A recent CIPHR study has revealed that 68 per cent of employers polled are considering reducing the pay of employees that choose to continue to work from home permanently.

This is despite the fact that 53 per cent of the employers have saved money by having more employees working remotely.

The survey found that it was more likely that larger companies would consider reducing the pay of employees that opt for home working permanently, whilst 10 per cent of employers have already permanently reduced location allowances during the pandemic.

The findings follow another CIPHR study in May 2021 into the wishes of UK workers, which found that 73 per cent of employees would accept some reduction in pay for permanently home working. A third (32 per cent) of those would accept a pay cut would take a 10 per cent reduction or more, with the median pay cut that all respondents said they would accept being 3.5 per cent.

Despite the sample size, the findings highlight the impact of the pandemic on employees' working arrangements and, in some cases, pay.

It is important for employers to formalise contractual changes affecting employees to avoid future disputes. Employees should also be notified of any changes to their written statements of employment particulars, including place of work and pay, in writing within one month of the change taking place.

Prior to formalising such changes however employers will need to consult with employees and seek agreement to the change, unless there are any provisions in their employment contracts which allow the terms to be varied. Failure to do so could result in unlawful deduction of wages and constructive dismissal claims being brought against employers in the Employment Tribunal.

The practice of 'fire and rehire', whereby an employer enforces a change to an employee's contract by terminating and offering re-engagement on different terms, should always be a last resort and such measures should only be considered after consulting with the affected employees about alternatives.