Be Careful What You Wish For – The Pandemic, Homeworking and Employee Pay Cuts

It’s sometimes hard to remember but in the hazy sunlit days before COVID 19 reared its ugly head, the right to work from home was generally regarded as something as an elite privilege. In most offices home working was the preserve of the top brass who would depart, laptop in hand, at around 3pm, leaving the lowly minions to another two hours of enforced drudgery before the home-time bell sounded.

Flexible working applications were often made by those who wanted to work from home for reasonable adjustment reasons or to navigate complicated childcare arrangements. Such applications were usually given short shrift with employers rolling their eyes and citing vague generalities about the sheer impossibility of getting the job done outside of the workplace.

COVID 19 and the subsequent experience of lockdown has, of course, blown all of this out of the water. If lockdown has shown us anything it is that it is possible for the majority of non-manual jobs to be done from home. Of course, some jobs are better suited to this than others, but employees in occupations as varied as academia, law and IT have survived and prospered during lockdown.

For many this has been a cause of great celebration, a lot of people really like working from home. There is no long and draining commute. No intrusive line management looking over your shoulder. Perhaps most importantly, no constant interruptions with ‘water cooler’ chit chat about I’m a Celebrity and Love Island…

However for others homeworking can be isolating and stressful. The company of real, actual human beings is a source of comfort and reassurance and a psychological need for many. Whilst Zoom and Teams can provide human company of a sort, they cannot replace the impromptu Friday lunch or the ‘cheeky’ post-work pint. For many people these are the consolations of office drudgery, the occasions where lifelong friendships and relationships are formed.  

Aside from these social factors, a perhaps less reported negative of home-working is loss of salary. The internet giant Google has recently sent shock waves through the US labour market by proposing pay cuts of up to 25% for employees who opt to work entirely from home. An unnamed government minister has been quoted as suggesting that similar pay cuts should apply to UK civil servants:

“People who have been working from home aren’t paying their commuting costs so they have had a de facto pay rise, so that is unfair on those who are going into work.

“If people aren’t going into work, they don’t deserve the terms and conditions they get if they are going into work.”

So, can your employer cut your pay simply because you are working outside of the office? The short answer is no. Pay is the most important term of an employment contract and any attempt to dock your pay without consent is almost certainly a breach of contract. Whilst many contracts contain terms which are specific to geographical location – such as ‘London weighting’ – they are there to compensate workers for the overall living costs in more expensive parts of the country. They are not usually drafted in such as way as to give employers the ability to reduce pay if the work is not carried out in a specific location.

What an employer can do is to negotiate to change the terms of your contract. As an employee you can resist any attempt to make unilateral changes without your consent. However in the real world, individuals who are willing to take a stand in the face of corporate pressure may find that they do not subsequently find favour in the workplace. Employers also hold the trump card of being able to ‘fire and re-hire’ you on less favourable terms, as was brutally demonstrated by the energy giant Centrica in the recent dispute with a number of its gas engineers.

As with many issues in the post-COVID economy, this issue may be decided less by the technicalities of employment law than by brutal economic reality. With the imminent ending of the Furlough scheme and redundancies on the cards in many sectors, very few workers are likely to have much of an appetite to decline relatively small reductions to their pay if it means keeping a job.

This blog was prepared by Mark Alaszewski, Employment Solicitor at didlaw.