By Chris Coombes - 30 April
Since the UK entered lockdown and employees began working remotely, employers have needed to quickly ensure staff have the equipment they need to perform their jobs. This triggers some important questions:
Most employers will have a clause in their employment contract (or an internal expenses policy) which states that employees will be reimbursed for “all reasonable expenses wholly, necessarily and exclusively incurred in the course of employment”, or wording to that effect.
Often, expenses (or expenses above a certain threshold) need to be approved in advance. Some employees may, therefore, seek to claim that they have a contractual right to be reimbursed for any equipment they have bought or that the employer must approve expense requests for equipment that is reasonably needed.
First, your contractual obligations will largely depend on what the employment contract or (contractual) expenses policy states. Many expenses policies are non-contractual. However, where an employee does have a contractual right, an employer must ensure it respects this in order to avoid a breach of contract claim.
In most cases, the question then arises: “What is a reasonable expense”?
As well as considering the employment contract/expenses policy, employers should remember that:
In each of the above contexts, the employer needs to ask the question: what expenses are reasonable? Listed below are some pointers that may be helpful to bear in mind when determining the reasonableness of an employee’s request.
Given we cannot be sure how long the lockdown will last, it makes sense for employers to be sure of their obligations in relation to reimbursement of expenses incurred during homeworking by checking the wording of their employment contracts and/or expenses policies (where relevant).
Where employers have non-contractual expenses policies in place, it may be advisable to consider updating these to add some clarification as to what expenses will be considered “reasonable” in the context of homeworking. Alternatively, this can be covered in a separate “homeworking policy” (see “Homeworking policy”) . Instead of including this in a policy, some employers may simply choose to issue some guidance to employees in this respect.
Another option that some employers may consider (if this is not already in place) is making reimbursement of all expenses (or expenses over a certain amount) conditional upon obtaining pre-authorisation. This would be an additional administrative burden for employers but, would also reduce the number of employees proactively purchasing expensive equipment and then expecting to be reimbursed for it.
One final word: National Minimum Wage
A note of warning: where an employer decides not to reimburse a worker for a particular type of equipment and the worker pays for it themselves, it is possible that this will reduce the worker’s pay for National Minimum Wage purposes if it is considered to be an expense incurred in connection with employment. This is more likely to cause a problem where employees are being paid at or near the National Minimum Wage level, as the deduction would then bring the worker’s pay below National Minimum Wage.
If you would like to read more articles on employment law red flags, opportunities and foreseeable issues during Covid-19, click here.