Return to the office or work from the beach?

Thanks to technological advancements over the past few decades, it’s become evident that many jobs no longer require employees to be physically present in the office. With tools like video conferencing and cloud-based collaboration platforms, working from virtually anywhere has evolved from a mere possibility to a reality for countless professionals. The traditional office environment has been reshaped, leading to a significant rise in remote and hybrid work models.

Return to the office

Employers are increasingly encouraging their employees to return to the office, driven by concerns over losing company culture, struggling to effectively supervise junior staff, and challenges in engaging new recruits. However, employees appear to be seeking more hybrid and flexible work arrangements, often resisting a return to the traditional office model. This creates a disconnect between employers and employees. So, how can employers effectively encourage workers to return to the office?

The first step for any business is to review their employment contracts and policies. In most cases, an employee’s contractual place of work remains their office address. However, complexities arise, especially in light of the COVID-19 pandemic, which led many employees to become accustomed to hybrid working for an extended period.

For employees with specific concerns, it’s important to remind them of their statutory right to make a flexible working request. This is especially relevant for employees who may need formal arrangements to work from home due to childcare or other personal reasons. For more information, please refer to our recent blog on the right to flexible working and the proposed changes under the Employment Rights Bill.

We have found that there is no one-size-fits-all solution. However, what’s clear is that it’s crucial for employers to have a clear, evidence-based rationale for their chosen approach.

Work from the beach

Employees are increasingly exploring new possibilities for where they can perform their jobs. One question that’s becoming more common is whether employees can work from home—except, in this case, their “home” is located overseas.

While it may appear to be an appealing option for employees seeking the flexibility of living in a different country, there are numerous factors that both employers and employees need to carefully consider before agreeing to such an arrangement.

1. Visa considerations

The first and perhaps most crucial question is: does the employee have the correct visa or work permit to allow them to work from the country they are requesting to work from?

We will always recommend taking specialist immigration legal advice both in the UK and in the country the employee wishes to work from. Practicalities around immigration requirements and who will bear the associated costs may also need to be ironed out in any overseas working agreement.

2. Legal implications

If an employee works from another country, even for a short period, they can become subject to the jurisdiction of that country and start to benefit from local mandatory employment protections.

Always take local advice on employment law and encourage employees to seek their own advice as well. We would recommend that any overseas working arrangement is agreed in writing and that it explicitly sets out factors such as: (1) the employment contract being subject to UK law and jurisdiction; (2) who will be liable for any additional income taxes or employee social security which may become payable because of the employee’s decision to work from oversees; and (3) the employee’s date of return to the UK.

3. Tax implications

Employers will need to carefully consider the risk that if an employee works remotely from another country, it could create tax obligations for the employer in that country. Typically, the biggest concern for employers is around whether an employee’s presence in the host country could create a “permanent establishment” in that country (i.e. a taxable presence of the employer entity). If a permanent establishment is created, this can trigger local corporate tax liabilities, so it is important that this risk is monitored, and local tax advice is sought as to the risk materialising. We recommend considering the duration of the relocation request as, broadly speaking, the shorter the relocation, the better for the employer.

4. Insurance implications

Employers will need to make sure that group insurances are not impacted or invalidated. We suggest speaking to insurers or benefits brokers in relation to the company’s liability insurance and benefits specific to the employee. Will the employee continue to be covered under any relevant schemes whilst working abroad or will you need to obtain additional insurances to cover any risks whilst the employee works from another country?

5. Health and safety

It is important that an employer considers local health and safety requirements. These could be more onerous than the equivalent UK rules.

6. Data protection implications

Businesses need to be aware that the employee’s presence in a foreign country could give rise to data protection considerations, particularly if their role involves processing personal data. Different countries have different data protection regulations, and failing to comply with these laws could lead to serious consequences.

In summary

Employers need to carefully weigh the pros and cons of allowing employees to work from abroad. On one hand, it can be a great way to retain talent by offering them flexibility and the opportunity to work in different locations. On the other hand, managing a remote team and a disbursed workforce spread across multiple time zones and countries can come with significant challenges.

Before making the leap to remote work abroad, businesses and workers need to ensure they fully understand the regulations, set clear expectations, and have the necessary infrastructure in place to support this new way of working.

How we can help

If you need assistance or have any questions on remote working, or considering an employee’s request to work from abroad, please contact our employment team.