Updated 26 March 2020
The COVID-19 (“Coronavirus”) crisis presents a number of challenges and potential legal issues for employers. Dealing with some of those implications and ways that employers can take steps to protect their staff and business to help in mitigating disruption, while ensuring compliance with legal obligations towards staff, will be key over coming weeks.
What are the current guidelines for home working for employees? Are there other options available?
Current Government guidance is that employees should, where possible, be working from home so as to help limit the spread of Covid-19.
If working from home is not a practical option, then unless there is a contractual right for lay off or short time working, these staff members should normally be paid - if it is the case that they are otherwise available and ready to work, but the reason they are not doing so is simply because they are being requested not to attend, by their employer. Every case is of course different. You should seek advice on your particular situation and proposed approach. Employers should also look into the new job retention scheme and ‘furlough principles’. You may be able to send staff home with the Government funding up to 80% of the employee’s salary (there is a limit of £2500 per month). If the people involved work together on temporary changes designed to help the business through a difficult time, this may help reduce compulsory redundancies or indeed, the prospect of the business closing altogether.
As an employer you should should keep your staff updated on what’s happening and the actions that are being implemented. Depending on how things develop with Coronavirus and Government guidelines, an employer may need to consult with staff. They may need to seek agreement about temporary pay reductions, to avoid more drastic actions being necessary (e.g. redundancies).
An employers could also ask employees to take annual leave or unpaid leave in the event of a forced closure of the business.
The Government is continuing to announce measures and support, including reliefs and loans, to help affected businesses and those who have temporarily had to close, find out more here.
What is furlough leave?
In English law there isn’t a statutory legal definition of ‘furlough leave’. However, the general understanding is that it refers to situation in which a temporary drop in business happens because of an unusual or extraordinary situation which impacts on the economy and commercial environment as a whole. Furlough leave is an option that employers can consider where staff would otherwise be made redundant.
If I send employees home, can I then claim furlough leave?
We don’t have the information regarding how the legalities of the furlough leave scheme will work. Nor the approach that HMRC will take. The Government is of course giving daily updates re their guidance. From what we know so far, it seems that employers will be able to access the support the Government will provide to support employees who would otherwise be made redundant because due to the Coronavirus crisis, there now isn’t any work for these people.
How much does will the Government pay for furlough leave? How do I access the money?
Employers can set out which employees are furloughed, that is, they’ve been sent home with no work to do or salary. The employer can then reclaim up to 80% of that person’s salary (which is limited up to a maximum of £2500 per calendar month per employee). The Government has said, once the scheme is operational, salaries can be claimed back to 1 March 2020. However, we are awaiting more guidance about how it will work in practice and what the conditions may be. As an employer, if you communicate to your staff about proposed changes, it’s a good idea to include a note that the plans are subject to change and review as appropriate.
Look out for an online portal which HMRC is creating for employers to be able to make these claims.
Does an employer need to go through the normal processes to make people redundant?
Even with the new furlough rules, employment law will still apply to anything you do. Make sure you still follow a process which should include meaningful consultation if possible.
The consultation process may need to be adapted somewhat in the present unique situation, but it should include considering what the alternatives are to compulsory redundancy and it should invite the staff to ask questions and share their suggestions. If you don’t do this, you might face legal claims such as for unfair dismissal.
Can an employer ask staff to take unpaid leave instead of making them redundant?
It’s best to work collaboratively with your employees with a view to agreeing working patterns which could include taking some unpaid leave or using up holiday days. The new provisions on furlough leave could also offer some important options for employees to consider.
This is a complex and very unusual situation so you should make sure you have specialist legal advice before you take any major steps.
If you do think you need to make people redundant, you need to check the terms of your employee contracts. There could be an express or implied right to lay people off or place them on short time working, which might be triggered in this situation.
What is the legal minimum I need to pay staff if I make them redundant,?
This depends on their length of service, their age and their weekly wage. A week’s pay is presently capped at £525. Each staff member is entitled to one week’s pay for each year of service up to a maximum of 20 years. This is adjusted for age (0.5 per year for those aged under 21 and 1.5 for each year for those aged 41 and over).
From 6 April 2020, the figure for ‘a week’s pay’ will go up to £538 gross.
Do employers have to pay sick pay?
Staff who are ill due to Coronavirus should be paid in accordance with the sick pay arrangements in their employment contract.
The contract may include contractual sick pay entitlements that are more than the statutory sick pay (SSP) entitlement. Usually contractual sick payments are stated to include any entitlement to SSP.
Staff who are not contractually entitled to sick pay may be entitled to SSP but this will be subject to eligibility. There is emergency legislation so that SSP will be available from the first day of absence as opposed to the fourth.
Employees may also become unwell due to anxiety caused by the coronavirus outbreak. This might make them unfit to work and therefore entitled to sick pay. If you have a staff member in this situation, you should actively manage the situation as you would with other types of sickness and they should be paid in line with your sickness policy as appropriate.
What happens if an employee is in self-isolation?
If a period of self-isolation is needed, due to Coronavirus symptoms, the employee will be deemed ‘incapable of work’ and they would be entitled to get SSP (or payment according to an applicable contractual sick pay entitlement) for a period of 14 days.
At the moment, SSP is payable from the first day of absence and at the rate of £94.25 per week. From 6 April 2020, the SSP rate will increase a little to £95.85. However, it’s not available to employees earning less than the lower earnings limit which at the moment is £118 per week.
Can employees request time off to care for dependants?
Now that schools are largely closed, with the exception of some schools that remain open to care for the children of key workers and vulnerable children, employers may have people facing childcare difficulties.
Staff do have the right to take time off work in order to care for dependants, which includes situations where an unexpected disruption to the care arrangements has occurred. An example of this would be if the dependant is ill and cannot attend the care-setting, e.g. school.
An employee should tell their employer as soon as is reasonable why they are absent and if possible, how long they expect the absence to last. This type of leave is typically intended to be short term and in the present atypical conditions, it’s likely that what’s considered ‘reasonable’ will extend over a longer period of time.
There’s no statutory right for people to get paid during leave to care for dependants. Usually it’s unlikely that an employee’s contract will provide for pay in these circumstances.
The employer has to take steps to avoid risks to which pregnant employees might be exposed due to their work. If the identified risks, including Coronavirus-related risks, cannot be avoided, pregnant employees have to be offered suitable alternative employment, temporarily. Alternatively, pregnant employees may need to be suspended from work on full pay for as long as necessary. Depending on how long that is, it could trigger the start of the person’s maternity leave.