10 Facts About Furlough Leave

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The Government’s Coronavirus Job Retention Scheme (CJRS) has been extended to the end of September 2021. However, from 1st July 2021, employers can only reclaim up to 70% of wages for hours not worked (up to the cap of £2,187.50 a month). Nevertheless, the employer must continue to pay at least 80% of the employee’s wages (up to the cap of £2,500 a month) for any furloughed hours. Therefore, from the start of next month employers will have to contribute 10% (up to the cap of £312.50 a month). It is optional whether an employer chooses to top up an employees’ wages above the 80%, but this cannot be reclaimed.

Did you know …

  1. There is no minimum period of furlough leave.
  2. Employees, directors and workers can be included in the Scheme.
  3. Decisions made by an employer as to who should be furloughed can amount to unlawful discrimination if the selection is based on any “protected characteristic” under the Equality Act 2010 (e.g. age, sex, race, religion, disability).
  4. Any reduction in pay whilst on furlough must be agreed with the employee, otherwise it amounts to a breach of contract.
  5. Holiday entitlement will continue to accrue for an employee during furlough leave.
  6. An employer can force an employee to use holiday entitlement whilst on furlough leave.
  7. Employers can carry out a redundancy consultation with employees whilst they are on furlough leave.
  8. Employees can be made redundant whilst on furlough leave, or at the end of furlough leave.
  9. If an employee receives a payment in lieu of their notice entitlement upon termination of their employment the CJRS cannot be used to help pay this.
  10. For the purpose of calculating an employee’s entitlement to various statutory payments, including redundancy pay, this must be with reference to their normal pay, not the pay received whilst on furlough leave.

For more detailed advice, whether you are an employee, worker or employer please consult with our employment specialist – Jennifer Carpenter, solicitor and managing partner.

 

Redundancy and Furlough Leave

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The Coronavirus Job Retention Scheme (CJRS) has been extended by the Government until 30th September 2021. However, from 1st July 2021 the level of the grant will be reduced and employers will need to contribute towards the cost of employees on furlough leave. Any employee/worker on furlough leave must receive as a minimum 80% of their pay, up to a maximum of £2,500 per month. In July employers will need to pay 10% and then 20% in August and September.

The CJRS is designed to help prevent staff from losing their job if they are unable to work as a result of the Covid-19 pandemic in circumstances where they would otherwise have been made redundant. There is, however no right to demand furlough leave from an employer, and no obligation upon an employee to agree to furlough leave if proposed by an employer. Guidance has already made it clear that furlough leave ,and therefore the CJRS, can be used for employees shielding, unable to work due to child care or other caring commitments. Presently, the scheme is most likely to be used by those in the hospitality, beauty and retail sectors but as the Government’s Roadmap moves forward this should reduce those unable to work due to pandemic related restrictions.

Does furlough leave have to be at full pay?

No, but for furlough leave to be lawful, and not in breach of contract, the staff member must give express consent, including to a reduction in their pay. An employer can choose to top up the pay to the full amount if they wish, but is only a legal requirement of CJRS that the employee receives a minimum of 80% pay (subject to the cap).

Does furlough leave have to be full time?

Since July last year furlough can be used flexibly so staff can work some of their contracted hours, or be on a rota system whereby they take it in turns with colleagues to be on furlough leave, or be working.
Can redundancies be made whilst staff are on furlough leave?
An employee can be made redundant whilst on furlough.

What is the position with regard to notice?

Full notice must be given and at full pay.

Is the rate of pay for redundancy affected for those on furlough leave?

Statutory redundancy payments for those that are eligible must be calculated by reference to a normal week’s full gross pay, not furlough pay rates.

If you are considering making redundancies then we can give you the legal advice and guidance to enable you to adhere to the statutory requirements and procedures; or to help explore alternatives with you. Please call us on 01799 523441

Uber Drivers Are Workers

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In a very recent February 2021 Supreme Court decision (Uber and others v Aslam and others [2021] UKSC 5), the employment tribunal decision that Uber drivers are workers within the meaning of UK employment legislation has been upheld. The decision reached was predominantly based on the degree of subordination and control to which the drivers were subjected by Uber making them workers, not self employed individuals. The court has also determined that the drivers’ working time included when they were logged in to the Uber app within the area in which they are licensed to operate and ready and willing to accept trips.

There has been an increase in the number of cases where it is necessary to determine whether an individual is either self employed or a worker. Many of these cases have involved couriers and drivers. Proving worker status is important to assert various rights that a worker would have, for example entitlement to receive national minimum wage and entitlement to paid annual leave. “Worker” is defined under section 230(3) of the Employment Rights Act 1996. However, Tribunals will not just look at how an individual has been labelled by the parties but the reality of the situation in practice.

This case is the fourth time the courts have reached the same conclusion regarding worker status. The significance of this case is that there is no further right of appeal from the Supreme Court and Uber must now deal with a situation whereby its drivers are workers. The financial impact for the company is likely to be significant. It may even change the way in which Uber can operate.

Now that worker status has been established this case will return to the employment tribunal, to determine the compensation due to the drivers in respect of their claims for holiday pay and unlawful deductions from their wages.

What can be learnt from this case? The courts will look to protect workers in spite of the contractual documentation they sign. If employers use complicated arrangements in an attempt to disguise the true nature of the working relationship it is likely to fail.

We can help by providing advice on the status of working arrangements for employers, employees, workers and contractors. All employers should be aware of any risk they may carry of having worker status claims brought by those that undertake work for them purporting to be on a self employed basis.

Contact our employment specialist Jennifer Carpenter, Solicitor and Managing Partner, for more detailed and specific advice.

Brexit and the Implications for Employment Law in the UK

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The UK left the EU on the 31st January 2020 following ratification by the UK and the EU of the Withdrawal Agreement. A transition period then applied until 31st December 2020. During this time for most purposes the UK was treated as if it were still a member of the EU. Therefore, most EU law continued to apply to the UK. It is the European Union (Withdrawal) Act 2018 that ended the supremacy of EU Law in the UK and prepared the legal framework for the UK to withdraw from the EU. The Act meant a conversion of EU law into UK law as it stood at the moment of exit. Meaning that any UK Laws derived from the EU remained applicable. Therefore, this means that any employment legislation derived from the EU remains applicable in the UK, but just on a different constitutional basis.

There is now an end to the principle of the supremacy of EU law to the effect that it no longer applies to any UK enactment or rule of law passed or made on or after 31st December 2020. The supremacy of EU law continues to apply in the UK where there is an inconsistency between an EU directive and UK domestic legislation and the directive was implemented before the end of the transition period, any inconsistency in the law should be resolved in favour of the EU directive.

Regulations have been enacted that have determined that the Court of Appeal in England and Wales are not bound by retained EU case law. This does, however, raise concerns with regard to creating uncertainty in relation to employment law matters. How to interpret retained EU law since the end of the end of the transition period on 31st December 2020 is tricky to determine.

Decisions will now rest with the UK Government as to whether it should retain, amend or repeal the UK employment law that has been derived from the EU. The most likely areas of law to be subject to change are:-

  • The Working Time Directive 1998. The UK has the Working Time Regulations 1998 that govern working time and holidays. There may be an overhaul of the way holiday pay works as this is currently a complicated area due to the effects of several previous European Court of Justice decisions.
  • Agency Worker Rights – This is an area that could see an overhaul as the Agency Worker Regulations 2010 are quite complex and unpopular.
  • The Transfer of Undertakings Protection of Employees Regulations (TUPE) provide the rules for business transfers. These can be difficult to apply in practice.
  • The Equality Act 2010 – this deals with discrimination legislation in relation to workers’ protections. The Government has already indicated that it does not want to reduce the protections as set out in this legislation. However, there may be some changes to discrimination based claims.

As it is early days since Brexit only time will tell as to how exactly this will impact on the future of employment law in the UK. Watch this space …

For all employment law related advice and representation please contact Jennifer Carpenter solicitor and partner.

What Is A Deed Of Variation?

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You may be surprised to learn that it is possible to alter someone’s Will after their death, providing that any beneficiaries left worse off by the changes agree. The changes can be made by what is known as a deed of variation.

If someone dies intestate (without a Will) then the intestacy rules govern who inherits. A deed of variation can also be used to change the inheritance in the same way as if there was a Will.

There are various reasons why it may be a sensible idea to change a Will or redirect inheritance under the intestacy rules. These include:-

  • to reduce the amount of Inheritance tax (IHT) or Capital Gains Tax (CGT) payable
  • to provide for someone who was left out of the Will
  • to move the deceased’s assets into a Trust
  • to clear up any uncertainty over the Will

Deeds of variation are a useful inheritance tax (IHT) planning tool because any inheritance from an estate that is redirected to others will be treated as if the deceased made the gift. This means that the person allowing the redirection does not have to survive the gift by seven years in order for it to fall outside of their own estate and therefore not be subject to IHT. A common example would be a child who is to inherit from their parent’s estate. If the child is already financially sound then they may not require the inheritance which would only increase the size of their estate, giving rise to further IHT charges on their own death. In this situation, the child may wish to redirect the inheritance to their own children who could benefit from the money.

It is important to know that a deed of variation must be made within two years of the date of death. Furthermore, once a deed of variation is signed it cannot be revoked so it is paramount that careful consideration is taken before entering into a deed of variation.

For more information, please contact our Wills and Probate department for expert and professional advice.

Adams Harrison Excellent Lexcel Audit Result July 2020

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Adams Harrison is excellent – it is official.

Adams Harrison has held the Lexcel accreditation since 1999 and over the last four days has undergone a rigorous full reassessment. The result being that the firm has passed with flying colours.

What is Lexcel?

It stands for Legal Excellence and is a Law Society accreditation in relation to legal practice management standards that is optional for law firms to attain. Lexcel defines quality management procedures in seven areas: structure and strategy, financial management, information management, people management, risk management, client care, and file and case management.

During the audit there were absolutely no findings of non-compliance and the auditor identified 40 areas of good practice, an increase of four from the annual assessment last year.

The auditor for the assessment, when reporting the outcome, stated that an increase in the number of areas of good practice was a “remarkable result”, particularly in light of the recent Covid-19 pandemic.

Within the auditor’s report he has stated that the firm has a very robust and tested disaster recovery and business continuity plan. Reference was made to the firm having the Cyber Essentials kite mark.

The auditor stated that “processes and systems are extremely well understood by staff, and are also very well embedded into both the operations, and culture, of the Practice.”

In relation to risk management the finding was: “The Practice should continue to be commended for the practical, effective and comprehensive approach it has taken to operational risk management” and “the processes are clearly effective, very well implemented and, taken together, continue to constitute a highly robust approach”. It was stated that Adams Harrison should be highly commended for the work done to remain compliant against the requirements of the Standard.

The auditor was of the opinion that the Practice continues to place “very significant emphasis on the levels of ongoing client care which it provides.”

The report states that “In Lexcel terms, Adams Harrison, continues to be an extremely well run, and extremely well managed Practice – made all the more noteworthy by the fact that it has been achieved in a period of ongoing change and significant uncertainty!!”

 

Furlough Leave Update Information

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All employers and organisations please be aware that in order to qualify for the subsidy from the Government’s Coronavirus Job Retention Scheme all employees/workers furloughed must have been given written instruction that they cannot do any work for the organisation that has placed them on furlough, and have consented to this in writing. This is contained in the Treasury Guidance to HMRC dated 15th April 2020.

The scheme has very recently been extended until the end of June.

For all your furlough leave questions answered, whether you are employer or employee, please contact our employment specialist Jennifer Carpenter, Solicitor and Managing Partner.

Some FAQs About Furlough Answered

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Some FAQs about furlough, answered by employment law specialist, Jenny Carpenter, Solicitor.

Do you have to be employed to be placed on furlough leave?

No, the Coronavirus Job Retention Scheme applies to the self employed, contractors and zero hour workers.

Can furlough leave be used for those shielding at home from Covid-19 as they are in the vulnerable group of individuals?

Yes, the Scheme Guidance makes it clear that those that are shielding in line with public health guidance can be placed on furlough leave by their employer. However, this is only the case if the employee cannot work from home and would otherwise be made redundant.

Can a worker/employee with caring responsibilities be placed on furlough leave?

Yes, if for example an employee is unable to work because there is no child care provision (particularly relevant as schools are closed) then they can volunteer for furlough leave. However, an employer is not obliged to place an employee/worker on furlough.

Can apprentices be placed on furlough leave?

Yes, and they can continue with training during this time, but not work.

Can a furloughed worker/employee undertake voluntary work whilst on furlough leave?

Yes. But not for the organisation that has placed them on furlough leave.

Can paid work be done by a worker/employee on furlough leave?

This depends. Paid work cannot be done for the organisation that placed them on furlough. However, if the worker/employee’s contract of employment permits them to have more than one job then there is no reason why they cannot take up paid work elsewhere.

Can a Nanny be placed on furlough leave?

Yes, the Guidance makes it clear that those employed by individuals can be placed on furlough. However, they must be paid through PAYE payroll and have been on the payroll as at 28th February 2020.

Can a director of a company be placed on furlough leave?

Yes, provided the decision is made by the Board of Directors and documented. It does of course mean that the director cannot then do any work for or on behalf of the Company during the period of furlough. The director can though carry out his/her statutory obligations under the Company Act 2006.

Employment Law Terms Explained

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As a result of the Coronavirus pandemic we are experiencing unprecedented employment circumstances and lots of different terms are being used to describe a worker/employee’s situation:-

Laying off

The employer provides the employee with no work, nor pay for a undefined period, but retains them as an employee.

Short time working

The employer provides less work (normally less hours of work) for less pay but retains the employee.
An employer should only impose one of the above if the contract of employment makes full provision for this, otherwise the employee would have a claim for breach of contract.
In certain circumstances where an employee is put on short time working or lay off they become entitled to claim a statutory redundancy payment. This is only where the employee has at least two years continuous employment with the employer and the statutory scheme for claiming redundancy pay is followed.
To be able to claim the employee must have been laid off or kept on short-time working (or a combination of both) for at least four or more consecutive weeks; or a total of six weeks (of which no more than three are consecutive) in any period of 13 weeks.

Redundancy

A potentially fair reason to dismiss under the Employment Rights Act 1996, either due to:-

  1. A place of work closure
  2. A company/business closure
  3. There no longer being a need, or there is a reduced for employees of a particular kind.

It is worth noting, however that notice must still be given to the employee that the employment is to be terminated.

Furlough leave

With the worker/employee’s consent they agree to go on paid leave for a minimum period of three weeks whereby they do not undertake any work and are retained as an employee. The employer can utilise the Government Retention Scheme and recoup up to 80% of staff wage costs via HMRC. The employer is not obliged to pay 100% of pay during furlough leave. Forcing an employee to be furloughed would amount to breach of contract. Therefore, it can only be done with the employee’s express consent.
There is no right to request furlough leave, nor any right to request redundancy as an alternative.

For advice as an employee or employer our employment law specialist solicitor Jennifer Carpenter is available at [email protected].

Do I Need To Appoint A Guardian For My Children In My Will?

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If you have children under 18 and you are making a Will, you should consider who would look after your children if you were to die while they are still under 18.

Writing a Will can give you peace of mind that your children will be cared for by whom you choose to look after them.

It may be that you have blood relatives who you would not want to look after your children. A Will allows you the opportunity to appoint who you would like to act as guardian for your children. You can also set out your reasons for the appointment in your Will.

If there are disagreements after your death, your Will and any additional wishes you have left would be used as evidence in court for your reasons for your appointment. Your reasons would be taken into account and carry weight with the court.

If you do not name guardians in your Wills and several potential guardians come forward, the court would have to decide to make a child arrangements order setting out with whom the child should live. The applicant who the Judge feels is best able to meet the needs of the child would be appointed. The court would need to take into account all the circumstances such as the child’s relationship with the proposed guardian and the wishes and feelings of the child him or herself in line with a child’s age and understanding.

If you were to die and the other parent of your child has parental responsibility, they would automatically become the child’s guardian irrespective of whether the parents are living together or not. If you choose someone other than the other parent with parental responsibility to be a child’s guardian in your Will, that person will not automatically become a child’s guardian. If they want to become the child’s guardian on the first parent’s death, they need to make a court application and ultimately if will be the court’s decision as to who is the best guardian to meet the children’s needs. The court will try to make a decision based on what is best for the child’s welfare using the welfare checklist which we can advise you on.

When choosing a guardian, you should consider the size of their own family and whether it would be feasible for them to take on your family. They may also not live locally which would involve a move of schools and friends for your child. They may also be older than you and within the period of guardianship may struggle to look after your children.

In your Will you can provide your guardians with additional assistance. If you own your own property; you can specify that your guardians live in your property with your children to prevent as much disruption to them as possible.

If you anticipate that your guardians would need a bigger car or would need to build an extension to their own property; you can provide a power for your executors to loan them money for this purpose.