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A perfect storm of Brexit, pandemic-induced reappraisal of working practices and severe staff shortages have led many UK employers to look in more detail at the feasibility of employing staff overseas.

Advances in remote working technology have of course made employing overseas staff more practical, and the concept of working with staff that you only ever “meet” online has become increasingly acceptable. I know of businesses employing invoicing staff in the Philippines and marketing staff in South Africa.

Many practical issues remain, however, including delivery of training, monitoring performance and managerial challenges associated with lack of face-to-face interaction with overseas workers.

There are a number of legal issues that need to be thought through as well. First, immigration law. Post Brexit, employing a worker from South Africa, the Philippines or some other further flung part of the world is no different from employing a French or Spanish citizen. Our near neighbours are not treated any more favourably by current immigration regime. However, if a worker is engaged outside the UK and remains physically based overseas throughout the employment, immigration laws are not engaged. Even though 100% of that worker’s output may be “landing” within a UK business, the worker is not deemed to be working in the UK for immigration purposes. Occasional trips to the UK for training, where the employee is not performing any productive work, are also unlikely to be considered to be working in the UK and therefore would not engage immigration laws.

So far so good, but thought needs to be given to employment laws in the country in which the worker is based. A UK employment contract can specify a place of work anywhere in the world, so contractually UK law will apply. However, the employment protection regime of the particular country in which the employee is based is likely to take precedence if, for example, the employee is to is to be made redundant in the future. Local advice also has to be taken in relation to taxation and national insurance equivalent of the country in which the worker is based. In case of accident, public liability insurers should be informed of the location of workers and, if necessary, alternative policies taken out if overseas workers are not included within existing policies.

An additional issue arises where overseas staff are senior and in a decision-making capacity in relation to the business. In that event, the taxation authorities of the country in which the employee is based may take the view that the UK business has established a branch in that country, leading to potential liability for corporation tax equivalent.

Superficially therefore there are attractions in off shoring roles, but thought needs to go into the practicalities and legal considerations, particularly where it is envisaged that the overseas employment is likely to be long-term.

The Future of Work Seminar

Tuesday 20th September, 09:30 – 11:30 at The Army and Navy Club,  Pall Mall, London

Navigating COVID-19 and its aftermath is one of the biggest business challenges of our time and as organisations are now looking ahead to life after the pandemic, they are choosing three options for returning to the workplace: call everyone back to the office, adopt a hybrid model, or provide more fully remote opportunities.

During the session we will look in detail at;

The legal, practical and social consequences of returning staff to the office and

The future of work in general, both short and long-term

The implications of having staff work remotely from overseas

The seminar will also give you the opportunity to share your experiences of these topics with other delegates.

The cost for one place will be £130 + VAT with discounts for multiple bookings.

For more information or to secure a place, please email sarah@sherrardslaw.com

Meanwhile, if you would like further information on any of the topics detailed in this blog please email advice@sherrardslaw.com or call the office on 01273 834120 to talk to a member of our team.