UK: requirement to interview for own job plus lack of consultation and appeal rendered redundancy unfair

The EAT ruling in Gwynedd Council v Barrett serves as a reminder that a fair redundancy will normally require the employer to identify a reasonable pool of at risk employees and fairly score the individuals against fair selection criteria. It will not be fair instead to require individuals to interview for what are essentially the same jobs as those they are already doing. A ‘forward looking’ interview process will only be appropriate where redundant employees are being considered for alternative jobs which are genuinely new posts. However, in both scenarios it will usually also be a requirement of fairness to consult with the employees over the process and to provide a right of appeal.

 

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK COVID-19: Chancellor confirms changes to Coronavirus Job Retention Scheme

The Chancellor has this evening confirmed the following changes to the Coronavirus Job Retention Scheme (CJRS):

  • Claims for periods after 30 June 2020 will only be possible from employers who have previously used the scheme in respect of employees they have previously furloughed for a 3 week period ending no later than 30 June – the latest an employee can be placed on furlough for the first time is therefore 10 June 2020.  Employers will have until 31st July to make any claims in respect of the period to 30 June. (As yet there is no detail as to whether there will be an exception for TUPE transferees unable to comply with this deadline in respect of furloughed transferring employees.)
  • Partial furlough will be possible from 1 July 2020, rather than August as originally announced.  From 1 July, employers will be able to claim in respect of previously furloughed employees either for full furlough, or for partial furlough where employees work part of their normal hours.  The employer must pay wages and employer NICs and pension contributions for the hours worked, and can make claims under the CJRS in respect of the normal hours not being worked.  There is no restriction on the working hours or shift pattern but employers must agree the arrangement with their employee and confirm that agreement in writing.  The minimum period for a claim will be a week (ie, the furlough arrangement agreed between employer and employee and reported in a claim to HMRC must cover a period of at least one week, although the claim could be in respect of wages for only part of a week where the employee is working part of their normal hours).  Further details will be included in future guidance to be published on 12 June.
  • For July, the CJRS grant will continue to cover 80% of wages for unworked hours (subject to the monthly cap of £2,500 or, for partial furlough, a proportionate cap reflecting the hours not worked), plus associated employer NICs and pension contributions.
  • For August, employers must pay the employer NICs and pension contributions for the hours not worked;  the CJRS grant will continue to cover 80% of wages subject to the cap.
  • For September, employers must contribute 10% of the capped wages (plus employer NICs and pension contributions) with the government paying 70% of capped wages for the hours the employee does not work (so the employee continues to receive 80% wages subject to the cap).
  • For October, the employer contribution increases to 20% (plus employer NICs and pension contributions) and the government contribution reduces to 60% of capped wages.
  • Employers can continue to top up wages to 100% if they wish.
  • The scheme will close on 31 October 2020.

The press release is here and a fact sheet with further details here.

We have updated our client briefing on the CJRS to cover these changes, available here.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK COVID-19: new Treasury Direction (published 22 May) amends Coronavirus Job Retention Scheme

On Friday 22 May 2020 the Treasury published a further Direction (dated 20 May) modifying the legal framework for the Coronavirus Job Retention Scheme (CJRS).  Claims for payment under the CJRS made after the publication of the further Direction on 22 May will have to comply with the new, amended version of the Schedule.  Claims made on or before 22 May should comply with either the original Schedule published on 15 April or the new Schedule (as a whole).  The 20 May Schedule extends the scheme until 30 June 2020 so a further Direction will be needed for the extension of the current terms until 31 July, and for the new terms applicable from August (which are expected to be announced towards the end of next week).

Many of the changes are on issues where the 15 April Schedule conflicted with HMRC’s published Guidance and have now brought the Schedule into line with that Guidance or clarified areas of uncertainty.  There are also some new provisions, which presumably will be reflected in further iterations of the Guidance in due course.

Perhaps most significant is the amendment to the requirements for placing an employee on furlough. The 15 April Schedule required a written agreement between employer and employee that the employee would cease all work in relation to their employment, whereas the HMRC’s Guidance initially suggested that only written confirmation of being furloughed was required for the purposes of eligibility under the CJRS, and subsequent versions stated that furloughing should be consistent with employment law but didn’t otherwise need a written agreement.  The 20 May Schedule now provides that, for the purposes of eligibility to make a claim, the required instruction to cease work is satisfied if:

  • the employer and employee have agreed that the employee will cease all work in relation to their employment – and this can be made by means of a collective agreement between employer and trade union
  • the agreement/collective agreement specifies “the main terms and conditions upon which the employee will cease all work” (presumably it would be sufficient to set out the extent to which the pre-furlough terms and conditions have been varied, eg agreed reductions in pay or benefits, and perhaps also the extent to which the employee is permitted to work for other employers or can study or volunteer during furlough)
  • the agreement is incorporated expressly or impliedly in the employee’s contract
  • the agreement is in writing or is confirmed in writing by the employer (and writing includes in electronic form)
  • the employer keeps the agreement/collective agreement/confirmation until at least 30 June 2025.

Employers who did not obtain written agreements from furloughed employees  (whether because they were not varying any contractual terms, or because changes were agreed orally) will welcome this change for future claims.  They may also be able to rely on the new Schedule in respect of past claims (if those claims complied with all the provisions of the new Schedule). However, employers should note that there is still a requirement for agreement, and for a written record to be made of that agreement (covering both the cessation of work and the applicable terms).  It remains unclear whether the agreement itself can be retrospective or implied (although there is nothing expressly prohibiting this).  It would obviously be prudent to ensure these new provisions are satisfied for newly furloughed employees and to provide written confirmation of the agreement for those already furloughed if this has not yet been done.

Other changes include:

  • it seems that the employer and employee can now agree to end a period of SSP in order to start furlough (notwithstanding continuing SSP eligibility) – this is presumably aimed at allowing employers to agree to furlough individuals whose eligibility for SSP is due to being in the extremely vulnerable category advised to shield (but who are not actually unwell);
  • where a period of unpaid leave started before 1 March, and the employer and employee reached an agreement before 20 March 2020 to end it earlier than originally planned, the employee can be put on furlough after the revised end-date;
  • no claim under the CJRS can be made for a period of unpaid leave between 1 March and 30 June and furlough cannot begin during that period; there is no express prohibition on ending that leave earlier than planned in order to furlough;
  • a director will not be treated as doing work (and therefore outside the CJRS) where they are simply making a CJRS claim for, or paying wages to, an employee of the company; the carrying out of duties as a trustee or manager of an occupational pension scheme is also permitted (save where the employer’s business is the provision of occupational pension scheme independent trustee services);
  • furloughed employees can now study or do training even if not directly relevant to the employee’s job and agreed in advance – its purpose can be to generally improve an employee’s effectiveness in the employer’s business or the performance of the employer’s business, provided it does not contribute to business activities, generate income or profit, or significantly contribute to the production of goods or services for sale;
  • it is now clearer that, when calculating the reference salary (80% of which is to be paid, subject to the cap of £2,500 per month), benefits provided through salary sacrifice are not included, but variable payments for overtime, timing of shifts or additional duties will be included provided there is no discretion about how the amount is to be calculated;
  • reference salary for those taking furlough after a period of unpaid leave,  paid statutory family-related or sick leave, or other reduced rate paid leave immediately after statutory leave, should be calculated as if the employee had been on paid annual leave receiving normal pay required under the Working Time Regulations during those periods;
  • an employer no longer needs to deduct from the CJRS claim any amount of SSP for which an employee is eligible, even if not claiming it during furlough;
  • the relevant date for TUPE transfers has been changed to 28 February in line with the current Guidance, a new provision extends the CJRS coverage to TUPE business transfers from an insolvent transferor (where the automatic transfer of employment contracts does not apply) and transferors may also be able to claim for employees whose furlough periods do not last 21 days only because of a TUPE transfer.
Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

Asia Employment, Pensions and Incentives Update May 2020

Our Asia Employment, Pensions and Incentives update this month looks at:

  • the new measures in South Korea introducing paid emergency childcare leave to ease the burden on working parents;
  • the Employment Adjustment Subsidy in Japan, intended to try and prevent employers from resorting to immediate redundancies;
  • in Thailand, the new data protection rules and how they impact the collection of COVID-19 data;
  • this month’s Asia Comparative Article, which looks at the requirements and restrictions around the use of fixed term employment contracts in Singapore, Hong Kong, Thailand, Taiwan and the PRC; and
  • our Compliance Check this month, which will help businesses ready for reopening in Singapore and sets out the Safe Management Measures that need to be implemented.

In addition, our Hong Kong team recently published an article for employers returning to work. You can access that article here.

For those of you that missed our termination of employment webinars, you can access the Thailand webinar here and the SEA (Singapore, Malaysia & Philippines) webinar here.

Finally, don’t forget our upcoming regional webinar on return to work measures, taking place on 21 May 2020. You can register for that webinar here.

 

 

 

Fatim Jumabhoy
Fatim Jumabhoy
Partner, Singapore
+65 6868 9822
Narendra Adiyasa
Narendra Adiyasa
Partner, Jakarta
+62 21 3973 8000
Tess Lumsdaine
Tess Lumsdaine
Senior Associate, Hong Kong
+852 2101 4122
Rebecca Lim
Rebecca Lim
Associate, Singapore
+65 6868 8063
Gillian Miao
Gillian Miao
Counsel, Mainland China
+86 21 2322 2325

UK COVID-19: People: Chancellor extends furlough scheme until end of October

The Chancellor has just announced in Parliament that:

  • the Coronavirus Job Retention Scheme will continue without change until the end of July
  • the Scheme will remain in place and available to all sectors through to the end of October, but from August there will be greater flexibility. Employers currently using the scheme will be able to bring furloughed employees back part-time.  Employers will also be asked to ‘start sharing the cost’ of the scheme.  Employees will continue to receive at least 80% of their wages subject to the £2,500 per month cap.  Full details will be available by the end of May.

The Treasury press release is available here.

Australia: COVID-19 – This week in Employment (1 May 2020)

This week saw the introduction of the COVIDSafe application, which is designed to speed up the process of contacting people who have been potentially exposed to COVID-19.

Further guidance has been released in relation to the JobKeeper legislation and by SafeWork Australia regarding work health and safety considerations.

More information regarding these developments in the employment space this week are outlined below.

A reminder that at any time you can visit our Wellbeing and Culture page, view our webinar series, listen to our podcast channel or read the most relevant COVID-19 legal insights from across our global network.

Introduction of the COVIDSafe App

The Australian Government has launched the new voluntary COVIDSafe App, which seeks to increase the respond rate to local outbreaks. The App tracks and identifies whether an individual has been in close contact with a person diagnosed with COVID-19.

The COVIDSafe App was passed under the Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential) (Emergency Requirements – Public Health Contact Information) Determination 2020 (Cth) which provides privacy protection for data collected through the App. To read this determination, please follow this link.

From an employment perspective, it is important to note that a person (including an employer) cannot require another person (including an employee) to download COVIDSafe to a mobile device. There are also other similar prohibitions.

More information on the COVIDSafe App can be found here and on the Department of Health’s website.

JobKeeper ‘one-in, all-in’ principle

Treasurer Josh Frydenberg has announced that the Government will update the JobKeeper rules to emphasise the “one-in, all-in” principle.

In a JobKeeper update issued on Friday, Frydenberg said the that this principle will ensure that employers cannot select which eligible employees will participate in the scheme. Rather, if an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme.

The Treasurer’s full announcement can be found here.

JobKeeper extension and updated payment verification process

The ATO has extended the time to enrol for the initial JobKeeper periods from 30 April 2020 until 31 May 2020. This means that, if businesses enrol by 31 May, they will still be able to claim for the fortnights in April and May, provided they meet all the eligibility requirements for each of those fortnights.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight provided it is paid by 8 May 2020.

Additionally, the Australian Government recently introduced the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 1) 2020. This instrument amends the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 to require the Commissioner to verify JobKeeper payment information with authorised deposit-taking institutions.

Please follow this link to view the new instrument.

You can also find more information on the JobKeeper application process here and on the ATO website.

Release of the JobKeeper disputes benchbook

The Fair Work Commission has released the JobKeeper disputes (Coronavirus economic response) benchbook to assist parties lodging or responding to JobKeeper dispute applications under the Fair Work Act 2009 (Cth) (link here).

The FWC have now clocked over 120 applications to deal with disputes under the scheme, while a union-run ‘Jobscammer’ website recorded more than 250 responses in its first week.

SafeWork

SafeWork Australia has recently released new guidance material including:

  • guidance that outlines key considerations when undertaking a risk assessment associated with COVID-19 (link here);
  • a template with examples of a risk register to assist businesses in assessing the risks associated with COVID-19 (link here);
  • a factsheet to provide guidance for Registered Training Organisations in delivering an introductory safety training course through connected real-time delivery (link here); and
  • a template to assist businesses with drafting an emergency plan (link here).

JobKeeper Navigation App is now live!

We have developed the JobKeeper Navigation App (which is designed to help you understand this scheme, whether you are eligible to receive this payment and what steps you should take next).

You can access the App here. We recommend using the Google Chrome browser to get the best web experience.

Weekly webinar

This week’s webinar hosted by Merryn Quayle (Partner in our Disputes team) discussed how to manage supply chain issues. John Laing (Senior Expert, McKinsey) explores how businesses are coping with supply chain issues and what’s next, Kristin Stammer (Partner in our Corporate team) explores terms and products, Patrick Gay (Partner in our Competition team) discusses excessive pricing and ACCC relaxation of enforcement, and Nanda Lau (Partner in our Corporate team in China) looks at China, specifically shifting supply chains elsewhere and the state of China’s supply chain market.

Click here to access the webinar.

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UK COVID-19: updated HMRC guidance (30 April): TUPE coverage and other changes

HMRC has this afternoon published updated versions of its guidance on the Coronavirus Job Retention Scheme.

An important change is to eligibility for TUPE transferees. The updated guidance for employers on checking eligibility to claim now states that “a new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.”

28 February was the date given in the original version of the guidance, until it was updated (on 15 April) to refer to 19 March.  That change meant that, where transfers took place before 19 March, transferees still had to comply with the requirement to have made an RTI submission for any furloughed employees on or before 19 March in order to be eligible for a furlough grant.  Transferees acquiring employees between 28 February and 19 March may have expected to be eligible, based on the earlier guidance, but found themselves unable to claim due to not making an RTI submission in time.  The reversion to the 28 February date will be welcome news for those transferees, although the terms of the Treasury’s Direction will also need to be amended to give legal force to this change.

Two other helpful clarifications have been made:

  1. There is a new provision stating that furloughed employees can undertake “union or non-union representative duties and activities for the purpose of an individual or collective representation of employees or other workers” without this counting as work for the employer (which is prohibited during furlough).  This is helpful given the possibility that employers may wish to start the information and consultation process for collective redundancies during furlough.  Although the amendment is not clearly covering the involvement of individual employees in electing non-union representatives, this ought also to be permitted.  Employers without existing representative bodies may wish to consider starting the election process while employees are on furlough now, to ensure they have representatives in place if and when needed.
  2. The guidance now states that employers can extend a period of furlough by any amount of time whilst the employee remains in furlough.  This clarifies that there is no need to allow furlough to end and then re-start it, although in some cases extension might require further employee agreement and it would be prudent to get this in writing if feasible.  Obviously furlough can only be claimed for days up until the date the CJRS ends.

The amendments also include a new paragraph explaining how the rules apply to annually paid directors.

The main change to the guidance on how to work out 80% of employees’ wages is to include further details on calculating NICs, and to make it clearer that, for variable pay employees, the employer must pay the highest of 80% of the same month’s wages from the previous year or 80% of the average monthly wages for the 2019/2020 tax year (subject to the cap), rather than the choice being at the employer’s discretion.  A minor change to the webpage on how to claim notes that employers with an employee without a NI number should contact HMRC.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK COVID-19: latest updates on CJRS

Minor changes to HMRC’s Coronavirus Job Retention Scheme Guidance continue to be made.  The main changes made on 23 April are as follows:

  • It has been clarified that employees who are made redundant or stop working after 19 March (and for whom an RTI payment submission has been made on or before that date) can be rehired and furloughed in the same way as those ceasing employment after 28 February (and for whom an RTI payment submission has been made on or before 28 February).  There is no requirement for the employee to be re-hired by any particular date, but the furlough can start no earlier than the date of rehire.  This includes fixed term employees who stop working due to their contract expiring.
  • Employees who start and finish work between 28 February and 19 March 2020, whether on fixed term contracts or otherwise, are not covered by the CJRS.
  • As previously discussed here, there is some discrepancy between the HMRC Guidance and the Treasury’s Direction as to what written confirmation or agreement to furlough is needed for valid claims to be made under the CJRS.  The Guidance now provides that a collective agreement reached between an employer and a trade union is acceptable for the purpose of a claim.

The issue of agreement to furlough has also been the subject of published correspondence from HMRC on 23 April.  In response to a request for clarification on HMRC’s interpretation of the requirement in the Schedule to the Treasury Direction (which sets out the legal framework for the CJRS), that the employer and employee have agreed in writing that the employee will cease all work, the correspondence states that:

  • HMRC will act at all times in accordance with the Direction
  • its interpretation of the Direction is as set out in the HMRC Guidance
  • it expects employers to consider the Guidance in the first instance when seeking to understand the operation of the scheme and the HMRC’s interpretation of the Direction
  • it considers that the Guidance is consistent with the Direction – the Guidance currently provides: “To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. … There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.”
  • “put simply”, this means that the employer and the employee must reach an agreement and an auditable written record of this agreement must be retained. “It does not necessarily follow that the employee will have provided written confirmation that such an agreement was reached in all
    cases.”

This suggests that an employer should have obtained agreement by the employee to be furloughed but this may not need to be confirmed by the employee in writing; a written record made by the employer that there has been oral agreement with the employee (or perhaps implied agreement in some cases) may suffice.  We discuss this further in our updated client briefing on the CJRS, available here.

Given the uncertainty, there remains a risk of the HMRC requiring repayment of grants made for employees where written furlough agreements have not been obtained. Commentators have suggested that employers may have a credible judicial review claim against the Treasury and/or HMRC on the basis that they should be entitled to rely on the earlier versions of the Guidance, at least in relation to those already put on furlough and up to the point of the Schedule being released. It would, however, seem prudent now to put in place furlough agreements as soon as reasonably practicable given the revised Guidance.

Other recent developments include:

  • new regulations were made on 24 April 2020 providing that, for furloughed workers starting family-related leave on or after 25 April 2020, their statutory family-related leave pay rate will be based on their usual earnings rather than the furloughed pay rate.  HMRC’s Guidance now notes that the statutory pay entitlement may need to be calculated differently for these furloughed employees and refers employers to updated guidance on SMP here.
  • on 28 April the Government launched a new online learning platform, the Skills Toolkit, providing free digital and numeracy courses aimed at furloughed staff.
Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

Australia: COVID-19 – This week in Employment (24 April 2020)

This week saw the applications for the Federal Government’s JobKeeper scheme officially open. To apply, or to access more information on the JobKeeper scheme, please follow the link or visit the ATO website.

Some other key developments in the employment space this week are outlined below.

A reminder that at any time you can visit our Wellbeing and Culture page, view our webinar series, listen to our podcast channel or read the most relevant COVID-19 legal insights from across our global network.

Changes to the JobKeeper turnover test

The Federal Government have recently introduced the Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020.

This new instrument applies to provide alternative bases for an entity in a class of entities to satisfy the decline in turnover test for the purposes of receiving JobKeeper payments, when the Commissioner is satisfied that there is not a relevant comparison period for the purposes of an entity in a class of entities satisfying the decline in turnover test.

The Federal Government hopes that this instrument will keep more Australian workers in jobs through the course of the COVID-19 coronavirus disease pandemic by creating alternative decline in turnover tests for classes of entities where the relevant comparison period is not appropriate.

To access the new instrument, please follow this link.

FCA orders employer to reinstate injured worker

The Federal Court of Australia has ordered an employer to reinstate an injured worker, pending the outcome of his disability discrimination claim, so he can maintain a connection to employment and access JobKeeper payments during the COVID-19 pandemic.

Please see the full decision here.

Amendments to the Fair Work Regulations

The Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 (Cth) commenced on Thursday, 16 April 2020.

This Regulation amends the Fair Work Regulations 2009 (Cth) to temporarily shorten the period that employees must have access to a copy of a proposed variation of an enterprise agreement, and before which employees must be notified of the details of the vote on the variation, from seven calendar days to one calendar day.

Please see a link to the new Regulation here.

Impact of COVID-19 on businesses

The Department of Education, Skills and Employment have now released the first instalment of the Impact of COVID-19 on Businesses report. This report, which is based upon a survey of more than 250 businesses, found that around 32% of COVID-19 impacted businesses have had to let staff go.

Additionally, the report noted that steps taken by businesses to respond to the pandemic include instituting new rules such as requiring staff to use hand sanitiser (68% of businesses), providing staff with equipment such as masks (48% of businesses) and reducing staff hours (45% of businesses).

Please find the full report here.

Update to Western Australia’s pay-roll tax laws

This week, Western Australia passed the Pay-Roll Tax Relief (COVID-19 Response) Bill 2020.

The new Bill, amongst other things, increases the payroll tax threshold to $1 million on 1 July 2020 and waives payroll taxes for wages paid between 1 March 2020 and 30 June 2020 for employers with Australian taxable wages of less than $7.5 million at 30 June 2020.

The new legislation is deemed to take effect from 1 March 2020, and can be found here.

New interactive guide

Now live is the second in a series of interactive guides: People: Protecting and reshaping, which explores approaches to safeguarding employees, preserving skills and protecting personal data.

New JobKeeper Navigation App — launching soon

Stay tuned for the upcoming launch of our App designed to help you understand the Federal Government’s A$130 billion JobKeeper payment scheme, determine if you are eligible to receive this payment and outline what steps you should take next.

Weekly webinar

This week’s webinar hosted by Carolyn Pugsley (Executive Partner and Joint Global Head of Practice in our Corporate team) features a panel of experts discussing the following areas:

  • Market disclosure regarding COVID-19 and potential risk areas – by Timothy Stutt (Senior Associate in our Head Office Advisory team and Australian lead for our ESG practice);
  • Insurance – by Guy Narburgh (Special Counsel in our Commercial Litigation team); and
  • Class actions – by Christine Tran (Senior Associate in our Commercial Litigation team).

Click here to access the webinar. Next week’s webinar will focus on supply chain issues.

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UK: Coronavirus Job Retention Scheme goes live; updated guidance

The Coronavirus Job Retention Scheme online portal has gone live this morning enabling employers to lodge claims.  Grants are expected to arrive in employer bank accounts within six working days of submitting a claim.  The portal can be accessed here.  An online calculator is available to assist with the simpler employment scenarios and will be extended to cover more situations later.

Minor updates have been made to the HMRC employer guidance here and to the guide on calculating claims here.  We have updated our CJRS briefing to reflect the 17 and 20 April updates and it is available here.