This article is an extract from GTDT Market Intelligence Remote Working 2022. Click here for the full guide.
1 What are the most consequential issues that an employer should consider when determining its post-covid-19 remote work policies?
Finding the most efficient staffing models and flexible arrangements to ensure they meet increased customer demand and new staff expectations has been thrust into the spotlight for many organisations. Businesses finding their feet post-covid-19 are considering the composition of the workforce and creating structures that draw on the various forms of staffing solutions that are appropriate to the business, with due regard to the benefits and drawbacks of traditional and flexible workforce solutions. Businesses that are able to hit the sweet spot with flexible staffing solutions while being able to attract and retain the right talent are at a strategic advantage to their competitors, who may struggle with structures that are too lean or overly bloated as the world economy continues to ebb and flow.
However, being able to offer staff workplace or working hours flexibility may not be enough. While workplace flexibility has become a significant area of negotiation when concluding employment contracts, members of the modern workforce increasingly demand that their employers’ activities match their own personal ideals. This includes that the business operates in a sustainable way and provides benefits for the environment, local economies and the surrounding communities. Companies facing negative publicity for breaches of corporate values may struggle to convince talented applicants that their workplace will result in meaning and fulfilment. Employees are cancelling employers whose corporate image and values are at odds with their own, and favouring businesses more closely aligned with their personal ideals.
The pandemic doubled down on this focus on corporate citizenship, and businesses have had to ensure they identify sustainability risks and opportunities in every part of their business strategy, including in workforce planning.
Attracting the right talent particularly requires responsible leadership and increasing transparency. Employees of the modern workforce want to be in an environment where they feel they are making a meaningful contribution to the greater global issues, over and above having flexibility.
Employees, customers, shareholders and other stakeholders are demanding that organisations take a stance on important issues such as racism, sexual harassment, unemployment, meaningful work, and income inequality. Leading businesses are turning this challenge into a competitive advantage by creating workplaces with purposeful engagement and ways to accommodate a diverse set of employees with differing workplace needs.
Business indicators such as staff turnover and employee engagement are now the critical markers of organisational effectiveness.
Employers are also considering changes in their employee relations strategy that move from a primary focus on collective engagement to recognising the needs of smaller interest groups or, where possible, individual employees.
Employee engagement surveys, individual feedback sessions, career planning, performance management, employee goal and expectation setting, anonymised feedback channels and exit interviews are useful tools in the arsenal of the modern people practitioner and line manager.
A successful post-pandemic business will also create opportunities for feedback and information from staff and stakeholders outside – or in addition to – the traditional upward communication channels. They will also find workplace-appropriate mechanisms to regularly test the employee relations climate, being nimble to adjust employee relations strategies to tailor to the fast-changing views of society as reflected in the workplace.
A further imperative for employers of the modern workforce will be creating a purpose for employees by communicating an understanding of what the business is and the reason for its existence, then linking that to the function of the teams and individuals.
Employers that are able to correctly identify the right workforce mix when considering the various options available to them and then find ways of accommodating and communicating with their staff to create meaning and purpose for them are at a strategic advantage when it comes to attracting the right talent and managing an engaged workforce in the new world of work.
In this era of high employee mobility – even when taking into account the dramatic unemployment rate – staff appear to be more inclined to vote with their feet than filing a grievance.
2 Pragmatically speaking, is there a threshold to determine when working remotely (from home or otherwise) requires local rules to apply?
No, there is no magic number that requires an employer to consider, establish or maintain local workplace rules. Working from home triggers health and safety considerations, but this applies equally when a person works from home routinely or occasionally. It is sound employee relations practice to create certainty for staff where they are expected to work in circumstances outside of the norm, or where a new dispensation is created. Policies should be flexible preferably and capable of change at short notice, and should ideally not create contractual or permanent entitlements that are incapable of change on prior notice or consultation. Whilst some employers are desirous to see a return to a level of compulsory attendance at a bricks and mortar workplace, others are allowing teams a level of flexibility to determine what works best for each team, office or location, with a third group of employers abandoning traditional offices altogether in favour of permanent working from home arrangements.
3 If employees voluntarily move away from their main work location, can employers unilaterally impose locally appropriate compensation packages?
This depends on the contractual entitlement. Where the employment contract allows for a change in remuneration on prior notice, the employer may rely on the contractual flexibility (subject to normal requirements of fairness). In most instances, though, the contracts would not allow for a unilateral reduction in salaries. Employers would thus have to negotiate such changes. Where employees are reluctant to consent to such deductions, employers may employ various fair and lawful levels of economic and managerial persuasion to secure such consent. The operational requirements of the employer may also warrant the redundancy of roles no longer required due to the changing business requirements, with new roles speaking to the amended business realities. There are statutory limitations on the employer’s need to effect redundancies where the termination follows the employee’s refusal to accept a demand on a matter of mutual interest. Employers should thus act with caution to ensure that their business needs are distinct from demands to amend terms and conditions of employment.
4 Do you anticipate a rising trend of employers hiring remote workers as opposed to managing office-based employees who subsequently go remote? What practical issues should employers bear in mind when considering remote hiring?
The option of employing new hires as remote workers is certainly one that businesses should consider. It may be easier to secure consents associated with remote working from new hires rather than to negotiate changes with existing staff. Every business hiring a new employee should thus consider whether the employee should work remotely, or whether the contract should at least allow the employer the flexibility to unilaterally enact such a change in future. Employers are in better bargaining positions at the initial contracting stage than at any stage after commencement of employment, as a general rule.
There are many issues associated with establishing a permanently remote workforce. The numerous practical factors to be considered during the planning and implementation of remote work policies include employment law requirements in respect of minimum employment conditions, corporate and employee tax repercussions, workplace health and safety regulations and employee monitoring and data privacy concerns. Employers should consider changes in business needs that may warrant the company to require staff to assemble at the workplace at short notice, attend client meetings or company events in person, or other likely aspects that would warrant limitations placed on the employee’s ability to work from any location. Businesses deal with these requirements in various ways, from introducing a need for the employee to reside within a certain distance from an existing office, or being available to report for duty at the business premises within a prescribed period, to fixing dates for compulsory attendance at the workplace.
5 Do local laws provide remote employees with more generous leave entitlements, such as sick leave? Can employees avail themselves of leave entitlements in both the primary work location and the remote work location?
No, remote workers do not benefit from more generous leave entitlements. Some employers have introduced unlimited paid time off as an incentive to staff to manage their workload more flexibly, but most businesses still extend the same leave benefits to office workers and remote employees. Where staff work across jurisdictions, employers generally comply with the leave requirements of the host jurisdiction unless there is a legal obligation to honour the provisions of the original jurisdiction.
6 What are some best practices for protecting confidential and proprietary information in a remote work environment?
Many employers implement cybersecurity policies to assist them and their staff to manage confidential and proprietary information, especially when working remotely. The policy will generally contain prescripts regarding the compulsory use of two-factor authentication, encryption of messages, limitations on the use of unsecured Wi-Fi networks, using strong passwords and password managers, and using firewalls, antivirus software and anti-malware.
7 How does a remote employee affect the employer’s tax obligations? Do the employee’s activities render the employer to be ‘doing business’ in the remote location? Will these activities create a taxable presence for the foreign employer in the local jurisdiction?
Working remotely in a different jurisdiction could create a permanent establishment risk for the foreign entity with resultant tax obligations. It could also trigger local company registration requirements. Contracting an employee in a jurisdiction could be an indicator of the company doing business in that jurisdiction, which could result in a duty to register a branch office, and may have a bearing on the permanent establishment risk. Employees could also attract local income tax obligations or breach visa requirements should they do business in another jurisdiction.
The Inside Track
What do you think are the most exciting and promising opportunities of remote working? How do you think it will affect the future of work?
Remote work offers exciting opportunities for employers. Where employees are not bound to a specific location or need to commute and are able to work flexible hours, employers may be surprised at the range of applicants interested in taking up employment. Parents, workers with a wanderlust, those who value time to exercise or be outdoors, workers who cannot afford to stay close to major cities – these are all groups who often fall outside of the regimented requirements of the typical office environment. Employers looking for remote staff are able to draw from a wider pool of talent, and increase their prospects of increasing workforce diversity.
In your view, what are the most difficult challenges raised by the rise of remote working? How do you think employers should tackle these challenges and adapt accordingly?
Employers must look at the effectiveness of each job to be performed remotely, possible changes to working hours, and whether remote work will be permanent. Also to be considered are the legal restrictions of each country in which employees are based, immigration and tax issues for employees in other countries, the cost of home equipment and expenses, including insurance and compliance monitoring, and who will bear the cost, as well as data security and protection laws. Protecting workplace culture and keeping a check on employee mental health, updating policies around job performance assessments and career progression is also necessary, as is assessing how diversity and inclusion are impacted by the work-from-home scenario.
What do you enjoy most about practising and advising in this area?
Employment law is dynamic in that it has people at its core. People are unique, with no two employees behaving the same or requiring the same from their employer. Businesses similarly differ and have their own personalities, values and habits. The mix of employees with their own demands, business with different personas, and the conflict inherent in the employment relationship, makes the practice of employment law a wonderfully emotional and cerebral challenge. Layer into that the added responsibility of dealing with the livelihood of employees and sustainability of their employers, and you have the makings of a truly challenging yet immensely rewarding profession.