29 Apr 2020

It's been a busy week. Since our last article on 23 April, there have been nine developments in employment law and practice that you should know about.

1. Furlough scheme - updated HMRC guidance

Shortly after the Coronavirus Job Retention Scheme (the Scheme) was announced, HMRC issued guidance for employers. It has updated this guidance on a regular basis, often on a Friday evening or at the weekend, causing much exasperation amongst employment lawyers!

The latest update was published on the evening of 23 April. It includes a handy table to help employers work out if an employee is eligible under the Scheme and a new section on fixed term contracts, which provides that an employee who was employed on a fixed term contract that expired after 28 February (or 19 March) can be re-employed and put on furlough as long as an RTI submission in respect of them was made to HMRC on or before 28 February (or 19 March). If a fixed term contract has not yet expired, it can be extended or renewed. This brings employees on fixed term contracts into line with employees on permanent contracts.

If an employee was made redundant or stopped working after 19 March, they can also be re-employed, furloughed and claimed for under the Scheme.

The guidance also makes it clear that if an employer and trade union reach a collective agreement on furloughing employees, this is acceptable for the purposes of a claim under the Scheme.

The latest version of the guidance is here. We have updated our FAQs on the Scheme to take it into account.

2. Work out 80% of your employees' wages under the Scheme

Guidance issued by HMRC to calculate 80% of an employee's wages under the Scheme has been updated a number of times. The latest version includes an updated section on how to claim, and information about the calculator for employees who are paid variable amounts.

3. First payments made under the Scheme

The Scheme opened for claims on 20 April and the first payments were due to be in employers' bank accounts by 28 April. HMRC have confirmed that it takes six working days from the claim for payment to be made. Employers are being asked not to contact HMRC to chase payment until the six days have passed and to ask employees not to contact HMRC directly, as they will not be able to answer any queries from individuals.

4. Furloughed employees and family-related leave

A statutory instrument called The Maternity Allowance, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay (Normal Weekly Earnings etc.) (Coronavirus) (Amendment) Regulations 2020 may have one of the longest titles in history but it does exactly what it says on the tin.

It came into force on 25 April and means that any furloughed employee going on paid family-related leave (ie maternity, adoption, paternity, shared parental or parental bereavement leave) on or after 25 April will be entitled to pay based on their usual earnings rather than their furlough pay. The usual earnings will also be used to decide entitlement to a statutory payment. Furloughed employees who went on family leave before that date will presumably be entitled to pay based on their furlough pay, unless the employer decides to make up the difference in pay.

5. The Debenhams case

In a second case on the Scheme and insolvency, administrators appointed to Debenhams applied to the High Court for directions that they would not be deemed to have adopted the contracts of employment of employees who had been furloughed if they remained furloughed and the administrators took no further action in relation to them, except for paying them the amount that was reimbursed to the company through the Scheme. Adopting a contract has the effect that salary or wages payable under that contract are payable in priority to any expenses of the administration and any floating charges.

The High Court refused to direct that the administrators would not be adopting the contracts and gave guidance on what would constitute adoption. It held that adoption would take place if at any time after 14 days from the appointment of the administrators they caused the company to make a payment to the employees under their contracts of employment (including an amount that was reimbursed under the Scheme) or if the administrators made an application under the Scheme.

Case: Re Debenhams Retail Ltd (in administration) [2020] EWHC 921 (Ch)

6. Testing for essential workers

The Department of Health and Social Care has published guidance on coronavirus testing for essential workers, which has been updated a number of times. The testing scheme has recently been extended to essential workers with symptoms and people who live with essential workers and have symptoms. The guidance contains a long list of people who can now be tested. Employers can use a portal to refer employees for testing. Employees will then receive a text message with a code they can use to register for a test. The test is voluntary and the results will only be sent to the individual and a central database.

7. Guidance on providing apprenticeships

Guidance regarding the provision of apprenticeships during the COVID-19 outbreak has been updated by the Department for Education and the Education and Skills Funding Agency. The guidance states that apprentices can be furloughed and take part in volunteer work or training while furloughed, provided this does not provide services to or generate revenue for their employer. This makes it clear that an apprentice can continue their off-the-job training while furloughed but they must be paid at least the relevant national minimum wage rate for time spent training. The guidance also deals with breaks in learning, evidence of achievement and functional skills assessments, and contains an extensive set of FAQs.

8. Reporting on modern slavery

In a further piece of guidance, the Home Office has published a document for businesses on addressing and reporting on modern slavery risks during the pandemic. While it is essential for businesses to continue to identify and address risks of modern slavery in their operations and supply chains, the Home Office states that they should also consider new or increased risks of labour exploitation. Businesses can delay publication of their modern slavery statement by up to six months without penalty if this is due to coronavirus-related pressures (such as reduced staff capacity), although they will have to state the reason for the delay in their next statement.

9. Law Commission Report on employment law hearing structures

In a welcome change from COVID-19 news, the Law Commission has published its report on employment law hearing structures. Running to 212 pages, it makes 23 recommendations for changes to the management of employment cases. The key recommendations are:

  • Extending the time limit to six months for bringing all employment tribunal (ET) claims
  • ETs should be able to hear all breach of contract claims (even if the employee is still employed), the current £25,000 limit should be increased to £100,000, and workers should be able to bring claims
  • The Government should investigate the creation of a fast track for enforcement within the ET structure
  • A specialist list should be set up to deal with employment and discrimination-related cases in the High Court (such as wrongful dismissal, equal pay, and injunctions relating to restrictive covenants, confidential information and industrial action).

The Law Commission makes recommendations for law reform but it is up to Parliament whether it accepts them or not.