Employment Law Update – November 2020
Thursday 12th November 2020
FURTHER GUIDANCE RELEASED FOR EXTENDED FURLOUGH SCHEME
On 10 November, HMRC published updated guidance on the extended Coronavirus Job Retention Scheme (CJRS) which contains some important points which employers need to bear in mind as, in certain respects, they represent a shift in approach.
Confirmation of points we already knew
- Employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month
- The extended scheme is open for employees who were employed on 30 October 2020
- It is also open for employees who were made redundant or stopped working on or after 23 September 2020 if they are then rehired
- Employers do not need to have previously claimed for an employee before 30 October 2020 to claim for periods from 1 November 2020
- Employers can furlough employees for any amount of time and any work pattern
- Claims can be made for periods ending on or before 31 October 2020 until the deadline on 30 November 2020
- There is no maximum number of employees that an employer can claim for from 1 November 2020 (unlike before where employers could only claim for the number of employees they had claimed for prior to June)
- Employers must confirm in writing to the employee that they have been furloughed, and keep a written record for five years
What’s new or unexpected
- Furlough pay during notice may no longer be possible from 1 December*: the guidance contains the following note which is very telling: “The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November”
- Employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before this Friday, 13th November
- Employees returning from maternity leave need to give the statutory eight weeks’ notice to end maternity leave early in order to then be furloughed (furlough pay is typically higher than SMP) – note that we have previously taken the view that employer and employee could waive the 8 week notice requirement but this option isn’t mentioned in the guidance and the clear inference is that such a scenario is not allowed: “If your employee decides to end their maternity leave early to enable them to be furloughed (with your agreement), they will need to give you at least 8 weeks’ notice of their return to work and you will not be able to furlough them until the end of the 8 weeks”
- Publication of names of employers using the scheme: the guidance states, “From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards”.
*it seems we will not know until later whether this will apply to those already on notice where notice has been given before 1 December, or whether it applies only where notices are issued from 1 December. As the guidance merely talks about “claim periods starting on or after 1 December 2020”, the suggestion is that it will apply regardless of the date of issue of the notice. It will be what it will be so in reality this should not impact employers’ plans.
EMPLOYER NOT LIABLE FOR EMPLOYEE’S PRACTICAL JOKE GONE WRONG
In Chell v Tarmac Cement and Lime Ltd, the High Court considered whether an employer was liable for an injury caused to a third party after an employee’s practical joke went wrong.
The claimant (C) was a subcontractor working for Tarmac (T) on their premises. One of T’s employees carried out a practical joke, setting off explosive pellet gun targets close to C’s head by hitting them with a hammer and causing C to suffer permanent damage to his hearing. C alleged that he was targeted due to tensions between the workforce and subcontractors.
C claimed that T was directly and vicariously liable for the employee’s actions on the basis that T should have risk assessed for the foreseeable risk of injury arising from the tensions between the two groups, and that T was responsible for the actions of the employee.
In coming to his decision, the Judge considered that the pellet gun target was not work equipment and had been brought on site by the employee, using the pellet gun targets formed no part of the employee’s normal duties, hitting the target with a hammer as a practical joke did not advance the employer’s goals, and the fact C and the employee were on T’s premises at the same time only provided opportunity for the practical joke rather than the it being within the employee’s usual activities.
Notwithstanding the tension between the workforce and subcontractors, there was no suggestion of fear for the safety for any individual. The Judge found that there was no foreseeable risk of injury, so there was no duty for T to risk assess to that effect.
It was held that the employer was not liable, directly or vicariously, for the employee engaging in the practical joke as the employee was on a ‘frolic of his own’ and the joke was outside the ordinary course of his employment.
This case highlights that practical jokes are likely to be outside the scope of activities that employers should carry out risk assessments for and that, provided they are not connected with the employee’s usual duties, employers are unlikely to be found directly or vicariously liable for injuries arising when they go wrong.
NATIONAL MINIMUM WAGE: TRAINING COSTS CAN BE REDUCTIONS
The recent case of Commissioners for HMRC v Ant Marketing highlights that, when calculating whether the national minimum wage (“NMW”) has been paid, deductions for the cost of training is expenditure ‘in connection with employment’ and so may be treated as ‘reductions’. This means that if training costs are deducted, and this takes employee pay below the NMW, the employer is in breach.
This is the case even if the deductions are a contractual liability, are contingent on the event of an employee leaving within a certain time period, or only represent a proportion of the training costs incurred by the employer. Where training is mandatory, the expenditure is much more likely to be regarded as ‘in connection with employment’ (and therefore treated as a reduction for NMW purposes). However, deductions for non-mandatory training may also be treated as a reduction, depending on the circumstances.
If a worker has not been paid NMW, they can enforce their entitlement by making a claim for breach of contract or for unlawful deduction from wages, HMRC can enforce the worker’s entitlement by issuing a Notice of Underpayment, and/or the employer may be guilty of a criminal offence if it has refused or wilfully neglected to pay the worker their entitlement.
Where employees are paid NMW (or close to it), employers must bear in mind the consequences of any deductions from those wages. Deductions made for training, even where not compulsory or are only payable in the event the employee leaves employment, may be treated as reductions and cause the employee’s pay to drop below NMW. This can have serious financial and criminal consequences for employers.
A FAILURE TO DO SOMETHING CAN BE A BREACH OF TRUST AND CONFIDENCE
In Nair v Lagardere Sports and Entertainment (UK), the High Court highlighted that a failure by an employer to do something can amount to a breach of the implied term of trust and confidence, just as a positive action can.
Employment law requires employees and employers not to conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence between them. This case highlights that ‘conduct’ can be passive, taking the form of a failure to something.
The claimant was employed by the World Sports Group (WSG) from 2006 and sought bonus payments of over $25m from WSG Hong Kong and WSG Singapore. He moved to the defendant (another company in the WSG group) in 2015. He claimed he was strung along in respect of the bonus payment until he had enough and resigned in 2017.
He then brought a claim for breach of contract against the defendant in relation to the bonuses, arguing that the implied term of trust and confidence required the defendant to take reasonable steps to ensure that WSG Hong Kong / WSH Singapore paid the bonus.
In dismissing an application to strike out the claim, the judge noted that the test was whether in all the circumstances the employer conducted itself so as to destroy or seriously damage the relationship of trust and confidence without reasonable or proper cause. That conduct could take the form of a failure to do something, although whether a failure is a breach of the term will depend on the facts.
This is not a change of the law but a useful reminder that a failure to act can result in employees resigning and successfully claiming constructive dismissal. Things such as failing to deal with a grievance, failing to make a payment, failing to make reasonable adjustments or failing to deal with alleged bullying/discrimination can all result in employees successfully claiming constructive dismissal.
If you require any further information on the above developments please do not hesitate contact one of our employment law experts below.