“I’ll be home for Christmas”

This is the season to be jolly, or at least to spend time with the family (where permissible). In this regard we have seen an in-crease in requests from employees wishing to work from different jurisdictions than those in which they are normally employed. This article deals with the issues arising from home working in foreign jurisdictions.

On the 2 December 2020 the European Commission published a communication to the European Parliament on recommendations for member states on staying safe from COVID-19 during winter.

This comes hand in hand with the Danish government taking further lock down measures in areas where infection rates are high. Part of these measures include a “strong recommendation” for private employers to allow their employees to work from home.

The Danish measures are in line with the communication recommendation to member states. The European Commission recommends member states to “encourage employers to allow people to work from home or from the place where they intend to spend their end-of-year festivities some days before and after – preferably around seven days, whenever possible. This will allow workers to self-quarantine before engaging in social or household gatherings, or events and/or before returning to the workplace”.

In principle this recommendation is beneficial for those employees who are from different jurisdictions from where they work. Particularly in the context of COVID-19 restrictions, as such employees are unlikely to have seen friends and family this year due to travel restrictions and quarantine periods.

However, the issue of allowing employees to work from different jurisdic-tions does pose several issues for employers. Whilst most employers will not want to play the role of Scrooge and allow employees some flexibility, there are a number of important factors to be considered before such arrangements can be agreed, which are discussed in further detail below.

Tax and social security
Consideration should be given to the risk of permanent establishment by the employee’s presence in another jurisdiction, which is likely to be determined by the nature of the activities the employee undertakes. The creation of permanent establishment could lead to a potential corporate and employment tax liability. In addition, the employee’s period of working in another country could give rise to income tax or social security payments in that country.

Employment rights
Employers should also give consideration to what country’s mandatory employment provisions will apply to the relationship. In Denmark, Danish law will normally apply to the relationship if the employee has their closest connection to Denmark. In making this analysis the Danish courts would look at where the employees reside and where they undertake the majority of their duties. Employers will therefore need to consider the risk of another country’s mandatory employment regulations applying to the relationship.

In addition, employers will also need to consider the requirements of an employees work permit. Would there be a breach of the permit by allowing the employee to work outside of the country named on a work permit?

Working environment
The Danish Working Environment Act also applies when an employee works from home in Denmark. This includes the rules on the performance of the work and the rules on the use of technical aids. The Danish Working Environment Authority has encouraged companies, employees and health and safety organizations to work together to find good, temporary solutions during COVID-19.

Data privacy
A further issue of employees working from another jurisdiction is the protection of data. This is of particular importance if the employee seeks to work from a different jurisdiction outside the EEA. The GDPR restricts transfers of personal data outside the EEA, unless the rights of the individuals in respect of their personal data is protected in another way. Employers will therefore need to ensure compliance with the requirements before any request to work outside the EEA is granted. With Brexit looming employers will also need to consider the implications of data privacy for employees seeking to work in the UK. At present the situation is not clear and is subject to a positive adequacy decision from the EU.

We recommend that you take specific advice on this issue to avoid the pitfalls mentioned above. It is advisable to have a written agreement in place with employees covering home working arrangements and we Mette Klingsten law firm assist in the drafting of such agreements.