Google Search? Google seeking to explore new employment pay options

2 October 2021

As a result of the COVID-19 pandemic, it is becoming more common for employees from all industries to opt to work from home on a full-time or a part-time basis. Indeed, many employers worldwide are making it easier for people to work from home or adjust their working hours.

However, US employees of the tech giant Google may face a permanent pay cut of up to 25% if they decide to work from home or move to areas with a lower cost of living. This decision is based on a new pay calculating algorithm the company has developed which calculates the effect that changes made to their place of work may affect their productivity, and therefore overall pay.

While Google has no plans to implement their new policy for employees in the UK, employers in the UK may want to consider how, if they want to implement a similar change in regards to pay, how it would be received by their employees.

Such an employer would face several hurdles in legally and successfully implementing a policy and change of contract terms to decrease pay for those who opt to work from home. It would require them to change their employee contracts which is not as simple as it sounds.

How can an employer change your contract?

Unless there is an existing term in the employment contract for the employer to make unilateral changes, an employer can try and change the terms of employee contracts of employment in the following ways:

  • By informing and consulting with the employee on the desired change of terms, mutually agreeing to change the terms, and finally confirming this in writing. This can be difficult as not all employees will agree to the proposed changes of their terms of employment especially if they consider them to be unfair and unreasonable in the circumstances. If an employer dismisses an employee for refusing to accept the proposed changes to their contract they could have grounds for an unfair dismissal claim. Furthermore, the employer could be held liable for a breach of the employee’s contract of employment.

  • By terminating the employee’s current contract and then re-hiring them under a new contract of employment including the new policy – this is known as the “fire and re-hire”. This is not a popular strategy and can lead to potential claims of unfair and/or constructive unfair dismissal. It has come under much public scrutiny, with many even calling to make the practice illegal.

  • By making the changes without consulting the employee and enforcing the new contractual terms and policy, and if they do not actively object to agree to these new terms by implication. However, this can be tricky as the employee may refuse to work under the new terms and policy, resulting in a claim for breach of contract and constructive unfair dismissal.

However, even if an employer can unilaterally change their employee’s contracts (because a term in the contract allows them explicitly to do this), they may still have problems implementing a new policy as it may be indirectly discriminatory against certain employees.

What is indirect discrimination?

An employer is liable for indirect discrimination if they have policies or procedures that put employees with protected characteristics, as defined by the Equality Act 2010, at a particular and substantial disadvantage.

Indirect discrimination occurs when an employer does not intend to treat their employees less favourably based on any protected characteristics. Yet their policies or contract terms still have the detrimental impact by disadvantaging employees with these protected characteristics more than employees without them.

Google proposed plans may be indirectly discriminatory towards certain groups. For example, employees with disabilities may be more likely to work from home or live in certain areas with more accessibility to other services they require. Therefore, they may be particularly affected by the proposed pay cut.

The new policy may also be indirectly discriminatory based on sex, as a pay cut based on home working may disproportionately employees with child care needs, which as seen in the recent case of Gemma Dobson (https://www.redkitesolicitors.co.uk/legal-news/fired-for-refusing-to-work-weekends-nhs-nurse-wins-appeal/)

If you are an employer looking to change your employment terms and conditions of employment, or an employee who wants to confirm their legal rights, please feel free to contact our specialist Employment Law Team for independent legal advice. Click here for Employment Law Team

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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