Penalised for Working from Home?

Since March 2020 working from home has become the norm for vast numbers of employees across the UK. As we start to see the winding down of COVID restrictions some are now asking if that can continue.

More specifically recent press reports have highlighted the start of a potential trend for employers to introduce salary differentials for employees who continue work from home as opposed to attending their office or other place of work. Google in America has introduced such an adjustment to their employment terms. Closer to home an unnamed Cabinet minister was said to have suggested that civil servants who continue to work from home might suffer a financial penalty for doing so. Is it feasible to introduce salary adjustment for such employees who continue to work from home rather than go back to their offices or places of work?

Whilst it may be tempting for some employers to look at this as a cost saving device it is important to bear in mind that introducing such a differential will not be without its difficulties and indeed it could lead to expensive claims by disaffected employees.

The first and most crucial point to bear in mind that it will be extremely difficult for an employer to make unilateral changes to salaries. An employment contract is a consensual agreement between two parties. A unilateral change by one party to that agreement will almost inevitably be a breach of contract – all the more so when it is a change to such a fundamental term. So, if you are thinking of such a change the first question must be, can you reach agreement with affected employees to make the change?

Second, what is the rationale for the change? An employee who is working from home will in the vast majority of cases continue to perform all relevant duties under his or her contract of employment albeit remotely. If a salary differential is introduced in such circumstances how is it to be justified? This takes us into the realms of steps short of redundancy to preserve the work force. Is the truly the reason for the change or will it be seen simply as an opportunist attempt to reduce costs?

Third, such a step could unwittingly lead you into the territory of discrimination either on the grounds of sex or disability. Many people may have legitimate reasons to be home based either by reason of child care for example or because of underlying health issues. If such a person was to be penalised financially by way of salary adjustment it will almost certainly lead to a claim for discrimination. Such claims are uncapped and expensive. Can you justify the change to salary so as to avoid such a claim?

So, in summary whilst the idea of a salary adjustment for home working might appear superficially attractive it is a potentially perilous step to take. If this is something you have been thinking about we strongly recommend you take advice from a member of our employment team.