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Many businesses are suffering from the spread of coronavirus and considering what options are available to them to manage their workforce during this turbulent time.
Clare Thomas, Solicitor at Bowcock and Pursaill answers some of the most frequently asked questions, including the alternatives to furloughing.
Employment: Q&A re Covid-19
Employers have faced unprecedented times in the last few weeks. Even financially healthy businesses must navigate changing government guidance carefully to take advantage of the help offered by the government and protect themselves against employment law claims. We have set out below some of the key points that have arisen over the last few weeks.
The Government guidance refers to different types of individuals within society and offers specific steps which those individuals should take to protect themselves and others from Covid-19. These broadly fall into the following categories:
When should SSP be paid?
As result of recent legislative changes, SSP should be paid when an employee is absent from work due to sickness and/or must stay at home because they or someone in their household has Covid-19 symptoms to prevent infection or contamination with the coronavirus (Category 3) and because of that isolation, is unable to work.
If someone is shielding (category 2) and or socially distancing because of a specific age/condition (category 1), then it is anticipated that the Government intends for them to receive SSP if, as a result of following the guidance, they could not work.
Some employees may seek to argue that they should also receive SSP because they are unable to attend work as they are anxious about doing so (for their own or someone else’s safety) but unless they fall within category 1, 2 or 3 then we do not believe this is the Government’s intention.
What about contractual sick pay?
Generally speaking, where SSP is due, any contractual enhanced company sick pay would also be due in the same circumstances. Some employers may try to argue that it is not triggered but this will depend on the wording of the contract and the stance the employer wishes to take under the circumstances. If an employer wishes to vary a contractual sick pay scheme so that it specifically does not apply to absence due to Covid-19 then this will amount to a change in terms and conditions and must be done in the usual way and taking into account the duty to collectively consult where appropriate.
What evidence is required?
Employers will need to be flexible about the evidence of sickness absence they require from employees or workers. Depending on the circumstances, obtaining a Fit Note will be more difficult. The government has launched an on-line system which employees can use to provide evidence to their employers that they must self-isolate because they fall within category 3.
Employees who fall within category 2 should have received confirmation of this from their GP and/or they may need their GP to confirm they fall within category 1. It would be reasonable to expect employees to provide a copy of any such confirmation to their employer.
Using annual leave
The government has passed emergency legislation relaxing the restriction on carrying over the four weeks leave derived from the Working Time Directive with immediate effect. Carry over will be permitted where it was not reasonably practicable to take it in the leave year as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society). ACAS guidance suggests that this could apply where a worker is*1:
Arguably it is reasonably practicable for workers on lay-off or furlough leave to take annual leave. However there remain questions over how annual leave could impact on furlough leave so many employers will be cautious about using holiday during furlough leave until this is clarified.
Carried over leave may be taken in the two leave years immediately following the leave year in respect it was due.
As these rules only apply to 4 weeks of annual leave, the remaining 1.6 weeks will be governed by the contract of employment and/or any holiday policy in place. Employers will need to decide how to handle this holiday entitlement and may want to enter into an agreement with their employees that this is carried forward also or ensure that they are able to take this holiday during the relevant holiday year.
Employees could choose to take some annual leave and this would be booked in the usual way. Alternatively, an employer could instruct workers, who are not on sick leave, to take annual leave provided they are given the required level of notice.
Employers may also need to allow employees to reschedule holiday which they have been unable to take due to sickness and/or self-isolation.
Working from home
Following the government’s advice on 23 March 2020, all employees should work from home wherever possible. Where this is already established then there is unlikely to be an issue.
However where it is a new requirements, employers may need to obtain consent from the employee and also ensure that all health and safety implications have been considered.
If employees fall within categories 1 and 2 then employees who cannot arrange homeworking should think carefully about requiring them to come into the workplace.
In normal circumstances it would not be appropriate for an employee to work from home while also providing childcare. However under the circumstances, employers may need to take a more pragmatic approach and consider how childcare needs and work requirements can be met to avoid precluding potentially a large proportion of the workforce from performing any duties. Acas provides some guidance as to how this can be achieved, including working different hours, agreeing that the employee may not be able to work a full day or a full week, reducing work targets and being flexible about deadlines where possible.
The same approach may also be required if an employees is caring for someone else, such as an older relative or someone who is ill.
Employees may also assert their right to time off to care for dependents and take unpaid leave. However, the long-term nature of this problem a more flexible approach is likely to be preferred and/or furloughing may be an option.
Acas provides useful guidance on working from home including the following issues: supporting employees to adjust to homeworking, health and safety including mental and physical health, equipment and technology, keeping in touch, pay and terms and conditions of employment, expenses, insurance, etc. *2
Furloughing
Under the Coronavirus Job Retention Scheme an employer can choose to furlough employees who have no work. What that means is the employer designates the employees as furloughed with HMRC. We currently understand that the employer will complete an online form or process with HMRC to designate which employees are furloughed, and to give details such as the dates that they are furloughed and the dates that they are un-furloughed and what their pay is.
During a period of furlough, an employer must pay the employee 80% of their usual pay, which is capped at a maximum of £2,500. This will then be recoverable from the government. The employer can choose to top up that pay if they want to, which would allow the employee to potentially receive 100% of pay during a period of furlough. Alternatively, the employer could vary the employment contract (if required) so that the employee only receives 80% of the maximum of £2,500.
The employer then re-claims from the government, the 80% (subject to cap), the amount equivalent to the employer’s national insurance contributions and the minimum auto-enrolment contribution that the employer has to make during that time.
Whilst we anticipate annual leave will continue to accrue during furlough leave, we do not yet have specific confirmation about the impact of taking annual leave during a period of furlough.
For an employer to qualify for furlough leave they must have been operating a PAYE system on 28 February 2020. They can only furlough employees who were employed on 28 February 2020.
An employee can be furloughed for a minimum of three weeks. It is understood that it may be possible for an employer to, for example, furlough an employee for three weeks and then un-furlough an employee for a period of time (if, for example, work picks up), and then re-furlough that employee. However, we have not had specific confirmation of this from the government.
It is possible to backdate a period of furlough to the 1 March 2020. It’s therefore understood that an employer who has already made employees redundant may be able to effectively undo that redundancy notice, and instead choose to furlough those employees from 1 March 2020. The same may also apply to those who have employees to whom an employer has not been providing work to for the last few weeks. The employer may be liable to pay these employees 100% of their wages for that period but they could reclaim 80% of the wages paid (subject to the cap of £2,500) for the period when no work has been provided.
It is important for any employer who is furloughing employees to bear in mind that those employees cannot perform any work for the business whilst being furloughed. There are a couple of exemptions to that. So, for example the government have said that an employee can do some training and they can also do volunteer work.
Furloughing may require in a change in contractual terms and therefore consent from the employees. If so, usual employment law principles will apply. Furthermore, employers will also need to be aware of the risk of discrimination arising from decisions in respect of furloughing, particularly when not all the work force is to be furloughed.
Alternatives to furloughing
The new guidance issued on 23 March 2020 requires the public to stay at home, subject to limited exceptions. Commuting to work is permitted but only where the work “absolutely cannot” be done at home. The effect of the guidance is also (to some degree) to close down all non-essential business and this is continuing to have a profound impact on businesses even with the support of furloughing and other government loans/grants.
Even with the support of furlough, many businesses will need to carefully consider their ongoing viability and ensure that they are running as efficiently as possible in order to recover from this downturn once the restrictions are lifted. If there are 20 or more at risk of redundancy then the duty to collectively consult will be triggered unless there are “special circumstances”. Employers must then also ensure that they establish a genuine redundancy situation and follow a fair procedure, in order to protect themselves from unfair dismissal and/or discrimination claims.
Alternatively, employers may seek to change contractual terms to make them more sustainable in the short/medium/long term. These employees would remain working and employment law principles would apply to any change in terms and conditions to mitigate the risk of claims for unfair dismissal, discrimination and breach of contract.
If you have any questions in relation to any matter raised in this article or any other employment matter please contact Clare Thomas (ct@bowcockpursaill.co.ukor 01782 200500)
(*1 https://www.acas.org.uk/coronavirus/using-holiday)
(*2 https://www.acas.org.uk/working-from-home)
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