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Employment law Tips for July 2020


This month we include some Coronavirus issues, but also a useful case in interpreting TUPE.

1. 88% of employees would be uncomfortable commuting on public transport for the rest of 2020
  • This is according to a recent survey conducted by Breathe, Posture People and HR Central.
  • This suggests that employers will need to think carefully before insisting that all staff return to the office en-masse, despite any relaxing of Government guidelines on return to work. Further, given this reluctance, it is likely that staff will push to ensure that employers have complied strictly with the guidance. Employers who fail to deal with the matter properly are therefore at risk of employment claims, as well as complaints to the Health & Safety Executive.
  • Here is a line to further information about local lockdowns, where Fudia Smartt has been quoted in recently. 
2. Details on the future immigration system

With the Government’s rejection last month of the opportunity to extend the post-Brexit transition period beyond the end of this year, we are hurtling fast into the future immigration system. The Government published details on its plans recently and the main points are as follows:

  • UK Employers are encouraged to apply for sponsor licences now that will allow them to sponsor EU and other non-UK nationals in the post-Brexit immigration system.
  • Advertising roles will not be required before sponsoring a non-UK national.
  • The annual cap on new hires from outside the UK who will be earning less than £159,600 will be suspended.
  • Minimum salaries for sponsored non-UK nationals will be lower.
  • Employers will be able to sponsor non-UK migrants for jobs at A-level and above, rather than at degree level or above as is currently required.
  • The Home Office will relax the ‘cooling-off’ rule that prevents some sponsored workers from returning to the UK for 12 months since last being sponsored.
  • A new 2-year visa will allow international students to work, or look for work, in the UK after graduating.

For more information, please see Samar Shams’ recent article on the topic. You might also be interested in this blog on students’ work rights and work visa options in the future immigration system.

3. Consequences of breaching CJRS

Under the Coronavirus Job Retention Scheme, some 9.3 million jobs in the UK have been furloughed. Employees should not be generating revenue for their employer whilst on furlough, but the scheme is open to abuse. HMRC has indicated it will take a zero-tolerance attitude towards the worst offenders of the Scheme.

  • Employers will have 90 days (extended from 30), usually from the breach of the furlough conditions to self-report any breach made in error to HMRC through their online form.
  • Employers must keep records of the Scheme for 6 years but if there has been fraud, HMRC can go back 20 years.
  • HMRC can impose an additional tax liability of 100% (less any amount already repaid) for every pound a business was not entitled to receive under the Scheme – this is the default penalty charge.
  • Businesses acting quickly and voluntarily disclosing payments made in error may have the penalty reduced to no less than 30% but where HMRC has to prompt disclosure, the penalty charge will not be reduced below 50%.
  • Misuse of the Scheme could also result in:
    • Directors/HR professionals being implicated personally, and directors have duties which may be breached if Scheme claims are not managed properly: they may be liable for damages but also face dismissal and disqualification where a breach amounts to unfit conduct.
    • Breach of contract claims against the employer (breach of the implied term of mutual trust and confidence).
    • Whistleblowing claims by employees who alert their employers, or HMRC/another government agency of their employer’s potential abuse of the Scheme and who are then dismissed or suffer any detriment as a result.
    • Clawback provisions.
4. Increase in tribunal awards and settlement sums

Tribunal awards and settlement sums have increased – so says a survey carried out in 2018 using data from 2016/17, and single (not multiple) claims. The survey reports that since the last survey in 2013, median settlement awards have doubled- from £2,500 to £5,000. Median Employment Tribunal awards have increased from £3,000 to £5,000.

5. Do enhanced changes to employment contracts made before a transfer fall foul of TUPE?

This was a question posed in Ferguson v Astrea Asset Management Ltd (EAT case) where the number of directors/employees improved their contractual benefits specifically in view of a pending TUPE transfer. The variations were found to be either void or fell foul of the EU abuse of law principle. Regulation 4(4) of TUPE, rendered void all contractual variations made because of a transfer and not just those adverse to the employees. Alternatively, the transferee, Astrea, could rely on the EU abuse of law principle preventing claimants from relying on the new contractual terms since (i) the purpose of the EU rules (ie safeguarding employee rights) had not been achieved, and (ii) their intention was to obtain an improper advantage by artificially obtaining variations to their contracts of employment in contemplation of the transfer. Voluntary enhancements made by a transferee after the transfer will still be valid.

 

If you have any questions please contact the Employment Team: 

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