Although some businesses are now going back to the office, it seems that remote working or working from home (WFH) is now the first choice for many employees.
But what about employers? What happens if you are an employer and you really don’t think that WFH is in the best interests of your company? Can you reduce pay?
You cannot reduce pay without an employee’s consent.
Employees contracts are binding agreements with their terms and conditions clearly stated.
If pay is reduced, without consent, then it is unlawful. Employees can then quite rightly start a grievance procedure, and potentially you can end up at a tribunal, paying out costs, fees and damaging your reputation.
So the first thing to do is to consult and gain consent.
An employee must consent in writing. A company must keep a copy of this consent. Ideally, it would be a signed letter, but an email from the employee can be accepted.
How do you gain consent for reduced pay?
If you are struggling because of the pandemic and the alternative to reducing pay is redundancy, then it is possible employees will consent.
However, it may be difficult unless this is enacted fairly across the company.
If an employee is doing the same job and getting the same results personally for you, then it is very difficult to argue about reducing their pay.
A blanket reduction, of say 10% across the board may seem like a logical way of handling a pay cut, but this leads to questions about how you calculated the level of pay.
It could lead to claims because it could be argued this level of cut is unfair. Why not 5%? What was the 10% based on?
You also have to consider if there are staff that have always been allowed to work from home, at least part of the week. This really does make pay cuts without consent extremely likely to elicit claims for discrimination.
Other risks to a company should also be considered.
- Will staff feel less motivated to work for less?
- Will they leave and find jobs elsewhere?
- Will your company suffer in terms of reputation, leading to difficulty with suppliers, partners and clients?
Employment law is a tricky area. The pandemic has made life unpredictable for many employers and employees. Consent, engagement and communication is always the best way to make any changes to terms and conditions but even more so now that times have been so challenging.
If you have a good employment solicitor on board, it is always worth investing in a consultation to find out if your plans are legal, or if there could be an alternative way of achieving the same outcome.
If you are an employee facing changes to your terms and conditions that you are not happy with, then an employment solicitor can explain what you may be able to do to better any outcome.
To reserve a consultation with employment specialist Justin Sadler at Barrett and Co Solicitors in Reading for £95, please call 0118 958 9711.
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Justin deals with all aspects of Dispute Resolution for both businesses and individuals, including including Contentious Probate, Employment Law ( for both businesses and individuals) and Commercial Litigation. This means that he is familiar with the many different courts and tribunal as well as the many different methods for resolving disputes, including alternative dispute resolution such as adjudication and mediation.