Staff Working in Another Jurisdiction – Employment Law and Practical Issues for Jersey and Guernsey Businesses

A seismic shift in the employment landscape as a direct consequence of Covid-19 is a real appreciation of whether working from home ‘works’. Historic reticence or a lack of adequate technology previously prevented employers from embracing remote working but this has been replaced with the evidence that for some roles long term remote working is achievable.

This has led to an increase in staff making requests to be allowed to work from a base outside their employer’s home jurisdiction. Additionally given the restrictions on individuals moving to work in the Channel Islands, the ability to employ somebody who is not physically present in the Islands is attractive for some businesses. Our Channel Islands employment law team is increasingly being asked to advise on these issues and the indications from a poll at our recent employment law conference is that interest in this area is significant and growing.

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Posing what looks like a simple question of “what are the issues an employer faces when employing someone who works abroad?” results in a lengthy list of points to be considered. To a large extent with careful consideration these points can be resolved but detailed reflection by the employer is necessary before committing to employing somebody based permanently overseas.

So what are these issues? In general headline terms only, the employer is going to need to think about following:

Employment rights: A vexed question to understand is what will happen to the employment rights of an employee moving abroad and at what point might they pick up employment rights in the foreign jurisdiction/lose their local protections. Whether the employee is a new recruit who never comes to the Channel Islands or is a current employee moving abroad, the employer must understand the employment rights the employee will have in that other jurisdiction as well as the employer’s own obligations in the Channel Islands and under that foreign regime.

Economic substance, tax and social security: Specialist local advice should be sought to understand the consequences of having an employee based in a foreign jurisdiction. It is likely that additional requirements will be imposed and in some cases an “establishment” may be created. The tax regime will vary from jurisdiction to jurisdiction and may be dependent on the existence of, for example, double taxation agreements.

Immigration and housing issues: Where the employee is leaving the Channel Islands, perhaps on a trial basis, to work abroad the local housing and immigration frameworks can cause significant difficulties should the trial be unsuccessful and the employer wish to recall the employee. In many cases the departure of the employee will affect their right to work in or return to the Channel Islands. These should be understood and thought through in advance.

Health and safety: Although the employee is based out of the “home” jurisdiction the employer’s obligation to ensure they have a safe place and system of work continues, in addition to any additional obligations that could be imposed under the relevant foreign law. The employer needs to be able to discharge its duties albeit remotely; it is particularly important to bear in mind how to address and prevent stress related injuries being sustained by a relatively unobserved employee.

Data protection: If the employee is going to be in a country covered by the GDPR or equivalent legislation then this is likely to be relatively easy to deal with (noting concerns about data security and control) but if the employee is outside the GDPR zone, additional considerations apply and will need to be addressed and resolved.

Regulatory obligations: Many employers in the Channel Islands are regulated financial services businesses. For those employers, thought needs to be given to the exact role and tasks to be undertaken by an employee based overseas and whether those tasks can be done from another jurisdiction without causing regulatory issues under the Channel Islands regulatory regimes or creating obligations under the regime of the foreign jurisdiction.

Practical considerations: The raft of employment relations considerations around proper management of individual employees in the context of a broader team needs to be considered and weighed as to whether the proposed arrangement is practical.

Where a request has been made by a current employee, the employer must give that request due consideration. As it seems unlikely that the right to request flexible working in Jersey applies, the position across the Channel Islands is the same; the employer must clearly understand the nature of the employee’s request, give timely and proper consideration to it and carefully record its decision, being mindful not to act in a discriminatory way.

This note is an overview of some of the key issues that are frequently present but additional concerns arise in specific cases. This is an area where tailored legal and professional advice should be obtained in respect of the specific arrangement in contemplation. The advice should cover: (a) addressing these issues in a written foreign remote working policy document to sit alongside an employee handbook; (b) in each case obtaining a jurisdictional gap analysis considering the legal, regulatory and tax implications between the employer’s home jurisdiction and the proposed foreign jurisdiction; and (c) how to deal lawfully with specific requests by employees

Sarah AshGroup Partner*T +44 (0) 1481 748
Victoria PrattSenior CounselT +44 (0)1481 748

Daniel ReadPartnerT +44 (0) 1534 700

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