Remote Work Policies: Legal Considerations for Employers

Remote working abroad has legal implications for UK employers

Vine Hill Advisory Chambers has teamed up with employment lawyer Ami Naru for a regular column offering answers to readers’ legal questions on employment/HR matters. Ami will cover the latest employment issues facing the industry and respond to questions and dilemmas posed by you. In this column, Ami answers a reader’s questions about staff working overseas.

Q.One of our long-serving employees wants to work remotely from her parents’ house in Spain for part of the year. She is a good worker and we’d like to make this work. As a UK-based travel company, we have never done this before. Are we legally allowed to agree, and what are the risks?

A.

The idea of ‘work from anywhere’ sounds simple but the legal and operational implications can be significant, especially in the travel and tourism sector where flexibility has often been seen as a perk. 

Since April 2024, employees have the right to request flexible working, and that includes requests for remote or hybrid arrangements. However, a request to work internationally is not automatically granted and an employer can lawfully refuse it if it creates legitimate business or legal complications. 

As you wish to retain this employee’s services, you are minded to grant the request but it is important to note the moment your employee starts working from another country, international tax rules may come into play. For example, if they work from Spain for more than 183 days in a tax year, they may become a Spanish tax resident. This can create dual-tax obligations and require your business to register in that country for tax purposes or even create a ‘permanent establishment’, which could come with corporate tax liabilities, as well as an administrative headache.

There are also social security considerations – you may need to pay into that country’s system or obtain an A1 certificate (within the EU) to maintain UK coverage. 

The next thing to consider is that, even though your employee has a UK contract and you’ll want UK employment legislation to apply, sometimes local labour laws in the host country apply, especially if the arrangement is long-term. That may include holiday entitlements, minimum wage requirements and termination rights. In some jurisdictions, local law overrides the UK contract if the employee habitually works there. This can result in unexpected liabilities if, say, you try to dismiss someone under UK procedures that don’t match the host country’s laws. 

It is also a commonly held myth that because the employee is working remotely, the employee rather than the employer is responsible for health and safety obligations. Under UK law, you’re still responsible for your employee’s health and safety, even if they’re working remotely abroad. 

In addition, if the employee is handling customer data from outside the UK or EU, this could breach UK GDPR or international data laws. You may need to implement additional safeguards to remain compliant and review your Data Protection Policy.

Some employers are also nervous about accommodating requests for fear of opening the floodgates for other employees. It is always good practice to have a clear remote work abroad policy in place to save you from major compliance headaches later. 

Certainly, before saying yes or no to this employee, you should consider having such a policy as it not only protects your business, but shows employees that you’re engaging in good faith.

International remote work offers incredible lifestyle flexibility for employees, but the legal risks for employers are real. That said, it is not impossible to accommodate your employee’s request, which should be taken seriously. Document your considerations and seek professional advice where needed.