The world of work continues to grapple with the challenges posed by remote working. Many employers are doubling down on their efforts to get people back to the office to help drive growth, productivity and team cohesion, while others continue to maintain existing hybrid arrangements. It is a divisive topic, as many employees don’t want to give up the benefits that remote working offers, while for others, a lack of social interaction means more time in the office is welcomed.
Real estate transformed
Remote working has reshaped the residential and commercial markets. Many employees have turned their back on city living and prioritised the space, affordability and quality of life that suburban and rural areas can offer. There has also been a shift in the type of places people want to work.
Offices are being redesigned to support hybrid working and to optimise the use of space, while some employers opt for co-working spaces as a flexible alternative. There is a greater focus on creating collaborative and innovative working environments, with wellbeing and sustainability initiatives a priority for both employers and employees. Against this backdrop, there are a number of key legal considerations.
Lease provisions: Many businesses have sought flexible lease terms to help reduce their footprint, minimise costs and/or to redesign or repurpose space (if needed). Options include shorter terms, inclusion of break clauses and having rights to assign, sublet or share occupation. If office space is underutilised, liability for service charges and other shared contributions wouldn’t be reduced to reflect that. This has prompted many businesses to explore opportunities for rent relief, waivers or lease restructuring with their landlord. In some cases, agreeing terms to surrender a lease early may be a solution, but that would likely come at a cost.
Landlord’s consent for alterations would likely be required for works needed to implement any initiatives, so a review of the alterations provisions in the lease would be required. When vacating a premises, businesses will likely be required to restore the space to its original condition, which can involve significant costs. Disputes may arise over the extent of reinstatement and the costs involved.
Change of use/planning: Residential leases may contain covenants which restrict use to residential purposes. If an employee is using their residential home for business purposes and this constitutes a material change of use, then that could require planning permission.
Insurance: Home insurance policies may not cover business use or work-related accidents, so policy terms may need to be revisited. Employers may also need to ensure remote working arrangements are covered by their own liability insurance.
Business rates: Substantial use exclusively for business purposes could result in a business rates liability rather than council tax.
In respect of all of these legal considerations, specialised legal advice should be sought.
Remote working and employment law
We now look at the employment law considerations relevant to hybrid and remote working and any changes in policy relating to them:
Employment contracts and policies: Employers need to tread very carefully when changing requirements around office attendance. While some employees had their employment contracts updated during the Covid-19 pandemic to allow remote working (or were new starters whose contracts made it the default), most employees who work remotely continue to do so on an informal basis.
Depending on what formal measures are already in place, moving to a hybrid or fully remote working model – or conversely, requiring a full return to the office – may require formal variation of contracts (which itself presents a host of legal considerations) and updates to policies. Things can become particularly complex when an employment contract is unclear or has potentially been amended by later discussions/communications about working arrangements.
Clear polices around eligibility, data security, confidentiality, health and safety, working hours and communication protocols would likely need careful attention. The fairness and consistency with which employers apply the terms of such policies to their employees – including exercising their discretion to make exceptions for individual cases – will be crucial to mitigating the associated risks.
Flexible working requests: More and more employees are trying to resist changes to their remote working patterns by relying on their statutory right to request flexible working by submitting formal remote working requests. All employees have the statutory right to request flexible working from the first day of their employment (the previous requirement to have 26 weeks’ continuous service has been removed) and may make up to two statutory flexible working requests in any 12-month period. A statutory request triggers the employer’s obligation to follow the statutory process and associated conditions. Employers can only say no to a request on the basis of one or more of eight permitted business reasons.
Working time and monitoring: Flexible working can also include changes to working hours and times. Employers must ensure that employees do not exceed maximum working hours and take adequate rest breaks, as required by the Working Time Regulations 1998. While employers may wish to monitor productivity, they must balance this with employees’ rights to privacy. Any monitoring must be proportionate, transparent and compliant with data protection laws by selecting the least intrusive means to achieve the intended purpose.
Health, safety and wellbeing: Employers retain responsibility for the health, safety and welfare of remote workers (and in the case of pregnant women, must also assess the workplace risks posed to employees and make alterations to working conditions or hours if needed). This would include conducting risks assessments of their homes to assess ergonomic setups and electrical safety.
Employers should be mindful of the potential for isolation, stress, and mental health issues among remote workers and must also make reasonable adjustments for disabled employees, which may include providing specialist equipment or adapting working arrangements. Requests for reasonable adjustments may, but don’t necessarily have to, be made under the statutory flexible working regime. Crucially, employers’ duties to make adjustments requires going above and beyond how they would accommodate non-disabled employees, which could mean making exceptions to normal office attendance policies.
Non-discrimination: Remote working arrangements must be applied fairly and not disadvantage employees with protected characteristics under the Equality Act 2010. Refusing a request for home working from an employee who cites childcare responsibilities can amount to sex discrimination in certain circumstances. This is because, statistically, women are more likely to bear the primary responsibility for childcare. As a result, a policy or decision that disadvantages those with childcare responsibilities may disproportionately affect women, potentially giving rise to a claim of indirect sex discrimination. Since January 2024, such claims can be brought by men too if they face the same childcare obstacles.
Further, employees with caring responsibilities for elderly or disabled adults are protected against direct discrimination based on being “associated” with someone who is protected because of age or disability. This group of employees is increasingly under the spotlight, since the introduction of a new statutory right to carer’s leave in April 2024.
Other considerations
Since the Covid-19 pandemic, many employers began receiving requests from employees to work from “home” from an overseas country and, five years later, there is undoubtedly still a strong appetite among staff to work abroad, either on a temporary basis or, in some cases, indefinitely. This raises additional legal challenges including risks/liabilities in relation to taxation, social security, employment protections, immigration, IP/confidentiality, restrictive covenants, data privacy and regulatory implications.
Data protection and confidentiality (the need for secure IT systems, training and clear policies on data protection, storing of confidential information and cybersecurity measures), tax implications (for both employers and employees) and the management and protection of intellectual property may all need to be considered.
Understanding the legal realities of remote working is key
Remote working has introduced a diverse range of complex legal and practical considerations presenting both opportunities and challenges for employers and employees alike. Employers will need to adapt their strategies to retain and attract talent while fostering a productive and supportive work environment where employees want to work. Employers should seek specialised legal advice to navigate these multifaceted issues and ensure compliance with relevant laws and regulations.
Top tips when handling home working requests
• Review and update contracts.
• Know and follow the correct statutory process within the required deadlines.
• Explore the reasons behind any request for remote working and assess each request on an individual basis (including whether exceptions to your policy are justified).
• Have a clear rationale for office attendance that is shared, articulated and reviewed and which can stand up to scrutiny.
• Gather data to support any hybrid or office working policy.
• Consider your policies as part of an overall workforce strategy and value proposition.
Tom Merrick is a legal director in real estate and David Lyons is a senior associate in employment at Lewis Silkin LLP
