Remote working from Ecuador: “workation” or employment condition?💻

Remote working from abroad sounds like an attractive, modern solution to many employers and employees. As long as the work is done well and everyone is satisfied, there seems to be little cause for concern. But there is a legal catch: if you allow this for long enough, it can become a permanent employment condition. The employer can then no longer simply reverse this with a new policy.

This is evident from a recent ruling by the Midden-Nederland District Court.

What happened?

An employee worked for a Dutch employer and moved to Ecuador with his family in 2020. The idea was that he would work partly there and partly in the Netherlands, with annual evaluations. It was explicitly agreed in the arrangement with the employee that if anything changed in the employer's personnel regulations, this would also apply to the employee. Due to COVID-19, the employee stayed in Ecuador longer than planned. From 2022 onwards, he worked mainly from Ecuador. 

In 2023, the employer introduced a new workation policy. Working abroad on a structural basis no longer fitted in with this policy. The employer therefore informed the employee that working from home in Ecuador would be phased out and that he would have to return to work in the Netherlands. The employer argued that working from Ecuador had never been intended as a permanent arrangement and that it did not constitute a condition of employment. Furthermore, the employment contract stated that Zwolle was the place of work and did not include any provisions for working abroad on a permanent basis.

The employee argued that working from home in Ecuador had become an acquired right. The employer had not objected to this for years, thereby giving the employee a legitimate expectation that this would continue to be possible in the future. The employee took the matter to court and won the case.

The court stated that an employment condition does not necessarily have to be agreed upon when concluding an employment contract. An employment condition can also arise as an acquired right from a course of conduct followed after the conclusion of the employment contract. The court also looked primarily at the practical situation. The employee had been working largely from Ecuador for years, with the employer's consent. Moreover, the agreed annual evaluations were not (or hardly) carried out. Another factor was that the employee performed well and had completely organized his family life around living and working in Ecuador. According to the judge, the employee was entitled to assume that the agreements on working from home in Ecuador would continue and that the new policy did not apply to him. Furthermore, the agreements about working from home in Ecuador had been made in mutual consultation and after advice from HR. These agreements were put in writing and added to the employee's personnel file.

According to the court, this was no longer a temporary exception, but a permanent way of working. Working from home in Ecuador had become part of the terms and conditions of employment.

The employer was also unable to successfully invoke the unilateral amendment clause in the employment contract. The judge found that the employer did not have compelling reasons to justify such a radical change. In this case, the interests of the employee outweighed those of the employer.

What does this mean for employers?

This ruling is primarily a wake-up call for employers who generously allow flexible working without clear frameworks. With good agreements, genuine evaluation moments, and clear documentation, you can prevent flexible policies from turning against you.

If you have any questions about your flexible working policy, please contact Dennis Oud, Tessa Sipkema, or Elke Hofman.