Smart working: the top five legal issues to consider

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Dentons

[co-authors: Francesco Armaroli, Francesca Servadei, and Claudio Orlando Miele]

Technology is radically changing the way people work, from manufacturing to banking, from marketing to legal services. The unstoppable digitization of every sector and industry is no longer an issue concerning the mere means of production; rather it affects efficiency and process optimization in a much deeper way. This is especially true in the case of smart working.

What is smart working?

Smart working is a way to fulfill working duties from remote without fixed terms or timetable, based on flexible working arrangements and the use of technological devices within a specific organization.

Smart working projects are often at the very center of the shift between a results-driven company culture into a more work-life balance oriented working environment. Such projects are spreading fast in many organizations, not only for their proven advantages (e.g., saving money on offices, flexibility, autonomy, etc.) but also because of their important social impact.

In fact, flexible working arrangements are typical of multinational companies where de-centralized offices and departments must keep in touch on a daily basis and bring forward projects in full autonomy, irrespective of the physical location of their employees.

What are the main legal issues connected to smart working?

Smart working is an innovative tool, which carries relevant social and economic gains for almost every private and public venture; however, it also includes some legal issues, which should be addressed properly in order to build a solid, smart-working architecture. Here is our short list of the five main legal issues.

  1. Data Privacy: Smart working projects imply important data privacy considerations, deeply inter-connected with employment law issues. For instance, the tracking and monitoring of employees’ daily working routine must be assessed under both a GDPR and a local labor law point of view. The adoption of data privacy policies and guidelines regulating the collection and processing of workers’ data when they work remotely is also an important issue. In fact, data breaches and the theft of a company’s confidential information often arise in situations where employees are not directly subject to employers’ control. This is why every smart working project should have a prior data privacy check before being implemented at a wider level.
  2. Data Security: The main fear of organizations is that their data ends up in the wrong hands, from competitors to the public. In this respect, data security is crucial, and flexible working agreements with employees should include specific confidentially clauses in this regard. This is especially true where organizations implement “bring your own device” (BYOD) polices or allow employees to take home their IT allocation. In addition, the loss or theft of personal data may trigger data breach notification obligations under data protection laws, as well as endanger employers from a civil liability perspective. In any case, it is essential for employers to adopt adequate safeguards for all their data sets and working tools prior to the start of any smart working project.
  3. eDiscovery: eDiscovery techniques involve the extraction of electronic evidence (e.g., emails, sms, log, audio and video files, etc.) from employees’ IT allocation in case of internal investigations, requests from public authorities, lawsuits or, more generally, when suspect illicit activities emerge. In fact, eDiscovery is becoming more and more important for almost every organization, because of the high risks it implies for both employees and employers. For instance, one of the main challenges is to provide employees with clear and transparent information concerning employers’ right to access their working devices, so to avoid the risk of avoidable litigation. In addition, in case of internal investigations, it is important to identify the legal basis upon which employers can rely to extract electronic evidence from their employees’ devices or digital accounts, as well as reporting them to authorities in case they conduct illicit activities. Finally, another layer of complexity is the case of cross-border eDiscovery practices, which may oblige organizations to pay attention to different rules and guidance depending on the jurisdiction.
  4. Employment: An important issue arises from the insurance protection of the smart worker, taking into account the possible risks lying outside a company’s premises to which the employee may be exposed and towards which employers have limited control. Therefore, in addition to the power of the employer to limit employees’ choice of the work place within reasonable boundaries, smart workers must be entitled to a particular insurance coverage against accidents. This is helpful as it can reduce the risk of litigation.
  5. Insurance: In light of the above, smart workers must be insured against specific risks related to the work place environment in which they work. In fact, the National Institute for Insurance against Accidents at Work prescribes employers to pay not only the ordinary insurance coverage, but also a supplementary and tailored coverage against the so-called “in itinere” accidents, which may happen en route between the smart worker’s domicile to the “smart working station” chosen outside the company’s premises.

What are Italian regulators saying?

Smart working is taking foot in Italy, although very slowly. In fact, recent provisions and incentives are trying to change this attitude and make smart working easier for both employees and employer.

For instance, Law 81/2017 introduced the discipline of smart working activities in Italy. According to this piece of legislation, smart workers are entitled to perform their professional activities both inside and outside the company’s premises always in presence of specific guarantees and protection.

In light of these recent changes, we do not exclude the possibility that the Italian Data Protection Authority will also address smart working in more detail in the coming months, in order to make clear how GDPR may affect this new way of remote working.

Finally, there remain some legal concerns regarding the way technology will further affect the way people work in the future. This is part of an ever-changing legal scenario, which poses great challenges from not only a data privacy and security perspective but also from an employment point of view.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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