The claimant was employed by the respondent company and as a result of the lockdown in March 2020 relating to Covid-19 he was temporarily laid off. It must be noted from the outset that this case arose in Jersey.  The claimant did not receive any wages during the period and the respondent outlined that it would have paid the wages if it had received a government wage subsidy.    The respondent had actually misunderstood the requirements of the Covid-19 Payroll Co-Funding Scheme (as the furlough scheme was termed in Jersey).  When the respondent realised its error, it was too late and the late application was rejected by Jersey.  The claimant lodged a claim based upon the lack of pay through that period.

The Tribunal outlined that the use of the Scheme was a matter between the employer/respondent and the State.  The issue that arose in this case was not a matter between the Scheme and the employee but rather an issue between the claimant and respondent as employee and employer.  Therefore, the Tribunal had to determine whether the employee has been paid appropriately considering that relationship.

The issue arising between the employer and employee was the terms of the contract.  The argument from the respondent was that the Staff Handbook had been incorporated into the contract and it allowed for employees to be temporarily laid off without pay.  The tribunal stated that the normal questions had to be asked i.e., did the parties agree either expressly or impliedly that the documents form part of the contract, and are the terms of the document apt to be incorporated.

The Tribunal held that the lay-off terms in the Handbook had been incorporated into the contracts of the employees and apt to have contractual effect.  There was a distinction made between terms of a contract and statements that were merely aspirational.  This was not an aspirational statement but rather a contractual one.   Therefore, it was held that the term applied especially as it allowed for the respondent to use the term where there had been a temporary cessation of work.   Accordingly, the claimant’s case was dismissed.

Practical Lessons

This case demonstrates an unfortunate turn in the recent cases involving furlough pay.   The Tribunal even outlined its sympathy and noted its dissatisfaction with the way in which the employer had failed to understand the remit of the Scheme offered by the Jersey Government.  Despite that, there was a clear distinction made between the Scheme and the relationship between the employer and employee.  Therefore, a strict contractual position was taken which allowed for the employee’s to be temporarily laid off due to a cessation of work.  It is highly likely that similar cases will come before the Tribunals across the United Kingdom on these issues and it is interesting whether this relatively hard line will be followed in other jurisdictions.
https://www.jerseylaw.je/judgments/tribunal/Pages/[2020]TRE106.aspx