Working from home - contracts, reimbursement and office equipment
VIRUS SNIPETS
With the easing of lockdown and the lifting of some of the restrictions, employers and employees alike are facing the question of whether to continue with the previously government imposed working from home policy arrangements or whether to comply with the new advice and start returning to the office.
Social distancing rules may make it difficult in many offices for the entire workforce to return and in Canary Wharf, with restrictions to the number of individuals permitted to enter a lift at any one time, mile-long queues are predicted as people attempt to reach their desks.
This is clearly an imperfect situation but it is apparent to all that a balance needs to be found. Central London is being called a ghost town and supplementary businesses continue to suffer from local cafes and shops, to those offering office support services.
It seems likely that many offices will operate a 50:50 policy with employees working alternately from the office for half of the week and from home for the other half. This will both reduce office costs for employers and also make social distancing more feasible.
Employment Contracts
Any business wishing to review their staffing arrangements and make working from home a permanent set-up (either full-time or part-time) will need to review all their staff contracts, to ensure that you are able to make the necessary changes unless, of course, both parties agree. The specific wording will determine exactly which practices can be altered.
Contract variation is much simpler if your existing employment contracts contain a flexibility clause (also known as a variation term) which may allow for you to change specific terms such as:
Hours or days worked
Rates of pay
Place of work
If your contracts do not include a flexibility clause it does not prevent you from making changes to employee contracts but it does mean that each change will need to be agreed to by both parties.
It is important staff are consulted during this process regardless of the existence of a flexibility clause; as mentioned in a previous note, working from home must be by mutual consent and it will, therefore, be crucial that the circumstances of each individual are properly understood to ensure that those team members who are suitable candidates continue to be allowed to work from home whilst others return.
On 6 April 2020, there was a change to the statutory requirements for employment contract written terms. If you do make any amendments to your employment contracts in the wake of COVID-19 and your existing terms pre-date 6 April 2020, in addition to providing any contract changes in writing, employers will also have to add the extra information required by the law[1].
As from April 2020, the following information must be included in all employee contracts[2]:
Name of both parties
Job title and role description
Start date (and end date of a fixed-term contract) and date of continuous employment
Salary, details of all remuneration or benefits
Agreed normal working hours and day of the week expected to be worked and if these are variable
Holiday entitlement including how holiday pay is calculated
Details of other types of paid leave e.g. maternity and paternity leave
Main location of the job (and any other places the employee may be expected to work)
Notice period
Information of the pension scheme
Details of any collective / trade union agreements that directly affect conditions of employment
Terms related to sickness absence and eligibility for sick pay and leave
Company arrangements for grievance and disciplinary procedures
Details of training entitlement provided by the employer and any part required to be completed by the employee including any training that is required but not paid for by the company
It is worth noting that despite the recent policy that all work that can be done from home, should be done from home, there is currently no legal right for employees to work from home although they may request flexible working which includes working from home. A flexible working request may be refused by employers on one of the following prescribed grounds[3]:
It will cost your business too much
You cannot reorganise the work among other staff
You cannot recruit more staff
There will be a negative effect on quality
There will be a negative effect on the business’ ability to meet customer demand
There will be a negative effect on performance
There’s not enough work for your employee to do when they’ve requested to work
There are planned changes to the business, for example, you intend to reorganise or change the business and think the request will not fit with these plans
It seems reasonable to assume that employers will see an increase in requests as they look to re-open their offices. However, employers will have to balance business requirements with their Health and Safety obligations.
Reimbursement and Compensation
Homeworking expenses include:
Equipment, services or supplies you provide to employees who work from home (e.g. computers, office furniture, internet access, pens and paper)
Additional household expenses such as gas or electricity charges
Providing home working expenses to employees can have tax reporting implications for the employer and there are weekly limits as to the tax-free amount that employers can contribute towards additional household expenses[4].
If an employee purchases equipment personally for business use, they can, and will usually, seek reimbursement from their employer and in some instances, employers will ask their staff to purchase their own equipment. However, large reimbursements usually have tax implications for employees which are likely to be unwelcome to many.
Given current circumstances, a temporary tax exemption on employee reimbursements was introduced in May 2020 which came into effect on 11 June 2020 and will remain in force until the end of the tax year 2020/21 provided that the purchase meets the following two conditions:
The equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak; and
The provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer.
For purchases made from 16 March 2020 up until 11 June 2020, HMRC will exercise discretion and not collect tax and National Insurance Contributions due on any reimbursed payments[5].
Provision of IT and Office Equipment
For many businesses, it is not standard practice to issue all employees with work laptops, this is often a privilege (or a burden) of seniority.
Whilst employers are under no obligation to provide technology to staff who are working from home it may be prudent to provide computer equipment for a number of reasons from employee goodwill to combating cyber security risks. If the employee’s own equipment is being used, associated costs may need to be reimbursed.
Under the HSWA and the Provision and Use of Work Equipment Regulations 1998, employers are required to ensure that all equipment used by people for work is suitable and safe, and that adequate training has been given. All equipment must[6]:
Be safe for the use
Be in adequate state or repair
Not cause a hazard to others who may be affected by it
As an employer, you remain responsible for the condition of any equipment that you provide to home workers and it must therefore, be reviewed on a regular basis.
Employers also remain responsible for homeworkers’ health and safety (see our previous article, now available on our website iscalegal.co.uk). Each employee working from home should be issued with a basic first aid kit as you would have in any office environment.
Unless employers supply all of the furniture for home working (e.g. a desk and an ergonomic chair) the use of potentially unsuitable domestic equipment that is not designed for 8-hour use, can leave you open to liability in the event of a chronic condition developing.
It is those at the bottom of the corporate ladder who are likely to be suffering the most, both from a lack of mentorship and from cramped, unsuitable home office environments. From an employer perspective that means inefficiency.
Final thoughts
Whilst employers do not have to provide all stationery and equipment required by teams working remotely, it is clear that to maintain goodwill, it is prudent to provide as much equipment as is reasonable possible. In the instances where it is not possible for the company to provide certain items, it is important that employees are clear on the corporate policy for expense claims so that they may seek reimbursement within these parameters.
Contracts and company policies may need to be re-written to reflect the current environment and staff will need to be carefully consulted as employers look to either make permanent changes or to re-instate old norms.
Homeworking is not likely to represent a cost saving for employers.
[1] https://www.acas.org.uk/changing-an-employment-contract/when-changes-are-agreed [2] https://www.acas.org.uk/what-must-be-written-in-an-employment-contract/what-the-written-terms-must-include
[3] https://www.gov.uk/flexible-working/after-the-application
[4] https://www.gov.uk/expenses-and-benefits-homeworking/whats-exempt
[5] https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2020-05-13/HCWS237
[6] https://app.croneri.co.uk/topics/working-home/indepth?product=136#WKID-201707171033380292-16621642