Sunday, 5 April 2020


Since March 20th, when the Government set out a wide range of measures to help both employers and employees as a result of the Covid-19 epidemic, things have moved on apace. Rishi Sunak, Chancellor of the Exchequer, sought from the start, to tackle the likely hardship that employees will suffer and to help businesses to retain a workforce that it will be able to call on when business picks up. Thus avoiding mass redundancies.

Measures such as the deferral of VAT and income tax payments, a 12 month break for payment of business rates in some sectors, in addition to changes to SSP, have been brought in to assist businesses in the current climate. Importantly, the Government has also introduced the Coronavirus Job Retention Scheme (CJRS) which is discussed below. A new website has been launched to help businesses find out how to access the support: Coronavirus Business Support Website.

As the situation evolves, the Chancellor, to his credit, has taken steps to ensure that businesses do not suffer more than necessary from the inevitable time lag in some of the measures coming into force.

The Government has, for instance, at the time of writing ordered banks to grant emergency loans from more businesses after fewer than 1,000 were approved out of 130,000 enquiries. Sunak has just announced that he is barring lenders from demanding personal guarantees from all borrowers for all loans under £250,000.

Several banks had asked directors to put their homes or savings up as collateral and charged interest up to 30%.

Here are some of the latest questions about the CJRS Scheme:

Q: What is the CJRS Scheme and what does it cover?

CJRS will allow all UK employers (big and small, private and public) to apply for a grant to reimburse them for part of the salaries that they pay to those employees who are laid off because of the downturn in work (otherwise known as furloughed workers.) The furloughed workers will be on furloughed leave. During this time, they will continue to be employed by the employer but will not be allowed to work for a temporary period of time.
The CJRS will assist employers by reimbursing them up to 80% of the wages of each furloughed worker, up to a maximum of £2,500 per month (we will update you once the Government confirms whether this means £2,500 per month before or after tax.)

Q: When does the CJRS start and finish?

Our understanding is that the CJRS will run from April 2020 (date to be confirmed) but will be backdated from 1st March 2020 and is expected to run for at least three months.

Q: How can employers obtain a grant from the CJRS?

As we understand it, (1) employers will need to designate affected employees as furloughed workers and notify those employees of this change and agree this with them (2) employers will then need to submit information to HMRC about those employees who have been designated as furloughed and their earnings via a new online portal which is being set up (3) HMRC will then reimburse 80% of wage costs for furloughed workers up to a cap of £2,500 per month. Exactly when these funds will be available is currently unknown.

Q: Will employers have to pay the money back?

The word “grant” is used in all the guidance to date, which would suggest that the employer will need to pay the money back at some point, but that is not our understanding; it just seems that the Government could have chosen a better word to describe it, e.g. a “payment”. It was reported yesterday (4th April) an employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary. The 80% apparently does not include non-monetary benefits (eg the value of health insurance or a car

Q: Does the £2,500 monthly cap refer to basic or the employee’s take-home pay?

The Government has not stated whether this refers to basic pay or take-home pay. However, it would be reasonable to consider that the wages covered by CJRS would be applicable to the employee’s take-home pay.

Q: Does the employer have to make up the remaining 20% of the furloughed employee’s pay?

The guidance does not deal with this point, although it does state that an employer could “choose” to make up the difference but it is not obliged to. We do not feel that many would want to make up this difference in the circumstances.

Q: Would self-employed people get similar help?

Yes. The Bill which passed through the House of Commons includes provision for a new statutory self-employed pay. This will ensure that the net monthly payments of a self-employed or freelancer do not fall below 80% of that which they received in the previous three years.
Q: What about employee’s rights whilst they are furloughed?

As the contract of employment will continue, we anticipate that any rights and benefits (save those in respect of their pay,) will continue to accrue as usual. As such, employees would also continue to accrue holiday as they are furloughed.

Q: When will the new HMRC portal go live for employers so that they can apply for the grant?

HMRC are working to get this up and running before the end of April 2020. Hopefully it will be available before then.

Q: Can an employee start a new job when on furlough?

Yes. The guidance expressly allows this.

NOTE: Employers must notify employees of their furloughed status in writing and keep the record of that written notification for five years.

As clarification on matters is announced, we will update you as quickly as possible.

Thursday, 19 September 2019

Does Redundancy Pay Contribute to the 25k Cap on Contractual Claims?

No according to His Honour David Richardson of the EAT in Uradar v Lancashire Care NHS Foundation Trust [2019] UKEAT 0301_18_2006

The rationale for the decision can be distilled (very briefly) down to the fact that there were two very different causes of action; a statutory AND a contractual claim.

Interestingly, at paragraph 28 the statutory cap is derided for being anachronistic;

As we leave this case we would add the following comment. The statutory cap in the 1994 Order has remained unchanged for a quarter of a century. It seems only necessary to pass a statutory instrument to provide for a higher cap. The powers are now contained in Sections 3, 8 and 41 of the Employment Tribunals Act 1996. This case and the case of Eden to which we have referred, demonstrates that at its present level the cap is capable of producing real injustice. In order to bring the claim for a contractual redundancy payment before a Tribunal with relevant specialist experience, the two employees had to forego substantial parts of their contractual entitlement. If the statutory cap had been increased in line with inflation they would not have suffered these losses. The statutory cap is also out of step with the very much wider powers of the ET and in other areas of its jurisdiction.

Hopefully we shall see an adjustment of the statutory cap soon at least to level in step with inflation.

Friday, 5 July 2019

ECJ holds that employers must record daily working time

In the case of FederaciĆ³n de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE, ECJ 14.5.19 (C-55/18).The ECJ considered the extent of employer's record-keeping obligations in relation to the provisions of the EU Working Time Directive on maximum weekly working time and daily and weekly rest.

Article 31(2) of the Charter of Fundamental Rights of the European Union (‘the EU Charter’) provides: ‘Every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave.’ These rights are given effect by the EU Working Time Directive (No.2003/88), which requires Member States to take the necessary measures to ensure (among other things) that workers are entitled to a minimum daily rest period of 11 consecutive hours (Article 3); a minimum uninterrupted weekly rest period of 24 hours (Article 5); and a limit on average weekly working time of 48 hours (Article 6).

The ECJ concluded that, in order to ensure the effectiveness of the rights provided for by the Directive and enshrined in Article 31(2) of the EU Charter, Member States must require employers to set up an ‘objective, reliable and accessible system’ enabling the duration of time worked each day by each worker to be measured.

Wednesday, 26 June 2019

Attempt to enforce Re-engagement remedy with an injunction fails

It is a well trodden path that employment tribunals may order an unfairly dismissed employee to be re-engaged. It has also been accepted that the employer's failure to comply results in (not a particularly hefty) additional compensatory award.

The attempt by one clever lawyer to enforce that re-engagement order via an injunction has flopped in The Court of Appeal see Mackenzie v The University of Cambridge.

Lord Justice Underhill swiping the appeal 'over the boundary' commented (para 33):

The obligation is one that the statute does not intend should be specifically enforceable (s117 ERA1996) : the only remedy for non-compliance is the additional award. If that means that it is a rather unusual form of "order", so be it.

Friday, 15 June 2018

Supreme Court Rules on "Self-Employed" Plumber

The long - awaited Supreme Court ruling in the landmark Pimlico Plumbers case has upheld previous decisions that an ostensibly "self - employed" plumber was in fact properly classified as a "worker" with valuable employment rights under UK law (including discrimination protection and holiday pay).The ruling is important because of its the likely impact on a large number of individuals operating on a self-employed basis, including those operating in the "gig" economy. At the heart of the case (Pimlico Plumbers Ltd and another v Smith [2018]UKSC 29) was the employment status of Gary Smith, a plumber who worked on a self employed basis with Pimlico for approximately six years over 2005 - 2011. Both the Employment Appeal Tribunal and the Court of Appeal supported Mr Smith's position that he was a "worker" with limited, but often valuable, employment rights , including holiday pay. Pimlico Plumbers took the case to appeal in the Supreme Court.The comany has lost that appeal, with the Supreme Court supporting previous rulings that key aspects of Smith's working conditions meant that he cannot be classed as an independent self - employed contractor for employment law purposes. In the view of the Supreme Court, the fact that Pimlico exercised tight administrative control over Smith, imposed conditions around how much it paid him and on his clothing and appearance for work, and restricted his ability to carry out similar work for competitors if he moved on from the company, all supported the conclusion that he was a "worker" and not genuinely self-employed. The Supreme Court also noted that a main feature of his relationship with the company was that he would do the work personally, rather than pass it on to a substitute contractor, even though he did have the option to pass work to another Pimlico operative.

Tuesday, 22 May 2018

Royal Surrey County NHS Foundation Trust v Drzymala

A doctor was employed on a series of fixed-term contracts.Her last contract was not renewed because her employer decided to make a permanent appointment to the role she had been performing. She interviewed for the position but was unsuccessful after a competitive recruitment process. Her employer mentioned an alternative role in a lower ranking post but did not discuss it with her. The doctor was given three months' notice in writing of the end of her fixed term contract, without mention of a right of appeal or the possibility of alternative employment. She raised a grievance and requested an appeal against the termination of her employment. Her employer acknowledged that it should have offered a right of appeal against the non-renewal of her contract, but did not think that it would have changed the outcome. The doctor brought a succesful claim for unfair dismissal in the ET. Her employer appealed, arguing that informing her of vacancies as required by the Fixed Term Employee Regulations satisfied the requirements of fairness, or at least provided evidence in support of it having acted fairly.The EAT dismissed the appeal and concluded that compliance with the FTER doers not of itself create a defence to an unfair dismissal claim. The Tribunal was entitled to find that the dismissal was unfair due to the employer's failure to expand upon its initial discussion with the doctor regarding alternative roles, and not providing a right of appeal against the non-renewal of her contract.

Female Employee Wins £24,000 Discrimination Award

A female employee at DWP has been awarded £24,000 in compensation after she was discriminated against because of IVF treatment.In the case of Ginger v Department for Work and Pensions, the Employment Tribunal held that the DWP had discriminated against a female employee when a colleague asked her whether she could cope with a second child and when she was refused leave to take further IVF treatment. Mrs Ginger commenced her employment with the DWP in July 2009 , where she was employed as a work coach at Luton Job Centre.In 2011, she began a course of IVF treatment and gave birth to a son.In 2013 she began a further course of IVF treatment and in June 2014 she had a three-day absence from work for pregnancy - related /childbirth complications.In July 2014 she began a further course of IVF treatment and informed her then - manager, Mr Mills, that she may need time off at short notice for IVF treatment. At the end of September 2014, Mrs Ginger suffered a miscarraige and was therefore absent from work until January 14th, 2015. On January 15th, 2015 Mrs Ginger attended a return to work interview with Mr Mills.Mrs Ginger confirmed that she had been absent from work after suffering two miscarraiges , and that she was undergoing counselling due to her miscarraige.Mrs Ginger alleged that at this meeting Mr Mills stated to her "in order to have a miscarraige your pregnancy must be confirmed". Mrs Ginger subsequently made a claim for pregnancy discrimination in the Employment Tribunal, which upheld her claim as follows: In April, 2015 Mr Mills asked her if she could cope with a second child and whether it was a good idea to have further IVF treatment - the Tribunal found that this conduct amounted to direct sex discrimination, as the Tribunal held that Mr Mills would not have spoken to a man in this manner.The Tribunal also found that, as Mrs Ginger was refused leave in May 2015 to attend for further IVF treament - this conduct amounted to direct sex discrimination, as the Tribunal held that Mr Mills would not have spoken to a man in this manner. Ginger v Department for Work and Pensions 3401940/2015