Remote Work Legal Issues

Remote Work Legal Issues

Employment Law & Remote Teams

Long gone are the days of 9-5 with the boss in the corner office and the team behind their desks.  Today’s workforce is diverse in background, often with multiple specialities, working anywhere at any time.

Building a first-class team is more than just finding the best people across the globe.  Having a modern, remote-working team requires managers to consider the legal issues involved in hiring and managing a geographically diverse employee base.

Philip Van Den Heever is an Employment Law specialist at Frank Law, and he shares some thoughts on how to avoid legal issues with remote teams.

First Step Before Hiring Distributed Teams

Being able to leverage talent from across the world is a wonderful opportunity for businesses in the 21st century. Companies are no longer bound by geography and can build their teams based on merit, not address. However, If a business chooses to fill roles with workers from abroad, legal considerations should be planned for and discussed.

For some businesses, aside from access to highly skilled workers, there may appear to be financial benefits to employing someone from overseas. Nevertheless, in some circumstances, the employer/employee relationship will still fall under the Fair Work Act, regardless of where the employee works and resides.

Other companies may choose, or be required by the overseas country, to open a foreign subsidiary to employ its nationals. This still doesn’t mean that the Fair Work Act won’t apply, and sometimes businesses will have to manage competing or conflicting local and Australian laws.  

Crucially, Australian law is concerned about whether there is a significant employment connection with Australia. Hiring and HR managers should get proper advice on the potential legal issues before deciding to employ from abroad and shouldn’t assume there are always clear benefits from doing so.

Local Laws & Regulations For Distributed Teams

When employing abroad, managers should be aware of any employment laws and regulations in the overseas country that might be binding.

European countries, in particular, have very favourable employment terms such as medical insurance, annual leave entitlement, and sick leave that may not be typical for an Australian worker.

If the laws are more favourable in the overseas country then employees may be incentivised to seek the protection of those laws over less favourable Australian entitlements.

Conversely, some countries have very little employee protection when it comes to dismissal.  Businesses should think very carefully about how they structure their overseas hiring to accommodate the differences in law between the two countries, to minimize risk.

Unfair Dismissal Laws For Overseas Employees

Different countries have different laws regarding dismissal, sometimes even different states within the same country.

If businesses have employees working in multiple jurisdictions, they might assume they are entitled to treat them with the same set of regulations.

The Fair Work Act places personal responsibility on managers and HR managers for their decisions, so individuals can be held liable if they make decisions based on overseas law when Australian law applies. This is why careful planning and taking expert legal advice is essential when hiring overseas.

Considerations For Selecting Which Laws Apply

A court of law would look at two key questions when deciding which country’s law applies:

  1. What is the employer/employee relationship as a whole?  Is it sufficiently connected to one country or another?
  2. What is in the public interest? For instance, if the case before the court involves a discrimination complaint, the court may decide Australian laws apply because that particular discrimination is not recognized in the other country.

Information Security Considerations With Overseas Employees

All businesses will have their data, privacy, and information security paperwork in place but they should consider how, or even if, they are enforceable with an employee overseas.  Enforcing Australian orders in foreign territories is difficult and expensive.

Hiring managers should carefully structure their systems and processes to decide who is allowed to see what.  It is much easier for managers to trust someone they engage with every day in the office than someone they may never have met in person overseas.  Businesses should therefore think about how they will protect sensitive information and what roles are better suited to being based at the main office.

Regardless of whether there is an employment agreement with security stipulations, based in Australia or another country, the enforcement of it can be problematic and costly.

Foreign Jurisdiction With Overseas Contractors

The line between employee and contractor is already blurred.  The assessment used to determine whether someone is an employee or a contractor is multifactorial so when businesses add in a foreign jurisdiction, it complicates matters further.

Some businesses use foreign contractors to their benefit but if it isn’t carefully considered it can cause massive headaches and the applicable contractor/employee laws in the overseas country also need to be understood.

Please note that none of the information shared in this article constitutes legal advice.  You should engage your own employment law expert to discuss your particular situation.

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