'Not sensible' | Firm says staff can work from home permanently if they take HUGE pay cut

Firm says staff can work from home permanently if they take HUGE pay cut

A London law firm has offered staff the option to work from home permanently... if they take a 20% pay cut.

As first reported by law firm news outlet rollonfriday.com, all employees and lawyers (with the exception of partners) at City firm Stephenson Harwood have been given the ultimatum amid ongoing debates about the role of hybrid and homeworking, following the end of the UK Government’s Covid-19 restrictions.

Currently, the company’s 1,100 employees, based in offices in London, Paris, Greece, Hong Kong, Singapore and South Korea, have the option of working from home for up to two days a week. But according to The Times, junior lawyers at the company who wish to take up home working full-time would see their starting salaries of £90,000 drop to around £72,000.

And a spokesperson for the firm confirmed to the publication that anyone taking up the offer of permanent homeworking was likely to be ruled out of opportunities for promotion to partnership level.

“Like so many firms... we see value in being in the office together regularly, while also being able to offer our people flexibility” the spokesperson said.

Not surprisingly, the firm added it did not expect many employees to take up the offer.

Are there legal risks to this decision?

Following this news, Donald MacKinnon, Group Legal Director at employment law and HR support firm WorkNest said the law firm’s approach to home and flexible working could cause a number of issues for a business, some of which could also be classed as discrimination which can have severe consequences.

MacKinnon said: “If homeworking is being used by a woman because they have caring responsibilities or by a disabled person then arguably paying them a lower wage for working from home may be indirectly discriminatory.

“The employer would need to justify that lower pay is a legitimate and proportionate measure which might depend on whether the employer could show that an employee saves 20% of their wage by working from home.

“It could also raise equal pay issues if the same work is being carried out by a female home worker compared to a male office worker. It opens up questions around whether the two roles are comparable.”

MacKinnon concluded: “Ultimately a move such as this could leave an employer vulnerable to potential claims as well as it possibly having an overall negative impact on employee engagement.”

'Not a sensible approach'

Martin Williams, Head of Employment at Mayo Wynne Baxter, questioned why the offer was made to staff in the first place.

“Stephenson Harwood has said it was not expecting many people to take up the offer of working from home full time with a 20% pay cut – which is not surprising as it is a big chunk of money. It makes you wonder why it was offered it in the first place”, he said.

“The question is, if working from home is going to have a detrimental effect on meeting customer demand or quality of the work produced, how does paying someone less overcome that problem?

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“It is hard to see how taking money away solves any of the issues an employer thinks they might have with people working from home – especially when they are saving money on office space.

“If someone has been working from home all this time and it has not had a negative impact on the business, they can make a Flexible Working Request.

“An employer does not have to acquiesce to that request, but if the employee has proven that they can work remotely and effectively over the past two years, it’s going to be very difficult for the employer to decline their request.

“Having inflexible blanket policies on working from home is not a sensible approach. What employers need to do is to manage employee expectations and consult with staff on a case-by-case basis.”

Are staff willing to take a pay cut for WFH?

Stephenson Harwood’s offer of a pay cut for the convenience of working from home may seem ludicrous at first glance.

However, academics from Henley Business School recently published a report on flexible working which reveals that 27% of employees surveyed would be willing to take a salary reduction to work from home full-time. The research suggested that the amount that workers are willing to give up was not trivial, with employees being willing to forgo over £3,300 per annum to be able so.

For context, the average expenditure of commuting by car is £1,768 per year, and overall a family spends over £3,700 on transport each year, according to the Office for National Statistics (excluding air travel).

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