Benjamin Thomas is content manager at contract management software company Concord. Views are the author’s own.
The shift to remote operations has brought to the forefront complex legal considerations, including for contracts. In-house legal leaders can help ensure their approach to contracts reflects best practices in this new environment by reevaluating how they treat data security, confidentiality, compliance and other matters that are on the forefront of change.
The transition to remote work has amplified the significance of data security and confidentiality. In remote settings, the traditional boundaries of office-based data protection are blurred, posing challenges in safeguarding sensitive information. That means security is paramount. Advanced encryption, virtual private networks and regular audits will help ensure compliance with data protection laws.
Adjusting contract terms is also crucial. It's imperative to revise contracts to ensure they reflect the realities of remote work while complying with labor laws – for example, by specifying work hours, data privacy and home office reimbursements.
Remote work raises new compliance issues as well. For example, each jurisdiction can have different regulations regarding worker rights, data protection and employment standards. Navigating these complexities requires understanding how state and international laws impact your remote work contracts.
You also need contract modifications to deal with issues affected by remote work. This means including confidentiality agreements and protocols for remote access to sensitive information, and paying heed to the legal aspects of employee monitoring and performance metrics.
Case studies and legal precedents
Recent legal cases and precedents related to remote work contracts highlight a variety of challenges and best practices for businesses:
Holiday pay and remote work. A case from the Northern Ireland Court of Appeal, expected to be reviewed by the Supreme Court, focuses on underpayments of holiday pay. If the Supreme Court upholds the decision, workers in England, Wales, and Scotland could recover underpayments of holiday pay going back up to two years. This case underscores the importance for employers to accurately track and compensate for holiday pay, even in remote work settings.
Agency workers' rights. The U.S. Supreme Court is set to hear a case (Kocur v Angard Staffing Solutions Limited) concerning the rights of agency workers to be considered for internal vacancies. This case could impact how remote and temporary workers are treated in terms of internal job opportunities, making it essential for businesses to be mindful of equal treatment and opportunities for all workers, including remote ones.
Redundancy notifications. The case of R (on the application of Palmer) v Northern Derbyshire Magistrates Court will be heard by the Supreme Court, focusing on the liability of company administrators in failing to notify the secretary of state of planned redundancies. This highlights the need for proper notification and consultation processes during mass redundancies, which can be more complex in remote work environments.
Industrial action protection. The Supreme Court has granted permission to hear a legal challenge in the case of Mercer v. AFG, which could provide greater protection for striking workers. This decision may impact how businesses handle industrial actions, particularly in sectors with a significant remote workforce.
Employment law compliance across borders. For employees working remotely from different countries, employers must comply with employment laws of both the home and host countries. This includes laws on termination, benefit contributions, and social security legislation. This scenario was highlighted in cases involving U.S. and UK employers with employees working remotely abroad, illustrating the complexity of legal compliance in cross-border remote work arrangements.
The future of contract management
As remote work becomes more prevalent, the evolution of contract management is likely to be significantly influenced by technological advancements and changing work practices.
Here are some predictions on how contract management might evolve:
Increased use of contract management software. The shift towards remote work has highlighted the importance of digital solutions. Contract management software tools are becoming essential for automating and optimizing various stages of the contract lifecycle, from creation and negotiation to tracking and managing through renewal or termination.
Centralized document storage. Remote work necessitates easy access to documents by all relevant parties. Contract management software can provide centralized repositories for all contract-related documents, ensuring that team members can access, review, and collaborate on contracts from anywhere in the world.
Enhanced collaboration tools. Effective collaboration is key in contract management. Software solutions often include features such as comments, annotations, and version tracking, facilitating seamless teamwork regardless of physical location
Streamlined approval workflows and electronic signatures. Waiting for physical signatures and approvals can slow down contract processes. Digital solutions streamline these workflows and allow for electronic signatures, thus reducing delays and improving efficiency.
Robust security measures. With sensitive contract data being accessed remotely, enhanced security measures like encryption and access controls are becoming more important. Audit trails add an extra layer of accountability and transparency.
Adaptation to future disruptions. The pandemic has taught the value of including clauses in contracts for future occurrences of similar disruptions. This includes provisions for relief and clear statements to avoid confusion and exploitation.
Local employment strategies. The pandemic highlighted the challenges of global workforce management. Post-pandemic, companies might focus on employing local experts to reduce dependencies on foreign contacts and adapt provisions in contracts accordingly.
Challenges in remote collaboration. Remote collaboration involves overcoming challenges like asynchronous work, maintaining company culture, and effective time management.
The transition to remote work necessitates a strategic reevaluation of contract management. Looking ahead, these adaptations are crucial steps towards a digitally integrated, legally robust future in business operations. This evolution isn't just a response to current challenges but a proactive approach to future workplace transformations.