The Government has promised help specifically to preserve jobs, and has urged employers not to rush into decisions. Nonetheless employers will be feeling the pressure to act quickly.
This Q&A deals with the law as it stands but we are expecting changes to be announced soon.
This Q&A is a guideline and does not constitute legal advice. The guidance provided is correct as at 18 March 2020 but is subject to change as the situation evolves.
If you have any questions leading on from these Q&A guidelines, please contact a member of our Employment Team at emp@teacherstern.com.
There are two very important preliminary points:
• The statutory rules dealing with the kind of measures employers may be considering were not designed to cover a situation such as the COVID-19 pandemic. The government is considering implementing new statutory rules appropriate for the COVID-19 situation. Subsequently the statutory rules are set out very briefly below, but they are not recommended as a first line of defence. Consultation and agreement with staff will always be a better way forward, where possible; and
• The position is fluid and may change from day-to-day– government assistance and guidelines published over the past couple of days, relating to financial assistance and social distancing in particular, may be increased/ramped up. We will do our best to keep these bulletins updated.
1. Can we send employees home without pay?
Employees on zero hours contacts are not entitled to any working hours or pay. Otherwise, unless the contract has a lay-off or short-time working clause (most contracts do not), employees are entitled to be paid the minimum number of hours provided for in their contract even if the employer cannot provide work.
If you have been forced to shut down because of the Government’s advice it is best to have group meetings/consultation to discuss how best to go forward. We appreciate that consultation may be difficult while employees are not at work and you might need to be flexible as to how these are carried out. The aim is likely to be to retain employees on reduced or no pay in order to avoid redundancies and to avoid the business going into administration.
2. Can we cut pay?
No, not without agreement.
Again, the best way of achieving this is consultation and agreement with staff, particularly when the alternative if an employee refuses a pay could amount to a redundancy situation. In certain circumstances, there may be other options available to you, including in relation to dismissal, and we would recommend that you contact our Employment Team to discuss these further.
Our suggestion would be to consult with your employees and suggest the best way forward with voluntary pay cuts and/or short time working, but if that is refused, then more severe sanctions can be used/discussed.
3. What are statutory guarantee payments?
All employees who are not being paid for a full day’s work during the time they would normally be allowed to work are entitled to Statutory Guarantee Payments (SGP). The employee does not need to be on “lay-off” or “short-time working” to receive an SGP.
An SGP is a maximum payment of £29 a day for 5 days in any 3 months. If your employee earns less than £29 a day, they should be paid their usual daily rate (pro-rated for part-time employees).
Placing employees on short-time working or introducing lay-offs can ultimately result in redundancy payments. Affected employees, with at least two years’ continuous service, have the right to demand to be made redundant if the lay-off or short-time working runs for:
• 4 or more weeks consecutively; or
• 6 or more weeks in a 13-week period, where no more than 3 are in a row.
To make a redundancy claim, the employee must give you written notice in advance that they want to make a claim. To contest the claim, you need to serve a counter-notice in writing within 7 days of receiving the employee’s notice of claim. You can only contest to the claim if it is reasonably expected that, within four weeks of the date of service of the employee’s notice, the employee will be able to come back to work for at least 13 continuous weeks without being laid off or kept on short-time working.
Please contact our Employment Team (emp@teacherstern.com) for further details on how this process works.
4. (a) Can we make staff redundant if there is no work? (b) What about if it is only for a few weeks?
The strict legal answer to (a) is yes. If there is no work available at the place where the employee works, that is a redundancy situation. Subject to consultation, the employer can make redundancies. However, this may not be the best solution as, depending on length of service, paying out redundancy payments could be very expensive at a time like this and notice pay and accrued holiday would also have to be paid.
It is far better to implement measures by agreement, perhaps to shorten working hours, send staff home, introduce pay cuts, and generally to try and keep staff on board for as long as possible.
This approach would also cover (b) as it would be uneconomic to pay out a redundancy payment and then re-engage the individual after a few weeks. The employer could “delay” the redundancy and say it may only apply after six weeks, but in practice this is very difficult and employees may be distrustful of this kind of approach
5. Can I ask my employees to use their holiday?
Yes, employers have the right to tell employees and workers when to take holiday if they need to. For example, you can decide to shut for a week and everyone must use their holiday entitlement.
If you decide to do this, you will need to inform your employees in advance at least twice as many days before as the amount of days they need people to take.
Employees will need to be paid for this period.
6. Can businesses recover money from the government?
The government has announced a series of measures to support businesses including:
• a statutory sick pay relief package for SMEs
• a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
• small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
• the HMRC Time To Pay Scheme
• the government has set up a dedicated helpline which you can call if you need a deferral period on tax liabilities: 0800 0159 559.
Further information on how the above measures will work will be outlined by the government over the next few days. In the meantime, you can consult this guidance for further details: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses- about-covid-19/covid-19-support-for-businesses
In relation to insurance cover, you should check the terms and conditions of your insurance policy and speak to your provider, but the government and insurance industry have confirmed that where businesses have cover for both pandemics and government-ordered closure, the advice to avoid pubs, restaurants, theatres etc. is sufficient to make a claim.
7. What do we do with employees without symptoms but who want to stay at home?
If the employee can work from home, you must allow them to do so.
It is important that you listen to any genuine concerns employees might have regarding the risk of COVID-19 and take all possible steps to address such concerns. This can include agreeing to flexible working hours and cancelling face-to-face events and meetings.
Employers need to be especially careful with employees who are in a higher-risk category for COVID-19. A requirement insisting that such vulnerable people work or travel to work may or a decision to not pay or to dismiss them due to their absence in this scenario, could amount to discrimination or give rise to a constructive unfair dismissal.
8. What happens to staff if we have to close down?
If you need temporarily to close your business, make sure staff have a way to communicate with you and other people they work with. You can consider asking employees to take holiday or placing them on short-time working/lay-off if you have the contractual ability to do so.
If you need to close your business permanently in relation to COVID-19, you will need to make your staff redundant. The Employment Team can assist you with this process.
You may need to consider liquidation which would involve appointing an insolvency practitioner depending on your financial circumstances. In those circumstances your employees’ employment would automatically terminate as a result of the insolvency unless specifically agreed otherwise and certain employee costs are covered by the Government. Alternatively, administration with a view to streamlining and then reopening once the crisis is over or a Company Voluntary Arrangement may be options which will not necessarily result in terminating employment contracts. Both of these will enable a business to continue to trade. Our Insolvency Team can advise further.
If your business is struggling as a result of COVID-19, please see the section 6 above on the measures the Government is implementing to assist businesses.
9. Are we entitled to require an employee to work from home?
The Government has made certain recommendations backed by Public Health England and other statutory bodies. These include, in summary that everyone should work from home if they can.
That does not mean that employers get to decide whether they want them to work from home, it means that if duties can be performed to a reasonable extent from home then that should be allowed.
10. Are we entitled to require employees to come into the workplace?
Yes, you do not have to permit your employees to work from home if they cannot perform their duties from home, do not have the equipment or facilities required to work remotely or if your business does not have the appropriate IT infrastructures necessary to enable your employee to work from home.
However, as set out at point 9 above, in accordance with Government guidance in relation to social distancing, you must allow employees to work from home, if they are able to do so. Please also note that you may need to make exceptions for special categories of employees as explained at question 11 below.
11. Are there any special categories of employees we should allow to work from home?
Yes, Government advice issued on 16 March 2020 has urged employers to allow all workers who fall into any of the below categories to work from home:
• Individuals aged over 70.
• Women who are pregnant.
• Individuals aged under 70 with an underlying health condition (being any adult instructed to get a flu jab each year on medical grounds) would be strongly advised to work from home for the time-being. These are listed as:
o chronic (long-term) respiratory diseases, such as asthma, chronic obstructive pulmonary disease (COPD), emphysema or bronchitis.
o chronic heart disease, such as heart failure.
o chronic kidney disease.
o chronic liver disease, such as hepatitis.
o chronic neurological conditions, such as Parkinson’s disease, motor neurone disease, multiple sclerosis (MS), a learning disability or cerebral palsy.
o diabetes.
o spleen issues, for example, sickle cell disease or where an individual has had their spleen removed.
o a weakened immune system as the result of conditions such as HIV and AIDS, or medicines such as steroid tablets or chemotherapy.
o being seriously overweight (a BMI of 40 or above).
Those who fall into the above high-risk categories have also been advised to avoid travelling on public transport, if possible. If you have vulnerable employees who are unable to work from home, you should consider whether you can make arrangements to allow them to avoid travelling at rush hour or taking public transport.
12. Can we refuse to allow an employee to work from home if they will also be looking after children who have been sent home from school or nursery?
The Government has announced that all schools in England, Wales, Scotland and Northern Ireland will be closed from 20 March 2020. Although, in usual circumstances, it would not be appropriate for employees to work remotely and also provide childcare, employers will have to take a pragmatic approach as the COVID-19 outbreak escalates. It is unclear how long school closures may last and as such we would suggest that you take a flexible approach and allow employees to work around their childcare responsibilities. Failure to do so may contravene certain family-friendly rights in place for employees with carer responsibilities. Our Employment Team can advise further.
Of course, employees may ask for time off to look after their dependents, especially if their children are sick. Such employees will not have a legal right to sick pay for this time off but may have a contractual right to time off. Alternatively, you may wish to offer pay depending on your workplace policy. It is also useful to consider whether the time off the employee has requested is reasonable for the situation. You might ask that they take a few days off as paid leave and take any additional time needed as holiday.
13. Are there any home-working health and safety issues we should consider?
Yes, employers are responsible for an employee’s welfare, health and safety as far as is reasonably practicable and you should consider the obligations you have towards your employees in relation to the equipment they are using and the facilities they have access to. Whether your employee is working from home or is in the workplace, your duties toward them in relation to health and safety remain the same.
Where work can be done at home, you should:
• ask staff who have work laptops or mobile phones to take them home so they can carry on working
• arrange paperwork tasks that can be done at home for staff who do not work on computers
• pay the employee as usual
• keep in regular contact
• check on the employee’s health and wellbeing
If you have any questions about these Q&A guidelines, please contact a member of our Employment Team at emp@teacherstern.com.