7.1 Digitalisation and Remote Work: New Opportunities for the Demutualisation of Risks to Workers

Remote work and, more specifically, telework have risen to the foreground since the pandemic. Even if post-pandemic figures point towards a decrease in telework, the transformation of jobs and the possibilities given by new technologies have created new realities centred around the remote performance of work. Its significance as an instrument in the context of work–life balanceFootnote ¹ or the appearance of the concept of digital nomadFootnote ² are but two examples among others. Remote work has thus not only become more important because of its greater weight between the different modalities in which work is organised. It has also come to the foreground of social, political and academic interest.

One of the different notions it challenges is the notion of workplace through its virtual extension from the premises or establishment of the employer (or the employers’ client) to the home of the worker or even any other place allowing the connection with the employers’ organisation. In Labour Law, the workplace is a legal concept which has significance in different ways. While through the right of ownership, as a means of production, it enables the powers of the employer, it serves as a concept limiting the scope of application of the exercise of those powers, even if new technologies involve a relativisation of this spatial limitationFootnote ³. It also serves as a reference for the exercise of employers’ responsibilities, above all in terms of health and safetyFootnote ⁴. The workplace is also generally taken as a reference for the recognition of rights of representation of workers, sometimes translated through the concept of establishment of the employerFootnote ⁵. Finally, as developed hereunder, the workplace is an important notion in establishing the applicable law in cross-border employment situations.

The surge of remote work involves some disruption in the application of the rules depending on the concept of workplace and their function of guaranteeing workers’ rights and interests and defining responsibilities of employers. This surge also changes the framework within which employer responsibilities are exercised. The diffusion of the notion of workplace increases the possibilities for employers to evade their responsibilities and decrease individual and, above all, collective response through invisibilisation, atomisation and the shifting of costs in terms of means of production, health and safety, and so on, a process that amounts to the demutualisation of the risks surrounding workFootnote ⁶.

But when remote work has a cross-border character, that is, when worker and employer find themselves in different legal jurisdictions, the diffusion of the notion of workplace (and correlative rights and responsibilities) acquires an additional dimension, which is the possibility to apply to the worker an employment and social protection regime which can be more beneficial to the employer than the regime applicable to the worker if she were working at the premises of the employer or if she were working remotely, but in the same jurisdiction. Generally, the surge in technologies and new types of jobs increase the easiness with which remote work can happen in a cross-border situation and creates new possibilities for companies to delocalise the workforce, without delocalising physically themselves, opening new establishments abroad or extending supply chains internationally through subcontracting. Delocalisation happens thus without almost any movement of capital or workers, escaping more classical modes of migration, and shifts the legal perspective from the provision of services or the sale of goods towards the contract of employment.

While this phenomenon does not seem generally extended yet, it cannot be dismissed as purely potential, given already existing practices and the awareness of companies to the new management techniques it offersFootnote ⁷. Some states have recently started to provide special visa regimes for ‘digital nomads’Footnote ⁸. While virtual delocalisation, also coined ‘telemigration’Footnote ⁹, does not necessarily aim to decrease labour costs or the demutualisation of risksFootnote ¹⁰, it is undeniable that those possible consequences can be seen as strong incentives to have recourse to that practice. Also, as shown in the different court decisions analysed hereunder, legal problems and conflicts of laws in cross-border remote work are not as much a ‘sleeper’ as a few years ago, when recent literature on the matter started to appearFootnote ¹¹.

Some forms of demutualisation through legal means taking advantage of disparities between jurisdictions can affect general labour conditions (salary, working time, etc.), or the legality of arbitration clausesFootnote ¹², but it would not be unreasonable to imagine that status of employment can become a central concern. As an important range of labour rights depend on the recognition of that status, offshoring work to jurisdictions allowing for easier application of the status of independent contractor might become an important demutualisation practiceFootnote ¹³. And considering that telework or remote work might involve a certain relativisation of the notion of subordination, as argued by Adalberto Perulli in his chapter in this book, doubts about a consistent recognition of the status of employee across borders cannot be dismissed.

Moreover, employers have not only more choices of jurisdictions under which the working conditions of their employees could be regulated, but they start also having a larger workforce from which to recruit. They can ‘enlarge the labour pool’ to workers located in other countries. This does not only in itself put pressure on wages of certain sectors because of the increase in competition, but also by enlarging possibilities to employ workers in countries with lower labour protections, without the need to physically relocateFootnote ¹⁴. As such, this increases the possibility for social dumping. Not only social dumping in its ‘lighter’ meaning, as used, for example, by Catherine Barnard when she refers to the possibility to replace workers by cheaper onesFootnote ¹⁵ and increase the probability of movements keen to races to the bottom. But it increases also the possibility of social dumping as defined by the European Parliament in its Resolution of 14 September 2016 on social dumping in the European Union, according to which ‘the concept covers a wide range of intentionally abusive practices and the circumvention of existing European and national legislation (including laws and universally applicable collective agreements), which enable the development of unfair competition by unlawfully minimising labour and operation costs and lead to violations of workers’ rights and exploitation of workers’.

One could argue that the possibility to offshore new types of jobs towards countries with lower standards of living is not to be seen as something negative, above all from the perspective of the countries seeing job opportunities grow, and generally of jobs which could be considered as being of a higher qualityFootnote ¹⁶. However, one has also to consider the disrupting effects this might have in the offshoring countries, without guaranteeing perfectly proportional corresponding benefits in the receiving countries. Moreover, possible benefits might not offset the potential problems caused by the lack of physical link between employer and worker abroad, and the consequent precarious situation of isolated workers. And this above all when considering that the work provided might be ‘gig work’ or crowdwork in an important number of casesFootnote ¹⁷. Another dimension to be considered is the imbalance existing between the (legal or real) possibilities of employers to virtually delocalise abroad and the right of workers to perform cross-border remote work. Most court decisions until now seem to refuse recognising such rightFootnote ¹⁸. Also, the international element adds to the deficit and difficulties for solidarity between workers. The possible application of different national laws might have a negative impact on representation and collective bargaining and might involve a fragmentation of that representationFootnote ¹⁹. Moreover, the surge in cross-border remote work has also brought forwards problems in terms of adscription to social security systemsFootnote ²⁰, and this might also be another factor incentivising delocalisation, or hampering performance of cross-border telework as a right of workers. Finally, the new cross-border situations that are created by the surge in remote work present challenges to legal certainty in terms of the laws applicable to the different relationshipsFootnote ²¹, as well as where possible actions can be brought in case of conflictFootnote ²².

All those problems are increased by the diversity in remote work situations with a digital component. The determination of the applicable law to permanent cross-border remote workers, digital nomadsFootnote ²³, workers teleworking only partly abroadFootnote ²⁴, posted teleworkers, cross-border crowdworkersFootnote ²⁵ or platform workersFootnote ²⁶, as well as their vulnerabilities, differs greatly.

The following section contains a brief discussion of the existing rules determining the applicable law on the contract of employment in cross-border situations and argues that they are not adapted to the new realities of the enhanced digitalisation of remote work. The third section is dedicated to analysing how the existing framework could be reinterpreted to bring it more in line with those new realities, starting from the discussion of existing cases where new approaches were proposed in litigation. The last section briefly argues that remote work is another field where we must think about new techniques for the extraterritorial application of labour law.

7.2 Cross-Border Remote Work and the Inadequacy of the Traditional Conflict of Law Rules Concerning Employment Contracts

According to Article 8 of the Rome I Regulation, which defines the conflict rules when a case is brought before the courts of the Member States of the EU, the applicable law to an employment relationship is that which has been contractually chosen by the parties. This connecting factor has only a relative importance, however, because (i) in the absence of choice, other connecting factors apply and (ii) in any case, provisions which can only be waived to the profit of the worker (mandatory provisions) which would apply according to those other connecting factors have precedence on the applicable law chosen by the partiesFootnote ²⁷.

According to Article 8(2) of Rome I Regulation, thus, in the absence of choice of law, the ‘main’ applicable law is the ‘law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract’, being understood that this law will not change in case the worker is temporarily employed in another country. Therefore, in a situation where a worker is hired to work remotely from the country where she resides for an employer in another country, the law of her country of residence would applyFootnote ²⁸. According to the CJEU, it is the place where the worker fulfils her economic and social duties and where the business and political environment affects employment activitiesFootnote ²⁹.

On the other hand, it would be less clear if cross-border hybrid forms of work, where the worker works remotely in one country and works part of the time at the employers’ location in another country, would involve the application of the law of the former. According to the jurisprudence of the CJEU, the ‘habitual place of work’ is the one where the worker carries out the ‘essential’ part of her duties, which would be a question of importanceFootnote ³⁰, even if according to earlier jurisprudence the amount of time worked at one physical place, or another, is not to be ruled outFootnote ³¹.

Furthermore, when the applicable law cannot be determined with reference to the ‘habitual place of work’, the ‘contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated’. While the CJEU has interpreted that alternative criterion in a restrictive wayFootnote ³², it seems that this definition might be applicable in the case of digital nomads, because their moving between different places without being possible to distinguish in which of the places the essential part of their duties is performed makes it impossible to ascertain the habitual place of work.

Also, Article 8 of the Rome I Regulation contains an ‘escape clause’, according to which ‘where it appears from the circumstances as a whole that the contract is more closely connected with [another] country […], the law of that other country shall apply’. In application thereof, another law than the habitual place of work or the place of engagement could apply if it is showed that the centre of gravity of the relationship is situated in another country. For this, elements like the place where taxes are paid or where social security coverage is given, or the parameters relating to salary determination and other working conditions, have to be taken into consideration, applying a qualitative, and not quantitative, approachFootnote ³³. In 2020, the Dutch Rechtbank Midden-Nederland applied the escape clause in a case where the worker was habitually (tele)working in the Netherlands for a company situated in London, after having worked ‘hybridly’ in EnglandFootnote ³⁴. The plaintiff considered that the termination of her contract was not valid under the law of the Netherlands and, thus, claimed the payment of salary. The court deemed the law of England and Wales applicable to the contract, despite the fact that taxes and social contributions were paid in the Netherlands, because (i) the decision to move to the Netherlands was made by the worker to allow her to stay with her husband, and was ‘only’ tolerated by the company which had no interest in such a move; and (ii) the company had no establishment or any activity in the Netherlands. The court recognised that, while Article 8 of the Rome I Regulation had as an objective the protection of the weaker party, given the circumstances of the case, the worker could not claim such protection. While this decision can be criticised for not interpreting restrictively the escape clause and asking for ‘interest’ of the company in cross-border remote work for worker protectionFootnote ³⁵, it shows that other considerations can be taken into consideration, like the location of the activity of the company.

The Rome I Regulation only operates within the sphere of the EU, but the Private International Law rules to establish the law applicable to the contract of employment in the rest of the world tend to follow the same principles. As a few examples found in the literature, one can cite CanadaFootnote ³⁶, countries of North-Eastern AsiaFootnote ³⁷, TogoFootnote ³⁸ or IndiaFootnote ^39, Footnote ⁴⁰.

Even if the overall logic of those connecting factors is the protection of the workers as a weaker party in a contract, this is not done directly, but only through the application of a logic of proximity with the physical place of work or the close connections with the place where the relationship is principally embedded. The logic of protection and the logic of embeddedness coincide in case of work performed at the premises of the employer but can diverge in case of cross-border remote work, contrary to what the CJEU seems to understand in KoelzschFootnote ⁴¹. The application of the habitual place of work as general connection factor and the strict interpretation of the exceptions have as consequence that, in case of cross-border remote work, and above all telework, the presumed link between the place of work and the activity of the company can be severedFootnote ⁴². As such, the ‘habitual place of work’ is not necessarily the place where, according to the CJEU, ‘the business and political environment affects employment activities’.

Therefore, the territorial character of the application of norms, which seems to be confirmed by the principle of the habitual place of work as connecting factor, allows employers to delocalise employment in countries with less strict protection through permanent or at least long-term remote work, without the necessity to have any activity in those countries (nor in the country of the business or establishment, for that matter). This also raises the question of equal treatment between employees of a same company, who might see applicable different regimes in function of their place of work, while possibly being part of the same ‘virtual’ team. And this runs contrary to the principle of equal treatment between teleworkers and ‘presential’ workers enshrined in most of the recent legal frameworks regulating teleworkFootnote ⁴³.

There is also a question of unequal treatment between the application of the habitual place of work in the absence of choice of applicable law in the contract and the application of the same connecting factor when parties have chosen to apply the law of the employers’ location to the contract. In the second case, according to Article 8 (1) of the Regulation, the choice of law expressed by the parties “may not, however, have the result of depriving the employee of the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable pursuant” to the connecting factors applicable in the absence of choice of law. The system of the most favourable provisions between the forum of the business of the employer and the forum where the worker habitually works will only apply in case the law of the former has been chosen contractually, but not if no choice has been expressedFootnote ⁴⁴.

Another problem is to be found in the fact that overriding the choice of applicable law expressed in the contract is only available if the contract is an individual contract of employment. Those protective rules therefore do not generally apply in relations between self-employed and their clients. Here, technology connecting workers with their ‘employers’ could be used to ‘hire’ workers in forums which make it more difficult to detect bogus self-employment. Also, the existence of self-employed status makes it easier to impose conflict resolution agreements which might avoid the application of the judicial forum rules, making it also more difficult to bring proceedings to the courts of the location of the employer, which renders more difficult to apply possible solutions as proposed in the next sectionFootnote ⁴⁵.

Within the EU context, the application of the EU-notion of worker to Article 8 of the Rome I Regulation involves, however, some harmonisation in this matter, so some authors do not see great risks in that respectFootnote ⁴⁶. But this leaves the rest of the world out of the picture, as well as those categories which are situated between the EU notion of worker, which has been criticised to leave out problematic forms of personal work and genuine self-employedFootnote ⁴⁷, and which might involve different levels of protection in different countries, so that some ‘applicable law shopping’ might be done by employers.

7.3 Remote Work and the Reconstitution of the Fragmented Cross-Border Place of Work

Litigation in matters of conflict of laws in cross-border remote work situations in their new context is quite recent and jurisprudence is scarce. However, some rulings have already addressed the attempts to reconstitute the workplace in cross-border remote cases based on the proposal of new interpretations of existing locational factors, mainly the place of work or the establishment of the employer.

A first example can be found in cases, related to German social law, where companies without establishment in Germany tried to have their remote workers in Germany receive benefits in application of the short time working arrangements system (Kurzarbeit), during the suspension of activities of those companies for reasons related to the COVID pandemic. Even though the workers in question were registered with the German social security system (because they were residing and working in Germany), both the Landessozialgericht Berlin-BrandenburgFootnote ⁴⁸ and the Landessozialgericht MünchenFootnote ⁴⁹ refused to recognise the extension of the right to benefits to those workers by allowing a broad interpretation of the notion of establishment or branch of the employer, to include home offices or co-working spaces. The appeal courts overturned the decisions of the lower courts by relying on the territoriality principle, rooted in the need for the state to be able to control the conditions of access to social benefits. This control would not be possible if the employer would be physically situated outside the German borders. There was thus no reason to depart from the classical interpretation of the notion of branch or establishment, according to which there must be a separate, operationally independent part of the company to which commercial, technical and personnel measures are assigned exclusively instead of to the overall organisation. The mere physical distance from the employing company cannot be considered as a criterion, especially in times of modern means of communications which allow to work away from the physical offices.

Another recent example, already discussed by BarredaFootnote ⁵⁰, concerns litigation on the application of Quebec labour norms on the cross-border remote work situation. The most recent case concerns a worker, Mrs Marchetta, with residence in Quebec who worked for a US company both from her home and in the United States. The company was active on the US market, but not in Canada. The worker sought to apply the Quebec law and its provisions concerning protection against dismissal, instead of the fire-at-will system of the United States. According to section 2 of the Loi sur les Normes du Travail, the provisions of the law apply to workers (i) when they have their place of work in Quebec, (ii) when they work both outside and inside Quebec (with a substantial part inside) for an employer established in Quebec, and (iii) when they have their residence in Quebec and work in another jurisdiction, but for an employer established in QuebecFootnote ⁵¹.

The idea that it should be the physical place of work which determines the application of the Quebec Labour Act under rule i) had already been challenged in cases where remote work was performed in Canada, but outside of the province of Quebec, with the argument that with new technologies, the physical place from which the employee performs the work is of a secondary order and could thus be considered to be done at the employers’ premises, situated in Quebec. The courts, however, while recognising that fact (and invoking even the possibility of legislative changes) refused to depart from the classic interpretation involving the need of physical presence at the place of workFootnote ⁵².

Central in the Marchetta case was the interpretation of the notion of establishment of a company under rule ii), necessary for it to be in Quebec for the law to apply to situations where a worker works both in and outside the province. According to existing interpretation, the employer must have its residence, domicile, enterprise, registered office or office in Quebec and must provide, with a certain character of permanence, services in Quebec through one or more employees. In previous cases, the fact that a sales manager worked for an American company from its home in Quebec, attending to clients in both Quebec and the United States, while the equipment (internet, computer, etc.) was provided by the employer, was deemed sufficient for the notion to apply. In the case discussed here, following this jurisprudence, the Tribunal Administratif du Travail found that the home of the worker could be considered as an office or establishment of the employer. However, the decision was overturned by a second ruling of the Tribunal Administratif du Travail. The Cour supérieure du Quebec confirmed the second judgment and found that having a computer and a phone provided by the employer was not sufficient, as other elements were needed to show ‘a certain degree of organisation of the place where the employee worked, which allows to conclude that it forms a point of contact of the employer in Quebec, for some of its activities’Footnote ⁵³. Having an activity in the forum seems thus to be an important factor of connection, present in the case of sales representatives, but absent in this case, despite the fact that the worker seemed to exercise a substantial part of her activities in Quebec.

Moving to the EU context, would there be no space to argue that, in some circumstances, when teleworking, the place of performance of the work could be the employers’ premises, as the technological environment sufficiently relativises the place where work is performed? Or conversely, if the application of the law of the forum of establishment of the employer involves weaker protection than the law of another jurisdiction to which the situation is also connected with through remote work, could this establishment be extended to the place of work in that other jurisdiction? Considering the reasoning of the court in Koelzsch, this seems to be difficult. However, one must not forget that the judgment is permeated with the objective of protecting the weaker party (in the case at hand, as an argument to not allow too easily the application of the second alternative criteria of Article 8, the place of engagement, i.e. the establishment of the employer). At point 46, the Court refers to recital 23 in the preamble to the Regulation to find that the interpretation of Article 8(1) ‘must be prompted by the principles of favor laboratoris in that the weaker parties to contracts must be protected by conflict-of-law rules that are more favourable’.

Some authors argue in favour of the use of the ‘place of engagement exception’ (place of business of the employer) to try to solve the problems that might involve the application of the habitual place of work in case of remote work, above all when the employer has no real activity in the country from which work is provided. The argument would be based on the reconstitution of the fractured workplace through the idea that the worker would be virtually present at the place where the business of the employer is established, which is the place from which control on the worker is exercised as well as the destination of the provision of the work and the services which are sold by the employerFootnote ⁵⁴, or to use a similar concept, where beneficial ownership is exercisedFootnote ⁵⁵.

However, firstly, it would be difficult to admit that this argument could amount to the idea that the habitual place of work cannot be established, which is a precondition for the application of the place of engagement exception. Secondly, such an approach does not fit within the existing systematicity of the instruments determining the applicable law, which defines the habitual place of work as the general rule, and the place of engagement as an exception to be interpreted strictly. Thirdly, and again, it is not guaranteed that the establishment of the employer is also the place of beneficial ownership.

Another possibility would be the use of the ‘escape clause’ to attain the same objective. Is it possible to consider that a situation where a remote worker working habitually in one country can have a closer connection with the country where the employer is established, based on the idea that establishment is to be considered as an extension of the workplace abroad? This approach could be seen as more ideal, in the sense that it provides more flexibility to consider different factors for the application of the law of the ‘better’ forum. The decision of the Dutch court commented above shows that the reach of the employers’ activity could also be considered. The corporate motivation behind the creation of the cross-border situation could be used as an element of analysis, conducing to the application of the escape clause when the habitual place of work has been chosen to evade responsibilities or leads to social dumping. The principle of equality between on-site workers and remote workers could also be considered in this context.

Another mechanism, complementary to the first, would be the use of Article 9 of the Rome I regulation, which provides that the ‘overriding mandatory provisions’ of the law of the forum will apply no matter the applicable law pursuant to Article 8. As a premise, this would require that the worker would bring proceedings against her employer in a forum in the EU which would be more favourable to her. The CJEU confirms that the court of the forum cannot, in principle, apply overriding mandatory provision of another law than that of the forum, even if it is the applicable law to the contractFootnote ⁵⁶. This impedes thus, within the EU, application of the most favourable ‘overriding mandatory provision’ (except if, pursuant to Article 9(3) the application of mandatory provisions of the law of the place where the obligations arising out of the contract are performed render the contract unlawful). According to the Lugano Convention, as well as the Rome II regulation, a worker can always bring proceedings before the courts of the location of the employer, so this would cover the situations of delocalisation through remote work. The problem resides, however, in the uncertainty of the notion of ‘overriding mandatory provisions’ of labour law that would apply.

According to Article 9(1) of the Rome I Regulation, ‘overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation’. There is a lot of uncertainty concerning the interpretation of the concept, and a wide margin of appreciation seems to be given to the courtsFootnote ⁵⁷. According to the CJEU, which bases its opinion on recital 37 of the Regulation, ‘this exception has the purpose of enabling the court of the forum to take account of considerations of public interest in exceptional circumstances’Footnote ⁵⁸. According to the same recital, the concept ‘should be distinguished from the expression “provisions which cannot be derogated from by agreement” and should be construed more restrictively’. In this context, the question arises whether a rule protecting a weaker party in a contract, like the employee, could be considered as overriding. It seems that this might be the case, among other reasons, because the CJEU has accepted that the social protection of workers involved a public interestFootnote ⁵⁹. It could also be argued that there is a recognised public interest in applying certain provisions protecting the employee working remotely from another jurisdiction (and, in the EU, above all when working from a third country), which would be combatting social dumping in the sense this chapter understands it. Having recourse to such cases of remote work has a negative impact on the labour market of the state where the employer is situated and would give those employers a competitive advantage regarding employers using the local workforceFootnote ⁶⁰.

Some authors suggest that the concept of overriding mandatory provisions could be interpreted as including the minimum provided by the posted workers’ directive, which would thus be applicable to telework provided from third countriesFootnote ⁶¹. They argue that the directive corrects the social dumping that the Rome I Regulation allows in case of temporary change of the place of work, and could thus be applicable in other cases where the anti-dumping function of the Rome I Regulation is thwarted by its shortcomings, and does it by selecting a series of standards which it considers essentialFootnote ⁶². However, one could argue that the Directive addresses an explicit exclusion of the Rome I rules, contained in the last sentence of Article 8(2), the temporary modification of the place of work of the worker. This exception was introduced not to hamper the freedom to provide services, in the context of the building of the single market. Nevertheless, EU Member States should remain free to combat social dumping operating from outside the EU and make remote work from third countries conditional on the respect of certain standards without this going against EU single market rules.

In any case, the overriding mandatory provision approach is a mechanism that allows for the simultaneous application of the laws of different jurisdictions to one and the same cross-border situation, an approach which is not generally pursued by the standard conflict rules, which tend to the application of the law of a sole jurisdiction to all the conflicts arising out of the same employment relation. As such, all the circumstances surrounding a cross-border situation are considered for a solution applicable to all aspects of the relation, and no distinction is made between the types of claims made before the court. The reference to the word ‘contract’ as object of the closer connection analysis of art. 8(4) of the Rome I Regulation, instead of ‘conflict’ or a more open work like ‘situation’, is an example of that uniform approach. And that uniform approach, even under less ‘territorial’ interpretations, can favour workers when such fora offer better protection (and, in some cases, avoid social dumping practices), but might also be to their disadvantage (or encourage social dumping practices) when they are regulated by less protective labour normsFootnote ⁶³.

Therefore, the problem is not only about which connecting factor would be better as an overall solution, but also how several objectives and interests, which can be different in each case, can be reconciled. In this context, it is important to point out that extraterritorial application of labour law does not need to be comprehensive. Some conditions, like wage rates, can be modulated in function of local realities, but others, related to health and safety, protection against dismissal or fundamental rights could be considered to have a vocation to apply universally, answering thus possible reservations against extraterritorial applicationFootnote ⁶⁴. Therefore, a diversified approach to the determination of the applicable law might be a step towards more adapted solutions to the complex problems posed by cross-border remote work and the conflicting interests in play, alluded to in the first section. The application of more favourable provisions in case of choice of law, the ‘governmental interests’ approach or the application of overriding mandatory provision of one forum together with the law of another shows that such diversified approaches exist. And in that context, the question of the status of employment, the lifting of the corporate veil and the respect of basic labour rights are paramount to finding a just balance between the different interests and could justify extraterritorial application of more favourable laws.

Finally, this section cannot be concluded without mentioning the role which can be and must be played by unions and worker representatives in the matter. An important function they could fulfil is helping remote workers located abroad to bring claims before the courts of the forum of establishment of the employer. Most possibly, lack of funds and knowledge make it virtually impossible for an individual abroad to pursue the application of more favourable norms or mandatory provisions to their contract of employment (or to assess their status of employee for the purpose of benefitting from weaker party protection). Even if the lack of conflict rules on the application of collective rights might question the formal representativeness by those agents of workers abroad, they should have the knowledge and the resources to organise formal representation for bringing cases before the courts. Another question is the introduction, through collective bargaining, of clauses in individual contracts with a cross-border element that would favour the application of the most favourable norm. Given the actual system, pressuring employers to introduce a choice of law clause applying the law of the employers’ forum would already be a good way forward, as it involves the application of ‘the best of both worlds’ to employment contracts with a cross-border element.

7.4 Conclusion: Another Battlefield for the Extraterritorial Application of Labour Law

The enhanced virtuality of the place where remote workers provide their labour eases the way towards worker management strategies taking advantage of the existing rules defining the applicable law in a cross-border situation, while those same rules limit the freedom of workers to work remotely from other jurisdictions than the one decided by or agreed with their employer. The territorial character of those rules and their interpretation does not consider the cross-border character of the growing labour market which the increased virtuality of the place of work creates, and in which the employer enjoys much greater freedom than the worker to act.

New avenues to promote extraterritorial application of labour laws to cross-border remote work situations, to protect workers’ rights and to limit social dumping, must be explored. Some advocate for specific instruments on cross-border remote work or specific categories of remote workersFootnote ⁶⁵. But the fact that the proposed Platform Work Directive does not seem to consider cross-border situations further than legislating a mechanism to ensure a coherent application of employment status across the EU and providing no extraterritorial reach shows that policymakers have not given real thought to the problem. But the GDPR shows that EU instruments can have extraterritorial effectFootnote ⁶⁶.

Most authors discuss possible interpretations of existing rules, as has been done here as well. However, it is not only for the courts to address the problem through innovative interpretations, given existing limitations. Legal instruments should be revised to take the new realities into account. And the discussion which precedes the revision should not so much be centred on which legal order should apply, but which would be the adequate connecting factors. A better (but nevertheless complementary) approach would be to discuss which labour law institutions or rights should be given extraterritorial reach in the different configurations in which cross-border remote work manifests itself currently, and to what extent. The existing system of ‘overriding mandatory provisions’ can be a starting point or inspire new norms, so as to protect not only the interests of the parties to the contract but also those of the community in generalFootnote ⁶⁷. And this should be done considering, firstly, the different situations of vulnerability in which remote workers can find themselves; secondly, the limitation of the incentives for the employer to have recourse to social dumping through remote work; and thirdly, the difficulties that the current system of determination of applicable law has on the workers’ right to cross-border telework.