The term ‘satellite workplace’ or ‘satellite employee’ is becoming increasingly common. In this article, we present these concepts from a labour law perspective.
What is a satellite office and who is a satellite employee?
A satellite workplace is when an employer employs employees living in a geographical location other than the registered seat of the employer in a way that these employees work partly from home and partly from offices run by the employer in a location separate from its main seat, such as rented premises, co-offices, branch offices, in short satellite workplaces. Employees employed in such arrangements are called satellite employees, who, although they belong to the organisational unit of the employer’s headquarters in terms of the employer’s organisational structure, may be physically present in another organisational unit of the employer during the course of their work.
What benefits can we expect?
There are many advantages to running a satellite workplace. For example, when recruiting new employees, the distance between the employee’s home and the employer’s seat may not be a primary consideration. The model can be used to provide a wider range of employment opportunities for candidates living in locations other than the employer’s headquarter. This allows a larger pool of employees to be selected for the most suitable position, which is a competitive advantage, especially in jobs which are difficult to fulfil.
The employment structure avoids the negative effects of teleworking, such as professional isolation and blurring of the boundaries between work and private life.
Satellite working can also be a solution in temporary situations, when a company wants to expand into a new market or location, or when a project requires certain colleagues to work temporarily in a place differing from the company’s main address.
The perception of satellite employees from a labour law perspective
From a labour law point of view, satellite employees are teleworkers, given that they work at a location separate from the employer’s seat. Teleworking takes place irrespective of whether they work in an office run by the company or provided otherwise.
Under Hungarian law, the teleworking agreement must be included in the employment contract. The employment protection requirements vary depending on whether the work related to a particular job is performed with or without the use of a computing device.
Opportunities for implementation
There are several opportunities for creating satellite workplaces. The company can provide working conditions in its own or in a longer-term leased office space for exclusive use or it can arrange office services with community office providers. The number of satellite employees, the amount of costs that can be absorbed and the planned duration of the whole structure may be factors in choosing the most advantageous option.
Cross-border satellite work
The satellite work model can be envisaged not only within a country but also across borders. There are no barriers to cross-border employment, but there are a number of considerations to be taken into account, including:
- employment protection rules,
- tax considerations (tasks involved in setting up an establishment),
- rate of pay, currency of payment,
- comparison of costs and savings to be made,
- equal treatment,
- business confidentiality and data management, data security requirements.
In summary
Working in a location other than the employer’s seat can address a number of challenges that are increasingly important today, such as the need for companies to choose colleagues from a larger labour market. However, to avoid potential tax and labour law risks and unnecessary costs, it is essential that entities take their decisions with all aspects of satellite employment in mind and carefully consider them.
