By Charlotte Geesin on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Let’s start with the basics: any change to an employee’s rate of pay is likely to be a change to the terms of their employment contract. This means that the employer will need the employee’s authority to make such a change, or risk claims for breach of contract and – if the employee resigns because of it – constructive unfair dismissal. 

However, there are some instances where things will be easier to navigate.  If the proposal is to remove allowances or uplifts that are expressly paid because of an employee’s location of work, such as a London allowance, it might be easier for an employer to justify removal of that allowance for employees that are permanently based at a location outside the area that attracts the allowance; but it would need to be clear that these allowances are only paid during a period when the employee meets certain location criteria, and that they can be removed if that criterion is not met.

If a company is based in London (or another capital city), does it need to pay a London-weighted salary to its remote workers based elsewhere?

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