Employment and pensions

Employment Law Coffee Break: Covid-19 update, constructive dismissal claims and pensions spotlight for employers

Published on 28th Jan 2021

Welcome to our Employment Law Coffee Break in which we highlight the latest developments and issues impacting UK employers.


Covid-19: Latest developments for employers

Build back better

Amid reports of increasing unemployment, the government is pushing its initiatives to "boost skills and jobs" as it seeks to help the nation "build back better". Last week it announced a a new Build Back Better Business Council, enabling business leaders to work directly with the government to fuel the Covid-19 economic recovery.

As it seeks to reinvigorate the employment market, the government has also removed the minimum number of Kickstart scheme work placements an employer must create in order to apply directly for the scheme as well as other measures to "supercharge further and technical education, realigning the whole system around the needs of employers, so that people are trained for the skills gaps that exist now, and in the future, in sectors the economy needs". These include its Lifetime Skills Guarantee, which from April 2021 will offer adults without an A-level equivalent qualification the chance to gain one for free in a range of sectors including engineering, health and accountancy. The government is also expanding apprenticeships to make them "portable", and growing its digital boot-camps, which give adults the opportunity to build up sector-specific skills. Employers will be given a "central role in designing almost all technical courses by 2030, to ensure that the education and training people receive is directly linked to the skills needed for real jobs".


As the vaccine roll-out continues, this week we talk to Osborne Clarke's Eva Otaegui in Spain and Sabine van Baren in the Netherlands on the considerations for employers in their jurisdictions.

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In the UK, despite calls for school teachers to be vaccinated as a priority in the next few weeks, the government has committed to its existing priority groups, which focus on the elderly and vulnerable first, stating though that teachers will be vaccinated as a "matter of priority" within those. The government has also announced that schools will not begin to reopen until 8 March 2021; please do speak to your usual Osborne Clarke contact to discuss the options for your business as parents continue to home-school for at least another month. Prime-minister Boris Johnson has confirmed that in the final week of February he will set out a plan for how the lockdown can be eased.

Coronavirus Job Retention Scheme

The government has published a new Treasury Direction, formally extending the scheme until 30 April 2021. The direction reflects changes in the guidance for calculating the grant for non-fixed rate employees' in March and April 2021 to avoid any furlough periods in March and April 2020 impacting on the claim for those months. Employers using the CJRS should continue to check carefully the deadlines for making claims and submitting any amendments to HMRC. It remains the case that the CJRS is not available where employees are on notice of termination and employers using the CJRS and looking to make redundancies should take legal advice on the particular legal and practical considerations this gives rise to.

Constructive dismissal: does raising a grievance prevent an employee bringing this claim?

In a recent case, the Employment Appeals Tribunal considered whether raising a grievance prevents an employee from claiming constructive dismissal. Here, the fact that the employee considered that the employer's conduct had breached the implied term of trust and confidence did not prevent the employee from pursuing a grievance in that respect. The EAT held "where an employee intimates that he considers the contract has come to an end, he is not to be taken to affirm that the contract has come to an end for all purposes. In particular I do not consider that the parties can be presumed to intend that a clause designed to procure the resolution of differences should be regarded as being evacuated because one party asserts that the implied obligation of trust and confidence has been breached". It is perhaps not surprising that the EAT was keen not to discourage the resolution of workplace disputes through grievance processes and other channels of resolution outside the Employment Tribunal system.

Employers faced with constructive dismissal complaints should proceed on the basis that, for these purposes, grievance or appeal provisions may be regarded as severable from the remainder of the contract and capable of surviving independently, even though the remainder of the contract is properly regarded as terminated through breach.

Pensions spotlight for January

Value for money and consolidation

The FCA has consulted on value for money in personal pension schemes and is aiming to publish a policy statement soon.

The government also intends to change the law so that, from 5 October 2021, the trustees of most occupational (trust-based) defined contribution (or money purchase) schemes with assets of less than £100 million must complete an annual, more detailed, 'value for members' assessment, taking account of new guidance. If the scheme does not provide value for members, the trustees must say whether they are going to consolidate (terminate the scheme and transfer its members to another scheme) and, if not, the reasons why and the action they are going to take or have already started to take to improve value for members. Click here to read about the action employers need to take.

Automatic enrolment

The Department of Work and Pensions has confirmed that the earnings threshold for automatic enrolment for the tax year 2021/2022 will remain at £10,000 (the same level as for 2020/2021), potentially increasing the number of eligible jobholders who earn more than this and must be automatically enrolled (assuming wages have risen in real terms).

The lower limit for qualifying earnings will also remain unchanged at £6,240 for 2021/2022. Jobholders who earn above this level (but no more than £10,000) have the right to opt in to the workplace pension scheme.

The upper limit for qualifying earnings will increase to £50,270 for 2021/2022, a rise of £270 from 2020/2021. This will result in a small increase in the contributions payable to workplace pension schemes in cases where contributions are based on qualifying earnings (earnings above £6,240 capped at £50,270) rather than on basic salary or another definition of pensionable pay."

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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