim the taxes applicable on the income attributable to the permanent establishment. This analysis may vary if the foreign employer resides in any country with which there is a convention for the avoidance of double taxation in force with Argentina.

8 What are some best practices for tracking remote work arrangements?

To establish the best practices for tracking remote work arrangements, it is important to bear in mind that in the case of international home-office employees, the applicable law will be the one where the tasks are performed or that corresponding to the employer’s domicile, depending on which is more favourable to the employee.

In this sense, the advice of expert lawyers of the corresponding jurisdiction is recommended to adjust all the related documentation to the local regulations.

In Argentina, an important aspect is that local labour law is of a protective nature. In this sense, the ‘labour public order provisions’ cannot be waived by agreement of the parties unless they grant the employee broader rights. In addition, it is recommended that all documents related to the employment relationship be executed in Spanish (or in a double-column format) to avoid misinterpretations in the case of a conflict. Should a conflict arise, a court of law may dismiss a document written in a different language, since it could argue that the foreign language version could not be clearly understood by the employee.

To conclude, as the home-office regime is currently a hot topic, regulations and provisions will be evolving. For example, in Argentina, there are certain aspects still pending regulation, such as working day, training of personnel, transnational benefits, protection of labour information, voluntary nature of the regime, exercise of collective rights, and rights and obligations of the parties. Therefore, to track remote work arrangements, it is advisable to request the advice of specialist lawyer who is updated on current legal practice.

The Inside Track

What do you think are the most exciting and promising opportunities of remote working? How do you think it will affect the future of work?

It is clear that the home-office setup is here to stay because it benefits both employers and employees.

For employees, the most exciting and promising opportunities are savings in time and costs related to the transport, the possibility to adapt personal life and obtain more free time, the organisation of their work based on compliance with their tasks and/or goals and not necessarily in the fulfilment of a fixed work schedule, and the opportunity to spend more time with their family, among others.

Regarding employers, the positive aspects mainly relate to savings in office rent (either by closing offices or moving to smaller spaces) and in achieving greater productivity from their employees.

In your view, what are the most difficult challenges raised by the rise of remote working? How do you think employers should tackle these challenges and adapt accordingly?

One of the most difficult challenges related to the rise of remote working is that the currently applicable regime is not clear enough, and ignores certain relevant aspects.

Also, a difficult challenge is that, within the home-office framework, it will be necessary to delimit the blurred border between work and personal life, and at the same time, strike a balance to prevent technology from taking over our time.

In this sense, it will be a challenge to continue experiencing this new way of working as a lifestyle and receiving its benefits.

What do you enjoy most about practising and advising in this area?

We enjoy practising and advising this area because it is a new and dynamic topic, and is constantly changing, so this encourages us to be creative and come up with tailor-made solutions for every business need.

In addition, we must take into account the current situation of each client that asks for our advice, taking multiple aspects into consideration. In this sense, in the crisis scenario that some industries have endured due to covid-19, we have optimised our efforts to adjust to clients’ needs as we feel we are partners in their course of business and their success is ours.