Summertime usually means an influx of employees booking in annual leave to take a break from the workplace. However, some employees are looking to make the holiday feeling last a little longer by working remotely from their holiday destination. Given the damp start to this summer in the UK, it’s not surprising that employees are looking to maximise their holiday allowance and spend more time in the sun by combining their work and annual leave.

Flexibility in work remains a big employment law trend and while we have seen larger organisations calling for a return to ‘normality’ and in-person working, many employees continue to work flexibly and remotely. The COVID-19 pandemic brought both the possibilities and benefits associated with remote working into much sharper focus and has encouraged many employees to request working arrangements that they might not have thought to be possible a few years ago.  

From an employee retention perspective, allowing employees to work remotely from another country can help to give organisations a competitive edge as well as reducing employee turnover and improving staff morale.

There are potential legal risks associated with employees working abroad as well as some practical steps that employers can take to limit these risks. As we will outline below, the safest approach is to take expert UK and local advice before approving any remote working arrangements. However, some employers may be comfortable with taking on risk where the employee has the legal right to work in the host country and the arrangement will only last a short period of time.

Some practical considerations to keep in mind with regards to remote working arrangements could be:

• The employee having a legal right to work in the host country.
• Jurisdictional issues, and whether the employee will benefit from local employment law protections.
• Tax and social security considerations if the employee is outside the UK.
• The risk of the employer creating a ‘permanent establishment’ for tax purposes, particularly if the employee’s role involves negotiating and concluding contracts on behalf of the employer.
• Consider health and safety requirements.
• Data protection considerations.

Ultimately, if the remote working arrangement only lasts for a few weeks, it is likely to be low risk. However, the risk will increase the longer that the arrangement continues, and so you should keep in regular contract with the employee and regularly review the efficacy of the working arrangement.

Given the number and complexity of these legal issues, it is sensible to consider introducing a policy, especially if you anticipate more than just the odd request. A policy can be a helpful way of ensuring that a proper process is followed and that all requests are dealt with appropriately, consistently and promptly. We would also advise entering into a short written agreement with the employee, setting out the basis on which the request has been agreed before the employee begins working abroad to avoid any crossed wires or confusion from either party.

If you would like to discuss any of these issues in further detail or require a Remote Working policy or Remote Working Agreement, please do get in touch with a member of our Employment team.