Does the destination country's labour law apply to employees on a workation?

Employers allowing workations generally assume that the employee's home country employment law continues to apply and for most workations, that assumption holds. But the EU legal framework on this question is less settled than many realise. In a peer-reviewed paper recently published in the E-Journal of International and Comparative Labour Studies (ADAPT University Press, Volume 14 No. 03/2025), Dr. Martina Menghi, labour law specialist and Senior Manager at WorkFlex, and Pieter Manden LLM MBA, tax lawyer and Co-Founder of WorkFlex examined exactly this question.

The paper deals with the question of which employment law is applicable to employees during workations, according to EU law. Not surprisingly, in cross-border situations, the employee benefits from special protection. Working abroad might trigger the application of the law of the Host State, notably concerning two categories of rules: provisions that cannot be derogated from by agreement (1) and overriding mandatory provisions (2). Unfortunately, both categories are not defined by EU legislation. Provisions belonging to the first category (mainly considered as, for instance, on minimum wage) are those of the State corresponding to the habitual place of employment. In case it is not possible to identify it, residual criteria might apply. Further, provisions belonging to the second category must always be applied by national courts, regardless of the law applicable to the employment contract. While legal scholars often disagree on categorisations and interpretations of such rules, the ECJ confirmed that this category of provisions must be interpreted strictly.

The posted worker Directive defines the rules (e.g., salary), which are 'overriding mandatory provisions' of the Host State, applicable to posted employees. It makes sense to ask whether these would be applicable to workationers too. However, several arguments speak in favour of not equating employees enjoying workations to posted employees and there is no evidence that these rules would be considered as overriding provisions during workations. Even if a risk of application of some Host State employment law provisions exists, it appears strongly mitigated.

The aim of this paper is to highlight important criteria to consider when identifying applicable employment law for workationers temporarily working from abroad during a so-called 'workation' (a combination of work and vacation), as published in the E-Journal of International and Comparative Labour Studies. These people, which we will refer to as 'workationers,' are employed in one State ('Home State') and temporarily working in another one ('Host State'). Given this context, it is crucial to define what must be considered as a workation given the fact that this definition will influence the outcomes for applicable laws.

A workation occurs when employees find themselves in a situation where these four cumulative requirements are met: (1) the main aspects of a temporary stay abroad are solely determined by an employee, such as the destination and the duration of their visit to a Host State. (2) The employer allows (but does not assign) the employee to temporarily work remotely outside of the Home State. (3) The trip does not have any business reason or purpose, i.e., the employer has no initiative nor need for the trip, which is privately driven, to occur. (4) The employee is bearing the relevant costs, e.g., the travel costs related to the trip.

By contrast, the opposite of the above features qualifies as a business trip, where there is an employer interest behind the trip; it is the employer that sends an employee abroad to perform their work in an employer-defined Host State and situation.

This paper focuses on the legal framework in EU law, whether the existing international private law rules, both from primary and secondary levels and including relevant decisions of the European Court of Justice, fall short in providing the necessary answers or not. This topic has been discussed a lot in recent literature but is far from being crystallized.

As argued in this paper, there are some relevant pieces of legislation that are available even if workations did not represent their scope of application at the time these rules were adopted in EU private law. On the contrary, the relevant rules were instead shaped with business trips in mind. Therefore, applying the existing rules to workationers is particularly complicated.

This paper does not intend to analyze specific national rules, if these exist. National laws, if mentioned, are done so through examples and illustrations of practical implementations. Given the current legal framework, however, it should be possible to identify some common rules for workationers within the Member States.

The rules that will be analyzed were adopted before the Covid-19 Pandemic and the explosion of remote work during and following it. As a result, the rules were never designed with the current reality in mind, which leads to an ambiguous situation.

At the same time, workationers already existed prior to the pandemic. Take Mario as an example: he is an associate at a big German law firm that deals with mergers, projects that usually take months. The negotiations for a new project start after Mario booked his vacation to Greece. If he is lucky enough to be allowed by the law firm to leave for vacation, instead of having to cancel it last minute, the most likely solution would be for him to constantly look at his mobile phone, read, and send emails to catch up and understand what is going on during his (physical) absence from the office. This raises some questions: does such a situation justify the application of Greek employment law? Is Mario considered to be on a business trip, or does he even qualify as a posted employee? It seems that these questions, even if open, were not considered as relevant before the advent of workationers.

Not surprisingly, in situations characterized by some degree of internationality, a cross-border dimension (employment in the Home State and temporary remote work in the Host State) presents potential law conflicts. Notably, one of the main risks is that the Host State's employment law becomes applicable. This has some very relevant practical implications. Amongst others, the following questions need to be answered: which minimum wage standards must be applied to these employees, those deriving from the law of their Home State or their Host State? Which law determines the maximum working hours, the minimum rest periods, and annual holidays?

These are not merely theoretical questions. For employers running workation programmes today, they remain very much unresolved  and the EU legal framework, as it currently stands, was simply not designed with this reality in mind. Those looking to go deeper will find the full legal analysis in the paper by Dr. Martina Menghi and Pieter Manden.

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