In Brief – May 2020 employment law round-up

Coronavirus Job Retention Scheme

As you will have no doubt seen in the news recently the Government has announced changes to the Coronavirus Job Retention Scheme. The original scheme will close on 30 June 2020 but it should be noted that the final date by which an employer can furlough an employee for the first time will be the 10 June 2020, in order for the current three-week furlough period to be completed by 30 June 2020.

A new Coronavirus Job Retention Scheme will be opened from 1 July 2020 but only those employees who have been furloughed on or before 10 June 2020 will be eligible. There will be no changes to the payments made under the new Coronavirus Job Retention Scheme for July 2020 but from 1 August 2020 there will be a gradual reduction in the level of government support until this new scheme closes on 31 October 2020:

  • From 1 August 2020 - The government will pay 80% of wages up to a cap of £2,500, but employers will start to pay national insurance and pension contributions.
  • From 1 September 2020 - The government will pay 70% of wages up to a cap of £2,187.50, with employers paying 10% of wages as well as NI and pension contributions.
  • From 1 October 2020 - The government will pay 60% of wages up to a cap of £1,875, with employers paying 20% of wages plus NI and pension contributions.

In addition, a flexible furlough scheme will be available from 1 July 2020, whereby staff can be on furlough for part of their working time and then be asked to return to work for the remainder of their working time. Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June 2020.

A more detailed summary of the changes is available here and we will also be running a webinar after the additional guidance is published to help employers interpret it.

Tribunal News

The Presidents of Employment Tribunals (England & Wales and Scotland) have carried out a further review regarding the listing of Employment Tribunal cases during the COVID-19 pandemic and tentative steps are being taken to have cases heard over the summer and autumn with a further review in November. It is anticipated that there will be variations in different regions and the increase in the number of hearings being considered will be dependent on staffing levels.

It has been confirmed that most "in person" hearings commencing before Friday 26 June 2020 are to be converted to case management hearings by telephone (or electronic means), and all hearings commencing on or after Monday 29 June 2020 will - subject to further direction - be proceeding.

In July and August 2020, some standard track cases (typically unfair dismissal) will be heard remotely, and some short-track (simple money claims) and preliminary hearings will begin to be heard in person at tribunals. In September and October 2020 tribunals will begin to determine more difficult cases such as discrimination using the Cloud Video Platform, with a small number of in-person hearings.

Practice Directions on remote hearings will be issued shortly in both England and Wales and in Scotland dealing with a range of matters including the conduct of remote hearings, the expectations of parties/representatives and public access to such hearings. Both will be supplemented by guidance which will be updated as experience grows of conducting hearings remotely.

A link to the Presidents of the Employment Tribunals updated FAQ document and to their road map can be found here.

If you have any hearings listed or to be listed please make contact with your usual Foot Anstey contact.

Recent Cases

Beneficial contractual changes void if by reason of TUPE transfer

The Employment Appeal Tribunal has made it clear that any change that is made to an employee's contract of employment solely or principally because their employment is to transfer to another employer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is void, and that this applies to all variations including beneficial changes, not just those that are detrimental.

In the case of Ferguson and others v Astrea Asset Management Ltd, two months before the transfer the four directors employed by the transferor company agreed to vary their own employment contracts to their advantage. After the transfer, they would retain their status as employees but would no longer be director-shareholders and the new terms which they introduced were intended to compensate them for the anticipated loss of their right to dividends. These changes were found to be unenforceable as the sole reason for the change was the anticipated transfer. The purpose of TUPE is to safeguard the rights of transferring employees not to improve them and there was evidence that the directors were seeking to obtain an improper advantage.

The EAT judgment made clear that this decision does not prevent an employee from reaching an agreement with their new employer to receive beneficial changes after the transfer.

For those inheriting staff following a TUPE transfer, this case highlights the need to ensure they know what terms and conditions staff are employed on prior to any transfer and to be able to identify both whether any changes have been made pre-transfer and what the reasons were for those changes, to then establish whether such terms can be challenged.

More on employment status – when are you a worker for the purposes of the Working Time Regulations?

The reasoned order issued by the European Court of Justice in B v Yodel Delivery Network Limited has indicated that a Yodel courier, engaged as a self-employed independent contractor may not be a worker under the Working Time Regulations, although the case has to return to the Employment Tribunal for a final decision.

In this case it was established that Mr B used his own vehicle to deliver the parcels and was communicated with via his own mobile telephone. He could work for other delivery organisations (including competitors) and, subject to Yodel's power of veto, he was able to subcontract his work (or use a substitute). Unless there was a fixed time delivery, Mr B could determine how and in what order he delivered his parcels as long as they were delivered between the times of 7:30 and 21:00 (Mon to Sat). There was also no requirement on Yodel to provide work or for Mr B to accept any work that was offered. It was found that Mr B's independence was not fictitious in that the contractual terms reflected the situation and Mr B was not subordinate to Yodel in that he had a great deal of latitude.

In bringing his claim under the Working Time Regulations, Mr B claimed that he was an employee/worker, despite accepting that he was self-employed for tax purposes.

It is still clear from this case that when examining a working relationship, the courts will look at the reality of the situation, considering a number of factors, and will not blindly follow what is contained in the contract. Where an individual has genuine independence and discretion as to whether to undertake work combined with an absence of subordination, this case indicates that they may not be a ‘worker’ for the purposes of the Working Time Regulations. However, this is always a very fact-sensitive area and therefore if there is any doubt over the employment status of an individual, legal advice should be sought.

Changes to legislation

National Insurance Contributions on termination payments

With effect from 6 April 2020, employer national insurance contributions (Class 1A) will be payable on any element of an ex gratia termination payment in excess of £30,000 (including the value of any benefits in kind). Prior to this change only income tax was charged on any payment in excess of £30,000.

Employers are still entitled to make ex gratia termination payments (which would not otherwise be taxed) up to £30,000 without any deduction for tax or national insurance.

Your usual Foot Anstey contact would be happy to discuss the impact of this with you when considering any termination packages.

More changes to SSP

Over the last few months there have been several changes to the statutory pay regime,including the extension of the entitlement to statutory sick pay to people who have been told to self-isolate under the new "Test and Track" system, which is now in place in England.

Accordingly, a person who has been notified that they have had contact with a person with coronavirus, and is then required to self-isolate, will be entitled to statutory sick pay.

However, please note that those staff who are required to quarantine for 14 days after they return from a trip abroad will not be entitled to SSP, although they may be entitled to contractual sick pay and terms of their contracts should be checked.

Information and consultation arrangements

Under the Information and Consultation of Employee Regulations 2004 employees can request to negotiate with their employer about reaching an agreement in relation to information and consultation arrangements. Once a valid request has been made in line with the regulations, the employer must negotiate with the representatives.

From 6 April 2020, the threshold required for a request to set up information and consultation arrangements has decreased from 10% of employees to 2% of employees, subject to the existing minimum of 15 employees. This change may mean that employers receive more requests for such arrangements to be put in place. If any such requests are made you should think carefully about whether you agree to any such arrangements being put in place and if so, how the consultation agreements will operate.

Other guidance

The Information Commissioner's Office has updated its workplace testing guidance for employers. A link to the guidance is here.

In short, the guidance confirms that employers can in principle carry out temperature/health checks provided that they are only collecting such information as is necessary and not sharing the data any more widely than necessary. The guidance reminds us that a data protection impact assessment is a helpful step to be taken as part of any overall return to work risk assessment if this type of measure is to be put in place (or any measure which requires the collection of personal data) and helpful in demonstrating compliance with data protection legislation.

If you need any help or advice related to employment law, please get in touch today.