Can employers reduce salary for homeworking employees?

With increasing numbers of staff expected to return to the workplace, many employers are facing reluctant employees, used to eschewing the daily commute to work from home. But, some employers are viewing this shift in working practices as an opportunity for positive change for their business.
 
Employees only have a contractual right to work from home if the arrangement has been agreed with the employer; it is not automatic (particularly so, now that government advice is no longer to work from home where you can). Otherwise, an employee should make a flexible working request, which the employer is not obligated to grant if it will not suit the needs of the business. Indeed, the employer can justify refusing such a request on various grounds, for instance where such an arrangement is going to reduce productivity or prove expensive.
 
Employers should also remember that employees who want to make such a request must have at least 26 weeks’ service and cannot have made a flexible working request in the previous 12 months.
 
Yet, some employers are taking the opportunity presented by a request to work permanently from home to redraw key terms of homeworking employees. Employers are agreeing to allow more staff to work from home, full time or on a part-time, ‘hybrid’ basis, on the condition that the employee’s salary is reduced to reflect the fact that it reduces the employee’s costs, especially in expensive cities, such as London. Travel expenses and city bound benefits (such as gym memberships) can also be amended to reflect an employee’s new working location.
 
Such steps, however, can only be taken with the full agreement of the employee and should be confirmed in writing by varying the employee’s contract of employment or in a side letter. A unilateral change to an employee’s terms, without their consent, could give rise to a constructive unfair dismissal claim for breach of contract.
 
If you have any questions please contact the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.