| HR & EMPLOYMENT LAW
Jackie le Poidevin, Editor-in-Chief, HR Adviser |
3 Tips to Avoid Discrimination when Making Redundancies
The UK is now in its biggest ever recession. A survey published this week by the Chartered Institute of Personnel and Development and Adecco, a staffing company, has suggested a third of more than 2,000 companies polled expect to make redundancies this quarter. In addition, research from Citizens Advice has claimed that one in six (17%) of the working population are facing redundancy, with disabled people and working mothers most at risk of being axed. Here, we look at what Citizens Advice found and give some tips on how to avoid discriminating against vulnerable groups when carrying out redundancies, which could result in costly tribunal claims.
According to Citizens Advice’s survey of more than 6,000 people:
- A quarter of disabled people (27%) are facing redundancy, rising to 37% for people whose disability has a substantial impact on their activities.
- Nearly half of people who are extremely clinically vulnerable to coronavirus (48%) – and who are likely to meet the Equality Act definition of ‘disabled’ – are facing redundancy.
- Four in 10 people with caring responsibilities (39%), either for children or vulnerable adults, are facing redundancy.
- Three in 10 people with children under 18 (31%) are facing redundancy, compared with fewer than one in 10 (7%) of those who don’t have children under 18.
Understand the Legal Risks of Unfair Selection for Redundancy
If your redundancy process isn’t fair, employees who have worked for you for at least 2 years can claim unfair dismissal. If you’ve targeted them for dismissal because of a protected characteristic such as disability, they can also bring a discrimination claim, even if they don’t have 2 years’ service. There’s no cap on awards for discrimination.
Dismissing a woman because of her caring responsibilities is likely to be indirect sex discrimination. This is because more women than men have been caring for children or adult family members during the COVID-19 outbreak. Dismissing someone who had to stay at home because someone in their household was shielding may be disability discrimination by association.
Tip 1. Don’t Assume Employees Won’t Bring Claims
There were already backlogs in the employment tribunals before COVID-19 and these are now growing. However, this doesn’t seem to be putting employees off considering claims.
Citizens Advice has said the number of people it is supporting over being selected for redundancy has soared by 370%. Meanwhile, Acas has reported a 160% increase in redundancy-related calls to its helpline over the past 2 months. You could find yourself bogged down in time-consuming grievances and Acas early conciliation, even if the dispute doesn’t make it all the way to a tribunal.
Tip 2. Use Fair Selection Criteria
To show you’ve acted in a fair and non-discriminatory way, you must have an impartial method for selecting who to dismiss. It’s fine to use selection criteria that allow you to keep your best people but it’s safest to do the following:
- Use at least two, and preferably three or more, criteria to ensure fairness and reduce the scope for complaints.
- Choose criteria that you can mark employees against using reliable evidence, such as their absence, disciplinary and performance appraisal records.
- Avoid subjective criteria like ‘commitment’ or ‘flexibility’.
Tip 3. Apply Those Criteria Fairly
To ensure fairness and avoid discrimination, you should:
- Only use accurate, verifiable records of performance, attendance and conduct. Don’t rely on poor performance during home working in the lockdown, for example, unless you can prove this.
- Use a longer timescale (at least 2 years) for assessing absence and performance. If you only look at the employee’s record during the COVID-19 outbreak, this could result in a successful discrimination claim. For example, it might be indirect sex discrimination to dismiss an employee whose performance fell because she was juggling working from home with home schooling her children. Or if someone with a mental health issue found it stressful to work from home, it might be disability discrimination to choose them for redundancy based on a drop in performance.
- Avoid selecting employees for redundancy purely because they were on furlough. If you chose them randomly for furlough, or if they asked to be furloughed because they had to shield due to a disability or had caring responsibilities, this could be discriminatory.
- Assess performance and attendance over the same period for all your employees to create a level playing field. If some employees have been furloughed, this means it will be safest to assess employees based on the period before the coronavirus crisis.
| PAYROLL
Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
How to Meet Employer’s NIC Costs on CJRS Grant Payments
From 1 August 2020, the support available under the Coronavirus Job Retention Scheme (CJRS) gradually begins to wind down. From August onwards, employers will no longer be able to claim the associated employer’s National Insurance on grant payments claimed under the scheme – instead they must meet these costs themselves. They must also pick up the tab for the minimum employer pension contributions that they are required to make under auto-enrolment.
Claim Employer’s National Insurance
Employer’s National Insurance on grant payments can be claimed for claim periods up to and including 31 July 2020. The last date that claims can be made for periods up to an including 30 June 2020 is 31 July 2020; claims for July can be made until 30 November 2020.
Where the employer has chosen to top up the employee’s wages, the employer must meet the cost of the employer’s National Insurance on the top up. Likewise, where an employee is flexibly furloughed in July, the employer must pay the employer’s National Insurance attributable to the earnings paid to the employee for the hours that they work.
Calculating NIC Claims – Periods to 30 June 2020
For periods up to 30 June 2020, the employer’s National Insurance that can be claimed on the grant payment is determined by reference to the daily rate of employer’s National Insurance payable, rather than calculating the National Insurance on the grant payment separately by reference to the pro-rata secondary threshold.
Example
An employee is furloughed for 21 days in June 2020. There are 30 days in the month. The employee is paid on the last day on each month. The employee’s usual pay is £3,000 a month. This is equivalent to £100 a day (£3,000 ÷ 30).
The employee is able to claim a grant of £1,680 for the 21 days that the employee is furloughed (80% x £100 x 21). The cap does not apply as the amount claimed (£80 per day) is less than the maximum of £83.33 per day for a month with 30 days.
The employer pays the employee his normal wages of £900 (9 days @ £100) for the remaining 9 days for which he is not furloughed.
The total amount paid to the employee is June is £2,580 (£1,680 + £900).
Employer’s National Insurance on the total amount is £255.03 (13.8% (£2,580 – £732)).
This is equivalent to £17.00 per day.
The employer can claim back £357 (21 days @ £17).
Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.
Claims for July 2020
July 2020 is the last month for which employer’s National Insurance can be claimed on grant payments. For July, different rules apply and the employer National Insurance claim is worked out by reference to the pro rata secondary threshold. The approach is as follows:
- Start with the relevant secondary National Insurance contributions threshold that corresponds to the pay period. Where this is a month, the threshold is £732.
- Divide by the number of days in the pay period.
- Multiply by the number of days for the furlough or flexible furlough claim.
This gives the pro-rata employer National Insurance threshold for the period of the claim.
If the employee is flexibly furloughed, it is also necessary to divide by the number of usual hours in the flexible furlough claim and multiply by the flexible furlough claim.
The adjusted pro-rata secondary threshold is used to calculate the amount that can be claimed.
- Start with the amount of the grant.
- Deduct the pro-rata secondary National Insurance threshold.
- Multiply by 13.8%.
Example
An employee is paid £3,100 pounds a month and is furloughed for 21 days in July. The grant claim is £1,680.
The secondary threshold is £732 per month. This is equivalent to £495.87 for 21 days (21/31 x £732).
The employer’s National Insurance that can be claimed is £163.31 (13.8% (£1,680 – £495.87)).
Interaction with the Employment Allowance
Claims for employer’s National Insurance under the CJRS cannot be made where the employer’s National Insurance is covered by the Employment Allowance. If the Employment Allowance has already by claimed, the associated employer’s National Insurance on grant payments can only be claimed once the Employment Allowance has been used up.
However, there is no obligation to claim the Employment Allowance at the start of the tax year. Where this has not been claimed, eligible employers may want to claim from August once it is no longer possible to reclaim employer’s National Insurance under the CJRS.
| HEALTH & SAFETY
Paul Smith, Editor-in-Chief, Health & Safety Adviser |
Coronavirus: 7 Actions to Manage Contractors and Other Third-party Service Providers
In the past, contractors were mainly used for construction and building maintenance but now firms turn to outside specialists for a much wider range of services, such as copying, catering and facilities management. Here we set out the extra challenges COVID-19 has created, along with key issues to consider when working with any external providers.
It is no surprise that contracting out to specialist third-party suppliers (TPSs) has become so popular, for there are so many business arguments in their favour. In particular, TPSs:
- Help firms keep headcounts down and at the same time provide absolute clarity about the costs of a particular service.
- Allow access to economies of scale and, of course, specialist know-how.
- Enable firms to focus on their core function.
New Risks Caused by COVID-19 and Your Liability
But COVID-19 has introduced a potential complication: using a TPS will mean your employees could be working alongside people you don’t employ, and whose ‘COVID-Secure’ procedures might well be different from yours. Some readers have told us they have delayed essential maintenance work (such as fire system checks) because of uncertainty about risk assessments, safe systems and potential liability. In other cases, firms have refused to disclose key information, claiming it is ‘confidential’.
In law, responsibility for health and safety is shared between the client and the TPS. Both you, as the client, and the TPS must ensure people’s health and safety, and both of you need to safeguard your own employees as well as anyone else that might be put at risk.
Cases such as R v Swan Hunter Shipbuilders Ltd (1982) make it clear that employers stay responsible for their own employees’ health and safety even when the firm whose activities put them at risk is a third party. On top of this, the Management of Health and Safety at Work Regulations 1999 specifically require employers in shared workplaces to co-operate, co-ordinate and share information.
7 Collaborative Actions You Need to Take
So, for COVID-19 as for other hazards, the way forward lies in collaboration. Any confidentiality issues can be dealt with by a suitably worded non-disclosure agreement (NDA). These should be mutual: they should impose the same obligations on both sides without being loaded in either’s favour. For example (as one reader neatly put it) you can’t reasonably expect your TPS to tell you about COVID-19 cases in their workforce if you won’t commit to do the same in return!
With that dealt with, our 7 practical tips are:
- Share your COVID-19 risk assessment with any TPS that works on or comes onto your site.
- Ask them for their equivalent – it doesn’t matter whether it is a separate document or built-into existing Risk Assessments and Method Statements (RAMS). Indeed, checking that coronavirus is included in RAMS is a good test that the TPS is keeping these up to date.
- Look for new angles: each may include practical ideas the other can learn from.
- For any work, ensure core safeguards are put in placeg. hand-washing/use of sanitiser, social distancing, and not coming to work if people have any of the three main COVID-19 symptoms, or have been told to self-isolate by NHS Test and Trace.
- Deal promptly with any concerns raised, whether that’s by your own employees or those of the TPS. Don’t fall into the trap of ‘it’s one rule for us and another for those contractors’.
- Don’t use COVID-19 as a pretext to put off safety-critical work (e.g. electrical testing, statutory lifting equipment/pressure plant checks and fire alarm/extinguisher servicing). You do, though, need to be satisfied that the TPS will apply their own COVID-Secure precautions as well as respecting your own.
- Be nimble enough to update procedures promptly when circumstances change, or it becomes clear that safeguards are not working.
Tip
A possible reason people fail to follow procedures is that they do not even know they exist: use multiple methods (signs, notices, screens) so that people are in no doubt about what you expect. Get the key messages across to all workers, not just employees.