Can employers only offer pay rises to staff returning to the workplace?

Although legally businesses can do this, it is not great for culture and there is a real risk of employment tribunal claims arising, says David Jepps

After it was announced that Covid-19 restrictions would be easing from 19 July 2021, employers have been seriously considering what their return to the workplace will look like. Many employers have announced permanent flexible or hybrid working plans, but there are others who want people back in the office full time. 

Employers may be tempted to encourage workers back to the workplace by stating that those in the office are more likely to be considered for pay rises. Although this is technically legal, this is not a great idea as it creates a real risk of employment tribunal claims arising from three separate areas of employment law: unfair dismissal; discrimination law; and health and safety-related provisions. 

Constructive dismissal

Only considering pay rises and promotions for employees who are willing to return to the workplace could be seen as unreasonable behaviour triggering constructive dismissal claims. A constructive dismissal is where an employee leaves in response to behaviour by the employer that amounts to a repudiatory breach of contract.

What that means in day-to-day terms is that the employer does something that is bad enough to destroy the trust and confidence necessary for the employment contract to continue. The employee can treat themselves as dismissed and – if they have been employed for more than two years – can claim unfair dismissal. 

Constructive dismissal claims are more difficult to win than regular unfair dismissal cases and this, coupled with the need to end employment, means that only employees that are financially confident, incredibly upset and prepared to walk out on the job will pursue them.

Discrimination claims 

Employers could also face discrimination claims. Such claims can be brought without leaving or terminating employment and focus on a ‘protected characteristic’. The most likely basis for such claims would be on grounds of disability or sex. 

It is unlikely that an employer would say that they will not give pay rises or promotions to disabled or female staff. That would amount to direct discrimination. But indirect discrimination claims could arise, nonetheless. 

These would be founded on arguments that reducing the chances of pay rises or promotion for those that did not return to the workplace would be imposing a requirement that is more difficult for disabled or female workers to meet, therefore amounting to discrimination against them indirectly when they are penalised for not meeting it.

It is accepted that female employees often have more childcare responsibilities than their male counterparts so that could be a compelling factor here. Moreover, clinically vulnerable employees are likely to be disabled so medical objections to a return to the workplace could spark disability discrimination arguments.

It may be the case that insisting on a return to the workplace is justifiable for commercial reasons, but penalising those that cannot comply is a very difficult action to justify.

Health and safety provisions 

Section 44 of the Employment Rights Act 1996 gives a health and safety-related right not to be subjected to a detriment for leaving or refusing to return to work in circumstances where the worker reasonably believes there to be serious and imminent danger which they could not reasonably avoid. 

Such claims do not require any minimum length of service and can be made without ending employment. A ‘detriment’ can include not being paid for not coming in to work as well as being excluded from pay rises and promotion. This provision is a real risk for employers where staff do have genuine concerns and is likely to lead to liability if employers fail to attempt meaningful dialogue aimed at resolving matters.

That being said, if the employee acts unreasonably, will not enter into a dialogue on these matters or rejects reasonable measures to put things right then their claims will likely fail. 

Overall, employers need to consider their reputation, morale and balance the risks of these various claims – which normally need to be made within three months – against the commercial benefits a return to the workplace will bring. Many businesses will be deliberating on these changes in the weeks to come. 

David Jepps is an employment partner at Keystone Law