Finally, after weeks of debate amongst employment law practitioners and silence on the part of the Government, the question of whether employees can take annual leave whilst furloughed has been answered with a resounding “yes”.

The latest version of the Government’s guidance for employees confirms that employees can take holiday whilst on furlough and must be paid their usual holiday pay in accordance with the Working Time Regulations. That means employers will have to make an additional payment to top up wages to full pay for furloughed employees who take holiday during furlough leave.

Where employees wish to take holiday whilst furloughed, the usual rules for notification (in their contract of employment or the default rules under the WTR) will apply. An employer may refuse a holiday request by serving counter-notice, which must be given at least as many calendar days before the date on which the leave is due to start as the number of days which the employer is refusing.

An employer who would like employees to take some holiday entitlement during a period of furlough leave (perhaps to avoid operational difficulties later in the year) can give notice of a requirement to take WTR holiday. Notice must be at least twice the length of the period of holiday that the worker is being required to take.

If you would like advice on any of the issues raised above or assistance with drafting a furlough agreement, please do not hesitate to get in touch with us.

The Treasury has now published a formal detailed Direction to HMRC setting out how the Coronavirus Job Retention Scheme should operate. Full details can be viewed here

There is one aspect of the Treasury Direction which is of particular note.

The Direction provides that in order for an employee to be properly furloughed, there must be a written agreement between the parties confirming furlough leave, although this may be in an electronic form such as an email

This is significant as it appears to be inconsistent with the official guidance published by the Government which states that in order to be eligible for the grant employers must simply “confirm in writing to their employee that they have been furloughed.”

It is not clear from the Treasury Direction whether, if you subsequently obtain written agreement, a claim can be backdated to cover the period when you thought employees were furloughed but in fact may not have been.

If you would like advice on any of the issues raised above or assistance with drafting a furlough agreement, please do not hesitate to get in touch with us.

The available Government guidance on the Coronavirus Job Retention Scheme (which deals with furlough leave for eligible employees) was updated on 9 April 2020, just before the bank holiday weekend, and again this afternoon.

The link to the updated guidance is here https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme.

Firstly, the date on which an employee has to have been on the employer’s payroll in order to qualify for the scheme has been changed from 28 February to 19 March 2020.

Secondly, the updated guidance contains an important clarification concerning employees absent through sickness and furlough leave – important not least because it is an issue that will arise for many employers but also because it contradicts the previous indications on this issue.

The guidance now makes it clear that whilst the furlough scheme is not intended to deal with short-term absences from work due to sickness, employers who wish to place employees who are absent through sickness (or indeed have self-isolated or are ‘shielding’) on furlough leave are free to do so.

The important point appears to be that someone’s absence through sickness etc. should not be a consideration in deciding whether to furlough them. Employees should be furloughed on the same basis as their counterparts who are able to attend work. To do otherwise risks claims of discrimination.

It also means there is nothing to prevent employees who have been absent long-term through sickness (and may in some instances be receiving generous company sick pay) being placed on furlough leave.

The final update is less official and has come to our attention via a ‘tweet’ issued by HMRC Customer Support. The ‘tweet’ in question stated that it is possible to take annual leave when on furlough leave, and it must be paid at full pay. This is a useful indication of the likely position although we should stress there has been no official guidance as yet on the subject of taking annual leave whilst on furlough leave. Our view is that entitlement to normal holiday pay will most likely be limited to the statutory minimum annual leave of 5.6 weeks.

If you would like more advice on any of the issues raised above or in our Coronavirus FAQs (read here), please do not hesitate to get in touch with us.

Over the weekend, the Government has produced further guidance on the Coronavirus Job Retention scheme.

Key points include the following;

• Subject to any restriction in their employment contract, employees can start a new job when on furlough leave (meaning they could end up earning 80% of their old salary and 100% salary from a new job).
• In addition to basic salary, an employer can reclaim 80% of contractual commission owed to employees.
• Employers cannot however reclaim the value of non-monetary benefits such as a company car.
• Directors who are furloughed can still perform their statutory duties, but no other work.
• ‘Workers’ (as opposed to employees) who are paid through PAYE can also be furloughed and receive support through the scheme.
• Employees can be furloughed, brought back to work and then furloughed again multiple times however each period of furlough leave must last for a minimum of three weeks.
• An employer must notify the employee of their furlough status in writing and keep a record of the written notification for five years.

Further guidance can be found here

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

If you would like more advice on any of the issues raised above or in our Coronavirus FAQs (read here), please do not hesitate to get in touch with us.

Key employment law changes coming in to force on 6 April 2020

Further to our update at the beginning of the year, there are a key number of changes coming in to force on 6 April 2020 including legislation under the Good work plan.

Termination payments
All termination payments above the £30,000 threshold will be subject to class 1A NICs. If you are negotiating a settlement agreement or exit package this is something that both parties will need to consider as it places obligations on the employer and may result in a smaller financial sum for the employee.
Statement of terms for all workers
All workers, not just employees, will be entitled to a written statement of terms of employment from day one of their employment (or before), rather than within two months of starting. This information must also now include: details of all remuneration and benefits; any paid leave the worker is entitled to; any probationary period; the hours and days of the week the worker is required to work; and details of any training provided by the employer.

Changes to holiday pay calculations
The reference period to calculate a ‘week’s pay’ for those who do not have normal working hours or those whose pay varies will be extended from 12 to 52 weeks. If an employee has worked for less than 52 weeks then the reference period will be the number of weeks the employee has worked.

Changes to agency worker contracts
Employment businesses must provide agency work-seekers with a key information document before the terms under which they will work are agreed. The information to be given includes: minimum rate of pay; any deductions to that pay, how they will be paid and by whom; and annual leave entitlement.
The “Swedish Derogation” provision that appears in many agency workers’ contracts (which enabled businesses to opt out of equal pay requirements) will no longer apply. Temporary work agencies must advise workers of this in writing by 30 April 2020.

Statutory Parental Bereavement PayA new statutory right will apply from 6 April 2020 which entitles employees to take one or two weeks off work following the death of a child under 18 or a stillbirth. A new statutory payment, statutory parental bereavement pay, may be payable during parental bereavement leave, this will depend on the individual’s length of service and earnings.

Statutory Sick Pay and Family Related Pay
The statutory sick pay rate will increase from £94.25 to £95.85 and the statutory rate of maternity pay, paternity pay, adoption pay, and shared parental pay will increase from £148.68 per week to £151.20.

National Minimum Wage and National Living Wage
As of 1 April 2020, National Living Wage increased from £8.21 to £8.72 per hour for those aged 25 and over.
National Minimum wage increased as follows;
• For 21 to 24 year old the rate increased from £7.70 per hour to £8.20 per hour
• For 18 to 20 year old rate increased from £6.15 per hour to £6.45 per hour
• For 16 to 17 year old rate increased from £4.35 per hour to £4.55 per hour

We are likely to see further developments as the year progresses and as a result of the current Covid-19 pandemic, but you can put yourself in the best position by taking steps now to ensure you have the correct documentation and processes in place. We can do the hard work of reviewing and updating your contracts and policies, so get in touch and we would be happy to discuss how we can help you.

Employees are what makes a business tick but what happens when the employment relationship goes wrong?  Sometimes workplace relationships break down, issues with performance or conduct arise, disputes develop, and if these can’t be resolved internally or result in a dismissal, a tribunal claim may follow. 

Dealing with an employment tribunal claim can be costly and involve substantial management time and work, as well as being worrying for colleagues who are involved as witnesses, but there are steps you can take to minimise the chances of receiving a claim. 

Contracts and Policies 

When it comes to avoiding employment claims and protecting your business, there are no easy answers, however putting in place effective employment contracts and HR policies and applying them consistently is the first and most important step.  

The second step is to keep those contracts and policies up to date. Employment is an area of law where the goalposts are constantly being moved or removed, so a regular review of your contracts and policies will ensure that you remain compliant with current legal standards and requirements and minimise the risk of employment tribunal claims.

Training

Contracts and policies don’t work in isolation.  Ensuring that your managers are well prepared on how to, and more importantly how not to, deal with formal grievances, investigations and disciplinary hearings is a crucial step in preventing a straightforward matter from escalating into a tribunal complaint. There are a number of clear procedural stages that need to be carried out for a dismissal to meet the legal test of fairness – providing training sessions for managers will equip them with the relevant knowledge to follow the appropriate procedure. 

Training for employees on equality and diversity and the standards of behaviour you expect in the workplace is also important – conduct that some employees consider to be harmless may in fact make others feel very uncomfortable at work and may be unlawful. 

Equality and diversity training is also essential as part of a “reasonable steps” defence for your organisation in the event that a member of staff is harassed by a rogue employee.

The Human Element

An informal face to face meeting with an employee who has a concern, or about whom you have a concern, can work wonders if handled in a sensitive way. Where appropriate, a friendly, honest chat in the early stages can resolve a complaint before it develops into something more formal and if an employee feels they have been listened to and dealt with reasonably, they may be less likely to take the matter further. Similarly a word to the wise may lead to an improvement in performance or conduct without the need to take formal disciplinary action – if the problem persists you still have the option of moving to a more formal stage of the disciplinary process with the advantage that this will come as less of a surprise to the employee. 

The Letter from the Tribunal 

What happens if, despite your best efforts, you receive an employment tribunal claim?

You will often (but not always) have advance notice of an incoming claim in the form of a telephone call from an ACAS conciliator – all potential claimants must contact ACAS to discuss early conciliation before lodging a claim although there is no obligation on either party to pursue conciliation. 

In any event you should be on the look out for the arrival of a claim form – note that forms are not always sent to the right place or person so alert all managers.

Once the claim form lands, it is essential to take advice and act quickly – the time limit for responding to a claim is 28 days from the date it is sent out to you. Ignoring a claim is not an option, a failure to lodge a defence is likely to result in a default judgment being entered against you. You will need to gather all the relevant evidence and speak to the people involved as soon as possible so you are in a position to lodge the best possible defence. 

Our expert employment team here at Pannone Corporate can provide bespoke in house training and carry out contract and policy reviews, as well as supporting and advising you to defend tribunal claims. If you’d like to discuss any of these matters, or for advice on HR and employment law issues more generally, please don’t hesitate to get in touch with us on 0800 131 3355 or fill out our contact form.