This is the time of year when many businesses will take stock and plan for the quarters ahead, however the impact caused by the coronavirus (COVID-19) pandemic may loom heavy over these plans. Many businesses are attempting to balance outgoings and ensure cashflow remains intact for the next few months, which, for many, could bring a downturn in income. To mitigate the deepening economic and social impact, the UK Government has introduced a package of support to help both employers and employees through the crisis.
Currently, some of the most pertinent measures for staffing and management include the Coronavirus Job Retention Scheme (CJRS), updated advice on statutory sick pay (SSP) and recommendations around working from home.
Whatever measures your business decides to put in place, it’s vital to be clear and comprehensive in your HR communications, whether that is hygiene policies for essential businesses, explaining working from home procedures to your workforce or consulting your workforce about furlough.
The CJRS is a ground-breaking government initiative, under which employers are able to ask an employee to stop working, while keeping them on their payroll. Under the CJRS, employers whose operations have been severely affected by Coronavirus can access a grant to cover 80% of the wages for employees on “furlough”, up to a maximum of £2,500 a month (plus associated national insurance and pension contributions). The CJRS will apply irrespective of the size or sector of the organisation meaning that businesses, charities, recruitment agencies and public authorities are eligible, and it isn’t necessary for employers to show that they are suffering financial hardship. Though the measures introduced are unprecedented in modern times and could act as a lifeline to companies most affected by coronavirus, there are still areas of the JRS where clarity is urgently needed and businesses are still trying to make sense of the support that is available to them.
The scheme aims to reduce the number of redundancies, particularly for businesses who would otherwise have no other choice but to let staff go, such as those in the retail or hospitality sectors. If current patterns persist, research from the British Chambers of Commerce (BCC) has predicted somewhere between seven million to 10 million people could be furloughed – at a possible cost of £30-40 billion over the next three months.
The CJRS will be in place for 4 months starting from 1 March 2020. It has already been extended from end of May to the end of June but could be extended again if further redundancies are to be avoided, as it will take businesses some considerable time to return to “normal” operations once the restrictions begin to be lifted.
Employers can only claim for furloughed employees that were on the PAYE payroll on or before 19 March. This date was previously 28 February and has been updated in order to bring into scope those who had recently changed jobs and were not on the new employer’s payroll. However, this update also added a new stipulation: employees also must have had an RTI submission made to HMRC on their behalf on or before 19th March. An RTI – real time information – submission is how employers communicate tax and other deduction information to HMRC. However, for monthly payrolls in particular, RTI submissions for recent employees may not have been submitted by 19th March (even if they were on the payroll by then). This could mean that new starters do not in fact qualify and previously eligible employees no longer qualify. HR and financial teams will need to thoroughly review the RTI and payroll information of any recently hired staff, to clarify their eligibility under the CJRS.
However, provided an RTI submission notifying payment to HMRC has been made on or before 19 March, employees can be on any type of employment contract including full-time, part-time, agency, flexible or zero hour contracts.
Though many will welcome furlough as an alternative to redundancy, it is still a worrying situation for employees to be placed in and consulting individuals about furlough must be handled sensitively. Employers have discretion to choose which employees to furlough but should be aware that equality and discrimination laws will apply in the usual way. Decisions about who or who not to furlough should not be based on a protected characteristic. We recommend that employers try to establish a fair selection process and criteria – in the current climate this may include consideration of employees who fall within vulnerable groups or have caring responsibilities as a result of the coronavirus outbreak.
Employees must agree to be furloughed since it represents a temporary change to their terms and conditions of employment. The decision to furlough must be confirmed to the employee in writing and a record of that communication needs to be kept for 5 years. There is currently some confusion about whether an employee needs to expressly confirm their agreement to the employer in writing but that is the safest option for employers. A number of businesses that we are speaking to are preparing written furlough agreements. Since the JRS was announced templates have become available online, including an example Furlough Agreement my firm, BLM, has prepared.
Employees must be furloughed for a minimum period of three consecutive weeks and can be furloughed multiple times. Whilst on furlough employees cannot undertake any work for their employer, but they can undertake training and they are able to take on a second paid job if their employment contract allows. Employers should ensure a thorough handover has taken place if the roles and responsibilities of a furloughed employee will be assumed by other members of staff in their absence.
Whilst the CJRS is in its early days, there are gaps that still need to be addressed, amongst the most pertinent is whether a furloughed employee can be directed by their employer to take paid holiday and whether the employer must top up the government grant to ensure that employees who take holiday receive their usual pay in full on those days. HMRC has indicated that it will provide clarity on this issue shortly.
The CJRS was introduced in an effort to minimise redundancies whilst still supporting businesses against premature closure or collapse. However, employers do still have the right to make their workforce redundant, and employees do not have a right to require their employer places them on furlough as an alternative.
Once more, this is a decision that must be sensibly and appropriately communicated to staff. This is a highly fraught time for nearly every person across the country, and it’s likely these decisions will not be taken lightly by those in charge. However, redundancy should be treated wherever possible as a last resort, not least of all to mitigate reputational risks; there have been instances of businesses receiving significant public backlash upon announcing redundancies, specifically when people believed the company had other options available.
Statutory Sick Pay (SSP)
The law on Statutory Sick Pay (SSP) has changed during the coronavirus outbreak, with the Statutory Sick Pay (coronavirus) (Suspension of Waiting Days and General Amendment) Regulations 2020 now in effect with changes applying retrospectively from 13th March 2020.
The new regulations confirm that SSP can be paid from the first day of an employee’s absence from work where an employee is incapable, or deemed incapable, of doing work by reason of coronavirus. Up until now, SSP has only been payable from the fourth day of absence.
The definition of who will be deemed “incapable to work”, and so entitled to SSP, has been expanded to include those who are isolating themselves “in such a manner as to prevent infection or contamination with coronavirus”. This will include anyone with symptoms of coronavirus who are self-isolating for seven days, anyone who lives with someone who has symptoms of coronavirus and so needs to stay at home for 14 days. It also covers cases where employees stayed home for 14 days as they lived with symptomatic people, before subsequently developing symptoms themselves – therefore needing to self-isolate for seven days from the onset of this.
The new regulations confirm that people who are shielding or who refuse to work because they are in a vulnerable category are not entitled to SSP, unless they fall within the categories referred to above.
In addition, The Coronavirus Statutory Sick Pay Rebate Scheme enables certain employers to reclaim SSP payable as a result of coronavirus. This repayment will cover up to 2 weeks’ SSP per eligible employee in businesses with fewer than 250 employees (as of 28th February 2020), provided that they had a PAYE payroll scheme that was created and started on or before that date. Employers can only claim for employees who are eligible for sick pay due to coronavirus. Employers do not need a doctor’s fit note from an employee in order to make a claim, but if supporting evidence is required, Isolation Notes can be obtained through NHS 111 Online (and for those with living with someone, or having to care for someone with the symptoms, these notes are available through the NHS website). The scheme will repay employers at the current rate of SSP for periods of sickness absence starting on or after 13th March 2020. HMRC are still working to put a repayment portal in place. Employers must keep certain records in order to claim.
If a business has remained open due to its ‘essential status’, employers have a responsibility to communicate to staff on the action being taken to reduce the risk of exposure. It’s also important to ensure emergency contact information is kept up to date, and management should look out for symptoms in staff, making the process for reporting sickness and SSP provision clear.
Working from home
Whilst official guidance is not in place to advise employers on how to approach working from home, there are some simple ways to ensure staff wellbeing is not negatively impacted at this time. We should all be incredibly grateful for the technology available to see us through this crisis, and regular video calls with team members are proving to be a vital way to check in on how staff are coping with their new situation.
Many will be pondering whether working from home will become the new normal. Once this crisis is over, employers may well see an increase in flexible working applications from employees to want to spend more time working from home. In those circumstances, you may want to consider introducing a homeworking policy that clearly explains the safeguards that need to be put in place and the practical arrangements that make homeworking a success.
The UK has not faced a threat to our normal working lives on this scale since the second world war, something the vast majority of us never experienced. Health and livelihoods are most people’s priorities right now, and as a business owner or HR team, this is something you will be acutely aware of on behalf of your workforce. Government advice is evolving and it can be tricky to keep on top of the latest updates. With most businesses in the midst of weathering this storm, it’s vital to take time to seek out appropriate advice about how best to respond to the pandemic in order to keep your company – and staff – on their feet.