Welcome to our Autumn update

Hello and welcome to our autumn update. At this time of year, we usually like to hold a HR and employment law briefing get-together over coffee and cake.

This autum, as an alternative, our plan is offer a free Zoom webinar – and give you the option to vote on what we talk about, in case there are any burning questions that you would like us to answer.

Please take a couple of minutes to respond to this survey to indicate what subject you would most like to see covered. If you can let us have your response by 7th November 2020, we’ll collate them all and go with the most popular option.

We’ll schedule the Zoom webinar for late November/ early December (depending on which subject we’re covering) and send you an invitation.

In the meantime, we’ve set out some interesting updates for you below, and Stafflex – our local employment agency – have included a thought-provoking commentary on their experience in the West Yorkshire economy.

As always, you’re very welcome to get in touch with us if you have any questions.

Job Support Scheme

The government has announced a replacement for the Coronavirus Job Retention Scheme (or furlough leave) which is due to start on 1st November 2020 and run for 6 months. There are two forms of the JSS scheme, which will apply to all SMEs and larger employers who can demonstrate a reduction in turnover and who have not been making capital distributions such as dividends.

Under, the first form, provided that an employee is still working and being paid for at least one third of their normal working hours, the pay for the hours not worked will be split as follows:

  • the employer will pay one third
  • the government will pay one third – subject to a cap of £697.92 per month
  • the remaining one third will be unpaid.

 Under the second form, which will apply to any businesses required to close due to local or national Coronavirus restrictions, the government will pay two thirds of employee’s wages up to a maximum of £2,100 per month. Employers will not be required to contribute towards the wages and will only be asked to cover National Insurance Contributions and pension contributions.

In order to be eligible, employees must have been on your PAYE payroll before 23rd September 2020 (this means a Real Time Information (RTI) submission notifying payment to that employee must have been made to HMRC on or before 23rd September 2020) and they must not be in their notice period. They do not have to have been furloughed previously.

If you want to make use of the JSS you will need to make sure that you have a written agreement with the relevant employees to set out the terms of work and payment.

Coronavirus Job Retention Scheme, Job Retention Bonus

This bonus will be available to employers in respect of each employee who has:

  • been on furlough at some point during the life of the furlough scheme; and
  • who remains employed (and not under notice) on 31st January 2021; and
  • who has been paid at least £1,560 in the period from 6th November 2020 to 5th February 2021.

HMRC will pay the bonus of £1,000 payable for each eligible employee. Employers must present their claims between 15th February 2021 and 31st March 2021. We await guidance on how the claims may be made.

Covid restrictions

The rules on who you can and can’t meet and where have been changing regularly, and with local lockdowns added into the mix it can be hard to keep up. The general work-related restrictions that have been announced and are expected to be in place until March/ April 2021 are:

  • People may use public transport to get to/ from work if they wear a face covering;
  • People should try to avoid sharing private transport, but this is not prohibited. If they do share private transport they should try to share with the same people each time, open the windows for ventilation, wear a face covering and clean the car regularly (particularly door handles, seat belt fastening etc where people touch);
  • Grandparents are able to provide childcare and this has been permitted under local lockdown rules;
  • The maximum of 6 people per gathering does not apply to workplaces;
  • Office workers should work from home where they can do so over the winter;
  • Employers should continue to follow COVID-19 Secure guidelines including having risk assessments in place;
  • Face masks must be worn by anyone, including staff, in:
    • Shops and indoor shopping centres
    • Banks, building societies and post offices
    • Museums, galleries, cinemas, theatres, libraries
    • Places of worship
    • Taxis and private hire vehicles
    • Bars, restaurants and hotels – when not eating or drinking (which should be done at a table)
  • Staff who are clinically extremely vulnerable should work from home if possible, but can go into work if the workplace is Covid-19 Secure;
  • The requirement for anyone with symptoms of Covid or with household members with symptoms of Covid to self-isolate remains in place;
  • People contacted via track and trace and suspected of being in a ‘high risk’ encounter will be told to self-isolate for 14 days (risk is based on distance to person with the infection);
  • Businesses that are open to the public should display a track and trace QR code so that people can ‘check in’ when they visit. This enables them to be contacted in the event of an outbreak relating to that public place. It is compulsory for businesses in the hospitality, tourism and leisure sectors and close contact services such as hairdressers and beauticians.

 People don’t have to wear a face mask if they cannot do so because of a physical or mental impairment or without it causing severe distress. Or in other very specific situations such as the person they’re talking to needs to lipread, or they need to take medication, they’ve been asked to remove it to verify their identify or they have run into a public place such as a shop to escape the risk of harm.

People don’t have to carry evidence of their physical/ mental impairment which makes it potentially difficult to enforce the rule with customers. However, for staff you are within your rights to request some medical confirmation of their impairment so that you can consider reasonable adjustments for that individual.

IR35 regulations

The IR35 Regulations are the rules that govern the status and tax treatment of self-employed workers. The recent change to IR35, that has received quite a bit of press, has been the shift in responsibility for determining the status and tax treatment of self-employed workers from the worker and HMRC to the organisation engaging them.

This change was rolled out to the public sector in 2017, and was due to affect the private sector employers with more than 50 staff from 6th April 2020. However, this was delayed and is now due to start from April 2021.

Brexit: Settled Status

We covered the issue of settled status in earlier updates and in our workshop last year, but it is important for employers of EU workers to remember that we’re moving towards the deadline for applications.

In order to continue living and working in the UK after 30th June 2021, EU, EEA and Swiss Citizens must apply for settled status or must already have an indefinite leave to remain. The deadline for applications is 30th June 2021.

Once they have applied, they will be notified of having settled status or pre-settled status and in either case can continue to work in the UK. They will receive a letter to confirm their status and you should make sure that you have a copy of this letter for your records – however the government advises that this in itself is not sufficient to prove their status. You should ask the employee to get a share code that enables them and you to view their immigration status online and check whether they have the right to work.

Stafflex: Outlook from a Local Perspective

Although the outlook looks fairly gloomy, there has been an uptick in demand for temporary staff across the north of England which suggests we could be turning a corner as businesses become more confident in their ability to hire new staff.

Temporary work is critical in any recovery and this is evidenced in past economic recessions as businesses opt for short-term solutions of temporary staff to meet demand whilst the future is uncertain – not to mention temporary work allows jobseekers to find work quickly.

There is also a huge increase in people seeking temporary work – numbers which we haven’t seen since the global financial crisis in 2009. In addition to this, we have also seen the biggest rise in staff availability in the North since data collection began 23 years ago. This suggests that the surge is driven by the COVID-19 redundancies.

Areas in particular demand for skills include accounting and financial, engineering, legal and IT sectors.

Permanent staff salaries continue to fall during August however it is the slowest rate of reduction in the five month sequence of decline. Temporary wages also fell for the sixth month in a row – evidence suggests that weaker demand and increased labour supply have contributed to the download pressure on pay.

There is no hiding from the uncertainty surrounding both the pandemic and Brexit. It is encouraging to see that the government has announced a new job support scheme from November for the next 6 months – but it must provide support for all types of businesses whilst also taking a lead on training and upskilling jobseekers to drive productivity and growth back to normal levels.

Some interesting cases:

  • Can ‘unofficial’ work be discounted for continuous employment purposes?

Mr O’Sullivan worked for DSM Demolition Ltd on an ‘unofficial’ basis for one week (week commencing 26th October 2015) before his contract of employment started (2nd November 2015). In that week he had done some work but he had not completed worksheets or been on payroll, DSM paid him £100 cash in hand and did not charge their client for the work that he had done. The question of when his employment started was important to whether or not he could claim unfair dismissal.

It was held that that week was work carried out under an ‘unofficial’ arrangement and was not the work of an employee, therefore Mr O’Sullivan’s employment did not start until 2nd November 2015.

This is an unusual finding and turns on its specific facts. It would be unwise to rely on it. 

  • Can you rely on anonymous witness evidence when dismissing an employee?

 Mr Christie was a carpenter working for a housing associating (Tai Tarian Limited). He was dismissed after a tenant alleged that he had made homophobic comments to her. The tenant was interviewed twice by two separate managers as part of the initial investigation, but requested anonymity which was granted. Mr Christie denied the allegation in the disciplinary hearing and no further steps were taken to re-interview the tenant. The disciplinary officer relied on the anonymous evidence and dismissed Mr Christie, who appealed. The appeals officer asked to re-interview the tenant but she declined due to personal circumstances. The appeals officer upheld the dismissal. Mr Christie claimed unfair dismissal.

The Employment Tribunal held that his dismissal was unfair: he had been employed for 14 years with no issues, and it was unreasonable to take the tenant’s anonymous evidence into account when she had refused to agree to a re-interview to provide further evidence. The Employment Appeal Tribunal held that it was potentially reasonable for the disciplinary officer to have accepted the tenant’s evidence and it was not established that the tenant refused to give further evidence, she just couldn’t at the time requested due to personal circumstances. The case is going back to a different Employment Tribunal for re-hearing.

It is possible to rely on one person’s word against another and to use anonymous witness evidence in a disciplinary setting. However, care must be taken to weigh all of the evidence available and to make an informed and balanced decision as to which evidence is preferred.

  • Can you dismiss on the basis of a breakdown of relations without a procedure?

Mrs Gallacher was a senior manager at Abellio Scotrail and employed for 10 years. Her working relationship with her immediate line manager deteriorated over a period of time when she requested a pay rise and didn’t get it, was asked to do on-call work that she didn’t want to do, and was not permitted to recruit a sub-ordinate who her line manager and another manager felt was not suitably qualified. She went off sick for 7 weeks and blamed her line manager for the breakdown in the relationship. Her line manager found it difficult to manage Mrs Gallacher who did not respond well when asked to do something she didn’t agree with and Mrs Gallacher’s subordinates began to raise concerns about her ability to lead, delegate and provide report.

The business then started making financial losses and it was felt that a good working relationship between Mrs Gallacher and her line manager was critical because her line manager  needed to be able to rely on her direct reports whilst she worked to improve the business situation. The line manager felt there was a breakdown of trust and confidence between her and Mrs Gallacher that was disruptive to the business at a critical time and could not be recovered as there was as need for an immediate change. Mrs Gallacher was called to a meeting and dismissed without procedure. Mrs Gallacher did not dispute that there was a breakdown in relations or assert that she had a medical condition that might have impacted on her behaviour. She brought a claim for unfair dismissal and disability discrimination.

It was held that: the employer’s argument that any form or procedure would have been futile because it wouldn’t have resulted in change and would have taken up time and extended the period of disruption in a critical period for the business and so the dismissal was fair. The facts of this case, including that Mrs Gallacher was aware of the breakdown of the relationship and not inclined to act to resolve it herself, are key to this decision. It was also held that the employer did not know and could not reasonably have known about Mrs Gallacher’s disability (which was menopause and depression).

  • Are paranoid delusions a disability? 

In July 2013, Mr Sullivan split up with his Ukrainian girlfriend and thereafter suffered paranoid delusions that he was being tracked by a gang of Russians, which made him late for work on a regular basis in 2013 and then recurred in 2017. Mr Sullivan was ultimately dismissed by Bury Street Capital Limited on April 2017 and brought a claim for unfair dismissal and disability discrimination. 

It was held that: his paranoid delusions could not amount to a disability because they only lasted for a short time and were not likely to recur – the legal definition of disability requires the impairment to have lasted or be likely to last for at least 12 months. In addition, it was found that the employer did not know and could not reasonably have known that he had these delusions.

  • Can an employee TUPE transfer to multiple new employers?

The TUPE Regulations apply where a business (or part of a business) is bought/sold as a going concern, or where a contract for services is transferred to a new supplier. In these circumstances, any staff assigned to the business or contract will transfer to the new owner/ new supplier.

Historically, where the business or contract has been broken up, the courts have ruled that the staff cannot transfer because their time cannot be split out across several employers. However, in this EU case (ISS Facility Services NV v Sonia Govaerts & Atalian NV (formerly Euroclean NV)), it was held that in this situation staff can potentially transfer to multiple new employers.

TUPE is a complex area and this new ruling is perhaps not particularly welcome. Earlier this year, an Employment Tribunal gave a non-binding decision that the TUPE Regulations could potentially apply to workers as well as employees – although there is no prior precedent for this. It is to be hoped that, once Brexit is concluded, the government addresses these two new issues and simplifies the TUPE Regulations to make them easier to understand and more commercially viable to comply with.

We hope you have enjoyed this autumn update and that it’s been a useful read. If we can help you with any HR or employment law matter, please get in touch.