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In response to a Financial Times article https://www.ft.com/content/55588f86-a4f8-4cf3-aecb-38723b787569 Kwasi Kwarteng, the new business secretary, has rejected the claims of Government plans to erode the working time directive and the 48 hour working week opt out.  https://www.theguardian.com/politics/2021/jan/14/government-rejects-report-it-will-lower-workers-rights-post-brexit

The House of Lords EU Services Sub-Committee, chaired by Baroness Donaghy, has launched an inquiry into the future of UK-EU relations on trade in services. This includes examining the impact of the provisions set out in the EU-UK Trade and Cooperation Agreement.

The Committee invites interested individuals and organisations to submit written evidence to this inquiry by 5 February 2021.

The call encourages anyone with experience or expertise of an issue under investigation by a select committee to share their views with the committee, with the full knowledge that their views have value and are welcome.

The Committee seeks evidence on the following questions in particular:

Cross-cutting issues:

1. What is the impact for trade in services of the UK and EU reaching a free trade agreement?
2. What effect may national reservations to the UK-EU Trade and Cooperation Agreement have on trade in services with the EU?
3. What effect will arrangements on the mobility of professionals have on trade in services between the UK and EU?
4. How will the intellectual property provisions set out in the Agreement affect UK-EU trade in services?

Financial services:

1. How will the arrangements in the UK-EU Trade and Cooperation Agreement shape UK-EU trade in financial services?
2. The Joint Declaration on Financial Services Regulatory Cooperation sets out that both sides seek to establish structured regulatory cooperation on financial services. What form should this dialogue take?
3. Given the plans to delegate more powers to financial regulators, what form of Parliamentary oversight of these regulators would be appropriate?
4. How might the financial services sector be affected by the changes in other, interrelated sectors?

Professional and business services:

1. How will the new UK-EU framework for the mutual recognition of professional qualifications affect professionals and service sector businesses?
2. What will be the impact of the Agreement’s provisions on the cross-border supply of services and rights of establishment, such as commitments on local presence and economic needs tests?

Research and education:

1. Under the future relationship agreement, the UK will become an associate member of Horizon Europe but will not associate with the Erasmus+ programme. What impact will this have on the UK’s research and education sector and students in the UK and EU?
2. What is your assessment of the Turing Scheme – the Government proposed domestic alternative to Erasmus+?

Creative industries:

1. How will the provisions in the UK-EU Trade and Cooperation Agreement affect the creative industries sector?

Data and digital services:

1. The EU has granted the UK a six-month data adequacy ‘bridge’ to allow the free flow of personal data until the EU determines whether or not to grant a data adequacy decision to the UK. How would the absence of a data adequacy decision at the end of this bridging period affect trade in services?
2. What impact will the arrangements agreed have on digital trade and trade in digital services between the UK and EU?

To participate in the call for evidence – please follow the below link:

https://committees.parliament.uk/call-for-evidence/373/future-ukeu-relations-trade-in-services/

If your business is located in Scotland please refer to specific Government guidance on homeworking published on the 13^thJanuary 2021.   Guidance released is to support the “stay at home” instruction and associated legislation which came into force in Scotland on 5 January 2021.

https://www.gov.scot/publications/coronavirus-covid-19-guidance-for-homeworking/pages/next-steps/

1. Accounts assistant berated ‘like a child’ in front of office was constructively unfairly dismissed

An accounts assistant who was led to the middle of an open plan office and “berated” in front of his colleagues for several minutes was constructively unfairly dismissed, the London Central Employment Tribunal ruled.

It found Liam Vaughan was subjected to “significant incidents of bullying” from management during his employment at Talbot Underwriting Services, concluding that the conduct of his employer, which did not offer any wellbeing support despite being aware of his treatment, was likely to “destroy or seriously damage the relationship of trust and confidence”.

2. Disabled fire station manager dismissed for ‘unacceptable’ attendance was discriminated against

A fire station manager dismissed because of his “unacceptable” record of attendance, which was linked to his disability, was discriminated against, the East London Tribunal ruled.

Mr A Hurle, who worked as a station manager for the London Fire Brigade (LFB) from 2 January 2019 until his dismissal on 24 October 2019, was discriminated against after he was subjected to a disciplinary procedure and ultimately dismissed for reasons linked to his mental health issues, the tribunal found. The judge said it was “completely inappropriate” to describe Hurle’s absence from work as “an offence”.

An LFB spokesperson said the organisation acknowledged the outcome of the tribunal. “We are committed to supporting the mental health and wellbeing of our staff and take our obligations under the Equality Act very seriously,” they said.

3. Worker asked if she had Alzheimer’s by manager wins age discrimination case

A tribunal found that Mrs M Crompton, who worked for Eden Private Staff from March 2018 until her dismissal in June 2019, was the victim of age discrimination after her manager made comments implying that her memory was “defective” because of her age and that she had Alzheimer’s that was linked to her poor performance.

The tribunal found the Alzheimer’s remarks were an act of direct discrimination because they would not have been made to a search consultant materially younger than Crompton. The judge added that, while the manager who made the comments “almost certainly saw her remarks as no more than office banter”, they still had the effect of violating Crompton’s dignity.

However, the tribunal ruled that her dismissal was because of her performance and was not connected to her age.

In a statement to People Management, Eden Private Staff said: “Our focus on internal training, rules and procedures has been sharpened to ensure nothing similar to this will happen in the future.  We regret that a member of our staff made an unfortunately phrased remark about forgetfulness intending it to be light-hearted and with no intent to offend.”

4. Pregnant worker told to resign after time off because of complications wins discrimination case

A customer service assistant who was told by her boss she should resign when complications with her pregnancy caused her to take time off work has won a claim for discrimination.

The East London Tribunal ruled that Mrs N Agarwal was treated unfairly by her employer, St John Freight System UK, after her boss told her she should resign because of her pregnancy and illness as a result of pregnancy. Additionally, the tribunal found the freight company had discriminated against Agarwal after changing her hours and work location when she sought to return from a period of pregnancy-related absence.

The judge said there was no evidence that St John Freight System intended to take any steps to change Agarwal’s working arrangements until she was off sick for a pregnancy-related reason.

5. Worker who found racially charged messages in work WhatsApp group was harassed

An operations clerk was the victim of harassment because of her sex, race and religious belief after finding explicit messages in a WhatsApp group used by her co-workers, the Watford Employment Tribunal ruled.

It said the contents of a group WhatsApp conversation used by employees of Deltec International Courier constituted harassment because it was unwanted conduct that had the effect of violating the dignity of Ms M Abdi, and found the comments created an “intimidating, hostile, degrading, humiliating and offensive environment” for her.

Abdi, who is a black woman of Somali origin, came across the group when, in the course of her duties, she used a colleague’s details to log into her computer. A number of offensive comments had been made, including the term “f***ing immigrants”, and members of the group had also asked what “her” problem was and for someone to “shut this terrorist up” before they “rip her headscarf off”.

The Department for Work and Pensions (DWP) has published its proposed increases to a number of statutory benefit payments. The following rates are expected to apply from April 2021:

• The weekly rate of statutory sick pay (SSP) will be £96.35 (up from £95.85).
• The weekly rate of statutory maternity pay (SMP) and maternity allowance will be £151.97 (up from £151.20).
• The weekly rate of statutory paternity pay (SPP) will be £151.97 (up from £151.20).
• The weekly rate of statutory shared parental pay (ShPP) will be £151.97 (up from £151.20).
• The weekly rate of statutory adoption pay (SAP) will be £151.97 (up from £151.20).

The rates will be confirmed once an Order is made. The increase normally occurs on the first Sunday in April, which would be 4 April 2021.

On 25^th November 2020, the Chancellor set out his economic plan to the House of Commons. As part of this, it has been announced that National Living Wage and National Minimum Wage rates will both increase as follows from 01 April 2021:

National Living Wage – aged 23 and over*                 £8.91

21 – 22 year olds                                                             £8.36

18 – 20 year olds                                                             £6.56

16 – 17 year olds                                                             £4.62

Apprentice rate                                                               £4.30

Accommodation offset                                                  £8.36

*National Living Wage has been extended to now include those aged 23 and over (currently aged 25 and over)

Please see below some frequently asked questions around this complex subject. We hope that you find this information useful!

When there is a prolonged downturn in business, this often leads to situations of lay off, short time working or in many cases redundancy.  So, what has made the Government introduce new legislation from 30^th July 2020 regarding redundancies?  The short answer is Covid-19: –

 FAQs

1. Can I make employees on furlough redundant?

Gov.uk’s Employees’ Coronavirus Job Retention Scheme (CJRS) guidance states that an employee can be made redundant while on furlough or afterwards, and that an employee’s redundancy rights will not be affected by being furloughed.

2. Is there a risk to making staff redundant during the pandemic and before the Coronavirus Job Retention Scheme has come to an end?

Where the business is continuing, there is the potential for the dismissal to be unfair.  You would be encouraged to talk to your Advisor before announcing the redundancy route to your employees so that your rationale can be explored as well as your capacity to move through the coronavirus period utilising other means i.e. lay off/ short time working or furlough which may be available to you.

3. Will it be an unfair dismissal if an employer makes someone redundant rather than placing them on furlough?

As each case will turn on its own facts, this would be difficult to determine generally.  Under section 98(4) of the Employment Rights Act, the test for reasonableness would be used and would consider the size of the employer and the resources available to it when determining whether the course of action taken was deemed appropriate.

It would potentially be reasonable that where an employer had evidence to support that it could not afford to furlough employees in March and pay the 80% of salary (pending HMRC opening the scheme on 20 April for reimbursements), that the redundancies would be seen to be fair but we anticipate that further evidence to support that employees had been consulted with, and had refused a deferred payment of wages would be needed to defend a claim for unfair dismissal in these circumstances.

Many businesses have closed during the Covid outbreak and other roles even in businesses that remain open have been genuinely eliminated. The fact that there may be a possibility that an employer may need employees in similar roles sometime in the future does not mean that an employer must furlough/continue to furlough employees. However, employers should be able to show that they have considered furloughing as an alternative to redundancy for each type of role they consider redundant, and document their reasons why it would not be suitable in the particular circumstances of the case.  Similarly, if furlough was not viable and if the employer had alternative means to weather the storm (i.e. contractual lay off and short time working clauses), they would be expected to document their reasons why these means were not viable in the particular circumstances of the case.

4. How is collective consultation carried out during furlough?

Whether the employer is able to meet this requirement when employees are furloughed and potentially without access to the means to participate in email communication or virtual meetings is unclear. It may be difficult for employers to provide the access and accommodation required while restrictions on movement remain, and the employer may not have sufficient technology available to provide access to employees who do not have access to a smartphone or the internet.

The employer would also need to ensure that meaningful consultation can take place with the representatives, taking into account the current level of restriction on movement. It may be easier to facilitate virtual meetings for a small group of representatives, but the employer should ensure that all of the representatives have access to the relevant technology, and that it allows proper consultation to take place.

5. Can an employee on furlough be served with notice and what notice pay are they entitled to?

We are not aware of any reason that a furloughed employee could not be served with notice of termination of employment. HMRC has also confirmed that employers can continue to claim under the CJRS in respect of employees’ statutory and contractual notice periods.

6. How should employers approach redundancy pooling where some employees are furloughed and others are not?

We consider it unlikely that the fact that some employees are furloughed should affect the employer’s identification of selection pools.  Furthermore, we encourage a substantially sound rationale connected to pools, in particular when only furloughed groups are placed at risk.

In deciding whether a redundancy selection was fair, a tribunal must decide whether the employer’s choice of pool was within the range of reasonable responses. The usual approach is to consider the type of work, which is ceasing or diminishing, and which employees perform that kind of work. If the employer confined its selection pool to those already furloughed, this may be regarded as unfair because the selection process for putting employees on furlough may not have been as vigorous as is required where dismissal is being considered. We think it likely that the conventional approach of identifying those who perform the same or similar work (whether they are currently furloughed and therefore not performing that work, or not) should be adopted.

7. Does scoring for redundancy change due to Covid-19?

Clients are advised to use objective criteria for redundancy selection, and to score those at risk against the matrix from the period running up to the Covid-19 outbreak and before furlough.  This is to ensure that those furloughed are not disadvantaged.  Many who were away from their roles during this time were absent due to childcare, age, or disability which adds to the risk of a discrimination claim.  If in doubt about your process, please call your Advisor.

NB: When there is a redundancy, the employee is entitled to both redundancy pay (if they have over 2 years’ service), and notice pay in line with their length of service and contractual clauses of notice. (These must conform to statutory minimum notice periods – which, after two years’ service is a week for each full year of service up to a maximum of 12 weeks).  Contractual notice may be more than the statutory minimum notice period, and where this is the case, you are obligated to fulfil the contractual notice.

8. Can I claim notice back notice payments under the furlough SJRS?

Yes.

9. Is there anything which impact the rate of the notice pay?

Yes.  There is a lesser known point of employment law which has bearing on whether notice is payable at full pay or a lesser amount.  Essentially you need to compare the contractual notice you have stated you will give the employee for their particular length of service, against the statutory notice for the same length of service.  For example:

Where the contract gives a week or more than a weeks more notice than is required by statue you may continue to pay at the furlough rate and will not be required to top this up to a “normal weeks’ pay”.

10. can I claim back from the CJRS for notice pay?

Although the employee is entitled to notice at their normal rate, what you may claim back will depend upon the date of the redundancy and the framework of the CJRS during the period which immediately follows.  Detail is currently as follows:

August

• The CJRS will remain at 80% contribution (£2,500 cap) for the hours the employee does not work. Meaning there is also a 20% deficit you will have to fulfil from the business.
• You will be required to pay the employers National Insurance and Pension Contributions.

September

• The CJRS will drop to 70% contribution (£2,187.50 cap) for the hours the employee does not work. Meaning there is also a 30% deficit you will have to fulfil from the business.
• The employer is required to pay employers National Insurance and Pension Contributions.
• The employer is required to top up 10% of the wage of non-worked hours (up to the cap of £2,500)
• and if working part-time, remains responsible for payment of 100% of pay for worked hours.

October

As above but…

• The CJRS will drop to 60% contribution (£1875 cap) for the hours the employee does not work. Meaning there is also a 30% deficit you will have to fulfil from the business.
• The employer is required to top up 20% of the wage of non-worked hours (up to the cap of £2,500)

11. Can I enforce annual leave during a notice period related to redundancy?

In short, yes however, conditions apply!

Under Regulation 15(2) of the working Time Regulations 1998 you are required to give express written notice of the dates on which you are directing leave to be taken.

In compliance with the regulations, the notice must double the amount of notice as the days leave, you are requesting your employee to take.  i.e. if you are directing 5 days, you will be required to give 10 days written notice of this.  Contact your Advisor for specific wording or for them to draft your outcome letters.

12. Can I claim back redundancy payments under the furlough scheme?

You cannot claim reimbursement of redundancy payments under the scheme (Employers’ CJRS guidance).

13. My employees have been made redundant and have been on furlough on the run up to their redundancy. What do I base their redundancy payments on?

A change in legislation which came into effect on the 30^th July 2020 means that employees made redundant while on furlough will be guaranteed redundancy pay based on their normal wage and not their furloughed rate under new legislation.

Under the change, furloughed workers would also be entitled to statutory notice pay equivalent to their normal wages, and any future unfair dismissal cases would be based on their full wages rather than pay under the furlough scheme, which can in some cases be substantially lower than an employee’s contracted pay.

Please talk to your advisor before you take any action.

HMRC has this morning updated its guidance to remove any uncertainty about the above.

You can continue to claim for a furloughed employee who is serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments.”

Please contact your advisor for further information.