19 May 2022

Recent reports of a legal firm offering permanent home working, but with a 20% pay cut, has been met with quite some criticism. But what does this mean for those employees wishing to continue working from home? Employment solicitor Dawn Gallie looks at the issues.

The firm has offered staff the option of hybrid working or, alternatively, the option of permanent home working on a full-time basis, but with a 20% pay reduction. Those that choose permanent home working will still need to be in once a month, but their travel expenses will be covered by the firm.

It seems that part of the rationale is that salaries have London weighting. Clearly, if employees remain working at home, commuting costs are reduced. During the pandemic, a large number of employees across sectors saved a great deal. The firm recognised that a number of staff recruited during the pandemic were not based in London. Presumably they are on less salary than those that were originally based in London but who now work from home.

Whilst there is some logic to the business rationale for reducing salaries, it does beg the question why those employees’ savings should be passed onto the employer, particularly in circumstances where the employee is working as hard and achieving or exceeding their usual targets.

It has been reported throughout the pandemic that employees who moved to work from home actually worked more hours than if they were commuting to the office. Travel time, and more, was often spent working instead. Employers also benefited from the reduced requirement for office space, along with the corresponding overheads.

Whilst employees will be saving on commuting costs, the cost-of-living crisis is a very real issue that needs to be borne in mind. Employees working from home have increased costs, which certainly eats into commuting savings.

One very real issue is staff morale. Suggesting that those working from home are worth less than those travelling to an office will have a negative impact on the employment relationship. If employees are working at the same level, with the same targets, it seems unfair to cut pay. There is also the possibility of indirect discrimination claims where those who work from home have a protected characteristic such as sex or disability.

A reduction in salary can only be made by agreement. Likewise, a change to the employee’s workplace has to be agreed by both parties. Therefore, in some situations, there is a negotiation to be done to the benefit of both parties. Where companies are struggling as a result of the ongoing impact of the pandemic, certainly home working and a corresponding reduction in salary might be an alternative option to redundancy. This is something that would require consultation with the staff as part of any redundancy process.

It is clear that home working, for many, produces a better work-life balance and, in turn, happier, more productive and engaged employees. Given the recruitment difficulties across all sectors, being open to hybrid and remote working with standard salary is likely to attract candidates, reduce staff turnover and make for a more positive working relationship. For more information contact Dawn Gallie on 01935 846233