When remote working was popularised during the COVID-19 pandemic, it seemed like a temporary change. Years later, the adoption of remote work in the UK has reached unprecedented levels as employees all over the country prioritise jobs that allow them to work flexibly.
The reality is that the legal requirements surrounding remote work in the UK are murky and constantly changing. Regulatory bodies are still issuing new guidance, employment tribunals are still setting precedents, and new compliance challenges continue to emerge.
For SMEs without dedicated legal departments or formal policies on flexible work in place, it can be difficult to keep up and ensure that the business remains compliant with current regulations. This guide examines five legal considerations that every SME must address to protect itself while maintaining successful remote working arrangements.
1. Employment Contract Modifications and Flexible Working Rights
Creating compliant remote working arrangements starts with proper employment documentation.
The Law Today
Recent changes to flexible working legislation have significantly impacted remote working requirements for employers. From April 2024, employees gained the right to request flexible working from their first day of employment, rather than after 26 weeks. This change means that businesses must have robust processes in place to handle these requests fairly and consistently.
The Employment Relations (Flexible Working) Act requires employers to:
- Consider all flexible working requests reasonably.
- Respond within two months of receiving a request.
- Provide clear reasons for declining a request.
- Offer an appeal process for rejected applications.
- Maintain detailed records of all decisions.
Common Contract Pitfalls
While these seem like small issues, they can very quickly escalate into larger problems and disputes. These pitfalls are:
Unclear Work Location Clauses: Many contracts specify office attendance without acknowledging remote work possibilities, creating ambiguity about employee obligations.
Absence of Equipment Provisions: Contracts often fail to specify who provides equipment, internet connectivity, or workspace requirements for remote workers.
Inadequate Performance Metrics: Traditional contracts may not address how performance is measured and managed in remote settings.
Missing Data Protection Clauses: Older contracts lack specific provisions for handling confidential information outside the office environment.
Next Steps for Employers
To ensure compliance, businesses should:
- Review all employment contracts for remote work provisions.
- Develop standardised flexible working policies with clear criteria.
- Create formal request and approval processes with proper documentation.
- Update job descriptions to reflect remote work expectations.
- Implement regular contract reviews to ensure ongoing compliance.
2. Health & Safety Obligations for Remote Workers
One of the most overlooked aspects of working from home involves health and safety responsibilities. The Health and Safety at Work Act 1974 doesn’t pause when employees work from home: employers retain full duty of care regardless of work location.
To remain in compliance, businesses have to extend their health and safety management to include home working environments. This involves:
Risk Assessments: Employers must assess the health and safety risks of home working environments, even though they may never physically visit the employee’s home.
Equipment Provision: The Display Screen Equipment (DSE) Regulations 1992 apply to remote workers, requiring employers to provide suitable equipment and arrange eye tests when requested.
Working Time Monitoring: The Working Time Regulations 1998 remain applicable, meaning employers must monitor and control working hours to prevent excessive overtime and ensure adequate rest periods.
Stress and Wellbeing: The Management of Health and Safety at Work Regulations 1999 require employers to assess and manage work-related stress, including isolation and mental health challenges associated with remote working.
Creating Compliant Health & Safety Procedures
To ensure that these requirements are met, employers can:
- Standardised home working risk assessments using digital forms and by communicating with them about their home work environment.
- Clear equipment provision policies specifying employer and employee responsibilities.
- Regular wellbeing check-ins to identify and address mental health concerns.
- Working time monitoring systems to ensure compliance with rest period requirements.
- Incident reporting procedures adapted for remote workers.
3. Data Protection and Cybersecurity
GDPR compliance can become more precarious when personal data is processed outside controlled office environments. Businesses can sometimes underestimate how remote working can complicate compliance if the correct safeguards are not put in place beforehand.
The fundamental principles of GDPR remain unchanged for remote workers, but implementation becomes more challenging:
Data Security: Article 32 requires appropriate technical and organisational measures to ensure data security. Home networks, personal devices, and unsecured environments create new vulnerabilities.
Data Breach Notification: The 72-hour breach notification requirement applies regardless of where the breach occurs. Remote working can complicate breach detection and response procedures.
Data Subject Rights: Ensuring individuals can exercise their rights (access, rectification, erasure) when data is processed across multiple home locations.
Ensuring Data Protection Compliance
Effective compliance requires:
- Comprehensive data protection policies specifically addressing remote working.
- Employee training programmes on remote data security.
- Technical security measures including VPNs, encryption, and access controls.
- Regular security assessments of home working arrangements.
- Clear incident response procedures adapted for remote working scenarios.
4. Cross-Border Employment and Tax Implications
Remote work becomes even more complicated when employees work across borders or from different jurisdictions.
Businesses run the risk of inadvertently creating tax and employment law obligations through informal remote working arrangements.
Permanent Establishment Risks
When UK employees work remotely from other countries, businesses risk creating a “permanent establishment” in that jurisdiction, triggering:
Tax Obligations: Corporation tax, VAT registration, and ongoing compliance requirements in the employee’s location.
Employment Law Compliance: Adherence to local employment laws, minimum wage requirements, and termination procedures.
Social Security Contributions: Potential dual liability for social security contributions in multiple countries.
Managing Cross-Border Compliance
- Clear geographic restrictions in remote working contracts.
- Pre-approval processes for any cross-border working arrangements.
- Tax advice before permitting extended overseas remote working.
- Immigration status verification for all remote workers.
- Regular monitoring of employee locations and working patterns.
5. Performance Management and Disciplinary Procedures
Employment law protections remain fully applicable to remote workers, but SMEs often struggle to implement fair and compliant performance management procedures in virtual environments.
The Challenges of Remote Performance Management
The Employment Rights Act 1996 and ACAS Code of Practice on Disciplinary and Grievance Procedures apply equally to remote workers. However, remote working arrangements create unique challenges:
Evidence Gathering: Traditional methods of monitoring performance and gathering evidence may not be applicable in remote settings.
Fair Procedures: Disciplinary hearings, investigations, and appeals must maintain the same fairness standards in virtual environments.
Right to Accompaniment: Employees retain the right to be accompanied in disciplinary hearings, even when conducted virtually.
Common Performance Management Mistakes
Informal Monitoring: Assuming remote work monitoring can be less formal or documented than office-based performance management.
Discriminatory Assumptions: Making negative assumptions about remote worker productivity without proper evidence.
Inadequate Investigation: Failing to conduct proper investigations when performance issues arise with remote workers.
Technology Failures: Not accounting for technology issues that might affect performance or disciplinary procedures.
Best Practices for Remote Performance Management
Compliant remote working contract provisions should include:
- Clear performance metrics specific to remote working arrangements.
- Regular check-in schedules with proper documentation.
- Virtual meeting protocols ensuring fair disciplinary procedures.
- Technology contingency plans for system failures during formal procedures.
- Training for managers on remote performance management and employment law.
Conclusion: Your Path to Confident Remote Working
Throughout this guide, we’ve explored the five critical areas where SMEs need to focus their attention:
- Updating employment contracts for flexible working rights.
- Ensuring health and safety obligations extend to remote workers.
- Maintaining GDPR compliance across multiple locations.
- Managing cross-border tax implications.
- Implementing fair performance management procedures for remote teams.
Your business has already adapted to remote working operationallyโnow it’s time to ensure your legal foundations are equally robust. The investment you make in proper remote work compliance support today protects your business tomorrow and gives you the confidence to make strategic decisions about your team’s future.
You’ve built something valuable; these legal protections help ensure you can continue growing it without unnecessary risks.
Ready to ensure your remote working arrangements are fully compliant? Download our comprehensive “Legal Essentials for Growing Businesses” guide, which includes a detailed self-assessment tool to identify your most important legal priorities.
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