Author: 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.

Sadly, most employers will find the time comes when one of their employee may contract coronavirus. In such a situation, is it best to Furlough or pay the employee SSP?

If your employee is on sick leave or indeed self-isolating as a result of Coronavirus, they’ll be able to get SSP, (subject to the usual eligibility conditions applying). The Coronavirus Job Retention Scheme Furlough) is not intended for short-term absences from work due to sickness. One of the main reasons for this is that the scheme places employees on Furlough in 3 week periods. Someone who is self-isolating may only need to be away from work for 14 days.

Additionally, the rules around SSP have been changed which mean if you are sick or self-isolating due to Covid-19, employers can pay employees from day 1 (rather than from the usual day 4).

Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, you want to furlough employees for business reasons and they are currently off sick, you can do so. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.

You can also furlough employees who are being shielded or off on long-term sick leave. It is up to an employer to decide whether to furlough these employees.

Employers should note of course that they can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not both for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill, needs to self-isolate or be shielded, then they might qualify for the SSP rebate scheme, enabling the employer to claim up to two weeks of SSP per employee.

Which to choose therefore will depend on how long you envisage the employee being away for, but SSP should generally speaking be the primary (and perhaps more apt) choice of the two.

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

Regular updates and new details on the Job Retention Scheme (aka Furlough) are published on an almost daily basis by HMRC currently.  

Here are some of the latest surprising, and not so surprising, developments:

1. The good news is that the HMRC portal is now working and in the testing stage.  HMRC have stated this will be open and running properly on 20th April. They have also clarified that they expect the first payments (once they have been processed) to be paid by the end of this month.
2. It has been clarified that directors can be Furloughed, and would be allowed to continue with any statutory duties, as long as they are not carrying out normal work for the Company.
3. Clarification has similarly been given as to what apprentices on Furlough can do.  Essentially, they are allowed to continue training/learning but cannot provide a service or generate revenue for the company they work for.
4. The situation regarding TUPE’d employees has been clarified.  Essentially, any employees who TUPE’d across to a new employer after 28th February will be eligible to be Furloughed.  Previously, HMRC had stated this would not be the case so this is no doubt a surprising, and welcome, clarification for some.
5. Lastly, a change to previously published guidance is that HMRC has clarified that employers can reclaim 80% of fees.  No detailed guidance has been published as to what the term fees encompasses but as HMRC had previously stated employers would not be able to reclaim fees, the change is no doubt welcome in any event.

If you’re keen to implement a furlough, or have further questions if you have been placed on furlough. Please don’t hesitate to contact our Head of Employment Law, Ilinca Mardarescu.

It wasn’t long ago that no-one had heard of the term “to be Furloughed”.  Now, it is one of the most common terms being used in employment law terms.

The term (which derives from the Dutch word Verlof), means to be granted a leave of absence and until recently was more commonly used for military personnel or services.  However, in these unprecedented times the Government have introduced the Coronavirus Job Retention Scheme (also known as Furlough Leave) to assist business with their staffing costs in order to prevent redundancies and job losses.  

In essence, HMRC will be paying a grant to employers for up to 80% of an employees’ wages (up to a £2,500 limit) where that employee has been asked to stay at home and not undertake any work.   

Guidance is being published on an almost daily basis as to how this will work in practice but recent guidance has confirmed some interesting (and welcome) new information in relation to voluntary work and second jobs.

Interestingly, the recent HMRC guidance has clarified that employees can start a new job when on Furlough.  This means that potentially an employee could end up earning 80% of their old salary under Furlough and then a further 100% from a new job which they take on.  It should be noted that this must still be allowed under the original contract of employment however so employees will need to check this (or seek their employer’s consent).  With the weather turning and farmers up and down the country desperately seeking help with their crops, now would be a good time for those on Furlough Leave to spend a month or two helping the nation whilst also earing themselves a little extra money.

Similarly, an employee on Furlough leave is able to volunteer.  Indeed, many in these challenging times have already started doing just this and it is heart-warming to see communities coming together and helping those more vulnerable.

There are few opportunities that many of us will have to make a real, tangible difference and impact in quite this way.  Most of us, in more normal times, need to work to earn a living. The Government’s scheme however may have a surprising outcome by allowing anyone on Furlough leave to spend a considerable amount of time volunteering and helping where it is needed most.  Social distancing is crucial right now but that doesn’t mean we can’t come together in different ways – for the good of the country.  

If you’re keen to implement a furlough, or have further questions if you have been placed on furlough. Please don’t hesitate to contact our Head of Employment Law, Ilinca Mardarescu.