How does salary sacrifice affect the Government’s Coronavirus Job Retention Scheme?

• Working with PFI providers to get contingency plans up to date

• If a PFI provider is struggling to achieve service delivery requirements due to Covid-19, then local arrangements should be put in place to:
  • maintain unitary charge payments
  • revise contract requirements/standards

moderating payment and performance regimes where appropriate.

• In any event, you may wish to review and adjust your requirements to reflect the current situation. It is possible that some requirements can be relaxed, whereas others need to be tightened. For example, there may be an increased need for cleaning and maintenance in certain areas of your PFI premises or the layout of the premises and/or room uses may have temporarily changed. With staff illness and shortage likely to be an issue, you may also wish to consider if the resource can be moved from one area to another to help maintain essential services.
• When putting local bespoke arrangements into place it is vital that:
  •  Contract requirements or performance standards are not relaxed to the point where health and safety are put at risk.
  • It is made clear that the arrangements are temporary and that matters will return to normal as soon as the Covid-19 emergency is over. Indeed the guidance note makes clear that if assets temporarily close they should be kept in such condition that they can be immediately up and running when this emergency is over. In such instances, likely a basic level of maintenance and security will therefore be required as a minimum.

A reduction in hours or salary or changes to hours or patterns of work is a contractual change – you can’t just impose it without significant risk. The same applies for lay-off or short-time working where there is no existing contractual right to impose these.

In summary, the process that an employer should follow to implement these measures is as follows:

1. Communicate the Company’s position clearly and the urgent need to achieve temporary cost-saving to ensure the ongoing financial viability of the organisation
2. Explain the proposed changes in detail and seek the employee’s agreement, and
3. Record the agreed changes in a letter which is counter-signed by the employee.

If employees will not agree then employers will be at substantial risk of claims for unlawful deduction of wages, breach of contract and/or constructive unfair dismissal if they seek to impose these changes unilaterally. Employers should be mindful that this approach is likely to cause significant employee relations issues and dissatisfaction if only some employees agree to a reduction in pay. Employers should have a clear strategy for what their approach will be if this is the case – for example, they may wish to instead explore a different measure such as redundancies. This may form part of the employer’s communication when explaining the reason for the changes and seeking the employee’s agreement.

Unions: Employers should also be aware that where there is a recognised trade union in respect of any part of the workforce which is being asked to agree to a change to terms and conditions, the recognition agreement or collective agreement will require the employer to consult and/or negotiate with the trade union in the first instance.

Collective consultation: Where 20 or more dismissals are proposed at one establishment in any 90-day period, there are stringent collective consultation rules which apply (regardless of whether the employees have two years’ service or not). All dismissals count towards this total unless the dismissal is “not related to the individual concerned” – therefore dismissals for things such as conduct or capability do not count, but most other dismissals will count. This will include where you are imposing changes to the contract such as reduced hours or pay.

The rules on collective consultation set out a prescriptive and time-consuming process which must be followed, and minimum timescales before any redundancies can take effect. The cost of any claims relating to failure to follow collective consultation requirements are substantial, and specific advice should therefore always be sought before seeking to implement collective redundancies. We will be publishing further guidance on this on the Hub shortly.

As the coronavirus outbreak continues to develop, we have seen many countries begin to implement emergency procedures and legislation in an attempt to control the spread of the disease.

These have included bans on gatherings and public events, closures of shops, bars, restaurants and public spaces, and full lockdowns which restrict all but key workers to their homes except in certain limited circumstances.

This has a direct impact on businesses and their ability to operate. So what happens if a contract becomes impossible to perform because of emergency legislation?

For example:

• If you are a hospitality business, you have agreed to host an event, and gatherings are prohibited
• If you are a manufacturer or service provider, and your staff are required to remain at home, making performance of the contract impossible

The Government will allocate £360 million to charities providing key services and supporting vulnerable people during the crisis.  £200 million of this amount will be paid to Hospices UK to be distributed to hospices to help increase capacity and give stability to the sector.  The remaining amount is to be allocated to:

• St Johns Ambulance to support the NHS
• victims charities, including domestic abuse, to help with potential increase in demand for charities providing these services
• charities supporting vulnerable children, so they can continue delivering services on behalf of local authorities;
• disabled people
• Citizens Advice Bureau to increase the number of staff providing advice during this difficult time

The Government Departments will identify priority recipients, with the aim that these charities will receive money in the form of a cash grant over the next few weeks and by the end of April to assist in paying amongst other costs April’s wage bill.

Remote mediations have become increasingly popular as a way of settling a dispute before it goes to court. There are a number of ways in which you can mediate remotely, but the most common platform is Zoom, due to its easy-to-use nature and the ability to have ‘break-out rooms’. We have answered some FAQs and set out a quick guide to remote mediations below.

What is remote mediation?

• Mediation is a form of assisted negotiation, in which a neutral 3^rd party mediator seeks to help the parties resolve their dispute. The process on the day is managed by the mediator and adopts certain key ground-rules. These are that discussions are private and cannot be referred to in court; and the process is entirely voluntary and non-binding, if and until a settlement is finalised. In the current pandemic mediations are now usually conducted remotely by video conference, instead of an in-person meeting.
• The structure of the mediation will depend on the matters that are in dispute. Before the mediation the parties will exchange their views in position papers and prepare a bundle of the key documents.
• Generally the parties will start the mediation in the same ‘room’ as the mediator, where they will be invited to set out their positions. The mediator will then put the parties into ‘break-out rooms’. These rooms serve as your own private ‘room’ which the mediator will join. You will therefore be able to have private discussions with the mediator without the other side being able to hear those discussions. The mediator will go between the ‘break-out rooms’ to discuss a party’s position further in order to attempt to reach a settlement.
• If an agreement is reached, at the end of the mediation the Settlement Agreement will be drafted. The Settlement Agreement works as an enforceable contract. The Settlement Agreement will outline the details of what has been agreed and the intentions of the parties, such as any actions required, payments to be made and appropriate timescales. Each party will sign the Settlement Agreement, which can be done electronically.
• It is not always possible to reach a resolution/agreement by mediation, but the mediator serves as an impartial third party in order to aid the process. If no agreement has been reached, the mediation may still prove useful as it will give you a better understanding of the other side’s position.

What should I do before the mediation to prepare?

• Ensure that you are in an area with minimal distractions. Mediation is a confidential process, so make sure that you are in a private location.
• Ensure that your microphone and camera work and that you have access to the online platform that will be used. We send our clients a link to the website in advance so that this can be tested out.
• Consider any agreed dress code and dress appropriately.
• Have a copy of the mediation bundle to hand, whether in hard or soft copy, and be aware of what documents are in there.

Any tips on what to do on the day?

• Remember to make sure that before you have any private conversations with the mediator you are in your break-out room.
• You may contact the mediator whilst being in the break-out room. On Zoom there is an ‘Ask for Help’ button on the screen. The mediator will then be prompted to join your room.
• Ensure that you inform the mediator if you or others enter/leave the room. It is important that the mediator knows who is present.
• Be mindful of body language and facial expressions as these can appear more enhanced on the screen, and they are easier to pick up in a remote mediation.
• Stay calm and focussed at all times. When you have a dispute it is sometimes tricky to maintain a calm manner, but this is always vital in attempting to reach an agreement.
• When engaging with the mediator avoid any external distractions such as text messages and emails, as it may come across that you are not interested in the process. It is important to pay attention so that you do not miss any dialogue which may be key to any agreement that is reached.
• When you are in the break-out room without the mediator make sure that you take breaks and keep refreshed, as virtual mediations can be tiring.