Part four of our 'Flying against the headwinds' series looks at remote working considerations during a time of crisis.
1. What happens to current employees who are stuck in foreign countries and cannot return to the office?
If employers plan to arrange employees to work from offices overseas temporarily, they should be mindful of properly documenting the arrangement. If employers intend for their employees to return to the original office once the crisis is over, they should make it clear that any temporary relocation arrangement is not intended to confer employee status with the host office. The determination of employee status can affect an employee’s entitlements to, for example, annual leave, severance payments, owed to the individual by both the original office, and possibly, the host office (if they operate as separate legal entities).
2. In a situation where an employee does temporarily work from an overseas office, which law(s) will be applicable to issues surrounding their contract?
The governing law clause of an employment contract often has a significant role in determining how the employment contract is regulated. Nonetheless, the situation will be murkier where the host jurisdictions’ laws nullify any provisions which seek to contract out labour protection under the local labour law.
3. What tax and social security implications will there be if an employer arranges its employees to work remotely?
The intermediary measures for new joiner on-boarding and current employee relocations may have implications on taxation.
From the employers’ point of view, the employer should be careful as to whether by engaging new joiners or employees remotely, they would be held to have a permanent establishment in another jurisdiction. Certain business activities conducted by the employees may also give rise to corporate tax liabilities.
From the employees’ perspective, performing work from abroad may affect their tax residence, and thus their liability to pay salaries tax or other forms of personal tax. On the other hand, the length of the employees’ stay may also affect whether or not the employers should contribute to the employees’ pension or social security accounts in a foreign jurisdiction. With the above implications in mind, employers should check whether any double tax agreement, exemptions for short visits or any other exemptions will apply.
4. If an employee cannot return to their normal place of work, can employers ask them to work remotely in the jurisdictions in which they are currently staying?
Many employers will consider invoking remote working arrangements for their staff during any crisis, mainly to ensure the safety of their staff to the extent reasonably possible and also for business continuity purposes. This could mean an employee may be working from an office in a different country or working from home or from a hotel abroad.
For most desk-based jobs, this can be easily achieved as long as employees have the ability to access the office network remotely. This would mean that an employee can work from anywhere, without geographical and temporal restrictions. However, whether remote working is feasible is one thing, whether the performance of work duties from a different jurisdiction is lawful, is another.
5. Are there legal implications for the employer when asking an employee to work remotely in a remote jurisdiction?
Prolonged working from a different jurisdiction could attract the application of local labour laws. In some jurisdictions, the mere fact that an individual is performing work physically in the jurisdiction could trigger local law rights, enabling the employee to "forum shop" for employment benefits and protections.
6. If an employer asks an employee to work in a remote jurisdiction, will that employee legally have the right to do so?
The necessity for a working visa is a factor that must be considered. In many jurisdictions, an employee may conduct a set of business related activities (such as attending meetings or conducting site visits) but any further work would require obtaining an employment visa. Failure to comply with the local immigration rules could cause not only the employee to be in breach of his or her conditions of stay, but could hinder and detriment the ability for the employer to obtain any working passes for other employees in the future. A number of countries also attach criminal sanctions to breaches of immigration law. Of course, the availability of instant communication technology and remote access has somewhat blurred the boundary between whether an employee is “at work” or not.
7. What steps can an employer take to minimise their risk when asking an employee to work in a remote jurisdiction?
Prior to arranging or approving a request for an employee to work remotely, and especially if considering placing an employee outside of his or her office base, employers should holistically measure and balance the multiple risks involved, including considering the applicability of foreign labour laws, permanent establishment taxation risks and immigration permissions.
Even if the employee holds valid permission to work in a particular country, employers should bear in mind the ambit of the permission (e.g. whether the employee can work from multiple locations within the country, or is restricted to working only in one province or one office) and also ensure the upkeep of normal protocols and procedures set up for renewal of visas. In moments of crisis, public services will normally also be interrupted, and so employers need to be extra diligent in ensuring that visas are renewed in a timely manner to avoid any complications.
8. How should I be communicating with employees, especially those who are working remotely?
The ways and content of communications with employees are ostensibly an area which is less regulated compared to other issues we have addressed. Nevertheless, oversight in this area may also have its commercial and legal consequences. From a commercial point of view, employers who can maintain effective channels for both online and offline communications with employees tend to be more successful in terms of staff engagement. Benefits of this include reduced turnover rate, improved morale and higher productivity. From a legal point of view, what and how things are being communicated to employees may have strategic implications as to how a potential labour dispute will play out.
9. Are there measures that employees can put in place to aid the employer employee relationship in times of crisis?
Experience tells us conversations are always better than confrontation when it comes to resolving work tension. In addition to the usual communication channels such as e-mails and instant messaging, employers are advised to establish an employee assistance programme for emergency or crisis management specifically. Through platforms like this, employers can clearly inform employees of their rights and obligations in times of a global crisis, and how they can get support from the employers.