Employment Law Discussion of Employment Status, IR35, Absence Issues and Brexit

Posted in : 'Any Questions' Webinar Recordings on 8 January 2021
Seamus McGranaghan
O'Reilly Stewart Solicitors
Issues covered: Employment Status; IR35; Absence Issues; Brexit

In this webinar recording, Director at O'Reilly Stewart Solicitors, Seamus McGranaghan, joins Scott Alexander, Head of Learning and Development at Legal Island, to discuss your employment law questions based on Employment Status, IR35, Absence Issues and Brexit.

The Recording

Podcast Version


Scott: Good morning, everybody. Happy New Year. I'm Scott Alexander. I'm from Legal-Island. I'm here along with Rolanda Markey from Legal Island as well, and of course Seamus McGranaghan, Director at O'Reilly Stewart solicitors.

And like I said, Happy New Year. I would have taken the start of 2020 over the start of 2021 any time. So let's hope that that wasn't a good omen or a bad omen, whichever way that is, but let's hope it doesn't get any worse than it did in 2020. But employment law doesn't disappear just because there's a pandemic on the go. How are you, Seamus?

Seamus: I am good. Thanks. Happy New Year to you, Scott, and to everyone that's listening in.

Scott: Yeah, thank you very much. Believe it or not, this is the fifth year in which we've been doing these webinars, and we're turning them into podcasts as well. That's how popular they are. We got approval from iTunes, I think, last week or last month, so these things are now going to be podcasts, everyone that's listening there.

So not only can you listen back to the stream on our website, but you can go to your podcast provider and listen to them in the car if they want to do that. Why anyone would want to listen to you and me in a car I have no idea, rather than music or something like that. I've no idea. But it gets away from COVID-19 sometimes maybe, Seamus.

Seamus: Yes, it does. And my question is why wouldn't they want to listen to us in the car?

Scott: Because we're so clear the first time, there's no need. There's absolutely no need to go over it again.

So, if you haven't been here before . . . I know we've got a lot of new listeners. We also get listeners from the Republic of Ireland. This is a Northern Ireland Employment Law broadcast, if you like. Rolanda was running one yesterday to do with the Republic of Ireland and remote investigations and a lot of Northern Ireland listeners there. I know they get blended together at times, but the law that we're going to be chatting about today relates to Northern Ireland and, some of it, UK, of course. But you're more than welcome to stick around and listen. And of course, you can listen back.

Now if you look on your right-hand side, you'll see there's a little question box. We've had a lot of questions in before today, but you can drop your questions in there. They'll be read out anonymously as we go along.

So we are giving you an offer today, because it's the start of the year. Why not have a look at that wonderful Employee Wellbeing eLearning Toolkit? And if you want to find out more, you can drop "yes" into the question box, but we'll send you it anyway. But if you specifically want to hear from Debbie and our eLearning team, then just type "yes", we'll pass it on to Debbie and we'll get in touch with the thing.

Poll Questions and Discussion

So, today, we're going to be trying to look at a couple of different topics that we're looking at. But before we do, we've got the poll. I forgot about the poll, we always do the polls. So let's have a look at the little polls that we have here.

The first one that you've got there is,

Regarding your organisation's economic outlook, are you more or less confident now than at the start of March?

Poll card. Question: regarding your organisation's economic outlook, are you more or less confident now than at the start of march? Answer: More 53%. Less 47%.

So click it in there. Let's see how happy you are compared to March 2020. I'm looking here at 50/50 at the moment. Absolutely. It's like one of those Scottish referendums at the minute. It's floating a couple of per cent either side, Seamus. We'll stop it there, because it's just positive, with 53% are more positive now than you were in March 2020. That's a good thing given what we're going through. I don't know if you have any comments on that, Seamus, but . . .

Seamus: Yeah, I have.

Scott: Fifty per cent are less confident than they were nine months ago.

Seamus: Look, I think it's probably a telling tale as we . . . it's difficult at the minute to look forward when we know we're going to be in this sort of lockdown position here for the next lot of weeks. I think to mid-February is what Boris Johnson . . . and we've got our own current lockdown here in Northern Ireland, which is due to end I think around the end of the first week of February.

It is all subject to review. You're looking at the coronavirus numbers and how they have really soared from December time. And it can feel difficult to look forward with some positivity.

But I suppose that the other side of the coin is that we do have the vaccine. My mother is 80 and she got her vaccine this week, and it's definitely happening. It's definitely getting rolled out. So let's keep positive. It's the start of the year.

Scott: Okay. And the next question we've got . . . here we go.

Do you have any contractors that will be affected by the IR35 changes?

Poll card. Question: Do you have any contractors that will be affected by the IR35 changes? Answer: 46% of listeners were unsure

So we're going to be looking at IR35 and employment status in the second part of today's broadcast.

Let's see how many people are impacted on it. That will depend on how many questions we deal with on IR35. And we are looking at a lot of people who are unsure. So you may have to explain what IR35 status means, if you like, to do with self-employed contractors in the workplace.

We'll stop that there, Rolanda. It's only around 60% are saying, but about less than 40% are saying definitely not going to be impacted. The others are unsure. So maybe just quickly explain, Seamus, what IR35 and the changes are that are coming in April.

Seamus: Well, these were changes that would due to come in, in April 2020. And because of COVID and coronavirus, they were postponed and moved to April 2021. There hasn't been any discussion from what I can see that there's going to be any change of the government's decision to implement it.

But this was something that we covered off during my topic on the Annual Review. We will cover it off in further detail with some of the questions that we've already had.

But essentially, what you're looking at, really, under IR35 is the government trying to clamp down in relation to people setting up what are called personal service companies or setting up limited companies, and really acting as an employee within that company. But it is the company that's providing the service. So they get around the ability to have to pay tax and National Insurance Contributions.

In short form, it's the government really clamping down on that. But we'll get into that in some detail whenever we move through the questions.

Scott: Okay. And the final poll question that we have today . . . somebody asked me to speak up, so I'm going to speak up there.

Have you revised your workplace risk assessments in the light of the spread of the new-variant COVID-19?

Poll card. Question: Have you revised your workplace risk assessments in the light of the spread of the new-variant COVID-19? Answer: 72% of listeners said yes

We're looking at a very positive number here as we're coming through.

So this has been put there because the TUC, the Trades Union Congress, suggested that because this new variant is so spreadable, if you like, and so infectious and seems to be airborne, the existing protocols that you have, the numbers of people that you allow in a workplace, for instance, that's no longer valid because this thing is much more contagious. So 72% are saying you have looked at your protocols. We might advise you to increase that.

Any comment there, Seamus?

Seamus: Yeah. Maybe it's worthwhile pointing out that this week, as regards the Executive briefing in the stay-at-home legislation, part of that legislation does require employers to undertake a workplace assessment. And that can also be an individual risk assessment for any employee that is unable to work from home. That's an important part of the legislation that has been brought in this week by the Executive.

The Health and Safety Executive do have a pro forma that you can look at and it covers . . . it's interesting because it doesn't just cover the aspects of risk whilst working in the office. We know we have this variance. We know that it's more infectious. The government have talked about it being 50% to 70% more infectious. The clear rule is that you must stay at home unless you are unable to work from home.

There are lots of jobs where you're not able to work from home. Take, for instance, solicitor firms are permitted there. They're now viewed as an essential service. They're permitted to open. But if you are a director in a firm, it's not that you can operate entirely from home. You may be able to do that four days out of the five days. But it's about risk assessment and making sure that that risk assessment is done. You may well get visits from Health and Safety that will want to see the risk assessments and make sure that they are done.

And just to highlight, I know that it's not something that we intended to maybe go through, but just for anyone that is working with employees that are CEV . . . that's the clinically extremely vulnerable. The guidance from the government on that has changed again yesterday. They haven't re-imposed shielding so stringently as they have in England, but the recommendation is that people do stay at home if they are CEV, that they do not go to work.

And what they've said is that . . . there is correspondence that's been issued by GPs and medical practitioners imminently to highlight that so that employees can show their employers if they receive it, or alternatively, if they're CEV, they can show that prior correspondence to satisfy employers.

And what they're saying is that you do not attend work if you have to receive statutory sick pay or company sick pay, whatever it is, that the medical correspondence should be sufficient for that. So just to flag those two points, Scott. I think that's important.

Scott: Thank you very much, Seamus. Yeah, it's a fairly febrile, changeable situation there, so keeping up to date. We do have a Coronavirus Hub, obviously, on our website. But that pro forma, somebody asked, "Is there a template?" You'll get on the HSENI website. So if you go to the Health and Safety Executive for Northern Ireland, they've got those templates for doing risk assessments. Certainly advise you to have a look at those.

Impact of Brexit on NI Employment Law

Now, employment status. We're going to have a look at those. We had a few questions that came in on that. Just before we do, something else happened apart from COVID. You may not have noticed it. It was Brexit. We had a question that came in this morning, Seamus.

What has been the impact of Brexit on employment law in Northern Ireland? Or if none so far, given we're in the early days of exit, what do you envisage the impact will be?

Seamus: Well, that's an important point, because while we were all consumed with COVID-19 again over the Christmas period, we were also aware that there was the agreement that the government arrived at with the EU in relation to a Brexit date. So there is a deal in place.

As regards to what we anticipate in relation to changes, the good news is that we anticipate very little change in the short term in relation to Brexit. We have now left the European Union. We've gone through the transition period, and we're out the other side of that.

So one thing that I would reflect back on is that we've been told multiple times that UK legislation regarding employment law wouldn't change. And essentially, Theresa May had told us that the government model may protect workers' rights, but would enhance them back whenever she was Prime Minister.

The Secretary of State told Parliament also that the government would entrench all existing workers' rights in British law, whatever the UK's future relationship was with the EU.

And we also have confirmation then that the UK legislation and implementing . . . sorry, the UK legislation implementing the withdrawal agreement, that it provided for EU law to be converted into UK law. I'm not sure if that's . . . no one has the retained EU law. And it's EU-derived employment legislation, which we all depend on if we think about any employment cases that we've had, gone through a tribunal, or in relation even to things like the working time regulations and our holidays. A lot of that is all derived from EU law, and it's going to be protected.

So, in general, workers in the UK will continue to enjoy the rights that they're currently entitled to under EU law.

There have been a couple of things that we have had an impact in or that the withdrawal has had an impact on. Obviously, we have our situation with our settled workers legislation for anyone that is working in Northern Ireland now from Europe.

Also, Scott and I had a quick chat beforehand and we were talking about these frontier worker permits, which essentially permit anyone that might be living on border areas to work within the Republic of Ireland. And that would be if they're based here in Northern Ireland, and they're from Europe, and they're travelling across. Just correct me if I'm wrong in relation to that, Scott.

Scott: It operates the other way. You're looking at people who would be non-Irish citizens, but they might live in Dundalk and work in Newry or whatever. And those EU or non-EU citizens, whenever they are travelling across the border, would need to have frontier status. If they're EU, it's a frontier status permit.

So it's quite complex, but there have been extensions on that and we can certainly send out some information on that.

In relation to the employment stuff Ciara Fulton from Jones Cassidy Brett wrote an article a couple years ago that she has agreed to update for us. So we'll be sending that out to subscribers hopefully next week, but certainly very soon, just about the changes and the impact there.

Obviously, with the protocol here, and the fact that employment law has devolved to the assembly, then the fact that something might change in England doesn't mean to say it's necessarily going to change in Northern Ireland either. It's keeping up to date with all these things. Let's do a plug for the Legal-Island Weekly Review. It is quite important.

But yeah, at the moment, I suppose what you're saying is that we don't anticipate too many changes. We have this six-month period where you're looking at getting settled status for EU citizens living over here. And there are issues about people who work on the frontier, with the Republic of Ireland. Yeah, get in touch and deal with those ones specifically. You cannot run at a time to get things through.

Seamus: The other the other issue was there was the concern around GDPR and what will happen as regards UK stepping out of Europe and becoming a third country then in relation to the transfer of personal data. But we understand that a part of the trade agreement provides a . . . there's a further grace period, essentially, to June 2021. And there's an adequacy agreement that's hoped to be in place before then. So it's worth our while watching out for that, but at the minute, I think we can proceed as we were prior to our formal withdrawal there.

The Queen's speech talked about an employment bill. You're absolutely right, Scott, that not everything, just because it's implemented in England, will be implemented in Northern Ireland. It tends to be that most of it does. Sometimes there can be variations done by the time it arrives here. And we're all aware of things like our statutory periods in terms of employment and things like that are different in Northern Ireland.

But maybe some things to watch out. Some of the commentators have said that for Brexit, maybe things down the line, looking at potential changes to the working time regulations. Obviously, we have… that there's due to be heard at the Supreme Court in, I think, the end of June/July.

And we know that'll be an interesting decision whatever way, but obviously with our rights protected in the working time regulations, those decisions should have to be made on the implementation provided here.

Agency worker regulations are also potential one that commentators have been talking about for a moment, TUPE and also maybe imposing a cap on discrimination compensation has been touted as well.

But I don't see certainly anything happening imminently. I think that it will take some time to work through any amendments that are going to be planned. I think we'll get notice of that. There'll be consultation in respect of it. And in the meantime, I think that we can take some comfort from the fact that the government confirmed that we would be working…

Scott: Okay, thank you very much. If you just joined us, you're listening to Seamus McGranaghan from O'Reilly Stewart. That was him, and I am Scott Alexander from Legal-Island.

Employment Status

So let's look at these questions that have been coming in over the last few days. Seamus, as organisations . . . this is on employment status.

As organisations may have no option but to put employees on furlough as a result of lockdown, do workers as opposed to employees qualify under the JSS?

Seamus: So the JSS was the planned replacement scheme for the coronavirus job retention scheme that was due to end in November time. Obviously, then, the government made the decision to extend the coronavirus job retention scheme out to the 30th of April. And I did hear Rishi Sunak made some soundings about extending it further again after April. But obviously, there's nothing concrete about that.

So, really, what we're doing at the moment, the JSS scheme was postponed. It may come back in some shape or form. The JSS scheme worked on two elements, JSS open and JSS closed. And I could see potentially if you hit the start of May on some businesses being able to open part ways or provide some facilities and others having to remain closed . . . that one would have been for the likes of the wet bars, as they talk about, being unable to open and things like that. But at the minute, we have the coronavirus job retention scheme. At this point, we should all be fairly well versed in relation to it because we've been working from it from last April.

The position as regards workers, mainly what you're looking at when you come to look at is the likes of casual workers or those sorts of elements, but what the scheme says is that employees on any type of contract are eligible for the coronavirus job retention scheme and that employers will be able to agree to any working arrangements with employees. So it's clear that workers can be included within.

There, you're really talking about most agency workers falling under the definition of workers, short-term casual workers, and some freelance workers as well. So, from the coronavirus job retention scheme, yes.

Scott: Okay. I saw that this week there was an extension to . . . the newly set up self-employment scheme has been extended as well. So there are different options out there, but certainly from what you're saying, gig economy workers, if they're deemed to be workers . . . I know there are a few arguments over that, but legitimately self-employed are all covered by the JRS.

Seamus: Yes. I think through November and December, there were a few scraps that happened between the unions and some employers. I know that Belfast City Council Waterfront Hall gig economy workers were going to be removed off furlough. I think that there was an issue at the Queen's University as well that arose. Now, they appear to have everything resolved, but you can understand the issues that employers will have in respect of casual workers, but there are methods and calculations of how you work out entitlements and things like that set out within the CJRS.

IR35 – Issues Arising

Scott: Okay. And another question that's come up . . . there are a few that are coming in the question box, so send those in and we'll deal with those once we've had a look at this, which is . . . We mentioned earlier in the poll IR35.

Who is responsible for determining whether an individual comes under the IR35 regime?

Seamus: This is a broad question. IR35, we can see from the poll there that there remains confusion in relation to the change in the legislation. And that probably has come about from the fact that the proposals were postponed last year, and we've taken our eye off the ball. But from my understanding, we're hitting April and the rules and the regulations will change at that point.

So maybe just take a bit of a time to explain this. Under the IR35 rules, if a contractor would be deemed to be an employee of the client . . . I don't want to get into the definitions of contractor and client. If the contractor will be deemed to be an employee of the client for their personal service company, they have to pay taxes if they were an employee.

And public sector clients have been required to deduct tax and social, and IR35 applies since 2017. So there should be a familiarity in public sector with this, but now it's moving into . . . the government are extending it out into the private sector.

So the responsibility for determining the employee status of individual contractors for tax purposes will rest with the client, or the would-be employer if I put it that way. So the client or the would-be employer is the organisation who is or will be receiving the services of a contractor. And they can also be known as an engager, a hire, or the end client. And the client must be responsible for determining if the off-payroll working rules will apply.

So the client or the would-be employer . . . maybe if we put it that way, it's slightly more explanatory. But if the client decides that the contractor is an employee for tax purposes, they or the entity that pays the contractor's intermediary will be responsible for operating PAYE. The client must share the determinations that they've made with the contractor and provide reasons if they're requested to do so.

So the key thing there is really that the responsibility will fall on the company, client, or the would-be employer if they have to deduct the tax and National Insurance. If they fail to do that, there could be a huge liability that arises between the company and HMRC in relation to those, because the responsibility is on them source.

So it would be the same as the employer-employee relationship. But at this point, because that relationship isn't actually in place, it's for the company to make a decision as to whether that applies or not.

A lot of self-employed individuals have set up these companies, the personal service companies, in order in a way to avoid having to pay the tax and National Insurance that they would as an employee. That's it put very crudely. There are many good reasons why there are other steps taken to operate that way. But this is what the government are trying to clamp down in relation to it.

With the position for the contractor, if the company or the client is a small company, your company is responsible for assessing whether IR35 will apply. The Companies Act of 2006, just to mention, defines a small business as a business with two or more of the following: that you have a turnover of £10.2 million or less, or you have a balance sheet total of £5.1 million or less but you have 50 employees or fewer. So it's two or more of those then you fall in that aspect of being a small company.

And that's where the issue will arise for a number of companies as they're having to make this determination and then to deduct the tax and National Insurance at the source.

So the question is "Who's responsible for determining that?" The response to that is if you're an HR advisor or manager, your company is responsible for making that decision.

Scott: Yeah, and the trouble is if you get it wrong, if you say, "No, this person is genuinely self-employed, and we don't pay tax and National Insurance", and HMRC come after you, the company pays the money. They got it wrong. So you've got a bill sitting and waiting for you if you get it wrong.

But if you decide that they are the equivalent of employees, then those people end up paying more tax than they have done hitherto. And therefore, there may be issues about them deciding that they're going to go work somewhere else because they're generally self-employed.

Seamus: Absolutely. And that's going to be . . .

Scott: Oops. Have you disappeared?

Seamus: . . . big issue for employers, is that if they decide . . . Apologies. Can you hear me now?

Scott: Yeah, we can.

Seamus: Sorry. That's going to be the big issue for employers, this risk, this liability that could occur as a result of not deducting the appropriate tax and National Insurance or making those deductions and HMRC coming in and doing an inspection and saying, "Here's your bill. I need a pay. Thanks very much". And at that time, your ship will have sailed because you'll have already paid the monies out to the contractor essentially. So huge liability, huge risk down the line, I think, for a lot of employers.

Remote Working During Covid-19 Pandemic

Scott: Okay. We've had a couple of questions come in on the question box there. Going back to earlier questions,

Can an employer make or force a staff member to come into work if their job allows them to work from home?

Seamus: Well, my reason of the regulations and the guidance is that the employer shouldn't be requiring anyone to come in to the workplace if they can in fact do that job from home. So, if the employer is forcing . . . I think that that's the key aspect of conducting this risk assessment. To make a decision, I think you would absolutely have to have a justification for the employee coming into the office or into the workplace.

If you are a manager of 12 staff and those 12 staff have to be in the workplace, it's unlikely that you're going to be able to do the job entirely from home. You're probably going to have to come in to fill that management role. But it's about sitting down and looking through and doing the risk assessment. The government's advice is clear: work from home unless it's not possible. So where it is possible, you should be staying at home and working from home.

Impact of Brexit on TUPE Regulations and Issues

Scott: Okay. A couple of TUPE things in here, Seamus, and then we'll move on.

What sort of TUPE changes are speculated, if any? If a company has an upcoming TUPE situation in Northern Ireland, are there any watch-outs?

Seamus: Well, TUPE is very complex. There's no doubt about it. I don't think that I've ever had had a TUPE scenario that has been straightforward. As regards the aspect of what things to watch out for, for me, the most complex elements of TUPE tend to be where you would have as service provision change that would be happening and the contract maybe moving out of this jurisdiction to another jurisdiction.

Most likely, if you're a company on the border and the contract was transferring from one jurisdiction into the next or from the North into the South, that always raises complexities. And the greater the distance in terms of the travel aspect for an employee to get to work, you'll tend to have in those scenarios the employees' reluctance to fulfil the transfer.

So I think it's worth watching in and around what happens with a crossover for jurisdictions because that was very much enshrined in the EU legislation, and particularly for us maybe service provision changes that are happening where the contract is moving North/South.

Just remind me, what was the second question? Apologies.

Scott: What kind of TUPE changes are speculated? Now, my understanding, the issue would be around varying contracts more than anything, because the law obviously in the UK is different when it comes to service provision change. They made it much simpler, basically, if TUPE applied, whereas the rest of Europe is a lot more complex. So most companies quite like the simplicity of the UK gold standard, if you like, when it came there.

But it's more about to allow more flexibility and allowing some changes, is my understanding. I don't know about you. Now, whether it takes place or not, I don't know, because now that we're out of the EU it's up to the government to change those things. But that was my understanding, that we're looking at giving a bit more flexibility, not just where companies have gone bust, but allowing some variations and not a complete protection. But I could be wrong.

Seamus: I came across that as well.

Scott: Now, if you are interested, we will be running . . . I didn't mean to plug this one, but seeing that it's there and I just signed off on the programme. On the 25th of February, we have the wonderful Dr John McMullen, the TUPE king himself is going to be running an event [Learn more: TUPE Masterclass] with us along with Adam Brett from Jones Cassidy Brett and Rachel Penny from Carson McDowell. So we're going to have those three TUPE experts dealing with things.

And what we'll be looking at is looking at TUPE changes from the client perspective and the transferor and the transferee, using various templates and checklists that we're going to be going through.

So, if you're interested in that, that will be on the 25th of February, watch out your Legal-Island emails, and you'll be getting those.

IR35 – Employment Status

And final question just on employment status here.

What do you need to include in your statement telling somebody their IR35 status has changed or applies? Is there any kind of template?

Seamus: I haven't come across any templates as yet. It's just not something that I've had to deal with. But I would imagine that there are templates out there in relation to that. Just to make you aware, there is a difference between . . . if your contract is deemed inside IR35, you're considered as an employee potentially for tax reasons. But that doesn't necessarily mean that you enjoy employee status, just to make that point clear. Ultimately, that is a question for the tribunal and for the tribunal to decide in relation to employment rights.

Just because you are deemed to have fallen within IR35 does not mean that you're an employee, or that a contract of employment should be issued, or anything like that. In some cases, it may well do, but I suppose the warning there is just don't jump the gun and think that you are automatically having to give employment rights to someone just because they simply fall within IR35.

What I would say about that is that there should be good consultation with any contractor in that sense, and make it clear why you've arrived at that decision and give them the reasons for it so that there is an understanding that you are going to make those deductions from any payment.

Scott: I'm just getting everything in here. "HMRC have an online assessment tool that can be completely downloaded and saved. I've used this to send to the individual with a covering email." So thank you very much for whoever sent that one in. So there is something on HMRC if you want to have look.

Now, I presume it's similar to the list they used to have when you were trying to check it out whether somebody is self-employed or a worker, an employee, the lists that were there, Seamus. And I suppose that would be the justification, you're saying. Do we control how you do work? Do you use your own tools? All those kinds of questions that are in that list that was on HMRC. Presumably, that's been kind of updated there and that's what the listener is referring to.

Seamus: Yeah, as I say, I haven't come across it myself. But those are all the usual standard things that a tribunal will look at. I did cover areas in relation to the sort of employment rights, employment status at the Annual Review.

There are a number of cracking cases that are set out within that domain specifically. There's one trans call, which is an interesting case. It's more so about employment status, but it does cover off on IR35 implications. And you can see how both touch on a number of the same issues.

There's another one, Gorman v. Terence Paul, Manchester Ltd., which was just a decision that was issued in June 2020. Trans call case was February 2020. So these are fairly fresh and new cases. And issues such as substitution and all those sorts of things are always considered by the tribunal.

I mean, just to touch on a couple of them within the Gorman case, those things that . . . this was a hairdresser case, and they were saying if the claimant didn't provide hairdressing services herself personally, she didn't get paid, that she wore a uniform, that she was given clients, she had no control over it. And one of the big issues in that case was that there was no right of substitution, so the employee couldn't send someone in to do her job. Rather than going into work herself, she had to be there.

And in actual fact, there was an expectation from not only the employer, but also from the clientele, that it would be this specific person that would be doing the work themselves.

So it's an interesting case if anybody wants to have a look at it. If you need the reference on it, just get in contact with me or with Legal-Island. But it's a great case for setting out exactly the issues in and around that sort of mutuality of obligation, I think.

Scott: Okay. Thank you very much. Seamus's contact details will come up in a moment.

Now, there was somebody who sent in a very long question just this morning exactly on employment status and such like. So, if you have that question, maybe you can get in touch with Seamus and he can deal with that on a one-to-one. If we have time, we might come back to it next week. But it's quite complex.

So we want to move on to the issue of absence. We've got a few questions in about absence. In fact, there was a case this week, Seamus, that . . . it was a case of Jaguar and Rumbold. And this chap had 808 absences. He was dismissed, and it was deemed to be an unfair dismissal. Somebody asked a question about that.

Absence and Ill-health Dismissals

And somebody asked another question,

"Could you outline how best to approach a possible dismissal due to long-term sickness and ill health of an employee?"

What are the things to keep in mind on how to ensure the dismissal is fair? Clearly, Jaguar didn't get it right in their particular case.

Seamus: So the Rumbold/Jaguar Land Rover, this sent shivers up some spines. But this was an employee that had been employed with the company from February 1999 to December '18. So quite a lengthy period of service. I've no doubt that that was one of the issues of both for the employer and ultimately for the tribunal.

But during this period, the company, Jaguar Land Rover, had put to the tribunal that they had paid £95,855 in sick pay to this employee. So almost £100,000 is what they said at the tribunal in sick pay.

The circumstances of the case were that there had been a number of absences that had taken place. And as the question said, I think there was a total of 850 absences. It sounds in terms of reasonableness and proportionality you would wonder how any employer could manage to retain an employee with that sort of level of absence. But you have to also consider all of the other applicable discriminative legislation that applies also.

Ultimately, it was a fairly straightforward case of Jaguar Land Rover not following their policies and procedures.

There is a good background in relation to this case, and ultimately, there was an issue that came down on looking at reasonable adjustments and looking at alternative work for the employee. And there was just a feeling by Jaguar in terms of following their position.

Ultimately, the judge made a determination at the hearing and said that the employer had not followed their own procedures regarding the absences. And so, when they decided to dismiss the claimant, this was not a sanction which fell within a range of reasonable responses available to them. Range of reasonable responses is one that we'll hear all the time in respect of unfair dismissal cases. But in addition to that, there was an issue over alternative roles that the employee could do.

There was a medical report that had said that the employee could do an alternative job in relation to sealer at the end of a paint line. And this was obviously conducting paintwork to the body of the car, but that he would need a walking aide. The claimant used a walking stick, and the employer said that there was a risk that he would damage the paintwork with his walking stick.

So a clear position there that the decision was unfair, and it's one where the employer has fallen down simply by failing to follow its policy and procedure. The lesson to be learned there is always follow the policy and procedure.

In relation to steps that the employer should take, it's one that comes up quite regularly in advices that I provide, whereby you'll have somebody that's off on long-term sick leave.

Long-term sick leave or sickness or ill health, it is a potential fair reason for dismissal. But you must ensure that your approach is legitimate and that you're not straying into the realms of disability discrimination or age discrimination.

Key case that most employment lawyers will be familiar with will be Spencer and Paragon Wallpaper case. The judge in that case said that employers should look at the following factors when making an assessment. They said they should look at the nature of the illness, the length of continuing absence, the need of the employer to have their work completed that the employee was engaging, or all considerations to be a factor, including the size and the nature of the employer and the length of time that is reasonable to wait for the employees that recovery. And then balancing the needs, essentially, of the employer versus the employee's needs and their ability to return to work.

But a key consideration in all of this is can the employer reasonably be expected to keep the post open for an employee who is absent due to long-term ill health? You absolutely as an employer should be ensuring that you're getting an occupational health report, or alternatively, a report from the employee's GP, and that you are also liaising a meeting with the employee to have discussions about contents of any report.

Ultimately, you tend to act from an advisory position to look at "Is there a return in the foreseeable future?" That tends to be the threshold, but you also must look at the whole circumstance, the holistic approach to look into when the employee might be able to return to work, what the timeframe for that might be, and whether or not that you can facilitate that through a temporary worker or whether the job can be held up.

And so lots of factors to take in. My advice tends to be do not rush that process, and certainly make your decision based on those two factors: the medical evidence that you have available and your consultation with the employee.

Scott: Yeah, employers get caught out all the time on that because they put up with it, put up with it, and put up with it, and then they go, "I'm fed up", and they sack them instead of dealing with it as part of a process.

There's another question here. Just want to do two more and then we'll finish up.

"We have an employee whom we suspect of flouting coronavirus rules, as she's had to self-isolate for coming into contact with someone infected with COVID-19 on four occasions so far". So she keeps meeting people that have the virus. "Do we have to discount this absence or can we include it for absence management reasons?"

Seamus: Well, we know that we're in very difficult and tricky times, extraordinary times, at present with COVID, and it may be that you just have someone that is very unlucky and have had to self-isolate on four occasions.

You would raise an eyebrow I think, although we were talking briefly before, Scott, in relation to some localities in Northern Ireland where maybe they're saying that 1 in 40 people might have COVID. And you can imagine the volume and number of people that are having to self-isolate as a result of that where the figures are very tight.

Scott: That's where I live. I've rarely crossed the door. I have to send my mother-in-law to get my paper. It's too dangerous for me.

Seamus: But the other side of it is that taking any disciplinary action against an employee should always be justified. We've lots of various examples of potential misconduct in the workplace as a result of COVID-19. But there are some instances that are less clear-cut when an employee has been engaged in behaviour outside of the workplace. That tends to be what we're looking at. It's not so much the behaviours that happen internally because of they're at work. It's what happened outside the place of employment.

And in general, the employer is not really entitled to take disciplinary action for what an employee does in their own time unless those actions are having a negative impact on the employer or the ability for the employee to do their work.

So looking at it sort of generally where COVID-19 is concerned, disciplinary action I think could be justified in and around three scenarios.

One, where you're physically attending a workplace and therefore you're putting the health and safety of colleagues or residents or whoever it is at risk.

Two, where you're unable to attend work because of a breach, and thereby you're disrupting the employer's business, and that would have to be at a high-end level. You're looking here at four occasions. You'd be wanting to test the legitimacy of that, although I appreciate that that's difficult at the minute because the GPs aren't providing any sick lines and things like that.

Or the third one where perhaps somebody has posted ill judged photographs on social media surrounded by large groups of people, and they can be identified as an employee of that employer.

I think those sorts of behaviours do take us into the misconduct territory and could put the employer's business, their customers, their clients, or their residents at risk and certainly could potentially damage the reputation of the employer also.

But it is worth saying that you should tread carefully, especially when you can't prove that the employee has flouted COVID rules. A person could test positive for COVID simply after a trip to the supermarket, as you were saying there, Scott. It just doesn't happen through social gatherings.

So take a cautious approach. Take a reasonable approach. Four is a lot, but I think it's worthwhile having that conversation with the employee and getting to the bottom of how the periods of self-isolation are happening.

Scott: Yeah, there are issues there just around people coping and behaviours. It's one of those difficult conversations that you might have in the past, take away COVID, where somebody simply isn't looking after themselves or they seem to have an alcohol issue or whatever it happens to be. You're in that kind of area perhaps, but I can understand where some employers are saying, "I'm just fed up. This person is never at work because they're always self-isolating because they keep going out". And that would become quite infuriating. I would imagine that's what's behind that question that came in there.

But anyway, things do change. Maybe you want to raise them at the next Employment Law at 11 webinar. You can see we're on the 5th of February there. And before that, we have the equally wonderful Mark McAllister, who's going to be looking at Employment Law Revision Day. What he's going to be doing is looking at case law, specifically at the cases that he raised at the Annual Review of Employment Law and any other developments that may have come since the Annual Review at the beginning of January. That's on the 29th.

As with all these webinars, there's only room for 500. So, if you want to register, go on to the website. It's on the Events page. And you'll be able to do that as well. You can log on to either of those. All our webinars are on the Events page.

If you really do want to find out about Irish employment law, we're also doing a couple of webinars on both case law and the various changes this month as well. So, if you go on to the Legal-Island.ie website, you can register for Irish things as well.

Thank you very much for listening. Thank you, Seamus, for your answers today.

Seamus: Thank you.

Scott: And thank you, Rolanda, in the background for organising everything. Thanks, everyone. We will see you, hopefully, later on this month. We'll be in touch about the TUPE and, of course, the eLearning. Take care, everyone. Bye-bye.


This article is correct at 08/01/2021

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Seamus McGranaghan
O'Reilly Stewart Solicitors

The main content of this article was provided by Seamus McGranaghan. Contact telephone number is 028 9032 1000 or email seamus.mcgranaghan@oreillystewart.com

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