The Coronavirus Paydemic

https://news.sky.com/story/clap-for-carers-pm-joins-applause-for-healthcare-workers-as-he-continues-coronavirus-recovery-11974399

By Shannon Clark, Robbie Graham, Salwa Ilahi, Jenna Murray and Ethan Robinson (Editor: SJ Crossan)

Introduction

The above picture shows people in Britain standing on their street participating in the ‘clap for carers’ which now takes place every Thursday.

In the past, seeing all of your neighbours standing clapping and banging pots and pans together every Thursday at 8pm would seem a bit odd. However, this is now the norm and we will go onto explain how this has become the case.

On the 31 December 2019, the Wuhan Municipal Health Commission announced reported a number of cases of pneumonia in the Wuhan, Hubei Provence (WHO, 2020) and so began a Worldwide pandemic. The cause of these cases of pneumonia were eventually found to be caused by a virus called the Coronavirus. The virus has been found to cause an incredibly infectious respiratory disease, also known as COVID-19, which has sent many businesses and economies spiralling into free fall as they come to terms with the impact of the disease.

It has changed the way that almost everyone in society has to go about their daily lives as they have now been advised not to leave their home unless absolutely necessary and if they do need to go out, stay 2 metres apart from everyone at all times. For many it has also brought about change to their working lives as a vast amount of workers are not either having their contracts terminated, working from home or been placed on a fairly new concept in UK Employment Law known as Furlough.

In this article, we will go onto explain the main changes that have taken place as a result of the coronavirus pandemic and how they have impacted on workers, businesses and employment law in the United Kingdom.

Coronavirus update

At the time of writing this article (April 2020), the number of confirmed cases of the coronavirus in the UK was approximately 162,000. While this number is not substantial in terms of the total number of workers in the UK, it has led to around 80% of the workforce in the UK (and across the world) having their jobs impacted by the pandemic. This is due to the fact that many countries, including the UK, have ordered non-essential shops and businesses, for example clothes retailers, pubs and restaurants, to close and stay closed until it is safe for them to re-open. As a result of this, there have been over 1.2 million new unemployment benefit claims in the UK since the beginning of the outbreak (Hope, 2020) and it is expected that around 8 million people will apply to the governments furlough schemefor funding (Osborne & Kellowe, 2020), which we will discuss later in this article.

Sick Pay

In the Employment Rights Act 1996, Section 230 (1) defines an employee as an individual who has a contract of service. As a result of this status, such individuals are entitled to employment protection and benefits such as the right to receive either contractual sick pay or statutory sick pay (Crossan, 2017). In relation to COVID 19, those entitled to contractual sick pay must follow their workplace’s usual protocol when reporting that they must self-isolate. Employees can self-certify for the first 7 days of absence however, they are required to get a note from NHS 111 or a doctor if they must isolate for more than 7 days (ACAS, 2020).

Typically, those described as workers or individuals on a contract for services are not entitled to the same level of protection. This leaves them unable to claim any form of sick pay. Due to the recent outbreak of COVID-19, the inability to claim sick pay could be argued to be one of the main causes of stress and financial worry for individuals due to the uncertainty and lack of information on how this virus is spread. As noted by ACAS (2020), this worry could now be said to be somewhat alleviated, as of 13 March 2020, the UK Government decided that both employees and workers must receive statutory sick pay from their first day of self-isolation if:

  • They have coronavirus
  • They have symptoms of coronavirus
  • Someone they live with has coronavirus symptoms
  • They have been informed to by NHS 111 or a doctor

Despite this, it should be noted that this change in policy will not be extended to the self-employed. Furthermore, for employees, contractual sick pay is often much more generous than statutory sick pay and it would therefore be beneficial for employees (if able) to claim this through their place of work instead of opting for SSP. In order to be eligible to receive statutory sick pay, employees must be earning at least £120 per week (BBC, 2020) and, as highlighted by the Office for National Statistics, the annual survey of hours and earnings has shown that around 1,766,000 individuals in the UK make less than £120 per week (ONS, 2020). This means that many workers will simply fail to qualify for SSP – such as those on zero hours contracts as they are unable to accrue enough hours; as well as over half of workers aged 65 and above. This leaves such individuals vulnerable to stress and money worries and may even encourage those suffering from viral symptoms and who are considered ‘key workers’ to attend work in order to make ends meet. This is particularly alarming as those aged 65 and above are more susceptible to infection from covid-19 (Hunt, 2020).

Prior to lockdown in March 2020, Gregg’s, the UK high street bakery retailer, unlike many other big businesses, announced that they would pay all staff contractual sick pay if they were required to self-isolate due to suffering Coronavirus symptoms (BBC, 2020). This approach is in huge contrast to the likes of JD Wetherspoon, which prior to quarantine, announced that all of its 43,000 staff would be subject to regular statutory sick pay rules if they had isolate in order to prevent the spread of Covid-19. This meant that not all Wetherspoons’ staff would be entitled to SSP and those that do qualify would only be paid after four or more days absence in a row which would have meant being entitled to receive less than £100 per week (Webber, 2020).

Furloughing

With the toll of the coronavirus pandemic and the lockdown that has ensued, it has left many individuals unable to work due to the variety of ways that they can be affected by the virus. It is essential that these workers are still able to receive some sort of wage to support them during these difficult times. This is where the furlough scheme can assist those who cannot do their jobs. It is a “granted leave of absence” to enable the employment of these individuals to continue despite the current circumstances (Hodgkin, 2020). Lawrie (2020) explains the way in which the furlough scheme works; meaning that an employer can claim 80% of an employee’s wages from the government up to a limit of £2,500 and the company is not under any obligation to fulfil the other 20% of the wage.

This provides a sense of security for these employees as they are reassured that their job is safe and that they can still receive some financial protection if they have been affected by the virus personally or if their employer is unable to provide them with work during these uncertain times.

However, the furlough scheme, which came into effect on 1 March 2020, is only a temporary measure with an initial duration of 4 months. An extension of this can be granted (only if necessary) and the minimum furlough period that an employee is to be placed on is 3 weeks in a row – although they may be entitled to be furloughed more than once (HM Revenue & Customs, 2020).

It is important to note that, when an employee is on furlough, they are not to perform work for their employer and after furlough has ended, the employer is not obliged to retain on the employee, raising the possibility of redundancy (Lawrie, 2020).

The opportunity to benefit from furlough applies to individuals regardless of whether they hold full time/permanent status or not, and this extends to apprentices, workers, individuals on zero hours contracts, agency workers and temporary employees (ACAS, 2020). The way in which a furlough agreement is made is by the employer approaching the the employee or worker for permission – unless there is a lay-off clause included in the contract. The affected employee/worker would then be required to sign a written agreement to this effect. As the West Cheshire & North Wales Chamber of Commerce (2020) explains that failure to secure an employee’s consent to furlough could lead to claims of a contractual breach or constructive unfair dismissal, which is not an ideal position for either party to be in.

“Two-thirds of British businesses have already used the government’s scheme since it was announced last month” reported Bernal (2020) and a prominent example is British Airways, one of the UK’s biggest airlines. The airline worked with the Unite union to furlough 80% of its workforce, which is approximately 36,000 of its employees (Harding, 2020). This major decision applies to a range of their staff, including engineers and cabin crew, and was expected due to the inevitable effect that coronavirus has had on British Airways (Webber, 2020). Instead of being made redundant, the furlough scheme is a means of offering protection for an individual’s job and part of their income. Many workers and employees will surely be glad of the scheme’s existence.

Pay Rise


The UK National Minimum wage and National Living wage was set to increase by 6.2% for 2.8 million people on 1 April 2020 (with this being announced in December 2019). This would be give full time workers an annual pay rise as the National Living wage will rise from £8.20 to £8.72. This would apply to those aged 25 and above. The increase of the minimum wage for 21-24 year olds has risen from £7.70 to £8.20; 18-20 year olds will see the rate rise from £6.15 to £6.45; and for 16-17 year olds there was to be a rise from £4.35 to £4.55. (UK Government, 2020).

However there where discussions that this wage increase may be postponed but this was rejected even though this new living wage will not effect furlough workers as they won’t see the impacts of this on their wages for quite some time. The businesses that haven’t furloughed their workers are being begged to continue in paying the ‘real living wage’ as it is essential to these workers risking their health and safety to come to work. Many companies have begged to have the rise delayed and postponed due to the fact that the coronavirus pandemic which is currently taking place has caused huge financial impact across the UK effecting the economy with smaller businesses suffering the most. It is understandable as to why the government and businesses would wish to delay the increase as this non-essential businesses during the coronavirus have closed e.g. restraints and pubs, thus these business have no money coming in to pay their staff the new minimum wage no less the one that we currently had. This new wage could mean that funds and savings in the business could run dry as they pay their staff furlough wages which could result in these businesses to suffer even with permanent closures of businesses across the UK. But to the millions of key workers whom are working all over Britain giving essential help during the Covid-19 pandemic are still on their living wages and this rise is essential to keep them afloat. (Sheldon,2020).

Amey plc refuses to offer higher sick pay to workers amid the Covid-19 pandemic

The previous living wage was just not enough for people to live on which is the reason that this increase was so important, as it helped make sure that the working class have a good standard of living, but most would say that it is still not good enough and many will not see the benefits until the pandemic is over as furloughed staff are one due 80% of their salary meaning that in the current situation their is even more stress, this can be said as not only are key workers not getting the wage that they deserve for their hard work that is keeping the UK afloat, but many working class citizens are left nothing near the end of
the month and this also goes for essential workers, such as NHS staff such as Hakeem Lawal who is a father of three started working as a cleaner for the NHS and has been working there since 2018 with no sick pay provided by his employer , he says “it was very hard because at the end of the month – more or less a week before the end of each month – you are waiting with nothing in your account at all” as well as the fact that the chemicals that he used to clean the facilities where very dangerous for his lungs, meaning that not only was he struggling financially to support his kids but he is aware that the job he is doing is harming himself and he has no safety net if these chemicals where to make him sick and have him off work (BBC News, 2020). It is also going to be more of a struggle for those working at home as it has meant that energy bills are rising as electricity is on far more often as people aren’t turning it off when going to work with a prediction from ‘Energyhelpline’ reckoning that household bills are likely going to rise by 30%.(Jones,2020). The living wage rise would have been greatly appreciated for families that will be struggling financially through the pandemic and self isolation nut if there are only getting 80% of their salary it could result in those who are already struggling to be put in an even worse situation with debt.

On 24 March 2020, during a trade union negotiation surrounding the topic of sick pay for refuse collectors (waste collectors), the head of Human resources at Amey plc (a services company that focuses on improving and maintaining the roads, railways and airports amongst other things) said that the company believed the Coronavirus is “less severe” than normal influenza and because of this they would not be providing their workers with unique sickness benefits (additional sick pay) if they choose to stay at home during the pandemic (Booth, 2020). The GMB trade union, who were arguing in favour of better sick pay for refuse collectors at the negotiation were shocked by Ameys comments regarding the coronavirus, they argued that it is unfair for these key workers to only be offered the minimum amount of sick pay (£94 per week).

Following the GMB’s defence of the waste collectors, Simon Schumann-Davies (the head of human resources for Amey) claimed that Coronavirus was significantly less severe than other diseases and stated that there would be no change in the sick pay that they offer to their workers: “we are applying exactly the same rules regarding sickness benefit as we would for any other condition in that we will be paying contractual entitlement.” (Davies, 2020)

In response to this Keith Williams from the GMB argued that Amey are forcing their workers to put their health at risk as they would financially suffer by choosing not to come to work and only receive statutory sick pay.

Following the barrage of criticism that Amey received for their actions towards their workers, a company spokesperson stated (on 31 March) that workers who decide to self-isolate will receive full pay. Shortly prior to this announcement, Amey had issued a statement clarifying that the opinions of Simon Schumann-Davies did not reflect its position on the pandemic. (Sumner, 2020). With the increasing severity of this situation it was inevitable that any decision by the company not to allow sick pay for workers would provoke an intense, public backlash and this, undoubtedly, forced them to change their policy.

Conclusion

The Covid-19 pandemic has had a massive impact on almost everyone – and will continue to do so for the foreseeable future. It has changed the way that workers in the UK go about their daily home and work life and has brought about massive amounts of uncertainty. However, some of that uncertainty may have been removed due to the factors explained in this article, such as changes to SSP and the UK government’s furloughing scheme as employees and workers can be, somewhat, helped financially during these unprecedented and difficult times.

References

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BBC, 2020. Coronavirus: Wages, sick pay and time off explained. [Online]. Available at: https://www.bbc.co.uk/news/business-51628524
[Accessed 26 April 2020]

Booth, R. (2020). UK firm won’t pay higher sick pay as Covid-19 ‘less severe than flu. Available: https://www.theguardian.com/world/2020/mar/30/uk-firm-wont-pay-higher-sick-pay-as-covid-19-less-severe-than-flu. Last accessed 28th Apr 2020.

Crossan, S. J., 2017. Scots Law Theory and Practice. 3rd ed. Glasgow: Hodder Gibson.

Harding, N., 2020. British Airways Set To Furlough 36,000 Staff. [Online]
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[Accessed 28 April 2020].

HM Revenue & Customs, 2020. Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme. [Online]
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Hodgkin, E., 2020. Martin Lewis explains meaning of furlough, how much pay it covers and if you are entitled. [Online]
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Hunt, M., 2020. How much statutory sick pay can I get if coronavirus stops me working?. [Online]
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Jones, R., 2020. Lockdown Means Energy Bills Will Rise. Here’s How To Keep Costs Down. [online] the Guardian.
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Osborne, H. & Kollewe, J., 2020. 140,000 UK companies apply for coronavirus job furlough scheme. [Online]
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[Accessed 29 04 2020].

Sheldon, J., 2020. Minimum Wage & National Living Wage WILL Rise Says Government – Will You Get The Pay Rise?.
[online] Express.co.uk. Available at: <https://www.express.co.uk/finance/ personalfinance/1261454/minimum-wage-2020-uk-national-living-wage-rates-april- increase-coronavirus>
[Accessed 28 April 2020].

Sumner, B. (2020). Coronavirus: Amey agrees to full pay for self-isolating workers. Available: https://unitetheunion.org/news-events/news/2020/march/coronavirus-amey-agrees-to-full-pay-for-self-isolating-workers/. Last accessed 28th Apr 2020.

UK Government (2020) Government Announces Pay Rise For 2.8 Million People. [online] Available at: <https://www.gov.uk/government/news/government-
announces-pay-rise-for-28-million-people
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Webber, A., 2020. Furlough in action: BDO, Renault, Paddy Power, Hogan Lovells and more. [Online]
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[Accessed 28 April 2020].

Webber, A., 2020. Wetherspoon treating coronavirus ‘like any other illness’. [Online]
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[Accessed 27 04 2020].

Copyright Shannon Clark, Robbie Graham, Salwa Ilahi, Jenna Murray and Ethan Robinson, 28 April 2020.

The impact of UK Law on sport

By Stephanie Crainey, Ross Codona and Briege Elder (Editor: SJ Crossan)

Introduction

Sport is often viewed as a special entity whereby the law and legal systems do not directly interfere with its rules (Laver, 2020). Therefore, the rules under which a particular sport is played are not an area where the legal system will usually interfere.

The government in the United Kingdom has adopted this non-interventionist approach to sport, meaning there is no general law for sport. Instead regulation is left to the National Governing Bodies (NBGs) (Bennett, 2019).

However, with the turn of a new decade and the economic crash caused by the COVID-19 pandemic, some major issues in sports law have arisen, including whether an athlete is an employee or worker, the terms and conditions governing athletes and their use of social media platforms. Can these issues possibly be addressed, never mind resolved?

Is an Athlete an employee or a worker?

Above British cyclist, Jess Varnish (right) who is currently involved in legal action against British Cycling and UK Sport over her employment status

The question of an individual’s employment status is always up for debate no matter which profession we are discussing. The focus of this question, in recent times, is mainly focused around the gig economy. This type of work might involve individuals providing a service e.g taxi driver (Uber) or food delivery (Nicholson, 2019).

However, due to the nature of the work (short-term and very insecure), gig economy workers are not usually granted the same rights and protection as employees under UK employment law.

Attempts have now been made to address this situation: in 2017, Matthew Taylor, Chief Executive of the Royal Society of Arts and former Downing Street adviser, was commissioned by the UK Government to conduct an independent review on modern working practices; and in the US State of California, Assembly Bill 5 was passed into law in 2020 giving gig economy workers employment status. The Taylor Review looked at the growth of the UK gig economy and considered its implications for worker rights and responsibilities (Nicholson, 2019). Despite the widespread attention that the Californian Assembly Bill 5 and the Taylor report both received, there is still not sufficient clarity surrounding the status of workers who provide services in the gig economy.

In 2018 the issue of employment status and sport received a lot of media attention when former Great Britain cyclist, Jessica Varnish argued that she ‘should be considered an employee of British Cycling or of the funding agency, UK Sport.’(McGowan, 2019). The world silver medallist set out to prove she was, in fact, an employee in order to enable her to sue British Cycling and UK Sport for both wrongful dismissal and sexual discrimination, after she was dropped by team GB before the 2016 Olympics. Shane Sutton, former British Cycling director, was found to have used sexist language toward Varnish, although he denied these claims. Sutton later left his post with British Cycling.

Unfortunately, for Varnish, she lost her claim for wrongful dismissal at the Employment Tribunal in early 2019. Put simply, the Tribunal held that she was not an employee of either British Cycling or UK Sport and, therefore, she was not entitled to bring such a claim. Varnish has now appealed to the Employment Appeal Tribunal.

The appeal hearing could either overturn the decision of the Tribunal or order a new hearing to take place. Varnish stated:

“I want to give others the opportunity to hold to account employees of governing bodies, who they interact with on a daily basis, and have significant control over their careers and opportunities.”

She added:

I continue to think it’s unfair that athletes still have no structured means to do this, and I hope this appeal will be the first step towards affecting change, and bring about a fairer, more modern and high performance system in the UK where athlete welfare is not just a sound bite, but something that we all believe in.” (McGowan, 2019).

In response to her statement, a British Cycling spokesmen added:

We very much regret that Jess has been advised to pursue the route of an employment tribunal when other avenues were available to her….. We will continue to represent what we believe are the best interests of every rider currently supported through the high performance system, and all those in our sport who hope to one day compete at an Olympics or Paralympics.” (McGowan, 2019).

Employment rights: employees vs workers

Determining the question of Jessica’s Varnish’s employment status (employee or worker) is vital to this case as it will decide what employee rights she is entitled to (if any).

True, most workers are protected against unlawful discrimination in terms of the Equality Act 2010, and harassment and victimisation in relation to ‘whistle-blowing’ actions (reporting of wrong doing in the work place). However, you must be an employee in order to be protected from unfair and wrongful dismissal (CIPD, 2020)

Section 230 of the Employment Rights act 1996 defines an employee as “an individual who has entered into or works under a contract of employment.”

Over many years, UK courts and Tribunals have developed specific tests that must be fulfilled in order to assess an individual’s employment status (Crossan, 2017). These include:

  • Mutuality of obligation
  • The control test
  • The economic reality test
  • The organisation or integration test

The definition of a worker (which is a wider concept than an employee) can also be found in different pieces of legislation e.g. the National Minimum Wage Act 1998 and the Working Times Regulations 1998. The Chartered Institute of Personnel Development (CIPD) defines a worker as:

an individual who undertakes to do or perform personally any work or service for another party, whether under a contract of employment or any other contract.’(CIPD, 2020).

Although the CIPD definition is based on the Employment Rights Act 1996, the definition of worker varies from statute to statute.

As in other parts of the UK employment market, the employment status of athletes will often be a contested concept, meaning that the various tests listed above will have to be deployed by the courts and Tribunals to resolve the issue. It is notable that a large part of Jessica Varnish’s original Tribunal action focused on the control test i.e. she had to follow the training regime laid down by British Cycling in order to be eligible for continued funding from UK Sport.

Athletes in the world of social media

Social media is a great way for an athlete to connect with their existing fans. As well as this, it also allows you, the individual fan to connect with others whom you have never met, such as other fans of your team/sport, or supporters from your hometown etc. Athletes, amateur and elite, can have their use of social media restricted and regulated through provisions contained in Standard Player Contracts.

This is completely understandable from the point of a view of an employer or sponsor because an athlete’s online activities/posts may bring about critical, reputational harm and financial loss to partnered clubs and associations. Athletes’ contracts may contain certain restrictions on what they can and can’t post on social media. However, these restrictions may or will vary from specific social media targeted polices (“blackout” before during and after games), to more general restrictions which cover wider aspects of an athlete’s behaviour (Social Media In Sport: Top Tips, 2020).

Clubs and organisation are urged routinely to remind athletes with regard to what is appropriate and inappropriate online behaviour. This can incorporate a reminder to athletes that, while they are not participating in the activity, they still have commitments to the employer and sponsors and are expected to stick to an agreed code of conduct – just as though they were working. Athletes may have both a personal and professional social media account, but the restrictions and requirements that they are expected to adhere do not change.

Social media allows athletes to secure sponsorship. Platforms such as Facebook, Instagram and Twitter are just some of the ways to reach thousands of people who you would not normally be able to target.

In the UK, athletes and brands must take care when posting promotions and sponsored posts. This is regulated by the Advertising Standards Authority and the Committee of Advertising Practice Codes. The CAP code requires that all advertising is easily identifiable.

In 2012, professionalfootballers, Wayne Rooney and Jack Wilshire broke this requirement after they posted a tweet under Nikes campaign slogan ‘#makeitcount’. The two athletes failed to make it clear that the tweets were in fact from Nike’s marketing communications. For an athlete or any individual using social media for promotional purposes, they must add ‘#spon’ or ‘#ad’ to a post, something which both Rooney and Wilshire failed to do. This helps to make the advertising easily identifiable and prevents anyone from failing to meet the requirements (Social Media In Sport: Top Tips, 2020).

A delicate balancing act

Guidelines for athletes to follow for social media may vary from each profession. It’s no surprise that what Athletes post can be seen potentially by millions of people around the world. There is a need to ensure that, before posting any content, they are happy with what they are about to upload. Are they happy for the post to be linked back to them and be easily accessible forever? Would they be happy if the post was to end up appearing somewhere which was not intended e.g TV, gossip magazines/blogs? It can be a very delicate balancing act.

It is important to respect yourself, your sport and the club/organisation of which you are part. Anyone, especially a public figure (such as athletes), must ask themselves, how might this be portrayed or received by my followers? Will this reflect negatively upon their “role model” status? Could my post effect sponsorship for them or the sport?

These are just a few guidelines that Scottish athletes have to consider Athletes must also ensure that the amount of time they are spending on social media is not affecting their performance. All of these factors are essential when considering what content to upload and share with your followers on social media. Ultimately it’s all about having respect for your audience and yourself.

Maternal/paternal rights for athletes

Many employees receive family-friends benefits which include parental leave or childcare. Diageo, for example, is a UK beverage company which recently introduced female employees to be offered a minimum of 26 weeks fully paid maternity leave under a new global policy (Rennie and Beach, 2020). The vast majority of employees, by contrast will receive just the statutory minimum maternity pay.

Maternity rights

Sporting bodies are generally falling behind in creating Family-Friendly policies which is inconsistent with modern attitudes towards athletes’ rights. Many British athletes e.g Jessica Ennis-Hill and Jo Pavey are parents, yet have still made a successful return to sport.

UK Sport Guidance states thatif a female athlete becomes pregnant they can continue to receive World Class Programme funding and support during pregnancy and after child birth. She (the mother) and her performance director are expected to agree a new appropriate training and competition programme that would map the athlete’s return.

Three months after childbirth, the sports performance director is encouraged to undertake a review with the athlete in order to assess them on her commitment to the agreed plan. By the end of the three months, if the athlete has made the decision that they in fact do not want to return to the sport, then they would be given a notice period depending on the length of time that they had been involved on the World Class Programme before they were then removed from funding (Falkingham, 2020).

Paternity rights

In 2019, the England Cricket team had its biannual tussle with rivals Australia. Batsman, Joe Denly, a new recruit to the England ranks, left the field at the end of the first 5 days of the final Test Match at the Oval in London. The athlete drove 60 miles to be with his wife for the birth of their daughter. The following day, Denly was back on the field facing the Australian bowlers. Joe then went on to create the highest score to date, only narrowly missing out on a Test century (Jackson and Brenner, 2018 and Anderson et al, 2019).

Denly’s story is a happier example than the experience of former Manchester United’s French star, Anthony Martial. The star was fined £180,000 and shamed publicly in 2018 for missing a week of training after flying to be his wife in order to support her through a difficult labour and welcome their son into the world. Two of the days in which he was away were dedicated to travel alone (Jackson and Brenner, 2018 and Anderson et al, 2019).

Sporting success is valued more than family. The famous one liner,“winners never quit and quitters never win” is one which athletes find so important. So much so that, in the 1990s, the President of Oakland athletics, Billy Bean missed his partner’s funeral in order to continue playing a game (Anderson et al, 2019).

These types of incidents sit completely at odds with decent treatment of employees. Organisations are increasing the length of time woman get full maternity pay. A study by the University of Birmingham found that only 9,200 new parents (just over 1% of individuals entitled) shared parental leave in 2017-18. However that rose to 10,700 in the financial year 2018-19. Companies now seem more willing to offer other options to just maternity leave, in the hope of recruiting and retaining high calibre employees (Birkett and Forbes, 2018).

How has Coronavirus has affected sport?

Law in sport is no different to ordinary law in that sporting organisations and sponsors have to respect and obey the rules. This has been particularly highlighted during the current COVID-19 pandemic crisis.

Coronavirus has caused major sports leagues and events around the world to cease current activities or cancel upcoming events due to strict lockdown rules (The Independent, 2020). COVID-19 has forced governing bodies to try to intervene and protect institutions within their area, for example, FIFA (the governing body of football) has set up a £121 million relief fund for its 211 national associations (Keegan, 2020)

The lockdown laws which come as part of the pandemic haven’t just affected international bodies but also had an affect domestically. In Football, national leagues such as the Premier League in England have come to a halt until further notice ,whilst some other leagues around Europe declared their seasons over or null and void as they have in Ligue 1 (France) and the Eredivisie (The Netherlands).

The halting of sporting activities isn’t the only implication of this crisis: it has had a major impact on the employment of all those involved in sport directly or indirectly.

In the UK, furloughing has been introduced to try and help businesses to pay their employees. The furlough scheme means that the UK Government pays 80% of employees’ wages up to a ceiling of £2500 a month (HMRC, 2020).

This causes issues, however, for many professional, sporting institutions, as many athletes are earning far above £2500 a month. Therefore such individuals are ineligible to be furloughed placing sporting institutions under serious financial strain should players refuse to take wage cuts. FC Sion, a football team in Switzerland, were forced to terminate the contracts of 9 footballers after they refused to take pay cuts (BBC, 2020b)

In other instances, the furlough scheme has been supported and it has had the desired effect. The McLaren Formula 1 team main drivers Carlos Sainz and Lando Norris have taken pay cuts in order to support their fellow employees on the team (Galloway, 2020)

Added to this, the UK Health Protection Regulations 2020 have prevented sports such as Formula 1, Football, Boxing or Rugby being performed because of current social distancing restrictions. Whilst this has had a detrimental effect on the sporting world as a whole, it has provided a boost in less traditional fields. E-sports have increased in prominence since the cancellation/postponement of traditional sporting events. Formula 1, in particular, has capitalised on the potential E-sports platform. Formula 1 has been hosting ‘virtual’ Grand Prixs where a mixture of current drivers, figures in the sport, other sportsmen or celebrities race against each other by using the official Formula 1 video game (Dixon, 2020).

The reaction has been positive as a reported 3.2 million viewers witnessed the inaugural virtual Grand Prix, the stature of many of those involved is testament to its success as prominent figures in world sport such as Thibaut Courtois, Ciro Immobile and Sir Chris Hoy have all competed in the virtual Grand Prix (Dixon, 2020)

The cancellation of major sporting matches and events is causing massive implications financially and logistically. In Rugby there had been suggestions that games in France could be played behind closed doors should the league be started again. Club owners highlighted objections to this, in particular, the owner of ‘Stade Toulouse’ would potentially lose millions of Euros before the end of the season should games be played behind closed doors (Ultimate Rugby, 2020).

The UK Health Protection Regulations 2020 have caused major financial implications to sporting institutions across the country. Leeds United, a football club competing in the English Championship, is set to miss out on lucrative financial benefits of promotion to the Premier League. Being promoted to the Premier League guarantees Clubs a large sum of prize money worth millions. However, the following season they spend in the premier league promises them close to £100 million even if they finish last place (Winters, 2020). This level of money could help Leeds United recover from its financial deficit. At the time of writing, all games have been postponed for the foreseeable future meaning that there is a lack of certainty as to what happens next.

Logistically on a global scale COVID-19 has caused the disruption of massive global events that take years of organisation to have now been postponed. Although some of the postponements are only estimated to be a year, the cost can still be detrimental. Reports claim that a one year delay of the Olympics could result in £2.3 billion in further costs (Mail online, 2020).

Conclusion

COVID-19 has emphasised key aspects of employment law, even at an elite level in sport there is more protection being employee rather than being a worker or self-employed. Many members of clubs and teams in different sports have agreed pay cuts. However, they are still being paid. This situation isn’t the same for professional golf: players are registered as self-employed. Footballers are still being paid or have at least agreed a deferral of wages or a temporary pay cut, but nevertheless, their employment contract still protects them during this time of major uncertainty. Golfing stars such as Rory McIlroy and Tommy Fleetwood do not have this protection unlike football stars such as Harry Kane and Raheem Sterling.

It is clear that UK employment law needs to do more in determining an athlete’s employment status. The UK Government must also work harder to protect athletes and their rights. Due to the catastrophic pandemic, not only will sports organisations and clubs suffer but also their athletes. The only certainty in these most uncertain times is that Covid-19 is likely to generate a plethora of future legal disputes which will shape our legal landscape, especially in the world of sport, for some time to come.

References

Anderson, E., Parry, K.D., & Batten, J., 2019. With women’s sport leading the way, male athletes could benefit from family-friendly policies too. Available at: https://scroll.in/field/942000/with-womens-sport-leading-the-way-male-athletes-could-benefit-from-family-friendly-policies-too [Accessed 22 April 2020].

Anderson, E., Parry, K.D., & Batten, J., 2020. Sporting Dads: Male Athletes Need Family-Friendly Policies Too. [online] Available at: https://www.google.co.uk/amp/s/theconversation.com/amp/sporting-dads-maleathletes-need-family-friendly-policies-too-125514 [Accessed 25 April]

BBC Sport. 2020. Should Sports Do More To Help Female Athletes Feel ‘More Comfortable’ Having Children During Career?. [online] Available at: https://www.google.co.uk/amp/s/www.bbc.co.uk/sport/amp/48336819 [Accessed 25 April]

BBC, 2020a. Coronavirus: How The Virus Has Impacted Sporting Events Around The World. [online] Available at: <https://www.bbc.co.uk/sport/51605235> [Accessed 22 April 2020].

BBC, 2020b. FC Sion sack nine players for reportedly not taking pay cut because of coronavirus crisis. Available at: https://www.bbc.co.uk/sport/football/51980881 [Accessed 22 April 2020].

Bennett, M., 2019. Sports Law In The United Kingdom | Lexology. [online] Lexology.com. Available at: <https://www.lexology.com/library/detail.aspx?g=7cc100e9-382e-4013-b1a0-8499c6889c0e> [Accessed 22 April 2020].

Birkett, H and Forbes, S (2018). Shared Parental Leave: Why is take up so low and what can be done? (1). Available at: https://www.birmingham.ac.uk/Documents/college-social- sciences/business/research/wirc/spl-policy-brief.pdf [Accessed 22 April 2020].

Chartered Institute of Personnel Development, 2020. Employment Status Q&As. [online] Available at: <https://www.cipd.co.uk/knowledge/fundamentals/emp-law/employees/status-questions> [Accessed 26 April 2020].

Dixon, E., 2020. F1’S Inaugural Virtual Grand Prix Draws 3.2M Online Viewers. [online] Sportspromedia.com. Available at: <https://www.sportspromedia.com/news/f1-virtual-bahrain-grand-prix-online-viewers-streaming-esports-julian-tan> [Accessed 22 April 2020].

Galloway, J., 2020. Carlos Sainz, Lando Norris take pay cuts as some McLaren staff furloughed. [Sky News online] Available at: https://www.skysports.com/f1/news/12433/11967263/carlos-sainz-lando-norris-take-pay-cuts-as-some-mclaren-staff-furloughed [Accessed 22 April 2020].

The Independent, 2020. Sport-By-Sport Look At The Impact Of Coronavirus Around The World. [online] independent.co.uk. Available at: <https://www.independent.co.uk/sport/sport-football-basketball-rugby-olympics-cancelled-coronavirus-impact-around-the-world-a9398186.html> [Accessed 22 April 2020].

Jackson, J. and Brenner, S., 2018. Anthony Martial faces fine despite return to Manchester United training. [The Guardian online]. Available at: https://www.theguardian.com/football/2018/aug/01/manchester-uniteds-anthony-martial-to-return-to-training-after-birth-of-child [Accessed 22 April 2020]

HM Revenue & Customs, 2020. Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme. [Online]
Available at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
[Accessed 22 April 2020].

Keegan, M., 2020. FIFA draw up plans for emergency relief fund as governing body looks to help cash-strapped football authorities facing ruin due to coronavirus pandemic [Mail online]. Available at: https://www.dailymail.co.uk/sport/sportsnews/article-8172853/FIFA-draw-plans-emergency-relief-fund-governing-body-looks-help-football-authorities.html [Accessed 22 April 2020].

Laver, N., 2020. Sport And The Law [online] Available at: <https://www.inbrief.co.uk/sports-law/sport-and-the-law/> [Accessed 22 April 2020].

Mail online, 2020. Tokyo Organisers Counting The Cost Of Postponement Of Olympic Games. [online] dailymail.com. Available at: <https://www.dailymail.co.uk/sport/sportsnews/article-8181433/Coronavirus-Tokyo-organisers-counting-cost-postponement-Olympic-Games.html> [Accessed 22 April 2020].

McGowan, A., 2019. Varnish Wins Right To Appeal Tribunal. [online] BBC Sport. Available at: <https://www.bbc.co.uk/sport/cycling/50825263> [Accessed 24 April 2020].

Nicholson, R., 2019. Are Professional Athletes Employees?. [online] Shepherd and Wedderburn. Available at: <https://shepwedd.com/knowledge/are-professional-athletes-employees> [Accessed 24 April 2020].

Rennie, J., Beach, N., 2020. Win-Win: A Progressive Approach To Maternity & Paternity Rights For Professional Athletes – Lawinsport. [online] Lawinsport.com. Available at: https://www.lawinsport.com/topics/item/win-win-a-progressive-approach-to-maternity-paternity-rights-for-professional-athletes [Accessed 25 April]

Scottish Athletics, 2020. [online] Available at: https://www.scottishathletics.org.uk/wpcontent/uploads/2014/04/SAL-Social-Media-Guidelines-191016.pdf [Accessed 23 April]

Talk Sport, 2018. The Money Each Premier League Club Earned From TV And Their Final Position. [online] Available at: <https://talksport.com/football/376346/how-much-money-each-premier-league-club-earned-tv-and-their-final-position-180518283150/> [Accessed 22 April 2020].

The National Law Review. 2020. Social Media In Sport: Top Tips. [online] Available at: https://www.google.co.uk/amp/s/www.natlawreview.com/article/social-media-sport-toptips%3famp [Accessed 23 April]

Trades Union Congress, 2020. Employment Status And Rights. [online] Available at: <https://www.tuc.org.uk/employment-status-and-rights> [Accessed 25 April 2020].

UK Health Protection Regulations 2020

Ultimate Rugby, 2020. Top 14 Owner Claims His Club Will Lose Millions If Games Are Played Behind Closed Doors. [online] Available at: <https://www.ultimaterugby.com/news/top-14-owner-claims-his-club-will-lose-millions-if-games-are-played-behind-closed-doors/625829> [Accessed 22 April 2020].

Winters, M., 2020. The colossal cost of cancellation: Leeds could lose £100m MINIMUM if promotion to Premier League is scrapped while National League leaders Barrow may miss out on £1m if the season is voided… the impact on lower leagues would be devastating [Mail online]. Available at: https://www.dailymail.co.uk/sport/sportsnews/article-8293009/Leeds-United-lose-100m-MINIMUM-promotion-Premier-League-scrapped.html [Accessed 22 April 2020].

Copyright Stephanie Crainey, Ross Codona and Briege Elder, 22 April 2020

Dismissal

Photo by Bruske Dede on Unsplash

By Helan Ali, Rebecca Brodie, Cameron Crossan, Jack Holland and Eve Richmond (Editor: SJ Crossan)

Introduction

Dismissal occurs where an employers terminates the contract of employment between themselves and the employee. There are several types of dismissal that can arise such as: fair, unfair, wrongful, summary and constructive.

Perhaps the most common mistake amongst members of the public concerning dismissal is the tendency to confuse wrongful and unfair dismissal: they are entirely separate (Crossan, 2017). An unfair dismissal is one which breaches or contravenes statute; whereas wrongful dismissal occurs when the contract of employment is breached.

In all dismissal claims, it is important to determine if the claimant is actually an employee. This status is outlined in S230 of the Employment Rights Act 1996 in that the individual in question must be employed under a contract of service.

Employment law – always a tricky area to navigate as a result of its sheer volume becomes particularly difficult when it comes to the area of dismissal – as there can be a delicacy when it comes to terminating the employee’s contract. If you look at recent media stories, there are several high profile dismissal cases such as former senior civil servant, Sir Philip Rutnam pursuing an unfair dismissal claim against UK Home Secretary, Priti Patel or the UK retailer, Asda (part of the Walmart group) forcing their employees to accept new contracts or to face dismissal.

Unfair dismissal

Fair dismissal occurs when there is a termination of the employment contract, but the employer has the right to act in this manner as per S98(2) of the Employment Rights Act 1996.

The employer may have fair grounds to dismiss an employee under grounds of capability where the employer genuinely does not believe the employee is able to carry out their role any longer. Such a dismissal can be seen in Taylor v Alidair [1978] IRLR 82 where a pilot was dismissed from his contract after he landed a plane negligently and there was serious danger to life and limb.  The pilot’s subsequent dismissal was completely fair in the circumstances.

An employer may also have the grounds to dismiss an employee on the grounds of conduct. Generally, one act of gross misconduct could potentially result in an employee’s dismissal.  However, employers must have clear guidelines and these must be adhered to, but it does not necessarily mean that in every situation the same same outcome i.e. that of dismissal be the end result. Employers are entitled to have recourse to what is known as a reasonable band of responses, which might include the following:

  • Verbal or written warnings
  • Demotion
  • Dismissal
  • Deduction in pay (if the contract so permits)

If the employer has acted reasonably when carrying out the dismissal of the employee, there can be no overturning of that decision by an Employment Tribunal. This is regardless of whether the Tribunal would have taken a more lenient approach i.e. a preference for a final written warning over dismissal (see Iceland Frozen Foods v Jones [1983] ICR 17).

Employees are not exempt from their employer’s code of conduct even when they leave the premises as their actions taken outside of work can still result in a dismissal.  This can be seen in McLean v McLane Ltd EAT 682/96 where an employee was drunk and disorderly outside working hours. He was also found to in possession of cannabis (a Class C drug in the UK).  This information was released to the media which reported the story and, as a result, the employee was dismissed. This action by the employer was deemed fair by the Employment Tribunal.

Not all employees are fairly dismissed and the actions of the employer might mean that have been unfairly dismissed. To qualify for employment rights regarding unfair dismissal, an employee must normally have a minimum of 2 years’ continuous service (as per the Employment Rights Act 1996), but there are numerous exceptions e.g. discrimination, health and safety and whistle-blowing dismissals.

Employers can, admittedly, find a way around the 2 year continuous service period by employing someone on short-term contracts, thus ensuring that the minimum qualifying period is never met and the employee has not acquired any rights in respect of dismissal.

In some employment roles it is not possible to be unfairly dismissed due to the nature of the role e.g. UK armed forces and/or police service staff. Employees have the right be accompanied to a dismissal meeting if they choose to do so, they can bring a fellow employee or trade union official. Further details on this can be found under S10 of the Employment Relations Act 1999. Employers should adhere to their company guidelines and follow procedural fairness when disciplining employees – especially if dismissal is an option they are considering (as demonstrated in British Homes Stores Ltd v Burchell [1978] IRLR 379).

Wrongful dismissal

Moving on to the issue of wrongful dismissal, where the contract is breached due to the dismissal procedure. The most common example is the employee does not receive the requisite notice period from the employer.  In this instance the employee would not require two year’s continuous service to raise a claim in this regard. The statutory minimum notice period, according to S86 of the Employment Rights Act 1996, is one week for each year of service up to a maximum of 12 weeks. 

Claims for wrongful dismissal must be made within three months’ minus one day of the effective date of the termination of the contract to the Office of Employment Tribunals (OET). The case of Morran v City Council of Tenants (1998) is highly instructive.

Morran claimed wrongful and unfair dismissal when his employer dismissed him without being given the compulsory notice period; he just missed out on accumulating enough continuous service. Held by the Scottish Court of Session, Morran was entitled to claim wrongful dismissal and receive compensation however he could not claim unfair dismissal as he had never acquired the actual right to bring such a claim. Employees who claim wrongful dismissal tend to be reimbursed by compensation. It would be very rare for an employee to go back to their job after claiming wrongful dismissal.

In fact, S236 of the Trade Union and Labour Relations Act (Consolidation) 1992 states that no court or Tribunal can issue an order for specific implement or anything which will force the parties to work together under an employment contract.

Summary dismissal

Another type of dismissal is summary: “This is when you dismiss someone instantly without notice or pay in lieu of notice, usually because of gross misconduct (for example theft, fraud, violence).” (UK Government, 2020). Summary dismissal if not handled properly can be wrongful or unfair. An employer will need to prove the employee has committed violent or serious acts or health and safety breaches.

Even if an employer feels summary dismissal is the preferred option, it is worth stepping back and taking stock. It is often better and far safer to suspend an employee on full pay and then investigate the situation to head off a potential claim for unfair and/or wrongful dismissal.

Summary dismissal will be justified if the employer can prove the act committed by the employee amounts to gross misconduct in the workplace. However, if the employee can argue that their actions were not that of gross misconduct and no notice period was given employer will be liable for wrongful dismissal. The remedies available to the employee would be compensation.

Constructive dismissal

One last dismissal claim is that of constructive dismissal. This arises when an employer commits a serious breach of the employment contract and the employee has no alternative but to resign. In these types of claims, employees can treat themselves as dismissed as the employer’s behaviour has effectively destroyed the employment contract.

The individual claiming constructive dismissal is saying S/he has been unfairly dismissed and for this claim to be granted they must prove the employer’s conduct was so severe that it amounted to a fundamental or material breach. Constructive dismissal occurs in “situations where the employer made unauthorised deductions from wages; subjected to bullying and harassment; where the employer refused to follow the proper disciplinary or grievance procedures.” (Crossan, 2020)

In Sharp v Western Excavating Ltd [1978] ICR 221, Lord Denning explained the rules regarding constructive dismissal:

An employee is entitled to treat himself as constructively dismissed if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment… then the employee is entitled to treat himself as discharged from any further performance.”

As a point of interest, Sharpe was not entitled to claim constructive dismissal: his employer was perfectly within its rights to refuse him time off from work to go and play cards. The employer’s behaviour was entirely reasonable and thus did not represent a material breach of the employment contract.

Procedural fairness

When contemplating dismissal as an option for disciplinary offences, it is often safer for employers to suspend the relevant employees on full pay and carry out a full investigation, rather than dismiss employee instantly. Employers should ensure that disciplinary procedures are clear and consistent and comply with current ACAS Codes on discipline at work (see link below).

https://www.acas.org.uk/acas-code-of-practice-on-disciplinary-and-grievance-procedures

Time limits for Employment Tribunal claims

Claims for both unfair and wrongful dismissal must be made within three months’ minus one day of the effective date of the termination of the contract to the Office of Employment Tribunals (OET). Failure by the claimant to submit an application within the time limit will mean that the claim is time barred i.e. it cannot normally be heard by the Tribunal – no matter its merits.

Remedies for dismissal

A claimant who brings a successful action for dismissal may be entitled to the following remedies issued by a court or a Tribunal:

  • Compensation
  • Reinstatement
  • Re-engagement

If the employee can claim dismissal, they could be entitled to compensation and/or reinstatement (failing that, re-engagement if reinstatement to their old position is no longer available). An employer does not have to reinstate or re-engage the employee and may find it more acceptable to pay a higher sum of compensation.

Sir Philip Rutnam

A current unfair dismissal case is that of Sir Philip Rutnam, former Permanent Secretary at the UK Home Office. Sir Philip is claiming unfair dismissal against his former boss, the current UK Home Secretary Priti Patel MP.

Sir Philip resigned because he is alleging that he was subjected to bullying by Mrs Patel (she denies these claims). At the time of his resignation, Sir Philip, was the Home Office’s most senior official, and he claimed that there had been a “vicious and orchestrated” operation against him. Sir Philip presented a claim to the Employment Tribunal for unfair (constructive) dismissal against the Home Secretary. A Cabinet Office investigation was initiated in March 2020 concerning the allegations against Mrs Patel in order to establish if she had breached the ministerial code. (Patel faces unfair dismissal claim from ex-adviser, 2020). The case is ongoing, but if Sir Philip is successful in his action, it will be hugely embarrassing to the UK Government.

Jo Millington

In another, recent case relating to constructive dismissal, a leading forensic scientist called Jo Millington was a victim of sexual orientation discrimination in the workplace. The scientist was asked by her boss whether she disliked him because of her sexuality. Millington, who is gay, took her case to an Employment Tribunal. She launched claims for sexual orientation discrimination, breach of contract and constructive dismissal against her former employer, ArroGen Forensics after the company’s CEO Joe Arend speculated whether her sexuality was the reason behind her evident dislike of him.

Arend had inquired whether Millington had a problem with him “because of her sexuality”, pointing out he was “big” and “used to play rugby”. The Reading Employment Tribunal was told Millington that she had previously complained about Arend’s behaviour when he referred to the level of her expenses and salary as “crazy”. The Tribunal found the company liable for discrimination on grounds of sexual orientation, constructive dismissal and breach of contract. It concluded that Jo Millington regarded her sexual orientation as a confidential matter; Millington was granted compensation. (Lowe, 2020).

No smoking!

In another unfair dismissal story, a long serving worker at a water bottling plant was sacked for smoking on the premises. The employee took a claim to Tribunal for wrongful and unfair dismissal, which resulted in a successful claim. The claimant, Mr Andrew was a team manager for production at Montgomery Waters Limited, where the no smoking rule was introduced in 2004. Employees were, however, permitted to smoke in a designated ‘smoking hut’.

Bosses were informed that Andrew was seen smoking outside the ‘smoking hut’. CCTV was viewed and appeared to show Andrew smoking, on four occasions, in prohibited areas. The footage showed a man wearing red overalls and Andrew was one of two people to wear these. Andrew, who had 15 years’ service with the company, was suspended during the disciplinary investigation. Andrew denied the allegations, but was still dismissed from his employment. During the Tribunal Hearing, the judge highlighted the vagueness in the firm’s handbook on whether smoking in prohibited areas would amount to misconduct. The judge also observed that it was the employer’s responsibility to enforce strict rules restricting smoking in particular areas. Although Andrew’s claims for both wrongful and unfair dismissal were upheld, the compensation awarded to him was reduced by 50% on the basis that he had contributed to his dismissal (Powys County Times, 2020).

New T&Cs

A controversial case regarding the potential threat of dismissal is Asda’s introduction of a new contractual agreement known as ‘Contract 6’, which will replace the existing agreement. It was introduced back in 2017 and, at this time, signing the new contract was voluntary.

‘Contract 6’ abolished paid breaks, introduced compulsory bank holiday working, staff could also be asked to work flexible hours and work in different departments within the store. In August 2019, Asda were accused of forcing employees to agree to accept ‘Contract 6’.

Asda stated that their employees are required to sign the new contract by November 2019 and, if they failed to do so, their contract of employment would be terminated. Employees would not be entitled to sick pay until the contract was signed. The GMB Trade Union attacked the new agreement and claimed that, under the new conditions, employees would be worse off. The main objection raised by the employees and their trade union was the inflexibility of the contract.

Under these new terms, day shift employees had to be more flexible with their working hours – they had to be available for work between 5am and midnight. It also meant employers could give less notice than before with regard to changing shifts. Employees took the view that Asda was disregarding employment law by unilaterally changing key terms and conditions.

In response to the claims being made, Asda may be able to justify their dismissals as fair in terms of Section 98(2) of the Employment Rights Act 1996 on the grounds that the employer can show that some other substantial reason is the justification behind terminating contracts.

In Asda’s case, the company may be able to justify their actions on the grounds that the new contractual arrangements have been necessitated as a result of a company restructuring exercise. This could make the dismissals potentially fair (Crossan, 2017).

Currently, lawyers for Asda and the GMB Trade Union are at loggerheads. One claim for unfair dismissal has so far been submitted by a former Asda employee, Duncan Carson. He was dismissed due to not signing the new ‘Contract 6’. Carson had worked at Asda for 13 years in total, and a large part of his legal argument is that “a contract is an agreement between two parties”. Carson believes, if one person can change the contract unilaterally.

Furloughing employees

The Coronavirus Job Retention Scheme (CJRS), announced by HMRC on 20 March 2020, is a UK Government funded scheme to provide financial support for employers to allow them to continue to pay part of their employees’ wage costs rather than lay them off during this crisis.

Eligible workers are put into the scheme by employers when agreement is made between both, and these employees are now furloughed workers (Association of Taxation Technicians, 2020)

Nunn (2020) explains that the scheme allows companies to ‘furlough’ their employees, covering 80% of the wage cost, allowing the claim to include 80% of their employee’s gross salary with cap of £2,500 a month.

CIPD (2020) defines furlough as a ‘temporary leave of absence from work’ due to economic conditions of affecting the company or country.

Although this is a new concept for the UK labour-force, the scheme does nothing to change how the fundamentals of UK employment law e.g. it does not mean a break in continuity of employment. The employee must give written agreement to the employer before being enrolled in the scheme.

The CJRS ensures the job security of the British workforce due to employers being unable to provide pay.

The official government site (UK Government, 2020) announced that the scheme is only temporary; set to last a maximum of 4 months, with a 3 consecutive week minimum period for each employee to be furloughed.

The government site explains that employees on sick leave are not eligible for furlough whilst the business is reclaiming Statutory Sick Pay. HMRC allows employers with less that 250 employees to reclaim 2 weeks of Statutory Sick Pay for each employee off work for a coronavirus related cause, although the method to do so has still to be put in place by the HMRC. Employees with multiple jobs can also be furloughed from either or both jobs, as the £2,500 wages’ cap applies to each job.

In order to be eligible for the government scheme, the employer must have PAYE account, and each employee must have been included on RTI submission in the pay period on or before 19 March 2020 (CIPP, 2020).

The UK Government (2020) also announced that any employees made redundant before 28 February, due to the impact of Coronavirus, could be eligible for furlough status – as long as they were on the PAYE scheme before they were dismissed. Employers could claim for them also and this part of the furlough scheme has prevented those in industries, such as hospitality, from being almost certainly made redundant.

It is, of course, up to the employer if they choose to furlough any dismissed employees who are eligible to partake in the CJRS and there is no legal requirement for the employer to go down this path.

Therefore, utilising the CJRS gives employers the cash-flow for the wage costs to be able to keep employees on their payroll for when the business reopens, as an alternative to dismissing them during this global crisis. At this present time,it ensures job security for the employee but it may also mean living with a reduced wage.

Conclusion

To summarise, dismissal is a vast and complex area of employment law yet once broken down becomes that bit clearer to understand.  The area is ever changing with cases now coming against the Government itself and what pathway that may open if Rutnam is successful in his claim against Patel.  There are also the uncertainties in the world just now surrounding coronavirus and the impact it was have on employee’s not only with their wages but with their employment status when this all ends.

References:

Association of Taxation Technicians, 2020. COVID-19: Job Retention Scheme- details for employers [online]. Available at <https://www.att.org.uk/covid-19-job-retention-scheme-details-employers> [Accessed 25th April 2020]

BBC News. 2020. Patel Faces Unfair Dismissal Claim From Ex-Adviser. [online] Available at: <https://www.bbc.co.uk/news/uk-politics-52356574> [Accessed 23 April 2020].

CIPD, (2020) Coronavirus (COVID-19): furlough guide [online]. Available at <https://www.cipd.co.uk/knowledge/fundamentals/emp-law/employees/furlough> [Accessed 25th April 2020]

CIPP,2020. Further updates to Coronavirus Job Retention Scheme guidance foe employers and employees [online]. Available at <https://www.cipp.org.uk/resources/news/further-updates-to-cjrs-employers-employees.html> [Accessed 25th April 2020]

Claire Knowels, 2017. What is the difference between unfair and wrongful dismissal [online] Available at https://www.peoplemanagement.co.uk/experts/legal/unfair-dismissal-wrongful-dismissal-differences (Accessed 26th of April 2020)

Crossan, S. J., 2017. Introductory Scots Law: Theory and Practice 3rd Edition. In: The Law of Employment. Glasgow: Hodder Gibson.

Crossan, S.J. (2020). Constructive dismissal. Scots Law [online] Available at https://seancrossansscotslaw.com/2020/04/09/constructive-dismissal/ (Accessed 26th of April 2020)

Employment Rights Act 1996

Employment Relations Act 1999

Lowe, Y., 2020. Leading Forensic Scientist Wins Sex Discrimination Case. [online] The Telegraph. Available at: <https://www.telegraph.co.uk/news/2020/04/23/leading-forensic-scientist-wins-sex-discrimination-case/&gt; [Accessed 23 April 2020].

Nunn. D, 2020. HMRC reveals 20 April start date for Coronavirus Job Retention Scheme [online]. Available at <https://www.aatcomment.org.uk/trends/coronavirus/april-20-start-date-for-coronavirus-job-retention-scheme/> [Accessed 25th April 2020]

Powys County Times. 2020. Water Bottling Plant Worker Sacked For Smoking In The Wrong Place Wins Compensation. [online] Available at: <https://www.countytimes.co.uk/news/18339002.smoker-wrongfully-dismissed-hearing-rules/&gt; [Accessed 24 April 2020].

Trade Union and Labour Relations Act 1992

UK Government, 2020. Check if you can claim for your employee’ wages through the Coronavirus Job Retention Scheme [online]. Available at <https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme> [Accessed 25th April 2020]

UK Government, 2020. Fair dismissal [online] Available at https://www.gov.uk/dismiss-staff/fair-dismissals (Accessed 26th of April 2020)

Copyright Helan Ali, Rebecca Brodie, Cameron Crossan, Jack Holland and Eve Richmond, 28 April 2020

Sick pay in the UK

By Rachael Holton, Ryan Kelly, Amy McWilliams and Jamie Watt (Editor: SJ Crossan)

As a society, we understand the concept of employment. You offer to work for an individual or an organisation in return for payment. Nonetheless, the status of employment, the kind of work and what kind of contract you have can take many forms. What are these different types of employment status? Well, as per Section 230(1) of the Employments Rights Act 1996, an ‘employee’ refers to a person who has gone into or works under a ‘contract of employment’. However, this is not the only type of employment status that exists, and this is a common misconception of today’s generation. In the workforce, some individuals are classed as ‘workers’ or ‘self-employed’. What is the difference?

Differences in Employment Status

For the most part, an employee works under what is referred to as a ‘contract of employment or service’. The agreement will list the basic rights of a worker, for example, whether it is temporary or permanent work, annual leave and working hours. An example is displayed below:

You could be forgiven for believing that this was the most widely recognised kind of ‘work’ or employment. According to figures from the Office of National Statistics, however, just 13% of the workforce in London are classed as ‘employees’, with over 27% working in the gig economy (Rodgers, 2018).

An employee essentially works under a contractual agreement. However, in any case, the rights vary to that of an employee, who is typically qualified for additional, and dissimilar sorts of rights. A worker must finish the work themselves except if they are offered consent to subcontract the work. A business will frequently utilise such and individual to help for a set timeframe, giving them enough work to fill their days over the length of their contract (Rodgers, 2018).

Conversely, a self- employed individual is classed as a subcontractor, who maintains their own business and, in this manner, assumes full liability for everything that accompanies that status. They work for themselves, implying that a great part of the time employment law, unfortunately, does not cover them (Rodgers, 2018).

The issues arising from an individual’s employment status can be seen in the case of Knight v Fairway & Kenwood Car Service Ltd UKEAT/0075/12/LA. The claimant was a cab driver working with the respondent organisation under written terms. If he paid the present lease and gave appropriate notices, he could work, or not, as he wished with no antagonistic outcomes under the agreement. He left the respondent organisation in the wake of being approached to do taxi jobs once they had been taken paying little mind to the conduct of the specific customer. He claimed wrongful dismissal, i.e. a claim for a breach of the employment contract.

Held: The Employment Tribunal ultimately decided that he was not working under a ‘contract of employment’ thus his case could not be heard by them. The claimant submitted an appeal. Nevertheless, the Employment Appeal Tribunal dismissed the claim on the grounds that the composed terms did not require any base or sensible measure of work from the claimant; he was allowed to work or not work. Nor in the conditions was there scope for inducing such a commitment from the way that the claimant, in truth, worked 7 days per week.

Employment Rights vs Employment Status

The distinction between these types of employment status’ is so important in the workplace, and it is crucial that employers and individuals are aware of such differences. All employees are workers in a sense; however, employees get certain employment rights in their agreement that a worker does not. The difference between a few of the rights available to individuals, based on their employment status can be seen below:

In the event that an individual is uncertain about their rights in relation to employment law, the Advisory, Conciliation and Arbitration Service (ACAS) has set out the rights these individuals are entitled to, depending on their employment status. A link to these rights can be found below:

https://www.acas.org.uk/checking-your-employment-rights

Now, while there are laws that cover both employees and workers e.g. under Section 10 of the Employment Relations Act 1999, both employees and workers have the right to be accompanied by another individual in disciplinary or grievance hearings, there can be clear differences in how employees and workers are treated. A significant topic that has come under scrutiny in the past, and especially now in these uncertain times, is that of Sickness and Absence in the workforce, in particular, the right to receive or claim Statutory Sick Pay (SSP).

Statutory Sick Pay

Positioned above is a copy of the Statutory Sick Pay document.

As previously mentioned, some UK employees could be entitled to receive a form of sick pay from their employers, otherwise known as contractual sick pay. However, the amount of money paid depends on the length of time the staff member has worked for at the commencement of the absence. Those who have worked at the organisation for less than a year, for example, may receive full pay for five weeks, and half pay for a further five weeks. For those, who had more than five years’ service, they would receive 26 weeks full salary and a further 26 weeks half pay (Crossan, 2020).

On the flip side, for employees who are not entitled to receive contractual sick pay, Statutory Sick Pay can be claimed. In order to be eligible, claimants must be earning a minimum of £120 before tax per week. To test whether s/he qualifies for SSP employees submit a written document to their employer, if requested, before a set deadline (Crossan, 2020).

If any of our readers wish to obtain access to this form, we have provided a link below:

https://www.gov.uk/statutory-sick-pay/how-to-claim

Sick Pay Across the Globe

On the other side of the world, however, in the US organisations are not obligated or required by federal law to offer paid sick leave. However, the Family and Medical Leave Act, established in 1993, enables eligible staff members of insured employers to take unpaid, job-protected leave for specified family and medical reasons (U.S. Department of Labour, 2020). Even though, organisations are not legally obliged to pay staff members for sick leave under federal law, some states require companies by law to offer sick leave. An example of this is the state of Massachusetts which permits five days of sick leave for employees (Foothold America, 2020).

Furthermore, in Sweden, members of staff who cannot work due to sickness, can normally obtain compensation for the full period that they are off work. At the start of the time off, a deduction to 20% of the compensation of the sick pay that you can receive during a normal working week (European Commission, 2020). In order to be eligible to receive sick pay from the employer, staff members must have worked for a minimum period of one month minimum or have worked continuously for fourteen days (European Commission, 2020). Workers who are off work due to sickness for more than a week must provide a medical certificate. In addition, for employees who are sick for more than two weeks, the Swedish Social Insurance Agency can provide a sickness cash benefit. In order to secure this entitlement, staff members must be absent for a minimum of a quarter of their normal working hours as a result of sickness. Whether employees receive this compensation is determined by their ability to work and not the severity of the sickness, as well as whether they are medically insured and providing a medical certificate that describes the sickness or injury (European Commission, 2020).

Coronavirus

In recent times, the Coronavirus (COVID-19) outbreak has had a detrimental effect on businesses around the world. It started in China and has infected people from one hundred and eighy five different countries. The ONS (Office for National Statistics) reported that more than a quarter of the 5,316 businesses surveyed have temporarily shut down or paused trading for the period 23rd of March to 5th April due to the COVID-19 outbreak (ONS, 2020). The virus has affected the operations of many organisations: many have seen a decrease in turnover and some organisations have even been forced to cease trading indefinitely.

Boeing “Body Blow”

Multinational corporation, Boeing, is one of the most prominent companies to be hit by the effects of the virus. The company told BBC News that they may have to cut up to 15,000 jobs, after the travel industry has been torn apart by the pandemic, while 10% of jobs will be cut over the organisation, Boeing conceded that the losses would be more extreme in certain divisions, for example, its commercial airlines (BBC News, 2020).

Most importantly, the workforces of many organisations have faced challenges due to the virus. More than half of respondents to The Opinions and Lifestyle (OPN) Survey said Coronavirus has affected their wellbeing (ONS, 2020). Full results of the survey responses can be obtained from the following link:

https://www.ons.gov.uk/surveys/informationforbusinesses/businesssurveys/businessimpactofcoronaviruscovid19survey

But the big question is, does the right to sick pay (that traditionally has only ever been available to employees), still apply amidst a global pandemic?

Well, ACAS has advised that employees and workers should receive any Statutory Sick Pay (SSP) due to them as of 13th March 2020 from their first day of isolation if the following applies:

  • They have Coronavirus
  • They have Coronavirus symptoms (fever, new continuous cough)
  • Someone in their household is showing Coronavirus symptoms
  • They have been told to self-isolate by a doctor (NHS 111)

They then must follow the UK and Scottish government guidelines for self-isolation. The individual must self-isolate for seven days and anyone else who lives in their household must self-isolate for fourteen days. Some employers may offer more than SSP, known as ‘contractual’ sick pay, as previously mentioned.

If an employer requires proof of sickness, then the workplace’s normal sickness reporting procedures should be followed. As normal, an employee can self-certify for the first seven days of sickness, without a sickness note from a doctor. If self-isolating for a period that exceeds seven days, then an online self-isolation note can be obtained from the NHS website (ACAS, 2020). The following link will take readers to the NHS self-isolation page, whereby they can request a self-isolation note:

https://111.nhs.uk/isolation-note/

Probationary Periods

Another factor that has come under question frequently amidst the pandemic, is whether probationary periods are still in place. Probation is commonly a multi month process, during which there is consistent evaluation and feedback of the employee by the employer. Formal probation audit meetings and Probation Reports, are finished at customary intervals, typically following two, five and eight months (Forestry and Land Scotland, 2020).

The point of the procedure is to give the two parties sufficient opportunity to evaluate whether they are appropriate for one another. By finishing effective reviews and highlighting areas of improvements, you are likewise forestalling circumstances where you need to dismiss staff during their probation period (Willis, 2019). Employees who are currently serving their probationary period have not acquired enough service to be able to bring a claim for unfair dismissal (which is 103 weeks’ for employees who started on or after 6 April 2012), but there is potential to bring claims for workplace discrimination and whistle blowing. The following story, involving Eileen Jolly, is an example of how costly discrimination dismissal cases can be for employers.

Age Discrimination

Eileen Jolly, a medical secretary (89) has been named as one of the oldest employees to successfully win an age discrimination claim in the UK. The elderly woman was awarded £200,000 by the NHS after being dismissed over claims she was not capable of operating a computer. She was said to have “catastrophic failure in performance” after becoming accustomed to “old secretarial ways”. Not willing to sit back and take the discrimination, she took her NHS trust to an employment tribunal. The Judge present, Andrew Gumbiti-Zimuto wrote: “There was evidence of the claimant’s training having been inadequate, incomplete and ‘on the job’ training was ad hoc and not directed” (Smith, 2019).

New Guidelines

Thankfully, however, new Coronavirus guidelines have stated that many individuals currently on probationary periods will have their probationary period paused or extended (Forestry and Land Scotland, 2020).

Furlough

What is also important to discuss, is that due to the outbreak, businesses have been forced to furlough many of their workers as this will allow them to take advantage of the governments Coronavirus Job Retention Scheme (CJRS). To furlough an employee means to temporarily suspend or layoff an employee, this is usually done without pay. This term is most used in US employment law and is not recognised within the UK. Therefore, the term left many workers confused when Rishi Sunak, Chancellor of the Exchequer, used the word ‘furlough’ in his Coronavirus Job Retention Scheme (Bernal, 2020).

The ONS reported that for those businesses who were still trading in the UK, 21% of staff had been furloughed (under the terms of the CJRS) from the period of 23rd of March to the 5th of April (ONS, 2020). The CJRS allows employers to claim 80% of their employee’s wages from the government, up to a maximum of £2,500 a month – this includes those working on zero hours contracts and flexible workers. This is a temporary scheme in place for four months starting from the 1st of March 2020 – depending on the circumstances, the scheme could be extended. This allows companies to furlough employees rather than dismiss them. It is important to note that if a worker is self-isolating, they cannot be furloughed and should receive SSP until they return to work.

The minimum time period for furloughing workers is three weeks and they are not permitted to rotate which of their employees are furloughed; this can be difficult if someone who is still working is required to self-isolate/falls ill. It is important to note that if a worker is self-isolating, they cannot be furloughed and should be receiving statutory sick pay or enhanced sick pay (if in their contract) until they return to work. Due to this, CJRS cannot be claimed by employers for these employees to ‘make up’ any statutory sick pay/ enhanced sick pay they are receiving.

Employees who are ‘shielding’ (those who have been contacted by the NHS and are required to self-isolate due to extremely high risk of getting very ill due to COVID-19) for twelve weeks are permitted to be placed on furlough. Employers who insist that vulnerable employees continue to attend work at this time, where the work cannot be done at home, could be considered to be breaching their duty of care. The following case displays the effects of a breach of the employer’s duty of care in the workplace (ONS, 2020).

In Walker v Northumberland County Council [1995] ALL ER 737, the pursuer worked in an especially unpleasant social work post for the Council. He had just endured a breakdown because of exhaustion and an absence of help from his managers. His manager gave confirmations that protections would be set up upon his arrival from sick leave so as to decrease the dangers of stress. The pursuer came back to work yet endured a second breakdown in light of the fact that the Council had neglected to take sensible consideration to forestall him experiencing mental wounds. The follower brought a case for harms against the Council.

Held: by the House of Lords that the pursuer ought to be treated as an essential victim who was qualified for damages because of the Council’s carelessness. The Council had returned him to his past (unpleasant) post in the wake of knowing about the primary breakdown and it was, thus, reasonably foreseeable that if the claimant was exposed once again to these upsetting conditions he would almost certainly, this would make him endure mental injury.

Amazon Workers Fight Back

The severity of the current circumstances is evident in the following news story.

Several Amazon distribution centre specialists over the US will not appear for work this week by phoning in sick, denoting the biggest nationwide protest so far against the organisation’s response to Coronavirus. Beginning on Tuesday 21 April 2020, more than 300 Amazon employees have vowed to remain at home. This is as a result of rising disappointment amongst employees as the organisation has neglected to give adequate PPE to staff, failed to execute ordinary temperature checks it guaranteed at distribution centres and would not permit employees to take sick leave (The Guardian, 2020).

Employees of the multinational tech company are demanding sick pay and the right to not be punished for utilising their right to freedom of speech. While there has been no formal action or resolution as yet, Amazon did issue the following statement (The Guardian, 2020):

Nothing is more important than the safety of our teams. Our employees are heroes fighting for their communities and helping people get critical items they need in this crisis.

However, if we do not see change soon, could this be the start of the global e-commerce’s deterioration? We sure hope not.

Readers can access the full article, published by The Guardian below:

https://www.theguardian.com/technology/2020/apr/20/amazon-warehouse-workers-sickout-coronavirus

Disney to furlough workers

Disney is also an organisation that has been hit significantly by Coronavirus and as a result, a Disney representative presented the following statement: “With no clear indication of when we can restart our businesses, we’re forced to make the difficult decision to take the next step and furlough employees whose jobs aren’t necessary at this time.” (Godfrey, K., 2020).

We encourage our readers to watch the video presented to gain a deeper understanding of just much of an impact this pandemic is having on employment worldwide:

Conclusion

In conclusion, Statutory Sick Pay (SSP), is a well-known facility available potentially to most employees throughout the UK. It has been in place, in its current form, since 1982, aiding those unable to work due to sickness and other health related issues, it is a hugely worthwhile employment right. Now, more than ever, we are (unfortunately) having to analyse such an employment right as a highly debated topic because of the Coronavirus pandemic. However, whilst the pandemic continues to spread rapidly, the UK is also offering protection to those workers who do not normally qualify for Sick Pay, in terms of University Credit, Contributory Employment and Support Allowance. Luckily for these individuals, the UK Government has stepped in and has extended SSP during the Coronavirus lockdown. Overall, it is safe to say that SSP has been of great help in relation to sick workers with income support and although its usefulness may not always be apparent, it is times like this we truly start to appreciate the value of such employment rights.

References

ACAS, 2020. ‘Coronavirus (COVID-19): advice for employers and employees’ [online]. Available at: https://www.acas.org.uk/coronavirus/self-isolation-and-sick-pay [Accessed: 24thApril 2020].

BBC News, 2020. ‘Coronavirus: Boeing to cut 15,000 jobs in ‘body blow’ [online]​    Available at: https://www.bbc.co.uk/news/business-52468882 [Accessed: 29th April 2020]. 

Bernal, N., 2020. ‘The UK’s coronavirus furlough scheme explained by experts’ [online]. Available at: https://www.wired.co.uk/article/uk-furlough-scheme-job-protection [Accessed: 26th April 2020].

Crossan, S., 2020. ‘Pay day?’ [online]. Available at: https://seancrossansscotslaw.com/2020/04/05/pay-day/ [Accessed: 28th April 2020].

Employment Rights Act 1996

Employment Relations Act 1999

European Commission, 2020. ‘Employment, Social Affairs & Inclusion’ [online]. Available at: https://ec.europa.eu/social/main.jsp?catId=1130&langId=en&intPageId=4810 [Accessed: 28th April 2020].

Family And Medical Leave Act, 2020. ‘Are US workers entitled to paid sick leave?’ [online]. Available at: https://www.footholdamerica.com/faqs/employing-a-us-worker/entitled-to-paid-sick-leave/ [Accessed: 28th April 2020].

Forestry and Land Scotland, 2020. ‘Covid-19 Coronavirus: Employee Advice’ [online]. Available at: https://forestryandland.gov.scot/images/staff/covid-19/02.04.20/1._Covid19_Coronavirus_-_Advice_for_Employees.pdf [Accessed: 29th April 2020].

Godfrey, K., 2020. ‘IT’S A SAD WORLD Disney furloughs staff and cast members and stops annual pass payments as theme parks remain closed’ [online]​​​   Available at: https://www.jennyeve.co.uk/blog/buzzwordbusinessblog/david-goliath-and-employment-status [Accessed: 29th April 2020]. 

Hunt, D. 2020. ‘Coronavirus Job Retention Scheme: the details (26 March)’ [online]  Available at: https://www.farrer.co.uk/news-and-insights/blogs/coronavirus-job-retention-scheme-the-details/ [Accessed: 27th April 2020].

Jennyeve, 2017. ‘Making the employee/worker/self-employed distinction in 2017 and what it means for your organisation’ [online] Available at: https://www.jennyeve.co.uk/blog/buzzwordbusinessblog/david-goliath-and-employment-status [Accessed: 27th April 2020].

Paul, K., 2020 Hundreds of Amazon warehouse workers to call in sick in coronavirus protest; The Guardian [online] Available at:

https://www.theguardian.com/technology/2020/apr/20/amazon-warehouse-workers-sickout-coronavirus [Accessed: 27th April 2020].

Office for National Statistics, 2020. ‘Coronavirus, the UK economy and society, faster indicators Coronavirus, the UK economy and society, faster indicators: 16 April 2020’ [online]. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/bulletins/coronavirustheukeconomyandsocietyfasterindicators/16april2020 [Accessed: 25th April 2020].

Rodgers, E., 2018. ‘Worker or employee? What is Employment Status?’[online]        Available at: https://www.perkbox.com/uk/resources/blog/worker-or-employee-what-is-employment-status [Accessed: 27th April 2020]. 

Smith, L., 2019. ‘NHS secretary, 89, sacked for ‘not being able to use computers’ wins £200,000’ [online]. Available at: https://www.mirror.co.uk/news/uk-news/nhs-secretary-89-sacked-not-20901143[Accessed: 29th April 2020].

Smith, L., 2019. ‘The 12 Most Notorious UK Discrimination Cases’ [online]. Available at: https://www.skillcast.com/blog/12-notorious-uk-discrimination-cases[Accessed: 29th April 2020].

UK Government, 2020. ‘Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme’ [online]​​​​​​​​   Available at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme [Accessed: 25th April 2020]. 

U.S. Department of Labor, 2020. ‘Family and Medical Leave Act’ [online]. Available at: https://www.dol.gov/agencies/whd/fmla [Accessed: 28th April 2020].

Willis, A., 2019. ‘Dismissal During Probationary Period’ [online]. Available at: https://croner.co.uk/resources/end-of-contract/dismissal/dismissal-probationary-period/ [Accessed: 29th April 2020].

Copyright Rachael Holton, Ryan Kelly, Amy McWilliams and Jamie Watt, 28 April 2020

Written statements of employment

Screen capture by Seán J Crossan

In the UK, the beginning of April is always an important period for employment lawyers because the British Government and/or the Westminster Parliament typically introduce new laws which directly impact on people’s terms and conditions of employment.

There is no such thing as one document which contains all the terms of an employment contract – something that my students and members of the public have difficulty understanding at first. It is important to grasp from the outset that there are various sources of the employment contract which include, amongst other things:

  • The written statement of the main terms and conditions of the contract (as per Section 1 of the Employment Rights Act 1996)
  • Employee handbooks (e.g. available on employer’s intranet)
  • Employer’s policies and codes of conduct (e.g. disciplinary codes)
  • EU Laws, Acts of Parliament and statutory instruments (e.g. Employment Rights Act 1996, Equality Act 2010, TUPE Regulations 2006, Equal Treatment Directives)
  • Judicial precedent and the common law (e.g. Walker v Northumberland County Council 1 AER 737)

Today new rules come into force about the written statement of the main terms of employment. Previously, only employees were entitled to receive such a document which had to be issued by an employer within 8 weeks of the commencement of employment (as per Section 1 of the Employment Rights Act 1996). Now, an employer must issue a written statement to both employees and workers from or before day 1 of their employment or engagement.

The written statement will contain important information about the contract of employment, such as:

  • The employee’s name
  • The employer’s name
  • Date when employment commenced and period of continuous service
  • The rate of pay and how often the employee is paid
  • Working hours
  • Holiday entitlement
  • Sick pay entitlement
  • Pensionable service and details of employer’s pension scheme
  • Notice requirements
  • Job title or brief JOD description
  • Whether the job is permanent/temporary/fixed term
  • The location of the employee’s place of work
  • The existence of collective agreements and how they affect the contract
  • Arrangements for working outside the UK (if relevant)
  • Details of disciplinary and grievance procedures

Furthermore, as a result of today’s changes to the law, the written statement must also address the following matters:

  • The hours and days of the week that the employee/worker must work for the employer and whether they can be changed and the mechanism for doing so
  • Entitlement to any paid leave
  • Entitlement to contractual benefits which have not already been addressed in the written statement
  • Probationary periods (if relevant)
  • Training opportunities provided by the employer

The legal status of the written agreement

The written statement is not the contract of employment itself because no single document could possibly encompass all the terms of such an agreement. There is nothing to stop the parties adopting the statement as the contract of employment, but it is important to understand that it can be varied or altered as a result of legislative changes, court decisions and collective agreements.

As of today, entitlement to leave for bereaved parents is being introduced; increases to the National Minimum and Living Wages come into force; and increases to a range of statutory payments are also taking place. With all of this going on, it would be very difficult – if not impossible – for any written statement to express the totality of the employment contract in any meaningful sense.

Failure to issue a written statement

Section 38 of the Employment Act 2002 gives employees the right to pursue an Employment Tribunal claim against an employer for failure to issue a written statement. This type of claim would usually be brought by an employee as part of another claim against the employer e.g. dismissal or discrimination claims. In such an instance, the employee would state on the Tribunal application (the ‘ET1’) that the employer had failed to issue written terms. It is always worthwhile submitting this type of claim as part of the bigger picture of the employee’s grievance because an Employment Tribunal could issue an award worth up to 4 weeks’ wages.

Any employee who is dismissed by the employer for requesting their statutory right to receive a written statement will have the right to pursue a claim for unfair dismissal in terms of the Employment Rights Act 1996.

An example of an extract taken from an ET1 form can be seen below:

Fictional example of an Employment Tribunal claim by Seán J Crossan

Employment status

The right to receive a written statement was, previously, a very important indication of a person’s employment status i.e. whether they had a contract of service in terms of Section 230 of the Employment Rights Act 1996 – as opposed to a contract for services.

In the leading House of Lords’ decision – Carmichael v National Power plc [2000] IRLR 43, two women who were engaged on casual as required contracts as tour guides at the (now demolished) Blyth Power Plant in Northumberland were not entitled to receive written statements of employment because they were engaged under a contract for services. There was no mutuality of obligation between the parties in that National Power was not obliged to offer the women work and the two women, if offered work, were not obliged to accept it. With today’s changes to the Employment Rights Act 1996, the two women in Carmichael would now be entitled to receive a written statement.

A link to the UK Government’s website which provides (free) access to a blank template for employers to generate their own written statement can be found below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/183185/13-768-written-statement-of-employment-particulars.pdf

Related Blog Article:

https://seancrossansscotslaw.com/2019/02/11/employment-contracts-read-them-or-weep/

Copyright Seán J Crossan, 6 April 2020

Pay day?

Photo by Jordan Rowland on Unsplash

One of the most important common law duties that an employer has under the contract of employment is to pay wages to the employee.

This duty, of course, is contingent upon the employee carrying out his or her side of the bargain i.e. performing their contractual duties.

The right to be paid fully and on time is a basic right of any employee. Failure by employers to pay wages (wholly or partially) or to delay payment is a serious contractual breach.

Historically, employers could exploit employees by paying them in vouchers or other commodities. Often, these vouchers could be exchanged only in the factory shop. This led Parliament to pass the Truck Acts to prevent such abuses.

Sections 13-27 of the Employment Rights Act 1996 (which replaced the Wages Act 1986) give employees some very important rights as regards the payment of wages.

The National Minimum Wage Act 1998 (and the associated statutory instruments) and the Equality Act 2010 also contain important provisions about wages and other contractual benefits.

There are a number of key issues regarding the payment of wages:

  • All employees are entitled to an individual written pay statement (whether a hard or electronic copy)
  • The written pay statement must contain certain information
  • Pay slips/statements must be given on or before the pay date
  • Fixed pay deductions must be shown with detailed amounts and reasons for the deductions e.g. Tax, pensions and national insurance
  • Part time workers must get same rate as full time workers (on a pro rata basis)
  • Most workers entitled to be paid the National Minimum Wage or the National Minimum Living Wage (if over age 25) (NMW)
  • Some workers under age 19 may be entitled to the apprentice rate

Most workers (please note not just employees) are entitled to receive the NMW i.e. over school leaving age. NMW rates are reviewed each year by the Low Pay Commission and changes are usually announced from 1 April each year.

It is a criminal offence not to pay workers the NMW and they can also take (civil) legal action before an Employment Tribunal (or Industrial Tribunal in Northern Ireland) in order to assert this important statutory right.

There are certain individuals who are not entitled to receive the NMW:

  • Members of the Armed Forces
  • Genuinely self-employed persons
  • Prisoners
  • Volunteers
  • Students doing work placements as part of their studies
  • Workers on certain training schemes
  • Members of religious communities
  • Share fishermen

Pay deductions?

Can be lawful when made by employers …

… but in certain, limited circumstances only.

When exactly are deductions from pay lawful?:

  • Required or authorised by legislation (e.g. income tax or national insurance deductions);
  • It is authorised by the worker’s contract – provided the worker has been given a written copy of the relevant terms or a written explanation of them before it is made;
  • The consent of the worker has been obtained in writing before deduction is made.

Extra protection exists for individuals working in the retail sector making it illegal for employers to deduct more than 10% from the gross amount of any payment of wages (except the final payment on termination of employment).

Employees can take a claim to an Employment Tribunal for unpaid wages or unauthorised deductions from wages. They must do so within 3 months (minus 1 day) from the date that wages should have been paid or, if the deduction is an ongoing one, the time limit runs from the date of the last relevant deduction.

An example of a claim for unpaid wages can be seen below:

Riyad Mahrez and wife ordered to pay former nanny

Equal Pay

Regular readers of the Blog will be aware of the provisions of the Equality Act 2010 in relation to pay and contractual benefits. It will amount to unlawful sex discrimination if an employer pays a female worker less than her male comparator if they are doing:

  • Like work
  • Work of equal value
  • Work rated equivalent

Sick Pay

Some employees may be entitled to receive pay from the employer while absent from work due to ill health e.g. 6 months’ full pay & then 6 months’ half pay. An example of this can be seen below:

Statutory Sick Pay (SSP)

This is relevant in situations where employees are not entitled to receive contractual sick pay. Pre (and probably post Coronavirus crisis) it was payable from the 4th day of sickness absence only. Since the outbreak of the virus, statutory sick pay can paid from the first day of absence for those who either are infected with the virus or are self-isolating.

Contractual sick pay is often much more generous than SSP

2020: £95.85 per week from 6 April (compared to £94.25 SSP in 2019) which is payable for up to 28 weeks.

To be eligible for SSP, the claimant must be an employee earning at least £120 (before tax) per week.

Employees wishing to claim SSP submit a claim in writing (if requested) to their employer who may set a deadline for claims. If the employee doesn’t qualify for SSP, s/he may be eligible for Employment and Support Allowance.

Holiday Pay

As per the Working Time Regulations 1998 (as amended), workers entitled to 5.6 weeks paid holiday entitlement (usually translates into 28 days) per year (Bank and public holidays can be included in this figure).

Some workers do far better in terms of holiday entitlement e.g. teachers and lecturers.

Part-time workers get holiday leave on a pro rata basis: a worker works 3 days a week will have their entitlement calculated by multiplying 3 by 5.6 which comes to 16.8 days of annual paid leave.

Employers usually nominate a date in the year when accrual of holiday pay/entitlement begins e.g. 1 September to 31st August each year. If employees leave during the holiday year, their accrued holiday pay will be part of any final payment they receive.

Holiday entitlement means that workers have the right to:

  • get paid for leave that they build up (‘accrue’) in respect of holiday entitlement during maternity, paternity and adoption leave
  • build up holiday entitlement while off work sick
  • choose to take holiday(s) instead of sick leave.

Guarantee payments

Lay-offs & short-time working

Employers can ask you to stay at home or take unpaid leave (lay-offs/short time working) if there’s not enough work for you as an alternative to making redundancies. There should be a clause in the contract of employment addressing such a contingency.

Employees are entitled to guarantee pay during lay-off or short-time working. The maximum which can be paid is £30 a day for 5 days in any 3-month period – so a maximum of £150 can be paid to the employee in question.

If the employee usually earn less than £30 a day, s/he will get their normal daily rate. Part-time employees will be paid on a pro rata basis.

How long can employees be laid-off/placed on short-time working?

There’s no limit for how long employees can be laid-off or put on short-time. They could apply for redundancy and claim redundancy pay if the lay-off/short-term working period has been:

  • 4 weeks in a row
  • 6 weeks in a 13-week period

Eligibility for statutory lay-off pay

To be eligible, employees must:

  • have been employed continuously for 1 month (includes part-time workers)
  • reasonably make sure you’re available for work
  • not refuse any reasonable alternative work (including work not in the contract)
  • Not have been laid-off because of industrial action
  • Employer may have their own guarantee pay scheme
  • It can’t be less than the statutory arrangements.
  • If you get employer’s payments, you don’t get statutory pay in addition to this
  • Failure to receive guarantee payments can give rise to Employment Tribunal claims.

This is an extremely relevant issue with Coronavirus, but many employers are choosing to take advantage of the UK Government’s Furlough Scheme whereby the State meets 80% of the cost of an employee’s wages because the business is prevented from trading.

Redundancy payments

If an employee is being made redundant, s/he may be entitled to receive a statutory redundancy payment. To be eligible for such a payment, employees must have been employed continuously for more than 2 years.

The current weekly pay used to calculate redundancy payments is £525.

Employees will receive:

  • half a week’s pay for each full year that they were employed under 22 years old
  • one week’s pay for each full year they were employed between 22 and 40 years old
  • one and half week’s pay for each full year they were employed from age 41 or older

Redundancy payments are capped at £525 a week (£508 if you were made redundant before 6 April 2019).

Please find below a link which helps employees facing redundancy to calculate their redundancy payment:

https://www.gov.uk/calculate-your-redundancy-pay

Family friendly payments

Employers also have to be mindful of the following issues:

  • Paternity pay
  • Maternity Pay
  • Shared Parental Pay
  • Maternity Allowance
  • Adoption Pay
  • Bereavement Pay

Employers can easily keep up to date with the statutory rates for family friendly payments by using the link below on the UK Government’s website:

https://www.gov.uk/maternity-paternity-calculator

What happens if the employer becomes insolvent and goes into liquidation?

Ultimately, the State will pay employees their wages, redundancy pay, holiday pay and unpaid commission that they would have been owed. This why the UK Government maintains a social security fund supported by national insurance contributions.

An example of a UK business forced into liquidation can be seen below:

Patisserie Valerie: Redundant staff ‘not receiving final pay’

Up to 900 workers lost their jobs when administrators closed 70 of the cafe chain’s outlets. Disclaimer:

Conclusion

Payment of wages is one of the most important duties that an employer must fulfil. It is also an area which is highly regulated by law, for example:

  • The common law
  • The Employment Rights Act 1996
  • The Working Time Regulations 1998
  • The National Minimum Wage Act 1998
  • The Equality Act 2010
  • Family friendly legislation e.g. adoption, bereavement, maternity, paternity

Failure by an employer to pay an employee (and workers) their wages and other entitlements can lead to the possibility of claims being submitted to an Employment Tribunal. The basic advice to employers is make sure you stay on top of this important area of employment law because it changes on a regular basis and ignorance of the law is no excuse.

Related Blog Articles:

https://seancrossansscotslaw.com/2020/01/30/2020-same-old-sexism-yes-equal-pay-again/

https://seancrossansscotslaw.com/2020/01/10/new-year-same-old-story/

https://seancrossansscotslaw.com/2019/05/13/inequality-in-the-uk/

https://seancrossansscotslaw.com/2019/03/31/the-gender-pay-gap/

https://seancrossansscotslaw.com/2019/04/05/the-gender-pay-gap-part-2/

https://seancrossansscotslaw.com/2019/06/26/ouch/

https://seancrossansscotslaw.com/2019/06/20/sexism-in-the-uk/

Thttps://seancrossansscotslaw.com/2019/04/30/paternity-leave/

Copyright Seán J Crossan, 5 April 2020

State of emergency

Photo by Markus Spiske on Unsplash

In a Blog published yesterday, I discussed the issue of entitlement to sick pay as a result of the Coronavirus or COVID-19 outbreak.

Related Blog article:

https://seancrossansscotslaw.com/2020/03/04/sick-pay-or-the-coronavirus-conundrum/

State of emergency

Governor Gavin Newsom of the US State of California declared a state wide emergency on Wednesday 4 March 2020 in order to counter the spread of the virus.

Please see a link below to an article in the Los Angeles’ Times concerning Governor Newsom’s announcement:

https://www.latimes.com/california/newsletter/2020-03-05/coronavirus-cruise-emergency-newsletter

How are the recent developments in California linked to events in the UK?

It should be recalled that Governor Newsom signed into law Assembly Bill 5 of 2019 in January of this year. You don’t remember this? Well, Assembly Bill 5 is better known as the Californian Gig Economy law which, in effect, gives thousands of workers employment status. Significantly, this means that many of these affected individuals will now benefit from greater levels of employment protection – including entitlement to sick pay.

Now, think about this: had the COVID-19 outbreak occurred last year, many Californian workers would have had absolutely no entitlement to receive sick pay if such individuals were forced to self-isolate or take time off because they had been infected. No doubt many of these workers turned employees will be breathing a huge sigh of relief that they are now covered by Assembly Bill 5.

Related Blog article:

https://seancrossansscotslaw.com/2020/02/13/california-dreamin/

The UK approach

Turning our attention to the UK, the British Government has taken a less generous approach to the issue of entitlement to sick pay. True, employees and other workers who already benefit from entitlement to statutory sick pay (SSP) should now be able to claim this from day 1 of sickness absence. It should be emphasised that this is a temporary measure justified on emergency grounds.

Previously, statutory sick pay was payable only from day 4 of the employee’s absence until Prime Minister Johnson’s announcement in the House of Commons on Tuesday 3 March 2020.

Jeremy Corbyn, Leader of the opposition Labour Party, immediately asked the PM if zero hours workers and self-employed individuals would have this benefit extended to them. The PM’s response to Mr Corbyn’s question will have disappointed many of these individuals. No entitlement to statutory sick pay for them. The problem for these individuals is that they do not meet the eligibility threshold where they earn £118 per week (the Lower Earnings Limit).

There is also the small fact that employment status (which is linked to entitlement to sick pay) is defined by the Employment Rights Act 1996. Section 230 of the Act defines an employee as an individual who has a contract of service. Many employment rights flow from this status and this means that many individuals who are engaged on a contract for services will simply not be eligible to claim statutory sick pay.

A link to an article in The Mirror newspaper about the exchanges in the House of Commons between PM Johnson and Mr Corbyn about SSP entitlement can be found below:

https://www.mirror.co.uk/news/politics/breaking-new-coronavirus-sick-pay-21629942

An evolving position?

… and yet, the UK Government’s thinking on this issue may be quickly evolving. On the BBC’s Question Time television programme broadcast on Thursday 5 March 2020, Matt Hancock MP, the UK Health Secretary said that people on zero hours contracts and self-employed persons should not be financially penalised for doing the right thing i.e. self-isolating themselves or being honest about having the virus.

It will be interesting to see how the story develops and what changes to UK employment law may follow as a result.

Copyright Seán J Crossan, 5 March 2020

Sick Pay? (or the Coronavirus Conundrum)

Photo by Macau Photo Agency on Unsplash

Coronavirus (COVID-19) isn’t just a potential threat to your health; it could also mean that your earnings take a hit.

How so?

If you have to take time off from work (i.e. self-isolate yourself) because you have (or might have) been infected by the virus, will you be entitled to receive sick pay from the organisation that you are working for?

It depends very much on your employment status …

… if you are a zero hours worker or genuinely a self-employed person, the answer is an emphatic no.

If you are deemed to be an employee (an individual who works under a contract of service) within the meaning of Section 230 of the Employment Rights Act 1996, you may be fortunate in that you have an entitlement to receive either contractual sick pay or statutory sick pay.

Contractual sick pay

If a contractual sick pay scheme applies to your employment, you might receive, at its fullest extent, 6 months full pay and then 6 months at half pay. This generous arrangement, of course, will not apply from day 1 of the employment and employees will have to build up their continuous service in order to be eligible for the maximum level of contractual sick pay. It is probably the case that an employee with just over a year’s service would receive 1 month at full pay for sickness absence and then 1 month at half pay.

An example of entitlement to contractual sick pay arrangements taken from the Collective Agreement (the National Working Practices Agreement) between Scottish Further Education lecturers and their employers can be seen below:

Statutory sick pay

What about statutory sick pay or SSP? This is relevant in situations where employees are not entitled to receive contractual sick pay.

It’s also worth pointing out that contractual sick pay is often much more generous than SSP and, even then, not all employees will be entitled to receive this benefit because they fall outside the eligibility criteria. The current weekly rate of sickness pay (in March 2020) is £98.25 and could be paid by employers for a maximum of 28 weeks.

Ordinarily, it becomes payable only from 4th day of sickness absence, but as of Wednesday 4th March 2020, the UK Government has announced that employees who self-isolate themselves because of suspected Coronavirus infection, will be paid SSP from day 1 of their sickness absence.

This is a temporary measure which will apply only for the duration of the current COVID-19 emergency, but people who are off sick with a medical condition other than the virus will also be entitled to benefit from these changes.

See links below to articles on the BBC website about sickness pay entitlement and COVID-19:

https://www.bbc.co.uk/news/business-51628524

https://www.bbc.co.uk/news/uk-51738837

The change in Government policy will not be extended to the self-employed; and to zero hours workers (who will not be able to meet the threshold conditions for eligibility). Frances O’Grady, the General Secretary of the UK’s Trades Union Congress (TUC) has stated that as many as 2 million workers may not be eligible for SSP under the current system.

There has been some concern expressed that individuals in these categories may continue to go to work – if they have the virus or suspect as much – because they will not receive SSP during their absence.

Eligibility criteria for SSP

In 2019-20, in order to qualify for SSP you must be an employee earning at least £118 per week or £512 per month (before tax). This is known as the Lower Earnings Limit.

In April 2020, SSP will rise to £95.85 per week, but individuals’ earnings must fall within any of the following bands in order to qualify:

  • £120 per week
  • £520 per month
  • £6,240 per year

Again, this will mean that many zero hours contract workers will simply fail to qualify for SSP payments.

More problems …

There is also another complication concerning eligibility for sickness pay which the COVID-19 outbreak has raised:

Let’s assume that you do qualify for either contractual sick pay or SSP, but you have decided to take the precautionary measure of self-isolation so as not to expose your colleagues to potential risk.

It may be that you have recently returned from a destination such as China or Italy where the virus has been particularly prevalent and you decide to play it safe by not going into work. You contact your HR Department or employer to inform them of your decision; you are thanked for being extremely considerate and responsible; and then you are told that you are not entitled to receive sick pay because you haven’t actually been diagnosed with the virus.

Matt Hancock MP, UK Government Minister for Health, thinks that current legislation does cover such situations and individuals who take precautionary measures, as outlined above, should benefit from sick pay provisions.

With all due respect to Mr Hancock, what he thinks and what current legislation or a contract of employment states might be entirely different realities. That said, Mr Hancock does have the support of the highly regarded Advisory Conciliation and Arbitration Service (ACAS) which is recommending that employers pay self-isolating employees who have taken such a precautionary measure (see link below).

https://www.acas.org.uk/acas-publishes-new-advice-on-handling-coronavirus-at-work

Conclusion

Clearly, COVID-19 is presenting a number of challenges to traditional practices or orthodoxies in the field of employment law. This is a serious issue given that recent estimates are predicting that up to 20% of the UK workforce could be in danger of contracting the virus and, consequently, they will be absent from work.

In some respects, the UK Government has been caught napping on the issue of extending employment protection e.g. entitlement to sick pay to people who do not have a contract of service and the COVID-19 outbreak has really exposed this shortcoming.

As Jonathan Rennie of law firm, TLT, had noted (as recently as this week) the UK Government has failed to implement any of the recommendations of the Taylor Review which favoured extended employment protection to workers who did not have a contract of service. It is somewhat ironic that the virus outbreak has forced the Government to break cover and extend some employment protection rights.

A link to an article on the BBC website about the predicted impact of COVID-19 on the UK workforce can be found below:

https://www.bbc.co.uk/news/uk-51718917

Copyright Seán J Crossan, 4 March 2020

California dreamin’?

Photo by Ross Sneddon on Unsplash

I’m currently in the fourth week of Semester 2 and I’m teaching Employment Law to a group of second year students. I usually begin this course by discussing the importance of an individual’s employment status.

In today’s world of work, the great divide very much rests upon whether a person has a contract of service OR a contract for services.

An employee is said to have a contract of service as defined by Section 230(1) of the Employment Rights Act 1996. Having this status potentially allows someone to acquire employment protection such as the right not to be unfairly dismissed; the right to a redundancy payment; the right to be the beneficiary of family friendly and flexible working practices.

After the first few lectures have been completed on employment status, I usually ask the students if they think this is an important issue?

Hopefully, if I have been doing my job properly and they have been listening to me, the penny will have dropped: it is more often better to be an employee than someone who works under a contract for services (e.g. zero hours workers, casual and atypical workers, freelancers and the genuinely self-employed).

There are notable exceptions (aren’t there always?): high earning British television celebrities (e.g. Lorraine Kelly) or a number of BBC news journalists have preferred to be treated as freelancers or self-employed persons. Why? They can then minimise their exposure to income tax liability in a way (often via the medium of personal service companies) that would not be possible because if they were employees they would almost certainly be taxed at source on a PAYE (pay as you earn) basis.

We have seen an explosion in the type of work that is often characterised or labelled as the ‘gig economy’. This work is often characterised by a distinct lack of employment rights; irregular working patterns; chronic insecurity; lack of long term career progression; and low pay. It is often impossible for such individuals to complete the necessary periods continuous service to acquire employment rights.

Companies such as Deliveroo, Lyft and Uber have become synonymous with the ‘gig economy’, as have whole sectors of the employment market e.g. catering, cleaning and hospitality services.

Admittedly, the UK Government of Prime Minister Theresa May (2016-19) did commission Matthew Taylor to review employment status. The main conclusion reached by the Taylor Review was that a minimum level of employment protection should be extended to workers – after all these individuals pay their National Insurance contributions too.

Links to the Taylor Report and the UK Government’s response can be found below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/627671/good-work-taylor-review-modern-working-practices-rg.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/679767/180206_BEIS_Good_Work_Report__Accessible_A4_.pdf

In Scotland, the devolved Government has also established a Fair Work Convention with the aim of promoting better and progressive employment practices by 2025 (see the link below):

https://www.fairworkconvention.scot

Admittedly, an employee does not gain these rights from day 1 of employment. They become entitled to claim certain rights as they build up their continuous service with the employer. So, for example, an employee (generally speaking) has the right not to be unfairly dismissed in terms of the Employment Rights Act 1996 if they have completed 2 years of continuous service with the employer.

Meanwhile, on the other side of the world …

… or California dreamin’

It’s not just in the UK that debates about employment status are currently playing out. At the tail end of 2019, it was with particular interest that I read about a story from the United States which highlighted many of the issues which I have just been discussing in this Blog.

A study, carried out in 2015/16 by economists (Professors Lawrence Katz and Alan Krueger at Harvard and Princeton Universities respectively) calculated that “12.5 million people were considered independent contractors, or 8.4% of the U.S. workforce.”

https://scholar.harvard.edu/files/lkatz/files/katz_krueger_cws_v3.pdf

Interestingly, in 2019, Professors Katz and Krueger appeared to disown or play down certain of their findings – especially in relation to the number of American gig economy jobs:

https://edition.cnn.com/2019/01/07/economy/gig-economy-katz-krueger/index.html

Assembly Bill 5

The US State of California has just enacted a law, Assembly Bill 5 2019 or AB5 (known more popularly as the gig economy law) giving those individuals working in the gig economy more employment rights. The law came into force on 1 January 2020.

A link to AB5 as enacted by the California State legislature can be found below:

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5

In theory, AB5 makes it much more difficult for employers to classify individuals as independent contractors for services meaning that many more people will be treated as employees with the right to claim the minimum wage and the right to receive sick pay.

The Supreme Court of California laid down very strict criteria for determining whether an individual was an employee or an independent contractor in what is being referred to as the ‘landmark’ decision of Dynamex Operations West, Inc v the Superior Court of Los Angeles County 30 April 2018 Opinion S222732.

The case establishes the ‘ABC Test’ which operates on the presumption that individuals hired by an organisation or business are employees unless the hirer can show otherwise. In this case, the Supreme Court moved away from the ‘seminal’ Borello Test which had been the standard way of determining a person’s employment status since the 1980s. Critically, AB5 reflects the Dynamex criteria.

Essentially, the hirer must satisfy all three parts of the ABC Test in order to prove that an individual is a genuine independent contractor.

The criteria in ABC Test (as contained in AB5) can be set out as follows:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The Dynamex decision is regarded as a landmark judgement because it overturns the Borello Test which had been the leading precedent for determining employment status in California since the late 1980s (see S. G. Borello & Sons, Inc. v Department of Industrial Relations (1989) 48 Cal.3d 341).

In Dynamex, the Californian Supreme Court made the following statement:

Although in some circumstances classification as an independent contractor may be advantageous to workers as well as to businesses, the risk that workers who should be treated as employees may be improperly misclassified as independent contractors is significant in light of the potentially substantial economic incentives that a business may have in mischaracterizing some workers as independent contractors. Such incentives include the unfair competitive
advantage the business may obtain over competitors that properly classify similar workers as employees and that thereby assume the fiscal and other responsibilities and burdens that an employer owes to its employees.

The Court noted, moreover, that:

In recent years, the relevant regulatory agencies of both the federal and state governments have declared that the misclassification of workers as independent contractors rather than employees
is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue and millions of workers of the labor law protections to which they are entitled
.”

A link to the Dynamex judgement can be found below:

https://scocal.stanford.edu/opinion/dynamex-operations-west-inc-v-superior-court-34584

Legislators in other US States (New Jersey and New York particularly) have expressed a desire to follow the Californian example and Democratic US presidential candidates, Bernie Sanders and Elizabeth Warren are strongly in favour of this type of law.

As you would expect in such a litigious society as the United States, AB5 has already been the subject of a legal challenge (which was unsuccessful). Predictably, Uber and another company, Postmates, were at the forefront of this action.

This legal challenge was hardly surprising, given that The Los Angeles Times reported in August 2019 that Uber and Lyft intended to establish a campaigning fund worth $60 million to fight AB5.

A link to the story can be found below:

https://www.latimes.com/business/technology/story/2019-08-29/ab5-uber-lyft-newsom-lorena-gonzalez-ballot-tony-west

Conclusion

So, even in the land of free enterprise, it would seem that not everyone wants to be their own boss and many people would, in fact, be more than happy to welcome the recognition of their status as employees.

That said, AB5 has, surprisingly, not met with the approval of every worker or potential employee. The California performing arts community has experienced problems with the new law, mainly because of its use of the term ‘fine artist’ which was not defined. Fine artists are exempt from the provisions of AB5, but who exactly is a fine artist? No one seems to be sure and The Los Angeles Times reported that one opera company had cancelled performances because they were unsure whether performers were to be classified as employees (with the additional costs that this would entail) or whether they were genuinely independent contractors.

Lorena Gonzalez, the Californian Assemblywoman who drafted AB5 said that a definition of the term was deliberately omitted from the law and that it the responsibility of the State’s Employment Development Department to clarify this issue.

Readers will find links below to media articles about AB5:

https://apple.news/A_pjrttPvTDSMSpV-VMet8w

https://www.bbc.co.uk/news/business-49659775

https://www.latimes.com/entertainment-arts/story/2020-01-29/ab5-independent-contractor-california-2020-arts

Related Blog Articles:

https://seancrossansscotslaw.com/2019/04/19/the-gig-economy/

https://seancrossansscotslaw.com/2019/07/22/good-work/

https://seancrossansscotslaw.com/2019/03/22/hello-im-lorraine-and-im-definitely-self-employed/

https://seancrossansscotslaw.com/2019/12/21/employee-or-not/

https://seancrossansscotslaw.com/2019/01/17/employment-status/

https://seancrossansscotslaw.com/2019/05/08/call-me-an-uber/

https://seancrossansscotslaw.com/2019/03/25/strippers-are-workers-too-discuss/

https://seancrossansscotslaw.com/2019/02/14/horses-for-courses-the-equine-flu-affair/

https://seancrossansscotslaw.com/2019/04/30/paternity-leave/

https://seancrossansscotslaw.com/2019/02/25/the-work-life-balance-or-utopia-reimagined/

Copyright Seán J Crossan, 13 February 2020

Take it or leave it …

Photo by Liviu Florescu on Unsplash

Take it or leave what?

This is the stark choice faced by thousands of Asda employees (US parent company Walmart) in the UK who have been told by their employer that they must accept new contracts of employment.

The GMB Trade Union representing many of the affected employees has publicly stated its opposition to the new contracts. The Union’s argument amounts to the claim that the new terms and conditions will leave employees in a worse position.

Asda has stated that if employees don’t agree to the new contracts of employment by 2 November 2019, they will no longer have a job with the company. Effectively, the employees will be terminating their employment with the company Asda is arguing.

What’s the legal position?

Well, Asda is stating that it wishes to terminate the existing contractual agreement with the affected employees and replace it with a new contract. In this type of situation, Section 86 of the Employment Rights Act 1996 is particularly relevant.

The Act lays down statutory minimum periods of notice that the employer must give to the employees in question. These statutory minimum periods of notice apply to all those employees who have been continuously employed for four weeks or more.

Given the amount of previous Blogs of mine where I have covered the issue of an individual’s employment status, I really shouldn’t have to remind readers that the statutory notice periods apply to employees only i.e. those individuals who work under a contract of service (as per Section 230 of the Employment Rights Act 1996).

The statutory periods are detailed below:

  • One week’s notice is required to be given to those individuals who have been employed for more than four weeks but under two years
  • If the employee has between two and 12 years’ continuous service, s/he is entitled to a week’s notice for every year of service
  • If an employee has more than 12 years’ continuous employment, the maximum notice period is 12 weeks

It is important to note that these are statutory minimum periods of notice and that contracts of employment may actually lay down a requirement for longer periods of notice.

Alternatively, some employers may choose to insert a term in the contract where they can pay off the employee immediately by giving them their full entitlement to notice pay. There is no need for the employee to work whatever notice period they are entitled to receive. This type of contractual term is known as payment in lieu of notice.

Back to Asda: the affected employees are being given their statutory notice period whether that’s 1 week, 2 weeks or up to the maximum notice period of 12 weeks (depending on the individual’s length of service) as per Section 86 of the Employment Rights Act 1996.

What if some people still refuse to sign the new contracts after their statutory period of notice has expired?

There is always the possibility that certain employees (with the requisite length of service or meeting other relevant criteria e.g. protected characteristic discrimination) may be able to raise a claim for unfair dismissal in terms of the Employment Rights Act 1996.

Asda, on the other hand, may be able to justify the dismissals as potentially fair under Section 98(2) of the Employment Rights Act 1996 i.e. for some other substantial reason (the necessity for a wide-scale reorganisation in a tough retail environment).

No doubt lawyers for both Asda and the GMB are already staking out their respective legal positions for a possible battle before the Employment Tribunal.

A link to the story on the Sky News website can be found below:

Asda refuses to remove sack threat for thousands of staff over compulsory contracts http://news.sky.com/story/asda-refuses-to-remove-sack-threat-for-thousands-of-staff-over-compulsory-contracts-11845215

Postscript

It has since been reported in the Daily Mirror newspaper that one of Asda’s longer serving employees who was sacked for refusing to accept the new contract is intending to lodge an Employment Tribunal claim.

Please see the link below to this story:

https://www.mirror.co.uk/money/asda-worker-sue-supermarket-after-20857926

The Guardian also reported that the negative publicity from this story could be costly for Asda – see the link below:

https://www.theguardian.com/business/2019/nov/10/asda-faces-backlash-enforces-new-contracts

Copyright Seán J Crossan, 26 October and 12 November 2019