By Nic Hart & Liam Hutton
The Advocate-General of the European Court of Justice has given the opinion in VL (Case C-16/19) that disability discrimination can be found by comparison between the treatment of one group of disabled employees and other disabled employees. Whilst Advocate General Opinions are not binding on the Court, they are commonly regarded as influential, and this Opinion has the potential to create a new basis for comparison in discrimination cases.
The case relates to an employer who paid a monthly allowance to those of its disabled employees who obtained and submitted a disability certificate as evidence of their disability. The issue of discrimination arose because only those who had not already obtained and submitted their certificate were eligible for the allowance.
The employer’s purpose for doing this was that by bringing about an increase in the number of disabled workers employed, the employer would be entitled to a reduction in its contribution to a disability fund.
In the Opinion, the Advocate General addresses whether this could be regarded as discriminatory for the purposes of the Employment Equality Framework Directive, and sheds some light on the applicability of the prohibition of discrimination to the conduct of an employer who treats two groups of disabled individuals differently on the basis of an apparently neutral criterion (in this instance, the date of submission of a disability certificate). Continue reading ECJ Advocate-General Opinion: Disability Discrimination Can Be Found By Comparison With The Treatment Of Other Disabled Employees
By Thomas Rainey
On 22 June 2020, the UK government proposed legislation to amend the Enterprise Act 2002 which would have the effect of expanding the circumstances in which the government would have the authority to review and/or block takeovers of UK companies by foreign entities.
Under the Enterprise Act 2002, the UK government is already empowered to intervene in takeover situations which they deem to be contrary to the public interest – such as relating to the fields of national and public security, media diversity and standards, and/or financial services’ stability.
The amendments now laid before parliament, will add to the above a fourth category of businesses key to the combating of public health emergencies, such as Coronavirus.
Protecting Vulnerable ‘Critical Healthcare Capabilities’
The UK government’s thinking is that, as a result of the economic disruption caused by the current pandemic, in the short-to-medium term some UK businesses may be particularly vulnerable to hostile approaches or distressed acquisitions. Continue reading COVID-19: UK Gov Tables Enhanced Foreign Takeover Restrictions
By Nic Hart
As advised, the Government Guidance for the new Flexible Furlough Scheme (FFS) was released on Friday evening – June 12th.
Accessibility to the new Guidance is not the most straightforward as the information is spread across the existing CJRS Guidance and three new pieces of Guidance. The Government has also produced a summary overview of the key changes to the CJRS and the timetable for the same.
The major changes to the existing scheme with effect from July 1st are:
- there will no longer be a minimum three-week period for furlough. Whilst there will not be a required minimum period to furlough employees, any claim made to the CJRS portal must be in respect of a minimum one week period regardless of how many days may have been worked in this one week period.
- Employers can no longer put in claims to the portal that cover more than one payroll period. All claims through the portal must start and end within the same calendar month.
- An employer cannot furlough any greater number of employees than have been furloughed previously – subject to the provisions of those returning from parental leave.
The key principles of FFS are clear. Continue reading New Guidance on the UK Gov Flexible Furlough Scheme – 12th June 2020
By Linda Crow
The new Corporate Insolvency and Governance Bill will introduce new provisions to protect a company from suppliers wishing to terminate supply contracts or invoking more draconian terms when the company is entering into certain insolvency procedures, a CVA, or a new restructuring plan or moratorium (as introduced by the Bill), (each an “Insolvency Procedure”).
The purpose behind the new provisions is to maximise the possibility of a company being rescued or being able to sell its business as a going concern by helping it to trade through an Insolvency Procedure.
Where a company (the customer) becomes subject to an Insolvency Procedure, the supplier will be prohibited from: Continue reading UK Corporate Insolvency & Governance Bill: Termination Clauses & Temporary COVID-19 Relief
By Nic Hart
Further to our earlier blog posts on this topic, please be reminded that the Coronavirus Job Retention Scheme (CJRS) is closing to new entrants from 30 June 2020. You must furlough new entrants on or before 10th June.
From 1 July 2020, there will be a new flexible furlough scheme where furloughed employees will be able to return to work on a part-time basis. Full guidance has yet to be issued (proposed for 12 June 2020) but present Guidance has advised that only employees who started furlough on or before 10 June 2020 will be eligible for the new scheme.
The Government Guidance states;
“From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June”
Continue reading IMPORTANT COVID-19 UPDATE: UK Gov Furlough Scheme Cut Off -10th June
By Nic Hart
In the daily press conference on Friday May 29th 2020, the Chancellor Rishi Sunak, announced further changes to the Coronavirus Job Retention Scheme.
In essence these are as follows:
- The CJRS will continue until October 2020.
- Flexi furlough will commence from July 1st 2020.
- Grants through the CJRS will be tapered from August 2020.
- The scheme will close to new entrants on 30 June.
This is commencing on July 1st 2020 -a month earlier than previously announced. Employers can decide the hours and shift patterns their employees will work on their return to work, so that they can decide on the best approach for them. Employers will be responsible for paying the employees’ wages while in work.
Further guidance on flexible furloughing and how employers should calculate claims will be published on 12th June 2020, but HMRC has provided some initial advice:
Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week. You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
Continue reading COVID-19: UK Chancellor Announces Changes To Furlough Scheme – 29th May 2020
By Linda Crow
Last week the UK government introduced the Corporate Insolvency and Governance Bill in Parliament.
The main objective of the Bill is to provide businesses with the flexibility and space needed to continue to trade during this difficult time caused by the COVID-19 pandemic. That said, the provisions around the new moratorium and the new restructuring plan proposal have been under consideration for a few years.
The Bill’s measures can be split into three categories:
- Those that provide greater flexibility, allowing companies protection from creditor action and safeguarding supplies whilst it explores options for rescue.
- Temporary suspension of parts of insolvency law to support directors continuing to trade during the crisis without threat of personal liability and to prevent aggressive creditor action.
- Temporary extension of certain times for filing documents at Companies House and temporary relaxation of strict compliance with constitutional requirements relating to corporate meetings (including AGMs).
The insolvency measures are: Continue reading Prompted By COVID-19: The UK Government Introduces Corporate Insolvency & Governance Bill
By Nic Hart
The Queen’s Bench Division of the High Court have held in Square Global Limited v Leonard that the absence of a garden leave set-off clause will not be fatal to a non-compete post termination restriction, touching on a the widely debated relationship between garden leave and non-compete clauses in employment contracts.
The case involved an employer’s attempts to enforce periods of garden leave and subsequent non-compete restrictions on an employee consecutively. The employee in question had resigned and in response claimed constructive dismissal on the basis that his employer had destroyed or seriously damaged the necessary relationship of trust and confidence between the parties, in breach of the implied term in the contract of employment. The High Court held on the facts that the employee was not entitled to resign summarily and by doing so, he had failed to give six months’ notice of termination and was in breach of his employment contract.
The employer sought to enforce a period of garden leave reflecting the six months contractual notice from the date of resignation, in addition to a further six months’ protection from the end date of that notice period on 11 May 2020 under the non-compete clause in the employee’s contract. This would effectively afford the employer a total of 12 months protection. The High Court were satisfied that the six month non-compete clause was pursuant to the employer’s legitimate business interests capable of requiring protection by restrictive covenants, and was reasonable, going no further than necessary to protect the employer’s legitimate business interests.
The High Court then went on to assert as follows:
“The garden leave clause which is included in the contract exists to cater, among other matters, for a situation where [the employer] has concerns about an employee’s conduct (e.g. harvesting client information, or engaging in deceptive behavior), and so chooses to restrict the employee’s duties during the notice period. On the assumption that such concerns have reasonable foundation, it would not then be unreasonable to enforce the full period of the post termination restrictions.” (Paragraph 191)
Continue reading High Court Judgement On Restrictive Covenants & Garden Leave
By Nic Hart
The High Court have held in Duchy Farm Kennels v Steels that an employer cannot avoid paying out on a settlement where an employee is in breach of a confidentiality clause, unless confidentiality is genuinely a condition of the agreement.
Here, the employer agreed to pay the employee a settlement sum in instalments in full and final settlement of the employee’s employment tribunal claims. The COT3 agreement also included:
- a clause under which the parties agreed to treat the fact of and the terms of the agreement as strictly confidential (‘the confidentiality clause’); and
- a warranty that the employee had not previously disclosed the facts and terms of the agreement to any other person.
The employer subsequently did not pay the final instalment, and the (now former) employee issued proceedings for payment. The employer sought a declaration that the sums were no longer recoverable on the basis of breach of the confidentiality clause in the agreement. Continue reading High Court Rules On The Effect Of Confidentiality Clauses In A Settlement Agreement
By Sam Pearse
On 20 April the United Kingdom’s Chancellor of the Exchequer announced that the UK Government would launch the Future Fund as part of the British Business Bank Coronavirus Business Interruption Loan Scheme. The Future Fund is intended to provide support to the UK’s innovative companies with good potential, for which we might read start-ups, growth companies or emerging companies. The Future Fund was launched on 20 May. This alert summarises the scheme, eligibility and the application process.
What financing is available?
Continue reading Covid-19: The Future Fund for Financing of Innovative UK Companies