Employers are making difficult choices at this time in situations which have never affected their workplaces before. Employment lawyers are having to advise in a context where the landscape is changing day by day. As fresh guidance is issued and new headlines emerge, the next legal queries evolve. This blog by Rachel Crasnow QC is the second in a series to examine how the interaction of the workplace and the corona virus creates novel problems for employment lawyers.
What is an employer to do where a working parent, for whom there remains home-based work, is not able to work because of school closures and their childcare responsibilities?
If a parent cannot work at evenings or weekends because, for example, their partner is a key worker at a hospital on shifts, it could be thought the natural recourse is for them to apply to take annual leave, since that is the key form of non-sickness related paid leave.
Other forms of leave are at first glance less advantageous: time off to look after a dependent is unpaid leave unless the contract says otherwise. The circumstances for this right to arise are likely to be satisfied, in particular the existence of an unexpected termination of arrangements for the care of the dependent. The employer of course has a discretion to continue with wages in such a scenario, but the economic downturn makes this unlikely for many workplaces. Contracts with family leave provisions are almost always unpaid.
But taking unpaid leave now leaves untouched annual leave for when “non-staycation” holidays become a possibility again. (This is particularly relevant given the guidance from Government on 27 March that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.) Individuals in this situation might ask why should they be required to use up their precious annual leave when they will need a holiday later in the year just as much as their colleagues without childcare responsibilities, given their inability to work is involuntary? Many employers would be sympathetic to these responses in the early days and even continue pay at 100%, but such generosity might well be time limited.
Female employees might argue that it is indirectly discriminatory to require parents to take annual leave in such circumstances since more women than men carry the primary burden of childcare and other domestic responsibilities, But at a time when both parents are working from home, demonstrating disparate impact could well require specific evidence rather than merely asking a court to take judicial knowledge of this social fact, Even where, as at the Bar, there is a risk that the removal of childcare support will impact far more on women barristers than men ( see the 57% / 4% primary carer statistic in my colleague Rachel Barrett’s recent blog on diversity issues during a pandemic), at the current time many fathers are by necessity taking on far more hours of childcare than usual. So careful thought needs to be put into an indirect discrimination claim, and that is before focusing upon questions of justification.
Whether an employer be justified in insisting that annual leave was taken requires a focus upon the arguments on both sides. On one hand, the employer could say he was being generous by not insisting on the female employee being forced to take unpaid leave for dependents. On the other, the offer of annual leave might suggest funds exist to suspend on full pay, which ought to have been offered in the first place. Much will depend on the options open to the particular employer at this extraordinary time. Debates about the legitimacy of reliance on costs often arise in justification arguments (note in Kapenova v Department of Health  ICR 884 the EAT confirmed that a public sector body can rely on costs, among other considerations, to justify indirect discrimination). How effective it will be for an individual to threaten indirect discrimination will be workplace dependent. A potential complainant will need to look to the make-up of the workforce as well as her own appetite for the risk of drawn-out litigation. Careful legal advice will be required.
Note that it will likely not amount to a breach of contract for an employer to instruct workers who are not on sick leave to take statutory annual leave if due notice is given (although the wording of contracts should be carefully checked).
Are other solutions available to the parent?
Parent employee designated as a ‘furloughed worker’?
If the specific workplace has some downturn in work, could the employer – with the consent of the workers – shift work to other employees and declare that the parent employee is designated as a ‘furloughed worker’ under the Coronavirus Job Retention Scheme (the Scheme)? This would enable the parent to look after their children (they would be unable to carry out any work under this new regime) whilst receiving 80% of their wages capped at £2500 per month. The guidance to date leaves it to employer discretion to determine if there is in fact no work for a particular employee because of COVID-19. Whilst there is nothing currently requiring the employer to pay the balancing 20% of wages, it is notable that the current Government guidance states that changing the status of employees remains subject to existing employment law. It could be argued that this proviso means that consent to pay less than 100% of pay is required. If this is right, and there is an absence of consent, employers may well consider unilaterally varying the contractor simply dismissing and then re-engaging on terms which precluded the employer being required to “top up” pay. If consent is withheld because the employee believes top-ups to 100% of wages are being allocated on a discriminatory basis, the dismissal could amount to a constructive unfair (and possibly discriminatory) dismissal.
Furlough decisions could be fraught with complications depending on the basis as to who enters the scheme; if an employer is selecting who is going to be furloughed and chooses all the women with childcare responsibilities, the male part of the workforce might complain under the Equality Act.
If a furloughed parent decides they do have some capacity to carry out work, their employer can exit them from the furlough scheme, according to the updated guidance of 26 March, but only after a minimum of 3 weeks.
It is possible to go from unpaid leave directly to furlough but only where the unpaid leave commenced after 28 February. Since schools closed after that date, this bar is unlikely to affect people in the scenario described above.
If the parent wishing to take time off for childcare purposes is a key worker, is an employer able to furlough them? The concept of key worker is not one which relates to the individual work undertaken. It would theoretically be possible for a teacher to be furloughed (where she was not required to teach vulnerable children or children of other key workers) but then taken off the scheme by her employer as and when the need arose, perhaps when other teachers became sick.
Many of the difficult choices which employers are having to make at the moment might have discriminatory consequences. As important as the avoidance of a tidal wave of new litigation in future months is the need to keep to a minimum feelings of unfairness within the workplace. Transparent policies and some type of consultation go a long way to keeping the peace in these challenging months. As the Government’s guidance is updated, advice will be kept under ongoing review.
Cloisters barristers are available to discuss the many issues arising in the current COVID-19 crisis, including our investigators and specialist mediation team. Please contact us through our clerks in the usual way.
27 March 2020