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The Government has introduced new laws, set out in the Employment Rights Act 1996 (Coronavirus, Calculation of a Week's Pay) Regulations 2020 SI 2020/814, designed to protect employees who are currently furloughed and to prevent them from being short-changed in a redundancy situation and to protect their statutory entitlements.

The legislation, which will come into force today 31 July 2020, will ensure that those employees who are made redundant and having been previously retained under the Coronavirus Job Retention Scheme are entitled to a statutory redundancy payment based on their pre-furlough wages.

Employees with more than 2 years’ continuous service would be entitled to a statutory redundancy payment which is calculated based on length of service, age and weekly pay, up to a statutory maximum currently £538 per week. Average weekly pay is usually worked out on the pay received over the 12 previous weeks up to when the employee is notified of the redundancy. The new regulations ensure that employers, when carrying out the calculation, treat any weeks where an employee has been paid a reduced furlough amount within that 12-week period, as instead the employee having been working at a full 100% rate of pay.

The changes will also apply to the calculation of a week’s pay for the purpose of a basic award for unfair dismissal, for statutory notice pay (after one month of employment, one week per year of service up to a maximum of 12 weeks), compensation for failure to provide a written statement of reasons for dismissal, remuneration for time off to look for employment or arrange training, compensation for failure to comply with an order for reinstatement or re-engagement, and the assessment of whether an employee is to be taken to be kept on 'short-time' for a week in accordance with S.147(2) ERA.

This is welcome news to clear up the uncertainty for employers and to give protection to employees, who will not be disadvantaged by calculations on reduced pay rates. Given that more redundancies are, unfortunately, expected in the coming months, the clarification from the Government is timely.

However, the new legislation does not affect the calculation of enhanced redundancy schemes or contractual notice period. The position regarding payment during a contractual notice period whilst an employee is on furlough remains unclear and we expect this to be tested in the Courts and Tribunals in the years to come. This is a complex area and if you have any questions please contact us today by calling either our London  or High Wycombe  offices on the telephone numbers referred to at the top of this page, or by email: This email address is being protected from spambots. You need JavaScript enabled to view it.  
 
Please note this article reflects our understanding of the law as at 31 July 2020. We highly recommend consulting us before making key decisions, as this is a vastly developing area and it may well have changed. If in doubt, contact our team.  

On 8 July 2020, Rishi Sunak announced the Government's 'Plan for Jobs' which introduced several new measures that the Government plans to implement to help rebuild the UK’s economy following the Covid-19 pandemic.   
  
The pandemic has greatly impacted the UK’s economy with over 9 million jobs (more than one quarter of the UK workforce) being furloughed through the Coronavirus Job Retention Scheme (“CJRS”). The new measures are designed to help support, protect and create jobs once the CJRS scheme ends in October 2020, whilst also preventing unemployment in the UK from soaring.   
  
Policy 1: Job Retention Bonus Scheme   
  
As the scheme starts to wind down, the Government are keen to encourage employers to bring employees currently on furlough back into the workplace.  
 
To incentivise employers to try to retain furloughed staff, the Government have announced that they will make a one-off payment of £1,000 to employers for every furloughed employee they reinstate in the workplace, with the proviso that the employee remains continuously employed until the end of January 2021. The focus of this scheme is to support those employees who have been furloughed in being retained. To be eligible for the scheme, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the CJRS in October 2020 and the end of January 2021. Payments from the Government will be made from February 2021 and further details about the scheme will be announced by the end of July.   

Read more: No more Furlough? The Government’s Plan for Jobs – July 2020

Applications for breach of sanctions, prior to Denton v TH White Limited [2014], often suffered harsh decisions and unjust consequences. The judgment in Denton manifests a more proportionate and just consideration of applications for breach of sanctions, encouraging parties to co-eperate and address minor defaults between themselves.The 3-stage test, as provided in Denton will likely aid applications for relief from sanctions which would otherwise be dealt with unjustly. 

The 3-stage test introduced in Denton requires the court to:

1) identify and assess the serioussness and significance of the non-compliance 
2) consider why the breach occurred 
3) evaluate all circumstances of the case so the application is dealt with fairly


At stage 1, discretion will be exercised to ascertain whether the breach is serious or significant. Serious or significant breaches may include,  the failure to pay court fees and the failure to comply with an unless order, but are by no means limited to these. At this stage, sanctions should be considered separately in cases where there are multiple breaches. If it is decided at this stage that the breach in question is neither serious nor significant, relief from that sanction will likely be granted and the second and third stages will not require significant consideration.

If the breach is considered serious or significant, the second stage will assume greater importance and the court will assess why the breach occured. Trivial reasons, such as simple mistakes or merely overlooking a deadline, are unlikely to be considered good enough reasons for the occurance of a significant or serious breach.

At the third stage, the court should consider all circumstances of the case. These include whether the sanction imposed is proportionate to the breach, how long after the breach occured before the application for relief from sanctions was made and whether other current or previous breaches have been committed. 

Denton provides guidance as to how application for relief from sanctions will be considered and assessed by the courts, however these applications involve considerable judicial discretion. By way of conclusion, applications which are prompt, well-reasoned and procedurally compliant will have a greater chance of success in court. 

This article was prepared by Rob Green with much assistance from Imogen Kelly.
Guidance for Employers

As the Government provides increasing indications that the UK will start to exit lockdown shortly, it is time for businesses to prepare for the weeks and months that lie ahead by considering health and safety practices, facilitating the return of necessary employees and considering business needs for the foreseeable future.

Health and Safety

The employer has a non-delegable duty to ensure so far as is reasonably practicable, the health, safety and welfare at work of all employees under the Health and Safety Work Act 1974. Employers are facing an unprecedented challenge in having to completely change working environments and practices to ensure safety amidst Covid-19, however there are a number of ways that this can be tackled effectively. 

1. Follow Government guidance and keep up to date

Taking reasonable care will most certainly involve employers taking heed of updated Government guidance and maintaining awarness of the same.

The Government has released 'Covid-19 secure' guidelines which include eight workplace settings including offices, factories, shops, vehicles and research facilities. It is advisable to carefully review the relevant guidelines in the first instance, and to monitor updates to the same.

2. Aseess risks of return to work: COVID-19 risk assessment

Employers should then consider their workplace in detail and identify the key risks facing their workforce. The most critical aspect of returning to work will be conducting a COVID-19 health and safety risk assessment. It is advisable to consult with employees on this matter, as they will be able to give a unique perspective of the challenges faced by individual roles. Risks may be different for different roles and different members of staff.

Employers are not obliged to take every possible measure to eliminate the risk of the spread of COVID-19 but they must take steps which are reasonably practicable.

If the risks cannot be avoided, consider how employees can continue to work from home, or if a staggered return could be facilitated to reduce the density of the workplace.

Employers should also consider how employees travel to work and whether arrangements can be made to avoid travel at peak times, or to encourage different, safer modes of transport.

Read more: The End of Lockdown - Planning for the Future

The Government announced yesterday evening that the Immigration Health Surcharge (IHS) for all NHS and care workers who have come to the UK from overseas would be scrapped as soon as possible. Doctors, nurses and paramedics had already been granted a one-year exemption from the charge.

The IHS is an additional fee paid by all non-European Economic Area (EEA) nationals coming to the UK for more than six months. It will also encompass EEA migrants arriving from January 2021.

The current charge is £400 per year, which is due to increase to £624 on 1 October 2020. As a result of the policy change, all NHS staff, health workers, porters and cleaners, of whom many are earning the minimum wage, will no longer be subject to this annual fee.

Working migrants already pay tax and national insurance like British or settled persons do; so, they are effectively charged twice for NHS treatment. Scrapping the IHS for overseas NHS staff is a positive policy change for our hard-working medical staff who are risking their lives on the frontline of Covid-19.

Aside from the Covid-19 legislation and the new HMRC government schemes to support employers and employees during these unprecedented times, there have been several other legislative changes and employment law developments in April 2020. These changes may have gone under the radar given the current circumstances affecting the workplace. This article is intended to provide a catch up for employers, employees and workers alike in case any of the legislative changes were missed.  
  
These include:  

  1. Right to written statement of particulars of employment extended to workers
  2. Additional information to be included in employment statement
  3. Abolition of Swedish derogation for workers
  4. Deferral of off-payroll IR35 rules to April 2021
  5. Change to holiday reference period for workers with variable pay under the Working Time Regulations 1998 
  6. Paid parental bereavement leave as a statutory right 
  7. National minimum wage, statutory rates, Vento Bands and compensation limits have increased 

 Right to a Written Statement of Particulars of Employment

From 6 April 2020, the requirement to provide a written statement of terms and conditions under section 1 of the Employment Rights Act 1996 (‘ERA 1996’) has been extended to include workers, not just employees, and must be provided from day 1 rather than two months from the start date of employment.  
 
Prior to this, only employees were entitled to a written statement of employment particulars undersection 1 ERA 1996 and employers had to provide the written statement within two months after the employee started their employment.   
  
The wording in section 1 of ERA 1996 has now replaced ‘employee’ with ‘worker’. This includes agency workers and zero hours workers and means that workers now have the same statutory right to a written document summarising the main terms of their employment as employees. This was designed to provide transparency and clarity for workers and clarity of terms can be beneficial for both the employee and employer, as there is less scope for any confusion over employment terms and can avoid the risk of disputes over working arrangements where terms are unclear.  
 
As workers are now entitled to the written statement from day 1, employers will need to ensure that the written statement is issued to the worker on or before the work begins and the majority of the information that needs to be contained in the written statement must be contained in a single document.   

Read more: Employment Law Update: Key Legislative Changes in April 2020

On 20 April 2020, HMRC announced that the online portal to apply for the Coronavirus Job Retention Scheme (the “Scheme”) is now up and running. As of yesterday, employers can now apply for direct cash grants under the scheme through HMRC’s new online portal, with the money expected to land in their bank accounts within six working days. 

Qualification Date  
 
On 17 April 2020, the Government published its fifth iteration of its guidance on the Coronavirus Job Retention Scheme with updates on individuals eligible for the Scheme and a new qualification date, which has now changed from 28 February 2020 to 19 March 2020. The qualification date is the date when an employee must have been on the employer’s PAYE payroll to be eligible for the Scheme. 
 
The original guidance stated that an employee had to be on the payroll on 28 February 2020 to be eligible. The guidance now states: “You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.” 
 
The aim of this change is to enable individuals who fell outside the Scheme, perhaps because they had recently moved jobs to a new employer and were not on their payroll as of 28 February 2020, to now be eligible.  
 
The qualification date was included in the Scheme to prevent businesses from making fraudulent claims by hiring “ghost employees” in order to claim furlough payments. However the new qualification date should still prevent fraudulent claims being made while bringing more employees in scope; in order to be eligible for the Scheme the employee must have been on the employer’s PAYE payroll on or before 19 March 2020, which was just before the Scheme was announced.   

Read more: COVID-19 Update at 21 April 2020: The Coronavirus Job Retention Scheme now live, Qualification...

In March, the Chancellor announced his plans to support employers and employees to endure both the immediate and long-term effects of COVID-19.   
 
In the uncertain economic climate, the key focus for employers over the coming months is going to be on keeping costs to a minimum wherever possible. The Government recognised that this would no doubt lead to redundancies amongst the work force, which ordinarily would not have taken place. The Coronavirus Job Retention Scheme is designed to avoid businesses having to take those drastic steps.   
 
The guidance is ever evolving and there are still many questions unanswered.    
 
Who can apply for the scheme?  
 
If you are unable to sustain staff wages or  have employees that are unable to operate or have limited work to do because of COVID-19, you may be able to benefit from a grant under this scheme by agreeing with employees that they will be put ‘on furlough’.  
 
Any entity with a UK bank account and a UK payroll scheme on or before 19 March 2020 can apply for the scheme, which includes businesses, partnerships, sole traders, charities, recruitment agencies and public authorities, provided they have a PAYE payroll scheme.  
 
Employers can claim a grant of up to 80% of an employee’s wages, up to a maximum of £2,500, plus employer National Insurance contributions and minimum auto-enrolment employer pension contributions. Discretionary commission, tips, benefits in kind and bonuses are not included in calculating the employee’s wages.    
 
Details of the Scheme (so far)   
 
Which employees are eligible to be furloughed under the scheme?  
 
Employers can make a claim in respect of full-time employees, part-time employees, employees on agency contracts, employees on flexible or zero-hour contracts and apprentices.  The latest guidance has confirmed the scheme applies to employees who are furloughed by reason of circumstances as a result of coronavirus or coronavirus disease; that is, not just those employees who would have otherwise been made redundant.  
 
The employee must have been on payroll on or before 19 March 2020, (provided the employer had submitted real time information payroll data by that date); anyone hired after this date cannot be claimedfor through the scheme (unless they have been rehired by their employer, having been dismissed prior to the scheme being announced).  

Read more: The Coronavirus Job Retention Scheme & Furloughed Workers

On 15 April 2020, the Government published its fourth iteration of its guidance on the Coronavirus Job Retention Scheme (the “Scheme”) with updates on individuals eligible for the Scheme and a new qualification date, which has now changed from 28 February 2020 to 19 March 2020. The qualification date is the date when an employee must have been on the employer’s PAYE payroll to be eligible for the Scheme. 
 
The original guidance stated that an employee had to be on the payroll on 28 February 2020 to be eligible. The guidance now states: “You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.” 
 
The aim of this change is to enable individuals who fell outside the Scheme, perhaps because they had recently moved jobs to a new employer and were not on their payroll as of 28 February 2020, to now be eligible.  
 
The qualification date was included in the Scheme to prevent businesses from making fraudulent claims by hiring ‘ghost employees’ in order to claim furlough payments. However the new qualification date should still prevent fraudulent claims being made while bringing more employees in scope; in order to be eligible for the Scheme the employee must have been on the employers PAYE payroll on or before 19 March 2020, which was just before the Scheme was announced.  

Read more: COVID-19 Update at April 2020: The Coronavirus Job Retention Scheme and Furloughed Workers –...

In March, the Chancellor announced his plans to support employers and employees to endure both the immediate and long-term effects of COVID-19.  
 
In the uncertain economic climate, the key focus for employers over the coming months is going to be on keeping costs to a minimum wherever possible. The Government recognised that this would no doubt lead to redundancies amongst the work force, which ordinarily would not have taken place. The Coronavirus Job Retention Scheme is designed to avoid businesses having to take those drastic steps.  
 
The guidance is ever evolving and there are still many questions unanswered.   
 
Who can apply for the scheme? 
 
If you are unable to sustain staff wages due to COVID-19, you may be able to benefit from a grant under this scheme by nominating employees as furloughed workers. 
 
Any entity with a UK PAYE payroll scheme on or before 19 March 2020 can apply for the scheme, which includes businesses, partnerships, sole traders, charities, recruitment agencies and public authorities, provided they have a PAYE payroll scheme. 
 
Employers can claim a grant of up to 80% of an employee’s wages, up to a maximum of £2,500, plus employer National Insurance contributions and minimum auto-enrolment employer pension contributions. Discretionary commission, tips, benefits in kind and bonuses are not included in calculating the employee’s wages.   
 
Details of the Scheme (so far)  
 
Which employees are eligible to be furloughed under the scheme? 
 
Employers can make a claim in respect of full-time employees, part-time employees, employees on agency contracts, employees on flexible or zero-hour contracts and apprentices. The employee must have been on payroll on or before 19 March 2020, (provided the employer had submitted real time information payroll data by that date); anyone hired after this date cannot be claimedfor through the scheme (unless they have been rehired by their employer, having been dismissed prior to the scheme being announced).  

Read more: The Coronavirus Job Retention Scheme & Furloughed Workers

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