Month: October 2024

The incoming UK Labour Government has announced several plans which should be music to the ears of SMEs. Proposals such as acting on late payments, making it easier for small and medium sized enterprises to access capital, as well as reforming procurement rules to give small business greater access to government contracts, would all be welcomed.

The much-anticipated Employment Rights Bill, published on 10 October 2024, provided a broad framework for an eventual overhaul of the employment landscape, but a significant number of original proposals were omitted from the Bill. The Labour government has pledged to implement further proposals after concluding reviews and consultations expected to begin in 2025.

It’s clear that, although not directly included in the Bill, a new ‘right to switch off’ which would give workers the right not to engage with work correspondence (including emails, telephone calls and instant messaging) outside their contracted working hours still features prominently in the Government’s “Next Steps” paper and remains firmly on the cards.

Maintaining Work-Life Balance is Good for Everyone

While most would agree that a healthy work-life balance is good for the employee and for the business, some SME operations could not function effectively if they were unable to contact key employees urgently. Many SMEs would also argue that the right to disconnect does not need to be legislated and could be achieved by a shift in culture and attitudes. Whatever form it may eventually take, businesses should prepare for its arrival.

‘Right to Switch Off’ in Europe

While the right to disconnect is not legally defined, many countries in Europe have some form of it in their laws. In Germany, the Working Hours Act guarantees workers an eleven (11-) hour break every twenty-four (24) hours, but the digital revolution has made it harder for employees to take this time. There is no statutory right in Sweden for employees to disconnect, however, Swedish employers tend to respect their employees’ private time. There is equally no right to disconnect in Denmark, however, there is a maximum number of hours that an employee can be required to work as well as mandatory rest periods an employee must take during the working day and during the week.

France is seen as the pioneer of the ‘right to switch off”, passing legislation in 2016 that allows employees to switch off their phones outside of working hours. In Ireland, the right to disconnect is embodied in a code of practice which can nonetheless be used as evidence in claims for breaches of employment rights. In Belgium, legislation requires written agreements or rules on disconnection agreed through collective bargaining. Portugal has adopted a much stricter approach with it being unlawful for employers to contact workers out of working hours other than in situations of ‘force majeure’.

‘Right to Switch Off’ Overseas

Further afield, Australia recently introduced a law which still allows employers to contact their employees outside their contractual hours but puts no obligation on the employee to respond. A few states and cities in the USA have considered it, but there are no immediate plans for such federal legislation across the Atlantic. Canada is considering a right to disconnect policy that would allow employees to opt out of work-related communication outside of regular working hours.

Implications for Employers

So, what could the proposals include for the UK? Reports suggest that a combination of the Irish and Belgian schemes is the preference, with the ‘right to switch off’ enacted through a code of practice, with an obligation on employers to enter into workplace agreements detailing allowable contact hours and tailored ‘right to switch off’ policies. It is not clear when these proposals will come into effect. The Government has not formally confirmed whether any scheme would be a simple code of practice, which seems the most likely, or a statutory right. It is also unclear whether company size will impact any legal obligations. The Belgian scheme for example applies to companies with twenty (20) or more staff.

The Risk of Litigation

While there may be no right to bring a tribunal claim based solely on an employer’s failure to follow, say, a code of practice, employees might be able to claim uplifted compensation in connected tribunal claims. Under ACAS guidelines, compensation can be increased by up to twenty-five per cent (25%) if an employer fails to follow established codes of practice in cases related to grievances or disciplinary claims.

Increased Importance of Bespoke Contracts of Employment

Reviewing contracts of employment to include your own right to disconnect policy and tailored flexible working and home/hybrid working policies will be essential to protect your business operationally and legally, whatever form any future legislation may take. Published guidelines around switching off outside of working hours may also be helpful, but there will always be exceptions, which should be clearly stated with examples in any on-boarding documentation.

Supporting Your Employees to Switch Off

Switching off policies could actually benefit some SMEs. Productivity tends to be higher when staff have a chance to wind down and avoid burnout. Persistent sickness and resignations also tend to be reduced. Many valued employees may be keen to retain the flexibility of managing their own working hours, so creating flexible but consistent policies to ensure compliance will be essential.

The Motion Paradox team of start-up business and legal consultants, based in London and Los Angeles, are well aware of issues that face companies with remote workers, often in different time zones and global locations. We can help you draft bespoke contracts of employment and HR legal guidelines that make sure your company is compliant with all the necessary regulations (whatever they may be) so the distinction between home and work benefits you, your staff, and your business.

 

Has business fallen out of love with remote working? Amazon has told its office workers that they may no longer work from home except in extenuating circumstances while PwC now insists that its UK staff work in the office for at least three days per week (a surprising volte face given PwC’s previously liberal attitude to remote/home working).

Many would maintain that the main advantage for business owners of remote working lies in recruitment. Offering flexible working arrangements makes the employer more attractive to candidates. By extension, remote working on a truly global basis also gives access to a vastly increased talent pool of highly skilled individuals in sectors such as IT/Tech or the creative industries that are, by their very nature, highly globalised.

Remote Working Beyond Geographic Boundaries

For potential recruits and existing staff global employment does offer great opportunities for personal and professional growth. But when those workers are located not just in different regions or places within one country, but on an entirely different continent, then the problems of working beyond geographic boundaries begin to emerge.

Managers of some quite large companies as well as more agile SMEs appear to have little option but to say to candidates and employees, who can work from anywhere in the world, that they are happy with the employee upping sticks, leaving their domestic base, and going to work remotely in say, a European country.

Problems with Trans-Atlantic Relocation

This is especially true for workers in the USA and UK, where the perception is, given that the English language and cultural norms are (more or less) common to both, a transition either way should be fairly straightforward. Even in this case, subtle cultural and language barriers do exist between the USA and UK, while misunderstandings and miscommunications that can hinder collaboration and productivity are even more pronounced in countries without the same shared Anglo-Saxon heritage. Some barriers are practical. Since Brexit, gaining permission to work in the UK has become much more complex and does not guarantee access to the rest of Europe.

Barriers to Globalised Employment

There are some legal barriers to globalised employment too. Individuals may need to demonstrate that they have a special talent to allow them entry to their chosen country. Governments globally are showing heightened vigilance against employers failing to comply with increasingly stringent immigration laws, with enforcement powers often including substantial fines. A visa and/or work permit may be required, which could place onerous burdens on the employer. Other questions may arise: How will payroll work? How will you deal with the payment of government taxes on earnings?

When hiring or doing business outside of your typical area of operation, being aware of local employment laws in that particular country is also essential. Failure to maintain local legal compliance could have far reaching financial consequences as could breaches of local data, privacy and protection laws.  Understanding the business ethics of different cultures around the globe will also feed into this issue. By way of example, we can look to Portugal. Portugal has banned bosses from text messaging and emailing staff out of working hours as part of laws dubbed the “right to rest”.

Managing Different Time Zones

Perhaps the greatest practical problem is managing different time zones between global locations. An employer may occasionally need to speak to the employee, sometimes on very short notice. Being based on west coast of the USA for example makes such communication with a remote employee somewhere in Europe tricky, given the up to nine-hour time difference.

Organisations with global operations therefore face complex issues that must be overcome to maintain an effective mobile workforce in an increasingly interconnected world. While embracing global remote employment can offer your staff professional and personal growth opportunities, it should only be attempted in the full knowledge of all the possible business pitfalls such a move entails.

The Motion Paradox team of start-up business and legal consultants, based in London and Los Angeles, are well aware of issues that face companies with workers in different time zones and global locations. We can help you through the process of managing such a distributed global workforce, making sure your company is compliant with all the necessary regulations to operate effectively and safely, whatever jurisdiction your staff may be based in.