Month: March 2020

Background

The Government has introduced a Job Retention Scheme for Furloughed workers.  The term Furloughed refers to being sent home with no pay due to having no work.  The term isn’t common in UK law as we have legislation around “lay-off”.  In the UK “lay-off” means to send employees home / reduce their hours due to having a reduction in demand with or without pay dependent on contract.  If it is without pay then then they can receive statutory lay-off pay of £29 per day for 5 days in any 3 month period (bugger all!) If the individual is on lay off for 4 consecutive weeks or a total 4 weeks in 6 then they can request to be made redundant.

The Governments Job Retention Scheme is designed to reduce redundancies; therefore, it only pays out for those that are sent home and are not working. Hence why they have used the term Furloughed and not “lay-off”.  They have however, insisted that to implement this you must follow existing legislation around “lay-off”.

What is that Legislation and what are they offering?

Firstly, an individual is only eligible for a payment if they have had one month’s continuous service (paid through PAYE) prior to the lay-off.  They must also be sent home and must not be conducting work from home.

To implement the lay-off you must have a lay-off clause in your employment contract (rare – more common in manufacturing organisations).  If you have the clause you can simply enforce it as per your policy.

If you don’t have a contract clause then you must consult with your employees in order to gain their agreement.  You must ensure that they individually sign a lay off agreement also. In normal circumstances the consultation period needs to follow a process and if more than 20 employees are impacted you would need to collectively consult, however given the current circumstances we believe that it is only practical to short cut this process.  Ultimately your justification is valid, they will receive at least 80% of their salary for staying safe at home and they will not ultimately be made redundant which is the alternative option.

How do we get the money and how much?

HMRC are currently working on this and your Accountant / Payroll provider will update you as soon as they have the data.  It is likely that there will be some form of refund process through the HMRC website.  They have promised that this is imminent.

They have currently offered to pay for 80% of a furloughed employee’s salary (capped at £2500 per month includes NI and Pension).  You do not need to make up the 20% but you can choose to do so if you can afford it.

Employees with less than a month’s service will not receive any government support therefore you can either pay for this yourself or you can terminate their contract (following a process).

Other points

Please be aware that employees on lay-off still accrue statutory holiday (FT 28 days inclusive of bank holidays).  You can insist that they take pre-booked holidays.  You will pay full pay for their holidays and then back on lay-off after.  Alternatively, if you can’t afford that then they can accrue holiday and take later in the year.

Bank holidays are as normal. If they normally work them then they will be on lay-off.  If they don’t or you are shut then you can opt to pay for the bank holiday day and the day reduces their overall accrued entitlement.

Should you need them to complete work duties from home or return to work you can do this.  They will come off their lay-off and return on their normal salary.

Note

We expect that there to be stringent anti-fraud measures and we warn all business owners that in the event of abuse of the system, they should expect public naming and shaming for what will be, after all, a form of illegal profiteering from a national crisis.  We expect heavy penalties to follow for those who abuse this benefit.

Please contact us if you need any further help with agreements, support and advice.

As coronavirus (also known as COVID-19) continues to spread, it is important employers consider how they respond to the global health crisis and share this with their teams.

It is a good idea to remind employees of the steps that they should take to reduce the spread of coronavirus, while continuing operations as normally as possible.

For example:

• Wash hands often and thoroughly with soap and water. In particular, after going to the toilet, before eating or handling food, and when you get to work/get home;
• cover your mouth and nose with a tissue or your sleeve (not your hands) when you cough or sneeze;
• put any used tissues in the bin straightaway and wash your hands immediately after handling used tissues;
• try to avoid touching your eyes, nose or mouth if you have not washed your hands recently; and
• try to avoid close contact with people who are unwell.

A couple of the most frequently asked questions from employers relating to the virus are below:

If an employee is advised to self-isolate to avoid the risk of spreading coronavirus, are they entitled to sick pay?

Current government guidance is that an individual should self-isolate at home for 14 days after visiting certain areas or after having close contact with someone who has tested positive for coronavirus (COVID-19).

If an employee is self-isolating, following government guidance, but they do not have any symptoms, it is arguable that they do not have the right to statutory sick pay, as this applies only where the employee is incapable of work due to illness. However, it would be good practice for employers to treat the absence as sick leave and pay the employee in accordance with their usual policy, or to pay them in full. Employers should aim to avoid the situation where an employee attends work against medical guidance, risking the spread of coronavirus, because they are concerned about not being paid or having to use up their annual leave allowance to cover any absence.

If an employee is absent following an instruction from their employer not to come to work as a preventative measure, they are entitled to be paid as usual.

On 26 February 2020, Health Secretary Matt Hancock made a statement to the House of Commons saying that “Self-isolation on medical advice is considered sickness for employment purposes. That is a very important message for employers and those who can go home and self-isolate as if they were sick, because it is for medical reasons.” Whether or not this is an accurate explanation of the legal position for all employees, it confirms that it is good practice for employers to pay sick pay to self-isolating employees as if they were in fact ill.

If an employee has tested positive for coronavirus, or has flu-like symptoms, they will be entitled to sick pay as usual.

On 4 March 2020, the Prime Minister announced that emergency legislation would be brought forward, including “measures to allow the payment of statutory sick pay from the very first day you are sick, instead of four days under the current rules”. No further details are yet known about this measure, such as which individuals will be covered.

What should an employer do if an employee is concerned about the risk of contracting coronavirus and does not want to attend work?

As a general rule, an employer can require employees concerned about contracting coronavirus (COVID-19) to attend work. However, the employer should check current government guidance about self-isolation and take the employee’s own circumstances into account when deciding whether there are grounds for the employee to stay at home.

Where there are no grounds for self-isolation, the fear of contracting the illness would not generally be sufficient reason for failing to attend work, and an employer faced with an employee refusing to come to work will be entitled to take disciplinary action for unauthorised absence. An employer could also stop paying an employee who refuses to attend work on the basis that the employee is failing to perform their part of the contract.

However, where business needs allow, an employer may wish to take a more flexible approach and allow employees to work from home, or to take periods of annual or unpaid leave. This is particularly advisable when the employer is dealing with vulnerable employees, i.e. those at high risk of developing more severe symptoms from the coronavirus, such as employees with asthma, diabetes or heart disease.

With the prime minister due to hold an emergency Cobra meeting today to consider bringing in measures to delay the spread of coronavirus in the UK, it is important to look out for further updates.

If you require any further support or would like some help with communication to employees on the matter, please do not hesitate to contact us.