In Brief – July 2020 employment law round-up

COVID-19 news

Government publishes briefing document on its "Plan for Jobs 2020"

Last month, the Government published its "Plan for Jobs", the second phase of its response to the COVID19 pandemic outlining the financial assistance being offered to boost the economy and jobs.

In the document, the government sets out a number of schemes to help employers including but not limited to:

Job Retention Bonus

The Government are introducing a one-off payment of £1000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. The payment is subject to certain conditions:

  • The furloughed employee must remain continuously employed to the end of January 2021
  • Employees must earn at least £520 per month on average between end of October and end of January 2021.

It would appear that the intention behind the scheme is to prevent employers making a knee jerk reaction to make redundancies at the end of the furlough scheme in October. It is the Government's intention that payments will be made from February 2021.

Kickstart scheme

The Government will introduce a £2 billion fund to create hundreds of thousands of high quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

High quality traineeships for young people

The Government will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16-24 year olds (at a rate of £1000 per trainee).

Payments for employers who hire new apprentices

The Government will introduce a new payment of £2000 to employers in England for each new apprentice they hire aged 25 and under, and a £1500 payment for each apprentice ages 25 and over from 1 August 2020 to 31 January 2021.

The Eat Out to Help Out Scheme

To encourage people to return to eating out, the scheme will entitle every diner to a 50% discount of up to £10 per head on their meal at a participating establishment. The discount can be used unlimited times and will be valid Monday to Wednesday for the entire month of August 2020.

The government's going to work advice: employer's discretion

In the Prime Minister's statement on 17 July 2020, Mr Johnson announced that the government are giving employers more discretion to manage where their employees work from the 1 August 2020.

Instead of telling people to work from home and only go into the workplace if they cannot work from home, the government will ask employers to make decisions about how their staff can work safely. This could mean continuing to work from home or it could mean making workplaces safe by following 'COVID-secure' guidelines (see below). The government advise employers to consult closely with their employees and will only ask employees to return to the workplace if it is safe.

The pandemic has forced the hand of many employers to embrace the working from home model. There is little doubt that some companies will shift towards a more remote workforce as a long-term trend particularly given the work life balance benefits (saving on commute time and cost) and the potential savings on expensive office space. Employers may therefore want to think ahead and give consideration to home working policies (if they don’t have them already) and whether contributions will be made to employee's household bills (gas and electric for example), particularly during the Winter months. Please do get in contact with a member of the team if you require assistance with a home working policy.

From October, the government intend to allow conferences and other business events to take place, provided they are done in a 'COVID-secure' way. The government will be running pilot events to test the viability of these events.

Industry specific guidance on making businesses 'COVID-secure'

The government advice to help businesses be 'COVID-secure' for specific industries has recently been updated and now includes guidance for performing arts and providers of grassroots sport and gym/leisure facilities. The government advice on how to make your Workplace COVID-secure can be found here.

Furlough scheme and notice periods

Last month, employers and employment lawyers alike had concerns that the Coronavirus Job Retention Scheme ("CJRS") could not be used to pay contractual notice, given that HMRC's guidance specifically referred to statutory notice. HMRC have now updated their earlier guidance to confirm that employers can use the CJRS to pay contractual notice which is a welcome relief. The guidance now says: "You can continue to claim for a furloughed employee who is serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments."

90-day window to notify HMRC of furlough fraud

The Finance Bill received Royal Assent on 22 July and became the Finance Act 2020. This act contains legislation to enable HMRC to recover sums paid under the CJRS which the employer was not entitled to. It will operate by imposing an income tax charge equivalent to 100% of the CJRS grant to which the recipient was not entitled, and which has not been repaid. Rather generously, the employer will be able to repay money received under the CJRS without incurring sanction or penalty provided they notify HMRC either within 90 days of 22 July 2020 or, when the income tax becomes chargeable (whichever is the latter of the two dates).

Face coverings in offices and shops in England

From 24 July 2020, face coverings will be compulsory in shops in England. Children under 11, shop workers and those with certain disabilities will be exempt. Those who fail to comply will face a fine of up to £100.

Currently, there are no plans to make the wearing of face masks and coverings mandatory for workers in offices in England. Matt Hancock explained that "when you are in close proximity with somebody… for a long time, then a mask doesn’t offer that much protection".

This position could change in the future, so watch this space!

In the courts… recent case updates

The Supreme Court – Asda and Uber

The Supreme Court have been busy this month, dealing with some landmark high-profile cases.

First, on 13 and 14 July 2020, the Supreme Court considered one the UK's biggest equal pay cases in the long running dispute between Asda Stores Limited and its shop floor workers (who are predominately women). The shop floor workers are claiming equal pay with comparators in the distribution depots (jobs predominately done by men). The retailer appealed to the Supreme court to overturn earlier rulings which claimed that the shop workers could compare themselves to the depot workers. This dispute is a landmark case and the outcome will have significant financial repercussions for Asda as well as other retailers including Tesco and Sainsbury's. Our previous articles setting out the facts and earlier decisions can be found here. A ruling is expected later in the year.

On 21 and 22 July, the Supreme Court heard evidence in relation to another high profile and long running dispute in the case of Aslam and Others v Uber BV and Others in which it addressed the issue of employment status in the gig economy. The Employment Tribunal decision in 2017 found that Uber drivers were workers and accordingly were entitled to receive basic worker rights such as the National Minimum Wage and holiday pay.  Uber argues that the drivers are self-employed. Uber appealed to the EAT (who agreed with the ET) and then the Court of Appeal (who agreed with the EAT). Uber has now appealed to the Supreme Court.

The outcome of this case will have significant implications on the rights of the gig economy workers in the UK and we will keep you up to date as and when a ruling is announced.

Mapping an employee into a new role may amount to constructive dismissal

An Employment Tribunal held in Argos Ltd v Kuldo that mapping an employee into a new role to avoid redundancy can amount to constructive dismissal where there is a lack of consultation and understanding as to how to assess the difference between the employee's current role and proposed suitable alternative employment.

The Claimant was placed at risk of redundancy due a restructuring after Sainsbury's plc acquired Argos. A colleague of the Claimant, who was also at risk of redundancy, resigned and the Claimant was mapped into their role. The difference between the Claimant's new and old roles was less than 30%, but the Claimant considered the role to be of a lower status and the job content to be different.

Argos appealed to the Employment Appeal Tribunal ("EAT") who upheld the appeal in part, as the first instance tribunal had incorrectly assumed that because the Claimant had been dismissed, the dismissal was unfair. The EAT referred the case back to the first instance tribunal to consider the question of fairness, whether the Claimant was entitled to a redundancy payment and whether the proposed new role was a suitable alternative.

This case highlights the importance of consultation and the potential risk in mapping employees into new roles in redundancy situations, especially where the employee considers the role to be a demotion.

TUPE: employment contracts may be split into part-time contracts across multiple transferees

The Court of Justice of the European Union ("CJEU") has held in ISS Facility Services NV v Sonia Govaerts & Atalian NV that where an undertaking is being transferred to multiple transferees, an employee's contract of employment can be split into part-time contracts.

The CJEU confirmed that the rights and obligations set out in the assigned employees' contracts of employment may be transferred to multiple transferees in proportion to the tasks performed by the individuals. This applies if it is possible to divide the contract without adversely affecting individual's working conditions and rights. If splitting the contract would adversely affect the individual, the transferee will be liable if the employment relationship is terminated, even if termination is initiated by the individual.

We may see this CJEU decision influencing the UK approach on splitting individual contracts of employment on a TUPE transfer. However, on a practical note, as the transferee will be liable for termination of the employment relationship, care should be taken when assessing whether dividing the contract will adversely affect the employee.

Unfair dismissal claims can proceed, despite no prospect of the Claimant being awarded compensation

The EAT in Evans v London Borough Council has held that a claim for unfair dismissal should not be struck out on the basis that no compensation will be awarded if the Claimant is successful. The first instance tribunal struck out the case on the basis that, as there was no prospect of the Claimant being awarded compensation, it was not in the interests of justice for the claim to proceed.

The EAT confirmed that this approach failed to acknowledge the potential value of the Claimant receiving judgment in their favour and the Respondent being held accountable for procedural unfairness.

The EAT's decision highlights the importance of procedural fairness during a dismissal. Even in cases where the Claimant may not be awarded compensation, the costs of defending a claim are likely to be substantial.

Agency workers who only work for a single end-user client may still be "temporary"

The EAT held in Angard Staffing Solutions Ltd v Kocur and others that workers who were employed by an agency on indefinite contracts and supplied to a single end-user client, were supplied "temporarily" and so fit the definition of an "agency worker" under the Agency Workers Regulations 2010. The EAT confirmed that when assessing whether a worker is supplied "temporarily", the tribunal should look at the basis on which the worker is supplied to work for the end-user on each occasion.

Angard Staffing Solutions Ltd is a company in the Royal Mail group, with over 17,000 employees. It supplies staff on a flexible basis to supplement Royal Mail's permanent employees. Royal Mail is its only client. In this case, each assignment was for a defined period and for a specified shift or shifts. The tribunal was therefore entitled to conclude that the worker was supplied to the end-user on a temporary basis.

This case offers some certainty to agency workers who work for a single end-user for a prolonged period. Where there is a flexible zero-hour contract in place and workers are periodically (i.e. monthly) notified of the shifts available, each month will be a separate temporary assignment.


The UK's Immigration system

From 1 January 2021, the UK will introduce a new points-based immigration system. It comes after the freedom of movement between the UK and EU comes to an end at 11:00pm on 31 December 2020. Our immigration specialist Gemma Robinson sets out the detail.

Finance Bill 2019-21

As mentioned above, the Finance Bill received Royal Assent on 22 July and became the Finance Act 2020. One of the interesting features of the legislation is that it will enable HMRC to recover sums paid under the CJRS which the employer was not entitled to. The employer will be able to repay money received under the CJRS without incurring sanction or penalty provided they notify HMRC either within 90 days of 22 July 2020 or, when the income tax becomes chargeable (whichever is the latter of the two dates).