Employees Who Work from Home

5. Contracts

Not every situation demands a new contract. As long as output is quantifiable, you can usually use a standard contract. You may, however, need to renegotiate if conditions are changed. Detailed 'Telework Guidance' can be downloaded from www.cbi.org.uk/pdf/teleworkbrief.pdf.

5.1 It is easier to negotiate teleworking contracts if the terms and conditions are as good as for employees who work on site.

Agree a letter of modification to the standard employment contract with the employee. A simple letter might state:

• Where the employee will be based.
• That both you and the employee have the right to terminate the teleworking arrangement at any time.
• That the company will supply and insure the necessary equipment. The equipment remains the company's property and is not to be used for private purposes.
• That the company will supply and pay for a telephone line for business use.
• That the employee must comply with relevant health and safety and security guidelines. The company will pay for any costs involved.
• That there is no change to other employment terms and conditions. For example, pay, hours of work, holiday entitlement and pension contributions.

5.2 Teleworking is not self-employment.

• HM Revenue & Customs is unlikely to accept that an individual with only one customer (namely your company) is self-employed.This is especially unlikely if the individual was previously an employee of yours.
• Introducing self-employment for whole departments which move to teleworking can cause legal problems.This is a complex area that involves the TUPE Regulations (which protect employees when a business changes ownership).