It's the most wonderful time of the year... almost! Twinkling lights are starting to appear in windows, the smell of mulled wine and cinnamon waft from the Christmas markets and children excitedly start to write their letters to Santa Claus... 

Meanwhile, in the North Pole, Santa's elves are busy in the run-up to their most crucial time of year making final preparations for the boss's trip around the world on Christmas Eve. Some lucky ones have been sent abroad for a few weeks to undertake the final checks "on location"!

We wondered if Santa, as the CEO of a large employer with a global reach – Santa Inc. you might say - has addressed all the global mobility considerations for his travelling elves? As we understand it, these elves sent to sit on shelves of children's homes aren't just any elves; their day-to-day operations involves them getting into all sorts of wonderful and magical mischief overnight at their deployed location as they play an ongoing game of hide and seek with the children and report back to Santa Inc. on who should be on the naughty or nice list.

The 24-day trip for an elf at a "customer's" home means a new place of work for the elf and raises the question of whether these elves could be considered business travellers for the purposes of their time working abroad or not? Has Santa considered all the issues that arise because of a business trip such as this? 

What is a business traveller?

In the world of global mobility/compliance, a business trip is generally considered to be a short trip to another country for an individual to undertake business activities on behalf of the employer with the intention of returning to the home country. For example, an employee attending a training session, attending a conference or attending a business meeting of a client. Often, a business trip is for a short period of time and the individual is not undertaking their usual job activities – this is often key. 

It is imperative that an employer understands: 

1. Is the trip their employee is about to undertake a business trip as defined by the relevant laws of the country they are visiting? 
2. If the trip is a business trip: 
   1. are there any restrictions on activities the employee should be aware of? 
   2. are there any employer obligations that need to be complied with?
3. If the trip is not a business trip, what is it, and what are the employer obligations to ensure the trip can be undertaken compliantly? 

Whether a trip is a business trip or not has implications, not least for:

• Immigration - does the employee need a visa to travel to the overseas country and carry out the proposed activities?
• Posted worker notification – is the trip considered to be a posting in the overseas country and if so, what notification and compliance steps need to be taken?
• Social security – does the employee need a certificate of coverage to avoid employer social security withholding obligations in the overseas country? 
• Income tax withholding – does the business trip attract income tax withholding obligations on the employer in the overseas country? 
• Health and safety and insurance – are there obligations on the employer in the country the employee is being sent to? 

For businesses that offer services to their customers, e.g. repairs, installations, on-site assistance/training, project-based work, care should be taken to avoid inadvertently misclassifying working overseas as a business trip. 

So, what about elves visiting the UK? 

Whilst the usual global mobility considerations will need to be undertaken, we have focussed on some key areas that Santa Inc. may have overlooked in their haste to meet their Christmas Eve deadlines. 

As we all know, Santa Inc's HQ t/a Santa's Workshop is in Lapland, a vast area spreading across Norway, Finland and Sweden, however, we have assumed that Santa chose to register the HQ in Finland. 

Immigration - Business activities will normally be linked to an individual's employment overseas and activities for visitors are mostly incidental to their employment. As the elves are spending 24 days in the UK and are effectively undertaking a specific project which is core to their role, this trip is unlikely to fall under the list of permitted activities for visitors under the UK's Immigration Rules. As such, if the elves are subject to UK immigration control and if they do not otherwise have immigration permission which gives them the right to work in the UK, a visa with appropriate work rights would be required. 

If the trip met the requirements for a business trip under the visit visa rules, for example, if Santa Inc. was sending drivers on a genuine international route between Finland and the UK to deliver goods and undertake cabotage operations, Santa Inc would need to identify which elves need to apply for a visit visa in advance of travel and which elves can travel to the UK visa-free. Especially for next year's Christmas season, Santa Inc. must be made aware that visa-free elves may be affected by the UK's recently-announced plans to expand its electronic travel authorisation (ETA) scheme for non-visa nationals. An ETA is similar to the USA's ESTA. 

If an elf was not helping Santa Inc. this year and instead was taking part in a pantomime or a special appearance, perhaps the elf would be able to take advantage of our Creative Visa service!

Santa needs to be careful not to only pick elves who already have the right to work in the UK, as this could inadvertently lead to claims of race discrimination by other elves who miss out on the opportunity to be placed in the UK because of their nationality. From a UK employment law perspective, to mitigate and/or avoid potential discrimination claims being made by other elves, Santa Inc. will need to ensure that job selections are based on suitability for the role rather than immigration status. This will depend on each case, but elves with the local language skills will be a huge benefit and could well justify sending specific elves to a particular country. If an elf's salary or any other factor means they are not eligible for visa sponsorship at all if they require it, Santa Inc. may be able to justify not considering them for the role.  But a tribunal may well have less sympathy for an argument that sponsorship is possible but too expensive, bearing in mind Santa Inc's extensive resources and global reach.  Santa may want to listen to our recent podcast on navigating the crossover between employment and immigration law before elf selection. 

Posted workers notification – As the UK is no longer part of the EU, and we are talking about trips starting in 2024, there are no obligations to comply with the posted workers notification. 

For elves being sent to Ireland or other European and (most) EEA countries, Santa will need to consider if the trip triggers the Posted Workers Directive (PWD).  This is a piece of European legislation which was introduced in the 90s to protect individuals from EU countries from being placed at a disadvantage compared to local comparative employees in the country they are posted to and providing services in. If the PWD applies, Santa Inc. would need to ensure a core set of rights for the elves. This is important if the core rights affect overnight working and overtime, which the elves prefer to do!

Each EU member state has interpreted and implemented the PWD in its own way. Some countries such as Belgium apply the PWD to any work that is carried out in that country.  While others such as Austria do not apply the PWD for very short visits such as training or seminars. 

It is useful to remember that some countries only apply the PWD to individuals whose "home" country is in the EU (such as the Netherlands) while other countries apply it to individuals from any other country (such as Denmark). 

Even though the PWD will not apply outside of the EU/EFTA countries, there are many examples of non-EU countries who have adopted a parallel provision, albeit in their own local legislation (e.g. Switzerland). Local advice is very important for Santa Inc.

Social security withholding – Assuming the elves are visiting from another EU state (and we assume the elves are being sent from Santa Inc.'s workshop headquarters in Finland), Santa Inc. should obtain an A1 certificate from the Finnish social security authorities prior to travelling to the UK to avoid Santa Inc. from having to make social security payments into the UK social security system because of the elf working in the UK. Where the elves are travelling from further afield outside the EU and the UK, a certificate of coverage may be available to Santa Inc, but this will depend on whether there is a social security treaty with Finland and the relevant overseas country. 

Income tax withholding – Due to the amount of time the elf is in the UK (24 continuous days), under UK law, the elf is liable to UK income tax on their earnings for these 24 days.  However, UK law is overridden by the double tax treaty between the UK and Finland.  Under the treaty the elf will be exempt from UK income tax on their employment income provided: (i) the elf is present in the UK for less than 183 days in any 12-month period, (ii) the elf is paid by Santa Inc. in Finland; and (iii) the remuneration paid to the elf is not borne by a permanent establishment or a fixed base of Santa Inc. in the UK.  Although the elf should be exempt from UK income tax under the treaty, Santa Inc. (a Finnish company) would ordinarily have a day 1 income tax withholding liability under the UK's PAYE system. However, that obligation cannot be enforced against Santa Inc. unless it has a presence in the UK.  A presence is an address in the UK on which HMRC could serve papers and enforce compliance (including a permanent establishment).   Even if Santa Inc. has a UK presence, provided the elf is exempt from UK income tax under the treaty, it would be possible to obtain advance clearance from HMRC confirming that Santa Inc. has no PAYE withholding obligations (although strictly, until the clearance is obtained, PAYE should be operated).

Health and safety and insurance – Santa Inc. will need to ensure that it has complied with obligations relating to health and safety and insurance requirements in the UK. The fact it is a Finnish company does not mean it does not need to comply with lots of legislation which will automatically apply to protect the elves in the UK. An often-overlooked obligation relates to the minimum level of employer liability insurance a foreign employer must have in place when an employee spends 14 or more continuous days working in the UK. Santa Inc. will also need to ensure it is covered for overseas workers under its relevant insurance policies and coverage. Santa Inc would be wise to obtain local advice on health and safety requirements and obligations, especially given that the elves may be carrying out high-risk activities including chimney descent, dealing with pets and small children...

Data protection – Santa Inc's elves will be processing a lot of personal data such as names and addresses and possibly sensitive data such as behaviour, school attendance and sickness records etc, they will also be transferring this data across the border to Finland and possibly other countries. Santa Inc. will need to ensure it is compliant with its processing and transferring of this data, as well as ensuring the elves are keeping this data secure in the UK.

Proper planning is essential for a successful elf deployment. By considering all the above, Santa Inc. can ensure the elves are well-prepared for their global mission – and lucky for Santa, he knows just who to call with his global mobility queries...hopefully this guidance lands Lewis Silkin on the nice list!