Can staff ask for extra work or a pay rise to deal with the cost of living crisis?

10 November 2022
Can staff ask for extra work or a pay rise to deal with the cost of living crisis?

Pay rises and even working two jobs will be common reactions to rising costs, but contracts should set out limitations, says Ed Cotton

In order to deal with the rising cost of living, employees may turn to their employers for pay rises and may also want to obtain additional work to bolster their income. So what are your options if faced with these requests?

The law

Other than increases in line with the National Minimum Wage, employers are not under any general legal obligation to increase wages. However, many employment contracts will include an annual pay review clause. Any annual pay review must be carried out in good faith, otherwise the employer will be in breach of the implied duty to maintain their employees' trust and confidence.

Employment contracts will usually require employees to seek their employer's consent to undertake additional employment or may include a ‘whole time and attention' clause. Employees may also be restricted from working for competitors both during and after their employment. Note, however, that it is illegal to include a contractual term in zero-hours workers' contracts requiring them to work exclusively for one employer.

Unless employees have opted out, the 48-hour limit on the working week under the Working Time Regulations will apply across all roles undertaken by an employee – including those undertaken for separate employers.

Employers have a duty to maintain a safe system of work for their employees. The scope of this duty is wide and could encompass the impact of employees undertaking multiple jobs.

Expert advice

Any request for a pay rise must be handled in accordance with the terms of an employee's contract of employment and taking into the account the duty to maintain an employee's trust and confidence. So, employers should ensure that they can objectively justify any refusal to award a pay increase – for example, because of increased costs to the business affecting payroll budgets, or financial restraint ahead of the likely forthcoming recession.

There is no legal obligation to consider a request for a pay increase. However, a failure to consider and respond to requests may risk resignations

Outside of any contractual obligation to review pay, there is no legal obligation to consider a request for a pay increase. However, a failure to consider and respond to requests may risk resignations.

You may wish to consider a one-off cost of living bonus payment instead, or consider other ways you can support employees financially – for example, by offering discounted food at work, season ticket loans, sign-posting to financial advice services or offering employee assistance programmes.

If an employee wants to undertake additional employment, it may be possible to accommodate this. However, you would need to consider the impact on the business, the impact on the employee and the terms of the employee's contract of employment.

To-do checklist

If you are presented with requests for pay increase or additional employment, you should:

  • Check the employee's contract of employment for pay review provisions and any restrictions or requirements that would prevent an employee taking on a second job.
  • Consider a one-off bonus or other non-financial options to support employees, if a pay increase is not possible.
  • Ensure that any additional hours worked in a second job do not exceed the maximum 48-hour working week (if the employee has not opted out).
  • Consider whether there are any health and safety or wellbeing issues if the additional work would place an undue strain on the employee's ability to undertake their role, particularly if there is a safety-critical element – for example, if they are working in a busy kitchen.

Ed Cotton (ed.cotton@tltsolicitors.com or 03 33 006 0492)

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