HR briefing

Welcome to this month's briefing for HR teams and in-house employment counsel – bringing you this month’s employment law highlights in an easy-to-read package. We hope all our readers are safe and well in these troubling times.


Coronavirus Job Retention Scheme

The Government has clarified a much-criticised aspect of the furlough scheme, which remains in operation until 31 October. New Regulations provide that any calculation involving “a week’s pay” – e.g. statutory redundancy payments – during furlough must use an employee’s pre-furlough full pay.

Kickstart scheme

The Government has now opened applications for grants under its new Kickstart scheme. For more detail of the scheme, which was announced in July, see our article. For applications, please see the Government’s website.

In the courts

TUPE transfers

Changes of contractor – termed “service provision changes” in the UK’s TUPE Regulations – sometimes see a single outgoing contractor replaced by a number of different incoming contractors, so that the service is split between them. Previous UK courts have decided that this kind of fragmentation does not result in a transfer of employees – because it would be impossible in practice to decide how to chop up an individual’s employment between the various incoming contractors. The ECJ has, however, taken a different approach, holding (a) that employees do transfer under the Acquired Rights Directive (the EU instrument from which TUPE is derived); and (b) that the incoming contractors each take on a pro rata liability for the transferred employees. The decision has difficult practical implications for business. In some cases, incoming contractors may be able to carve up a transferring employee’s time so that they each receive a useful amount of work from them. In others, the effect may simply be to make each incoming contractor liable for a pro rata share of termination costs.

Data privacy

The second problematic ECJ decision of this month’s briefing involves data privacy. For many years, the ECJ has expressed concern over the mechanisms under which data on EU citizens is transferred around the world. This is because some countries do not provide the same protections that are guaranteed by the EU GDPR. Most importantly, the US Government retains the power to examine personal data held in the US, typically for military/surveillance purposes, and typically without recourse to the courts (US citizens have the right to seek judicial review of any interference, but non-US citizens do not). The EU Commission and the US Government have put in place a number of different mechanisms to try to safeguard personal data flows between the US and the EU: the “Safe Harbor” scheme was ruled invalid by the ECJ in 2015, and its replacement, the “Privacy Shield” has now received similar treatment. This effectively means that any organisation needing to move employee or customer data to the US must find alternative ways of assuring data privacy. Putting in place “standard contractual clauses” or “binding corporate rules” are the most common way of doing this, but even with these in place the continuing ability of the US authorities to obtain data makes US-EU data transfers a very problematic area. Our Commercial team have written this blog on the decision if you would like to read further.

Fixed-term contracts

Some industry sectors – typically sports teams and some financial institutions – routinely use fixed-term contracts as a way of tying in particularly valuable employees. Where relationships do not work out as planned, it can be difficult to know what termination payments are required. The EAT has confirmed that the default position on early termination is that the employee is entitled to payment for the outstanding balance of the fixed-term. Since that may often be a considerable sum, employers wishing to use fixed-term contracts should think carefully about incorporating break or notice provisions into their drafting.

In the news

Discrimination and AI

All readers will be aware of the recent chaos surrounding the use of an algorithm to determine A-level grades for pupils unable to sit exams because of Covid-19. The debate brings into sharp focus the increasing use of algorithms and AI across all forms of human activity, including work. Some high-profile attempts to adopt technology have raised concerns that the algorithms underpinning selection or recruitment decisions, for instance, may have inherent discriminatory biases, and may be difficult to challenge in the courts. For a discussion of some of the issues arising from a growing use of artificial intelligence in the workplace, please see our article.