The financial impact of COVID-19 on businesses and employees has been clear for more than a year.

Many employers already had contracts of employment for their employees when they subsequently furloughed them as a result of the financial impact of coronavirus on their businesses. However, others did not.

Employers were then generally told by HM Revenue & Customs (HMRC) that they needed to have written furlough leave agreements in place and scrambled to put these in place. However, for those employers that did not have contracts of employment in place for their employees, gaps have arisen in the ability to bring their employees back to work during the easing of the lockdown.

Now that some industries are returning from the lockdown, they are finding that many of their employees have gone and found other work whilst also being on furlough, but have not requested permission from their furlough employers to do so. Many employees have also indicated that they are not willing to return to the existing jobs for which they have been furloughed, which has not only left those employers in the lurch, but has also meant that they have been making National Insurance contributions and pension contributions, as well as possibly topping up an employee’s pay, when that all might have been avoided.

So what can an employer do in these circumstances?

Many might hope that the employees might simply resign, but this is largely wishful thinking. After all, if you were being lawfully paid to do a job and be furloughed, would you resign? Therefore, trying to force an employee to resign could be a high risk move, particularly where that employee has two or more years’ service.

The next route might be to consider making those employees redundant, but redundancy focuses on the role rather than on the individual fulfilling that role. Therefore, if the employer makes an employee redundant because the employee will not return to that role, then the employer could be laying itself open to claims of unfair dismissal and perhaps even discrimination, depending on the circumstances.

Ordinarily, the aim would be to look at the contract of employment itself to see if it requires an employee to request permission before obtaining additional employment. However, in the absence of such a contract of employment, the alternative might be to attempt to enter into a new furlough leave agreement specifying that the employee must obtain permission before seeking additional employment from the point where they were furloughed, which might force the issue.

From there, the situation could go a number of different ways, so it is important that the process of taking employees off of furlough leave and managing any correspondence with them to determine what the next steps are is handled robustly. Employers should seek advice on how to handle this.

Employers also need to be mindful that there could be risks of HM Revenue & Customs reviewing the furlough situation to determine whether it is fraudulent or not (even if the employer claimed the furlough grant with the best of intentions) so, as part of this process, the employer should also gather as much information as it can from the employee to ensure that it has the best opportunity to defend itself should it need to.

It is also important to understand that, whilst it might not be possible to recover the sums that have already been paid, it might be possible to prevent making further payments to an employee who has no intention of returning to their post.

This article is intended for information purposes only and not as a substitute for legal advice. TP Legal does not accept any responsibility for any decisions that you may make as a result of reading this article.

This is a guest blog written by TP Legal Solicitors.

If you would like legal advice from TP Legal Solicitors, then please get in contact and click HERE.

Another groundbreaking MRO victory for tied tenants represented by the Pubs Advisory Service.

The Pubs Code Adjudicator arbitration ruled that EI Group (Stonegate) MUST issue a Deed of Variation to a tied tenant who was trying to go free of tie and, that the pub companies new lease was in breach of the pub’s code as it made the tenant worse off.

The case was another nail in the coffin of Pub Companies consistently proposing new agreements to sever the beer tie at MRO. PAS who represented the tenant made the firm and lawful argument that this matter could be done easier and cheaper using a common and widely used method of a deed of variation (DOV).

The Arbitrator ruled in favour of PAS/Tied Tenant:

.…..A standard template lease to be applied by the POB is potentially a burdensome position for the tenant with limited
strength and negotiating support and consequently could result in unfairness to the tenant…….

……I find for the Claimant that the MRO-compliant tenancy is
most fairly and appropriately achieved by a DOV and not by a NL (New Lease) and
satisfied that the DOV will comply with the provisions of sections 43(4)(iii)
and 43(5)(b) of the SBE&E Act15.”

Download the award here DOV_MRO_Award

If you need an award-winning pubs expert helping your business then please contact us HERE

The PCA recently published an MRO arbitration case in which the PubCompany Star Pubs and Bars (Heineken) were represented by DLA Piper.

The tenant was being represented by Pubs Advisory Service.

The tenant had sadly passed away sometime earlier and this event was now being gamed by the pub company to try and overturn the previous MRO award (which had gone in favour of the tenant).

In an unprecedented dressing down the arbitrator said, in its award to the parties, that the argument put forward (from Star Pubs / DLA Piper) was distasteful – see point 45.

You can download a copy here > Pubs_Code_Statutory_Arbitration_Award_Distasteful

If you want help with MRO or pubs code disputes contact PAS HERE

This evening saw another historic moment for leased and tenanted pubs.

The tied pub’s bill (Scotland) passed the house with overwhelming cross-party support, this is the second time PAS has backed statutory reform of the tenanted pub sector, and is delighted to see our arguments vindicated and victorious for the 2nd time in a UK Parliament.

The Scottish Government will now rise for an Election, when it returns in the early summer it will begin working with PAS and other stakeholders on the delivery of the code.

If you are a Scottish tenant and would like to help or find out more get in touch with us HERE

You can learn more about the Scottish Pubs Code and watch the stage 3 debate where the bill passed into law HERE

The outline HMRC reform of small brewers relief (SBR) discussed at SIBA’s Beer X online conference.

Reform proposals could see a 5000 hectolitre (hl) brewer pay an extra £44k duty per year a 15,000hl brewer will pay £40k less!

In other scenarios under consideration by Government, microbrewers would pay £20k extra, and bigger more regional brewers with 10,000hl operations will pay £58k less.

This will potentially force the merger of many 5000hl brewers to get the scale that comes at 10,000hl and reduce the numbers of independently owned operations.

Also proposed – if the chancellor is silent about duty in the budget it automatically rises by RPI but it may change to CPI & the SBR rate may change each year too.

Micro and Independent brewers are clearly going to be unable to plan under such scenarios and face a stark choice to merge or reduce their operations.

Watch the SIBA Beer X conference where the awful future for British Microbreweries under SBR reform is laid bare CLICK HERE

If this bothers you we suggest you write to your MP, the Treasury and the competition regulator HERE to outline your concerns about the anti-competitive nature of the reforms and ask for a competition inquiry into the wholesale beer market – the last one was in 1989!

#ukpubs