Davies and Partners
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Like every other profession, construction is calibrating to the new normal. For the latest on new normal in the office, please have a look at:
https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/offices-and-contact-centres
The construction team will continue to work from home, with admin functions performed by a support team based in the office. We worked at home a lot before the pandemic, so it is pretty much business as usual.
We continue to support our construction clients, assessing risk on existing and prospective projects in the light of the pandemic.
Health risk is, of course, a top concern and we are pleased to see at https://www.gov.uk/government/news/further-expansion-of-access-to-coronavirus-testing-helps-protect-the-most-vulnerable that: “construction workers to emergency plumbers, research scientists to those in manufacturing - can now be tested”. “All they need to do is go on the internet and apply for a test.”
The HMRC portal for claiming Furlough Leave payments is up and running. HMRC says it is confident that the system has capacity to deal with all claims and that it will make payments within 6 days of application. The proof will be in the pudding.
In advance of opening the portal the Government issued a flurry of further information in the latter part of last week, a fair amount of it on Friday afternoon. Clarification has been added, but there remain gaps and inconsistencies.
The full amount of information is now vast, but I thought it may be helpful to highlight a few points:-
Length of the scheme – It has now been extended to 30th June and could be extended further. It is thought that this change was undertaken now because some larger employers contemplating mass redundancies once the scheme ends would by law have had to start mass consultation by the middle of April. That wouldn’t have been great for morale at this very uncertain time and particularly so when businesses have no inkling of the ‘exit’ strategy and therefore cannot plan effectively.
The extent of the agreement between employer and employee – In the middle of last week the Treasury issued a Direction to HMRC setting out how it is required to operate the Furlough scheme. The document isn’t the easiest to understand, but said that in order to make a claim in relation to an employee there had to be a written agreement between the employer and employee, which could be in electronic form and in relation to which the employee specifically agreed to cease all work in relation to their employment. Prior to that point it had been understood that obtaining written consent from employees wasn’t essential. The various editions of the Guidance issued to employers, and we are now on our fifth version, have said different things. Subsequent to the Direction, Friday afternoon’s Guidance says that the agreement between employer and employee needs to be consistent with employment law and specifically envisages that this doesn’t necessarily mean that a written response is required from the employee. Good practice must be for employers to seek confirmation of agreement in writing, but if this is not possible it would seem that all is not lost.
It has been a busy short week, with a focus on Covid-19, of course. Since our news post last week an updated SOP has been issued which may be accessed at:
https://www.constructionleadershipcouncil.co.uk/news/site-operating-procedures-version-3-published/
The expectation is that employers will be able to start making claims in relation to employees on furlough leave from next week. In the meantime, further information has been issued upon the working of the scheme. Whether this will be the last we shall have to wait and see.
The Treasury has issued a Direction to HMRC in relation to how it is required to operate the scheme and further slightly updated guidance has been issued to the wider pubic. The Direction to HMRC is not exactly in user-friendly language! The following points appear to be of relevance: -
• As we know employees must be instructed to cease all work, but the Direction says that this scheme only applies if this is agreed in writing between the employer and employee. Agreement in writing can include an exchange of emails. However, some employers who have already furloughed employees may not have specifically sought confirmatory agreement from employees in these terms – especially where contracts include a right to lay-off in the first place and there is no contractual variation involved. Therefore, I would suggest that it is worth reviewing the mechanism by which employees were put on Furlough Leave before this detail was announced to ensure that no technical failing will be argued at a later date.
We continue to adapt as we help our clients work out whether to keep sites open during the lockdown and how to operate contract provisions rarely looked at before this pandemic was declared. It is looking likely that the lockdown will be extended and in England at least it is business if possible on construction sites. Scotland and Wales may plough their own furrow.
The latest guidance (7 April) for keeping workers safe is at:
The Government has now issued further guidance filling in some of the blanks. Unfortunately, there remain obvious omissions, particularly in relation to holiday. For now, all that can be said for sure is that holiday continues to accrue during Furlough Leave. It is possible that it can be taken without interrupting Furlough Leave and that employers have to top up to normal pay whilst holiday is being taken – but that is speculation. Hopefully, further guidance will come as it would be very helpful.
Some clarifications and expansions: -
• It is possible to re-employ an individual and furlough them if they left after 29th February even if the reason for departure was not redundancy. However, before simply doing so employers should work through the consequences of that action.
• As had previously been understood it is possible for a furloughed worker to undertake work elsewhere – provided of course it is not in breach of the contract with the employer.
One thing which has left me scratching my head over the last few days – and by the sound of it also a number of clients, colleagues and contacts – is exactly how holiday interacts with Furlough Leave.
Government guidance is frustratingly silent on the topic. Some things are clear, others less so. Here are some thoughts: -
1. Holiday continues to accrue during Furlough Leave – definite!
2. The Government has introduced new regulations allowing for greater carryover of holidays. If you listen to the headlines it may be thought that this only applies to those in the emergency sector who as a result of the crisis are unable to take holidays. However, a reading of the actual regulations shows that this goes a lot further. The provision is that up to 4 weeks holiday can be carried over from the relevant holiday year for up to 2 years if it is ‘not reasonably practicable’ to take the leave as a result of the effects of Coronavirus, including the effects on the worker, the employer or the wider society. It follows that if an employee does not take holiday during Furlough Leave and afterward the work demands are such (hopefully) that the employer is not able to agree to a glut of holiday requests when things return to some sort of normality, the employer can make use of this provision. It wouldn’t be a good idea to refuse all holiday as holidays are regarded as a health and safety provision. However, it would be reasonable to fairly regulate holidays or to deny holiday during a relatively short and particularly busy period even if this meant the employee couldn’t take all his or her holiday during the relevant holiday year.
On 20th March, in the midst of the coronavirus crisis, the Chancellor announced the Job Retention Scheme. As you will have hopefully read in my previous posts, the Scheme operates in scenarios where an employee’s role is temporarily no longer required due to the impact of the virus. Rather than employees being left out to dry, the government scheme will pay 80% of wage costs up to £2,500 currently, for a 3-month period, but potentially to be extended.
I have previously highlighted the lack of detail surrounding the scheme; however, since then, I have been made aware of the following information. This information is not official and therefore can’t be relied upon, but it is based upon information which I understand was issued to an MP.
In short, it is believed the scheme will operate as follows:
The detail of the Furlough Leave scheme is desperately required. The reality is that many employers are now having to apply furlough leave even though there are only headline details about how it will operate and many questions still to answer.
In the meantime, though the Government has rushed through Emergency Volunteering Leave. A few headlines in relation to it: -
• This applies to most employers but not to those with a headcount of less than 10.
• The right will be to unpaid leave – but terms and conditions save relating to pay will continue.
• The person will be acting as an Emergency Volunteer in the health or social care sector and a certificate will be issued by the user of the volunteer which will be known as an Emergency Volunteering Certificate.
• This will provide for a period of work of either 2, 3 or 4 consecutive weeks beginning and ending within a set 16-week block.
With the coronavirus crisis escalating each day, many tenants - both individuals and businesses - will face the prospect of being unable to keep up with rental payments. Indeed, with the announcement on Monday evening that UK is to enter a period of ‘lockdown’ lasting at least three weeks, many tenants may find themselves without an income, or see it significantly reduced. On the flipside, understandably, landlords will be concerned that their rental income may come to an abrupt halt.
As announced by the Ministry of Housing, Communities and Local Government, the Coronavirus Bill 2019-21 significantly changes the relationship between landlords and tenants throughout the duration of the crisis and, potentially beyond. The legislation provides additional protections for residential and business tenants. The Bill will have the following impact:
Like you all, we are working under very different conditions. Sean and Jan are used to working from home so the transition to home working has been straightforward. The only change is that callers may hear a dog barking in the background; we are working on some training on that issue! Our first concern is for people’s physical and mental well-being, but we know some employers, contractors and sub-contractors are worried about paying and getting paid on time.
We are happy to discuss options with you from the legal to the practical. There is no charge for an initial phone discussion, and we are open to no win no fee arrangements on suitable cases. Our debt recovery department works on a percentage of fee recovered; that might be of interest to some.
Matters are moving so rapidly. As I put this note together the construction industry is coming under massive pressure to stop working and it is possible that by the time you read this it will have been told to stop (it is already the case in Scotland). This will make furlough leave crucial n the construction sector, but it is becoming increasingly important elsewhere too.
The Government has massive pressure on it, but it would be extremely helpful to know the details surrounding the scheme rather than just the headlines.
The Government is working very hard to get the portal through which one can reclaim through HMRC up and running and will reimburse claims going back through the month of March.
Confused after last night’s announcement? From an employment perspective, the big question is whether people are allowed to attend their workplaces if the work cannot be done from home. There was confusion about whether one could only attend a workplace if it was an essential service or if it was absolutely necessary to go to work in order to carry out the work function. It appears the answer is the latter.
The Government initially said, “Travelling to and from work [is permitted] but only where it is absolutely necessary and cannot be done from home”. This wasn’t at all clear. It then published guidance saying “travelling to and from work [is permitted] but only where this absolutely cannot be done from home”.
Subsequently, Andy Burnham tweeted that he had clarification from the Government and that was to the effect that people “CAN leave home to work as long as they fully observe the 2 metre distance rule”. On that basis anyone can go to work provided the work cannot be done from home.
For employers, maximum flexibility is important e.g. avoid commute times if public transport is required.
Prior to Friday did you know the word ‘Furlough’? I must confess that I have been an employment lawyer for over 30 years, and it wasn’t a word that I was familiar with. As you will undoubtedly have heard, the Government has introduced a scheme whereby if an employee is laid off i.e. kept on the book but not given work, it will pay 80% of wage costs up to £2,500 currently for a 3-month period, but potentially to be extended. So far those are the headlines, the detail isn’t there as yet. This will be relevant to an awful lot of employers in the private sector and the detail will be much needed. For now, the following may assist: -
It is not entirely clear, but the payment would appear to be a maximum payment of £2,500 per month, so this would mean an employee normally paid just over £3,120 per month would get paid 80% of full pay. An employee who earned more than that would get a capped amount of £2,500.
Nigel Tillott Head of Davies and Partners Employment Law Department on the latest Coronavirus Update:
"I hope that you are all safe and well. Matters seem to be moving very rapidly now. Yesterday there was an announcement about restrictions on the use of the Employment Tribunal system. Today there has been an announcement that there will be no hearings involving personal attendance from Monday. For now, in relation to those already listed there will be a telephone discussion to work out the best way forward.
With the advent of Coronavirus, the employment and regulatory law situation is changing constantly.
There have been so many announcements, but amongst the less-heralded yesterday was a statement that the changes to IR35 will be postponed for a year until April 2021. This will be a relief for many medium sized and larger businesses who engage self-employed contractors through the contractor’s service company as well as to contractors themselves. Medium and large sized businesses would have taken responsibility from this April for tax and National Insurance contributions which HMRC assessed as being due on the basis that the reality of the relationship was one of employment. The change will also remove one impediment for those working through service companies to gaining contracts with businesses – albeit that many larger businesses had already decided no longer to engage with personal service companies.
A recent decision in RC v JC, a wife was awarded £400,000 in compensation for sacrificing her legal career to care for the children. This was awarded on top of an equal share of the family’s wealth after her divorce.
Mr. Justice Moor who delivered the judgment said that there have been ‘relationship-generated disadvantage’ to justify awarding the wife compensation as the husband was still able to enjoy a ‘stellar’ career.
Whilst there is some concern that this landmark case would open the floodgates to spouses seeking compensation in similar situations Mr Justice Moor stressed that his judgment should not be treated as a ‘green light’ for other spouses to make similar claims. The judgment affirms that in truly ‘exceptional circumstances’ the principle of compensation still exists in family law, and rightly so.
When: 26 February 2020 from 10.30am – 12.30pm followed by light buffet lunch
Where: Davies and Partners Solicitors, Rowan House, Barnett Way, Barnwood, Gloucester, GL4 3RT
Why: On 6th April 2020 significant changes are being made to IR35 in the private sector. For many years HMRC has been concerned that contractors have been able to use limited companies as a way of disguising what is, in reality, an employment relationship and thereby saving tax. From 6th April the user of the contractor’s services will often find itself liable for tax and National Insurance contributions on the payments.
Here in the construction unit, we have been pondering how to mark Brexit day. As lawyers, we are encouraged to consider mediation as a way of resolving disputes cheaply (relatively) and quickly. We know though that despite the court liking for mediation, there are some disputes that are simply not suitable for mediation. Brexit differences seem to fall into that category; discussion of Brexit rarely results in a change of position or a meeting of minds, rather a retreat to the trenches.
Davies and Partners Solicitors would like to say a massive thank you to all those who helped make the original Gloucester 10k a massive success in 2019.
This was the 6th running of the race which was established by Davies and Partners as a community event after the catastrophic failure of a commercial event that preceded it and which caused traffic gridlock around Gloucester.
As a community event there have been massive contributions from the Gloucester community and also those further afield and we have been able to give all proceeds back to the community.
Davies and Partners Solicitors has begun 2020 with the promotion of three of its senior solicitors, Caroline Davies, Kerry Raymond and Kirsten Compton, to the position of Legal Directors.
A lot of publicity has been given to the Employment Tribunal decision in the claim by Samira Ahmed against the BBC. For those who have somehow missed the detail, she used the equal pay legislation to claim that she was discriminated against on the grounds of her gender when paid £440 per episode of Newswatch when Jeremy Vine was paid £3,000 per episode in relation to presenting Points of View.
The decision in Samira’s favour has been made by an Employment Tribunal and not a Higher Tribunal. As such it is not binding on other Tribunals. As is usually the case the detail of the ruling is more complex than the headlines. In short, it appears that the BBC lost
This is the last Construction Unit news before the Christmas break and we wish you all an enjoyable break, whether or not it is a time of celebration for you.
The legal principle of unjust enrichment relied on by the Claimants in the December 2019 case of Munkenbeck [2019] EWHC 3225 in the Technology and Construction Court is rather esoteric, but this case will be of interest to consultants and contractors with novated appointments and building contracts.
Unjust enrichment involves the unjustly enriched paying the enricher the value of the benefit received. It can be claimed without a contract.
The case is lengthy, so in a nutshell:
Davies and Partners specialist Medical Negligence team have recently been successful in obtaining 'After the Event Insurance' to investigate claims relating to Bariatric surgery undertaken by Mr James Hopkins at Southmead hospital in Bristol.
