Lockdown abroad… liabilities, expectations, tax

With lockdown continuing, employees and employers are asking “what happens if you lockdown in another country”?

There are multiple considerations where employees decide to lockdown in another country;

  • Health and safety responsibilities
  • Tax considerations
  • Employment and quarantine rules

There are clear ‘no travel’ guidelines in place currently; and the quarantine rules (by country) for returning from a trip abroad will also need consideration by both employer and employee when anyone who is currently abroad says they wish to remain away. Any period of quarantine also needs to consider whether it can be covered by working from home or whether paid holiday or unpaid leave are required to cover that period.

Where employees have decided on lockdown in another country they will need to engage with their employer and agree how they will work from that location; and what communication structures will be in place to support that way of working. If working from home (albeit abroad) is not possible, employers are free to require annual leave is utilised (providing twice the notice to the period of leave) as well as periods of unpaid leave or even short sabbaticals may be considered.

There are wider considerations for both employer and employee around health and safety responsibilities (how to ensure the employee is working safely if they are continuing to work from home), potential double taxation and social security considerations in the host country, potential employment continuity where someone may find themselves abroad (and choose to stay abroad for lockdown) but are unable to work from that location. In these circumstances, employee’s may find themselves vulnerable to an employer’s request for them to return to work (incorporating a period of quarantine) – that said, employers should not rush into termination decisions in these circumstances. 

Questions of reasonableness and proportionality will apply where employees have more than 2 years’ service and therefore employment rights protection.

One size won’t fit all and each case will need consideration. Where employees can work from home (even if abroad), it would be wise to allow that and keep it under review (long periods of several months abroad may have tax implications). Where an employee can’t work from home/abroad, the employer may consider periods of leave and/or request the employee returns to the UK and follows the required quarantine rules.

Ultimately, this is a time for discussion and employers will need to take a pragmatic approach until any alternative guidance or rules come into place.