From Furloughing to Redundancy to Home Working to Sick Pay
A few weeks ago, the Coronavirus was barely on people’s radars and it seemed a world away from the state of play today. Every day we are faced with developments that are significantly impacting our day to day lives, and our businesses.
This article is written to bring you up to speed as developments stand today, 23 March 2020. These will inevitably change, and we will endeavour to keep you updated, as the developments happen.
Job Retention Scheme
On Friday the Chancellor announced the implementation of Job Retention Scheme. In a nutshell this will enable employers to recover 80% of the furloughed workers’ wages, to a maximum of £2,500 per calendar month. The finer details of how this will be calculated has not yet been released, although guidance is expected imminently. It is anticipated that for those with irregular earnings, there will be some form of averaging. If you do opt to furlough some or all your workforce, then it is indicated that it is within the employer’s discretion whether to top-up the remaining wages. Currently it appears that usual benefits will continue to apply to staff (i.e pension contributions, holiday accrual) although we are waiting for clear guidance on this.
The scheme will be back-dated to apply from 1 March 2020 and current plans are for it to be open for 3 months, although the Chancellor has indicated this could be extended “for longer if necessary”.
The payment is a grant for reimbursement, and as such the employer will need to make the wage payment to the worker and then will need to apply for the repayment though the new online portal. The portal is not currently live and there is no announced date for implementation, however it has been confirmed that HMRC are working around the clock to get it up and running, and it expected it the first grants to be paid within weeks. If your business is struggling now and needs short term cashflow support, then you may be eligible for the Coronavirus Business Interruption Loan Scheme.
According to Gov.UK furloughing applies to “workforce who remain on payroll but are temporarily not working during the coronavirus outbreak”. It therefore seems that it applies to not only employees, but also individuals with “worker” status. It does not apply to any workers who will continue to work either in the office or remotely. The scheme is designed to help business’ and affected individuals follow the current medical advice, whilst avoiding being laid-off or made redundant. Where businesses can operate without physical interactions and can work remotely, the scheme does not apply. It is currently not clear if the scheme will be applicable in cases of partial “furloughed”, for example where there the individual has a reduced workload.
Employers need to identify which of their workforce will be designated as “furloughed workers”. Unless there is a contractual term permitting the employer to change the individual’s employment status (which is not a common contractual term), they will need to notify the effected individual and seek their consent to the variation. It is sensible to obtain their consent in writing. In these circumstances, one would hope that employees would be likely to agree, given the other avenue could be termination of employment by way of redundancy or not being paid at all. In the event, of an employee refusing or challenging the request, do seek legal advice and we can guide you through your options.
When selecting individuals for furlough, employers would be advised carry out a clear selection process and rationale for individuals being selected. To safe-guard them from any subsequent challenges from employees around discrimination or unfair selection and potential constructive dismissal claims. Employers could also consider asking staff for volunteers.
Although it is hoped that above job retention scheme will limit the need to make redundancies, this nevertheless remains something that many businesses will still face. Any redundancies will need to fall within the current statutory provisions. There needs to be a genuine redundancy situation (a closure of business or diminished need for employees to do the work available) and a fair and reasonable procedure adopted. This would include a fair warning, a consultation process including selection process, and considering any possible options of suitable redeployment.
If you make redundancies, employees will be entitled to wages until termination date, accrued but untaken annual leave and notice pay. Employees with 2 years’ service or more will be entitled to a redundancy payment.
For many businesses home working will be a new thing. As well as juggling this crisis, businesses will now be supporting their workforce to adjust to a new way of working. Many do not have a home working policy in place, if this is your business it would be sensible to get a policy or guidance note out to staff. The policy should include your expectations on employees whilst working at home and what they can expect from the business.
Employers will need to support line managers and encourage them to keep up their supervisory aspects of their roles remotely. It is also good practice to have a system set up, whether it be a telephone call or a virtual meeting via zoom to keep in contact with teams within the workforce. Remember at this time, communication with your workforce is vital.
Self-isolation and sick pay
Employers must pay Statutory Sick Pay to any employees and workers, if they need to self-isolate because:
- they have coronavirus
- they have coronavirus symptoms, for example a high temperature or new continuous cough
- someone in their household has coronavirus symptoms
- they've been told to self-isolate by a doctor or NHS 111
If someone has symptoms and lives alone, they must self-isolate for 7 days.
If someone lives in a household and is the first to have symptoms, they must self-isolate for 7 days. Everyone else in their household must self-isolate for 14 days.
If anyone else in the household starts displaying symptoms, the person with the new symptoms must self-isolate for 7 days. This is regardless of where they are in the 14-day isolation period.
Employers may pay more than Statutory Sick Pay if the contract of employment provides a greater provision, however this is only likely to be applied where the individual has coronavirus and is sick.
Employees in self-isolation should continue to follow the business’ usual sickness policy.
Employees can 'self-certify' for the first 7 days off work. Those self-isolating due to coronavirus for more than 7 days can get an online self-isolation note from the NHS website.
Dependant care is available for staff who are responsible for children and although only usually used for emergency arrangements, it is likely the Tribunal would extend this to cover the whole period of closure, particularly given the medical advice for social distancing of the over 70s (many of which are the first port of call for helping with childcare arrangements).
If you employee is able to work from home, and you are happy to permit this with the knowledge that some flexibility will need to occur around working patterns, then payment of wages should be made as usual. If it is not possible for the employee to work, then dependant leave is unpaid. However, you may wish to consider whether they could be furloughed instead.
Where your business has any employees or workers that fall within the vulnerable or extremely vulnerable groups, encouragement and support should be given for them to follow the medical advice to socially distance or self-isolate. The advice is not mandatory and therefore you cannot force an individual to do this, unless you placed them on medical suspension (full-pay). However, home-working where possible should be encouraged.
If an individual chooses to follow the advice but home working is not possible you should consider whether furlough is appropriate, if not then the leave would be unpaid.
Employers can enforce employees and workers to use annual leave entitlements to cover some of the period of not working. If they wish to do this, they must give at least double the amount of notice as the leave they wish for them to take. For example, 2 weeks of leave will require 4 weeks of notice. When taking the decision of the amount of leave to require staff to use, consideration should be given to balancing the need now and the well-being of staff when they return until the nest holiday year commences.