Coronavirus and employment law
We at Thomson Snell & Passmore LLP appreciate that the coronavirus disease (COVID-19) has brought with it a multitude of issues. Whilst we cannot answer all of the questions that you might have, including any medical queries or when the toilet paper and pasta will be back in stock, we would like to assist our clients and contacts by providing some employment law knowledge as at 1pm on 24 March 2020. The reason for this date and time stamp is owing to the fast-moving nature of the Coronavirus.
Entering into employment
The uncertainty of the future has brought with it hiring freezes for many of our clients who have questions about where they legally stand with their new hires.
Essentially, there are three situations, as set out below, either the offer has:-
1. not been made yet;
2. been made but not accepted; or
3. been made and accepted.
1 An offer of employment has not been made yet
In these circumstances it may be worth considering delaying the offer in order to give your business some time to consider whether it would be advisable to make the offer at this stage. For example, is the role critical to your business now?
2 An offer of employment has been made but not accepted
If you find yourself in these circumstances, then it is easy (albeit possible a little embarrassing) to withdraw the offer or delay the start date of the individual by issuing a revised offer. This is because although the offer has been made, it has not been legally accepted yet. It is advisable to ensure you have evidence to demonstrate that the original offer has not been accepted and the reasons for its withdrawal, to avoid any allegations of discrimination.
3 An offer has been made and accepted
This is the most difficult position to extract your business from. Once the offer has been accepted a contract is formed.
Unlike option 2, above, you would be not able to ‘withdraw’ an offer in these circumstances. Instead, you would have to give notice of your intention to terminate, similar to the individual being in employment. Depending on the terms of the contract/offer you may need to provide notice that is the “normal” length of notice, i.e. not a shorter period than that you would be able to rely on during a probation period (e.g. a week) because technically they would not be within the probation period.
Alternatively, you could always have an open and frank conversation with the individual and agree a later start date. Understandably, this may cause upset for the individual who may have finished their previous employment to come work for your business. You might consider taking them on but put them on furlough (employed but not working from home) for 3 months under the Government’s new Coronavirus Job Retention Scheme, so that you can pay them and claim 80% of the employment salary from HMRC subject to cap of £2,500 per employee, per month.
1 Supporting your employees
All employers have a general duty of care to protect the health, safety and welfare of their employees and other people who might be affected by its business (such as customers, suppliers and visitors).
During the current situation with COVID-19, this duty of care should include implementing processes and protocols to help reduce the spread of infection, as well as to support employees who may be diagnosed with the virus.
These measures should include:
• Ensure employees understand that the business either has or is in the process of putting together a business continuity plan, which will include regular and clear updates to staff on what to do if, for example, the office has to close.
• Issuing clear guidance to employees on what to do if they, or someone they know, have been exposed to the virus and provide advice for self-isolation at home.
• Carry out a risk assessment to identify any particularly vulnerable members of staff, and update employees’ emergency contact details as appropriate.
• Provide adequate facilities to wash hands with soap and hot water and easy-to-access hand sanitisers and offer guidance on best practice in terms of hygiene, as per government guidance.
• Ensure all staff understand current absence procedures e.g. around sickness reporting and sick pay and what to do in the event that someone in the workplace develops the virus.
• Revisit policies around business travel and external meetings and consider advising against all non essential travel, as well as postponing internal and external events.
• Make sure remote working policies and procedures are up to date and that all staff are able to work from home at short notice if the office does need to close.
• Remove or reduce the amount of hot-desking for those still coming into work. This could be coupled with reducing the number of employees in work at any given time. For example, splitting the workforce into teams which come in on alternate dates.
2 Absence procedures, Statutory Sick Pay (SSP) and self-isolation
In response to the virus, the Government has introduced some changes to sick pay and sickness processes in the workplace which came into force on 13 March 2020.
The changes to the sick pay mean that SSP is available to any employee who self-isolates in order to prevent infection or contamination of the coronavirus in line with guidance from Public Health England who will essentially be considered incapacitated for sickness absence purposes. Additionally, SSP will now be from day one of absence, rather than day four.
The government have also agreed to reimburse those employers who have less than 250 employees at the date of 28 February 2020 for any statutory sick pay up to the first 14 days of sickness absence.
Organisations are asked to regularly check the public health guidance as to what includes incapacity which, for the moment, includes:
• those under quarantine. For example, those returning from high-risk areas.
• those self-isolating which could include those who have come in contact with someone with the coronavirus or have a persistent cough or fever or those individuals who feel uncomfortable attending the office and cannot work remotely.
• those caring for vulnerable people if they fall under the public health guidance which includes caring for those within the same household who are either vulnerable or who have shown symptoms of the coronavirus.
• those employees who have been advised to go home if they are sick or vulnerable under the guidance; and/or
• those who are genuinely unwell.
Under the evolving circumstances, the normal requirement to self-certify or go to a GP should be reconsidered and replaced with a notification via NHS 111 or NHS Online.
If the employee is absent to look after children because schools are shut, then this would not amount to sickness absence. But employees do have the right to take reasonable time off to care for a dependent, which is unpaid. There is also parental leave which allows employees 18 weeks of unpaid leave, per child, up to 18 weeks and/or the child reaches 18 years old.
Where individuals can work at home, then they should do so and will be entitled to pay for their work at their normal rate. If they do not fall within the guidelines and should technically be working but cannot, they should be placed on furlough. An alternative, for those who could be working would be to take annual leave.
Employers are urged to keep evidence of any individual who is currently absent because of the incapacity set out above as the rebate system is currently being developed.
Finally, where there is a potential that employees could be at risk of infection of the coronavirus, then they should be informed as soon as possible. However, the identity of the individuals should not be disclosed without consent. The reason being is that an individual’s health is a special category of personal data and can only be processed in limited circumstances. If you need to disclose the name of the individual in order to find out who they have potentially come in contact with, then you can seek their consent. However, this may not always be appropriate.
3 Remote working considerations
The government guidance at the moment is to encourage all employers to ask employees to work from home where possible and in particular those who fall in the vulnerable category.
Whilst lots of individuals cannot work from home, many can. We will discuss these individuals, below. Where your employees can work from home, there are a few items, set out below that you may wish to consider:-
• Ensure good posture by avoiding slouching and keeping the computer screen at eye height or higher.
• Ensure that the IT department has sufficient resources to:-
- physically supply your workforce with what they will need to work from home; and
- deal with the extra support your workforce may need from working from home.
• Ensure that you do exercise (if outside limited to once per day, pursuant to Government guidance) and take regular breaks.
• Avoid employees feeling isolated through regular videoconferencing or other visual conferencing like Skype or Zoom or telephone calls (check their preferences).
• Ensure clear messages are sent regarding all aspects of work life and avoid drip-feeding messages and/or causing confusion by only telling some of the workforce. For example, it is important to set expectations of hours worked/deliverables. This will be particularly difficult in light of the school closures/caring for other vulnerable people. It may be possible to consider a slightly more relaxed approach to work and potentially split care
• Consider the potential data protection breaches that may arise from people working from home, for example, those using personal laptops, mobiles etc.
• Consider a relaxation on certain policies, for example sickness absence, capability and disciplinary.
• Ensure that health and safety considerations are taken seriously. Where risk assessments have not been previously carried out, ensure that you identify any hazards/risks in working from home. This will depend on the type of work that the individuals are doing.
The Information Commissioner’s Office (ICO) recommends auditing the types of personal data being processed and the devices used to access that data; denying or restricting access to sensitive data on devices which lack a high level of encryption; and controlling access to data and/or devices using passwords or PIN codes.
It also suggests that businesses should have remote locate and wipe facilities in place to maintain the confidentiality of data in the event of loss or theft and should, where possible, avoid the use of public cloud-based sharing and public backup services if the services have not been fully assessed.
Businesses should review all software licences to make sure they have adequate provision to cover all staff working remotely should the need arise and that the terms of their licences allow for remote working.
Ideally, all of these considerations should be addressed in a comprehensive remote working policy, which is clearly communicated to all employees.
These are times of unprecedented uncertainty, but with careful planning, the right advice and good communication, businesses can help to balance their obligations to employees with their need to continue operations.
5 Coronavirus Job Retention Scheme
On Friday 20 March 2020 the Government announced an unprecedented package of measures in an attempt to protect millions of jobs and incomes from being lost during the COVID-19 pandemic.
The key policy under the package is the Coronavirus Job Retention Scheme, as part of which the Government have announced they will cover 80% of furloughed workers wages up to a maximum of £2,500 per employee per month. At present, it is unclear whether this means basic salary only but the wording suggests there is scope to include pension and benefits as well. If an organisation wishes to top this up for each employee, then that is at their discretion but will not be refunded through this scheme.
The scheme is initially for three months, being backdated to 1 March 2020; however the Government have said this scheme may be extended if necessary.
Any business in the UK is eligible for the scheme as long as workers are kept on the payroll and the employer must contact HMRC to receive the grant.
Currently the requirements are that the employer must designate the affected employees to be ‘furloughed’ and then submit information to HMRC through a new online portal (which is yet to be created).
During their time being ‘furloughed’ the employee should not work.
It will take time for the HMRC portal to claim these grants to be up and running. This may run into April, So to meet costs in the meantime, if you are an employer with a UK business activity turnover of no more than £45m, you should apply for the Coronavirus Business Interruption Lending Scheme through participating banks.
6. Emergency Volunteering Leave
Emergency Volunteering Leave (‘EVL’) is a temporary new form of statutory unpaid leave due to be enacted under the Coronavirus Bill. It allows for employees and workers to have time off in order to volunteer in the health and social care sectors during the COVID-19 outbreak.
To qualify for EVL, the worker must be issued with an ‘emergency volunteering certificate’ (EVL Certificate) by an appropriate authority, providing confirmation of their selection as an emergency volunteer and specifying the time period in which they will be volunteering. The worker must then provide written notice along with the EVL Certificate to their employer at least three days before the specified period begins.
A worker is entitled to take a block of two, three, or four consecutive weeks of EVL during a 16-week volunteering period. The first volunteering period will begin on the day which Schedule 6 of the Coronavirus Bill comes into force.
These provisions apply to all workers regardless of how long they have been employed, and workers who take or seek to take EVL are protected from detriment, as well as receiving additional unfair dismissal protections.
There are a few categories of work that are exempt including; micro businesses (with ten or fewer staff members), the military, the police, civil servants and parliamentary and commission staff.
7. Assistance for self-employed
The package of support announced on Friday 20 March 2020 included measures to support self-employed individuals and those who work for themselves.
Under these measures, self-employed individuals are entitled to SSP of £94.25 per week, for up to 28 weeks. It has been announced that this will be payable from Day 1 instead of the usual Day 4 for affected individuals.
The Chancellor also announced a number of tax deferrals, with the next round of self-assessment payments on account now being due in January 2021 as opposed to the original deadline of 31 July 2020. If a self-employed trader earns over the £85,000 VAT threshold, they will also benefit from the deferral of VAT payments for the next quarter.
On the 23 March 2020 the Government tabled a proposed amendment to the Coronavirus Bill in an attempt to provide more support for self-employed workers and freelancers, entitled Statutory Self-Employment Pay.
Self-employed and freelancer workers will receive the lower amount of either;
a) 80% of their monthly net earnings, calculated from an average over the last three years; or
b) £2,917 per month.
We are awaiting further clarification as to exactly who will benefit from this support, as the term ‘freelancers’ is yet to be defined. Whilst this amendment is yet to be approved, commentators anticipate it will be included in the Bill in light of the mounting pressure the Government has found itself under to implement further support for the self-employed.
Considering and terminating employment
Layoff and short time working serve as temporary solutions. Essentially people can be laid off or given short time working in the following circumstances:
Layoff occurs where there is temporary shutdown of work because the employer does not any or enough work. Therefore during this time, there is no work and no pay. However, the individual remains an employee and may be entitled to guarantee payments.
Employers need a contractual right to lay people off and if you were to lay someone off, then there is potentially a breach of contract and/or claim for constructive unfair dismissal. The individual may also be able to claim statutory redundancy.
You cannot lay those people off who are currently unable to work because they are sick/self-isolating.
- Short time working
Short time working applies where you have a contractual right to require people to work less hours for less pay. This occurs where there is a reduced work of a particular kind that the individual does. Similarly to layoff, if you do not have contractual right, then there may be breaches of contract claims and/or constructive unfair dismissal as well as redundancy pay. They do remain an employee.
In certain circumstances, employees can claim redundancy pay where they have been laid off or put on short term working for a period of 4 or more consecutive weeks. This can work as a mixture of the two rather than requiring 4 weeks of the same type of short time working.
8. Guaranteed payments
This right arises for any “workless day”, i.e. when someone should have normally have been required to work but the employer do not provide them any work. Zero hour employees/workers are unlikely to succeed for these payments. This is limited to 5 days in any 3 month rolling period.
There is a requirement to have a qualifying service of one month. Individuals can claim guaranteed payment and redundancy.
Even where there is a breach of contract, the employee can still be entitled to guaranteed payments.
Employees must show that the employer’s business had the diminished requirement of the work that the employee does or there is an occasion that affects the employer’s normal business regarding the employee’s work.
The guaranteed payment is calculated by the hours of work of the workless day times guaranteed hourly rate. Guaranteed hourly rate is calculated by the weekly cap (currently £525) and divided by the hours that the employee was required to work during the week. However employers often pay the maximum which is £29 per day from April 2019. This will go up as of 6 April 2020 to £30.
Travelling to work
Following the Prime Ministers broadcast on 23 March 2020 announcing ‘lockdown’ conditions being imposed on the country, there has followed some uncertainty as to who should and should not be travelling to work.
As things stand, individuals may travel to work ‘only where this absolutely cannot be done from home’ and as long as they ‘fully observe the 2m social distancing rule’. As a result, employers can still compel employees to go to work if their role cannot be carried out at home.
As with all of these developments, we expect further clarification to be released in the coming days as the Government issues Regulations implementing the changes.
As mentioned at the beginning of this article, we do not have all of the answers to your questions but we do have some. Other departments within our firm have worked hard to produce additional information for your business that may be of assistance, please see the link below.
There are a number of other sources that you can draw on to help your business and keep up to date with the changes, please use the links below.
A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.