Auditing, advisory and tax services firm PwC recently announced that 40,000 client services employees based in the US would be permitted to work virtually and live in any location in perpetuity. Those in support staff roles such as human resources and legal operations were given the option to work virtually on a full-time basis some time ago.
However, employees will be required to be at the workplace no more than three days a month to attend critical teams meetings, client visits and training sessions. Employees who choose to work virtually full-time from a lower-cost location would receive decreased remuneration.
Tyler Hendry, a senior associate at Herbert Smith Freehills New York confirms that PwC’s proposal to decrease employees’ remuneration where they opt to work from a cheaper location will generally be in accordance with US employment law.
That is because the majority of US employees are employed under at-will arrangements that allow employers to unilaterally change terms and conditions of employment without employee consent. (He did, however, note that this announcement raises a host of other compliance concerns, including ensuring compliance with state and local laws in the jurisdiction where an employee is located).
SA employment law does not permit a unilateral change to an employee’s terms and conditions of employment (which includes remuneration) in the absence of the employee’s consent. Therefore, while PwC in the US may be permitted to inform employees that if they choose to work from a lower-cost location, their remuneration will be decreased, its SA counterpart would be required to obtain those employees’ consent before doing so.
In the SA context it has been necessary for employers to take into account a variety of factors when determining which mode of working is mutually beneficial for both parties to the employment relationship. These include the employer’s operational requirements, the effect of working from home on productivity and collaboration with colleagues, screen fatigue as well as the effect of isolation on employees’ physical and mental wellbeing.
It is probable that in determining which model would be appropriate, the majority of employers will be required to consider two main categories of employees: those who are able to work from home and those who are not able to work from home. Those who are not able to work from home may fall into two subcategories: those who cannot work from home for logistical reasons (such as internet access or an inability to create a private working space) and those who cannot work from home because the nature of the position is such that they are only able to render services at the employer’s office (such as cleaners and receptionists).
The nature of the workplace, the sector in which the employer operates and the benefits and pitfalls of working remotely as opposed to in the office will need to be taken into account when determining what is appropriate for that employer. Whether an employer will require employees to present proof of vaccination before returning to the office (in accordance with their mandatory vaccination policy) would also be an important consideration.
Anecdotally, it appears as if the majority of SA employers would prefer to implement a hybrid model to continue to provide existing employees with the flexibility to which they have now become accustomed, as well as to attract top talent from across the globe which may then be permitted to work for the local SA entity from another country.
Importantly, employers must be able to show that those employees who are requested to work from home or from the office or a combination of both have been selected according to fair and objective criteria to mitigate the risk of an unfair labour practice claim or an unfair discrimination claim.
There are a number of important issues for employers to consider when determining whether it is appropriate or desirable for its employees to work from their homes.
First, an employee’s contract of employment ought to stipulate the employee’s place of work. It may provide for the employer to change the place of work from time to time. In the event that provision is made for such change, it would not be necessary to obtain the employee’s consent to change the employee’s place of work from the office to the employee’s home. However, it is advisable from a human resources and industrial relations perspective to consult with employees and obtain their views before amending the contract.
Second, an employer has an obligation to ensure that it provides a workplace which is both healthy and safe. It may be too onerous for an employer to inspect, whether virtually or physically, the working conditions of each of its employees who are able to work from home and the employer may then not be willing to assume any liability in that regard.
Third, employees have an obligation to maintain confidentiality in relation to their work product. This may present challenges in circumstances where the employee’s partner is also working from home.
Fourth, it will be necessary for the employer to ensure that the security of the employer’s hardware and software will be adequately protected while the employee works from home.
Employers may be required to consider whether it is necessary to amend the employment contract, alternatively the disciplinary code and procedure to include an obligation on the part of employees to protect the employer’s equipment from theft and/or damage.
Employers will need to satisfy themselves that employees are accessing a network which is safe and secure given the obligations of both employers and employees in terms of the Protection of Personal Information Act in relation to the processing of personal and special personal information.
It is probable that most employers issued allowances to assist employees with the “set-up costs” associated with working from home when the pandemic began. A reference to this allowance or benefit should have been or should now be included in the applicable policy or the employee’s employment contract to ensure consistency when new employees are employed.
Again, it will be important for employers to be able to illustrate that the criteria applied when issuing the allowance were fair and objective to avoid unfair discrimination or unfair labour practice claims.
In the event that the employer employs employees who are based in other countries, it will be necessary to take considered legal advice on the tax implications for both the employer and the employee. The employee’s remuneration will undoubtedly also become an issue of contention in light of the possible requirement to report on remuneration as outlined in the Companies Amendment Bill as it is probable that foreign-based employees will be paid more than their SA counterparts.
Those employers that were able to do so due to the nature of the service they provide adapted quickly and successfully to remote working in March/April 2020. In the event that employers did not consider the possible risks associated with remote working at that time, it is important that they do so now as more South Africans continue to receive vaccinations and the option of working from home or the office becomes more of a reality.
This article was published first by the Business Day: https://www.businesslive.co.za/bd/opinion/2021-10-18-jacqui-reed-many-issues-to-consider-in-new-work-scenarios/
For more information, please contact Jacqui Reed or your usual Herbert Smith Freehills contact: