Legal briefing | Employment, Immigration, Brexit |

Employment Update - May 2020

Overview

Key employment and business immigration developments for employers.

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In the news

Planning for post-lockdown work

The Prime Minister is expected to set out his "roadmap" later this week for easing lockdown restrictions and allowing workplaces to reopen. A draft Government plan leaked to the press reportedly urges employers to reduce hot-desking, minimise numbers using equipment, stagger shift times and maximise homeworking. With much to consider, employers should begin planning now for a phased return to work. Below are some of the key issues employers will need to consider:

  • Health and safety: Protecting the health and safety of staff and visitors to the premises will be paramount. Employers will therefore need to ensure that any return to work is done in a way which allows appropriate social distancing and is consistent with the evolving guidance from the Government and Public Health England. The rotation of staff, splitting of shifts and staggering start and finish times are all measures being considered but particular thought must be given to common areas, such as canteen, rest and changing facilities, where social distancing is more challenging. Businesses are also having to think about appropriate protective equipment, testing of staff, journeys to work and the use of contact tracing apps, which raise a host of data protection issues. Business lobby groups are urging the Government to provide guidance on these areas.Whatever the case, employers will need to conduct a careful risk assessment of the health and safety risks associated with employees returning to work.

  • Communication: Employers will need to give careful thought to communication strategies, both to inform staff of new safety procedures but also to ensure staff are confident that it is safe to return to the workplace. Employers will also need to consider how to manage staff who remain reluctant to return, despite safety assurances.

  • Selection issues: With a phased return highly likely, many employers will face difficult decisions about which employees to recall to the workplace. Some staff will be keen to return, while others will prefer to stay at home because of ongoing childcare issues or safety concerns. Employers will need to navigate potential allegations of unfairness or even discrimination associated with selecting some staff over others and should base their selection on the objective needs of the business, as well as taking account of staff preferences. Some employers are considering rotating staff at work and home, where possible, to help achieve greater fairness.

  • Flexible working: Homeworking is likely to continue to be the norm for many, at least in the short term. However, looking forward, employers will need to plan for responding to a likely spike in requests for flexible working where employees feel this has worked well during lockdown. These challenges will be more pronounced if, as is planned, schools are to return on a phased or rotational basis, as many employees will have ongoing childcare needs.

  • Unravelling furlough: 71% of UK employers have furloughed at least some of their staff, according to a British Chamber of Commerce survey. Under the Government's Coronavirus Job Retention Scheme (see our Q&A on the CJRS), employers can furlough staff (i.e. stand them down temporarily) and claim 80% of their wage costs from the Government (up to a cap of £2,500 per employee per month). Currently, employers must do no work during furlough but the Treasury is considering proposals by business groups to allow employers to claim for part-time work under a phased return.

  • Cost-cutting measures: Despite the Government boost, many employers will need to implement further cost saving measures once lockdown restrictions are lifted, such as agreeing longer-term wage cuts or reduced hours, or in some cases, even redundancies. Employers will need to consult collectively with staff over such measures in the coming weeks, particularly where changes to terms and conditions affecting 20 or more employees are proposed or 20 or more redundancy dismissals are likely.

  • Workforce mental health and wellbeing: The Covid-19 pandemic has raised a whole host of new challenges for employers in relation to managing employee mental health and wellbeing. This will continue with any easing of lockdown restrictions, as some employees will be anxious about returning to their daily commute and normal working lives. Others will sadly have suffered bereavement or will continue to be concerned about vulnerable family members. Others still will simply be unsettled by all the recent change or feelings of isolation with ongoing homeworking. Employers will need to think carefully about how they manage this through extensive workforce communications and a package of support measures for staff.

The CIPD has also produced guidance for employers on returning to the workplace and Government guidance is expected imminently.

For more information on the wider considerations for businesses, please see our note on the relaxing of lockdown and the key considerations for businesses on the Covid-19 resources page of our website.

Immigration radar

Right to work checks

The Home Office has temporarily relaxed the requirements for right to work checks for new hires in the light of the Covid-19 pandemic. Employers must normally check original documents in the physical presence of the employee but this has proved challenging with most offices closed and many employees working from home. The Home Office has therefore issued specific guidance which confirms that, during these exceptional times, checks can be carried out over video call using clear scanned copies of the identity documents, with the use of the online right to work checking service where possible (i.e. for individuals with biometric residence permits or EU nationals with settled or pre-settled status). Where scanned copies have been checked (rather than original documents) employers must record the date of the check and record that an adjusted check has been undertaken due to Covid-19. A retrospective check must then be undertaken within 8 weeks of the Covid-19 measures ending and the employer must retain evidence of both checks on record.

Sponsored Visas

The Home Office has made a number of changes to sponsored visas in the light of current travel restrictions and visa office closures. The key changes are:

  • Expiring visas: Employees whose visas have expired since 24 January 2020 or which are about to expire, but who cannot leave the UK due to travel restrictions, can now have their visas extended to 31 May 2020 (and this date may be extended further if travel restrictions continue). To obtain the extension, affected employees must contact the UKVI Coronavirus Immigration Team (CIT) to provide their details and explain how they have been affected by the travel restrictions. Such individuals will also be able to apply for new visas from within the UK until 31 May 2020, including applications where they would normally be required to apply from their home country.

  • New visas: Employees who have been granted a new Tier 2 sponsored visa while outside the UK are normally given an initial 30-day visa to allow them to travel to the UK to collect their full Tier 2 work visa. The Home Office has now confirmed that individuals who are unable to travel before the expiry of their 30-day visa due to travel restrictions will be able to request a free replacement visa for a further 30 days. Such individuals will need to contact the Coronavirus Immigration Help Centre.

  • Healthcare workers: The Home Office has announced that some frontline health workers and their families working for the NHS and independent health care providers will get their visas automatically extended for one year free of charge due to the current pandemic. This applies to eligible healthcare workers whose visas are due to expire before 1 October 2020.

 

Brexit and the new points-based immigration system

Understandably, Brexit projects have been put on the backburner while employers address the more pressing issues thrown up by the COVID-19 outbreak. However, the Brexit Transition Period is still set to end on 31 December 2020 and a new points-based immigration system will then take effect from January 2021. Under the new system, employers will need to hold an immigration sponsor licence to sponsor the visas of new EU employees who arrive in the UK after the end of the Transition Period. The latest government guidance on this makes clear that employers who do not yet hold sponsor licences should consider applying now if they plan to employ EU employees under the new system.

Case watch

Criminal charges - When can you dismiss?

The employee in this case was a hospital theatre porter who worked for a charity that operated hospitals. He had an unblemished record over 20 years but was arrested and charged with assault with intention to rape, which allegedly occurred outside of work. His employer dismissed him as a result of the potential damage to its reputation, considering the employee's role and interaction with vulnerable patients. The dismissal was on the basis that the employee would be reinstated if the charges against him were dropped or he were later acquitted at trial. The employee bought an unfair dismissal claim.

The Employment Tribunal found that the employee had not been unfairly dismissed because there was a genuine risk of damage to the employer's reputation if the employee were convicted. The Tribunal also found that a fair process had been followed as the employer sought further clarity on the charges from the employee and considered alternatives to dismissing him, including a prolonged period of paid suspension. However, paid suspension was not considered to be an appropriate use of charitable funds, as no trial date had been set and it was therefore not clear how long the suspension would need to run.

After the Employment Tribunal decision, the employee was acquitted of all charges. His employment with the charity was reinstated but he received no backpay. He appealed to the Employment Appeal Tribunal (EAT) arguing that his dismissal was unfair and that he should be entitled to compensation for the period between dismissal and reinstatement. However, the EAT ruled the employee was not unfairly dismissed and his appeal was rejected.

LAFFERTY V NUFFIELD HEALTH

This case confirms that it may be fair to dismiss an employee who is charged with a criminal offence where continued employment poses a risk to the employer's reputation. However, this will not always be the case; there must be some relationship between the charges or matters alleged and the potential for reputational damage. A serious driving offence, for example, is unlikely to bring the employer into disrepute if the employee's role does not involve driving. In contrast, in this case, the employee's role involved working with vulnerable patients and a possible conviction of assault with intention to rape would have had serious consequences for the employer's reputation. Before taking a decision to dismiss, the employer must also follow a fair process by allowing the employee to give their version of events and not taking the charges or allegations at face value. The employer should also consider alternatives to dismissal such as suspension pending trial, the reasonableness of which will depend on when the trial is likely to happen.

Restrictive covenants - when can you hire?

The employee in this case was an accountant who, during his employment, signed a new contract with post-termination restrictive covenants. He later resigned to work for a competitor. Before he started work, the competitor sought legal advice about whether the restrictive covenants were enforceable. The legal advice was that the covenants were probably unenforceable because there had been no consideration for them and they ran for a period of 12 months, which was too long. When the employee started work with the competitor, his former employer sued both him for breaching the covenants and the competitor for inducing that breach.

The High Court found that, contrary to the legal advice, the restrictive covenants were enforceable. Unbeknown to the new employer, the employee had received a pay rise for the covenants at the time they were introduced, so there had been consideration. Given the employee's senior role, the period of 12 months was also considered reasonable. The employee was therefore in breach of the covenants. However, the Court found that the new employer (the competitor) was not liable for inducing that breach, as it had genuinely sought and obtained legal advice that the covenants were unenforceable.

ALLEN V DODD & CO

While this case is helpful for employers, it also highlights the dangers of recruiting employees who are subject to post-termination restrictive covenants. A new employer that hires someone while they are still subject to post-termination restrictions risks being sued for inducing breach of contract. To be liable, the new employer must know or turn a blind eye to the fact that they are inducing a breach. Where the new employer has obtained legal advice that the covenants are unenforceable, it will not be liable for inducing a breach (even if the covenants turn out to be enforceable). Employers wishing to recruit staff who are subject to covenants should therefore seek legal advice before doing so. However, employers should exercise great caution here – the enforceability of covenants is rarely clear-cut and an employer could be at risk of liability in circumstances where the advice is that there is a chance of the covenants being enforceable. It is much safer to wait until any post-termination restrictions have run their course.

New law

Statutory sick pay

Earlier this year, the Government amended the statutory sick pay rules so that, with effect from 13 March 2020, workers self-isolating because they or someone in their household has symptoms of Covid-19 are eligible for statutory sick pay. On 16 April 2020, the rules were amended further so that workers who are shielding in accordance with an NHS notification due to a particular vulnerability are also entitled to statutory sick pay. For any absences related to Covid-19 since 13 March 2020, statutory sick pay is now payable from day one of the absence, rather than from day four, which is normally the case. Employers with fewer than 250 employees will also be able to reclaim statutory sick pay for the first 14 days of any Covid-19 related absence under the Coronavirus Statutory Sick Pay Rebate Scheme. The Scheme is not yet open but employers are advised to retain records to enable claims in future.

 

Emergency volunteering leave

The Government has introduced a new right for workers to take emergency volunteering leave to assist with the national efforts in relation to the coronavirus pandemic. The key features of emergency volunteering leave are:

  • the worker must become certified by a relevant public authority to carry out voluntary work in health or social care

  • the worker must give three working days' notice to the employer to take leave, and produce a copy of the certificate to the employer

  • the leave must be taken in one block, which may last for two, three or four weeks

  • employers cannot prevent workers from taking volunteering leave.

The leave is unpaid but a Government fund will be established to compensate volunteers for loss of earnings, and travel and subsistence expenses. The right to emergency volunteering leave was introduced by the Coronavirus Act 2020 on 26 March 2020 but regulations are still required to bring the right into force – these are expected imminently.

 

Compensation for discrimination

Compensation for discrimination and harassment is made up of two elements – the employee's financial loss and injury to the employee's feelings. The so-called "Vento bands" have been created to guide tribunals what to award for the injury to feelings element. On 6 April 2020, the Vento bands were increased, and the current bands are now as follows:

  • Lower band: £900 to £9,000 (for a low-level, one-off act of discrimination or harassment).

  • Middle band: £9,000 to £27,000 (for something more serious).

  • Upper band: £27,000 to £45,000 (for the most serious acts, such as an ongoing campaign of discrimination or harassment).

There is technically no limit on what can be awarded for injury to feelings and, in exceptional cases, tribunals can award compensation which is higher than the upper band. There is also no limit on the compensation which can be awarded for financial loss in discrimination and harassment claims.

Watch this space

Off-payroll rules

The Government has confirmed its plan to introduce reforms to the off-payroll in the private sector in April 2021, despite calls for further delay from the House of Lords.

Following an inquiry launched in February 2020, the House of Lords Economic Affairs Committee, Finance Bill Sub-Committee published a report criticising the Government's proposals to introduce the off-payroll working rules in the private sector from April 2021. The Sub-Committee questioned the success of the reforms in the public sector and argued for further delay in the private sector, as businesses will still be recovering from the coronavirus pandemic in April 2021. However, separately, the Financial Secretary to the Treasury has confirmed that the Government will proceed with the reforms in April 2021 but will commission research into the long-term effects of the changes in the public sector with the results to be available before implementation of the private sector reforms in April 2021.

Our Webinars

We are running an interactive series of webinars throughout the month of May, where we will be discussing a range of employment law issues associated with the Covid-19 pandemic, with each session including a Q&A section afterwards. The topics and dates are as follows:

  • The Coronavirus Job Retention Scheme: How is it working for businesses and what have we learned so far? (Wednesday, 6 May 2020, 4 - 4:45pm)

  • Preparing for Post-Lockdown: What are the key challenges of workplace reintegration and what steps should you be considering now? (Wednesday, 13 May 2020, 4 - 4:45pm)

  • Restructuring and Redundancies: How can employers go about streamlining the business and planning for the future? (Wednesday, 20 May 2020, 4 - 4:45pm)

  • Other Key People Issues for 2020: What else should be on the radar for the rest of the year? (Wednesday, 27 May 2020, 4 - 4:45pm)

If you would like further information about the webinars, please contact kirsty.stevens@traverssmith.com.

Our work

Since the last Employment Update, our work has included:

  • advising in relation to the Coronavirus Job Retention Scheme, how it operates and placing employees on furlough

  • advice around restructuring and collective consultation redundancy obligations

  • work around a request from a trade union for recognition and collective bargaining

  • advising a listed healthcare company in respect of a cross-jurisdictional contractual dispute with one of its departing executives

  • conducting an investigation and advising on a sexual harassment grievance raised by a senior employee against an executive

  • advising on the post-lockdown permanent closure of an office and redundancies / relocation of employees to home working

  • advising on the employment and data privacy issues arising from an employee's misuse of the HR database

  • supporting a client address a whistleblowing complaint.

For further information, please contact

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