Would you take a pay-cut to work from home?

This is the offer that Stephenson Harwood, an international law firm, made to its employees recently.

The firm announced that employees who choose to work from home on a permanent, full-time basis, would be subject to a 20% pay cut and would be required to come into the office once a month. However, the travel and accommodation expenses would be provided. Other staff have the option to work remotely for up to two days a week.

When asked for the reasoning behind their decision, a spokesperson for the firm said that “they see the value in being in the office together regularly, whilst also being able to offer flexibility,” as well as adding that “they did not expect many employees to take up the offer.” It was also stated that those opting for permanent home working were “unlikely” to be considered for promotion to partnership level.

The legal position

The potential danger with applying blanket flexible working policies, as Stephenson Harwood has done, is the risk of falling foul of equality and equal pay legislation. 

For example, if flexible working is being used by a woman with childcare responsibilities or as a reasonable adjustment for an employee with a disability, the fact that they are receiving a lesser wage could be discriminatory. 

This could lead to claims being brought in the Employment Tribunal where, if successful, there is no limit to the compensation that can be received.

Notwithstanding the legal position, this change is likely to have a negative impact on employee engagement because this policy could be seen as giving individuals an ultimatum and forcing their hand, when it comes to flexible working.

Due to the inherent potential risks noted above, we wouldn’t recommend implementing a policy like Stephenson Harwood’s, especially if it were to be the only option. It is likely that such an approach may see reduced employee engagement, increased employee turnover, limited ability to attract talent in the future and, potentially, increased legal claims. 

So what should you do? Read on to find out.

Flexible working: from an employer’s perspective  

All employees with at least 26 weeks’ continuous employment are able to make a statutory request for flexible working, in writing, for any reason. A new request can be made once every 12 months.

Where a statutory request is made, employers must deal with that request in a reasonable manner and notify the employee of the outcome, including any appeal, within a three-month period, unless that timeframe is extended by mutual agreement. If the employer wishes to reject a statutory request, they can only do so on one of the statutory grounds:

• burden of additional costs;
• inability to reorganise work amongst existing staff;
• inability to recruit additional staff;
• detrimental impact on quality;
• detrimental impact on performance;
• detrimental effect on ability to meet customer demand;
• insufficient work for the periods the employee proposes to work; and
• a planned structural change to the business.

It is of paramount importance that any flexible working requests are carefully considered and, before rejecting any proposed changes, employers should not only assess their practices and business needs but also the legal grounds to refuse a statutory request. 

Employers must also consider whether the employee making the request may have a protected characteristic and whether they are likely to suffer a disadvantage. Employers sometimes overlook this risk and it can be the greatest.

There is no single way to implement flexible working and employers need to consider whether it will require employees to submit flexible working requests (as above) or whether to implement a policy of discretionary flexible working.

Agreeing an overall position and outlining the company approach in a policy can be beneficial, as it ensures consistency. Policies should consider who is eligible for flexible working and how requests (if applicable) should be made. 

It should also outline what types of flexible working are available and how both employee and business needs will be considered and how decisions will be made.

Flexible working: from an employee’s perspective

As stated above, all employees with the requisite period of continuous employment can make a statutory request for flexible working, in writing, for any reason; which must be considered by their employer in a reasonable manner. 

If this does not happen, an employee can bring an Employment Tribunal claim.

The first step is to ascertain whether you are eligible to make a request, whether this needs to be done formally or whether there is a policy already in place. Depending on the circumstances, the correct procedure should be adhered to. If you are unhappy with the decision, you can appeal. 

If after exercising this right, you feel that your request was turned down without a valid business reason, or in a way that legally discriminates against you, you may be able to bring an Employment Tribunal claim. You should seek legal advice, first.

ACAS has some useful guidance on flexible working, if you need more information, here: Asking for flexible working: Making a flexible working request - Acas

If you are faced with a situation where your employer is trying to implement a pay cut if you choose to work from home, they cannot do so without your agreement unless the employment contract allows for this and this is very unlikely indeed. If they proceed without your agreement, this could be a breach of contract and/or unlawful deduction from wages for which claims can be brought in both the Employment Tribunal and the county courts.

You may find yourself in a situation where you are “working under protest”, which means you are continuing to work for your employer, but you make it clear to them that you do not agree to the change and take steps to challenge it. This should only be done for a short time whilst you try and resolve your concerns with your employer or take legal action. 

You should inform your employer that you do not agree to the change, that you are working under protest and that you may consider taking legal advice if a satisfactory resolution is not reached.

If you are in any doubt as to your position, you should take legal advice. We would be very happy to hear from you if you find yourself in such a situation and we can talk to you about your options.

The Birkett Long Employment and Human Resources team would be happy to help you as an individual or your organisation. Please contact any member of our Employment team