Newsflash - Autumn 2020

Newsflash - Autumn 2020

Posted  24th September 2020

Autumn 2020

We hope this newsletter finds you all well in an unusual time. We know some of you will be back to your workplace (some may never have left it!) and some will be working from home. Either way we hope you are staying safe and well. We have been and will continue to keep you updated on any key coronavirus related updates through our regular newsflashes but wanted to take this opportunity to focus on some other key areas which are or may affect our clients in the near future.


Top tips for Restructures & Redundancies

Writing this comes with a heavy heart as the impact of Covid is felt by many businesses in a range of sectors who are sadly having to face restructures and redundancies in their business. We have set out below some top tips to be mindful of if you are facing such a situation to help with a smooth restructure/redundancy process.

Check your policy
The starting point to any restructure/redundancy process is to look at your policy and see what requirements it places on the business in terms of timescales, process and additional redundancy costs. If you don’t have such a policy in place, your process will be governed by legal requirements and best practice and perhaps any additional obligations if you have undertaken previous restructures/redundancies. We can discuss these with you.

Cost out the restructure/redundancies
Prior to announcing any restructure or redundancy process, it is key to cost out the restructure and any potential redundancies/voluntary redundancies (including notice periods) to help you determine the viability of your proposals. Be mindful that employees are entitled to their pre-furlough rate of pay whilst calculating their statutory redundancy pay rather than their reduced rate of pay whilst on furlough leave. Please speak to us for advice on the rate of pay required for any enhanced contractual pay over and above the statutory amount. If an employee’s pay varies, or they have no normal working hours, then pay is normally averaged over the previous 12 weeks. If this period includes at least one week of furlough then the averaging must be based on full rather than reduced pay. It is important to remember when costing this out, not to identify the salaries of specific individuals who you consider may be selected for redundancy over others, as this could be used as evidence that you had pre judged the outcome in an unfair dismissal or other tribunal claim.

Prepare, Prepare, Prepare
It is worth taking your time to ensure the necessary documents and letters are prepared thoroughly at the beginning. A detailed business case, timetable and associated documentation (e.g. skills audits/selection criteria/job descriptions etc) will help to achieve a more meaningful consultation and ensure a smoother process, avoiding questions from any representatives or the employees directly which you may not have thought of or be prepared for.

Obtain Board Approval
Prior to announcing any restructure/redundancy process, make sure you have complied with any corporate structure requirements such as board approval.

Notify the Secretary of State
Remember that if you are entering into a collective consultation situation (i.e. you are proposing to dismiss 20+ employees within a 90 day period - which includes termination and reengagement through changes to T&Cs of employment) you will need to notify the secretary of state by completing a specific form (HR1) and sending a copy to the employee representatives. We can provide further guidance on this if it affects you.

Meaningful consultation
Be sure to listen to the feedback of your employees/representatives. Whilst you don’t have an obligation to agree to all of their suggestions, you do have an obligation to give them due consideration and enter into “meaningful” consultation.

Notice
Ensure you don’t forget about notice periods in preparing your timetable for the restructure/redundancy process. As a minimum this will be 1 weeks’ notice between 1 month and up to 2 years’ continuous service, increasing by a further week after 2 years’ service for each additional year of continuous service up to a maximum of 12 weeks. However, if your contracts provide for longer notice periods, they must be followed.
If the employee is only entitled to the statutory minimum notice period, this must be paid at their full rate of pay (prior to any reduction of pay as a result of furlough leave). If, however, they are entitled to longer contractual notice, please contact us for advice on the rate of pay applicable.

Be sympathetic
A restructure will be a very stressful, uncertain period for employees. Obviously it will take its toll on those directly affected, but even those not directly involved are likely to feel the effects of it as it will unsettle the workplace, colleagues and atmosphere. It will also have an impact on survivors as their workload may increase. Remember to offer support to all members of staff, not forgetting those who go through the process but are ultimately successful in obtaining a new or their existing position and the managers undertaking the process.

And finally, use us
Please use us right from the start. We can work with you to prepare the documents and letters and assist you throughout the full procedure. Please inform us as soon as you are seriously considering a restructure or redundancy process.


No Obligation to Offer Redundancy Appeal

As most employers offer the right of appeal in a redundancy dismissal, and many procedures allow for this, it may come as a surprise to learn that the Employment Appeal Tribunal (EAT) has reconfirmed in a recent case that appeals are not strictly necessary in a redundancy dismissal situation.

What happened?
The individuals were teachers whose school was due to close and another school replace it. They were told their jobs were at risk but they could apply for a position within the new school. They did this but were unsuccessful and so were made redundant. The individuals bought claims for unfair dismissal since they were not given any right to appeal the decision to dismiss them and there was very limited consultation. The employer argued a right of appeal would not have made any difference to the outcome of their dismissal since their place of work was closing. The original Tribunal decided that they had been unfairly dismissed because, among other things, they were not give the right of appeal nor had they undergone a meaningful consultation process and it took into account the size and resources of the employer (a local authority). On appeal the Employment Appeal Tribunal (EAT) said that their dismissal was unfair but there were specific regulations which applied to the school obliging the employer to give a right of appeal. However, more interestingly, the EAT referred to an earlier case which said that there is no rule that a redundancy dismissal will be automatically considered to be unfair simply because it did not have an appeal procedure. Therefore, in some cases it may well be fair to not offer a redundancy appeal. The overall fairness of the process needs to be looked at as a whole.

What does this mean for employers?
This case confirms that there is no general rule that a redundancy appeal must always be offered, nor that by omitting to do so will the dismissal necessarily be unfair. It is interesting that the ACAS Code of Practice for Disciplinary and Grievance Procedures recommends employers have an appeal process for disciplinary and performance cases. However, this does not apply to redundancy dismissals. Whilst there is an ACAS guide on redundancy (which states that it is good practice to offer an appeal) that guide is does not have the same legal status as the Code of Practice. Offering an appeal can remedy any procedural flaws that may otherwise exist, reducing the risk of a successful unfair dismissal claim but, on the other hand, reversing a decision in a redundancy dismissal on appeal can impact on individuals who considered themselves to be “safe” in their role and create further uncertainty in an already stressful period.
If you do not have a redundancy policy/procedure which requires an appeal and do not have a custom and practice of offering this for such dismissals, you may have flexibility as to whether (or at least to what extent) you offer appeals in such dismissals. There may be a particular redundancy situation you are faced with where you do not want to offer a full appeal procedure. In such cases, you may be able to tailor your process to accommodate that situation (requiring forward planning) and limiting when and how any appeal will be heard. If nothing else, it may give you comfort to know that if an appeal is overlooked for a particular reason in a redundancy situation, this does not always make the dismissal unfair.

How can we help?
If you would like to explore this specific situation further with us, or would like more general advice on a redundancy/restructure process including any policy you may have in place, please do contact us in the usual way.


Flexible working requests in light of Covid

It is estimated that between half and two thirds of workers had to change their working arrangements and work from home at some point during lockdown. With many businesses still not back to the office and workers remaining working from home, this has shown many employers just how flexible and productive their workforce can be away from the office and how many more jobs can successfully be carried out from home than previously thought.

We have already heard stories of many employers scaling back their office space with a view to making working from home a more permanent arrangement. As many individuals are reported to be enjoying the new flexibility in their working location or hours that Covid has brought, it would not come as a surprise that it is anticipated that there will be a rise in flexible working requests when they are asked to return to their previous working arrangements, to afford workers greater flexibility on a more permanent footing. We have summarised the procedure to follow below and set out some trickier areas to be aware of. If you are faced with such a request, please feel free to contact us for guidance and advice.

Who can make a request?
Previously, employees could only make such a request when they had certain caring responsibilities. However, since 2014, any employee with 26 weeks continuous service, who has not made a formal flexible working request in the last 12 months, can make a request for any reason. Despite the law being relaxed in 2014 to allow an employee to make such a request on any basis, the vast majority of requests are from females and on the basis of childcare needs, with the main request being for part time hours, although whether this will change as a result of Covid remains to be seen. Regardless of the reason for their request, the same process should be followed and the request given the same serious consideration. However, where the request is to enable the employee to carry out caring responsibilities for children, the elderly or disabled or to assist a disabled employee himself/herself, then employers need give the requisite consideration to those requests to avoid discrimination related claims. Requests for flexible working could be to change their working hours, days, or location of work (i.e. to work from home). Of course, when an employee submits a flexible working request, this does not mean the employer needs to agree to it. However, it must be given serious consideration and the correct legal procedure must be followed.

How to handle a request
It is essential that if you receive a flexible working request, it should be handled in line with your flexible working procedure if you have one in place. As a minimum you must comply with the legal rules which include:

  1. Meeting with the employee once a valid request is received to give due consideration to the request (this can be via zoom/teams etc in the current climate if preferred), unless you can agree it in full immediately. In most cases some arrangement, if not on the exact lines that the employee wishes, is achieved and the request is agreed by negotiation taking into consideration the role and the business needs;
  2. If it is agreed, it must be confirmed in writing to the employee as a permanent amendment to the employee’s contract (unless a temporary agreement has been reached);
  3. If there is uncertainty as to whether a requested working pattern will be successful, a trial period can be agreed;
  4. Where you are unable to agree with the request (in full or in part), any refusal must be on the basis of one or more of the eight business reasons below and the employee has the right to appeal that decision. It is essential that each case is considered separately, as a blanket approach to refuse flexible working requests can result in successful tribunal claims against the employer;
  5. You have 3 months to consider and give a response including the right of appeal within this time frame.

Employers can often feel under pressure by the legislation and be concerned about the risk of refusal. However, the requirement is not to agree to each request but to treat all requests in a reasonable manner. We can guide you through this process.

A request can only be refused on the basis of one or more of the 8 business grounds set out by the legislation, and the employer should have evidence as to why those business reasons apply in that case. The 8 business grounds are:

  1. The burden of additional cost.
  2. An inability to recruit additional staff.
  3. An inability to organise work amongst existing staff.
  4. Detrimental impact on quality.
  5. Detrimental impact on performance.
  6. Detrimental ability to meet customer demand.
  7. Insufficient work in the period the employee wishes to work.
  8. A planned structural change to the business
Tricky situations

It worked during Covid
If an employee submits a request to continue to work flexibly as they have done during lockdown, the business will need a sound solid business reason to reject such an argument and require their pre lockdown working arrangements to continue. This should be backed up by evidence which could include lower productivity figures, client/customer complaints or that with a split between some employees being office based and some home based, communication issues arise.

Consistency
Approaching requests in a consistent manner is very important to avoid arguments of discrimination or favouritism. Adopting a fair procedure, training managers on the process and centralising the process as much as possible can help to achieve this.

Potential Discrimination
As we mentioned above, whilst the process is the same regardless of the reason for the request, it is important to be aware that where the request is linked to a protected characteristic under the Equality Act (e.g. to enable the employee to carry out caring responsibilities for children, the elderly or disabled or to assist an elderly or disabled employee himself/herself or to accommodate religious requirements), they carry the potential to result in a discrimination claim if they are not handled carefully.
For example, refusing a woman’s request for part time hours for childcare purposes could result in an indirect sex discrimination claim because women remain more likely to be disadvantaged by a practice of requiring staff to work full time. Employers can justify indirect discrimination, but to do so they need to show they have a legitimate business aim for refusing that flexible working request and the aim is “proportionate” (meaning all alternatives have been properly considered).

Multiple requests
There are times when you could be faced with multiple flexible working requests and this could certainly occur when you require staff to return to work as usual. Faced with such a situation, the ACAS guidance and best practice is to consider requests in the order that they are received. However, some employers may be more inclined to consider those requests that could result in a potential discrimination claim ahead of others. Such an approach comes with a warning, however, to be careful not to fall foul of discriminating against the individual whose request is pushed to the back of the queue. For example, there could be a direct sex discrimination claim where a male’s request for flexible working is rejected but has or would have been granted for a woman.

How can we help?
If you would like a copy of our template flexible working procedure please let us know. If you are faced with a request and would like guidance on how to approach it, please do contact us and we can guide you through each stage, assist with letters and help test the robustness of any potential grounds of refusal.


Unfair Dismissal for not framing allegations correclty 

The facts
A teacher was charged with possessing a computer containing indecent images of children. It was a shared computer found at his home by the police. However, when the police couldn’t establish who had downloaded the images, it was decided not to proceed with a prosecution of the teacher but it reserved the right to do so in the future. The teacher was suspended by his employer whilst an investigation was carried out. The investigation report referred to the following concerns:

  1. The teacher’s involvement in the police charges of possessing a computer with indecent child images;
  2. If this became publicly known, it could bring the employer into disrepute;
  3. The position of trust the teacher holds in his profession.

A disciplinary hearing was convened and the invite letter referred to the allegation that the teacher was “involved in a police investigation into illegal material of indecent child images on a computer found within your home and the relevance of this to your employment as a teacher. “ No specific reference was made to the potential reputational damage of the employer as being an allegation the teacher was facing or a ground for potential dismissal. The employer dismissed the teacher on the following grounds:

  1. It was possible the teacher may have been responsible for the images found on the computer (even though the employer said there was insufficient evidence to conclude the teacher had downloaded the images);
  2. The risk of reputational damage from continued employment if he was prosecuted in the future and;
  3. An irretrievable breakdown in trust and confidence.

The teacher brought a claim for unfair dismissal but the original tribunal found this was a fair dismissal. The teacher appealed on the basis that he was not told that the risk of reputational damage was an allegation he was facing and that the employer couldn’t dismiss him based on the possibility he had downloaded the images.

What did the Employment Appeal Tribunal (EAT) decided?
The EAT decided that the dismissal was in fact unfair on the basis that the employee was not given notice of the full grounds on which a dismissal may be sought. The teacher was not given notice that reputational damage may be a potential ground for dismissal in this case. It was not sufficient for this to be mentioned in the investigation report. It is a separate potential ground for dismissal, and as such must be mentioned as such to allow the teacher the opportunity to to fully prepare for this ahead of the hearing.

Further, it was also decided that it was not reasonable to dismiss on the basis that the teacher “may have” downloaded the images nor that there could be reputational risk “if” he were prosecuted in the future. The EAT said that the employer can only assess the risks on evidence they currently have, not of unknown risks (which included a future conviction). This meant that the employer should have decided whether the misconduct was established and in this case, it was not able to establish this, it was a mere “possibility”. Decisions had to be made on the balance of probabilities on the evidence they had and not “guess” work.

What does this mean for employers?
This decision highlights the importance of taking care and being absolutely clear about the allegations being put to the employee and the disciplinary panel’s remit when hearing the case. It is a principle of natural justice that an employee knows the charges against him or her when facing a disciplinary hearing to enable him/her to prepare his/her case. It also reminds us that decisions must be taken on the “balance of probabilities” based on the evidence available and not on what might happen in the future.

We are here to help
We can help advise in all levels of disciplinary cases. In complex or contentious cases, we would strongly advise you contact us for assistance on the investigation and disciplinary process including framing the concerns and allegations fully and appropriately and communicating the final outcome.


Recent Covid Updates

  • Statutory Sick Pay: This has been extended to allow those who are isolating in advance of planned or elective surgery (to avoid catching Covid) to receive SSP.
  • Furlough compliance letters: HMRC have started to issue compliance letters to employers where they have concerns as to whether the furlough scheme has been used correctly. They are now reviewing the scheme and how it has been used, including whether the monetary claims are accurate and whether the individuals placed on furlough were eligible to do so.HMRC have said they are concerned with fraudulent cases as opposed to the genuinely innocent mistakes. HMRC consider the government may have paid £3.5m in fraudulent or mistaken furlough claims.
  • New guidance on calculating furlough pay: HMRC have updated its guidance to include information on how to calculate the amount of a claim under the CJRS where an employee’s furlough or flexible furlough leave ends partway through a claim period. In general, you would need to work out the employee’s usual working hours for the claim period and how many of those were worked and how many they did not work. When they end furlough or flexible furlough partway through a claim period you should now calculate their usual hours up to the last day of furlough (not to the end of the claim period), do not include working hours beyond that date. This calculation must be used from 14 September 2020. 


Upcoming Changes

  • The Supreme Court has confirmed it will allow an appeal to be heard in the case of The Harpur Trust v Brazel which decided that the 5.6 weeks minimum holiday should not be pro-rated for those working term time only or less than 52 weeks a year. We await further details on when this may be heard.
  • IR35 changes to apply to the private sector from April 2021: These rules prevent individuals working through a personal service company who perform roles similar to employees, paying less tax and NICs than if they were permanently employed by the client business. This means that from 6 April 2021 (delayed from April 2020 due to Covid), those medium and large private sector employers who are caught by the new rules will have responsibility to decide if the individual is caught by IR35 and become liable for deducting the right amount of tax and NICs from fees paid to the personal service company. 

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