In the first instalment of this two-part article, Gwyneth Pitt deals with some of the employment law questions which have been raised by the COVID-19 lockdown—which could impact your business or your clients.
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The unprecedented lockdown called by the Government on 23 March 2020, shutting most businesses and confining the British population to their homes, has caused massive hardship for millions of workers and their families. Many have lost their jobs and it is very possible that many more may do so once the taxpayer-supported furlough scheme comes to an end. In the meantime, as people are increasingly encouraged to return to the workplace, sharp differences of opinion about safety measures are appearing. It is likely that the legal, as well as the social and economic, consequences of the COVID-19 pandemic will reverberate through courts and tribunals for years to come.
The crisis has already exposed the particular vulnerability of workers in the gig economy, most of whom have contracts which describe them as self-employed even though very few can realistically be regarded as genuine entrepreneurs. Their contracts typically state that the employer has no obligation to provide them with work, and that they have a choice about accepting any offer. Also, they need not actually perform the work themselves but may send a substitute. On the whole, provided that these terms are not a sham (Autoclenz v Belcher) they have usually been successful in blocking such workers from claiming the status of ‘employees’ and attendant protection such as the right to claim unfair dismissal or redundancy payments. Many, however, have been able to claim the legal status of ‘workers’ under s.230(3)(b) of the Employment Rights Act 1996 (see Pimlico Plumbers Ltd v Smith) and so are entitled to the National Minimum Wage and rights under the Working Time Regulations, including paid annual leave.
Safety—the employer’s duty of care
Employers have a duty at common law to take reasonable care for the safety of their employees, a duty usually explained as having three aspects:
- a duty to provide safe fellow workers;
- to provide safe equipment; and,
- to provide a safe system of work.
This is basically a specialised form of the tort of negligence, and compensation will be awarded for breach. The duty to self-employed workers is much lower: effectively, self-employed workers are expected to take care for their own safety. But the case law shows that courts take a broader view of who should count as an employee when injury at work is at issue—see, for example, Lane v Shire Roofing—and it is likely that many gig economy workers would be held to be entitled to the same duty of care as employees. The duty is owed to workers as individuals—taking account of their particular characteristics—and includes employees working at home as well as those in the workplace.
The emphasis is on the word ’reasonable’, however, the employer does not have a duty to make employees safe at all costs. The risk of injury must be assessed, which entails taking account of the likelihood of it eventuating considered alongside the seriousness of the injury which may result, and then balanced against the costs of mitigating or eliminating the risk. Clearly, this is a particularly difficult exercise with COVID-19, as the likelihood of infection as reported is changeable (and based on incomplete information) and the seriousness varies from nil symptoms to death.
The common law duty is reinforced by employers’ duties under the Health and Safety at Work Act 1974, section 2 is in much the same terms as the common law duty of care, except that the standard is “so far as is reasonably practicable”. Guidance from the Health and Safety Executive (HSE) states:
“This means balancing the level of risk against the measures needed to control the real risk in terms of money, time or trouble. However, you do not need to take action if it would be grossly disproportionate to the level of risk.”
General duties under the HSWA are amplified in regulations. The Management of Health and Safety at Work Regulations 1999/3242, reg. 3, require all employers to carry out a “suitable and sufficient” risk assessment of the health and safety risks to which employees are exposed at work, and to take steps to minimise them. This risk assessment, which must be in writing if there are five or more employees, must be reviewed if there is a significant change in matters to which it relates—and clearly, COVID-19 has brought about such a change, so all employers should be completing new assessments. In addition, the Personal Protective Equipment at Work Regulations 1992/2966, reg.4, states categorically that “every employer shall ensure that suitable personal protective equipment is provided to his employees who may be exposed to a risk to their health and safety while at work”. Breach of duties under health and safety legislation is a criminal offence, but employees can no longer sue for compensation under the tort of breach of statutory duty in these circumstances.
Under the Provision and Use of Work Equipment Regulations 1998/2306, reg. 4, employers must provide employees with suitable work equipment—and this applies to those working from home as well as those in the workplace. At the beginning of lockdown there was a lot of improvisation as everyone tried to make new ways of working effective, but the longer working from home goes on, the less acceptable is it for employees to be using their own, possibly unsuitable, screens, keyboards and furniture. The HSE advises that employers should carry out a home workstation assessment before allowing permanent homeworking, but that this is not needed for temporary working from home. However, even if a period of several months can be described as temporary, it would be prudent for employers to consult employees about their needs, to give advice and certainly to be responsive to requests for support.
How can an employer ensure that it is complying with its duties, both in respect of employees returning to the workplace, or those working from home? In truth, no one can be absolutely sure, but relevant factors would clearly include compliance with advice from the Government, the HSE, Advisory, Conciliation and Arbitration Service and also the industry-specific guidance which has been drawn up under the auspices of the Government. Also highly relevant will be the steps which the employer has taken to engage in dialogue with the workforce to accommodate their concerns. All workplaces should have employee health and safety representatives, so the machinery for such consultation should be in place.
Furlough/suspension without pay/redundancy
Employees with two years or more service are entitled to a redundancy payment if they are dismissed for economic reasons. This will normally be a week’s gross pay, subject to a cap of £538, multiplied by the number of complete years that they have been employed, up to a maximum of 20 (the multiplier varies according to age). Employers planning multiple redundancies must begin consultation with their trade unions or other employee representatives according to strict time limits—at least 45 days in advance if 100 or more are to be dismissed, or 30 days if 20-99 jobs are to be lost. This is why several big companies were already announcing their plans for large-scale redundancies quite early on, even though the Government furlough scheme was supporting a substantial part of the wage bill.
The Coronavirus Job Retention Scheme (CJRS), currently extended to the end of October 2020, pays 80 percent of the salary of employees who have been laid off because of COVID-19, up to a maximum of £2,500 per month. Furlough must be for a fixed period of between three weeks and three months. During this time, the employees must do no work for the employer, although they are free to undertake other paid employment if they wish. (The system will be varied from 1 August to allow some work for the employer.)
It is important to note that, unless there is a term in the contract allowing it, employers have no right to lay off employees with less than their usual salary, and to do so is a fundamental breach of contract which would entitle the employee to leave and claim their notice money and redundancy and/or unfair dismissal. Even if the contract allows the employer to lay off staff without pay, they have the right to give notice of their intention to leave and claim a redundancy payment if laid off or put on short time for four consecutive weeks, or any six weeks in a 13-week period, as per the Employment Rights Act 1996 s.148. Short time means that the employee is earning less than half a week’s normal pay.
If the employer is prepared to top up the salary to the full amount, then there is no breach of contract, although the employee must still do no work for the employer if furloughed under the CJRS. That said, even where the employer is not topping up their salary, many employees will have agreed to accept less for the time being, well aware of the dire financial difficulties that all organisations are facing, in the hope of preserving their jobs in the longer term. In such cases, the parties would be wise to specify the terms on which they are agreeing to vary the contract—and for how long they intend the new terms to last.
Gwyneth Pitt has been teaching and writing about Employment Law for over forty years. In the course of her academic career she has taught at the Universities of Nottingham, Leeds and Huddersfield, as well as in France and the USA. She is currently Emeritus Professor of Law at Kingston University. Her textbook, Pitt’s Employment Law, is widely used in British universities and the 11th edition will be published this summer.