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The ‘new-age employer’: Why accountancy firms must adapt to meet the changing needs of employees

The 'new-age employer': Why accountancy firms must adapt to meet the changing needs of employees 1

By Kelly Feehan, Services Director at CABA, the charity supporting the wellbeing of chartered accountants and their families

As humans, our ability to adapt to a diverse range of environments is one of our greatest assets. We’ve proven this time and time again throughout the course of history, and the Covid-19 pandemic is no exception. Millions of workers across the UK have now successfully transitioned from office working to working from home, almost overnight, learning new skills and overcoming all kinds of obstacles.

During the past 3 months, much of the angst from employers about productivity levels or communication issues has been quashed. Supported by increasingly sophisticated technology, worker productivity during lockdown has risen by as much as 47% according to some surveys. As a result of our own success, we now have an opportunity to reimagine the way we work. Lockdown will become the prototype for new workplace models that support and empower the modern-day worker.

What happens next is the subject of much speculation. Will companies scrap their real estate altogether or will they opt for something smaller and more flexible? How will companies continue to support their staff as new working conditions bring additional pressures and challenges? Whatever the answer, companies need to be thinking about this now. Any procrastination could prove costly.

To help businesses navigate the changing landscape of the workplace environment, we explore some of the possible outcomes for office-based workers in the UK and the implications these may have on the role of the employer.

The evolution of the office

3 months in and the dust is beginning to settle. After the initial adrenaline surge, many companies are now taking stock of their situation and using this time to examine their office space. Do they really need as much space as they’re currently paying for? If their employees can successfully work from home and are happy to do so, the answer to this is ‘probably not’.

For the time being, we’re likely to see most office-based companies continue to operate with remote teams. Pandemic-proofing an office requires significant investment and there’s a hesitation from companies to spend money on grand-scale design solutions, as any changes may be rendered useless as we continue to learn more about Covid-19 or if a vaccine is found.

But what will happen to the ‘traditional’ office the long term? Well, it’s been suggested that the traditional office could take on a more fluid role – a space for collaboration and innovation, rather than admin tasks which could continue to be carried out at home. In this scenario, the office will remain the HQ, a hub where physical meetings and projects can be carried out, and where clients and employees can go when they need somewhere to sit down and chat.

Another suggested outcome would see companies ditching the central office hub for smaller regional offices, closer to where staff live. This would involve clustering employees into groups and creating a more convenient working environment that allows them to avoid long commutes.

There are also those who believe that while demand for real estate may dip in the short term, ultimately the pendulum will swing in the other direction and we’ll all end up back in the office before long. People who support the return to the office often cite the loss of workplace culture as a reason to avoid remote teams. Without a physical space to work in, it’s harder to cultivate the community spirit and sense of shared purpose that drives successful teams.

The likelihood is that most office-based workers are unlikely to go back to a 5-day working week in the office. From a purely environmental point of view, it’s hard to justify asking your employees to commute to work every day again – especially now we’re seeing increasing amounts of pressure on the government to ensure economic stimulus plans are environmentally sustainable. Large companies like Twitter and Facebook have already given many employees the option to work from home permanently. And where the trendsetters go, others will surely follow.

The ‘new-age’ employer

Regardless of the outcome, the role of the employer must evolve to support the changing needs of the employee. Employers must continue to be sensitive to individual circumstances, for example those in the high-risk category or those with care responsibilities. Employers who get this wrong will suffer in their ability to attract and retain talent, both now and well into the future.

Therefore, where possible, employers should try to give their staff the freedom to make their own decision about coming back to office. Workplace studies have shown that as many as 3/4 of workers want the choice to work from home after lockdown. An early consultation will give you a good indication of who wants to come back and whose circumstances may have changed.

Staff wellbeing should also be at the top of every employer’s list, both now and in the future. It’s important to have robust support systems in place for those who are anxious about returning to work. The thought of entering a new environment where you have little control over safety and hygiene can be nerve-racking, so employers need to go out of the way to address any concerns. On top of this, we’re now facing an economic recession, so feelings of stress and anxiety are likely to be heightened during this time. Remember, so much of the pressure that employees face often goes unseen, so it’s essential that employers invest time and effort in creating an open and honest workplace environment where staff feel safe to talk about their problems.

Personal development and progression will also require renewed focus. Home workers can feel overlooked for promotions and opportunities so employees may want to get back to the office to feel more ‘visible’ and back on the radar of management. This could be eased with effective leadership. Virtual teams will need more proactive nurturing because face -to- face contact time is more limited than in a physical shared space, therefore it takes longer for issues to emerge. Teams need extra clarification on what’s expected of them, how communication will work, what their accountabilities are and any personal development opportunities.

Finally, workplace culture will continue to be a critical aspect of any team, whether they’re working remotely or not. The office gives many workers a sense of identity and camaraderie, with people bonding over a shared set of goals. It also keeps people in a routine. Employers need to ensure that their employees still have ways of maintaining social interaction, be that through regular meet ups or video conference parties.

With change comes opportunity

Much like people, successful companies are the ones that can respond quickly and positively to a change in circumstances. No matter how big or small, or how well established, every organisation should now be looking to reinvent themselves in a way that aligns with its workers’ needs. Failure to do risks damage to your brand and the possibility of an out-of-date workplace that no longer attracts the best talent in a future workforce.

As lockdown continues to ease and new challenges emerge, we want to help you maintain a sense of balance and control in your lives. That’s why CABA has launched a new campaign site called Keeping Yourself Well’, which will feature a collection of self-help articles on topics such as returning to work, socialising, and managing increased workloads, along with information on all of our support services. Our content will cover all areas of wellbeing – mental, physical, career, financial, care and relationships – and we’ll continue to add more useful resources in line with what’s happening in the world.

Business

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work 

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  2

A new survey by leading outsourced communications provider, Moneypenny, into the return to work post-Covid lockdown, shows that almost half (45%) of office workers surveyed are returning to work immediately, with a further 31% due back in the next one to four months, however 48% admit to having some concerns about COVID risks and a further 15% are not at all comfortable about going back to the office.

For some workers the return to work has been further delayed, with 5% not required to return to work until January 2021 at the earliest, and 18% having no specific date to return.

The North East and East Midlands have the most workers already back at work among those surveyed (53% in both regions) compared to the East of England which has the lowest proportion (41%).

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  3

Navigating the new commute 

A reluctance to use public transport is shown in the fact that only 16% of those surveyed will use it to commute, while 66% will use their car. The East Midlands had the highest percentage of workers choosing to drive to work, with 81% saying they’ll commute by car, compared to 53% of those in London. Manchester had the lowest percentage of workers stating they’d be using public transport, with only 7% claiming it to be their commuting method of choice, while London had the most (29%).

Local Office Economy

In a blow to those hoping returning workers will boost the local economy, the survey showed more than 35% said that they won’t be visiting any local amenities when they go back to work.  There is a clear difference between the age groups however, as 51% of those aged 18-24 and 41% of those age 25-34 said they’d visit a nearby sandwich bar, compared with 21% of 45-54 and 11% of 55-64s who would do this.

Wearing masks in the office

The survey showed that 61% said their company has made masks compulsory, of which 28% require them to be worn at all times, in all areas, while 33% require them to be worn only in communal areas. A further 26% said their company has made masks voluntary and they plan to wear one, while 13% said they are voluntary but they won’t wear one.

When asked whether they minded having to wear a mask at work, 37% said they had no problems with the new rule, however, a further 36% said they would find it too much to do a whole day of work wearing a mask and 13% said they don’t mind wearing a mask at work short-term, but would be less happy if the policy was for the long-term. A disgruntled 9% don’t like having to wear a mask at work at all, as they feel it inhibits their freedom and human rights and they don’t like being told what to wear. A further 2% said they’ll refuse to return to work so long as masks are compulsory.

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  4

In larger cities, masks are more likely to be compulsory at work, with 40% of those in London stating that their companies have already made them compulsory for all areas of the office, compared to just 14% of those surveyed in Yorkshire.

Co-workers and social distancing

Social distancing at work is clearly a concern, as 16% of those surveyed said that they don’t trust their colleagues to social distance in the office, while 37% trust some, but not all colleagues.  Scotland’s workers seem to be the least trusting, with 23% of workers stating they distrust team members.

Death of the tea round?

Some offices have banned the sharing of equipment completely (cited by 31% of those surveyed) while even without a ban, a further 35% said they won’t be sharing stationery and equipment with colleagues.

Even the tea rounds have been called into question. While 47% said they will make teas and coffees for their colleagues, 38% will only make tea for themselves and 14% said their companies have banned tea rounds.

Office workers in the East of England are most likely to only make drinks for themselves (51%), in contrast with London, where 25% will make drinks for themselves.

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  5

 Commenting on the survey, Joanna Swash, CEO of Moneypenny said: ‘We were interested to see how many office workers are either already back at work or will be going back in the next few months.  While there is inevitably nervousness about Covid risks, it is positive to see the large proportion of people who are happy to work with their company in following the new health and safety rules and we’ve certainly been impressed by how innovative and agile our own clients have been in adapting to the new normal at work.’

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Business

Honest services wire fraud and the need for caution on multilateral development bank projects

Honest services wire fraud and the need for caution on multilateral development bank projects 6

By Joshua Ray, Legal Director, Rahman Ravelli www.rahmanravelli.co.uk

A recent court case extended US prosecutors’ extraterritorial reach for tackling corruption. Joshua Ray explains the implications for those accused of wrongdoing on multilateral development bank (MDB) projects

Imagine the following scenario: You are an executive for a Paraguayan construction firm that has just secured a contract with the Paraguayan government to build a hospital in that country.  The scale of the project means you will need to hire a number of subcontractors and, as you are in charge of choosing those subcontractors, you decide to seek bribes from those wanting the work. Such action is ill-advised and morally problematic. But as commercial bribery of this sort is not illegal in Paraguay, you may have breached your company’s code of conduct but you have not committed a crime under Paraguayan law.

Yet, unfortunately for you, the funds for the hospital were loaned to the Paraguayan government by the World Bank via a wire transfer from its Washington DC headquarters.  And under a recent decision from the US Second Circuit Court of Appeals, United States v. Napout, you may have just committed “honest services” wire fraud under US law—even though you never stepped foot out of Paraguay and did not break your home country’s laws. The Napout decision is important as it expands the extraterritorial reach of US prosecutors’ anti-corruption efforts.  For the reasons that I detail below, it has significant implications for foreign businesses, especially those engaged in projects sponsored by multilateral development banks (MDBs), whose financing comes from the US.

As they did after the 2008-2009 financial crisis, the World Bank and other MDBs are counteracting the current virus-induced global economic downturn with plans to deploy hundreds of billions of dollars in loans, primarily to governments in the developing world.  Much of this will be parcelled out to private sector entities to construct hospitals, testing facilities, sanitation systems and other important infrastructure. Such projects carry the risk of corrupt local officials and business leaders siphoning off such funds for themselves. MDBs are mandated by their charters to take all reasonable steps to combat fraud and corruption on MDB-financed projects.  They do not have law enforcement powers but they satisfy their mandate by building provisions into their contracts with direct borrowers (e.g. governments) that compel the borrowers to adhere to the highest ethical standards during the execution of MDB-financed projects.  MDB contracts require borrowers to give the banks freedom to audit any of their books and records that relate to MDB funds.

This right of an MDB being able to audit the books extends to any indirect beneficiaries of MDB funds for a project, such as suppliers, consultants and contractors. Such third parties must also agree to submit to the MDB’s jurisdiction to investigate and sanction them for corruption, fraud or other misconduct. Punishments imposed by MDBs can be harsh, and can include debarment; where a company is prevented from bidding on MDB-financed projects for a number of years or even indefinitely.  When an MDB uncovers misconduct through its own investigations it can – and often will – refer its findings to national law enforcement agencies; which can mean even more serious problems for those investigated.

The significance of the Napout decision regarding such situations is that it enables US prosecutors to pursue MDB-related bribery even when the purported wrongdoer is not subject to the US Foreign Corrupt Practices Act. Prosecutors can now pursue suspects for such bribery even if that suspect is not a US company, issuer or agent and has no other connection to the US.

The Second Circuit’s Decision

The appellants in Napout, Juan Angel Napout and Jose Maria Marin, were two former executives at football’s world governing body, FIFA. They had been convicted of using their positions to obtain millions of dollars in bribes relating to the sale of marketing and broadcasting rights. Napout had been president of Paraguay’s national football federation and Marin held the same post in the Brazilian football federation.

They both appealed on the basis that their convictions were the result of impermissible extraterritorial applications of the US honest services fraud wire statute.  The crux of their argument was summed up by Napout’s counsel, who argued that the US had no authority to police the relationship between a Paraguayan employee and his Paraguayan employer and an alleged scheme involving South Americans that took place almost entirely in South America.

The issue of whether the honest services fraud wire statute had been improperly extended to extraterritorial conduct was then reviewed by the Second Circuit. It concluded that as long as a wire fraud scheme involves a wire transmission from, into or through the US that is “essential” or more than “merely incidental” to the overall crime, the extraterritorial application of US law was permissible.

The appellants argued that honest services wire fraud was a materially different crime than regular wire fraud, as the focus of honest services wire fraud was not the use of the wires but the bad-faith breach of a fiduciary duty owed to the scheme’s victim. They argued that as the actual conduct underlying an honest services fraud scheme occurred abroad, it could not be prosecuted in the US solely because it used US wires.  But the Second Circuit disagreed: all that was required to uphold Napout’s and Marin’s convictions were facts showing that the use of US wires in their case (transfers of bribes in and out of US banks) was “essential” to their scheme. On that issue, the Court easily determined that the wires were essential: at least $2.4M of Marin’s payments were sent to his New York bank account and $2.5M of Napout’s were paid in US dollars generated by wire transfers originating in the US.

Implications for Participants in MDB-Financed Projects

The decision in Napout is relevant to MDB-financed projects as it clarifies the breadth of the honest services wire fraud statute and shows the ease with which US prosecutors can use it to target conduct that occurs almost entirely abroad.

The “honest services” variant of wire fraud is somewhat unique to US law and it is not universally recognised: a main piece of Napout’s defence, for instance, was that honest services bribery in a commercial context was not illegal where his conduct took place.  But in the Second Circuit’s view, this fact was largely irrelevant.  The Court ruled that the men had violated the statute by knowingly violating their duties to FIFA under the organisation’s code of ethics.

So, what does this mean in practice?  The Napout decision confirms that the reach of US anti-corruption efforts extends far beyond the bounds of the FCPA; which applies only to bribes paid to “foreign officials” by US issuers, domestic concerns or their agents.  Using an approach based on honest services fraud, all that US prosecutors need in order to have jurisdiction is for an “essential” US wire to be used in the scheme.  As several of the main MDBs are based in the US – including the World Bank and Inter-American Development Bank – a fraud or corruption scheme involving MDB money could easily make “essential” use of a US wire transmission; thus rendering the offenders subject to possible US prosecution.

This is an important point for companies and individuals participating in MDB-financed projects to keep in mind: even if commercial bribery is legal (or at least widely accepted) in the country where the project takes place, if the ultimate funding is flowing from the US then extreme caution must be taken to ensure that US wire fraud statutes are not violated.  This is particularly critical for projects taking place in developing countries where accepted business practices have not yet caught up with norms elsewhere.

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Business

Do your contracts and policies stand up to the Covid-19 test? A view from the UK

Do your contracts and policies stand up to the Covid-19 test? A view from the UK 7

By Amy Cooper of Ius Laboris UK firm Lewis Silkin

The coronavirus pandemic and lockdown have stress-tested employment contracts and policies, with some showing signs of strain. What should you do now to make sure your employment documentation is ready for the post-Covid future?

A host of new issues for employers has arisen out of the pandemic, from health and safety concerns, to handling furlough and unanticipated homeworking. Employment contracts and policies were not drafted with the current situation in mind, yet restrictions on how people live and work could continue until a vaccine or effective treatment is found, possibly for years. And it seems likely that, as we gradually emerge from the shadow of coronavirus, it will be into a different world of work where home and flexible working is standard.

Furlough and changes to hours and salaries

In March, the UK government intervened to protect millions of jobs with its Coronavirus Job Retention Scheme, encouraging employers to furlough their staff rather than make redundancies. But most employers did not have any contractual right to ‘furlough’ or lay off staff. The concept of furlough leave was completely new and lay-off clauses in employment contracts are unusual, as are flexibility clauses that might allow an employer to reduce employees’ salaries or hours.

As a result, many employers have had to seek explicit agreement from employees to vary their terms where furloughing or changes to hours or salaries have been necessary to avoid redundancies.

Working from home

For those businesses that unexpectedly had to ask employees to work from home, there have been numerous other concerns. These include the health and safety of employees working in their homes, over which employers have little oversight and control.

Also problematic is the protection of personal data where employees are more likely to be using personal devices for work or work devices for personal reasons. And another issue is information security and confidentiality. This is more difficult to manage where employees are hosting calls and meetings at home with family members or housemates in earshot, or they do not remember to lock away any devices and documents.

Finally, grievances, disciplinaries and performance management problems may still need to be dealt with, albeit remotely. Most employers’ policies did not envisage or provide for this eventuality.

These concerns need to be managed in the short term, but they may also become longer-term issues for those employees who opt to work from home for the foreseeable future. Employment contracts should be updated as necessary, and certain terms such as place of work may need to be renegotiated.

Some employers may also wish to reconsider salaries. For example, some employees are paid a premium to work in central London: it may be decided that such high salaries are not justified if they do not need to live in London or spend thousands of pounds commuting. Conversely, if employees work from home, they may wish to be provided with home office equipment and possibly recover other expenses.

The workplace

Some work cannot be done from home and employees, such as those who work in factories, supermarkets or on building sites, have in many cases continued going to the workplace throughout lockdown. These employers have different problems, such as implementing new health and safety measures in the workplace and ensuring employees abide by them. They may also have new data protection issues as they seek to collect more health data about employees, which might require new policies or changes to their privacy notice.

An increasing number of employers will face issues of this kind as they start to plan for the return of staff currently furloughed or working from home.

Sickness policies

Employers’ policies on sickness absence and sick pay are unlikely adequately to cover employees who are self-isolating in accordance with government guidance but not unwell. Although we hope that Covid-19 will not be with us forever, it would be good practice to amend sickness absence provisions to set out expectations for employees who are either suffering from the virus, shielding or otherwise self-isolating. Alternatively, a temporary policy could be introduced covering these matters.

What should employers do now?

Amy Cooper

Amy Cooper

Some problems employers are facing will only require short term solutions, while others might need permanent changes to contracts and policies. Bear in mind that we may see a second wave of coronavirus in the coming months which might result in another lockdown, or there could be local lockdowns or further requirements for vulnerable employees to shield. Employers should think about whether they need any of the following:

  • A temporary homeworking policy dealing specifically with health and safety, information security and data privacy, supervision and management, provision of homeworking equipment or how to expense any necessary items. If employers think employees may wish to work from home much more in future, they should start considering what sort of permanent homeworking policy they may require.
  • An updated health and safety policy or a return to work policy that considers relevant matters in the workplace (e.g. masks, 1m+ distancing, safety equipment, cleaning, shared spaces, one-way systems) and also how to manage employees’ commute so as to reduce risks. A return to work policy could also deal with data privacy issues and new conditions on processing health information.
  • Revision of disciplinary, grievance and performance management procedures to cater for remote working, for example, holding meetings by video conferencing, accompaniment, conduct of investigations.
  • A temporary change to sickness policies to deal with employees who are not sick but are self-isolating, quarantined after returning from abroad, or ‘shielding’ because they are clinically extremely vulnerable. Employers may want to pay employees sick pay in these circumstances even if they’re not ill, for example, to prevent those who may be ill from coming into the workplace and infecting others. They may also wish to amend policies to deal with any notification or evidential requirements.
  • Any changes to contracts of employment? Employers may wish to consider a range of new contractual provisions, such as including a right to lay off employees if work diminishes, or rights to alter working hours, the place of work, or to redeploy employees (e.g. to cover work if other employees are sick). If an employee’s place of work is changing permanently, the employer may want to renegotiate the contract.

Employers should take advice on their specific situation before attempting to make changes to contracts and policies. This can be a troublesome area and, if not handled correctly, could lead to employees claiming constructive dismissal on the basis that the employer has committed a fundamental breach of the employment contract. And remember that, even where employees agree to changes, the employer is still constrained not to exercise its contractual rights unreasonably by the term of mutual trust and confidence that is implied into every contract of employment.

Employers should also bear in mind that if their contracts and policies are regarded too unfavourably, employees may simply vote with their feet and choose to work elsewhere. On the other hand, judicious changes to employment contracts of employment could give employers valuable flexibility to operate in the emerging, post-Covid world of work.

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