Cutting pay for those who choose remote work

This week I was happily reading a ‘People Management’ article about an employer who had moved to fully remote working who was extolling the virtues of having done so, particularly around productivity. The next headline that caught my eye was that Stephenson Harwood, a law firm, had announced a 20% pay reduction for employees who choose to continue to work from home on a full-time permanent basis.  

I’ll leave aside the damage that such a move might do to employee relations and just focus on the legal issues.

Firstly, any such manoeuvre would need to be agreed with the employee in writing because it is a change to the current contract of employment.  An employee who moves to full-time homeworking is changing their place of work as well as changing their pay, in this example. Thus any change has to be agreed to. 

The  employee will also become entitled to claim expenses for travelling to the office – in this case, the employer is requiring them to attend once a month.  

One of the interesting points for me is that that the law firm has a hybrid working policy and staff are already permitted to work remotely for 2 days each week, which seems to be the average that many employers are experimenting with.  Given that those employees are not being required to agree a change to their salary, one can immediately see equal pay arguments as there is unlikely to be substantial differences between the kind of work that the employee hybrid working is doing compared to the fully remote one. The firm would have to rely on the material factor defence to justify the difference in pay for employees who are allowed to work 2 days a week and those who are working from home 5 days a week.  This is unchartered territory but if I was a betting person, I would bet that a Judge would be reluctant to find that there was substantial difference, particularly as working from home remotely, the employer saves the cost of having to run a desk in the City, the employee takes on the burden, for example, of electricity during the working day.

All good HR people will instinctively twitch at the potential for discrimination claims.  If those who choose to work fully remotely, on a full-time basis, do so because they are carers, for reasons related to their childcare or disability, they are entitled to launch discrimination claims about the indirectly discriminatory impact this policy has on them.

The spokesperson from the law firm also made a real blunder in admitting that those adopting exclusively remote working practices would be likely to be ruled out of promotion to partner level. Whilst everyone has been talking about hybrid working, we have been worrying about distribution of work so that those who are most visible in the office do not benefit from training opportunities, promotion and opportunities to do certain kinds of work compared to their colleagues who may be less visible as they are not in the room. This bold statement merely highlights the very worst fears that we all had.  Again, this kind of attitude, if followed through into practice, is likely to give grounds for discrimination claims.

I am sure we are going to see the lessons learned as we move forward………It makes me sad when I see other lawyers in my profession setting the worst of examples.  Especially in a week where somebody reported a significant increase in the number of employers reporting increased productivity or efficiency from home and hybrid working arrangements.  This was based on a survey of a 1,000 employers.  What’s interesting about that survey is that they surveyed employers in December 2020 and then again in October and November 2021, with the numbers reporting a negative impact from home working and hybrid working falling and those reporting positive effects increasing, suggesting that as time has gone on through the pandemic, people have become more used to new working arrangements and support it.

Refreshing Law Limited
6 May 2022