Last year was was an extraordinary one for many businesses, for all the wrong reasons. While there is light at the end of the tunnel with a roadmap for reopening, the employment law implications will continue to be felt in 2021 and beyond.
Employment tribunals were initially severely affected by coronavirus. There are now remote hearings, but the backlog of cases is already excessive; it may be up to a year before they are heard.
There was a glut of cases submitted in 2020, and most are yet to be heard by tribunals, so inevitably there will be significant learning points for employers further down the line, but there is a lot we already know.
Almost from the outset, it was clear that some employees were unhappy when they discovered they weren’t entitled to furlough payments. I heard of several instances of employees who had been paid cash in hand and weren’t “on the books”, or discovered that only a portion of their earnings were being declared, impacting what they could receive from furlough.
Salons that had moved towards a self-employment model found their income dried up as contractors had no money for rent. I know of several claims pending from both salon owners and contractors.
Some salon owners discovered employees had started doing mobile work and were offering this service to the salon’s clients; effectively poaching them. There were dismissals and some will end up at tribunal.
There will be arguments about whether the employees could do this work while on furlough, whether contracts were unclear or the process used to dismiss them unfair. For example, often there was no formal hearing due to lockdown and instead it took place via telephone or video call.
Some employers might not have appreciated that the Job Retention Scheme had prerequisites before staff could be furloughed. There needed to be either a lay-off clause or employees had to agree to be furloughed as an alternative to redundancy. So, in the absence of an agreement, has the employer unlawfully reduced pay?
The rules of the Job Retention Scheme were explicit that employees shouldn’t carry out income-generating work for their employer but there were reports of employees being forced to work or dismissed for refusing to do so.
The furlough scheme was used to fund holidays and notice pay but after December 2020 it could no longer be used for notice pay. Employees continued to accrue holidays while on furlough but could legally be required to use some while furloughed too. It made financial sense as employers only topped up the 80% furlough money but there are rules about how holidays can be imposed. Employers must give twice as much notice as the duration of the holiday. For example, an employee must be given two weeks’ notice to take one week’s holiday. Some got this wrong and there will be claims going forward.
Even with furlough, some salons decided it wasn’t viable to retain all staff. However, the expectation remained that employers should follow a process and consult appropriately before making redundancies. This procedure was not always followed.
I have heard of employees being forced to work additional hours after their furlough ended. Those that refused were disciplined or sometimes even dismissed. In January 2021, there was a headline story concerning a hairdresser who had left her salon job in November 2020 but later discovered that her former employer had still been claiming furlough money for her. HMRC has a hotline for reporting misuse of the furlough scheme.
One of the biggest areas of concern related to newly pregnant staff. The initial advice was that pregnant employees were at higher risk in our industry as social distancing was extremely difficult or impossible. It was not possible in most cases to work at home or be redeployed. The only option seemed to be suspending the employee on medical grounds on full pay. It is easy to understand why many employers opted for furlough or the employee just continued working instead. It will be for the employer to explain their actions if required.
There were numerous instances of employees refusing to return to work when salons reopened as they feared for their health and safety. No amount of reassurance or PPE would convince them, or they simply didn’t want to use public transport. The general advice was for employers to be slow to dismiss but this wasn’t always the case, and claims will be heard in due course.
To be fair to employers, the pandemic created unique circumstances and gave little time to plan, and we can only wait and see how employment tribunals interpret employers’ actions.
What happens next?
Going forward, inevitably salon owners will want to review their contracts, working practices and staffing levels. Reception seems to be particularly under the microscope with the rise of online bookings, cashless payments and the decline in reception being a waiting area for clients.
We don’t know what impact the Covid-19 pandemic will have on future demand and, therefore, staffing demand, but it’s a good time to review your redundancy policy.
Finally, if you have experience of one of the issues above, then remember that employees have three months from the date of dismissal in which to lodge a case with an employment tribunal.
David Wright is a consultant in all aspects of employment practice and law. He is the main employment law consultant for Habia and provides a personalised support service for UK salons. 01302 355372 davidwrightpersonnel.co.uk