Covid-19: rules on redundancy and notice pay for furloughed staff
Rules introduced from 31 July 2020 ensure that statutory payments to which furloughed employees are entitled are based on their normal pay, rather than furlough pay.
As to redundancy pay, for employees with normal working hours where pay does not vary with the amount of work done, these rules only apply where the calculation date for redundancy falls on or before 31 October. For employees whose pay varies with the amount or time of work done, their redundancy pay is based on full pay if they were furloughed for at least one week during the 12 weeks before the calculation date for redundancy.
These rules also apply to the calculation of statutory notice pay, but do not appear to apply where employees are entitled to contractual notice of at least one week more than the statutory minimum.
Practical point: Factors around entitlement to and the calculation of notice pay can be complex so employers should take advice if in doubt.
Disability discrimination: failure to make reasonable adjustments
In Hill v Lloyds Bank, Ms Hill was disabled, suffering from reactive depression, which she said resulted from bullying and harassment at work. Lloyds Bank refused to give an undertaking that they would not require her to work with the two colleagues concerned and, if there was no alternative, she would be offered a redundancy severance package.
The Employment Appeal Tribunal ruled that it was a reasonable adjustment for Lloyds to undertake to give her a redundancy severance package if her request to not work with certain colleagues was unworkable.
Practical point: This unusual case may be of concern to employers in relation to adjustments that may be considered reasonable in reducing a substantial disadvantage to disabled employees who have brought grievances and are uncomfortable working with certain colleagues following a breakdown in relations.
Unfair dismissal: no procedure followed
Gallacher v Abellio Scotrail concerned a senior manager whose relationship with her manager deteriorated at a critical time for the employer's business. Ms Gallacher was dismissed at an appraisal meeting with no procedure, forewarning or right of appeal.
The Employment Appeal Tribunal ruled that her dismissal for ‘some other substantial reason’ was not unfair. Very occasionally there are cases where procedures may be dispensed with because they are reasonably considered to be futile.
Practical point: This is a very rare case. Tribunals will always scrutinise dismissals where no procedure has been followed, to assess whether it falls within the band of reasonable responses.
Employment status: cycle couriers are workers
In O'Eachtiarna and others v CitySprint, CitySprint's couriers were issued with new contracts in 2017 following a successful employment status claim by one of their fellow couriers. In the latest claims against CitySprint, a tribunal considered whether cycle couriers were workers, both before and after the 2017 contractual terms were introduced, for the purposes of holiday pay claims.
The tribunal ruled that CitySprint couriers were workers, even after a change in their contractual terms, and were therefore entitled to receive holiday pay. It stated that although the couriers had a contractual right of substitution, this was a theoretical right only that had never been exercised and that personal performance was a dominant feature of the contract.
Practical point: When assessing employment status, the underlying documentation is only part of the factual matrix. The tribunal will consider how the relationship works in practice.
Covid-19: furlough bonus scheme
Employers that keep their furloughed employees on after the job retention scheme ends on 31 October 2020 may be entitled to a job retention bonus of £1,000 for every furloughed employee who remains continuously employed through to 31 January 2021 and meets the other eligibility criteria. Eligibility is not affected by putting employees on the new job support scheme.
Practical point: Businesses must ensure they comply with their obligations to qualify under the scheme, and can start preparing now by making sure their furlough claims are accurate and, if appropriate, that any amendments are notified to HMRC.
Graham Mitchell is a partner at Clyde & Co