Never before have we seen such an immediate and dire impact on businesses such as that caused by the Covid-19 pandemic. Thankfully, the Government has stepped in and announced various measures to help during this crisis.
Here is a brief summary of the key confirmed points as at 6 April 2020 relevant to businesses and their staff:
SSP and self-isolation
- Employees self-isolating because they have symptoms or they live with someone who has symptoms, are entitled to SSP.
- Vulnerable employees who have been advised to engage social distancing for 12 weeks, are not entitled to SSP. This was clarified by the new Statutory Sick Pay (Coronavirus) (Suspension of Waiting Days and General Amendment) Regulations 2020.
- Employees who have been advised to shield are not entitled to SSP, nor are family members who live with them.
- SSP is payable from the first day of incapacity, rather than day 4. This will have retrospective effect to 13 March.
- SSP will be recoverable for up to 14 days if you employ less than 250 staff (this is not yet in force). This will have retrospective effect to 14 March.
- Employees should submit an “isolation note” from day 8 instead of the usual fit note https://111.nhs.uk/isolation-note/
- Adopt a homeworking policy if you don’t have one in place already.
- Consider whether homeworking amounts to a contractual change requiring consent.
- Consider the health and safety implications of homeworking by conducting a risk assessment to identify hazards and assess the degree of risk.
- Does the correct infrastructure exist to facilitate successful homeworking?
- The Coronavirus Job Retention Scheme was introduced to help employers retain staff who would otherwise have been redundant. This scheme is financially preferable to laying staff off under a contractual lay-off clause.
- Employers can “furlough” its PAYE workers, i.e. put them on a temporary leave of absence, but workers must give their consent to accept the lower salary.
- The scheme applies to all PAYE workers, not just those who would have been made redundant as a result of Covid-19. They must still have been on the payroll as at 28 February.
- Employers can claim up to the lower of 80% of wage costs or £2500, plus employer NIC and employer auto-enrolment pension contributions for furloughed staff.
- You can reclaim any “regular payments”, such as past overtime, fees and compulsory commission payments as part of the wage costs.
- The scheme is backdated to 1 March 2020, open for at least three months, and will be extended if necessary.
- The minimum period of furlough is three weeks.
- There is nothing preventing employers rotating staff on and off furlough leave.
- Employees who were made redundant or left for any reason since 28 February 2020 can qualify if they are re-engaged by their former employer. There is no obligation on an employer to rehire and this and must be approached with caution as the person will still be an employee at the end of the furlough leave.
- Furloughed staff can work for another employer subject to their contract of employment permitting it.
- Employers need to confirm the agreement in writing to be eligible for the subsidy and retain for 5 years.
- The portal to access the subsidy is expected to be operational by the end of April.
- The four weeks’ leave under the Working Time Directive can be carried over into the next two leave years 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).
- Consider putting in place an agreement to allow staff to carry over the remaining 1.6 weeks’ leave.
- Holiday will continue to accrue during furlough leave.
- Issues relating to holiday during furlough leave and payment have not yet been clarified. It is likely that staff can take holiday if they wish, but not be forced to take it. The position is far from clear. You may wish to defer holiday requests and cancel leave for any staff on furlough until the position has been clarified so as to avoid any argument that annual leave has ‘broken’ the furlough period, which may lead to recoupment from HMRC of furlough pay.
- Any holiday pay for leave taken is likely to be 100% of normal pay, so will require topping up by the employer.
- Employees and workers will be able to take emergency volunteer leave in blocks of two, three, or four weeks’ unpaid leave. This is a new form of unpaid statutory leave.
The length of time that businesses are asked to close or have their staff work from home will dictate the overall impact on them and what measures may need to be taken to ensure survival. Issues such as redundancy (collective or individual) may need to be considered, especially if the Coronavirus Job Retention Scheme comes to an end and financial support from the Government dries up. It may also be necessary to agree a reduction in hours once staff come off furlough leave. It will also remain to be seen what type of claims will be brought in the employment tribunals arising out of actions employers have taken based on the Government guidance.
Please contact us if you have any specific queries arising out of Covid-19, as the above is a brief summary of the current position and does not amount to legal advice.
You should also keep checking the following links which are constantly updated: