Can Universities Require Employees to Be Based in the UK?

With remote working becoming ubiquitous in the sector since the introduction of the first lockdown, and universities now casting a cautious eye at current rates of infection as they try to plan for a possible full return to on-campus learning in September, careful thought needs to be given as to how a policy requirement to be based in the UK can be justified.

We spoke on this subject at this year's (entirely virtual) Universities HR Conference in May, and took the opportunity to poll those in attendance as to whether their institutions had any requirements for staff to be either:

• resident in the UK for the performance of their duties; or
• present on campus during working hours.

The results were as follows:

• Does your standard template contract include any express requirement to be resident in the UK for the performance of duties?

- Yes (44.9%, 31 responses)

- No (34.8%, 24 responses)

- I don't know (20.3%, 14 responses)

• Does your standard template contract include any express requirement to be present on campus during working hours?

- Yes (21.7%, 15 responses)

- No (66.7%, 46 responses)

- I don't know (11.6%, 8 responses)

It therefore seems that there is a wide degree of variation between HE institutions as to the extent to which they seek to regulate employee presence on campus or in the UK during working time. The level of uncertainty reported was also quite notable, with a significant minority of HR managers not knowing what the contractual or policy positions were. This is not to criticise the respondents who did not know the specific answer. After all, anyone with a passing knowledge of the sector's approach to HR policies in general will appreciate that they tend to be more detailed and more comprehensive in scope in comparison to, say, private commercial organisations. Also, given that the conference was taking place in May 2021, it is fair to say that anyone in HR practice at a university had plenty of other matters on their minds at the time!

However, given that nearly half of all delegates reported a contractual obligation to be based in the UK for the performance of contractual duties, it may be interesting to consider whether this creates any potential legal risks and, if so, what may be the best ways to manage them.

The Risks of Requiring Employees to Be Based in the UK

Probably the most obvious potential legal risk from a requirement of UK residence is that it is likely to amount to a "provision, criterion or practice" (PCP) for the purposes of an indirect discrimination claim under s19 Equality Act 2010. It should be relatively easy for a non-UK national to demonstrate a disadvantage to someone of their nationality compared to a UK citizen. Once demonstrated, the focus would then to the question of objective justification. Given that nationality is part of the definition of race for the purposes of the Equality Act, such a PCP would amount to indirect race discrimination unless objectively justified.

Of course, objective justification arguments are necessarily fact-specific. Each university will have its own particular aims when using such a policy. However, there are likely to be a number of areas of common ground. Some legitimate aims may include:

• avoiding the risk of employees acquiring additional statutory rights in the jurisdiction in which they are based
• avoiding the risk of creating a permanent establishment in the other country and therefore having to pay corporation tax there (which is particularly significant with more senior employees who are able to enter into contracts on the university's behalf)
• avoiding having to engage in overseas tax and social security jurisdictions
• avoiding issues with the employee's eligibility for insurance or pension benefits if the rules of the scheme only apply to UK-based employees
• ensuring compliance with government or Office for Students' guidance or requirements regarding on-campus teaching
• avoiding complicated management of personal data transfer across borders
• avoiding the cost of having to deal with all of these issues.

There may also be practical issues about the delivery of teaching and/or research remotely, although that argument may now be harder to make after more than a year of remote working for many.

As is often the case in indirect discrimination claims, the legitimate aims aspect of objective justification is likely to be the easier part to address. Indeed, the temptation amongst senior decision-makers might even be for the thought process to stop at the point of having established those clear legitimate aims without consideration of the other key aspect - that the PCP is proportionate. However, a careful review when the policy is being proposed should often lead to a reasonable conclusion that it is indeed proportionate and that the policy is therefore objectively justifiable. Given what a minefield it can be to have employees working from overseas jurisdictions, it is likely to be quite difficult to identify less impactful ways of achieving the aims set out above, indicating that a requirement to be UK-based would be proportionate. However, that justification exercise becomes more difficult in hindsight. A careful impact assessment at the time of implementing such a policy would greatly help to minimise the potential risk.

For specialist legal advice on the above, please contact Bob Fahy in VWV's Higher Education team on 07500 686163 or complete the form below.

This article first appeared in University Business in August 2021.