Should Home Workers be paid less than their Office Based colleagues?

A classic newspaper QTWTAIN (Question to which the answer is No), following reports in today’s newspapers in which an unnamed government minister suggested that civil servants who work from home should be paid less than those who come to the office. Given the speed with which policy U-turns take place, the Business Secretary has now said  a few hours later that this will not happen.

However, as I’ve seen similar arguments advanced in other business magazines, notably in the US, it’s worth thinking through the logic of this argument from a business, ethical and legal perspective.

The business arguments seem to be two-fold.

Firstly, people working from home are not commuting so are therefore saving money. Consequently they don’t need as much salary.

However, this fails to consider that people working at home will have higher utility bills (heating etc) and in many cases are expected to pay for their own office furniture, IT equipment, and other associated costs. So the net effect may be far less, even if you ignore the bigger question of what salary is paid for.

Secondly, it is suggested that people who work from home aren’t as productive or as willing to put in extra effort as those who attend the office. Setting aside the fact that I’ve yet to see any research or evidence to support this point, it starts from the assumption that people only “work hard” if they are closely supervised and will “slack” if they aren’t. Yet many jobs today (wherever they happen to be based) don’t require that level of micromanagement because they are task or outcome based – performance is measured on results rather than whether someone is sat at a workstation for 8 hours.

Ethically and legally, it is very difficult for a business to justify paying staff who do the same job in different locations (home or office) at a different rate, and since it’s still the case that a majority of home-based staff are women an employer who thinks of doing this is leaving themselves open to Equal Pay and Sex Discrimination claims.

The legal process for reducing someone’s pay is also a difficult and time-consuming one for an employer. Contractual changes need to be consulted on and if an employee doesn’t agree then businesses are left in the legally-fraught ‘fire and rehire’ scenario. Even if you get away with this legally, cutting people’s pay is far more likely to demotivate them and affect their productivity.

There are big issues for businesses who may be trapped in long-term leases for warehousing or office space they no longer require, as well as those businesses (such as coffee shops and sandwich bars) which are set up to service office workers who may no longer exist. This also leads to a broader policy debate about what our city centres and business districts can or should be there for, if their current purpose is no longer required. But that falls outside the remit of an HR blog post, although I might respectfully suggest it is something government ministers might want to pay more attention to.

Relocation, Relocation, Relocation

One query that I receive regularly from my SME clients is how to handle the people aspects of moving business location. Below are some of the common issues and some suggestions on how to deal with them.

a) Can staff refuse to move – even if they have a mobility clause in their contract?

In a word, yes. What many employers don’t realise is that relocation is legally a form of redundancy, since redundancy is defined in law as no longer requiring a particular job role at a specific location. So, you need to comply with the normal rules on consultation (in practice, since companies rarely move at 24 hours’ notice, you will probably have been consulting with staff about the move for some time anyway).

In most cases you will be offering employees an alternative – the same job on the same pay, just in a different location. But in a redundancy situation the question is whether it is ‘suitable’.

If you are relocating from Liverpool to Leeds, the extra travel time and costs, or the need to move house, may mean that it’s not suitable for many employees. Even if they have a mobility clause requiring them to work from ‘company locations’, suitability will still depend on a lot of factors.

Even a small move, which doesn’t appear to have the same issues, can still fall foul of this suitability issue. A move from Manchester City Centre to Salford Quays (roughly 3 miles) probably wouldn’t inconvenience many staff. But an employee with primary school age children, who lives in a commuter town outside Manchester, for example Buxton, may need to get an earlier train to get to work on time, causing problems or increased costs with getting children to school, as well as the extra cost of travel across Manchester. It may not be a ‘suitable alternative’ for them.

So, factor in potential redundancy costs when planning a business relocation – while most of your staff will not have a problem, there may be some who do.

b) Do we have to pay relocation expenses and if so for how long?

There’s no legal requirement to. You may want to, as a gesture of goodwill and to smooth the transition – especially if there are significant extra costs (e.g. having to cross a bridge and pay toll fees). If you do, you can decide or agree how long it is for – some companies will do for between 6 and 12 months.

c) Do we have to replicate facilities e.g. car parking or a canteen?

Only if it is a condition of individuals’ employment that you provide these benefits. If it is then you must do so – or if it isn’t possible provide an equivalent benefit, e.g. a car-parking allowance. If it’s not, then you’re not required to do so.  You might want to take the facilities you currently have into account when choosing your new location.

Remember, moving is disruptive and unsettling for many people – even if they can see the rationale for doing it – and so taking their welfare and personal circumstances into account after a move makes good business sense.

Office buildings as seen from Pall Mall, Liverpool

If we took a holiday it would be so nice

Conservative Prime Ministerial hopeful Jeremy Hunt caused a stir this week when he announced that, if elected, he would cancel all Civil Service holidays in August in order to make sure that preparations for a No-Deal Brexit were fully implemented. But can an employer simply just cancel holidays, especially if they have already been authorised and staff may have paid out for a trip away?

It may surprise you, but legally the answer is yes. In fact, in certain sectors (e.g. the NHS or emergency services) it’s not that uncommon – think for example of nurses and doctors having leave cancelled because of a winter flu epidemic.

However, it’s not quite that straightforward. Firstly, there are minimum periods of notice which must be given to cancel someone’s holidays. Unless you have a different written agreement, this is the same length of time as the period of the holiday. So someone who’d booked a fortnight’s leave must be given two weeks’ notice of cancellation.  As the new Prime Minister is only expected to take office a week before the beginning of August, and unless the Civil Service has specific rules, Mr Hunt would not have time to stop someone taking two weeks off at the beginning of August.

Secondly, you need to have a clear and urgent business reason. Preparing for an imminent ‘disorderly’ departure from the EU in 12 weeks would probably fit this description, as might things like a high level of staff sickness, or a major and unexpected change in business. If you don’t have a valid reason, however, you might find yourself facing a claim for constructive dismissal.

Thirdly, cancelling someone’s holiday is not likely to motivate or endear them to your business. So you need to balance the short-term issue against the longer-term impacts.

This post doesn’t cover the issue of whether you are liable to compensate people for losses caused by a cancellation. Most travel insurance policies wouldn’t cover cancellation by the employer, potentially leaving your staff significantly out of pocket. Not being a lawyer, I can’t say whether individuals would have grounds to make a civil claim for their loss (if you are a lawyer reading this please feel free to comment) but if they can you might find yourself exposed to significant liabilities.

So, overall, cancelling holidays is something that can be done, but it is an extreme decision to take and would require extreme circumstances, and a proper evaluation of the pros and cons, before I would suggest you do it. As with so much of employment law, the rule is

“Just because you can doesn’t mean you should”

via GIPHY

 

Left Holding the Baby (and other employment problems)

There are certain questions that crop up regularly among my small business clients, and while every circumstance is slightly different, here’s some advice on how to approach some of these common issues if they occur in your organisation

I’ve an employee who always seems to need time off because of problems with her toddler. Last week she took two days off because he had an upset stomach. Her colleagues are getting a bit fed up with covering for her.

First of all, your employee has a legal right to take unpaid time off if an emergency situation arises with a dependant. This right is restricted to genuine emergencies (for example, if nursery ring to say the child is sick and needs to be collected) and not known issues (such as a hospital appointment for the child), and is also restricted to the time required to put in place alternative arrangements – which depending on the circumstances might be anything from an hour to a day – not to provide the care itself. It would be unusual for an ‘emergency’ to last more than a day. If the individual does need more time off, you may be prepared to allow them to take holidays or some other arrangement, but this is at your discretion.

If the employee seems to have ‘emergencies’ regularly, you can discuss with them the situation and look at ways of resolving it. Current case law suggests that the employee is not entitled to an unlimited use of this right. Consider ways that you might be able to get around the situation – for example short-term changes to working hours, or some other flexible arrangement. In the case of childcare particularly, you might want to discreetly find out if the employee’s partner could assist more (often in these cases it is the mum who ends up dealing with the problem every time, not the dad).

My business trades a lot with the EU and we’re badly affected by Brexit. A few members of our staff are vocally pro-Brexit. Can I sack them for promoting something which is damaging their employer?

Probably not. Although political views are not a ‘protected characteristic’ under the Equality Act, if someone feels they have been dismissed for holding a political opinion they can make an unfair dismissal claim even if they don’t have the normal two years’ service. You would have to have to show that dismissal was a reasonable response – and given that it’s unlikely that you can directly blame your employees for the current situation, it would be difficult to substantiate this.

What you can do is make it clear that people should not be using the workplace to promote political views. Someone who repeatedly broke this rule could be taken through the disciplinary procedure and ultimately dismissed. Make sure you apply the rule consistently though, not just against views that you disagree with!

I’m closing down part of my business in a few months and told the one employee in this area he’d be losing his job, and that he would be doing lower paid work somewhere else in the business. He got very irate and walked off the job, and has never returned. Now he’s threatening constructive dismissal – does he have a case?

Unless you were particularly abrupt or unpleasant in the way you told him or did it in a humiliating way (announcing it unexpectedly in front of colleagues for example), it’s unlikely. You are however putting him at risk of redundancy and needed to consult with him – including on whether the alternative work is suitable (if lower paid, it’s unlikely to be). That could leave you at risk of an unfair dismissal claim if the employee has more than 2 years’ service. As he’s walked off before you could undertake proper consultation, or even give him his legal notice, you are likely to have a defence against a claim, but it could get messy and time-consuming. If he does make a claim, consider settling through ACAS early conciliation or via a Settlement Agreement.

MPs and Constructive Dismissal

MPs and Constructive Dismissal

One of the side products of this week’s decision by a group of Tory and Labour MPs to quit their parties and sit as an independent group was a somewhat heated discussion on parts of social media as to whether some of them, particularly Liverpool Wavertree MP Luciana Berger, would be able to claim constructive dismissal over their alleged treatment by their party organisations.

The first thing to say is that MPs are not employees of their political parties, so the simple answer is no. But as constructive dismissal is something that worries many small employers, it’s worth clarifying what it is – and isn’t.

Constructive dismissal is behaviour by the employer that is so awful that the employee can consider that they no longer have any trust or confidence in the organisation they work for and resigns as a consequence. It can be thought of in some respects as the opposite of gross misconduct (a situation where an employee commits an act that the employer can no longer have any trust or confidence in them, e.g. stealing, assault, leaking commercial secrets to a competitor etc).

It could be a single act by an employer, such as unilaterally reducing someone’s pay or demoting them to a lower grade. It might be humiliating someone in the presence of their colleagues and subordinates (this Gordon Ramsay clip is a good example – warning contains strong language). It can also be the final straw in a series of events which allows the person to conclude they can no longer work there.

It’s also worth remembering that an employer is responsible for the behaviour of their staff. So, if an organisation ignored or failed to deal with allegations of bullying, harassment, insulting or threatening behaviour against an individual employee by their colleagues, which then led to the individual resigning, they could be deemed to have constructively dismissed the employee.

Constructive dismissal isn’t a situation where an employer makes a decision that the employee is unhappy about (I’ve been asked questions about in the past about whether making someone move from a private to a shared office could be constructive dismissal for example – it wasn’t). And remember that if the person doesn’t resign there can be no constructive dismissal.

Constructive dismissal is also quite rare. There are, I think, two reasons for this. The first is that it takes a lot of courage, even in a very difficult situation, to simply walk out of a job.  The second is that to win a case at a tribunal, the onus is on the employee to show that the employer’s actions were such that they were justified in resigning, rather than a normal unfair dismissal where the onus is on the employer to show that its decision was fair and reasonable.  Even though the case is – like all employment matters – decided on the balance of probability (what the judge thinks is the most credible explanation of events) rather than the criminal standard of absolute proof, it still puts an additional hurdle in the way of a successful claim.

Based solely on the reports and social media postings I have seen, had she been an employee then Ms Berger certainly would have strong grounds for a claim. Whether she would have succeeded would have been up to a tribunal judge to decide. But it’s a useful reminder to employers that trying to ‘force’ someone  (or allowing colleagues to force them) out of an organisation can have far-reaching consequences.

Gordon Ramsay