There are a number of considerations for employers who wish to assign their employees to work abroad. These will include meeting the immigration requirements of the country of posting and any employment laws which are in place in that country. Often employers will develop a relocation policy or similar document to deal with all of the conditions and practices applicable to the posting.
It is usual for a number of issues to be agreed prior to the posting which will include:
1. Remuneration including any incentive payments, any additional benefits relating to relocation and the currency of the remuneration.
2. The tax position – the length of the posting may affect the employer’s tax status within the UK and this should be clarified if necessary.
3. National insurance contributions and benefits – the regulations in relation to this aspect of a posting are constantly changing and therefore both parties should ensure that the situation is clarified to ensure that any social security contributions to be made are paid in order that any state benefits can be preserved.
4. The law applicable to the posting should be clarified. The parties to a contract may choose which law will determine their respective rights and obligations. However, even if the parties agree that the law of the country outside the UK is to govern the contract a UK employee cannot be deprived of any UK statutory employment rights that may apply. Where employees carry out duties in more than one country, the place where the employee habitually carries out their work will be decided by the length of time the employee spends in each location and where they have worked the longest.
In relation to the enforceability of the employee’s UK statutory rights, it is generally necessary to look at the territorial jurisdiction from which the UK statutory employment right is derived to ascertain whether the employee can bring a claim to protect or enforce their rights within the Employment Tribunals in this country.
Whilst employees and employers are free to agree to enhance these conditions, they may not reduce or exclude them. Therefore the right of an employee not to be unfairly dismissed under UK employment law cannot be avoided by the parties agreeing that another country’s law will govern the employment contract.