Welcome to the first in our new series of quarterly newsletters, where we focus on new developments and hot topics in Employment Law.

 

In this issue, which marks the anniversary of the first lockdown, we look back and forward at the impact of the pandemic on employers, as well as updating you on what else has been happening in the world of employment law over the last 12 months.

It goes without saying that Coronavirus has had an enormous impact on businesses, the people they employ and how work is done.

We look here at where we are now and what businesses should be doing and considering as restrictions ease and workplaces re-open.

The Furlough Scheme

The furlough scheme has been extended all the way to 30 September 2021.  After various tweaks since its first inception, these are the key elements of the scheme in its current form:

  • The Government will contribute 80% to any workers’ salary, up to a maximum of £2,500 per month
  • Employers must contribute NICs and employer pension contributions to the furlough pay
  • To be eligible, the worker must have been on payroll between 20 March and 30 October 2020
  • Employers can still use flexible furlough, splitting a workers’ time between furlough leave and working time
  • The furlough grant can no longer be used for notice pay

Importantly, the grant is still only available where Coronavirus is affecting business operations. It cannot be used for non-Covid related reasons such as under-performance or unrelated sickness absence.

Working from home

Who would have thought 12 months ago that multi-day Employment Tribunals could be run from Barristers’ bedrooms and solicitors’ sofas?  From experience, we can tell you that they can, and they have worked incredibly well!

One question we have been asked is whether employers will be able to require staff to return to the office full time when the restrictions ease?  As a general rule, it is up to employers to determine where their staff carry out work.   However, we expect that employers will receive more flexible working requests from workers who can now show that they can work effectively from home. Employers may find it increasingly difficult to reject requests for flexible working. Unreasonably refusing requests can lead to claims of indirect sex discrimination.   There may also be some staff whose disability makes physically attending work every day difficult, so employers may need consider offering work from home as a reasonable adjustment.

Testing and vaccinations

Can employers compel staff to take Covid tests at work, or to be vaccinated as a pre-cursor to returning to work?   Only in very limited circumstances.

As well as various data protection issues, there may be many health or religious reasons why staff refuse to take tests or be vaccinated.   Making tests or vaccinations compulsory could lead to claims of discrimination, where the employer would need to show that the policy is justified.   It is hard to envisage many circumstances where it would be justified (in legal terms), save for cases where, for example, travel is a key part of the role and the individual cannot travel without having been vaccinated, or in certain care settings.  Whilst this might surprise some employers, it is worth noting that not even the NHS is making testing or vaccinations compulsory for its staff.

In order to encourage workplace vaccinations, the government is making testing kits available for free for companies with over 50 employees until 30 June 2021.  Businesses must register on the here by 12 April 2021 to take advantage.

Positive tests and self-isolation

Most employers will doubtless face situations where staff are required to isolate either because they have tested positive or because they have been told that they have to self-isolate by the Test and Trace system.

In these cases, if the worker can work from home, then you can ask them to work from home whilst they are isolating.   If they cannot work from home, they may be entitled to:

  • Statutory or company sick pay
  • Employment support allowance
  • Universal credit
  • A one-off isolation payment, payable by the government

Shielding

As of 1 April Public Health England will no longer advise people to shield.  This means that workers will no longer be entitled to statutory sick pay if they do not attend work due to shielding.  Like everyone else, those who have been advised to shield previously, should either return to work or work from home, where possible.

Returning from red-list countries

Some employees may have pre-booked holidays to ‘red-list’ countries which will require them to quarantine on their return.   Others may book trips to these countries knowing that they will need to quarantine when they get back.

If the employee can work whilst in quarantine, then employers can allow the individual to ‘work from quarantine’.   Where this is not possible however, what pay is the employee entitled to?  Assuming that they are not ill, then the employee may not be entitled to any pay whatsoever.

In order to minimise the potential disruption caused in these circumstances, it will be wise for employers to issue a notice to staff to advise them that they will not be entitled to any pay if they need to quarantine and cannot work after returning from a red-list country.

Top tips for return

Communicate!   Many employees will have been away from the workplace for over a year by the time things get back to some kind of normal, and some will be nervous about returning:

  • Carry out risk assessments of the workplace
  • Tell staff what Covid related safety measures are being put in place
  • Offer lines of communication for anyone who has concerns or questions

If you haven’t done so already, encourage staff to take some accrued holidays before they return, and to book future holidays as soon as possible:

  • Employers can require workers to take holidays on set dates – so long as they give double the notice of the amount of time to be taken off;
  • Employers may also allow some carry over if it is not possible for everyone to take all of their accrued days.

What else has been happening?

With Coronavirus dominating the news and keeping HR departments busy, it is easy to forget that there have been other important cases and developments since the pandemic hit.   Here are some of the key cases from the last 12 months

Uber and employment status

We reported recently on the Supreme Court’s decision that Uber drivers are workers for working time and national minimum wage purposes.   You can read our earlier article here.

Discrimination – Outdated Equality Policies

In harassment claims, an employer can run a ‘statutory defence’ that it took all reasonable steps to prevent the harassment from occurring.   This argument is often based on the fact that the employer has an Equality Policy that explains that harassment and any discrimination will not be tolerated.   In the case of Allay (UK) Limited v Gehlen the Employment Appeal Tribunal held that whilst the employer had such a policy, not enough was done to remind staff of the policy and the required standards, as evidenced by the repeated racial harassment suffered by the Claimant.   The statutory defence therefore failed and the Claimant succeeded in his case.

This case is a good reminder for employers to regularly review and update their Equality Policy, and to provide regular training to managers to minimise the risk of discrimination occurring.

Discrimination Part II – Are Vegans a protected group for discrimination purposes?

They can be…. In Casamitana v League Against Cruel Sports the Employment Tribunal held that the Claimant, an ‘ethical vegan’, who lives by a strict code based on his ethical views, was protected under the Equality Act on the basis that his philosophical beliefs relate to a substantial aspect of human life, have a certain level or cogency and importance, and are worthy of respect in a democratic society.

Whether a religion or belief is protected will depend on the facts of the case. In earlier cases, Scientologists and Rastafarians have been protected, whereas a Jedi was not protected (yes someone did claim that they were discriminated against because they are a Jedi!).   Interestingly, the same Judge from the ‘Vegan case’, held earlier in 2020 that a Vegetarian was not protected.

Gender Identity III

Gender reassignment is one of the 9 protected categories under the Equality Act.   In Taylor v Jaguar Land Rover, the Claimant, who identifies as gender fluid/non-binary, won £180,000 compensation in a landmark discrimination case, where, for the first time an Employment Tribunal held that a non-binary or gender fluid person is protected from discrimination.  The award here was extremely high owing to the level of harassment suffered and the future losses of earnings.  The Tribunal also made various recommendations to Jaguar Land Rover to prevent future discrimination.

What’s to come?

Aside from hopefully returning to something resembling normality in the next few months, here are some important developments that are definitely happening, and some we expect:

IR35

After several delays, the changes to the IR35 regime are finally due to come into force in April 2021.

For those of you who do not know what we are talking about, the IR35 regime was brought in in 2000 to identify businesses who do not pay the appropriate taxes for “disguised employees”, who work as self-employed contractors, often through intermediaries such as personal service companies (PSCs). At present, the responsibility to determine the tax status in the private sector lies with the party that pays the individual, usually a PSC.   Practically speaking, this has meant that many end user businesses have been able to avoid paying the correct Income Tax and National Insurance for contractors who should, if properly assessed, be classed as employees for tax purposes.

The IR35 regime reverses the responsibility.  From April 2021 the end user will be responsible for determining the tax status of contractors to make sure that the correct tax is accounted for.  This will not apply to small businesses, where the current regime will continue.

If you engage contractors and you have not already reviewed their employment status, you should do this without delay.  Our team will be happy to provide any necessary help and guidance along the way.

Carers’ Leave

After consultation in 2020, we expect new law to be passed to allow people with caring responsibility for vulnerable adults one week’s unpaid leave every year.  This will be in addition to the existing laws in respect of dependants leave.

Neonatal leave and pay

We also expect new law to allow parents up to 12 weeks’ additional leave to be added to maternity leave where their child has been in neonatal care.

Maternity and Redundancy

At present any employee who is on maternity leave and is selected for redundancy must be given first refusal of any suitable alternative employment.  It is proposed that this protection will be extended to cover the first six months after the end of maternity leave.

Health and Safety at Work

Under the current law, an employee can bring a claim in the Tribunal if they think that they have been subjected to a detriment because they reasonably believed that attending work would put them, or someone else (such as someone they live with), in imminent danger.   Claims of this nature were rare, until Covid happened.   As people gradually return to work and shielding support is removed, we anticipate more claims of this nature.    To add to the risk of claims for employers, from May 2021 the protection will extend to workers as well as employees.

Unfair Dismissal, Redundancy and Whistleblowing claims

More individuals are likely to bring whistleblowing claims flowing from the Coronavirus pandemic.  Countless workers will have raised health and safety concerns regarding the workplace and the risk of exposure to Coronavirus.  We expect many of these individuals will argue that they are ‘whistleblowers’ and attempt to join the dots between alleged whistleblowing and any subsequent bad treatment.

Given the enormous pressure that has been placed on businesses and the large number of redundancies that have been made over the last 12 months, it is almost inevitable that the Tribunal will have lots of cases where people challenge their selection for redundancy and claim unfair dismissal.

The last 12 months have thrown up lots of issues that our clients have not dealt with previously. 

We offer a variety of services to our clients, including helplines, insurance backed products for Employment Tribunal claims and other fixed fee services.   If you would like to discuss how we can help you and your business deal with Employment Law matters, please contact either Paul Stedman, Vicky Beattie, Neal Mellor or Sarah O’Brien on 0161 832 2500.

The evolution of working practices over recent years has brought a flurry of litigation, as new technology-based working models have brought various complex legal issues to the fore; none more so than worker status.

This month the Supreme Court handed down one of the most significant employment law decisions of the tech era, finding that Uber drivers are “workers” for employment law purposes.

What was the issue?

Very broadly, there are three types of employment status:

  • Employee
  • Worker
  • Self-Employed.

Distinguishing employees from workers, and workers from self-employed contractors, can be very complicated; but the distinctions are significant.

Employees are fully protected by employment law, whereas the self-employed have little to no employment protection.  “Workers” sit in the middle.  Workers cannot bring claims for unfair dismissal, but they are, for example:-

  • Entitled to national minimum wage and holiday pay; and
  • Protected under the discrimination and whistle-blowing legislation.

What were Uber saying?

Uber contended that their Drivers are self-employed contractors.  They pointed to a number of arguments, notably:

  • The Drivers’ contracts specifically say that they are self-employed contractors.
  • That Uber is simply a booking agent that allows drivers to access private customers through its app.

There are also a lot of factors in the relationship that would normally point towards self-employment.  For example:

  • Drivers use their own cars and can use their own phones.
  • Drivers are responsible for their cars’ operating costs.
  • Drivers can decide when and where they work.
  • Drivers can work for competitors.

What the Supreme Court held

Despite the various arguments for self-employment, the Supreme Court’s decision fell on the amount of control that Uber have over the Drivers once they have logged on to the app and reported for duty:

  • Whilst, in theory, Drivers can choose when they work, once they are logged on to the app they can be penalised (logged off) if they refuse or cancel trips.
  • Where a Driver’s average customer rating falls below 4.4, they become subject to “quality interventions” and can be removed from the platform if they do not improve.
  • Drivers can be subject to financial penalties if they do not follow the recommended route.
  • The Driver has no control over what the customer pays for a trip, or, in turn, what they are paid by Uber.
  • Drivers have no say in the terms of their contract with Uber.
  • Whilst the drivers can use their own vehicles, the vehicles are subject to vetting by Uber.
  • Unlike minicab drivers, who have to find their own customers, Uber Drivers have their customers delivered to them via the app.

What does this mean for you?

Crucially, this decision means that Uber Drivers are entitled to:

  • National Minimum Wage for the time when they are logged on to the app, regardless of whether they are transporting passengers; and
  • Holiday pay.

This decision is far reaching and will apply to all similar business models, such as Deliveroo and UberEats, who connect customers to service providers via digital platforms.

This is definitely welcome news for the tens of thousands of people affected, but you can expect your next Uber trip (and takeaway) to be that little bit more expensive!

If you have any questions about employment status or the affect of this decision on your business, please contact the BBS Law Employment Team.

Following the Prime Minister’s announcement on 31 October, additional financial support is being made available to individuals and businesses, including an extension to the furlough scheme, which will now remain open until December. 

Vicky Beattie and Neal Mellor of our Employment Team provide a useful summary of the latest changes

  • Employers of any size are eligible for the extended furlough scheme, which will continue for a further month.
  • Employees can be furloughed full time or can come back to work on a part time basis.
  • All employers with a UK bank account and UK PAYE schemes can claim the grant. The employer does not need to have previously used the furlough scheme.
  • Employees need to have been on an employer’s PAYE payroll by 23:59 30 October 2020 to be eligible for extended furlough. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
  • Employees can be on any type of contract to be eligible.
  • Employers will be able to agree any working arrangements with employees they are claiming for.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will be broadly similar to the current furlough scheme.
  • In order to claim the grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
  • For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. Employers will pay for the NICs and pension contributions. The grant must be paid to the employee in full.
  • Employers can choose to top up employee wages above the scheme grant at their own expense if they wish.

The Job Support Scheme (JSS), which was due to commence on 1 November, has been postponed until the extended furlough scheme ends.  

It is expected that further guidance and details, including how to claim under the extended furlough scheme through an updated claims service, will be provided shortly.

If you have any queries in relation to this or any employment issue, please contact Vicky Beattie or Neal Mellor by email or telephone – vicky@bbslaw.co.uk / neal@bbslaw.co.uk 0161 832 2500.

By Paul Stedman, Partner and Head of the BBS Employment Team

 

You can download a PDF of this article here – Updated Guidance for Employers 15 May 2020

There have recently been various developments in respect of the Government’s Coronavirus Job Retention Scheme (“CJRS”).

How is CJRS working in practice?

The Government portal for claiming grants opened on 20th April 2020.  From what we have heard, the system has been operating surprisingly well.

The Government has issued guidance on how to make claims through the portal.  Details are in this link: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

There is also a useful YouTube video explaining the system: https://www.youtube.com/user/hmrcgovuk

How long is the scheme open for?

As it stands, the CJRS in its current form is available until 31st July 2020.

The Government announced on 12th May that the Scheme will be extended further, until the end of October 2020, although it is suggested the employers may need to contribute to furlough pay from 1st August 2020.   We expect further information on how the scheme will operate after 31st July shortly.

How often can employers submit a claim?

Employers can only submit one claim during a “claim period” for each PAYE scheme it operates.

“Claim period” is not defined, but the portal allows employers to set their own claim period when submitting claims.  The end date for any claim period cannot be any more than 14 days in advance.

“It is vitally important that employers ensure that all of their furloughed workers are included on the claim when it is submitted.   It is not possible to make changes retrospectively.”

When are payments made?

Payments should be made within 6 working days of submission.

What else is new?

Furlough and holidays

Accrual

Annual leave does accrue during furlough leave.    Employers can ask furloughed workers to agree that only statutory annual leave accrues during furlough leave, although workers may be unlikely to accept this, and it could lead to complicated calculations of accrued leave entitlement when the worker returns to work.

Carry Over

Legislation has been passed that allows workers to carry over up to four weeks annual leave if they are unable to take their holiday allowance in a leave year because it was not ‘reasonably practicable’ to take annual leave ‘as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)’.

This is similar to the law regarding workers who are unable to take holiday because of illness and is likely to apply in the main to workers who are self-isolating or shielding for prolonged periods.

As most employers’ leave years run January to December, or April to March, this will hopefully not have a big impact if people are able to return to work in the not too distant future.

Can furloughed workers take holiday, and if so, what should they be paid?

We finally have clarification from the Government that YES furloughed workers can take annual leave when on furlough.  

Statutory holidays (5.6 weeks) should be paid at the normal rate, rather than the reduced furlough rate.    This means that employers need to ‘top up’ salary for days taken as holiday during furlough leave.

Employers can seek consent to pay contractual holiday, over and above 5.6 weeks, at the lower rate; although this will not apply to many workers as very few will have used their statutory allowance yet.

Can employers require workers to take holiday when on furlough?

The guidance does not give clear specific guidance on this, but the likely answer is yes, so long as the employer complies with the requirement to give double the notice of the amount of leave to be taken.   For example, an employer would need to give 2 weeks’ notice to require a worker to take 1 week’s leave.

Where an employee is shielding or self-isolating, the employee may have strong grounds to say that they are unable to take holiday on the basis that they cannot rest and relax.  We would encourage clients not to require employees who are shielding or self-isolating to take annual leave – remembering of course that the employer can require them to take annual leave when they are no longer shielding or self-isolating.

Maternity, Paternity and Adoptive Leave (etc) Pay

The snappily titled ‘Maternity Allowance, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay (Normal Weekly Earnings etc.) (Coronavirus) (Amendment) Regulations 2020’ confirm that pay for anyone taking any leave from the long list in the title will be calculated based on their normal full pay, rather than the reduced furlough rate.

Confirming/agreeing furlough status

After significant confusion, where the Regulations stated that the furloughed worker had to agree in writing that they would not carry out any work when on furlough leave, new guidance has been issued to make it clear that employers simply need to have a record that they have written to the worker confirming that they will not carry out any work for at least three weeks.  Strictly speaking, there is not therefore a requirement for the worker to confirm their acceptance in writing.  We do nonetheless advise clients to try and get email confirmation where possible.

Record Keeping

All employers must keep a record of the letters sent furloughing workers, for five years.  We expect that HMRC will be out in force undertaking audits of companies who have furloughed workers to uncover any foul play.  HMRC has not set out what penalties may be imposed for abuse of the system, but it likely that there will be.

Can workers get another job when furloughed?

The Government is keen to ensure that the country keeps running and it has made it clear that furloughed workers can carry out work for other employers, where permitted by the employer that has furloughed them.   Furloughed workers cannot however carry out work for associated or linked companies.

Workers will usually require the consent of their employer to carry out any work when furloughed.  We encourage our clients to be flexible. So long as any new work is temporary and will not interfere when the worker returns to full duties, this should not be a problem in most cases.

Can you furlough workers who transferred under TUPE after 28 February?

 Yes.  Again, the updated guidance has addressed this point.

What we still don’t know?

Notice Pay for furloughed workers

Inevitably, some furloughed workers will lose their jobs as a result of the downturn.  It is not yet clear whether employers should serve notice based on the reduced furlough rate or on the contractual full pay.

Where an employee has the statutory minimum notice period (one week for each year served), the notice pay will have to be paid at the full rate.

Where somebody has a contractual notice period that is greater than the statutory minimum, the starting position is that notice pay is paid at the rate that the individual is being paid at the point at which notice is served.  In the case of sickness absence for example, this often means that people on long term sick only get statutory sick pay during their notice period.

On that interpretation, furloughed workers who are served notice because their job is redundant, could only get notice pay at the reduced furlough rate.

However, many commentators expect that employment tribunals will find ways of ensuring that furloughed workers are not further disadvantaged and that their notice pay is paid at their full rate.

We expect developments and litigation in this area moving forward.

Life after furlough

With the gradual relaxation of lockdown employers will soon be asking their staff to return to work from furlough leave.

There are likely to be cases where people refuse to return to work and/or are unable to return to work because they are shielding.

Where people refuse to return to work due to health and safety concerns, employers may find themselves faced with whistleblowing or health and safety related claims if those workers are disciplined or forced to work against their will.

If you need advice regarding the CJRS, about bringing employees back to work, or about potential redundancies, we encourage you to contact the Employment Team on 0161 832 2500 or 0204 505 8080.