Insights Worked up, your monthly employment law lowdown – December 2020

Welcome to this month’s Worked Up. Given the year we’ve all had, we have sympathy for those of you who are glad that we are finally on the home stretch for 2020. 

It has certainly been an interesting year on the employment law front and we hope you have found our updates helpful this year. With vaccines already on order, it would be easy to think that next year will be smooth sailing but we suspect there will be plenty of HR conundrums and employment law developments to sink your teeth into.  We look forward to tackling these with you come January but, in the meantime, we would like to wish you all a restful break and a very merry festive period!

In this month’s edition, we set out an important change to the immigration rules, some subtle changes to the latest furlough guidance and touch on recent case law, which importantly extends health and safety protection to workers as well as employees.

If you would like to discuss any of the below updates, please do get in touch.

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This month's headlines

With the constant stream of Covid news over the last few months, you could be forgiven for having pushed Brexit to the back of your mind. However, the end of the transition period is drawing ever closer and it’s important that companies use the time remaining to ensure they are prepared for the changes that will come into effect next year.

Key for employers is the change to the immigration system. From 1 January 2021, a new “points-based” system will replace the current set of rules and employers wishing to recruit any workers from outside the UK (including EU, EEA and Swiss citizens) will generally be required to have a sponsor licence.  In essence, this means treating those from the EU in the same way as employers have previously treated non-EU citizens.

You can find out further details about this here.

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As we reported in last month’s edition (available here) and our subsequent update on 5 November 2020 (available here), the Job Retention Scheme is back and it’s set to continue until the end of March 2021.

While (at least until January), the extended scheme is set to operate in a similar way to how it operated back at the start of the scheme, with the Government contributing the full 80% of wages and employers only being required to cover pension contributions and employer’s national insurance contributions, there are a couple of key changes companies need to be aware of:

  1. The Government will be publishing the name, company number (if applicable) and an indication of the value of the claim (within a banded range) of any employer who claims for periods starting on or after 1 December 2020, unless the employer can show that publishing this information would result in a serious risk of violence or intimidation to the employer, any director/officer/partner/employee of the employer or any individual living with them; and
  1. For claim periods starting on or after 1 December 2020, employers will not be able to claim for any days during which the furloughed worker was on their notice period (whether contractual or statutory notice).

We assume the Government is preventing employers from claiming notice pay in an effort to discourage employers from terminating workers prior to the end of the furlough leave period. However, the downside of this for workers is that, along with the publication of employer names, it may discourage employers from furloughing workers where there appears to be little prospect of a return to normal operations following the end of the furlough leave period.

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R (Independent Workers’ Union of Great Britain) v Secretary of State for Work and Pensions and another

In this case, the High Court held that the UK had failed to properly implement the EU Health and Safety Framework Directive and PPE Directive by limiting the protection to just “employees” rather than the wider group of “workers”.

The case was brought by the Independent Worker’s Union of Great Britain which largely represents gig-economy workers who do not have “employee” status. The union’s members had raised a number of concerns regarding Covid-19 and, in some cases, their fears of having to work without the PPE they considered was required. While employees who reasonably believe themselves to be in serious and imminent danger and who consequently leave or do not attend work are protected from detriment pursuant to section 44 of the Employment Rights Act 1996, the same protection does not apply to workers.

The union challenged this law in the High Court alleging that the UK had failed to properly transpose the Framework Directive and the PPE Directive as both directives required certain protections to be conferred on “workers” and the UK legislation had limited this protection to “employees”. The High Court found in favour of the union in a decision that could have significant implications for workers.

Although the precise implications of this decision are not certain, it may mean that workers (which notably will include many freelancers working in Film and TV) could be protected from detriment where they take action in situations where they reasonably believe themselves to be in serious and imminent danger.

Given the current context where many individuals could have justifiable concerns about the risk of contracting Covid-19 when attending work or carrying out certain activities, it would therefore be advisable for employers to listen to any concerns raised by workers and to ensure that they aren’t subjected to a detriment (e.g. dismissed or having their pay reduced or withheld) as a result of raising such concerns or as a result of taking action linked to these concerns.

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Palmeri v Charles Stanley and Co Ltd [2020] EWHC 2934 (QB)

In this case, the High Court held that a company was entitled to summarily dismiss a stockbroker (Mr Palmeri) on the basis of his repudiatory conduct (namely a full blown office rant), even though the company had already planned to terminate the stockbroker’s contract with immediate effect, which in itself amounted to a repudiatory breach of contract.

Mr Palmeri had been working for the company for a number of years on a self-employed basis. His contract provided for a three month notice period, but contained no payment in lieu of notice clause. There had been difficulties between the parties for a few years as the company had sought to change its operating model to take a larger share of the revenues that its associates (such as Mr Palmeri) were receiving. Mr Palmeri strongly resisted this change as it would have caused him significant financial loss. Matters came to a head in a meeting on 21 April 2017 where the company gave Mr Palmeri an ultimatum that if he did not accept the new terms, he would be terminated with immediate effect.

Mr Palmeri was very angered by the situation he found himself in and verbally abused those present in the meeting as well as speaking disparagingly about members of the senior management team, including the CEO and other Board members. Mr Palmeri did ultimately agree to accept the new terms under protest, but, given what had transpired in the meeting, the company felt that it was not tenable to continue the relationship so it dismissed Mr Palmeri with immediate effect.

Mr Palmeri issued a claim for breach of contract but the High Court found in the company’s favour, holding that Mr Palmeri’s conduct (which included several regulatory issues which were only discovered after his termination as well as his outburst at the meeting) justified summary termination and the fact that the company had, in any event, been poised to deny Mr Palmeri his notice period, did not affect its entitlement to rely on the conduct that later followed and was discovered.

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