Post-Termination Restrictions: Supreme Court to the Rescue
18th July, 2019
Céline Winham considers recent Supreme Court case which clarifies enforcement of post-termination restrictions in contracts of employment
Last week’s adverse weather causing the closure of businesses, transport networks and schools raised many employment-related issues around the requirement to go to work in the snow and whether to pay employees for snow-day absences. We therefore thought we would focus this bulletin on whether an employee who cannot get to work should be paid, and how best to prepare in advance for such situations to minimise disruption to the business.
There could be many reasons why an employee unexpectedly cannot attend their place of work, such as:- travel disruption such as train cancellations or motorway closures; industrial strikes on public transport; flight cancellations or delays; bad weather; school closures; caring for a dependent; office closure.
Whether the employee should be paid in the above circumstances will depend on a combination of employment rights, namely the right not to suffer an unlawful deduction from wages and the employee’s express and implied contractual rights.
ACAS guidance suggests that, unless the contract provides otherwise, employees who are unable to turn up to work (even for reasons outside their control ) are not entitled to be paid because they have provided no “consideration”, meaning they have not done anything to earn their wage for that day. This approach seems to have become the widely accepted view of employers and advisers, even though the case law on this issue is far from clear, and in some cases supports a contrary view. Employers could ask if the employee wishes to take the time off as holiday, although they cannot require the employee to do this unless they have given the employee the required notice (at least double the length of time they want the employee to take off as annual leave). Other employers state in their policies and procedure that unexpected absences will be treated as unpaid leave, but if the employment policies are silent on the issue, it may cause friction in the working relationship if an employer deducts pay without informing the employee in advance.
The situation is of course different where it is the employer’s decision to close the workplace, as the employee may not be able to comply with the employee’s contractual right to be provided with work. Here, the employee should be paid unless the employer has a homeworking policy in place, which the employee is able to adhere to.
Forward planning will help minimise the difficulties that arise with unexpected leave and help provide clarity to employees. Employers may wish to consider:-
Having a policy in place setting out how your organisation will deal with the issue of pay in situations of unexpected leave (such as adverse weather policies and emergency time off for dependents). A deductions from wages clause in a contract could also include reference to leave for unexpected absence.
Whether the employee can make up the time they are absent at another time, or whether working from home or an alternative location is an option.
In situations where the employer wants the discretion as to whether the employee is paid, ensuring the discretion is applied fairly and consistently so that no claims of unfair treatment arise.
That a balance should be struck between giving employees the incentive to come to work by not paying them unless they do, and the possible upset to morale that refusing to pay may cause.
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