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Resourcing for 2021: homeworking, flexibility and wellbeing

04 March 2021

In the second of our three-part series exploring resourcing challenges, opportunities and trends in 2021, we examine the trend towards homeworking and other flexible working arrangements and the growing focus on wellbeing, trust and culture.

As discussed in the first article in this series, companies are facing resourcing challenges similar to those faced following the 2008/9 recession, but with new regulatory and labour market issues such as Brexit and tighter control and scrutiny of flexible working models. At the same time, there are opportunities to embrace arrangements and approaches that would have been unthinkable as a mainstream solution after the last recession.

In this article, we look at some of the legal issues on which we are increasingly asked to advise as employers redefine employment relationships for the future, from health and safety responsibilities towards homeworkers to employees’ requests to work remotely from abroad. 

More permanent homeworking?

Before the pandemic, data from the Office for National Statistics showed that around 5% of the workforce worked mainly from home in 2019. Towards the end of April 2020, this had risen to nearly 50% under the strict lockdown rules.

The response to lockdown has been transformative with many companies having to embrace more agile and flexible arrangements, for better or for worse. The Harvard Business Review described this period as the “most significant social experiment of the future of work in action, with work from home and social distancing policies radically changing the way we work and interact”. 

For many employees, working from home has been a welcome change and it is not surprising that large numbers are starting to indicate that they want this to be a permanent condition of their contracts. Flexible working requests are, of course, nothing new. A formal request triggers a legal requirement for the employer to consider and respond, but it does not automatically have to agree to the request (see further below). Nonetheless, given that many companies have managed with a fully remote office during lockdown, it may become harder to justify saying no. (See our article Flexible working post Covid-19 - sea change or nothing new?)

An important question is whether employers will look to renegotiate salaries as employees work increasingly from home. Some are certainly doing so. Whichever approach is taken, it is vital for employers to consider their approach early on before precedents are set.

Health and safety obligations still apply while staff are working from home, but this is an area where many employers are unsure and have had to adapt. Many are introducing or boosting their current health and safety offering by providing home desk assessments, contributing to the costs of home office equipment or couriering office equipment to their employees. (More information on this is available in our FAQs on homeworking.)

One of the issues that employers traditionally raised about homeworking was how best to monitor productivity or quality of output and enable effective supervision. Some employers, out of concern that employees are not managing to “switch off”, might also wish to know what hours employees are working. Employers can monitor employees’ work activities, but the level of monitoring needs to be proportionate and reasonable. (See our article on monitoring remote workers for a more in-depth discussion.)

It will be particularly interesting to see if the rise in homeworking is accompanied by an increasing call for a “right to disconnect”. In the short term, the current UK government seems unlikely to adopt a statutory right to disconnect (as in France) or even a non-statutory Code of Practice (as planned in Ireland), but employers may nonetheless come under increasing pressure to adopt internal company policies that acknowledge an employee’s need to switch off.

Organisations also need to prepare for the increased cyber risks posed by a dispersed and remote workforce. From a practical point of view, working from home raises additional confidentiality challenges, especially when employees live in shared housing. Many employers are putting protocols in place to deal with these concerns.

Clearly there are major benefits for employers of a more remote workforce, not only regarding the potential to reduce salary costs but also the possibility of a reduced office footprint. An Institute of Directors survey found that over half of the directors polled were considering better and more effective use of their workspaces in the long term. Many office-based organisations are looking at hot desks for a mixture of homeworking and office working, reducing their formal rented office space or even giving it up altogether. (See our RE: Occupy site for detailed analysis of this area.)

Remote working abroad

Employees are increasingly requesting to work remotely from another country and we expect this trend to continue during 2021.

At first glance this may seem an efficacious solution, but having employees working from an overseas location can cause complications.An employee’s stay in another country may give rise to local income tax or social security obligations in addition to the continuing UK obligations. There is also the risk that the employee’s activities will create a permanent establishment in that country with resulting corporate tax liabilities for the employer. 

Certain countries will require that any person carrying out work locally is subject to the local employment laws, which may be more generous as regards holiday, minimum wage and so on. Benefits such as pensions and health insurance may not be valid for individuals who live outside the UK for a period. It is also worth also remembering until recently it was not an issue for UK citizens to work and live in another EEA country, but that has all changed with the Brexit transition period having ended on 31 December 2020.

We are not suggesting that employers should steer clear completely of having employees working remotely from outside the UK. On the contrary, there are real opportunities for employers who are prepared to embrace this option. It is nonetheless important to be aware of the risks and take steps to minimise them.

Increase in flexible working requests

It seems inevitable that hybrid working between home and the workplace is most likely to be the norm for office-based workers, but that does not prevent employees making other types of flexible working requests. We have, for example, seen an increase in homeworking employees working adjusted hours, such as starting and finishing early or late. Some employees may want those arrangements to continue after the pandemic restrictions fall away.

Employers do not have an unfettered right to refuse a flexible working request. They must act reasonably in considering the request and can only refuse it where one of several permissible grounds apply. Given the length of the pandemic restrictions, it may be difficult for employers to refuse flexible working requests if they are essentially an extension of an arrangement that has been working successfully for several months.

Separately, the employer must ensure that any decision does not involve unlawful discrimination. Employees suffering from Long Covid may fall within the scope of disability discrimination protection, for example, so care would need to be taken in refusing a request made to accommodate any related symptoms.

An interesting question is whether a blanket approach of refusing flexible working requests will raise a presumption of indirect discrimination against women, on account of the childcare burden. The critical issue is whether such a policy causes a particular disadvantage to women as compared to men. Although many families have needed to adjust their childcare arrangements, evidence continues to suggest that women are disproportionately responsible for childcare. It therefore seems likely that indirect sex discrimination will continue to be a feature of many flexible working requests.

The law in this area is expected to become more employee-friendly, with the government having indicated that intends to use the forthcoming Employment Bill to “make flexible working the default position unless employers have a good reason otherwise”. In the meantime, employers have an opportunity to reconsider their general approach and policy.

Wellbeing, trust and culture

According to a recent study, over 90% of employees have been directly impacted by the pandemic in some form or another, whether through illness or anxiety about finances, with almost a third of employees suffering from mental health and wellbeing issues. Unsurprisingly, employee satisfaction has dropped significantly.

As we emerge from “crisis mode”, employers are actively considering what this means for the benefits they offer. Has there been a fundamental shift in what employees value? Should purely financial benefits (e.g. bonus) be reduced in favour of investing in benefits that address health and wellbeing (e.g. access to online fitness or mindfulness classes, or the availability of coaching/counselling)?  In the first article in this series, we discussed our prediction that 2021 would see a rise in flexible benefit schemes. We expect there to be a broader range of benefits available with a greater emphasis on benefits that address wellbeing and particularly mental health. We also anticipate a greater focus on upskilling line mangers to support employee mental health, with greater access to internal mental health first-aiders and longer-term support available externally. 

It will be interesting to see whether there is a change in the expectations of physical attendance at work. Before the pandemic, it would be usual (and expected) to attend work with a cold or snivel. With the availability of homeworking and much greater awareness about how viruses spread, we will likely see a reduced expectation for physical attendance at the workplace in circumstances where someone is well enough to work, but not 100%.  

While “employee engagement” was often said to be key to getting through the 2008/9 recession, times have moved on and that term nowadays implies so much more than effective communication strategies and other approaches adopted in the past. Increasingly, employees want to work for a responsible business, expecting their employer to be concerned and invested in the wider community. Social justice remains high on the agenda for employees, particularly younger generations. The particular impact of the pandemic on younger generations may exaggerate inter-generational differences about the “right” (or best) way to move forward, which is likely to add complexity to age diverse workplaces.

This growing trend has led many employers to realise that operating responsibly and sustainably, with a genuine commitment to diversity and inclusion, are vital qualities for attracting and retaining employees. There are many ways of doing this even during a time of constricted budgets – for example, by having a policy that allows employees to volunteer their time, or by taking positive action initiatives to address the underrepresentation of certain groups within your workforce.

We are also likely to see a renewed emphasis on (particularly consumer) businesses understanding and being responsible for the labour practices in their supply chain. At a basic level, that will require employers to ensure that relevant employees are properly trained to address this in commercial negotiations. More ambitious businesses are likely to want to make public statements about the expectations of their suppliers and partners and will need to ensure they have proper audit practices to enable them to deliver on their commitments. We expect this to result in an increase in the use of online tools employees can use to speak-up about poor behaviour.

Finally, the apparent speed of the vaccine roll-out will force employers quickly to confront its role in resourcing for 2021. For employers wishing to get back to the office environment, the vaccination programme will be key. Many employees have expressed a reluctance to commute or attend a workplace until they have been vaccinated. Some of them will have vulnerabilities for which an employer is legally obliged to make adjustments, but many will be suffering from more generalised anxiety given the length of time away from the office and from using public transport. Employers requiring a return to the physical workplace will need to consider how they can support a readjustment to whatever is their “new normal”. For some, that may mean encouraging (or even mandating) a vaccination, but even in those cases it will be important to consider how to support employees concerned about commuting. 

A final thought

As we commented in the first article in this series, this is a challenging time for business organisations but a chance to adapt and evolve by exploiting the opportunities of agile working and a more socially responsible business agenda. Employers need, though, to chart a course through the many storms brewing from the combined effect of the pandemic and Brexit.

In our final article in the series, we will explain how the Covid-19 pandemic is impacting a range of employment-related areas, from post-termination restrictions and reward packages through to outsourcing and collective representation. We’ll also consider how the impact of Brexit may drive employers to consider new resourcing options.

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