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A recent Employment Appeals Tribunal decision has confirmed an important principle of employment law: that in certain cases the dismissal of an employee without any procedure can be fair.

Generally speaking, unfair dismissal law requires employers to have both a “fair” reason for dismissal and to follow a “fair” dismissal procedure. There is an exception, however, where the employer contends – and can prove – that following a procedure would have been futile. This exception was successful in the recent case of Gallacher v Abellio Scotrail Limited.

The working relationship between Mrs Gallacher (a senior manager) and her own line manager broke down. Although the parties previously held two meetings to seek to resolve the disagreements, these were unsuccessful. Subsequently, during her annual appraisal, Mrs Gallacher was dismissed for lack of trust. Her claim for unfair dismissal failed as her employer was able to prove not only that a procedure would not have served any useful purpose, but also that it would have worsened the situation. This was a case where a continued good working relationship between Mrs Gallacher and her line manager was critical as the employer was going through a very difficult period. In addition, the evidence showed that Mrs Gallacher recognised the breakdown in relations herself and was not inclined to retrieve the situation.

The employment tribunal found the dismissal to be fair despite the absence of any procedure, and this was upheld by the Employment Appeals Tribunal. Although this case represents the exception from a well-established general rule, it serves as a helpful authority for cases where an employer has good grounds to believe that immediate termination of the employment, without adopting due process, is justified.

We would nevertheless recommend that you take specific legal advice on a case by case basis as each case will turn on its own particular facts and circumstances.

As Covid-19 lockdown measures continue to ease (at least for the time-being), employers need to manage a proper and lawful return to work, alongside a raft of new legal and economic measures (e.g. flexible furlough, possible redundancies and the Job Retention Bonus).

Despite government encouragement (and likely new guidance), employers and employee appear in no rush to bring employees back to “base”. Many are still conducting risk assessments and employee consultation. Others are keen to implement longer-term flexible and home working arrangements.

A note of caution, however. While during the early stages of the Covid-19 lockdown the Information Commissioner and Health and Safety Executive were willing to turn a blind-eye to elements of non-compliance, future non-compliance with data protection and health and safety requirements is unlikely to be excused as easily. Part of current return to work assessments must include compliance with data protection and health and safety requirements.

It is also important to bear in mind that the longer remote working continues the less “control” the employer has over work equipment (and passwords to such equipment); confidential information and contact with employees. Measures which may have been put in haste in March / April 2020 may no longer be suitable, and should be revised, going forward.

Bear in mind also that you may need to implement different arrangements to previously shielding employees who (in England) will be permitted outside their home from 1 August 2020. However, previously shielding employees will need to continue to maintain two metres distance (unlike others who may maintain a 1-metre distance from others provided suitable protective measures are in place). As a result, employers may need to make different arrangements for employees who previously shielded and are returning to work on or after 1 August 2020, than for non-shielding staff.

From 1 July 2020, employers have been able to implement ‘flexible furlough’ under which employees can do some work for their employer, without employers losing the right to claim furlough pay in respect of the hours not worked by the employees. 

Thee new regime is complex and below is a summary of the key points. Employers who seek to implement flexible furlough should familiarise themselves with all guidance and information on the new regime.

• Flexible furlough is only available in respect of employees who have been furloughed previously for at least three consecutive weeks in the period between 1 March and 30 June 2020.
• There is no minimum or fixed requirements of pattern or working hours in relation to flexible furlough. And, unlike in relation to “normal” furlough which required employees to be furloughed for at least 3 weeks at a time, there is no minimum period for flexible furlough. However, claims can only be made in weekly increments.
• Employers can claim a pro-rated amount of an employee’s 80% of salary, based on the proportion of hours not worked out of normal working hours. Calculation of “normal working hours” will vary depending on whether the employee is (normally) on fixed hours/pay or variable hours/pay. For employees with fixed hours/pay, the calculation is based on the number of hours worked in the pay period before 19 March 2020 (e.g. during the month of February if the pay period is monthly). For employees with variable hours/pay, the calculation is based on the higher of (i) the average number of hours worked in the tax year 2019-2020; or (ii) the average hours worked in the corresponding calendar period in the tax year 2019-2020 (e.g. for flexible furlough work in July 2020, look at the hours worked in July 2019).
• For any hours which an employee works during flexible furlough, employers will need to pay wages, tax and NICs in the usual way.
• Employers should submit data on the usual hours the employee would be expected to work in the relevant period, the actual hours for which the employee worked and the number of furloughed hours in the relevant claim period.
• Employers should have a written agreement on flexible furlough arrangements with their employees. It is unlikely that a written record of a verbal agreement will be sufficient. The guidance also states that any flexible furlough agreement must be “consistent with employment, equality and discrimination laws.”
• It is likely that holiday entitlement of employees working under a flexible furlough scheme will continue to accrue in the usual way.

With the Furlough scheme winding down and lockdown measures being eased, HMRC has announced plans to penalise company directors who intentionally breach the furlough scheme rules. 13 July 2020 saw the first reported arrest for Furlough fraud – Contractor UK reported the arrest of a business owner for a £495,000 Furlough fraud. The business’ bank account was frozen and computers and digital equipment seized.

It is predicted that HMRC will focus on the following three potential offences when carrying out checks:

• Furlough wages obtained and not paid to employees (in full or in part);
• Furloughed employees and directors worked during furlough; and
• Employers coerced employees to work while on furlough.

Provisions on Furlough-related offences and HMRC powers will be made under the Finance Act 2020 (which is expected to come into force later this summer) and, as things stand, are expected to include:

• Power to make company directors jointly and severally liable for penalties under the furlough scheme (even where a co-director was unaware of the fraudulent conduct in question);
• HMRC powers to impose a 100% tax charge on anyone who misapplied furlough funds, e.g. used furlough funds not to pay employees, but to cover other business costs);
• HMRC powers to impose a 100% tax charge on anyone who has received a payment under the scheme to which they were not entitled.

It is also anticipated (but yet to be confirmed) that, once the Act comes into force, employers will have a 30-day grace period in which to report maladministration or misuse of the Furlough scheme without being penalised.

The Finance Bill had its first reading on 2 July and its second reading – when a general debate on all aspects of the Bill take place and the remaining stages – is scheduled for 17 July 2020.

For advice on the Furlough scheme, please speak to Helen Boddy or Michal Stein at Boddy Matthews Solicitors.

Late last month, the government announced changes to the Furlough Scheme. Having seen more than 8 million employee benefiting from the scheme, at an approximate cost of £15bn, a gradual scale down has been introduced.

Key dates of the revised scheme are as follows:

1 July 2020: The Flexible furlough scheme comes into effect. Under this scheme, employers can agree with employees any level of part-time working without the employee coming off the furlough scheme completely. Employers will have to pay (the contractual pay) to the employee for the hours actually worked. Pro-rata furlough pay will be payable by the government for hours on which the employee is not working (subject to existing and changing limits, see below). Flexible working can be done on a week by week basis for the purposes of the furlough claim. We will review the flexible furlough scheme in more detail in a forthcoming blog.

1 August 2020: from this date employers will need to pay employer NIC’s and pension contributions on Furlough pay.

1 September 2020:  from this date, government contributions will reduce by 10%. This means that the government will pay 70% of furloughed employee’s wages up to a maximum of £2,187.50 per month. Employers will have to make up the “lost” 10% of employee’s salary (up to £312.50) in addition to paying employer NIC’s and pension contributions. Failure to make the necessary top up could mean that employees are not validly furloughed (with potential claims from the employees and, possibly, HMRC).

1 October 2020: from this date, the employer must contribute 20% of the employee’s salary, i.e. up to £625.

31 October 2020: the furlough scheme ends.

One of the many difficulties that employers have been experiencing during the Covid-19 pandemic and lockdown has been the day-to-day management of employees working from home in circumstances where the norm is no longer normal. However, businesses must survive and employees’ conduct and performance remains a critical issue.

With this in mind, ACAS has published guidance on conducting disciplinary and grievance procedures during the coronavirus pandemic. While the guidance has no legal force, in the event of a dispute, tribunals may take its content into account. This is a matter of some concern regarding employers with Furloughed employees as helpfully, ACAS takes the view that a Furloughed employee can still participate in a disciplinary or grievance investigation or hearing including if they are the person under investigation, chairing a hearing, acting as a companion or witness or taking a note, but somewhat unhelpfully, that participation must be voluntary.

In our opinion, matters are not as straightforward. For example, employers should not need an employee’s voluntary agreement to begin disciplinary proceedings, pandemic or not. We are also concerned that employees who act as companions, note takers or Chair during a hearing may be regarded as working by HMRC, which would be inconsistent with their Furlough status. The Employment and Tax regimes are separate and distinct and are not always aligned in their approach. We would, therefore advise caution, case by case assessment, reliance on established legal principles and the existing ACAS Code of Practice on Disciplinary and Grievance Procedures as well as bespoke legal advice.

From our experience, it is possible to conduct disciplinary and grievance hearings during the Covid-19 lockdown, provided certain adjustments are made. We have advised on remote grievance hearings, online mediation and conducting virtual workplace investigations. Creative solutions are possible and can be tailored to the specific needs and circumstances of employers and their workforce.

Alongside supermarket queues, handwashing, deep cleaning and Furlough, homeworking has been one of the defining features of the Covid-19 lockdown. The most recent ONS statistics on homeworking (2019 – published at the very start of lockdown) showed that of the UK’s 32.6 million in employment, only 1.7 million people reported working mainly from home. And, while there are no up to date statistics on the rate and number of homeworkers during Covid-19, there is little doubt that they are far higher than before. Many employers and employees expect home working to become more established, if not the norm.

So, what should you be thinking about if you want your workforce to work from home more regularly? The starting point must be an agreement in principle for homeworking to take place. This may have already been set out in your employment contracts, handbook or policies. But, if not, you will need to amend your documentation with the agreement of (and following consultation with) the workforce.

Issues to consider when establishing homeworking include:

• The employer’s health and safety obligations (these apply to remote workers in much the same as to those at the workplace);
• The government’s temporary relaxation on working at home assessments was based on the need for businesses to make emergency arrangements to meet the guidance. It is now clear that the period of working at home will be longer than anticipated and, in some cases, the ‘new normal’.
• Employers should review whether the initial measures that they took to support staff working from home are still sufficient. If an employee raises a concern about their home working arrangement, the employer should take action.
• In order to comply with health and safety obligations, the employer should carry out a risk assessment to identify and mitigate potential risks to their employees whilst working from home and to establish safe working practices in agreement with their employees.
• Check the employer’s liability insurance to ensure cover extends to employees working from home and any special conditions that the insurer may require.
• Provision, ownership and access to equipment. For example, will you supply a work laptop or other office equipment and, if so, how will you ensure its retrieval on termination of employment;
• Confidentiality and data protection issues;
• Expenses, tax and insurance. Employees will need to have and maintain adequate home and contents insurance policies. They may seek to recoup some expenses related to homeworking and some may be entitled to limited tax breaks. These issues ought to be determined in advance; and
• Communication, supervision and support of employees. Not everyone will find homeworking easy and some employees will miss the social element of work and/or the discipline intrinsic to the workplace. To ensure productivity remains high and employees’ well-being is unaffected, various safeguards will need to be introduced.

The Government may introduce a new legal right for employees to work from home, which would mean that employers would only be able to reject a working from home request if a staff member’s job could only be done in the workplace. Watch this space for more information once we know more.