Tumultuous is possibly an understatement when describing the past few years, not least the global Covid-19 pandemic proving a major game-changer socially, culturally, economically and politically. Significant shifts in all these categories of life have had profound employment law implications, pushing it ever higher up the corporate agenda.
‘Employers are obviously grappling with all of the myriad issues that this new world order has thrown up, and how they adapt their businesses to it,’ says Sharon Tan, employment partner at Mishcon de Reya. ‘What we’re witnessing is huge upheaval in the workplace generally, seismic changes coupled with economic challenges.’
This sense of radical movement in the field is shared by Colin Leckey, partner in Lewis Silkin’s employment practice: ‘There’s probably never been a time in my career where employment law has been more topical, more on the front pages, and more of a boardroom issue than it is today, and that’s been turbocharged by the pandemic’.
Leckey says practitioners in the space have had to adapt to the evolving situation. ‘We hurried to become experts in furloughing entire workforces, which they hadn’t even heard of before, and becoming health and safety lawyers as we all grapple with the consequences of Covid.’
Suzanne Horne, a partner in Paul Hastings’ employment department, adds: ‘The transformation of work that we’re all living through is manifesting itself in a number of really interesting and challenging ways for employers’. These transformations have resulted in substantial changes to the way people work, as well as where people work, she says, with corporates having to keep pace with the ever-evolving employment landscape. ‘Post-covid work was like living through an experiment – the rulebook has been ripped up’.
Hybrid working
When it comes to the mountain of issues employers are having to deal with, hybrid working is at the summit. In some industries this might be old news, but one undisputed effect of the pandemic has been to accelerate the trend toward remote or hybrid working.
‘A lot of people have readily embraced the opportunities that hybrid working has given them,’ says Tan. ‘If you go to the recruitment market one question that a lot of people ask is: “Can I work from home all the time?” There’s a whole new post-pandemic spate of requests, people asking to relocate to Scotland, Cornwall, Spain or wherever, saying: “My job can be done remotely, as I’ve shown before”’.
Tan suggests that this current preference of employees for flexible working contrasts with pre-covid prevailing tendencies among employers, which is creating tensions for some corporates: ‘Pre-pandemic there was a degree of presenteeism, that people weren’t working as hard from home. This was a fallacy, and post-pandemic this myth has been dispelled’.
She suggests that the narrative of office work has shifted from proof of productivity to a position of: ‘We need you here for collaboration, for creating ideas, and for training’.
However, the reluctance of some employers to embrace hybrid or remote working is not simply about traditional ideas of the workplace, issues of fairness and equality also come into play. Policies and approaches differ from employer to employer and from industry to industry, and as such advice must vary accordingly, a problem outlined by Leckey: ‘At one end of the scale you’ve got financial services industries and the big banks, some of whom have said, “we want everybody to work significantly in the office”. For them, queries will be about how to make this unpopular decision with a significant swathe of the workforce stick, and you’re probably going to be dealing with a flexible-working queries from people who say: “I worked perfectly effectively from my home for the last 18 months why aren’t I allowed to do that now?” At the other end of the spectrum are the utopian tech companies that really embrace the idea that people can work from anywhere and have been doing it long before the pandemic.’
While certain financial institutions may site the regulatory concerns that remote working throws up, for others the issue is potential indirect discrimination. ‘Are we going to end up with this sort of two-tier workforce where the ones that tend to work most from home are predominantly those with childcare responsibilities, who are disproportionately female, whereas the ones who like coming into the office are more predominantly male or younger?’ asks Leckey, who highlights that law firms are already starting to see disputes off the back of this tension.
The catch-22 for some employers lies in offering hybrid working to some employees to appease those that are keen and able to do it, which in turn angers a significant part of the workforce that cannot work remotely, due to the nature of their work or circumstances. Suzanne Horne suggests that a major endeavour for employers is attempting to solve this tension: ‘It may well be that you have different roles in a company where some people can work from home and some people can’t, flexibility is now incredibly important to so many employees and something that they expect to retain. So, for corporates it’s about sitting down and looking at their business and workforce, and trying to rewrite policies that are now completely out of date.’
Whether or not corporates can solve this conundrum without alienating a chunk of their workforce it’s clear hybrid working is here to stay, and with more and more employees walking around with their laptops or conducting videocalls from their living rooms, the spectres of data protection and cyber security loom greater than ever.
Data protection and cyber security
IT departments were already pulling their hair out over home-working security before Coronavirus, but data protection issues have been exacerbated by the pandemic-induced exodus from the office.
‘There are categories of job where it really wouldn’t be appropriate for that person to be sat doing their work with a laptop on a train, local Starbucks, or even in their house surrounded by housemates’, says Leckey. ‘There’s real security issues there and also a cross-border dimension, particularly once you get outside the UK and EU where GDPR rules apply.’
Whether within the safety umbrella of a GDPR country or otherwise, data and sensitive information is naturally more difficult to control outside an office environment. One core problem is highlighted by Tan: ‘Employers need to make sure that employees are not, for example, sending things in the most convenient way, rather than dealing with them in the organisation’s way. So, they’re not just sending things insecurely because it’s expedient or because they happen to be working from home. There’s a good chance of human error there’.
Alongside the – possibly expected – security concerns that remote working has thrown up, the way some employers are attempting to deal with the new norms of work is hinting at more novel conflicts ahead. Some businesses are now turning to digital solutions to calm their anxieties around hybrid work, which in turn is creating more potential data protection and privacy issues. ‘We’re seeing employers wanting to track the attendance of their staff at the office, because they’re trying to work out how many people are coming in,’ says Horne. ‘So we’re seeing issues around the collection of data and we’re also seeing employers looking at how they can monitor remote work’.
Cost of living crisis
‘Employment law is always changing, there’s always some issues in the news, this week it has to be strikes and the prospect of a summer of industrial action,’ warns Horne. ‘This is all related to the economic challenges that have arisen, whether directly or indirectly, from the pandemic and the war in Ukraine’.
Many fear these economic challenges are the opening salvoes of a looming recession. The spiralling prices of goods and services combined with inflation and a reluctance to raise wages en masse to meet these rising costs has inevitably resulted in pay disputes across the spectrum, from individual grievances to strikes.
Tan outlines the dilemma many employers are facing: ‘It’s a difficult one to land the messaging because we don’t want to be making a representation matching inflation, which might then run rampant. It might be impossible economically to keep up with that.’
While fears of soaring inflation are widespread, the prospect of walkouts and collective actions looks equally bleak. ‘We’re expecting a huge upsurge in strikes and industrial action, and threats of the same in the next year or two as we haven’t seen for years,’ says Leckey. ‘In this highly inflationary environment it’s going to cause a lot of tensions because employers have to make decisions on when to give in and then we’ve got to find a way to fund these pay increases, or we hold tight and risk people walking out or joining the competition.’
This tension between increasing pay or losing people, or even industrial action, seems set to dominate boardroom debates during this latest crisis.
Fortunately, it’s not all doom and gloom, some see possible routes around this seemingly no-win situation. ‘Is more and more money what people are really looking for?’ asks Leckey. ‘It might be that part of the way that you can square the circle of eyewatering demands for pay rises, is that increasingly for the younger generations coming to work it isn’t just about pay, it’s the all-round proposition’.
This ‘all-round proposition’, Leckey suggests, might include considerations such as: ‘Do the organisation’s values align with mine? Where are they on CSR, ESG, diversity and inclusion?’ Taking these considerations into account could provide at least part of the answer to the spiralling inflation conundrum.
The breakneck speed of change over the past few years has kept employment law a busy and dynamic space, where solutions continue to be found for some of the most difficult problems employers and employees face. In this environment adaptability seems to be essential, as Horne aptly sums up: ‘The real test for corporates is going to be trying to pivot and innovate to keep pace with economic and cultural change, and maybe political changes, so I think the trick in employment law issues is being as nimble as you can.’
Top five tips for corporates
- Increased dialogue and transparency with employees.
- Be open to flexible, hybrid working.
- Look to work-life balance solutions in immovable pay disputes.
- Nimbleness is the name of the game.
- Wear your ESG and CSR credentials on your sleeve.