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Welcome to our monthly newsletter, with a summary of the latest news and developments in UK employment law. A PDF version of this newsletter can be accessed here.

This issue will provide recent case law updates, law reform and legislative developments, COVID-19 updates and any other news over recent weeks.

Case law updates

Collective redundancy consultation: The European Court of Justice (ECJ) has ruled on the reference period and threshold numbers required for the Collective Redundancies Directive, and has concluded that where the threshold number of dismissals is met at any point across the relevant reference period, then dismissals occurring both before and after that point are subject to collective consultation rules. This raises questions as to whether section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), which applies the Directive in the UK (and which excludes the need to count employees whose proposed dismissal consultation has started) is compatible with the Directive. In the absence of amendments to TULRCA to clarify the situation, employers planning redundancies will need to have this case in mind, with an understanding of past redundancies as well as anticipated ones, when assessing whether the relevant thresholds for collective consultation are met. [UQ v. Marclean Technologies – NB: no English transcript is currently available]

Discrimination: The Court of Appeal has upheld the ‘cost plus’ basis for seeking to justify indirect discrimination, i.e., cost savings alone cannot be a legitimate aim and will rarely succeed as a defence, although it may be a factor where there is ‘something else’ (including where an employer is subject to financial constraints and is required to reduce its costs). Although not changing established principles, this case acts as a reminder that cost in itself should not be relied upon to rationalise potentially discriminatory practices. Incidentally the court also said that the phrase ‘cost plus’ should be avoided as inelegant. [Heskett v. Secretary of State for Justice]

Health and safety detriments: Following a judicial review, the High Court has held that the UK failed to properly implement the EU Health and Safety Framework Directive in the Employment Rights Act 1996 when only providing protection against detriment on health and safety grounds to employees and not also to workers. The Independent Workers’ Union of Great Britain, which initiated the proceedings, is calling for the government to urgently amend UK legislation to reflect this decision, which would significantly expand the scope of protection at a time when health and safety is particularly pertinent. [HC: IWUGB v. DWP]

Settlement agreement – COT3: Where arguments are being made to set aside a COT3 settlement due to misrepresentation, it is permissible for the tribunal to consider without prejudice communications. [Cole v. Elders Voice]

Summary termination: A firm was entitled to rely on a self-employed stockbroker’s repudiatory breach of contract to summarily terminate their relationship, notwithstanding the firm also having committed a repudiatory breach. [HC: Palmeri v. Charles Stanley & Co]

Tribunal hearings: An appeal against a decision to hold a merits hearing in person rather than remotely during the pandemic has been dismissed, reiterating the strong case management discretion held by judges. [Omooba v. Michael Garrett Associates]

Tribunal procedure – applications to amend pleadings: The Employment Appeals Tribunal has provided detailed guidance on the procedure to be followed when considering applications to amend, including how arguments in support of such an application should be approached, the matters to consider before such an application is made, and the importance of showing the consequences of the amendment being refused. This also reminds us that the tribunal has wide case management powers, and the appellant courts will seldom interfere. [Vaughan v. Modality Partnership]

Whistleblowing: The Court of Appeal has upheld the principle that multiple separate communications taken together could amount to a protected disclosure even if none of them, taken separately, would do so. Whether it is appropriate to take this approach is a matter of common sense and fact dependent, and it is not necessarily an error for the tribunal to fail to consider the composite approach. In the present case, the claimant failed to clarify which of his 37 communications should be grouped together, and the specific protected disclosure which arose from that combination. [Simpson v. Cantor Fitzgerald Europe]Continue Reading UK Employment Law update – December 2020

Over recent weeks, the UK government has announced the first steps it is taking to get businesses up and running again in the wake of the COVID-19 pandemic. This publication highlights a number of key areas for UK employers to consider as they start to plan ahead to re-establish and maintain their businesses, while at the same time ensuring that they comply with their legal obligations towards the workforce. While the considerations are plentiful, this guidance focuses on health and safety, human resources, and workplace planning and management.

To view the publication, please click here. We would be delighted to answer any questions you may have. Please feel free to speak to any of the key contacts mentioned in the publication or to your usual Reed Smith contact.Continue Reading Preparing for a post-COVID-19 return to the workplace: what do UK employers need to think about from a health and safety and HR perspective?

On 20 March 2020, the chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme (the Scheme) as part of the UK government’s measures to help support businesses through the current COVID-19 pandemic. We have seen various iterations of guidance on the Scheme (on 26 March, 4 April, 9 April, 15 April and 17 April), and on 15 April 2020, a Treasury Direction was issued setting out the legal framework. Here is the updated position, as at 20 April 2020.

About the Scheme

What is the Coronavirus Job Retention Scheme? It is a temporary scheme announced by the UK government on 20 March 2020 as part of its package of measures to help support businesses through the current COVID-19 pandemic.

What does the Scheme do? The Scheme allows an employer to designate certain individuals who are paid wages via the Pay As You Earn (PAYE) system as ‘furloughed’, keeping them on payroll but not requiring them to work. The employer can then seek reimbursement of some of its labour costs from the government (see below).

How is the Scheme accessed? Reimbursement is via an HMRC portal which went live on 20 April 2020.

When does the Scheme start? It will be backdated to start from 1 March 2020 and will run for an initial period of four months, but may be extended. Employers can use the Scheme at any time while it is open.

Is the Scheme compulsory? It does not appear to be a compulsory scheme; employers are not obliged to make use of the Scheme, and workers will need to consent to be furloughed if it means a change to their terms and conditions (see ‘Does a worker have to consent to furlough?’ below).Continue Reading Coronavirus Job Retention Scheme (updated position as at 20 April 2020)

On 20 March 2020, the chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme (the Scheme) as part of the UK government’s measures to help support businesses through the current COVID-19 pandemic. We have seen various iterations of  guidance on the Scheme (on 26 March, 4 April, 9 April, and 15 April), and on 15 April 2020, a Treasury Direction was issued setting out the legal framework. Here is the updated position, as at 15 April 2020.

About the Scheme

What is the Coronavirus Job Retention Scheme? It is a temporary scheme announced by the UK government on 20 March 2020 as part of its package of measures to help support businesses through the current COVID-19 pandemic.

What does the Scheme do? The Scheme allows an employer to designate certain individuals who are paid wages via the Pay as You Earn (PAYE) system as ‘furloughed’, keeping them on payroll but not requiring them to work. The employer can then seek reimbursement of some of their labour costs from the government (see below).

How is the Scheme accessed? Reimbursement is via an HMRC portal which is due to be live by the end of April 2020.

When does the Scheme start? It will be backdated to start from 1 March 2020 and will run for an initial period of three months, but may be extended. Employers can use the Scheme at any time while it is open. As HMRC is having to build its information technology infrastructure from scratch to administer the Scheme, there may be a delay in funds being available. It is expected to be operational by the end of April.

Is the Scheme compulsory? It does not appear to be a compulsory scheme; employers are not obliged to make use of the Scheme, and workers will need to consent to be furloughed if it means a change to their terms and conditions (see ‘Does a worker have to consent to furlough?’ below).Continue Reading Coronavirus Job Retention Scheme (updated position as at 15 April 2020)

What a month March has been! With the COVID-19 pandemic taking hold across the UK and globally, we’ve seen the UK government responding to the crisis by imposing increasingly restrictive limits on our activities, closing schools and workplaces, introducing emergency legislation within days, and announcing unprecedented levels of financial support. With updates and developments happening daily, it can be hard to keep up. So here’s a roundup of where we are, as at 1 April 2020, in respect of key COVID-19 issues affecting the workplace.

Workplace closures

On 20 March 2020, the prime minister announced that certain businesses (pubs, restaurants, cinemas, theatres, gyms, casinos, leisure centres, etc.) should close, and within days this was extended to businesses that were not providing essential services.

The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 came into force on 26 March 2020 detailing, specifically, which businesses must close (schedule 2), which can remain open (any business not listed in schedule 2), and which can remain open with limitations (schedule 1). This legislation will be reviewed every 21 days, with the first review due by 15 April 2020. Businesses failing to comply with this legislation face prosecution and fines.Continue Reading Coronavirus (COVID-19) monthly round up as at 1 April 2020

On 20 March 2020, the chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme (the Scheme) as part of the UK government’s measures to help support businesses through the current COVID-19 pandemic. Brief guidance followed after the announcement, with more detailed guidance released on the evening of 26 March 2020. There is a lot we still do not know, but here is the updated position.

 About the Scheme

  1. What is the Coronavirus Job Retention Scheme? It is a temporary scheme announced by the UK government on 20 March 2020 as part of its package of measures to help support businesses through the current COVID-19 pandemic. The aim of the scheme is to protect jobs and avoid redundancies in organisations whose operations have been severely affected.
  2. What does the Scheme do? The Scheme allows an employer to designate certain individuals who are paid wages via the Pay As You Earn (PAYE) system as “furloughed”, keeping them on payroll as an alternative to terminating their employment. The employer can then seek reimbursement of some of their labour costs from the government (see #2 under “Payments under the Scheme”).
  3. How is the Scheme accessed? Reimbursement is via an HMRC portal. In guidance released last week, the suggestion was that employers must notify HMRC which individuals have furloughed status, along with details of their earnings, although the updated guidance suggests a more general approach to claiming under the Scheme (see #1 under “Payments under the Scheme”). We expect to understand more about the process once the portal is launched.
  4. When does the Scheme start? It will be back-dated to start from 1 March 2020 and will run for an initial period of three months, but may be extended. Employers can use the Scheme at any time while it is open. As HMRC is having to build its IT infrastructure from scratch to administer the Scheme, there may be a delay in funds being available. It is expected to be operational by the end of April.
  5. Is the Scheme compulsory? It does not appear to be a compulsory scheme; employers are not obliged to make use of the Scheme, and workers will need to consent to be furloughed if it means a change to their terms and conditions (see #2 under “About furloughs” below)

Continue Reading Coronavirus Job Retention Scheme in the UK (updated position as at 27 March 2020)

Whilst the current COVID-19 pandemic has seen many businesses and industries suffer a significant downturn in work, for others the situation is reversed. Against this background, the UK government has announced further emergency legislation to relax the rules around the taking of annual leave.

Under normal principles in the Working Time Regulations 1998 (the WTR), annual leave entitlement must be taken in the holiday year to which it relates, with carry-over permitted in only very limited circumstances. However, with so many employees working to support the nation in the fight against the virus, the Working Time (Coronavirus) (Amendment) Regulations 2020 have been passed to amend the WTR.Continue Reading COVID-19 response: Changes to annual leave carry-over

On Friday 20 March 2020, the UK government announced a Coronavirus Job Retention Scheme (the Scheme) as part of its package of measures to help support businesses through the current COVID-19 pandemic. Following the announcement, separate guidance for employers and employees was issued but it is very early days in terms of understanding the detail of the Scheme; further guidance is expected in the coming days. What we know at the moment is:

  • The aim of the scheme is to protect jobs and avoid redundancies arising as a result of the coronavirus crisis.
  • The Scheme is available to any UK business, of any size and in any sector.
  • It will be backdated to 1 March 2020 and will run for an initial period of three months, but may be extended.
  • The Scheme allows an employer to designate certain individuals who are paid wages via the ‘pay as you earn’ (PAYE) system as ‘furloughed’, keeping them on the payroll as an alternative to terminating their employment.
  • It is thought that all workers paid through the PAYE system, and not just employees, could be furloughed and covered under the Scheme but this needs confirming.
  • There is no current guidance on how an employer selects individuals to furlough, nor how the scheme interplays with ongoing or upcoming redundancy activity.
  • The issue of consent has to be clarified. On the information currently available, workers who are not receiving 100 per cent of wages will need to consent to be furloughed. Where employers are making up the remaining 20 per cent of wages such that the worker is not out of pocket, there is an argument that consent is not needed.
  • It is clear that HMRC must be notified of the names of who has been furloughed.
    Continue Reading Coronavirus Job Retention Scheme as at 23 March 2020

The coronavirus outbreak has been declared an international public health emergency, and the current risk level in the UK has been set at ‘moderate’. There are no current signs of the spread slowing down, with an increasing number of positive tests in the UK and worldwide. On 3 March 2020, the UK government announced that