Francisco A. Casanova participates in the IR Global Employment Working Virtual Series Home Work: The challenges of cross border remote working
The past year has witnessed a huge remote working experiment for many of the world’s businesses and their employees as a result of Covid-19. And, for many, these new working practices have become hugely complex depending on where in the world business owners and employees have suddenly found themselves. Almost overnight, people are in uncertain territory regarding issues involving employment law, tax, social security and pensions, to name just a few.
FOREWORD BY EDITOR, ANDREW CHILVERS
What are the consequences for a business when an employee works from home on a semi-permanent basis, transferring their residence to another country?
In Venezuela, the laws and court decisions have historically held up the importance of the territorial application of the law. And that’s why our labour legislation applies to employees as long as the employment relationship is carried out in Venezuela. Venezuelan legislation will only apply for the period that the employee actually finds themselves effectively working for an employer in Venezuela. The consequence of Venezuelan law is that the employer will have to comply with a set of obligations set out in our legal instruments. Among them is the obligation to register with the Venezuelan Social Security Institute, as well as having to make periodic contributions to that institute. This also applies to all other government operated welfare funds. And the employer will also have to take tax obligations into consideration. For example, it’s possible for the employer to have to withhold tax depending on the particular circumstance. The local occupational health and safety law also has its own set of obligations, such as the employer’s obligation to inspect their employees’ place of work. This will be rather complicated in practice given these very particular circumstances that we are going through.
Are there specific rules applicable to remote working in your country? How do they apply to domestic and foreign companies?
In Venezuela, unlike other Latin American countries like Argentina and Chile, there really hasn’t been much of an initiative to regulate remote working through new legislation. We do not expect that to change any time soon. Nevertheless, the Minister of Labour recently said that the National Assembly should look into regulating remote work. For the time being, remote working is usually handled on a caseby-case basis by the employees and their employers. Employers tend to get around remote working by using independent con-tractors, but this requires a careful analysis of the particular rela-tionship given that there is a possibility that when an employer wants to hire an “independent contractor” they might, in practice, end up hiring an employee. This is important in part because Venezuela follows the International Labour Organization’s rec-ommendations with regards to determining the existence of an employment relationship, and if a court finds that the relation-ship established with the contractor meets the elements of an “employability test”, the employer risks legal action. Therefore, any company seeking to hire someone in Venezuela from abroad should take care to understand what constitutes an employee under Venezuelan law and thus make informed decisions when entering into agreements with local individuals.
Will companies have to provide new policies for remote working? Will this include providing employees with the necessary equipment and reimbursing costs related to remote work?
In Venezuela, remote work remains an uncommon practice. It wasn’t until the COVID-19 pandemic that this began to change. Therefore, there’s a lack of advancement in this area, mainly in the legislative field. Another reason is that the country is undergoing a prolonged economic recession. As a result, people prefer to attend the workplace rather than seeking alternative solutions, given the fact that they may have not have a stable internet connection nor the hardware necessary to carry out their jobs from home. In addition, a lot of big companies offer great benefits to their employees when they turn up for work, like breakfast, for example. Regarding the question of data protection, while Venezuela has entered the digital age in practice, with new mobile banking solutions, online subscription-based TV services and a whole host of digital platforms dedicated to e-commerce, the country has not adapted its data protection laws and regulation. We are behind other nations in that respect. Our two largest data protection regulations come from what we call the Habeas Data, a constitutional protection that allows Venezuelans to request access to any and all information about them in private and public records and even request that it be deleted. The other protection stems from a law that protects people from crimes committed over electronic media or networks. With the rapid growth of the digital economy in Venezuela in the recent years, we do expect that data protection norms will be catching up soon. Finally, there’s a rule in our Labor Law which regulates work from home, which states that employers who hire employees destined to work from home must provide said employees with all the necessary instruments and tools to carry out their jobs.
This rule was not meant to cover this current situation of online remote work, but it could serve as a guide for judges and the legislative when looking at these current circumstances.