Latest in Employment Law>Articles>Should workers who choose to remain working remotely have their pay cut?
Should workers who choose to remain working remotely have their pay cut?
Published on: 10/11/2021
Article Authors The main content of this article was provided by the following authors.
Seamus McGranaghan
Seamus McGranaghan

 We've got the Silicon Valley giants leading the charge here. Google, Twitter, Facebook, they're all tentatively saying they might cut the pay for people who decide to remain working at home.

As I mentioned earlier, the newspaper "City A.M." reported last month, just in August, that two-thirds of medium to large firms were considering cutting pay for remote workers. I would say this is controversial, to say the least. I cannot say that in any job interviews I've ever had anyone has ever asked me, "How are you getting here? Let's accommodate for that in your pay".

When I worked across in England, if I was working in Zone 1 in London, I got a London weighting. But to me, that was very much a different kettle of fish from my wages. And if I had moved to a different office within that organisation, the London weighting would have been removed. But that's very different to me than your actual wages being impacted.

Speaking for myself, I think working from home incurs expenses as well. My electricity bill is through the roof. We've got two of us working from home at the minute. Your heating bills go up in the winter, all of that.

So, it's unusual, but we've all been doing this for an excessive 18 months now, Seamus. Normally, I'd say if you've set up a practice whereby somebody is doing something for 18 months to two years, you may well have varied their contract. Do you think that's the case for working from home?

Seamus: It's something that we've touched on previously, but we have been working through the pandemic. I think that we are certainly at a crossroads at the minute in relation to where things are going to go to. I think September was always the planned date that we heard about a lot of employers wanting to have employees back into the office.

I think ultimately my view would be that, to date, you could, as an employer, certainly justify the reasons as to why it has been a temporary contractual variation, not a permanent one. But I think that we are at a crossroads now where potentially you will have employees coming forward and saying, "Look, what is my position? Am I going to be working from home in the future? Will it be a hybrid situation, or am I back into the office?"

I can, to an extent, Christine, understand where employers are coming from. They maybe feel that they're not getting the same value from their employees if they've been working from home. But yet, from an employee perspective, it isn't all roses at home either. It's difficult to manage that aspect working from home. There are definitely two sides to the coin.

My view would be, at the minute, that we probably are at a point where we need to see some sort of certainty going forward in respect to the future. If we get a surge in numbers, we might be back to where we were nine months ago. Who knows? There is certainly a fluid situation that is arising at the minute, but we have to be getting to a point at this point . . .

As you said, 18 months down the line, a lot of people are feeling very settled in the fact that they're working from home. They feel that they can do the job better at home. They feel they can concentrate better. They can dedicate more to their role because they don't have the travel. They can get up in the morning and don't have that lengthy travel period. They can dedicate more time to their work.

But up to date, I think we've been working through a pandemic. I think a temporary variation is probably where we've been at. But it can be different for other industries. It could be very much that this is something that has already become a full contractual variation.

I think from an employer point of view and from an HR perspective, you need to be getting things into writing. Whether that's amendment of contracts, whether it is letters issued to the staff to update their terms and conditions, I think that's definitely where we're coming to.

Christine: It's decision time, really. Are you going to be hybrid, or what's going to happen? My real concern for it is, is it going to create a two-tier system within organisations? We can obviously see people whom at-home working is going to be more attractive for. Women with children are going to want that. I have to say that I find it easier to pick my children up. Just nipping from home rather than from the office. And then you've also got disabled employees. They will be able to do a job that maybe potentially wasn't open to them before. You cut out the hassles of commuting when you've got maybe issues with your mobility. That's my concern.

Also, we were chatting about the gender pay gap. If women are the people working from home and businesses decide to cut the pay, is that going to make that worse? Will there be questions of "Is this work of equal value?" coming up?

I think the big pitfall, for me, for employers is just make sure you've got a really good reason if you're going to be cutting wages, and not just because you're working from home. You don't want to start alienating groups.

Seamus: Absolutely. To be clear about it, and not to tell anybody anything that they already know, but I do think that a unilateral decision by an employer to cut salary is a high-risk strategy. I think that you are likely that an employee is probably not going to agree to a pay cut on the basis that they are going to be thinking, "Well, I'm doing the exact same work that I am doing, except that I'm doing it from home. Where is the under-value here? Where's the entitlement to reduced salary or wages?"

I think employers are going to have a difficult time in relation to getting agreement in respect of any reduction in salary. If they unilaterally do that, they're looking potentially at claims of constructive unfair dismissal and discrimination claims.

I think that's a really important point in relation to the discrimination element, particularly in and around gender. If women are going to be more willing or wanting to work from home than men, there are all those issues arising in relation to, "Is there a detriment that will arise for women that are working from home? Will they be overlooked in respect of promotions because they're not in the office, they're not visible? Will they miss out on opportunities? Are you valued a better employee because you can enter the office rather than working from home?"

It's shaken this idea and belief that if you work from home, you've got your feet up for the day. I know that there are lots of tests and measures that can be done, if you have a timing system, if you have a project that you're working for, you're seeing it through to completion. There's evidence there that the work is being done.

But I think we've definitely moved a long tway. The pandemic has no doubt assisted and helped in that. But there are issues for, I think, employers that are simply looking to say, "Listen, employees working from home, I'm not getting the same value, I'm not getting the same work, I'm looking to cut salary". So lots of issues that arise.

The few other ones that came to me as well would be that if the employer does make a decision . . . I think where the risk is, Christine, as well is . . . almost the other side of it is for employees that want to work from home, they might be so keen to work from home that they will say to their employer, "I'll take a pay cut", or, "I'll negotiate with you in respect of my terms and conditions". That's going to leave those individuals vulnerable and it's going to set precedents as well.

There's that side as well, where people would be so keen to accommodate because they want to work from home that they might agree to changes of their terms and conditions. All that might be ultimately indirectly discriminatory.

I think there are those issues. But also, anybody that has their pay cut and thinks that they're doing the same job is going to be demoralised. Where's the motivation? Specifically, if you're saying, "There's an employee that is able to go into the office every day and they're being treated so much better, and I'm being treated in a detrimental way . . ." As you say, it's creating different rules for different people and this two-tier approach, and I do think there are issues around discrimination.

And also, potentially, can employers use it as a tool? "We're not giving you flexible working, but we'll give you working from home and we'll bargain with you then in relation to the terms and conditions relating to your employment".

So definitely difficulty. The main ones would be it's the loss of opportunity. It's the visibility. When it comes to training, it's promotion access, even to the work and to the clients. You might feel that you're not getting the ability to get the "good work", if I put it that way, just in my own terms. You're losing out on the good work. Then will that result in these claims for breach of contract, constructive dismissal? Unlawful deduction of wages claims is another one that's a potential. Then the whole aspect of discrimination.

It would be interesting, actually, to get the views of somebody maybe from the Equality Commission in relation to how they see it. At the minute, it works well and there's a value to it, but when things settle down and you get back into a normal way of working, are those individuals going to be at a disadvantage and a detriment?

Christine: I suppose what we're saying here is there's not really a safe way to reduce a worker's wages. That's the bottom line, really, isn't it? For employees, a lot of good has come from the pandemic and the ability to work remotely. But from an employer's point of view, a lot of work has come from the pandemic, to say the least. There's been a lot of stuff that we didn't really see coming. None of us has ever been locked up before. We didn't know what it would be like, and now all these things are spinning out from it. HR teams are just scratching their heads and extremely busy, aren't they?

Seamus: Yeah, absolutely. There's the whole issue that everybody is a bit burnt out and a bit . . . We're coming off the back of the summer going, "Where did it go?" It is difficult.

But look, it's about making sure that the balance is right for the business. The business has to be there to give the jobs, so there are reasonable arguments. But at the same time, the bigger concern for me would be where it is all going on a discriminative element. I think that that's going to be the hot topic.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 10/11/2021