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Top 5 recent workplace developments

  • Market Insight 19 August 2020 19 August 2020
  • UK & Europe

This is our selection of the recent developments which we think will have a significant impact on HR practice.

Top 5 recent workplace developments
  1. COVID-19: New law on redundancy and notice pay for furloughed employees

The government has introduced new rules aimed at ensuring that statutory payments to which furloughed employees are entitled, such as redundancy or notice pay, are based on their normal pay, rather than reduced furlough pay.

The new rules came into force on 31 July 2020.

Calculating Redundancy Pay:

  • For employees with normal working hours where pay doesn’t vary with the amount of work done, the new rules only apply where the calculation date for redundancy falls on or before 31 October.
  • For employees whose pay varies with the amount or time of work done, such as piece workers, shift workers or those with no fixed hours, their redundancy pay is averaged out over the 12 weeks before the calculation date for redundancy. Under the new rules, provided they have been furloughed for at least one week during those 12 weeks, their redundancy pay is based on full pay rather than their reduced furlough pay.
  • These rules will not apply to employees whose employment terminated for redundancy before 31 July, except if their statutory notice would have expired on or after 31 July if full statutory notice was given.  

Calculating Notice Pay:

  • These rules also apply to the calculation of statutory notice pay – but not where notice was served before 31 July.
  • However, for employees who are entitled to contractual notice of at least one week more than the statutory minimum, the new rules do not appear to apply.
  • That said, some employers are nevertheless choosing to pay notice at the full rate in any event.

Practical point

The new rules provide clarity on the calculation of the identified statutory entitlements.

The rules do not affect the statutory cap on redundancy pay which is based on a week’s pay capped at £538 (and subject to a maximum award of £16,140).

 Factors around whether employees are entitled to pay at the full rate during notice and the calculation of notice pay can be complex so it is important to take advice if in doubt.

 

  1. Disability discrimination – failure to make reasonable adjustments

The Employment Appeal Tribunal ruled that is was a reasonable adjustment for an employer to undertake to give an employee a redundancy severance package if her request to not work with certain colleagues was unworkable.

Ms Hill was disabled, suffering from reactive depression, which she said resulted from bullying and harassment at work. On her return to work after a period of sick leave she sought an undertaking from Lloyds Bank that they would not require her to work with the two colleagues concerned and if at a later stage there was no alternative, she would be offered a severance package equivalent to that provided on redundancy. The Bank refused to give an undertaking to that effect.

Ms Hill brought a claim for disability discrimination on the basis of failure to make reasonable adjustments, which was allowed by an employment tribunal. The Bank appealed.

The EAT decided that her disability discrimination claim should succeed because the Bank had a "practice" of not giving firm undertakings in circumstances like these and that practice put Ms Hill at a substantial disadvantage in comparison with others not suffering a disability. This was because, without that undertaking, she suffered a level of anxiety and fear about the possibility she would be required to work with those colleagues that a non-disabled person who had been bullied and harassed would not have. The EAT said that having the undertaking would have removed the disadvantage because it would have alleviated that fear - and it would have been reasonable for the Bank to give the undertaking requested.

Practical point

This case may be of concern to employers in relation to the adjustments that may be considered reasonable in reducing a substantial disadvantage to disabled employees who have brought grievances and are uncomfortable working with certain colleagues following a breakdown in relations.

The EAT noted that an undertaking such as this one may well be required as a reasonable adjustment rarely, but more generally that taking some more informal steps to assuage an employee's reasonable concerns at an early stage might prevent a request escalating.

Hill_v_Lloyds_Bank_Plc

 

  1. Unfair dismissal - no procedure followed after breakdown in working relations

The EAT ruled that a dismissal for "some other substantial reason", when the employer had not followed any procedure, was not unfair.

Ms Gallacher was a senior manager. Her relationship with her manager deteriorated at a critical time for the employer's business, and she was dismissed at an appraisal meeting with no procedure, forewarning or right of appeal.

The tribunal found that the reason for the dismissal was a lack of trust and confidence between two employees at a senior level which was a barrier to delivering the objectives of the business. The dismissal was for "some other substantial reason". Given the irretrievable breakdown in working relations on both sides, the tribunal noted that any procedure would not have served a useful purpose. It concluded that, given these stark circumstances, the decision to dismiss Ms Gallacher without any procedure was within the band of reasonable responses.

The Employment Appeal Tribunal agreed. It said that there will very occasionally be cases where procedures may be dispensed with because they are reasonably considered by the employer to be futile.

Practical point

Tribunals will always scrutinise dismissals where no procedure has been followed, to assess whether they fall within the band of reasonable responses.

This is a useful example of a very rare case in which an employer is found to have acted fairly despite not taking any formal procedure before dismissing an employee.

Gallacher_v_Abellio_Scotrail_Ltd

 

  1. Employment status - Cycle couriers are workers

An employment tribunal ruled that CitySprint couriers were workers, even after a change in their contractual terms, and therefore entitled to receive holiday pay.

CitySprint issued new contracts to its couriers in 2017, following an employment tribunal decision in which a CitySprint courier brought a successful employment status claim. In the latest claims against CitySprint, a tribunal considered whether cycle couriers were workers, both before and after the 2017 contractual terms were introduced, for the purposes of holiday pay claims.

The tribunal concluded that the couriers were workers before and after the change of contracts and therefore entitled to holiday pay during both periods. It said that although the couriers had a contractual right of substitution, this was a theoretical right only that had never been exercised, and that personal performance was a dominant feature of the contract. Although most of the couriers did other work, they did not provide their services as cycle courier elsewhere. So even under the new 2017 contracts, the couriers were workers.

Practical point

This decision confirms that when assessing employment status, the underlying documentation is only part of the factual matrix and a tribunal will consider how the relationship works in practice.

The Supreme Court recently heard the appeal on the employment status of Uber drivers in the UK. The Court of Appeal previously concluded that although the contractual documentation indicated that Uber drivers were self-employed, they were in fact workers and therefore entitled to national minimum wage, paid holiday and whistleblower protection.

The owner of Just Eat Takeaway has announced this month that he intends to end "gig" working at his company across Europe. He has stated that he would rather run his company with staff who get benefits and more workplace protection.

O'Eachtiarna_and_others_v_CitySprint__UK__Ltd

 

  1. COVID-19: Furlough bonus scheme

As part of the government's plans to support the UK economic recovery, it announced plans to pay a Job Retention Bonus to employers who keep their furloughed employees on after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020 - and further details have now been published.

The Job Retention Bonus is a one-off payment to employers of £1,000 for every furloughed employee who remains continuously employed through to 31 January 2021.

Employers will be able to claim for all employees who:

  • were furloughed and had a CJRS claim submitted for them that meets all the relevant eligibility criteria
  • were continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021
  • were paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months) - the employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via Real Time Information (RTI) reporting system
  • have up-to-date RTI records, and
  • are not serving a contractual or statutory notice period for the employer making a claim that started before 1 February 2021

In order to qualify, employers must have complied with all the PAYE obligations, kept their payroll up-to-date and maintained accurate records, and have a UK bank account.

Employers will be able to claim the Bonus after they have filed PAYE for January 2021 through the gov.uk website. Payments will be made to employers from February 2021.

Practical point

Employers can start preparing now by making sure their furlough claims are accurate and, if appropriate, any amendments are notified to HMRC, and that their employee payroll reporting is up-to-date and accurate.

Further details are due to be published by the end of September 2020.

End

Additional authors:

Corinna Harris

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