Those who have lost their homes, businesses and possessions in the riots of the last few days, will at some point have to address the question of what insurance they had, what their legal rights are, and how to go about rebuilding their lives. In this article, Kate Fretten, Employment Partner, addresses the legal implications for employees unable to get to work because of disruption or because their office or shop is closed due to riot damage or because their workplaces have been burnt to the ground.
For those unable to get to work because of travel disruption or disruption to their personal circumstances, clearly the first thing to do is to try to contact your employer and explain why you can’t work. Employees and employers should be aware, however, that an employee who is not able to work through travel or other disruption is not entitled to be paid, unless some provision in the contract says otherwise. If there is nothing explicit in the contract to that effect, payment may have ‘become’ contractual through custom and practice, i.e. if the employer usually pays employees in such situations. But, in the absence of a contractual term, the employer can lawfully withhold pay until the employee returns to work.
Where employees can work from home, this should be considered as a suitable compromise and an employee would have to be paid in such circumstances. If not, they may be able to arrange to take annual leave or, if they are unable to get to work because childcare arrangements have broken down, dependents’ care leave (which is unpaid, unless the employee has a contractual right to be paid for it).
However, the situation is different where the workplace is closed because of riot damage, or because the employer is unable to open it up because of disruption in their own personal circumstances. Assuming the employee is ready and willing to work, then the employer must pay his or her wages. But beware of one exception to this. Employees are not entitled to be paid in such circumstances where the employer has a contractual right to lay them off without pay. In that event, employees may be entitled to claim a ‘guarantee payment’, which is currently a maximum of £21.20 a day for up to five days in any three-month period.
Finally, what is the position for employees, like those of the Carpetright store in Tottenham and the Croydon furniture store, whose workplaces have been so publicly burnt down? It’s possible that the employees of large chains may be offered employment elsewhere in the business. Or, if alternative premises are being sought, they may be laid off, and if they satisfy the conditions, be entitled to guarantee payments, until they can work again.
But those employed in a family business are more likely to have had their employment contracts ‘frustrated’. This happens when an unforeseen event makes the performance of the contract impossible. This means that the contract ends automatically, ‘by operation of law’, without a dismissal on the part of the employer or a resignation on the part of the employee. The effect of frustration is that the employee cannot claim unfair dismissal, because he or she hasn’t been dismissed and isn’t entitled to any notice or payment in lieu of notice.
There may be a small glimmer of hope for employees in these incredibly difficult circumstances, however. A provision in the Employment Rights Act 1996 says that a dismissal is deemed to be by reason of redundancy where a frustrating event affecting the employer operates to terminate the contract. Frustration usually occurs, in the employment context, because of events affecting the employee, such as long-term illness or imprisonment. There is no dismissal, even for redundancy pay purposes, in such situations. But the destruction of a workplace is a frustrating event that affects both the employee and the employer, so the frustration of the employee’s contract would amount to a dismissal solely for the purpose of claiming redundancy pay. This may, of course, be small compensation for those who have had their livelihoods ruined.
Assuming any of the rioters and looters are in employment and assuming they receive lengthy prison sentences, they, too, may find that their employment contracts are frustrated (with no chance of redundancy pay), provided they are lucky enough to escape summary dismissal for gross misconduct of course.
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