Following the UK Government’s recent publication on the plans for the wind down to the Coronavirus Job Retention Scheme, we have produced a practical checklist to help UK employers look at the changes that need to be considered when preparing to resume business activities with a partial or full return to work.

To download the checklist, please visit MayerBrown.com. It should be read alongside our article, End of the Line: UK COVID-19 Furlough Scheme Update.

 

The European Court of Justice (“ECJ”) has delivered a ruling on the issue of what happens when there is a transfer of an undertaking under the Acquired Rights Directive which involves multiple transferees.

In the case of ISS Facility Services NV v Sonia Govaerts and Atalian NV, ISS held cleaning contracts with the city of Ghent which were divided into three lots. Ms Govaerts was the project manager for all three lots. The contracts were re-tendered and awarded to two new contractors, with one of the contractors taking two of the lots (to which Ms Govaerts was 85% assigned) and the other taking the third lot (to which Ms Govaerts was 15% assigned). The Belgian courts took the view that the transfer qualified as a transfer of an undertaking under the ARD and so the employment of Ms Govaerts would transfer. They then asked the ECJ to rule on whether Ms Govaerts’ employment should be split between the new contractors or whether it should transfer only to the contractor that acquired the lots on which she was mainly employed.

Surprisingly, the ECJ found that the ARD did not prevent an employee’s contract of employment being split into part-time contracts, each in proportion to the extent to which they were assigned to the parts of the business acquired by the transferees. However, the ECJ held, this will only occur if such a division is possible and does not cause a worsening of the working conditions of the individual or have an adverse effect on their rights, which are matters for national courts/tribunals to decide. In addition, the ECJ found that, if a division of the contract is not possible or would adversely affect the rights of the worker, the transferee(s) would be regarded as being responsible for any consequent termination of the employment relationship, even if that termination was initiated by the worker.

The ECJ’s ruling may lead to a change in approach to such situations in the UK, where the current case law does not support the splitting of an individual’s employment across multiple transferees.  This is no doubt influenced by the difficulty inherent in dividing up a person’s employment in a way that does not adversely affect their position.  Given that the transferee(s) would be liable if the employment contract is subsequently terminated, and such terminations would inevitably be by reason of the transfer, the risk for transferees is that these dismissals would be automatically unfair unless an “ETO” (e.g. redundancy) reason can be argued.  As a starting point, transferee employers involved in outsourcings and business acquisitions should investigate carefully the extent to which they have adequate indemnity protection against such outcomes.

One of the changes to the furlough scheme announced by the Chancellor last Friday was that the scheme will close to new entrants on 30 June, and so the last date on which an employer can furlough an employee for the first time is 10 June 2020 (so they can complete the minimum three week furlough period by 30 June). The Government fact sheet published following the Chancellor’s speech states that “employers will only be able to furlough employees that they have furloughed for a full three week period prior to 30 June”.

The question many of our clients are asking is: can we “re-furlough” an employee who has returned from furlough, or who returns before 30 June? Or are they treated as a “new” employee?  We are hoping that this will be clarified by a new or amended Treasury Direction but, as yet, that has not been published.

We have, however, been made aware of advice provided to one of our clients by HMRC, which confirms that employers can re-furlough employees after 30 June, as long as they were furloughed for a minimum three week period at any time prior to 30 June 2020. While this is not definitive, it is a helpful indication as to how HMRC envisages this change being applied.

Remember, too, another key change to the scheme going forward is that the total number of employees that an employer can furlough cannot exceed the maximum number for whom they have claimed previously under the scheme. It is not clear what date is relevant for these purposes, but it seems likely to be effective from 1 July.

To read our latest update on the UK Government’s announcement regarding the end of the furlough scheme, please visit MayerBrown.com.

Following our recent update on Life in the Time of Corona, Part 3: Handling Collective Consultation in the UK, we have produced a practical checklist that highlights the steps that employers should consider when handling collective consultations in the UK during these challenging times, particularly when staff are working remotely.

To download the checklist, please visit MayerBrown.com.

The UK Government has, in keeping with past practice, used the arrival of the bank holiday weekend to update the Coronavirus Job Retention Scheme. It has now published a second iteration of the Treasury Direction, which we have reviewed. To read our commentary on the updated Direction, please visit MayerBrown.com.

It is going to be one of the sadder consequences of the Coronavirus pandemic, that most employers are going to have to look closely at whether or not to make significant job cuts to their current headcount. Whilst some employers may view this as an opportunity to recruit and acquire staff either generally or in particular areas, most employers are going to be looking at scheduling necessary headcount reductions. The news that there are more than 7 million people are currently on the Furlough Scheme has doubtless concentrated minds wonderfully at the UK Government, which is why the Coronavirus Job Retention Scheme has been extended until the end of July 2020 in its current format and is then being tapered rather than a cliff ending. Presumably some of the Government’s thinking is that some employee’s jobs may be saved, and some employee’s jobs may be moved to part-time working, and to the extent that there are job losses these will be scheduled over three months rather than one horrendous month. To read the full update, please visit MayerBrown.com.

The latest guidance from BEIS, published 13 May, confirms how holiday entitlement and holiday pay is to work during the Coronavirus pandemic. The Guidance Note is informative in some areas but makes a number of quite odd suggestions in others. We must remember that it is simply guidance. An employee’s statutory rights for holiday leave and holiday pay are not affected by this, although the guidance will be of persuasive effect. It will have more impact in relation to the Furlough Scheme, where clearly employers are entitled to expect that HMRC will respect guidance put out by BEIS. To read the full update, please visit MayerBrown.com.