Returning to work after Covid-19 – some legal issues

Paul Nicholls QC |

Following the government’s recent announcement of a partial relaxation of the lockdown, the prospect of a return to work is in sight for many people. In some industries such as construction staff are already being encouraged to return to work. As the R number falls, others will no doubt follow. But what are the legal pitfalls which await employers?

The starting point, of course, is that employers owe a duty to provide a reasonably safe system of work and to take reasonable care for the safety of their employees: British Aircraft Corp v Austin [1978] IRLR 332. In addition they are bound by the implied term of trust and confidence. For both reasons, employers will need to take steps to make their workplaces safe for individuals to return. What steps will have to be taken will vary from employer to employer but steps may include closing canteens and other communal gathering places, staggering work start and finish times and taking steps to enable social distancing to be put in place. No doubt the provision of PPE will also have to be considered.

There is an obvious risk of constructive dismissal claims if employees feel that employers have not gone far enough to protect their well-being. Employees who feel that inadequate steps have been taken may resign and say that their reason for doing so is a failure to put in place sufficient steps to preserve their safety. That could give rise to claims of unfair and wrongful dismissal. In addition, employees may seek to present their claims as protected disclosure cases. They may say that they had been complaining about the employer’s failure to take action and that the continued lack of response was because of the complaints. Hence they may seek to formulate a case based on protected disclosures (or health and safety disclosures under s 100). Strictly speaking this analysis should not work because the question in an unfair dismissal claim would be what was the employer’s reason for its breach of contract. If the breach was failing to take adequate steps to ensure safety of employees, it is difficult to see how the reason for that breach was the fact of a complaint made by employees. It might be, in a particular case, that the employer ignored the complaints, but it would still be difficult to say that the reason for inaction or insufficient action was that those complaints had been made. Nonetheless, I am sure that such claims would be brought.

In order to respond to or pre-empt them, the employer would need to show that it had not acted in breach of contract because it had taken such steps as were reasonable to protect health and safety. It does not seem to me to follow that the fact that, for example, in a given workplace, corona virus appeared would mean that there had been a breach. The term does not require complete success, only that reasonable steps are taken. What that means as a minimum is that an employer can show it has followed government guidance: https://www.hse.gov.uk/index.htm#. Anyone failing to have regard to this guidance is likely to find itself in difficulty. But individual circumstances will vary and it would still be open to a court or tribunal to find a breach of contract even if these measures were followed because some other step which ought to have been taken was not.

There may be scope for inventiveness. One employer of whom I heard was taking employees’ temperatures daily in order not to admit anyone with a higher temperature (and no doubt not keeping any records …). This could be a means of reassuring staff that those attending were less likely to be carrying the virus.

There are problems inherent in many of the suggestions of steps employers might take. The problems are two-fold. One is cost: many steps are likely to involve additional cost at a time when many businesses are already under huge financial pressure. The other is that many steps – such as staggered start times and shorter days – are likely to affect the volume of income producing work which businesses can do and so reduce income at a time when employers must be keen to maximise it. There are likely to be questions in some cases of whether a return is worthwhile if employees will not be able to work as fully as they have previously.

Sections 44 and 100 of the Employment Rights Act 1996

What about those who, having been told to return to work, do not do so?  It is inevitable that some people will not come back to work. This is arguably the biggest problem. There will be plenty of people who say that they fear using public transport and so cannot safely come back to work. They will be reinforced in that by the PM’s statement in which he advised people not to use public transport. Such people are protected by sections 44 and 100 of the Employment Rights Act 1996. Those sections create the right not to be subjected to detriment or dismissed for employees who

‘in circumstances of danger which the employee reasonably believed to be serious and imminent … left (or proposed to leave) or (while the danger persisted) refused to return to his place of work or any dangerous part of his place of work’

The ‘danger’ in question does not have to be in the workplace itself: Harvest Press v McCaffrey [1999] IRLR 778. This means that the employee who fears returning to work because of the need to use public transport would be protected by these sections as long as  it were accepted that the risk of contracting the virus on public transport was a serious and imminent danger. Therefore even the employer who had done everything to make the place of work safe could still find employees that there were employees who refused to come back because of concerns about getting to work and who would be protected from detrimental treatment, including dismissal for doing so.

The right to claim unfair dismissal is not subject to any qualifying period and compensation is uncapped.

So what can the employer do where employees refuse to come back?

Refusing to pay would be a high risk strategy, for two reasons. One is that the employee who feared using public transport would say that not being paid was a detriment for refusing to return to work while the danger inherent in the use of public transport persisted. Hence there should be a remedy for non-payment under s 44. Further the employee who resigned in response to not being paid would be able to bring a constructive unfair dismissal claim under s 100: the breach would be the non-payment and the reason for it would be the employee’s refusal to return to work because of danger.

Even apart from s 44 an employee could say that the employer was obliged to pay because the individual was ready and willing to work so as to give rise to the right to payment in accordance with Miles v Wakefield MBC [1987] AC 539. The only reason for not attending was the difficulty of using public transport. An employee ready and willing to work would therefore be able to stake a contractual claim to payment.

The employer could impose a requirement to return. The question would then be whether the employee became disentitled to pay by reason of failing to comply with a lawful and reasonable instruction. The question would then be whether the instruction was lawful and reasonable, which would bring one back to the practicability of using public transport. The employee’s argument would be that, if returning to work was not practicable, that the imposition of the requirement to do so was not reasonable.

What about dismissing those who refuse to return?

The same problems arise of the reason for dismissal being the employee’s refusal to return to work where the employee reasonably perceived danger – and thus an automatically unfair dismissal – and whether, even apart from s 100, a dismissal for failing to do that which the employee was unable to do was substantively fair. Even apart from s 100, the question would arise whether the dismissal was fair if there were doubts about the reasonableness of the instruction to return.

Whether considered in the context of imposing a requirement to return or just managing those who do return, there may also be disability discrimination issues. Those with certain disabilities may be particularly vulnerable to Covid-19 which would give rise to a duty on the employer to make reasonable adjustments. A requirement to return to work would be a provision, criterion or practice. To the extent that such a requirement place a disabled person at a substantial disadvantage – which might well be the case where that person was at greater risk from the virus – then the employer would be under a duty to make reasonable adjustments. It is not difficult to imagine that that duty could include not requiring the person to come back to work at all.

Could there be a nuclear button?

Frustration

Might employers be able to say that these exceptional circumstances amount to a frustration, the effect of which would be that contracts of employment came to an end not because of a dismissal but because if the effect of a supervening effect – here, the virus. The employer’s argument would be that the straitened circumstances affecting the business and the financial consequences meant that it was not sustainable to continue to employ persons; the employment contracts could no longer be performed because of the effects of the virus. Whether that case could be mounted on the facts would be specific to each case, of course. But if it were right, the effect would be that all contracts of employment or all in a class affected by the event (such as, for example, all those employed in jobs which required attendance at a place of work) would come to an end; there would be no picking and choosing between employees in comparable roles.

None of this works for as long as employees are covered by the furlough scheme because, to the extent it applies to an employer, it enables employees to be paid by the state and thus contracts to continue. But once it comes to an end or requires employers to start to contribute, it may be that some will say they are unable to make the payments necessary to keep the contracts alive.

English law has traditionally kept frustration within narrow bounds because of its substantial consequences. Its essence is that an event supervenes which so significantly changes the nature (not merely the expense or onerousness) of the contractual rights or obligations that it would be unjust to hold the parties to their obligations: the circumstances radically change the nature of what a party was required to do: Davis Contractors v Fareham UDC [1956] AC 696, National Carriers Ltd v Panalpina [1981] AC 675. The most famous cases are the ‘coronation cases’ where people hired rooms to watch a coronation which was postponed due to the King’s illness and it was held that the contracts for the hire of the rooms on the date on which the coronation was originally due to take place was frustrated. The parameters of frustration were recently considered in Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 335 which shows the strictness of the doctrine. (In that case, leases held by a European agency were not frustrated  by the UK’s departure from the EU.)

Relying on frustration and telling employees that their contracts were at an end not because they were being terminated by the employer but because they were frustrated would be a high risk strategy because of the limited circumstances in which frustration has been found. It has tended to be unforeseeable events such as the cancellation of the coronation or that something due to be done has become illegal. It might be said that illness is foreseeable, but here one would say that this is a type of illness we have not seen for 100 years. It has been held in the context of employment that an employee’s incapacity due to illness or injury is capable of frustrating a contract: Marshall v Harland & Wolff Ltd [1972] ICR 101, Egg Stores (Stamford Hill) Ltd v Leibovici [1977] ICR 260. It may be said that, if those cases are right, then the same ought also to be able to be said of a virus which has the potential to affect – and perhaps keep away from work – a whole or part of a workforce. It seems possible, therefore, that if the financial circumstances affecting employers are serious that they may seek to go down this route, difficult though it may be.

Redundancy

It seems likely, in a legally less radical manner, that there may be redundancies. Employment lawyers can at least feel that they are in more familiar territory. There is one argument – not yet tested and so up for debate – which may assist employers. One consequence of any redundancy exercise is the need to engage in collective consultation. Apart from anything else, that has the consequence that staff have to remain employed for the duration of the exercise. But is there a possible route out for employers? Imagine this case. An employer says to staff – even now – you will remain employed for as long as the furlough scheme lasts, but as soon as that ends, I will dismiss you as redundant. In the usual course such a statement would involve an employer proposing to dismiss employees as redundant so giving rise to the obligation to consult under section 188 of TULRCA. However, the coalition government introduced an exception from the duty to engage in collective consultation in the case of fixed term employment. Section 282 of TULRCA provides that the provisions dealing with the procedure for dealing with handling redundancies (including collective consultation) do not apply to employment under a fixed term contract unless the employer proposes to dismiss for redundancy and the employment comes to an end, in essence, after the expiry of the fixed term. But if the employment ends at the end of the fixed term, the duties do not arise. What matters about all this is the expansive definition of a fixed term employment. It includes the case where the contract will terminate ‘on the occurrence or non-occurrence of any other specific event’ apart from reaching a retirement age. What this appears to mean is that the employer can create a fixed term employment by saying that it will terminate on the basis of the occurrence of some extraneous event such as, in my example, the ending of the furlough scheme. So if I say to workforce now: once the furlough scheme ends, I will have no need for you; I will no longer be able to afford you so I will be reducing my workforce and you will, as a group, be dismissed, then the argument – untested, as I say – is that this mean that the collective consultation provisions do not apply. The employer would still need to dismiss for redundancy (but if that was not so, the collective consultation provisions would not be engaged) but, if this is right, it may provide a means by which employers can manufacture a route out of the duty to engage in collective consultation.

Paul Nicholls QC

May 2020

Disclaimer: this article is not to be relied on as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought.

© Paul Nicholls QC May 2020.