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20 January 2021
A recent judgment from the Jersey Employment and Discrimination Tribunal is believed to be the first employment decision relating to the restrictions imposed on businesses in Jersey due to COVID-19.(1)
The employer, PG Plumbing (2014) Limited, closed for a period during the COVID-19 lockdown and temporarily laid off staff.
The claimant, William Hague-Holmes, was not paid his wages during that period. The employer said that it would have paid the claimant if the business had received a government wage subsidy. However, the employer had misunderstood the government's COVID-19 payroll co-funding scheme, believing that wages would be funded only for employees earning more than £2,000 per month. The employer realised the error too late and its wage subsidy application was rejected.
The tribunal ruled as follows:
I am sure it does not need to be said, that the interpretation of the Scheme by the Respondent is wrong, plainly wrong and frankly I consider an unreasonable one to make. On any reading of the Scheme documentation it is not one any person should make, let alone an employer who has employees depending on their salary to be able to cover they day-to-day outgoings… However, the scheme is an arrangement between the States and the employer and any employee is not directly impacted by the Scheme: their contract with their employer and the employee's entitlement to pay under it, still remains in place, unaffected by the Scheme and its existence. Whether the employee has been paid appropriately is a matter between the employee and the employer, and not the States.
The tribunal, therefore, could not intervene in a failure to claim under the co-funding scheme; it had to consider the terms of the contract and whether there had been a breach of contract by the employer. This case is therefore a reminder of the importance of clear and unambiguous contracts and the incorporation of policies and other terms into a contract. The tribunal held that:
The question then is whether the parties have expressly or impliedly agreed that the document forms part of the contract between them. If they have, the terms of this document must be 'apt' to be incorporated.
In this case, the claimant argued that if there was a valid contractual term for him to be temporarily laid off without pay, it was "hidden away on page 11 of the handbook". The tribunal chair considered that the usual contractual principles apply: what was the term, was it incorporated into the contract and, if so, was it apt to be a contractual term?
The staff handbook included a term that empowered the employer to lay the claimant off for short periods. The tribunal chair found the lay-off terms to be incorporated and apt to be of contractual effect ("it established rights and duties on the parties and did not 'merely' set out aspirational or discretionary matters"). In addition, the chair found that the contract covered the circumstances in this case – that the employer was unable to offer the claimant work owing to the lockdown (a temporary cessation of work).
Although the claimant was unsuccessful in his claim, the tribunal chair expressed sympathy, saying that the claimant was "the victim of an unreasonable and unsustainable interpretation by the Respondent of a clear and plain term in the Scheme".
For further information on this topic please contact Helen Ruelle, Will Austin-Vautier or Laura Shirreffs at Ogier's Jersey office by telephone (+44 1481 721 672) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). Alternatively, contact Rachel DeSanges at Ogier's Guernsey office by telephone (+441481 721 672) or email (email@example.com). The Ogier website can be accessed at www.ogier.com.
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