Working remotely abroad according to Estonian legislation

What is teleworking abroad?

Teleworking abroad means that the employee carries out his or her daily tasks outside the employer's place of business abroad, as agreed by the parties. This form of employment must be distinguished from posting, which in itself is also the performance of work outside the place of work provided for in the employment contract. In the case of a posting, the employer pays the employee a daily allowance at least equal to the statutory minimum and reimburses other expenses related to the posting in accordance with the statutory rules. As a general rule, an employee has no right to refuse to go on a posting. Teleworking is done by agreement between the parties, which means that the employer cannot force the employee to telework and the employee cannot demand teleworking.

Remote working agreement

It is reasonable for the employer to agree with the employee the general principles of teleworking or to describe the principles of teleworking in the work organisation rules so that the employee does not have to renegotiate the terms of teleworking before each teleworking assignment.

The telework agreement with the individual employee should definitely be in writing if teleworking abroad. At the very least:

• Place of teleworking - the place of work could be fixed as the actual place of work, neither too narrowly nor too broadly defined. The Employment Contracts Act requires the place of work to be agreed with the precision of the municipality. Such a degree of precision is also worth considering in the case of teleworking abroad;

• Work organisation - there could be an agreement on the organisation and control of the assignment of tasks, how and by what means to communicate with the employer and colleagues, working hours and how to monitor compliance;

• Use of work equipment - it should be agreed what work equipment the employee can take abroad, what the rules are for storing and maintaining work equipment, whether the employer will install remote management software on the employee's computer and who will assist in the event of technical failures, how the secure processing and protection of personal data and the employer's business secrets will be ensured;

• Health and safety requirements that employees must comply with. When allowing teleworking, employers must take into account the need to ensure that teleworking is carried out safely from a health and safety perspective. Remote working is carried out outside the employer's premises, which makes it difficult for the employer to check the employee's actual working environment and whether the employee is observing health and safety requirements. In the country of destination chosen by the employee, health services may be difficult to access or of low quality. The employer may provide guidance to the employee on how to sign a health insurance contract.

• Period of teleworking - when the employee starts teleworking abroad and when he or she returns.

Working environment and safety at work

If the work is carried out remotely, the employer shall ensure compliance with the health and safety at work requirements, as far as this is possible given the specific characteristics of telework. The Occupational Health and Safety Act devotes a specific paragraph to the employer's obligations in the case of telework.

It obliges the employer to:

• set out in the risk assessment of the working environment possible risks arising from the nature of work and, considering the particular nature of teleworking, apply measures for preventing or reducing an employee’s health risks;

• supervise the employee before authorising teleworking and on a regular basis, as appropriate and taking into account the specificities of teleworking;

• ensure proper work equipment for performance of duties;

• organise medical examinations of employees in the same way as at the employer's usual place of work;

• investigate occupational accidents and occupational diseases;

• pay sickness benefit in accordance with the law.

The employer must critically assess whether it is able to meet all these obligations, given the employee's teleworking arrangements.

The law states that the telework workplace is to be set up by agreement between the employee and the employer. It is therefore also the employee's responsibility to design a suitable and comfortable working environment.

Applicable law

When an employee telecommutes from abroad, it is important to define the law applicable to his or her employment contract. These issues are still relatively straightforward if the place of teleworking is in another EU Member State.

The choice of applicable law must be based on Regulation (EU) No 593/2008, the Regulation of 17 June 2008 on the law applicable to contractual obligations (Rome I) and the Private International Law Act. Under the Rome I Regulation, the parties may agree on the law applicable to the employment contract. However, the choice of law must not deprive the employee of the protection afforded to him or her by provisions which cannot be derogated from by agreement on the basis of the law which would have been applicable in the absence of choice.

Also, under our own private international law, in the case of an employment contract, the choice of law must not lead to the deprivation of the protection afforded to the employee by the mandatory provisions of the law of the country which would apply in the absence of choice.

In the absence of a choice of law, the employment contract is governed by the law of the country where:

• an employee normally does his or her job when carrying out the contract, even if he or she is temporarily working in another country;

• is the place of business through which the employee is recruited, if the employee does not normally work in the same country.

However, the foregoing does not apply if it is clear from the circumstances that the employment contract is more closely linked to another country. In that case, the law of that other country will apply.

However, if an employee wants to telework outside the EU, it is worth being particularly careful about allowing him or her to do so. It is important to do the homework beforehand and find out whether a tourist staying in the country on the basis of a visa or other type of right is allowed to work there in the first place, and whether the person needs to apply for a different type of visa or work permit. If the person breaks the rules, he or she may face local sanctions, which may not be limited to expulsion.

While penalties for illegal employment in the country of residence generally apply only to the employee who breaks the law, the consequences of tax law infringements related to employment can also extend to the employer. The question of who, where and in what proportions must pay the employee-related taxes, as well as health insurance contributions, needs to be clarified in advance, both before moving to an exotic third country and before moving to another EU Member State for long-term teleworking. Depending on the nature of the work, the level of responsibility and the length of the period of employment, the employer may be required to register as a non-resident employer in that country, to register a permanent establishment, branch or subsidiary or otherwise to comply with requirements under local tax law or an international agreement.

If you need any support in preparing an agreement, please feel free to contact us.