IGA News

Be Aware - December 2020

Be Aware - December 2020

30 November 2020

Employment & Furlough

In the first week of November England went into a second, month-long lockdown. A number of members raised questions as to how this will affect their business. With the Regulations now being passed, and the extension of the Furlough scheme, we have taken the opportunity to provide answers to a number of common questions regarding employment.

“What is the interaction between furlough and remaining holiday days, can we request/require employees take annual leave, can we buy back any annual leave, and are employees able to carry over any holiday into next year?”

Annual leave continues to accrue during furlough. Employers can still give notice under Regulation 15 of the Working Time Regulations and require employees to take their leave during furlough. We would advise that any request is proportionate to the amount of furlough, so as not to be too unreasonable.

Legally, you are not allowed to ‘buy back’ unused holiday except on termination of employment. Arguably, that could be different with contractual holiday entitlements over and above the 28 days UK/EU leave, but we would not advise this distinction is made unless it is necessary.

Holiday can be carried into the next two leave years if it is not reasonably practicable and agreed by employees and employers because of the coronavirus, etc.

“Can I hold back sales staff commissions in order to evenly spread over the furlough period and December when salespeople come back to work?”

It seems to be the case that sales staff were worried about December because they would have normally earned commissions in November. It must be remembered that most furlough claims will include a proportion of regularly earned commission (calculated at 80%). As such, whilst sales staff are not at work they have ‘earned’ and been paid commission proportionately during the period.

Employees must earn at least the minimum wage and deductions cannot take them below the appropriate hourly rate for any period worked (see previous guidance regarding the distinction between furlough and ‘work’ for the purpose of the NMW). Provided there are no minimum wage issues, then this will be a question of contract. There is no obligation on an employer or employee to agree any change to their normal arrangement regarding commission. If on commercial grounds, or for business reasons, it is not a good idea for the company to change its normal policy, then there is no obligation on an employer to do so.

“Can you provide clarity around the minimum period of “7 consecutive days?”

The position regarding the 7 consecutive days required for flexible furlough remains unclear and we are awaiting further guidance.

We generally advise members to maintain a 7-day pattern for the purposes of furlough, as this will assist in managing staff availability and expectations, and is required by HMRC during any claims, but it is not necessary for any one employee to be either at work or furloughed for the full 7 days.

“Can I maintain a zero hours agreement with my staff during furlough in order to respond to daily demand?”

Flexible furlough is designed to allow employers to respond flexibly to demand. It is more than possible to bring different staff in for different days in different weeks, and each claim period for 7 consecutive days can be different. However, this must be in-line with the contractual arrangements between you and your staff, and staff will be entitled to reasonable notice.

If members maintain a zero hours, very flexible arrangement in the agreement to furlough letter, then the challenge for members will be maintaining and retaining a sufficiently clear written record of the agreements with staff and the hours worked or not worked in any 7-day period, in order to be able to process furlough.

Updated Guidance on CJRS

In another development, on 13th November 2020 the Government quietly updated its guidance on the CJRS scheme on Friday night to provide that, in a few weeks, employers will not be able to reclaim furlough monies for periods of notice. The precise wording inserted into the guidance is as follows:

“For claim periods starting on or after 1 December 2020, your employer cannot claim for any days on or after 1 December 2020 during which you were serving a contractual or statutory notice period for your employer (this includes people serving notice of retirement or resignation).”

This is a significant development and clearly results in greater costs for employers, particularly if they are restructuring or making redundancies as a result of the crisis.

Lone Working

“I run a small body repair MOT workshop. I sometimes have to leave my technician working on his own when I am out of the business, is that okay? Is there any law in this area?”

Employers who have employees who are likely to be working on their own need to carry out a risk assessment. The Health and Safety at Work Act 1974 ensures a duty of care on employers to ensure the health, safety and welfare of their employees. The Management of Health and Safety at Work Regulations also require employers to carry out a risk assessment.

In the above situation a bodyshop or MOT testing area is likely to be a relatively hazardous environment. The employer is required to consider the risks posed to a lone worker in such an environment. Where a risk assessment shows it is not possible for the work to be done safely by a lone worker, arrangements for providing help or backup should be put in place. A risk assessment might include that it is not safe for one person to work alone, examples include working in a confined space or work involving electrics or other dangers where two people might be required to be present.

Precautions should be planned for foreseeable emergencies e.g. fire, equipment failure, illness and accidents etc.

The following questions should be asked by the employer:

  • Does the workplace present a special risk to the lone worker?
  • Is there a safe way in and a way out for one person? Can any temporary access equipment which is necessary, such as portable ladders or trestles, be safely handled by one person?
  • Can all the plant, substances and goods involved in the work be safely handled by one person? Consider whether the work involves lifting objects too large for one person or whether more than one person is needed to operate essential controls for the safe running of equipment
  • Is there a risk of violence?
  • Are women especially at risk if they work alone?
  • Are young workers especially at risk if they work alone?
  • Is the person medically fit and suitable to work alone?
  • What happens if the person becomes ill, has an accident or there is an emergency?

COVID: Employment Law Update

There continues to be important developments in employment law that may have gone under the radar for many employers, but which could be important when making decisions on furlough and the dilemma (faced by many employers) when someone claims they can’t return to work on the grounds of health and safety.

R (on the application of the Independent Workers Union of Great Britain) v Secretary of State for Work and Pensions and Anor

Under the Employment Rights Act 1996 there is a protection for employees from suffering detriment or dismissal on health and safety grounds.

Section 44 of the Employment Rights Act 1996 provides (among other things) that it is unlawful to subject an employee to detriment for leaving or refusing to return to the work place in circumstances of serious and imminent danger, or for taking appropriate steps to protect him or herself or other persons from danger. In the context of the Covid crisis, this previously little utilised section of the Act has come to the forefront and we expect in future years there to be litigation as to when that threshold was met by an employee and when, to the contrary, an employer can demonstrate that it took steps as were required. Each case is likely to turn on its own facts.

Importantly however, in a case law development, the High Court held in R (on the application of the Independent Workers Union of Great Britain) v Secretary of State for Work and Pensions and Anor that the protections offered by the Employment Rights Act do not go far enough because they only apply to ‘employees’ in law and not the wider category of ‘workers’. The Court said that the Working Time Directive requires protection of workers as well as employees, thus widening the scope of the protection from the legislation. In the motor industry, most employment relationships are that of employer and employee, but workers are utilised in different sectors, so it is important for employers to be aware of this development.

“Can a failure to return to work constitute acceptance of a breach of contract (for the purposes of a Constructive Unfair Dismissal claim)?”

Constructive Unfair Dismissal can be claimed by employees with over two years’ service where they resign in response to an alleged fundamental breach of contract by the employer.

A common question in law however, is whether, in order to bring the contract to an end, one party has to communicate to the other the acceptance of what it deems to be the other party’s fundamental breach(es)?

If such communication is not present, then as a matter of law, it can be argued that there is no termination of contract and therefore an employee’s claim in such circumstances could fail.

The Employment Appeal Tribunal (EAT) has recently considered this matter in Chemcem Scotland Limited v URE.

Facts

The facts are complicated involving a family business, but essentially the Claimant was on maternity leave and argued that the Respondent employer committed various repudiatory breaches throughout her maternity leave and had shown an unwelcome/hostile view about her employment during her maternity leave.

Rather than expressing to the employer her acceptance of what she deemed to be those fundamental breaches of the contract, the employee simply failed to return to work following her maternity leave.

The original Tribunal found that her ‘no show’ and failure to return was sufficient to communicate her acceptance of the employer’s breach and that she could claim constructive unfair dismissal. The company appealed, arguing that as the Claimant had failed to communicate her acceptance of the repudiation by the employer, then as a matter of law, it could not be a termination of contract so the claim must fail.

The EAT dismissed the employer’s appeal and agreed with the employee. They found effectively that it was for the Tribunal, on the facts of any individual case, to make an assessment whether such a failure to return to work constituted an implied acceptance of a repudiatory breach. It commented that in “normal circumstances” a failure to return to work might not constitute such acceptance of the breach of contract, but on the facts here, the Tribunal was entitled to find that her conduct in not returning was such acceptance.

Comments

The case should serve as a note to employers in similar circumstances. If an employee simply disappears from work, this could still constitute an acceptance of an alleged breach of contract by the employer. The employer might not be in receipt of a formal written or oral notification that such a position was taken by the employee.

General Note

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us via the Direct Member Helpline or 0845 305 4230 at any stage for advice and assistance as appropriate.