Emplaw Monthly - End of May 2020
NEW FROM OUR AUTHORS
Cloisters Toolkit: Returning to work in the time of Coronavirus
Cloisters' expert employment barristers have produced an invaluable and detailed online guide, Returning to Work in the Time of Coronavirus, which explores the critical legal issues which arise as businesses reopen
Furloughing employees - FAQs for employers on the coronavirus job retention scheme
A useful resource from Emplaw authors, Lewis SIlkin, updated as at 23rd May, on how furlough works in practice under the Coronavirus Job Retention Scheme
Employer/Advisor need to know
Low Pay Commission report on non-compliance and enforcement of the national minimum wage
The Low Pay Commission has published its report on non-compliance and enforcement of the national minimum wage, which looks at available evidence on how many low-paid workers are underpaid and who they are. It examines the Government’s approach to enforcing the minimum wage, as well as highlighting some important policy challenges around the underpayment of apprentices and workers’ access to pay information.
IR35 changes on track but criticised
Back in March, the government announced a new commencement date of 6 April 2021 for the new rules for off-payroll working in the private sector and, on 18th May, the government issued a notice of amendments to the Finance Bill 2020 to provide for this new date . It also makes some other amends such as limiting the rules to UK resident clients and clients with a UK permanent establishment. but fundamentally the principles remain the same. For more information see Emplaw law card Employee or Self employed
Meanwhile, the House of Lords Economic Affairs Finance Bill Sub-Committee has issued a critical report . Their inquiry found ‘these rules to be riddled with problems, unfairnesses, and unintended consequences. The potential impact of the rules on the wider labour market, particularly the gig economy, has been overlooked by the Government. It must devote time to analysing all of this. A wholesale reform of IR35 is required’
Legislation and litigation
Law Commission report on Employment Law Hearing Structures
The Law Commission has published a report on Employment Law Hearing Structures. It is a hugely detailed report which makes 23 recommendations including raising the contractual damages limit from £25K to £100K and extending the time limit for bringing a claim to six months for all employment tribunal claims.
The Independent Workers Union of Great Britain (IWGB) seeks to extend Health and Safety protections to ‘workers’ via a Judicial review
The union has sent a pre-action protocol letter and will argue that the UK Government has failed in its obligation to transpose health and safety directives from EU law into UK law. Certain aspects of UK health and safety law only protects employees whereas EU law extends protections such as the right to adequate Personal Protective Equipment (PPE), to all those classified as workers.
Joint ET Presidential Guidance on Electronic Signatures
The Presidents of the Employment Tribunals (England & Wales, and Scotland) have produced a Joint Practice Direction on the use of electronic signatures in employment tribunals, including in respect of employment tribunal judgments or written reasons
The government has published Our Plan To Rebuild: The UK Government’s COVID-19 recovery strategy. This includes provisions for working together with businesses and unions to help workers back to the workplace safely, and guidance on how to stay safe outside the home.
The strategy sets out overarching principles and proposals for a phased recovery and the roadmap for a 3-stage step by step lifting of restrictions, although the plan depends on successfully controlling the spread of the virus. The strategy document refers to 14 supporting programmes such as the Covid-19 Secure guidelines for making workplaces less infectious (see above) as well as plans for testing and tracing
FAQS on what you can and can’t do
Updated on 22nd May , the government has issued easy to check guidance on Coronavirus outbreak FAQs: what you can and can’t do. It also includes a series of questions on workers’ rights such as ‘What if they try to fire me because I won’t go to work but cannot work at home?
Guidance on staying alert and safe
Also updated on 22nd May, this guidance replaces previous social distancing guidance . The guidance, called on ‘staying alert and safe’ (social distancing) including what this means for businesses and venues.
The guidance applies in England. It provides:
As part of this plan:
- People and employers should stay safe in public spaces and workplaces by following “COVID-19 secure” guidelines. This should enable more people to go back to work, where they cannot work from home, and encourage more vulnerable children and the children of critical workers to go to school or childcare as already permitted
- You should stay alert when you leave home: washing your hands regularly, maintaining social distancing, and ensuring you do not gather in groups of more than two, except with members of your household or for other specific exceptions set out in law
- You must continue to stay home except for a limited set of reasons but - in line with scientific advice - can take part in more outdoor activities
Coronavirus Act 2020 - status update
The Department of Health and Social Care has published the Coronavirus Act 2020 status table which sets out the status of the provisions in the Act, which are in force, which have been suspended or reviewed etc.
The Health Protection (Coronavirus, Restrictions) (England) (Amendment) (No. 2) Regulations 2020 (SI 2020/500) (Regulations)
The latest regs which impose restrictions on most businesses and organisations that deal with the general public and on individuals' rights of movement and assembly in England came into force on 13th May 2020
Coronavirus Information for the nations
There is coronavirus information for people and businesses in:
- Scotland at https://www.gov.scot/coronavirus-covid-19/
- Wales at https://gov.wales/coronavirus.The Welsh government has published the Health Protection (Coronavirus Restrictions)(Wales)(Amendment)(No.3) Regulations 2020: http://www.legislation.gov.uk/wsi/2020/497/contents/made. These are the third set of amendments to the principal regulations: http://www.legislation.gov.uk/wsi/2020/353/contents/made. It has also published guidance on the regulations: https://gov.wales/staying-home-and-away-others-guidance
- Northern Ireland at https://www.nidirect.gov.uk/campaigns/coronavirus-covid-19
Court processes – guidance
Guidance in relation to the coronavirus pandemic includes cross jurisdictional guidance, on matters such as pdf bundles, as well as specific information for Employment tribunals, including FAQS and Practice Direction
Staff at work
Acas guidance on disciplinary and grievance procedures during the coronavirus pandemic
The law and practice on disciplinary and grievance procedures still apply during the pandemic.
Acas has published guidance on how to manage these procedures during the pandemic, including the circumstances in which a procedure can go ahead.
HSE - Managing Risk and risk assessments at work and other guidance on working safely during Covid-19
The Health & Safety Executive has published guidance on managing risk and risk assessments at work in light of COVID-19. The guidance sets out steps needed to manage risk and includes a risk assessment template and examples.
The HSE has also published short guides to Working safely during the
Coronavirus outbreak and Talking with your workers about preventing
CIPD guide on how to manage working from home
The CIPD has issued a useful guide on homeworking plus a homeworking questionnaire for use to gauge what preparations and steps are needed
Acas guidance on coronavirus and mental health at work.
Staff may need additional mental health support during the coronavirus pandemic, particularly if they already have mental health problems: https://www.acas.org.uk/coronavirus-mental-health/supporting-staff-mental-health
Access to Work scheme guidance - changes during Covid
DWP guidance on how the scheme is affected, including the impact of working from home.
Equality and Human Rights Commission guidance for employers
The Equality and Human Rights Commission has published guidance on how to avoid discrimination against people with protected characteristics in the workplace during the pandemic.
The EHRC notes that employers play an important role in ensuring the issues their employees face aren’t made worse by discriminatory decisions regarding furlough, sick pay or redundancy.
The EHRC notes the following:
- Ensure the decisions you make, for example who gets extra hours or who is made redundant, are not based on protected characteristics, for example their age, sex, a disability or because they are pregnant.
- Involve employees in decision making processes in a way that takes into account their protected characteristics, such as communicating to employees on maternity leave or communicating in accessible ways to disabled employees.
- Set up working options in a way that does not disadvantage workers with different protected characteristics, such as those in particular age groups, disabled employees, women or pregnant workers. Make sure people selected for home working, reduced hours or furlough are chosen based on business requirements and not on a particular protected characteristic. For example, think about ways disabled people can work from home, either in their current or a different role, or work their usual shifts, through making reasonable adjustments. Where possible, it is best practice to consider what the employee wants to do.
Certification officer advice - impact of COVID-19 on trade unions and employers’ associations
The Certification Officer has published advice regarding complying with the Trade Union and Labour Relations (Consolidation) Act 1992 because of the impact of the coronavirus pandemic. The advice states:
The Certification Officer is clear that the priority for trade unions must be to comply with the government’s guidance on dealing with the pandemic, and that the safety of their staff and members is paramount.
Where a trade union believes that it cannot comply with the Act, that it will miss any deadlines set for it by the Certification Officer, or that it must breach its rules relating to any of the matters set out in Section 108A of the Act, it should seek to notify the Certification Officer at the earliest opportunity.
The Certification Officer will consider any representations made to her relating to any of these issues on a case-by-case basis, and she will seek to accommodate any requests made in those representations. The health and safety of Union Members, staff and the general public will be her primary concern.
The guidance regarding the provision of apprenticeships during the COVID-19 outbreak has been updated.
Claiming back SSP- Statutory Sick Pay (Coronavirus)(Funding of Employers’ Liabilities) Regulations 2020 and BEIS Guidance
These Regulations provide for certain small and medium size employers to reclaim some or all of their Statutory Sick Pay (SSP) costs from HMRC. Section 159B(7) of the Social Security Contributions and Benefits Act (inserted by the Coronavirus Act ) allows these Regulations to have effect in relation to days of incapacity for work that fall on or after 13th March 2020
Regulation 3 provides that an employer may make a claim in respect of an employee’s period of incapacity for work related to coronavirus where the first day of incapacity for work in that period arose on or after 13th March 2020. It makes further provision about which SSP costs an employer is entitled to reclaim and limits the amounts which can be claimed per employee and in total. It also provides for when an employer is not entitled to claim by reason of exceeding limits on receipt of State aid under the Temporary Framework for State aid measures to support the economy during the current COVID-19 outbreak set by the European Commission or having certain entitlement to a grant under the Coronavirus Job Retention Scheme.
Regulation 4 defines an eligible employer for the purposes of regulation 3 by reference to the number of employees enrolled on all pay as you earn schemes operated by the employer on 28th February 2020 and by reference to whether it is reasonable to assume that the employer would be regarded as “in difficulty” for State aid purposes. The number of employees of connected companies or connected charities must be aggregated for the purpose of determining eligibility.
BEIS has also published guidance on claiming back statutory sick pay paid to employees due to coronavirus.
For other information on SSP during Covid-19, see the update in April’s Emplaw Monthly
The Coronavirus Statutory Sick Pay Rebate Scheme is now live at
Temporary exemption from tax/ NICs for coronavirus related reimbursed expenses
The government has stated that there will be a temporary exemption from income tax and national insurance contributions in relation to the reimbursement of home office equipment purchased by employees who are working from home as a result of the coronavirus outbreak.
The expenditure must meet the following two conditions to be eligible for relief:
- That equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak, and
- The provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer (under section 316 of ITEPA).
The exemption is a temporary measure and will have effect from the day after the regulations come into force until the end of the tax year 2020/21.
FCA extension of period to cover absent senior managers
The FCA has extended the maximum period that firms can arrange cover for a senior manager without needing regulatory approval from 12 to 36 weeks in any 12-month period.
This extension applies to all solo regulated firms and can be used if e.g. a senior manager is absent because of coronavirus or recruitment is difficult because of the pandemic.
The extension lasts until 30 April 2021.
Investment Association guidance on executive pay
The Investment Association has published guidance on shareholder expectations on executive pay in UK listed companies and how Rem Coms should be reflecting the impact of CoVID-19 on executive pay. The IA expects to update the guidance periodically. The IA addresses the question about furloughing employees and the impact of this on executive pay (Q4).
The guidance addresses the following key areas:
1. Should a company that has suspended or cancelled a dividend in relation to FY2019 consider adjusting bonus outcomes for FY2019?
The IA expects RemComs to consider how this should be reflected in their approach to executive pay.
Where bonuses have already been decided/ paid, shareholders would expect Rem Coms to consider the use of discretion/ malus to reduce any deferred shares related to the 2019 bonus or to reflect this in the 2020 bonus.
2. Would shareholders support performance conditions being adjusted for CoVID-19?
IA members do not expect performance conditions to be adjusted for annual bonuses/ in flight long term incentive awards but Rem Coms should ensure a good link between company performance and executive remuneration outcomes.
3. Where companies have already granted 2020 LTIPs what do shareholders expect to ensure there will be no executive windfall gain?
If the share price is solely related to CoVID-19 there does not need to be an adjustment to the grant size. However, the Rem Com should look at the general market and share price response over the performance period to ensure windfall gains will not be received on vesting. Discretion should be used to reduce vesting outcomes in such a case.
3. Where companies expect to make LTIP grants in the coming months, what are shareholder expectations?
Rem Coms should take into account the individual circumstances of the company and the impact of CoVID-19. Rem Coms should consider whether it is appropriate to make LTIP grants at present and whether the current LTIP grant should be postponed. Coms should explain the approach to shareholders, e.g.
- grant on normal timeline setting performance conditions and grant size at current time
- ditto re grant size but set performance conditions within 6 months
- delay grant and assess.
4 What are shareholder expectations if a company seeks additional capital or takes government money such as furloughing employees?
This should be reflected in executives’ remuneration outcomes. The IA Principles of Remuneration are clear that exec remuneration should reflect pay and conditions in the wider workforce.
Failure to reflect this would have wide reputational ramifications.
5. For companies who have 3-year rem policy up for a shareholder vote, how will shareholders view proposals to change remuneration structures?
If companies are seeking to impose variable pay increases the Rem Com should carefully consider whether such an increase is appropriate.
If a new rem policy has not yet been consulted on, it may not be appropriate to being forward policies with substantial changes if the company is significantly impacted by CoVID-19.
Return to work
Return to Work guidance
The government has published ‘Covid-19 secure guidelines’ to help employers, employees and the self-employed understand how to work safely during the pandemic.
The BEIS guidance includes 8 guides (updated 25th May) covering a range of different types of work:
- Construction and other outdoor work
- Factories, plants and warehouses
- Labs and research facilities
- Offices and contact centres
- Other people’s homes
- Restaurants offering takeaway or delivery
- Shops and branches
Note the guide on Shops and branched was updated on 25th May to reflect that non essential retail shops can re-open from 15th June.
The government sets out 5 key points, which should be implemented as soon as practical:
- Work from home if you can
- Carry out a COVID-19 risk assessment, in consultation with workers or trade unions. The government expects employers with more than 50 employees to publish the risk assessment on their website.
- Maintain 2 metres social distancing, wherever possible
- Where people cannot be two metres apart, manage transmission risk
- Reinforcing cleaning processes
Return to safe workplaces - resource for workplace representatives
Information from the TUC to help representatives assess whether an employer is doing the right thing
Acas guidance for employers and employees on coronavirus
The Acas guidance has been updated to include coverage of return to work issues
House of Commons Library briefing paper on Returning to Work
The House of Commons has published a briefing paper discussing issues relating to returning to work following the government’s COVID-19 recovery plan. It provides an overview of relevant health and safety law and a discussion of recent government guidance on working safely in the context of COVID-19.
ICO Guidance for employers on workplace testing
The Information Commissioner’s Office has published guidance for employers on workplace testing for symptoms of COVID-19. The General Data Protection Regulation and Data Protection Act 2018 are engaged so employers who carry out testing must comply with data protection requirements. Data relating to health will be ‘special category data’ so it must be even more carefully protected. The ICO states:
As long as there is a good reason for doing so, you should be able to process health data about COVID-19. For public authorities carrying out their function, public task is likely to be applicable. For other public or private employers, legitimate interests is likely to be appropriate, but you should make your own assessment for your organisation. […]
Employers must also identify an Article 9 condition for their processing.
The relevant condition will be the employment condition in Article 9(2)(b), along with Schedule 1 condition 1 of the DPA 2018. This applies due to their employer health and safety obligations. This condition will cover most of what employers need to do, as long as they are not collecting or sharing irrelevant or unnecessary data.
Extension of coronavirus job retention scheme
The government has announced that the CJRS will remain open until the end of October 2020.
From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.
Whilst the detail of the proposed changes have not been officially published and are expected this week, it is reported that employers will be asked 'to pay 20-30 per cent' of furlough wages and there may be a prohibition on putting further staff on furlough.
Update of Treasury Direction
The Treasury Direction sets out the legal framework for the CJRS scheme. Originally published in April ( see article in April's Emplaw Monthly), the Direction has been updated moslty to bring it in line with and clarify areas of certainty where it conflicted with HMRC's published guidance.
- the removal of an explicit requirement for a written *agreement* to furlough
- clarification that when calculating the reference salary that can be claimed under the scheme, variable payments for overtime, timing of shifts or additional duties should be included provided there is no discretion about how the amount is to be calculated
HMRC Guidance updates and new guidance
The current key documents from HMRC are:
- Employer’s CJRS guidance: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme. This guidance (updated 14th May) reflects the extension of the job retention scheme until end July 2020. From August-October 2020 employers will have to pay a percentage of salaries of furloughed staff. On volunteering, the guidance clarifies that employees may only volunteer for another employer or organisation, not their present employer.
- New Guidance, ‘Check which employees you can put on furlough to use the CJRS’: https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme. This guidance, which was originally part of the Employer’s guidance above. explains which employees can be put on furlough and claimed for under the CJRS and was . (updated 21st May)
- Employee’s CJRS guidance: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme (updated 21st May)
- 80 % guidance: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme. This updated guidance now includes non-discretionary payments for hours worked, including overtime to be included in regular salary or wages. There is also a new section on non-discretionary payments (updated 21st May)
- Claim Guide: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme. The updated guidance states that records should be retained for at least six years (updated 21st May)
BEIS Guidance on holiday entitlement and pay during coronavirus
The Department for Business, Energy & Industrial Strategy has published guidance on how holiday entitlement and pay operate during the pandemic, where it differs from the standard holiday entitlement and pay guidance.
Workers who have been placed on furlough continue to accrue statutory holiday entitlements, and any additional holiday provided for under their employment contract.
· require workers to take holiday
· cancel a worker’s holiday, if they give enough notice to the worker
The required notice periods are (as per the Working Time Regulations):
· double the length of the holiday if the employer wishes to require a worker to take holiday on particular days
· the length of the planned holiday if the employer wishes to cancel the worker’s holiday or require the worker not to take holiday on particular dates
Employers can ask workers to take or cancel holiday with less notice but need the workers’ agreement to do so.
Workers on furlough can take holiday without disrupting their furlough. The notice requirements for their employer requiring a worker to take leave or to refuse a request for leave continue to apply.
If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.
There is no statutory right to time off for bank holiday. Employers can include bank holidays as part of a workers’ statutory holiday entitlement if they choose, but do not have to do so.
Pensions Regulator guidance on automatic enrolment and salary sacrifice
- The Pensions Regulator has provided clarification on an employer’s automatic enrolment duties for a furloughed member of staff. Automatic enrolment (AE) duties continue to apply as normal, including re-enrolment and re-declaration duties. This is the case whether the employer’s staff are still working or are being furloughed.
- The Pensions Regulator has also issued The DC pension contributions: COVID-19 technical guidance covering the specific areas of pension contributions where there is a salary sacrifice arrangement and defined contribution (DC) certification
Regulations governing the calculation of statutory maternity and other parental payments for furloughed employees
The 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 (SI 2020/450) came into force on 25 April 2020. They provide for the calculation of "normal weekly earnings" for the purposes of statutory maternity pay (SMP) and other statutory parental payments where the recipient is on furlough. For example, for a woman on furlough whose pay is reduced as a result, her normal weekly earnings for the purposes of eligibility for SMP will be calculated based on the pay she would have received if she were not furloughed
Self-employment income support scheme
The government’s self-employment income support scheme opened on 13 May 2020.
Self-employed individuals or members of partnerships whose business has been adversely affected by coronavirus will be able to apply for a Self-Employment Income Support Scheme (SEISS) grant worth 80% of their average monthly trading profits.
The payments – to be paid in a single instalment covering three months and capped at £7,500 – are expected to reach bank accounts within six working days of each claim.
NHS test and trace: workplace guidance
Guidance, issued on 27th May on the NHS test and trace service for employers, businesses and workers . It includes the instruction that 'If people can’t work from home, employers must ensure any self-isolating employee is receiving sick pay and give them the option to use their paid leave days if they prefer.'
Contractual variation to improve Directors’ remuneration prior to TUPE transfer rendered void
Mr Ferguson and Mr Kevill were directors of Lancer and beneficial owners of Lancer's holding company; they were also employees of Lancer and Mr Lax and Mr Pull were employed by companies which they controlled which contracted their services to Lancer; there were seven other Lancer employees. Lancer's sole business was managing the Berkeley Square Estate on behalf of the owners under a management agreement.
Injunctive relief does not require defendants to have committed actionable wrong
This judgement concerns parts of the defendants' applications to strike-out all or part of the Particulars of Claim and/or summary judgment.
The defendants contended that Media Entertainment, an online gambling business, had failed to state sufficient facts to give rise to its asserted claim (being a claim for misuse of what was known to be the Media Entertainment's confidential information) in law.
Referees were not employees – tests of mutuality and control considered.
The question in this appeal is whether certain referees engaged to officiate at football matches by the appellant, Professional Game Match Officials Limited (“PGMOL”), were at the relevant time employees of PGMOL (being engaged under contracts of service) or were self-employed (being engaged under contracts for services).
Concept of ‘worker’ under Working Time Directive: delivery courier for Yodel was not a worker
Directive 2003/88 (the Working Time Directive) was transposed into national law by the Working Time Regulations 1998, Regulation 2 of which provides:
‘In these Regulations
“worker” means an individual who has entered into or works under …:
Material breach of contract not remedied by stated intent to perform- actual performance required
This case concerns the interpretation and operation of a material breach clause in a consultancy agreement between Mr Bains and Arunvill Capital. The core issue raised by this appeal is whether the claimant, as he alleged, had remedied a material breach within the required, 21-day, period. If he had not, Arunvill was entitled summarily to terminate the Agreement; if he had, the claimant was entitled to a termination payment equal to 6 months' remuneration.
Homophobic comments made on radio programme suggesting discriminatory recruitment policy could fall within Equal Treatment Directive
The judgement was made after hearing the Opinion of the Advocate General at the sitting on 31 October 2019