As the cost of living continues to increase, businesses and their employees face challenging times ahead.  Nevertheless, as we discussed in our recent Employment Legal Update Seminar at Trinity Park on 29th September, this cannot necessarily be viewed as a legal problem with a legal solution. This short article picks up on some of the themes that emerged from our discussions with attendees at our Seminar and contains some practical suggestions for you to consider. 

Wage pressure

As the cost of living increases, it is clear that there will be a demand for higher pay. There are different options that business can consider if they wish to give additional financial help to their staff. For example, some businesses are offering a one off cost of living payment to help their employees financially as many enter the undoubtedly challenging winter months. This payment does not only benefits employees, but it is also often a more attractive option for businesses compared to awarding pay rises.  A discretionary one-off payment gives more control for the employer in relation to the total financial outlay and, especially given the cost pressures businesses themselves face, is a smaller (and short-term) commitment compared to a permanent pay rise. Discretionary payments may also be structured in such a way so that they are not pensionable, again making it an attractive option for businesses.  We are also finding that some businesses are waiting to see what the full package of government support will be for individuals during this crisis, before they decide whether to make additional financial payments.

Impact on productivity

During our discussions, it became apparent that employers are concerned about how financial pressure on employees may affect their productivity.  In particular, financial concerns may impact upon employees’ wellbeing and mental health.  In turn, this leads to the risk of increased sickness absence.   Employees should be reminded of any Employee Assistance Programmes an employer may have in place and employers may signpost staff to any other support services as appropriate.  

Industrial action

There has been a notable increase in the use of industrial action across a variety of sectors. Undoubtedly, the cost of living crisis is increasing union membership and as a result, further strike action appears inevitable. However, we also need to question whether in fact, the financial pressures employees increasingly find themselves under will mean strike action becomes an option that is no longer affordable, as a Trade Union’s members may not be able to forfeit wages to go on strike. Nevertheless, as Sheilah Cummins pointed out in her recent article, 'Industrial Relations: Are we facing a winter of discontent or the demise of collective bargaining?', with a recession looming and inflation continuing to rise – more and more workers are likely to turn to trade unions for the protection afforded by collective bargaining.

Hybrid working – new habits?

A further area of uncertainty for many business is how to plan office space.  As a consequence of the pandemic a large proportion of businesses have moved towards hybrid working and, with their employees working remotely throughout the week, a number of employers have downsized their office space and financially benefitted from doing so.  However, attempting to predict employees’ working habits over the next few months is likely to be rather tricky.  Some business may be expecting that hybrid working habits will be affected by fuel, heating and electricity prices in the coming months. Therefore, some employees may try to avoid the cost of working from home by opting to go into the office more often, whilst other employees may want to avoid commuting costs. This means that employers should be prepared for potential change in office traffic and consider whether they need to be more directive with their employees as to when they are expected to be in the office.  This leads us on to the next topic being debated…

Hybrid working – a contractual right?

An ACAS Survey (June 2022) found that 60% of employers have seen an increase in hybrid working for staff compared to before the COVID-19 pandemic. We are not surprised by the results of this survey, as this very much represents what clients have been talking to us about over the past year or so.    However, with hybrid working seemingly becoming the “norm” in certain office-based sectors, a consequence appears to be that some employees are forming the view that hybrid working is a “right” they can demand. 

Whilst it is undoubtedly true that an organisation who promotes and enables flexible and/or hybrid working is more likely to be considered an attractive employer to a potential recruit, unless the employment contract states otherwise, the ability to work remotely is not a contractual right.  Indeed, we would expect that the majority of employment contracts still state the place of work as the office location.  Whilst employees may start mentioning “custom and practice”, given the unique circumstances surrounding the pandemic, even if remote working has continued until now, employers should still feel confident in relying on the contractual working arrangements in order to establish working arrangements that also work for the business.  Naturally, as further time elapses, the more merit that may be found in “custom and practice” arguments.  Therefore, we suggest it is imperative to set boundaries and expectations with staff now, such as making it clear that the needs of the business may necessitate increased time in the office (or indeed if performance or productivity concerns arise).  Introducing a Hybrid Working Policy would also assist in this regard, as well as covering other issues such as security of information and setting expectations with regards to working hours.

Finally, we noted that employees with the requisite length of service do have the right to make a flexible working request under the statutory regime, which can include a hybrid working pattern. Employers need be aware of the strict timescales in responding to a statutory flexible working request and if declining a request, ensuring it is for one of the eight statutory reasons.

The above are just a few of the discussion points that arose during our recent Seminar.  Further, practical guidance on this topic may also be sought from Sheilah Cummins’ article published back in August 'Cost of Living Crisis: What are the risks and issues posed to employers and their staff?'.

If you would like advice and assistance with any of the matters raised above, please contact Prettys Employment Team on employmentexpert@prettys.co.uk