Impact of coronavirus: early signs that employment disputes are increasing

Have the numbers of employment disputes increased during the coronavirus pandemic? We asked our employment team for a snapshot as they handle thousands of employment claims each year and are well placed to measure this.

Background

The UK’s first two patients tested positive for Covid-19 on 29 January 2020. Cases started to surge from 4 March and the UK was put into lockdown on 23 March. By that date, many businesses were already struggling - footfall was down and many staff had been laid off, had their hours cut or had already been made redundant. In an attempt to reduce the number of people made redundant, the Chancellor introduced the Coronavirus: Job Retention Scheme which allowed businesses to furlough staff who met the criteria. 

Increase in disputes

Unsurprisingly, our legal expenses team have seen an increase in the numbers of employer and employee disputes which have been referred to them. Most of these are linked to coronavirus and fall into one of the following types of claim:

Redundancy

There is an increase in the numbers of people who have been made redundant and believe their selection was unfair and, in some cases, discriminatory.

The downturn in the economic climate does not mean employers can skip their usual processes. You still need to adopt a fair and transparent redundancy procedure and, if you are making 20 or more people redundant, you may have to undertake collective consultation before redundancies can take effect. Individual consultation doesn't have to be done in person and can be done over the phone, via zoom/skype/teams etc.

Furloughing

We've received a number of claims from employees who believe they should have been furloughed to protect their health and safety alleging that this failure amounts to an act of discrimination. Others claim that their employers have not conducted a fair, non discriminatory process before deciding who to furlough. Some have also alleged that this amounts to a fundamental breach of the implied term of trust and confidence giving them the right to resign and claim constructive unfair dismissal. 

Government guidance on the Coronavirus: Job Retention Scheme has been inconsistent and it's unsurprising that both employers and employees are confused about the scheme (and some aspects still remain unclear). We've produced loads of updates to help employees and employers understand the scheme, available from our coronavirus portal.

Changes to Employment Contracts

Some employers have varied the contractual terms and conditions of their staff to quickly adapt to the changing economic circumstances. We've seen an increase in the number of employees alleging that changes have been imposed on them without their agreement and asking for advice about unlawful deduction from wages claims, constructive unfair dismissal and failure to collective consult. 

Generally, it is only possible to change terms and conditions with the agreement of the affected employees. If you simply give notice of the change, disgruntled employees may resign and claim constructive unfair dismissal (they will need two years’ service to do this). In this uncertain climate that risk is probably unlikely (and most people contacting us haven't resigned). Most have chosen to work “under protest”  as this gives them the right to sue at a later date and others have simply refused to accept the new terms and have insisted on being paid their contractual salary/rate of pay. 

Even if you have a contractual right to vary the terms and conditions of staff, you must still take care. The clause must be clear and permit you to make the change. Generally, the more significant or onerous the change, the more difficult it is to rely on a specific or general variation clause in the contract. So if, for example, your contracts state that you can change any term without agreement, you would not be able to rely on this to reduce pay or benefits, but you could do so to make minor changes such as changing the amount of notice your staff have to give you to book leave.

Settlement Agreements

We've seen an increase in the number of employers offering settlement agreements to resolve employment disputes. Employers are generally expected to pay for an employee to take legal advice on the affects of the agreement. 

Our fixed price employment law service

If you are interested in finding out about how we can support you with our fixed-fee annual retainer, or flexible discounted bank of hours service, please contact Gareth Finney: gareth.finney@irwinmitchell.com or 0778 317 0084.