Home working and pay: Alex Monaco on Radio London

Would you take a pay cut in return for working from home?

The transcript below is of a Radio London broadcast aired on 3 May 2022 between Alex Monaco, CEO of Monaco Solicitors and Vanessa Feltz, Radio London Presenter. The initials VF stand for Vanessa Feltz and AM is for Alex Monaco.

See our page on flexible working for an overview of the various different ways you can carry out your work role, including working from home.

Broadcast Transcript

VF: Here’s a personal question for you lovely listeners: Would you be happy to work from home, permanently?

Maybe the answer to that is yes, you would love it. You love working from home, it’s so much better, you don’t have to travel anywhere, you save on transport costs and commuting, you have more time in your day, you have more freedom, you can do what you need to do when you need to do it.

You can wear your pyjamas all day and nobody judges you. You don’t have to pay for lunch because you’re having lunch from your own fridge.

In every way maybe you’re more productive, you work harder, there’s no one to distract you, no one to talk to, nothing to look at. You’re just busily working, you get more done and you really love working from home.

Now if that is the case, here is the question: If you’d like to work from home permanently, would you still want to do it if your boss or your company told you you’d be paid 20% less? Would it still make sense? Would it still be worthwhile? Would it be financially worthwhile?

Maybe the answer is yes, it would. Maybe you just like it so much it’s so much better for you, your childcare and everything else you need to organise, you would be happy.

Or maybe not happy, you would be a bit reluctant, but you would settle for a 20% reduction in your salary if you could just keep on working from home. That’s what the London law firm Stephenson Harwood has offered its staff.

And joining me on the programme is Alex Monaco, employment lawyer and founder of Monaco Solicitors. Hi Alex, Good morning

AM: Hi, Good morning

VF: So, we were wondering about this. Is it legal to say ‘if you want to keep on working from home you can but you get 20% less than your colleague who comes in to work every day?

AM: Well you have got to start with your contract of employment and you’ve got to look at your place of work in your contract. Most people got their contract before the pandemic and most people would say your place of work is in the office. But if you got a job in the pandemic, or after that, it might say that your place of work is at home.

Certainly, that’s what we have started doing at my firm – recruiting people to work remotely. I think what Stephenson Harwood are saying – the law firm that are offering the 20% pay cut to people – is that, during the pandemic, they recruited people outside of London and they paid them less.

So now they’re saying that if you live in London, as your listeners do, then you can move out of London if you want, and you can save on your cost of living, but what we’re actually going to do is to pay you 20% less.

It’s really interesting because you’ve got London Weighting which has been around for decades….

VF: Yes, What % is London Weighting in relation to your salary, or is it not related to your salary?

AM. I think it varies, but you are looking at 10% or 20% even and a lot of listeners to this show are obviously going to have London Weighting. The question is in the future, is that going to go?

And where are we in terms of the culture? Because we know that the tech is there so that people can work at home and the culture was there in the pandemic.

The government has tried to bring people back into the office, tried to tell everyone to come back. By and large a lot of people have ignored that and a lot of employers have ignored it……

VM: Yes, including civil servants, as Jacob Rees-Mogg has pointed out.

AM: Right, but is it a bad thing to work from home? Let’s be honest, people’s mental health, their happiness, is probably higher when they are at least working from home some of the time, because they’re not having to do the rush hour commute and be on the tube which is a nightmare for everyone.

It’s better for the environment according to most of the studies and you know if you are disabled, or if you are the carer of a child – and more likely to be a woman in that case statistically – you might find it’s better for you to work at home, so that you can do the school run, also so that you don’t have to drive in [to work].

So there are lots of benefits from working from home. The company is saving the rent and the electricity………………

VF: But only if no one works from the office. But if half the workforce works from home and half the workforce works in the office, or as you said your mental health would be better if you worked from home some of the time.

So if you spend Tuesdays to Thursdays at home and the rest of the time in the office, then the company isn’t saving anything.

The office is there without you in it. The company is spending whatever they have to spend on the head office or the premises of work.

You’re not there, most of your colleagues aren’t there, so, you saunter into the office for a couple of days, then go home again. You know, it’s the worst of both worlds rather than the best of both worlds, isn’t it?

AM: That’s true right now because we haven’t really adapted fully. So what we’d need to see is companies shutting their offices. Then it begs the question of what happens to city centres? Do they become like ghost towns?

Is that bad for the economy and everything just shifts to online shopping and there’s no soul there anymore?

And we will become these lonely recluses sitting at home just with our devices and no actual humans to keep us company. There is that, and it could be a bit of a nightmarish scenario.

On the other hand, I think also it depends on your generation. So, if you are a family person, you probably have plenty of company at home. You’ve probably got the partner, the children.

But if you’re a young person just coming out of college or university or school, you don’t really want to sit in your bedroom the whole time, day and night working, so you probably do want that option, to go in [to the office].

But a lot of the people making those decisions in these times are the senior people who are a little bit old fashioned perhaps and they are trying to apply the rules based on their own preferences, rather than looking across the whole workforce and asking ‘what do people want?’ and ‘what is better?’

And that mental health and that happiness that you can get from giving people flexibility, that does relate to a bigger increase in productivity across the workforce, so it does commercially make sense,

I think there is something else at play here too, and that is we are seeing a lot of wage increases across the economy partly because of Brexit and the brain drain of Europeans leaving the Capital, partly because of big tech becoming such a huge force during the pandemic.

That’s kind of distorting wages across the economy. There’s nothing wrong with people getting paid more at all.

As an employment lawyer for employees, I’m very much in favour of employees’ rights and so on, but as a business owner as well, it’s quite a hard one to balance the books and to stay profitable.

You can’t just suddenly flip to a high wage economy overnight. It’s something that should be done over five or ten years.

Right now, it’s kind of good times for employees because they’re receiving high wages. But how long can companies keep up and are firms offering these kinds of 20% pay cuts because behind the scenes they are just desperately trying to keep up by saving a few pounds on the wage packet?

VF: Quite. You know I’ve worked for various TV and various other TV shows and various other things, and for one company that I worked for, I was told that if you work from home and you broadcast via zoom, then you get, I think it was half the fee you’d get if you came in.

And it isn’t the contributor’s choice whether you come in or not. They tell you whether you’re coming in or not, depending on the number of people in the studio. You know, that kind of thing. So it’s not as though you get to choose. You know you say ‘well I’ll stay at home and get half the fee’, but it’s they who say ‘stay at home and you get half the fee’.

And no one would ever dream of upsetting a TV company by arguing about something like that and you just have to put up with it. But I didn’t know whether that was legal, moral….I didn’t know what was going on with that one at all.

AM: Yes, that’s an odd one. It’s an interesting situation where you are actually seeing an employee being offered a choice.

Where it’s their choice and you say: well you can go home and you can get paid 20% less, that’s bringing into the equation a bit of negotiation that the employees didn’t really have before. There wasn’t that kind of flexibility. It was, as you say, you’d just get told what to do.

In your situation, being told, well half at home and half at work, I guess that depends on whether you are a contractor or an employee. So if you are a contractor you don’t really have any rights – broadly speaking – there are obviously grey areas.

Whereas if you are an employee you do [have rights], especially if you’ve been there for two years. At that point, you have the right not to be unfairly dismissed or constructively dismissed which is …….

VF: So, if any of my listeners are being told, you can work from home if you like but you’ll get 20% less money or any other figure, or any sort of reduction in your money or your fee, can they say, well hang on a minute, I’ve been here over two years, there’s nothing in my contract that says it [my pay] should be diminished and can you sort of fight on that basis?

I mean people are always nervous to do it and quite rightly, because they think they might get the axe if they do.

AM: Well, this is it. There is that distinction between what your rights are on paper and how you’re going to implement those rights in practice. Because most people don’t have lawyers and they don’t really have access to the legal system and it’s just a big scary thing.

So it’s probably safer to go along with the culture that we’ve got and let’s see where the times take us.

If you’re specifically feeling put upon yourself – it may be that you’re disabled for example, and you do struggle to come in to the office for whatever reason, or you might be a carer of children and that might be affecting you – then I think you’ve got stronger arguments at that point. It’s quite a complicated area.

VF: It certainly is, and it’s kind of a new area for employees and employers both, isn’t it?

AM: It is. And just from personal experience with my employees, I just think people are happier working from home.

I’ve had plenty of feedback: they like to come in now and then, to touch base, do some team building and bonding and things like that. But in terms of your actual daily life, it [workng from home] is just less disruptive. You’ve got your things around you, you’ve got your food there …………

VF: Do you know, I think so many people feel so differently. They feel trapped at home, they feel isolated and bored. They feel out of the social loop, there’s no water-cooler conversation, there’s no flirting, there’s no fun.

All you’re going to do all day is be stuck at home seeing nothing but yourself and it’s a real drag, the fridge is too near, the diversions are too few and the stimulation is lacking and you want to get out and you want to come back. It’s no joy if you never leave home and never return.

The whole point is that home is only ‘home sweet home’ when you’ve been out of it. If you’re just stuck in it all the time, it’s like a permanent lockdown. It doesn’t work out.

I mean, it really does depend as you quite rightly say, on your age, your stage, your place in the company, what kind of personality you have, how long your commute is, how gruelling, whether you’ve got children, all that kind of stuff.

But there certainly is a proportion of people who really benefit from going in to work and from being part of the workplace and part of the workforce and all the things you joined a company to experience, rather than sitting in your bedroom in your pyjamas and using your bookshelf as a desk, which isn’t ideal for some.

You obviously prefer to stay at home, it’s quite clear, Alex. Very nice to talk to you and thank you so much for joining us.

That’s Alex Monaco the employment lawyer. This is quite a complex one. So, if you’ve been told that you’ll get a reduction in your salary or your fees if you work from home, you may want to give us a call about it and also talk about whether you think he’s right when he says that so many people want to work from home.