While we bask (or bake) in a mini-heatwave, employment law has continued to provide us with some hot topics.
In a previous update, we had told you how notice pay and statutory redundancy payments wouldn’t necessarily be calculated on the basis of pre-furlough pay rates for redundant staff. On 31 July 2020, the Government introduced new regulations which changed the way in which a “week’s pay” is calculated for both these two payments and a few others. In summary, the payments are now based on pre-furlough pay for those with normal working hours or furlough pay without the furlough scheme’s cap for those who do not have normal working hours.
You should also remember that although employers can claim under the furlough scheme for contractual notice periods spent on furlough (not just statutory notice periods as a former version of the Government’s furlough guidance indicated), the scheme doesn’t cover any payments made in lieu of notice.
Away from the world of furlough, Employment Tribunals have continued to find that staff made out by their “employers” to be self-employed do in fact have certain employment rights. In one case, a hairdresser who signed a consultancy agreement was found to be an employee as the written agreement didn’t reflect the reality of the working relationship where the salon exercised significant control over her.
In a second case, CitySprint cycle couriers were found to be workers even after their employer changed their terms of engagement. In both cases, a contractual right of substitution was never utilised and personal performance by the individual hairdresser and couriers was at the heart of the contract.
A post-termination non-competition restriction in the hairdresser’s contract also pointed in favour of a finding of her being an employee. If you do engage with individuals on the basis that they are self-employed consultants, it’s best not to include such post-termination restrictions in their contract unless the importance of the restriction (assuming that it is drafted so as to be enforceable) outweighs the risk of them being found to have employment rights at some time in the future.
Finally, a recent and somewhat bizarre judgment of the European Court of Justice on reference from a Belgian court held that a contract of employment of a transferring worker could be split between more than one transferee in proportion to the work carried out by the worker in the various parts of the undertaking transferred to each transferee. UK case law going back many years had held the employment contract should transfer as a whole to whichever transferee took on the majority of the work carried out by the transferring employee pre-transfer. Splitting a contract between two parties in terms of remuneration and other benefits in proportion to work to be carried out for them by the transferring employee is likely to be both practically and administratively nightmarish for all concerned, if such a division is even possible.
The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP.