Author: Ilinca Mardarescu

The Furlough scheme has been a life-line for both businesses and employees alike during lockdown.  Sadly however, there are those that have tried to take advantage.

The CJRS has changed in scope a few times over the past few months.  We are currently at the stage where employees are allowed to work part-time and also be on Furlough part-time, if that is what the business requires.  This was not always the case however when Furlough was introduced.  At the start of the scheme, any employees on Furlough were categorically not allowed to work for their own employer.  Indeed, even now HMRC is clear that employees who work part-time and are on Furlough part-time must not carry out any work on the days they are Furloughed.

The reason is simple.  HMRC has confirmed that more than £27.4bn has been claimed through the CJRS.  But, this money is taxpayer’s money and HMRC has also confirmed, in no uncertain terms, that it will be investigating any allegations of fraud in relation to the CJRS.  Indeed, HMRC have set up a hotline to report fraud and it says it has received more than 4,400 reports of suspected fraud linked to the scheme up until the end of June.

The much-publicised recent arrest of a Solihull man in relation to CJRS fraud should also make employers think twice.  Computers and other digital devices were seized, and funds held in a bank account relating to his business have been frozen.

A further eight men from across the West Midlands have been arrested as part of a linked investigation, which involved the deployment of more than 100 HMRC officers to 11 locations. Further computers and other digital devices have been seized here as well as business and personal records.

This is a clear indication by HMRC that they will be looking at any suspected cases and following up any “tip-offs” they may receive.

The government is fully aware of this issue and have given employers a grace-period to get their house in order.  The Finance Bill (will receive Royal Assent later this month) will trigger the start of the 90 day period for businesses to notify HMRC that they received furlough scheme payments which they were not entitled to receive or retain.  Mistakes may happen when processing but clearly now is the time to revisit this issue and make sure any payments received where lawful and in accordance with the scheme rules. 

For any assistance with this or any other employment-related query, please do not hesitate to contact our Head of Employment, Ilinca Mardarescu.

The Chancellor yesterday announced a number of financial measures to get the country back on track and spending.

Crucial amongst this was of course his announcement regarding the CJRS, or Furlough as it is widely known.  

Currently, approximately 9.3 million workers are having 80% of their salaries paid for by the government (up to the £2,500 a month threshold) under the furlough scheme.  The scheme has been extended to October, but with increased employer contributions being tapered between now and the end of October.

As employer contributions start to increase businesses may well start considering redundancies, and the Chancellor is well to aware of that.  However, he rejected calls to extend the scheme citing the fact that the longer people are out of work the more their skills could “fade”.  Instead, he has tried to encourage businesses to keep on employees by awarding them with a £1,000 bonus for every staff member kept on for three months from when the furlough scheme ends in October.

He clarified that this means businesses will only receive the bonus if they pay the employee throughout November to the end of January.  Furthermore, the employees must be paid at least £520 on average, in each month.  

Whether this will be enough to prevent businesses from making redundancies only time will tell. 

For advice on any aspect of ensuring a safe return to work for staff, or any other employment queries, please contact our Head of Employment, Ilinca Mardarescu.

Employers are increasingly looking at ways of saving costs and there has been much in the media about companies requiring their staff to accept a reduction in pay.  But, is this lawful?  And what should you do as an employee if the question has been raised?

Your salary is a fundamental term of your employment contract so an employer cannot simply change that without your agreement.  However, there may be repercussions if you refuse to accept a change – such as redundancies.

When considering the issue of a reduction in wages both employers and employees should try to work together if possible.  Issues which need to be considered are:

• Has a proper consultation taken place?
• Is this happening company-wide?  If not, why not?
• Can an end date be agreed so that the reduction only lasts for a certain period?
• If a reduction in wages is required, will there also be a reduction in hours worked?  Or in respect of targets where appropriate?
• Has everything been clearly recorded in writing?

It is also important not to fall foul of the current National Minimum Wage legislation.

Reduction in wages is often a very emotive subject for employees who rely on their wages to pay their bills.  It is therefore crucial it is handled correctly to avoid the employee making a claim of unfair/constructive dismissal or breach of contract.

For advice on this or other employment queries, please contact our Head of Employment, Ilinca Mardarescu

We have all heard about the imminent changes to the Coronavirus Job Retention Scheme (“CJRS”).

Here is an easy-to-follow guide setting out the financial changes over the coming months.  

The important point to note is that employees who are “on furlough” will continue to be entitled to receive 80% of their wages (up to £2,500 per month).  What is changing is who will be paying for this.

July August September October

CJRS contribution – wages	80% (up to £2,500)	80% (up to £2,500)	70% (up to £2,187.60)	60% (up to £21,875.00)
CJRS contribution – Employer’s contribution pension and NIC	Yes	No	No	No
Employer contribution – wages			10% up to £312.50	20% up to £625
Employer contribution – pension and NIC	No	Yes	Yes	Yes

Employers can still choose to top up employee wages above the 80% total (and £2,500 cap) should they wish of course. 

Despite the above increased contributions employers will now be able to ask staff to work for them on a part-time basis whilst also being on furlough.    Employers will have to pay the employees for any hours worked and the wage cap above will need to be calculated on a pro-rate basis.

For any assistance with this or any other employment related query, please contact our Head of Employment, Ilinca Mardarescu. 

Redundancy occurs where an employees’ dismissal is:

• wholly or mainly attributable to the fact that the employer has ceased or intends to cease to carry on the business for the purposes of which the employee was employed, or in the place where the employee was employed; or
• due to the fact that the requirements of the employer for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed have ceased or diminished or are expected to cease or diminish.

The crucial question therefore is whether the requirements for employees to do that type of work has ceased or diminished. So, the amount of work needed to be done might remain the same (or may even increase) but if it can be done with less people (perhaps due to the increase of the use of technology) then there is a redundancy situation.

Examples of genuine redundancies include:

• the work the person does is no longer needed due to a downturn of business, a new line of work which requires a different skill set, or new processes or technology being introduced;
• the employee’s job no longer exists because the work is being done by other employees;
• the workplace has closed because the employer has ceased trading or has become insolvent; or
• the employer’s business, or the work the person is doing, moves to another location.

Employers may try to claim that the reason for the termination of an employee’s role is redundancy but this needs to be clear on the facts/evidence.  Redundancy should not be used as an excuse to terminate the employment of an employee for other reasons.  Any redundancies based on an employee’s pregnancy, race, religion or other discriminatory factor will be automatically unfair and may also give rise to a claim of discrimination. 

Even where such genuine redundancy situations exist, employers must still follow the correct redundancy procedure or they risk the redundancy being deemed to be an unfair dismissal.

Employers will need to follow a specific redundancy procedure which shows the employer acted fairly.  This means employers will need to:

• identify the relevant “pool” of employees which are likely to be affected by the redundancy;

• decide upon a fair selection process and be able to clearly show how this will work;
• enter into a period of consultation with employees where the above information is discussed and finalised;
• undertake the selection process and hold individual consultation meetings with each employee to discuss whether or not they have been provisionally selected for redundancy. 
• The consultation meetings for those that have been provisionally selected for redundancy should also include discussions about whether it would be possible to avoid redundancies somehow (potentially by redeploying them into suitable alternative roles internally or considering any other suggestions put forward by employees). 

Consultation periods will vary in time and there is no set time period for how long consultations should take when there are only one or two employees being made redundant.  However, the minimum time period for larger redundancies is set as follows:

• For 20-99 proposed redundancies – 30 days minimum consultation.
• For 100 or more proposed redundancies -45 days minimum consultation.

There is no statutory right to appeal your redundancy. However, it is good practice in accordance with the ACAS guidelines and if there is a contractual dismissal policy or a procedure set out in an employee handbook for instance not following this could mean the termination would be classed as unreasonable resulting in a finding of unfair dismissal, or in some cases could amount to a breach of contract claim.

The above is a general guideline and it may be appropriate in some circumstances to consider offering voluntary redundancies first or consider “bumping”.  Bumping occurs when an employee whose role is not at risk of redundancy is nevertheless dismissed and the vacancy left is filled by an employee whose original role was redundant. The dismissal in this scenario is still considered to be by reason of redundancy.  Employers may wish to consider a bumping redundancy as a way to retain more skilled and experienced employees within the business.  Tribunals have held that whether or not there is an obligation to consider bumping in a particular case depends on number of factors including how different the two roles are, the qualifications of the employee at risk of redundancy, and whether or not the other employee would take voluntary redundancy.

In practice, it is important to invite employees to consultation meetings in the correct way (i.e. in writing and allowing them to bring with them a trade union rep. or colleague with them should they wish).  In larger consultations, employee representatives will need to be appointed.

For more specific advice on anything to do with redundancies please contact our Head of Employment, Ilinca Mardarescu.

Late on Friday 29th May we heard a bit more about how the CJRS will run in the next few coming months. Whilst the Treasury Directive and Employer’s Guidance has not yet been published, the main points are as follows: 

– The last day on which any new employees can be placed on Furlough will be 10th June. 

– From 1st July employers will be able to ask employees to come back to work on a part-time basis without it affecting their entitlement to Furlough. This means that employers could, for example, ask an employee to work 2 days per week and be on Furlough for the remaining 3 days per week. As businesses open up more I predict this will be highly utilised. 

– From August, employers will be unable to claim back NI & pension contributions. This will have to be paid for by the employer as normal.

– From September, employers will need to contribute 10% of an employee’s wages (so the government will only reimburse 70% of wages up to a max. of £2,190). 

– From October, employers will need to contribute 20% of wages (so the government will only reimburse 60% of wages up to a max. of £1,875). 

The scheme will close for good on 31st October 2020.

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

For any assistance on implementing any of these changes, please contact our Head of Employment, Ilinca Mardarescu 

What seems like a long time ago now, the government promised that statutory sick pay (SSP) will be payable from day 1 of illness (as opposed to from the 4th day of sickness as is usually the case) if the reason for the illness is coronavirus.  Employees are also entitled to SSP if they are shielding on the advice of the government or if they have to self-isolate because they are living with someone who has symptoms.  

In addition, the government have just now extended the entitlement to SSP to people who have been told to isolate under the new “Test and Trace” system which has just been announced.  

To date, it has been up to the employer to pay this upfront and claim the payments back at a later stage.  The government has finally published its guidance for employers on how to claim this back including what information they will need.  Employers have been reminded that they must keep records (which HMRC may later insect) for 3 years at least which must include:

• the dates the employee was off sick
• which of those dates were qualifying days 
• the reason they said they were off work – if they had symptoms, someone they lived with had symptoms or they were shielding
• the employee’s National Insurance number

They have also released an online check to see whether employers are eligible for a rebate.  

This can be found at:

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

For any assistance on claiming these rebates or calculating SSP, please contact our Head of Employment, Ilinca Mardarescu 

Settlement agreements, or compromise agreements as they used to be called, are increasing in popularity.   Employers now routinely use settlement agreements when parting ways with an employee.  By and large, they can provide both parties with peace of mind in an uncertain time.  They can be used in a variety of situations although they are most commonly used when an employer terminates the employment of one of its employees.  The reason for the termination may be due to a disciplinary or performance matter, a redundancy situation or other termination.  Settlement agreements can (more rarely) be used to resolve issues such as where there have been grievances or complaints but the employee is still employed or changing a term of the employee’s contract. 

The essence of a settlement agreement is that an employee gives up the right to make a claim against the employer in return for financial compensation (and/or other benefits such as an agreed reference).

How settlement agreements arise

Most of the time an employer brings up the possibility of a settlement agreement in confidential or “without prejudice” discussions with the employee.  Often, a redundancy consultation has begun or performance issues have started to be investigated.   The settlement agreement is often raised as an alternative to continuing with the correct procedures.  

At times, employees may wish to leave and will request a “package” which, if agreed, will be in the form of a settlement agreement.

Things to watch out for

A well drafted agreement will specify what claims the employer believes you have.  Most agreements however will often try to exclude all claims  – even those an employee does not know about.  This is unlikely to be enforceable but your adviser will discuss this with you in detail.

The reason for the termination could also be important to some if they have some sort of income insurance so this should also be discussed with your adviser.  This may well be relevant for benefits also.

You should discuss any other benefits you are entitled to with your adviser so these can be included in the agreement.

Tax free payments

Whilst contractual payments such as accrued but unused holiday pay or notice must be taxed as usual, some payments can be paid tax free. The first £30,000 of a redundancy or ex gratia payment can often be free of tax and National Insurance.   However, the tax regulations are complicated and specialist advice on this is crucial. 

Other benefits

An agreed reference can often be an important factor for employees when considering whether to accept a settlement agreement.  Other benefits include matters such as the employer paying for outplacement counselling or an agreed announcement to staff and/or clients. 

Legal advice 

For a settlement agreement to be valid, employees must have taken ‘independent legal advice’ from a ‘relevant independent adviser’. The adviser can be a solicitor or barrister, or in some cases a trade union official or a worker in an advice centre such as a Citizens’ Advice Bureau. The adviser will need to have insurance covering any claim arising from the advice given to their client and they will need to sign a separate certificate confirming this.  Because a settlement agreement is not valid without such legal advice employers routinely offer to pay for the employee to receive this legal advice (up to a set maximum) so there is rarely any cost to the employee.

It is important that you tell your adviser everything there is to know so that they can properly advise you.

For further advice on offering or accepting settlement agreements, please contact our Head of, Ilinca Mardarescu.

ACAS has published new guidance on best practice when conducting disciplinaries and/or grievances during these unprecedented times.

Many employees are currently on leave, have been Furloughed or are simply working from home.  But following the correct procedures for disciplinaries and grievances is still important – and non-compliance can potentially incur an increase in any award should a matter proceed to the Employment Tribunal.  However, whilst it is important to follow ACAS guidelines as much as is practical at the moment, it should also be noted that these are guidelines only.  

ACAS has clarified that an employer can continue with disciplinaries or grievances but must do so in line with current public health guidelines (i.e. social distancing).  It has also advised that employers should give careful consideration to the health and wellbeing of its employees when deciding whether and how to proceed at this time.

Continuing with a disciplinary or grievance may require telephone or video conferencing where employees are working from home or have been Furloughed.  Employers should therefore consider whether this can be done fairly.  Issues such as whether everyone has the right technology to hand, whether this method would affect disabled employees more, allowing for extra time, being mindful or others in the house and how such methods would affect witnesses or companions should all be discussed.

ACAS has clarified also that Furloughed employees can still raise a grievance, attend as a witness or companion and even be asked to attend a disciplinary hearing but that they should agree to do so and all public health guidance should be followed.

Ultimately, an Employment Tribunal will always consider whether an employer acted reasonably in all the circumstances taking into account the size and nature of an employers’ business.

For any assistance with arranging and conducting either disciplinaries or grievances during lockdown and beyond, please contact our Head of Employment, Ilinca Mardarescu.

The phrase “a new normal” is probably the most used phrase of 2020 so far.  We are all being told that even when lockdown starts easing, our lives will not simply fall back into what it used to be.  

Amongst the many changes a lot of us are experiencing is the new working from home (WFH) regime.  Some have been more used to doing this pre-lockdown but even those people have been used to being able to network and have face to face meetings whilst WFH.  In these new times, we are required to stay at home with little or no other human contact.  All our meetings are online and Zoom, Teams and other platforms have seen a marked increase.

We have all seen various articles giving employees tips and tricks on how to effectively WFH.   These are to be commended as we are all getting used to a new way of working.  

Here I highlight 5 tips for employers to ensure WFH runs smoothly for their employees.

1. Equipment

It goes without saying but in an office environment people have a dedicated desk, a suitable chair (set at the correct height and position) and all the equipment and technology one needs within easy reach.  This is not always as straight forward when employees are WFH.  Some may not have a separate room to set up as an office – some may only have their dining room table.  Assisting employees with getting set up – and encouraging them to have a dedicated work space where possible will – greatly increase morale.  This includes having open discussions about broadband speed (inadequate broadband can be demoralising for the best of us!), how to work online scanners and apps and having the correct phone package.

2. Keep the lines of communication open

If you are used to being able to pop in to the office next door, having your employees scattered out of sight can hamper the usual lines of communication which can often lead to productive brainstorming.  Employers should remember that employees may feel reticent to call up their manager/boss/employer with small queries so it should be a regular part of your routine to check in all your direct reports.  This doesn’t always need to be in the form of a phone call.  And not necessarily always strictly work-related.  Share an interesting article, send a text asking how they are doing, call them up when you know they have just finished a project. 

3. Structure, lists and targets

Let employees know that whilst you appreciate life and the way everyone works has changed (especially now with children also at home!) the working day is just that.  In order to keep motivated, setting a structure in place and encouraging the use of daily lists can be beneficial.  It helps employees feel that they have achieved their objectives.  Similarly, setting targets can help both you and the employee know where they stand.  Employees should also be encouraged to dress appropriately (within reason) especially if they will be undertaking video meetings with clients.  In the same vein, employees should be encouraged to switch off their computers at lunchtime and take a break – this can be even harder to do when WFH but is equally as important.

4. Praise and reward employees

If number 3 above is utilised properly employers and managers should be able to easily see when their employees have been working well and completing daily tasks.  In “real life” a quick well done would have been easier face to face but an acknowledgement and/or praise is still crucial now when WFH.  It can assist employees in being motivated as much as anything else and will give them a sense of accomplishment.

5. Be “visible”

WFH should not mean out of sight.  With the advent of so many online and communication platforms it is important for all to stay in touch – not just for work but for the human interaction.  Your employees need to feel like a team – and employers, managers and bosses are as much a part of that team as anyone.  Friday “virtual drinks”, online quizzes or just a lunchtime Zoom chat can help all feel connected.

For any assistance with the practical working of these or any employment-related questions, please contact our Head of Employment, Ilinca Mardarescu.