Most employers are now seeing staff return to the office for at least a portion of the working week. Most have chosen to do so gently and to rely on encouragement, reminders of the importance of in-person collegiality and free lunches for those attending the office. Some employers are now looking for ways to enforce – as opposed to encourage – return to those who are failing to show up. When we see employers taking a stricter approach, we also expect to see more and more requests for flexible working – which covers not only hours but also location – including working from home (WFH). A YouGov poll in 2021 found that 81% of respondents expected to work from home at least one day a week post-lockdown and 33% expected to WFH at least three days a week.
At the same time as expecting a wave of remote working requests, The Daily Telegraph newspaper grabbed attention last week when it reported that employers across the UK are poised to reduce pay and/or benefits for home workers. Ten percent of employers plan on reducing pay for home workers after failing to encourage people back to work. This is according to a CIPD survey of 1,000 respondents. Four percent have already made the reduction and 13% are on the cusp of doing so.
The legal implications of rejecting flexible working requests and/or reducing pay for those who WFH are complex. We discuss some of the issues below.
REDUCING PAY AND BENEFITS
It does seem entirely logical that pay is, in part, tied to the employees’ expenses – where they live, commuting costs, child-care costs – and the employers’ own expenses – high rent properties with utilities. If the employee wants to have the benefit or flexibility of WFH, then the bargain is to strike a different deal.
Salary, like place of work, is contractual: any variation must be done expressly with consent or impliedly through custom and practice. To change any contractual term without consent can amount to a breach of contract and allow the employee to resign and claim constructive dismissal. Note also that if the employer is found to be in breach of contract, the benefit of any restrictive covenants will be lost which can, depending upon the industry and the individual, be very valuable to an employer.
Many global employers, however, do not take into account cost of living or prevailing tax regimes in local jurisdictions but tie pay almost exclusively to productivity: if that has not reduced as a result of WFH what is the rationale to reduce pay? In analysing employment rights, many claims depend upon the tribunal conducting a balancing exercise – the necessity for the employer to take the action versus the detriment to the employee. If the employer’s position is that its costs (usually predominantly premises after staff costs) have not gone down and therefore it needs to reduce its costs, a tribunal will look at what other measures an employer could have taken to save costs which have less of an impact on the employee – for example, downsizing its office space.
There is also an argument that the employee’s costs as a result of WFH have not necessarily reduced: employees are now paying for their own heating and lighting to be able to WFH and many have invested in their own equipment. The benefits of annual railcards are lost when only travelling 2 or 3 days a week and so commuting less becomes less efficient and more expensive.
To avoid potential claims we …….