Calculation of a Week's Pay Regulations don't have retrospective effect


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An employment tribunal has held in Bayliff v Fileturn Ltd that the Employment Rights Act 1996 (Coronavirus, Calculation of a Week's Pay) Regulations 2020 (the Regulations) did not apply retrospectively to the calculation of an employee's notice pay for the period before the regulations came into force.

The Regulations set out how a week's pay is calculated for the purposes of certain statutory payments, including statutory notice pay and statutory redundancy pay for an employee who is, or has been, furloughed under the Coronavirus Job Retention Scheme (CJRS). Where an employee is entitled to statutory notice, their notice pay is calculated based on their pre-furlough pay.

Mr Bayliff was furloughed by Fileturn Ltd from 1 April 2020 and was paid the furlough pay of 80% of his salary in accordance with the CJRS rules. On 18 May he was given 12 weeks' notice of redundancy which expired on 10 August. He was paid 80% of his notice pay to 30 July, and then 100% of his notice pay from 31 July (when the Regulations came into force) to 10 August. He brought an employment tribunal claim for breach of contract and unlawful deduction from wages, claiming that his 12 weeks' notice should have been paid at 100% of his wage.

The tribunal dismissed Mr Bayliff's claim holding that the Regulations came into force on 31 July 2020 and were not retrospective. Accordingly he had been paid his full notice pay entitlement and there had been no breach of contract or unlawful deduction from wages.

Take note: The introduction of Regulations to ensure that furloughed employees who were made redundant should have their notice calculated at their normal rate rather than the reduced furlough rate was announced on 30 June. The Regulations themselves came in the following day. It was argued by some that where an employee had been given notice before the Regulations came into force, but still had some of their notice period to run after 31 July, the Regulations should apply to the whole of the notice period payment. There was no accompanying guidance published with the Regulations so this has been an area of some uncertainty (and a number of employees may have brought claims similar to those brought by Mr Bayliff). Although the tribunal decision is not binding, the tribunal was clearly of the view that the Regulations have no retrospective effect. 
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