Understanding employment rights oveseas becoming more important for mobile Irish workforce
Working across different national boundaries for undertermined time periods can create grey areas when it comes to employment rights and tax obligations
While jobless Irish make up the majority of those taking up positions overseas, employees of multinationals are also being sent abroad in large numbers
A greatly reduced demand for workers in Ireland in recent years, coupled with skills shortages in rapidly expanding global markets, has led to a much more mobile Irish workforce.
While jobless and underemployed Irish people make up the majority of those taking up positions overseas, employees of multinationals are also being sent abroad in large numbers, with long-distance commuting, frequent business travel and short-term assignments in other jurisdictions providing a more flexible alternative to conventional long-term secondments for both employers and employees.
But working across different national boundaries for undetermined time periods can create grey areas when it comes to employment rights and tax obligations, and employees need to be vigilant when signing contracts for overseas assignments to ensure all eventualities are accounted for.
A survey last year by PricewaterhouseCooper revealed that one in three employers don’t have an international employee mobility policy in place, and this informality can cause problems down the line, according to Davnet O’Driscoll, associate with Hayes Solicitors and member of the Lawyers International Network for Employees and Executives (LINEE), which provides legal advice for globally mobile workers.
“There’s a whole range of different setups for employees going overseas. It depends on the organisation, duration of the assignment, and whether the employee is to be seconded or transferred to another company or subsidiary, which is usually short-term with a right of return, or relocated on a more long-term basis,” she says. “Each situation has different implications for the employee’s status in the long-term.”
A new contract may not be necessary for short projects, but if an employee is to be posted abroad for longer than one month, employers are legally obliged to provide certain terms in writing before departure.
The most important thing to establish is whether the worker’s direct employer will change, O’Driscoll advises. The jurisdiction of employment should be identified clearly, especially if the position involves a lot of travel.
If there is a problem then the employee will know who to complain to, or what jurisdiction to sue in.
Employees who are relocating will generally have their current contract terminated before taking up employment on a new contract with the new company or subsidiary overseas.
“Employees should look at things like continuity of service and seniority to ensure this is taken into account, assurances as to how long the job will last, what is the position in relation to return, and what their employment rights will be, which can be very different to Ireland, depending on the jurisdiction,” O’Driscoll says.
Employees relocating to the US are particularly vulnerable, as employment law is much less protective there than in Europe and companies can hire and fire at will. Existing service may not be recognised, nor may entitlements to severance packages in Ireland.
In many instances, especially for secondments where employment remains with the Irish company, it is possible for employees to bring their current terms and conditions with them to the host country, or negotiate to “equalise” provisions like annual leave. This is especially significant for countries outside the European Union where the statutory minimum of 20 days holidays does not apply.