Where a business employs homeworkers, it should ensure that contracts of employment reflect the changes involved in working at home and any additional obligations involved for the protection of both employee and employer. Where the employee becomes a homeworker during their employment, perhaps following a flexible working request, their contract should be reviewed and updated to ensure it contains any relevant clauses or amended clauses to cover their amended circumstances.

Implementing Homeworking

Employers should reserve the right to monitor homeworking arrangements and performance in the probation clause for new employees. For existing employees, reference to a trial period should be included during which again, homeworking arrangements will be monitored. They should also reserve the right to extend or withdraw the arrangement where applicable. Any clause should also allow the employer to revert to the original arrangements if the change has proved to be unsatisfactory or circumstances change. Please note that following any trial period where the homeworking has been confirmed, this is likely to be considered a permanent change to the employee’s terms and conditions so any change thereafter will be a further variation which may require the employee’s consent.

Contracts should set out to whom the employee reports, how often and in which circumstances they are expected to attend the employer’s premises. The employee should also be required to confirm any change of home address and that there is no issue or further agreement required to allow them to work at that address.

Homeworkers should also be made aware that the other company policies still apply to them regardless of the fact they are not working on company premises.

Health and Safety

Employers remain responsible for an employee’s health and safety even when they work at home. An employer will need to review the employee’s homeworking arrangements and set out any rules in the contract. The contract should also set out responsibility for maintaining any equipment and any associated costs for example – utility and communications bills, insurance, IT equipment, office furniture.

One of the main health and safety risks with homeworking is that employees do too many hours and do not take adequate breaks. Employers should set out what is expected and the requirement to take breaks (see below).

Employers need to have a clause allowing them to enter the employee’s home (at reasonable times and on reasonable notice), to carry out health and safety risk assessments of any equipment, workstation or other homeworking arrangements.

Working hours

Part of the reason the employee may wish to work from home is to have some flexibility around which hours they do. In this case the contract should reflect this but ensure the minimum requirements are clear. The contract should also point out that it is the employee’s responsibility to ensure they take adequate breaks.

If the employee is paid by the hour the contract should set out what arrangements are in place for validating time worked or ‘clocking in’.

Equipment

Homeworkers’ contracts will require a clause covering ownership, maintenance and the requirement to report faults or malfunction. Such clauses should reserve the right for the employer’s representatives (at reasonable times and on reasonable notice), to enter the employee’s home to install, inspect, replace, repair, maintain or service equipment, and recover it after termination of the employment or cessation of homeworking.

Confidential Information and Data Protection

Control of data security and confidential information may be a reason why employers are not keen to sanction homeworking. Data protection legislation is currently in the spotlight with the imminent implementation of the General Data Protection Regulations in May of this year. The risk with homeworkers is different than with other employees. Employers should audit the risks involved in the employee working from home and take appropriate measures to ensure the data is protected.

The contract should cover  IT security measures – e.g. when the employee is required to encrypt and/or password-protect information, instructions on locking the computer terminal whenever it is left unattended, ensuring any wireless network used is secure and other security measures – what to do with securing paperwork and retention of physical data.

Homeworkers should be included in training in the Employer’s data protection and confidentiality policies.

Tax

An employee may be entitled to claim a deduction against taxable income for certain household expenses and travel costs. The contract should ensure that the employer makes no guarantee that this is the case and the responsibility for any making any claim for deduction lies with the employee.

Payments of reasonable additional costs made by the employer to the employee in relation to working at home under homeworking arrangements are exempt from tax where the employee works at home regularly (rather than just from time to time), by agreement with the employer. This can be demonstrated by a contract clause covering hours of work. The payments which are exempt are those which cover reasonable additional household expenses. The HMRC guideline is that a payment of £4 a week will be exempt but a greater amount can be approved if there is evidence to justify it. Again the contract should cover that the employer makes no guarantee about what is exempt.

A computer which is provided to an employee to use at home in the course of their employment will be exempt from income tax, provided any private use is ‘insignificant’. To ensure a tax charge does not arise, the contract should reflect that the use of the computer equipment for non-business purposes is prohibited or kept to an insignificant level.

Discrimination

Employers need to ensure homeworkers are not treated any differently to those who work at the employer’s premises. They should be included in all training and social events. They should also be monitored for stress and isolation. Homeworkers often work part-time and so could bring a claim under Part-time Workers (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2000. Less favourable treatment could also result in sex discrimination or equal pay claims. When reviewing the homeworkers’ contract employers should take the opportunity to audit it for areas of the homeworkers’ terms and conditions that could result in less favourable treatment.

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NOTE: Kiera Lee is speaking at Legal-Island's Contracts for the Modern Employment Relationship event on 17th May at the Merchant Hotel, Belfast. The 'early bird' offer ends soon.