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Homeworking and the law FAQs

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22 FAQs about homeworking and the law

1. Do we have to give employees a new employment contract if we ask them to work from home?

Not necessarily, although normally it would be advisable to do so unless such a change is provided for in the wording of the existing contract. It depends on how specific you have been in their existing contract. If it involves a significant change in their terms and conditions of employment - for example, a place of employment different from that specified in their contract - you will need to record the amendment to their contract. If you have left matters such as the place and time of work to management discretion, you may not need to worry about issuing a new contract.

2. Can we require people to work from home?

It depends on what their employment contract says. Employers have no general right to require this.

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3. Can we cut the pay of people who work from home?

Yes, if the contract of employment permits you to do so, or you reach agreement with the employees concerned. Otherwise no, unless you are willing to risk a claim for constructive dismissal. It could be seen as a fundamental breach of contract - although if your employees continued to work, an Employment Tribunal might hold that they had effectively accepted the change of terms and conditions.

4. Do we have to pay new homeworkers the same rate as employees who originally worked in our offices who now work from home?

Not necessarily. But take advice before you pay them differently, because it could be risky. For example, you risk breaching the equal pay legislation, particularly if the employees you are relocating include a higher proportion of one sex than the employees you are recruiting at a lower rate.

You also run the risk of a case being brought against you under the Equality Act 2010 if the employees you are taking on have another of the 'protected characteristics' that is not shared by the people you are moving to work from home. Protected characteristics are age, disability, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and gender reassignment.

In any case, you will have to show that your decision to pay less can be objectively justified (ie, there is an acceptable business reason for doing so).

5. How do we work out whether 'piece rate' home workers are earning the minimum wage?

Under the 'fair piece rate' system, you may choose to pay the minimum wage for every hour worked, or bring in a 'rated output' system.

Under this system you must calculate the average production speed of the people doing this form of work, and use the resulting figure as the basis for calculating how long piece workers should take to do the work given them. Provided you fulfil certain conditions, the average production speed may be used as the basis for calculating whether workers are paid the minimum wage. This is done by multiplying the number of hours piece workers should take to do the work by 120%.

6. How do we prevent home workers using their time and our equipment to work for other people?

You could put an appropriate term in their contract of employment, expressly forbidding such activities. But even in the absence of such a term, all contracts contain implied terms - terms which may not be spelt out, but which are nonetheless binding. One of them is a duty on employees to serve their employer honestly and faithfully, and work with due diligence, skill and care.

If you can prove that a home worker is in breach of this term, you will certainly have grounds for disciplinary action, and may - if they are working for your rivals, or the offence is repeated - have grounds for dismissal.

7. Can we force someone we want to promote to return to the office?

In theory, yes - unless you have given them a contract which says otherwise, or have reached a different agreement verbally, or have by your conduct given them reason to think they can work at home indefinitely. It is up to you as employer to decide where the work shall be performed. In practice, however, you have to ask yourself whether it is worth it.

If your employee has decided that the ability to work from home is worth more to them than promotion, at best you are going to end up with someone who is unhappy in the job. You could alternatively aim for a compromise, under which they work two or three days a week in the office, or even better, leave it to them to organise their work in a way to guarantee your overall objectives.

8. Can we turn down a request to work from home?

Almost all employees with at least 26 weeks' service have the right to ask for flexible working which can include working from home. You must consider requests in a reasonable manner. You can only refuse a request for one of the eight business reasons allowed by the legislation.

Flexible working might include working for some or all of the time from home.

It is up to the employee to come up with sensible suggestions as to how the new system might work, and to give them to you in writing. You must then respond by arranging a meeting within 28 days to consider the request. Within 14 days of the meeting you must write either to agree a new work pattern or to refuse the request. You cannot refuse, however, unless you can demonstrate one or more of the following eight clear business reasons for doing so:

If you do refuse, you must give your reasons in writing, dating the letter and giving details of your appeals procedure. If the employee is going to appeal, they must do so in writing within 14 days, and you must then arrange another meeting within 14 days of receiving this letter. You must write, giving details of the outcome of the appeal, within 14 days of this meeting.

If you have refused again, it is open to the employee to take further steps, for example, by involving Acas or another mediator, or - if your procedure was incorrect, or your decision based on incorrect facts - by going to an Employment Tribunal. If the Employment Tribunal finds against you, you will have to reconsider the application, and may have to pay compensation - so it obviously pays to get it right first time round.

You are not at present obliged to consider home working for other employees, but it might make sense to do so, particularly if there are good reasons for the request (such as care of elderly dependants). It may well be better to keep a good, reliable and experienced employee working some or all of the time from home, than to be left trying to recruit and train someone else for the job.

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9. Can we sack an employee who refuses to work from home?

In certain circumstances, yes, particularly if the contract of employment permits you to change the employee's place of work and the power is exercised reasonably. However, if your employee has been employed continuously for two years, they might be entitled to bring a case against you for unfair dismissal.

Assuming that you have no grounds other than the reorganisation for the sacking, you will have to rely for your defence on 'some other substantial reason' - which means demonstrating the necessity of the change. Depending on how good your case is an Employment Tribunal might or might not accept your reasons. If it does not, you could be liable for a basic award of up to £17,130, and a compensatory award of up to £93,878. Take legal advice.

10. How long is reasonable to give home workers the opportunity to change their minds?

There is no legal obligation on you to keep the option open. If you have used the opportunity provided by home working to scale down your premises, the law accepts that the change may have to be permanent.

However, it may pay you to leave the option open indefinitely if you can. Even with employees who are long established as home workers, circumstances may change, and the reasons for opting for home work in the first place may cease to exist. If you cannot offer them the option to come back to work, they may decide to work elsewhere. You might be able to reach an acceptable compromise by offering a 'hot-desking' arrangement, or providing for the employee to come into work for two to three days a week.

11. Is there a time limit on issuing a revised statement of employment particulars?

A revised statement of particulars should be issued within one month of the change in question.

(A 'written statement of employment particulars' includes the main conditions of employment - read more on the GOV.UK website.)

12. What are the legal implications, if we ask current employees to work from home on a self-employed basis?

You are effectively dismissing them from your employment, so you will have to have good reason, or those who have two years' continuous employment will be able to sue you for unfair dismissal.

Of the acceptable reasons for dismissal (conduct, capability or qualifications, illegality, redundancy, or 'some other substantial reason'), most are inappropriate if you wish to continue to use these people on a self-employed basis. You will probably have to rely on 'some other substantial reason'.

You will also have to persuade HM Revenue & Customs that your employees are genuinely self-employed, otherwise you will still be liable for their income tax and National Insurance contributions. One of the factors HMRC is likely to take into account is the extent to which their income comes from a variety of sources, so you will not be able to rely on using them on a full-time basis.

One way and another, this is a more difficult move than it might at first appear. Think long and hard, and take good legal advice before you make it.

13. If we employ people to work from home on a freelance basis, we have have to pay their tax and NI?

If they are genuinely freelance, no. However, HM Revenue & Customs decides this on a case-by-case basis, looking at a range of factors such as:

If you control what the workers do, when they do it and how they do it, and if you carry the financial risks of the business, HMRC is likely to find that you employ them, whatever their employment contract (or lack of an employment contract) says about the matter. And if you employ them, you are responsible for their tax and National Insurance.

Read more about employment status on the HMRC website.

14. Who is responsible for the health and safety of home workers?

You are. All the normal health and safety legislation (including the Health and Safety at Work Act 1974, the Display Screen Equipment Regulations, and the Provision and Use of Work Equipment Regulations) continue to apply, and you have the usual duty of care to your home-based employees.

15. Do we have to have health and safety inspections for home workers?

You need to be able to show that you have discharged your duty of care. If possible, it is good practice to get your health and safety officer (or a manager trained in health and safety) to make an initial inspection, and at regular intervals thereafter to get your home-based employees to complete self-assessment forms which are reviewed by your health and safety officer, or by a manager trained in health and safety.

16. Are home workers entitled to sick pay?

Yes. Apart from the change in their place of work, their terms and conditions will, in most cases, remain the same.

17. How do we ensure home workers do not work in excess of 48 hours a week?

With difficulty. It is your responsibility to ensure that they do not breach the Working Time Regulations, and a recent case at the European Court of Justice has emphasized that this is a positive rather than a negative duty - ie you must ensure that your workers take rest breaks, and not just that they can if they want to.

You should at the least get them to do time sheets - which are checked - and look out for obvious signs of an inability to switch off (such as emails sent out in the middle of the night). Alternatively, you may wish to agree with the employee that the 48-hour limit does not apply (although you may then have to keep more extensive records of working time, and ensure that no employee exceeds 65 hours a week).

18. Are home workers entitled to a break after six hours?

Yes, although it will be difficult for you to manage this, other than by relying on time sheets. You should make sure they know that they are entitled to such breaks; after that you will have to rely on them.

19. Are we responsible for data kept at a worker's home, or accessible on a home worker's computer?

Yes. If your employees will be dealing with information on other people, you should make data security an issue in the initial checks you make on employees, to find out whether they would be suitable as home workers. You should have a policy on data security which should cover home workers. You will certainly want to ensure that they can lock their work away when they are not working on it.

20. If we provide the home workers equipment, who insurances it?

This is a matter to be decided between you and the home worker: it could be either. However, if it is to go on the home worker's home insurance policy, you should ensure that the insurer has been informed, and ask whether there will be any premium variation. If there is a premium variation, it would be reasonable for you to pay it.

21. If a home worker travels to the office, do we have to cover their expenses?

This is a matter for negotiation. Some organisations do; some don't. They could reasonably argue that they are travelling between one place of work and another.

22. If we contribute to a home worker's extra costs (eg heating), what is the tax and National Insurance position?

In theory such payments are taxable, and they will have to be declared. In practice HM Revenue & Customs may allow a local dispensation, of up to £300 a year, on expenses incurred for work and related purposes, including heating, lighting, the metered costs of increased water usage, increases in the cost of home contents insurance, business telephone calls, etc. The expenses must be 'reasonable', and may not include the costs of alterations to the premises, or purchase of furniture.

If you do not make such payments, the worker can claim the cost against their tax liability, though this means less than full recovery. They can also claim for setting aside one room for working at home. This may give rise to a capital gains tax (CGT) liability, but in many cases this can be offset by the annual CGT exemption.

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Read this guide to homeworking and hybrid working from Acas.

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A Complete Guide to Homeworking the Legal Requirements

Employer obligations for employees working from home.

Homeworking is on the rise. According to the Office of National Statistics, by 2020, 50% of the UK workforce will be working flexibly and working from home.

Right now, 4.2 million people call their house their office and the expectation for flexible working is becoming more and more in demand. Is your business ready?

Before you can offer such a benefit, you need to understand the legal requirements for working from home. You also need to make sure that your staff have the tools they need to work effectively while out of the office.

Legal Considerations for Homeworkers

Employment Contracts – These Must Reflect Homeworking

A standard employment contract will not cover homeworking arrangements. To protect your staff and your business, you need to outline:

1. Place of work

If the employee will be working from home, the normal place of work will be the employee’s home. However, include a provision that the employee can be required to attend the office. This gives you the flexibility to call them in when you need them.

You should also include a provision that homeworking is subject to change if the employee moves house. As an employer, you are responsible for your staff, so changes in the place of work must be given due consideration.

2. Hours of work

As well as how many hours they should work, specify when the employee will need to be available for work. Many homeworking employees work flexible hours, so outline their “core hours” and never assume they are doing a normal 9-5.

3. Expenses

Working from home means that employees will be using their internet, electricity and phone for work purposes. So be explicit with expenses.

As an employers, will you cover…?

Outline the things your employee can and cannot claim for in their contract. In certain circumstances, payments by employers to reimburse employees for reasonable costs incurred as a result of homeworking can be tax-exempt.

3b. Tax exemptions for employee expenses

To be eligible, the employee must be working under homeworking arrangements . Employers can pay £4/week and the employee doesn’t have to record expenses. Alternatively, employees can choose to seek tax relief arrangements.

4. Confidentiality and data protection

To protect your business, your staff and your intellectual property, make sure your employee contracts set clear provisions for data security.

These should cover:

If the employee is using their own computer/phone, ensure you have a right to monitor work communications on those devices.

Make sure they have a password in place to limit access. Also, include in the contract terms that allow you to provide them with any security equipment you deem necessary (shredders, CCTV, filing cabinets etc.)

5. Rights to enter

Consider whether you need to include a licence to enter the employee’s home. You may need to install, maintain or service company equipment, or retrieve it on termination. A right to enter will also allow you to carry out risk assessments for health and safety purposes.

6. Trial periods & Review

Homeworking might not be a good fit for you or your employee. A set trial period and review baked into the contract will give both parties an opportunity to be flexible about homeworking.

Staff Benefits & Homeworking

If you offer on-site benefits as part of your employment contracts you must offer those benefits to homeworkers too. Failure to do so can result in discrimination allegations and breach of contract.

Ensure, for example, that they have access to work related benefits (such as the staff canteen or workplace gym) even though they may not use them regularly.

Public liability insurance

Check your employer’s liability insurance covers employees working from home. Make sure that any lack of action does not invalidate the insurance.

Health and safety at work extends to the home

As an employer, you are responsible for the health, safety and welfare of your employees. You must exercise all reasonable means of ensuring this.

Data protection and security

Most homeworking employees move data (or devices that can access that data) into public spaces. That opens up the risk of data being mislaid. Many breaches have occurred from documents being left on trains, USB sticks falling out of pockets, or laptops being stolen.

But you can’t just monitor all your employees’ personal dealings. They have the right to privacy.

As the Article 29 Working Party states : “Technologies that monitor communications can […] have a chilling effect on the fundamental rights of employees.”

Stay compliant by setting clear boundaries and responsibilities for all parties. Carry out a risk assessment of the data protection implications of homeworking. This would include consideration of the following:

Employees working from home does not change their tax status. You still deduct income tax and national insurance contributions as normal.

However, you may advise the employee:

Reporting and performance reviews

Out of sight does not mean out of mind. If you are implementing homeworking, you need to review performance and quality policies. Employees working from home can feel isolated and without support. This can affect morale and company culture.

Working time

Under the Working Time Regulations 1998, time spent travelling to work does not count as “working time”.

However, where the employee’s normal place of work is their home and they travel to their employer’s premises or to see clients/customers, this could count as “working time”.

You will need to ensure that homeworkers do not exceed the 48-hour limit on their working week when travel is taken into account (or that they have opted out of the maximum hours’ cap).

Mortgage provider consent

Remind your homeworker that they must have consent from their mortgage provider to work from home.

Remember…Equip your staff

There is no legal obligation on an employer to provide the equipment for homeworking. But it only benefits your business to make sure your staff have the tools they need to do the job.

Most employers will provide basic equipment at least. This usually means providing a phone and computer.

If the employee will be using their own computer equipment, agree on whether or not you will pay for maintenance, repairs and software updates.

Benefits of letting employees work at home

Being able to work at home isn’t just handy for employees. It has can benefit your business, too.

20% of employees that work from home find themselves more productive. With no commute and fewer workplace distractions, your staff get more work done. Giving them the flexibility to choose where they work is considered a benefit. You can attract and retain critical skills and talent.

No commute also means a lower overall carbon footprint for your business. The average commute is 15 miles to work and the same back. If your employee drives an average car, that commute puts 4.6 metric tons of carbon dioxide into the atmosphere every year.

That doesn’t include the cost of heating and lighting a workspace. Letting employees work from home reduces your overheads and frees up office space. In places like London where office space is at a premium, many businesses are opting for hot desking and getting rid of permanent desks altogether.

In order to gain these benefits, you need to make sure you meet certain legal requirements. This includes changes to employment contracts, setting policies for health and safety, data security, tax, public liability and making sure you’re meeting the training and development needs of your staff.

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Working from home and hybrid working

Hybrid working is a type of flexible working where an employee splits their time between:

Working from home is the most common way of working remotely.

An employee might work from home all the time, or as part of a hybrid working arrangement.

Requests for home and hybrid working

How to ask for a change, respond to requests, and deal with disagreements.

Health, safety and wellbeing when working from home

Including risk assessments, mental and physical health, and dealing with problems.

Policies for home and hybrid working

Why employers need a policy, what goes in it, and what to consider.

Managing staff who work from home

How managers can support staff, manage and monitor performance, and keep in touch.

Training and commentary

Events and training – flexible working (including working from home and hybrid working)

Blog – flexible working: a dream or a reality?

More support

If you have any questions about working from home and hybrid working, you can:

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Flexible working

Flexible working is a way of working that suits an employee’s needs, for example having flexible start and finish times, or working from home.

Flexible working rules are different in Northern Ireland.

All employees have the legal right to request flexible working - not just parents and carers.

This is known as ‘ making a statutory application ’.

Employees must have worked for the same employer for at least 26 weeks to be eligible.

What employers must do

Employers must deal with requests in a ‘reasonable manner’.

Examples of handling requests in a reasonable manner include:

Read the Advisory, Conciliation and Arbitration Service ( Acas ) code of practice on flexible working requests .

If an employer does not handle a request in a reasonable manner, the employee can take them to an employment tribunal .

An employer can refuse an application if they have a good business reason for doing so.

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Amends to your employment contract for your home workers….and ensuring you have the right systems in place for a remote workforce…

As the coronavirus pandemic persists, employees are getting used to working from home and many are noticing benefits including avoiding stressful, time-consuming commutes; saving money on travel and food; managing work more efficiently; fewer interruptions; and seeing their children more often.

After the pandemic passes, it is expected there will be a cultural shift towards working from home as a norm and many employees will want to do this, at the very least for part of the week. Equally many employers, having seen the benefits of their staff remote working, are deciding to give notice on their offices and get their heads around running teams of remote workers.

As an employer, you need to make sure that you have the right systems in place to properly support employees who work from home.

Contracts for employees who work from home

Where an employee’s ‘place of work’ is changing to their home address some changes are required to their contract. A new contract may not be necessary but may be simpler if the contract is due for a refresh. If the contract is relatively new and fit for purpose then the new clauses may be added in using a variation of contract letter which the employee needs to agree to and countersign to confirm their agreement.

The new clauses, relevant to homeworking, may include the following:

• where the employee will be based. • hours of work and the requirement to take breaks. • that both employer and employee have the right to terminate the homeworking arrangement at any time. • reimbursement of expenses and/or contribution towards utility costs. • that the company will supply and insure the necessary equipment. The equipment remains the company’s property and is not to be used for private purposes. • that the company will supply and pay for a telephone and internet connection for business use. • that the employee must comply with relevant health and safety and security guidelines. The company will pay any costs involved. • confidential information and data protection. • that there is no change to other employment terms and conditions such as pay, hours of work, holiday entitlement and pension contributions.

The home office

A good home office should meet minimum requirements:

• a suitable workspace and a reasonable working environment. • secure premises and a lockable cupboard or desk. • compliance with health and safety regulations, including suitable desk and chair and display screen equipment assessment. • a business telephone line and broadband access. • a computer with internet and email access, office software and access to a printer. Access to a secure virtual private network (VPN) can allow your staff to connect to your company network from home. • adequate insurance. Home contents insurance normally excludes business equipment but most employers’ insurance policies cover any place of business.

Health and safety in the home

Normal office health and safety requirements apply equally to employees who work from home.

An initial risk assessment must be carried out, although this can be done by the employee. Employers need to give homeworkers simple, specific health and safety advice and record what has been done.

Areas to consider are:

• the seating and layout of the employee’s computer workstation. • electrical equipment – has it been tested and certified? • extension leads and cables for telephones, computers and printers – there should be no trailing leads. • adequate lighting levels, ventilation and room temperature.

Planning permission is not normally required

Permission is unlikely to be required if all the following are true:

• only one room is used for homeworking; • only those who live in the house work there; • the work does not lead to a substantial volume of visitors, nuisance to neighbours or extra car parking.

Tax and business rates are not usually a problem

Homeworkers can ensure the room used has a secondary purpose (eg as a guest bedroom) to avoid paying:

• business rates; • capital gains tax on the sale of the property.

Using technology for employees who work from home

It is safer for employees who work from home to save their work directly onto the employer’s system, rather than their own equipment. This reduces the risk of a data security breach and limits the employer’s exposure to the provisions of the General Data Protection Regulations.

You can create a secure virtual private network (VPN):

• this enables employees who work from home to connect to your existing computer network online, from any computer with internet access. • it gives them access to relevant files and systems on the company network, and to resources on the company intranet. • a fast broadband connection makes it easy to exchange information • the major cost, for an existing network, is the connection fee.

Understand the pitfalls

• there is a danger of people gaining unauthorised access to your systems. Your computers should be protected with passwords, firewalls and anti-virus software. All data and files should be saved to your intranet where it can be backed up and protected. • faster technology costs more money. • homeworkers may need training. • employees may not use the technology productively. • employees may fail to back-up information stored on home PCs and laptops.

If you need any help at all with revising your employment contract, or drafting a variation of contract letter, please do get in touch [email protected] or +44(0)7917878384

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Employment issues (work life)

Advice for employers on home working

home working contracts uk

The expectation for flexible working is becoming more and more in demand. According to the office for national statistics, more than 8 in 10 workers who had to work from home during the coronavirus pandemic said they planned to do hybrid work.

Government proposals around changing the rules around flexible working requests include reducing the formal content required for a request, day one rights, as opposed to eligibility currently subject to 26 weeks’ service and allowing up to 2 requests a year. The debate continues around finding arrangements that work for employees and employers and with employers often having to approach how they deal with requests and principles of flexible working, carefully, to reduce the risks of claims and attract and retain good calibre candidates to jobs.

In the current economic climate, businesses may be reassessing their requirements with consideration being given to reducing office space and rental costs, which may result in more companies considering a home-based workforce for the long term.

As we continue to debate what the 'new normal' looks like, it is evident that this is something of a moving target with expectations, trends and business requirements seemingly changing quickly. Against this background, it is worthwhile considering what the legal implications are for employers on some of the key considerations around home working.

Contracts of employment

Where consultation is needed on employment contract changes, dealing with a refusal to agree to contract changes, duties towards employees when working from home, confidentiality and data protection issues when working remotely, where reasonable adjustments may be necessary, right to requests for flexible working.

Many employees will be working under contracts of employment with no specific provision to work from home, and the place of work will most likely be stipulated as the employer’s premises.

Unless there is a written term in the contract of employment permitting home working, employers would need the agreement of the employee in order to insist on home working. Imposing a unilateral change without the agreement of those affected employees could constitute a breach of the employment contract. What happens in practice, though, may also be relevant, whether that is around the employer and/or an employee wanting to revisit the 'normal' place of work and how work is delivered post Covid-19.

It is recommended that employers check the wording of the 'place of work' clause in their employment contracts as the wording may include a degree of flexibility in the favour of the employer, which can allow for a change in place of work on a temporary or perhaps even permanent basis.

If the contract contains wording allowing for flexibility and changes then the employer may not be in breach of the terms by enforcing a permanent switch to home working. Employers should note that it is still important for employers to act reasonably when implementing such a clause, otherwise, they risk breaching mutual trust and confidence - This is a term implied by law in all employment contracts and breach of it is commonly used in constructive unfair dismissal claims. It is also worth keeping in mind that terms can become part of the contract by “custom and practice”. If in doubt, employers should seek legal advice on their particular documentation and issues arising.

In any event, employers are well advised to ensure they communicate with staff in advance and where appropriate, consult as well as set aside reasonable time before implementing changes to the place of work to allow employees time to prepare and adjust.

Where there is no flexibility to the place of work clause the employer will need to adopt a different approach. Employers will need to discuss the possibility of working from home with employees and consult with them in order to get their agreement to home working along with the necessary change to the terms of their contract. Again, communication is key and a lack of communication is often a key part of disputes arising.

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If however, employees in this situation maintain a refusal and the employer can demonstrate that:

then it may be possible for an employer to dismiss.

In appropriate circumstances, such dismissals can be considered fair with the employer relying on “Some Other Substantial Reason” as the potentially fair reason to dismiss, provided the employer can demonstrate that the dismissal was reasonable in all the circumstances.

This should be a last resort if there is a failure to agree and the alternatives have been considered. Such dismissals are subject to due process and bring with them the risk of, amongst other things, unfair dismissal claims for eligible employees. Employers who approach such matters without due care will be exposed to claims and again, seeking professional advice early is prudent.

Employers who are faced with this scenario and are looking to dismiss should look to offer those refusing employees re-engagement on the new amended terms, including the homeworking provisions. Consideration should also be given to the numbers of employees affected: if this is 20 or more then collective consultation may need to be undertaken with potentially severe penalties if the right steps are not followed.

Where employees are working from home, employers should ensure that they are treated in the same manner as all other employees. Home-based employees are entitled to the same rights and benefits as any employee working at the employer's premises.

An employer has both statutory and common law duties towards its employees and is responsible for an employee’s health and safety, “so far as is reasonably practicable”. In practice, this means that employers should conduct a suitable risk assessment of all work activities carried out by homeworkers to identify any possible hazards. Employers will then need to consider these obligations to decide what measures need to be put in place.

In addition to the health and safety aspects of home working, employers will need to consider how to safeguard business confidentiality and data protection requirements with increased chances of breaches taking place when outside of the employer’s premises.

Careful consideration is needed given the potential damage and loss that could be caused through unauthorised breaches, including significant fines that can be imposed by the Information Commissioners Office for breaches of data protection legislation - which has been strengthened since 2018.

It is also key for employers to ensure that they have suitable arrangements in place to help maintain contact with other staff, including office-based and home-workers, in order to limit issues that could arise through increased isolation of working remotely.

Where an employee has a disability, then consideration should be given to whether the provision of some equipment is required in order for the employer to comply with their duties under the Equality Act 2010 to make reasonable adjustments.

It is still the case that employers are not required to agree home working requests from staff. There is no right to work from home and instead, presently, employees with 26 week’s service have the right to request flexible working arrangements.

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Employees working from home, employment contracts and working from home.

An employee's place of work is stated in the written statement of their terms and conditions of employment.

When an employee starts working from or at home, it may be necessary to amend the written statement as a result.

You must follow set procedures when changing an employment contract.

See how to change an employee's terms of employment .

Working from home arrangements during the coronavirus pandemic

The working from home arrangements that were in place during the COVID-19 pandemic were not normally considered to be permanent variations to the contract but post pandemic it may be mutually beneficial for it to become the new normal working arrangement and so it may suit both employer and employee for it to remain in place. See the Labour Relations Agency's (LRA) guide on flexible working .

Working from home - contracts, reimbursement and office equipment

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

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)

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.

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.

[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

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Covid-19: winding-up petitions.

Homeworking and hybrid working: the legal aspects

There’s plenty of content out there dealing with the approach employers can take to home or hybrid working. But what does home or hybrid working mean for contracts and policies? Both will need tailoring – here we consider some of the key points to keep in mind.

Over-arching approach to home and hybrid working requests

Changing contracts of employment, place of work, salary and benefits, confidentiality, intellectual property, equipment and communications systems, special equipment, trial periods and right to revert, right to enter, reporting and appraisals, health and safety, discipline and grievances, data protection, tax and computers.

A change from workplace-based working to home or hybrid working will likely require a change to the contract. The rest of this note looks at the various component parts which will require consideration.

If the change has been instigated by the employee, they will likely consent to a variation. However, if the change is to be imposed, employees may be less willing to consent.

Flexibility clauses are unlikely to assist, and employers should consider their options in advance if they want to make changes to ways of working.

The employee’s place of work or, where the employee is required or permitted to work at various places (including their home), must be set out, together with an indication of that and the address of the employer.

It would also be sensible to include a requirement to attend the workplace from time to time, for example, for meetings, training, and team building. Linked to this might be a requirement to live within a commutable distance of the workplace.

Establishing when the employee will be available when working from home is a must. Will there be complete flexibility, strict working hours, or “core” hours? Can the employee be required to work outside these hours? Commitments such as childcare or other dependants are likely to impact on this and will need to be addressed.

Employees cannot opt out of rest breaks and employers should ensure that home or hybrid workers comply with the limits on working time and that adequate records are kept. No one will oversee whether such worker take their breaks, so the contract or a policy should make it clear they are responsible for regulating their own working time and taking breaks.

It is also important to have a clear distinction between working time and personal time at home – employee well-being depends on it. The longer-term nature of these agreements increases the importance of getting this right.

If the salary and benefits provided to those working from home are less favourable than those provided to comparable workplace-based employees discrimination claims could arise and any differences would have to be objectively justified.

Depending on where the employee lives, employers may consider that a location-related salary band (for instance, London weighting to take into account increased cost of living) is no longer appropriate for an employee who moves from being workplace-based to home-based. Changes to an employee’s salary, will amount to a contractual change and must be agreed. However, it may be something the employee is willing to consent to in exchange for homeworking. Consider though the discrimination risks if employees are required to take pay cuts as a condition of home or hybrid working.

Such expenses may include travel expenses to attend the workplace, telephone, broadband, heating and lighting costs, and any increased insurance premiums.

There is no legal obligation to reimburse expenses incurred by an employee working from home. Employers may contribute a specific sum towards the homeworker’s expenses or reimburse actual reasonable expenses incurred. Alternatively, employers may decide not to provide a contribution or make any reimbursement. Consider the approach and whether amendments are required to existing expenses policies (or whether a new policy should be introduced).

Confidentiality is more difficult to police when an employee is working from home, and even more so if the employee can work from remote locations that the public has access to. Carefully consider therefore where staff are permitted to work from and ensure this is reflected in the employment contract and any associated policy.

Additionally, those working from home or other remote locations should be required to keep confidential information secure. Include precautions for keeping confidential information secure, such as forbidding access by household members, passwords and encryption, secure storage, and shredders.

An express obligation to return confidential information on termination should also be agreed.

Where employees work from home, employers will have less physical control over the work output and will therefore need to carefully consider the measures in place to protect IP.

Consider what equipment will be required by a home or hybrid worker, who will provide and pay for it, and who can have access to it.

If an employer supplies computer equipment, it will need to consider the systems in place for policing its use. The employer will also need to satisfy itself that the risk of a data security breach is low and that appropriate data privacy impact assessments are carried out.

Employee monitoring may require a different approach and employers should discuss any changes with employees.

Employers should also consider whether policies capture the issues that typically affect homeworkers. For example, providing guidance to employees on the appropriate use of social media and their obligations to protect the employer’s reputation.

These issues can be addressed by ensuring policies to make fit for home or hybrid workers.

There is no legal obligation to provide the equipment necessary for home or hybrid working, though one may arise if such working is at the employer’s request. However, ensure compliance with all duties owed to individuals. For example, if a homeworker has a disability, the provision of equipment may be required as a reasonable adjustment. Such equipment may need to be available both at home and in the workplace.

Consider whether it is sensible to have a trial period and a right to require the employee to revert to conventional working at the end of that trial. If there is to be a trial, the duration and the measures used to identify success or failure should be clearly set out in the contract.

Remember exercising a contractual right to revert will be subject to the implied term of mutual trust and confidence and discrimination rules will apply. So good reasons to revert will be required.

Reserve a right to enter the employee’s home, for example, to carry out risk assessments or install, maintain and service equipment. Plus recovering property on termination.

Home and hybrid workers should be appraised like any other workers. They might worry that managers and colleagues think they work less effectively, so consider how to measure the quality and quantity of such. A suitable reporting and appraisal system should be agreed, building in sufficient opportunity for formal and informal reviews of work, projects, performance, expectations, and any difficulties which arise.

Home and hybrid workers should not be denied promotional opportunities open to comparable workers merely because they work at home all or part of the time. All decisions on this must be capable of objective justification.

There is likely to be increased scrutiny of compliance with health and safety obligations as home or hybrid working models become more prevalent and long term. So, revisit all health and safety risk assessments and act on them.

Also review existing polices and consider whether amendments are needed to reflect changed working practices.

Home and hybrid workers will have the same entitlement to sick pay as other employees but reporting mechanisms may need to be different. Interestingly, sick leave among home workers over the past 12 months have fallen. There could be various of reasons for this, and employers should monitor it and formulate their approach to when an employee should be “off sick” and not “working while sick”.

Disciplinary and grievance rules can be amended to set expectations around using work time (from home) for domestic, family, or other commitments – such as chores, running another business and childcare. Alternatively, consider whether rules setting out expectations for those working from home would be helpful.

Significant data protection implications arise with home or hybrid working. Employers will need to take technical and organisational measures (including training) to protect against unauthorised or unlawful processing of data and data breaches.

A home or hybrid employee may be entitled to claim a deduction against taxable income for certain household expenses and travel costs.

For a household expense to be tax deductible, the expense must be incurred wholly, exclusively and necessarily in the performance of the duties. There are HMRC Guidelines on this which are applied restrictively.

The fact that an employee does some work at home because there is no time to complete it during the working day or because the employer’s premises are too far away, is not sufficient. Similarly, relief is not available where an employee simply chooses to work from home some of the time.

If an employee can satisfy the tests various deductions can be claimed.

Payments to reimburse reasonable additional household expenses incurred while working at home under homeworking arrangements have been exempt since 6 April 2003. The exemption only applies where the employee works at home regularly by agreement with the employer, instead of working on the employer’s premises. It does not apply if the employee simply takes work home from time to time. The payments are intended to meet reasonable additional household expenses; as a general guideline, HMRC will approve a payment of £6 a week to an employee working at home, without supporting evidence of the cost, but a greater amount can be approved if there is evidence to justify it.

If a computer is provided to an employee to use at home in the course of their employment, no income tax charge will arise provided any private use is insignificant.

To ensure a tax charge does not arise, consider prohibiting the use of the computer equipment for non-business purposes or require it to be kept to a level which is “insignificant”.

Any equipment provided by the employer will need to be covered by insurance if possible.

Working from home will not normally require planning permission, provided no structural alterations are required and any business use remains ancillary to the use of the house as a home. However, if there are structural changes, or if the house is used for wider business purposes (such as meetings) planning permission may be required. There would generally be no obligation on the employer to fund this.

Please feel welcome to contact Paul Seath with any queries you may have around hybrid or home working.

Download our Homeworking and hybrid working interactive map.

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Remote Work Agreement

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This Remote Work Agreement (also known as a home-working agreement , or a flexible work agreement ) can be used by an employer in the United Kingdom to create an agreement for a current employee to work remotely .

At the start of an employee's employment , their employment contract will take the form of a written contract. This contract will contain the particulars of employment . The particulars of employment will ordinarily cover the place or places of work where the employee shall be required to work .

The contract of employment may provide sufficient flexibility/mobility regarding the employee's place of work. For example, it may say that the place of work is subject to change (although any such clause cannot be unreasonable in order to protect the employee from unfairness). In the event that there is no such flexibility within the contract of employment, the employer will need to take steps to address the formalities of the remote working agreement .

Where there are changes to the employee's contract of employment, the employer is required to provide the employee with a "statement of changes" (This requirement is set out in law: at section 4 of the Employment Rights Act 1996 in England, Wales and Scotland; or Article 36 of the Employment Rights (Northern Ireland) Order 1996 in Northern Ireland). The statement should be provided to the employee within one month of the change to contract of employment (i.e within one month after remote working has commenced).

However , it is important to note that a statement of change acts only as evidence of a change to the contact but will not formally vary the existing contract . An employer will therefore need to either: -

1. provide to the employee with a written document setting out the new terms and specifically amending the contract ; or

2 . an employer may choose to create a brand new contract of employment to cover remote working, which the employee and employer would then re-sign as a new contract .

This document can be used for the first option set out above, where an employer wishes to amend the existing contract of employment . The document can therefore be used to set out the details of the remote work agreement in order to formally and expressly amend the terms of the contract so that the place of work can be changed .

A remote work agreement may provide for an employee to work exclusively from home or alternatively it may provide for the employee to work at home in addition to their usual place of work .

It is also useful for an employer to have a working from home business policy , which outlines the approach an employer shall take in the management of remote working . It is also important for employers to consider how data protection/processing and confidentiality can be maintained during a Remote Work Agreement. Businesses may wish to have an additional specific Confidentiality Agreement to address this specific issue.

How to Use this Document

The change to flexible working may have been initiated by the employee making a request for flexible working . An employee has the legal right to make a request for flexible working (including remote working) after twenty-six weeks of employment .

Where an employee has made a formal request for remote working in writing, a meeting should usually be held to discuss this . The process may also include discussions with a trade union representative where applicable. Similarly, meetings and discussions should be held where an employer has initiated the shift to remote working. An employer should not unilaterally ( i.e without the consent of the employee ) change the terms of an employee's contract of employment, as this could result in them being in breach of contract.

Care should therefore be taken to follow the ACAS guidance and code of practice in England, Wales and Scotland or the Labour Regulations Agency guidance in Northern Ireland to ensure the process is handled fairly and properly . Whilst discussing and reaching an agreement, both the employee and employer should maintain a relationship of 'mutual trust and confidence' and care should therefore be taken to ensure the amendments to the contract are reflective of this relationship.

It is vital that the agreemen t must be, as the name suggests, an agreement . Any changes to a contract of employment have to be agreed and should follow the process as outlined above.

Once a fair and proper agreement has been reached between the employer and the employee regarding Remote Work Agreement, this document can be used to contain the new terms concerning the employee's place of work . Thought should be given in particular to the following details which can be included within the document:-

Matters which are not specific to the employee's new remote working pattern, such as their salary and annual leave entitlement, should ordinarily remain the same as per their original contract.

Once the relevant details have been completed, the employer should sign two copies of the document . The two signed copies should then be provided to the employee . The employee should then sign and date their acceptance on the bottom of both copies , retaining one for their records and returning the other to the employer . The employer should then retain the signed copy .

The key piece of law which is relevant to remote working in England, Wales and Scotland is the Employment Rights Act 1996 .

The key piece of law which is relevant to remote working in Northern Ireland is the Employment Rights (Northern Ireland) Order 1996

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The lawyer can answer your questions or help you through the process. You will be offered this option when you complete the document.

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You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

A guide to help you: How to Organize Remote Working for your Employees

Other names for the document: Remote Work Contract, Home-working agreement, Homeworking agreement, Contract of home working, Work from home agreement

Country: United Kingdom

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Remote Work Agreement
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