The COVID-19 pandemic has led to hitherto unimaginable restrictions on how we go about our daily lives. This, in turn, has led to a host of challenges for employers of all sizes and in all industries. Some sectors, such as food production and food retail, can barely keep up with demand, while others such as hospitality and travel have seen demand plummet. Both extremes bring different issues for employers.
Lawyers are not immune. Employment lawyers’ phones are ringing off the hook and their inboxes bursting at the seams. In contrast, residential property has gone into slow mode.
How can clients and practitioners navigate these uncharted waters? This article aims to summarise some of the help available in the UK, and points to consider. It sets out the position as of 26 March, but readers should bear in mind that the situation is evolving very quickly and they should follow GOV.UK and GOV.SCOT for updates as the Government’s actions and guidance inevitably change.
Staying at home and away from others
The key message from the UK Governent is to stay at home in order to protect the NHS and save lives. In terms of places of work, the significant measures are:
- Businesses and premises that must close include cafés, bars, restaurants, clothing shops, hotels, libraries, cinemas, gyms and places of worship.
- Exceptions include takeaways and delivery services, online retail services, postal services, supermarkets, pharmacies, banks and cycle shops.
Businesses/premises not on the “must close” list can remain open for the time being. Employers must take steps to ensure they meet their health and safety obligations, which include social distancing of two metres where practicable.
The Prime Minister also said, “only go outside for food, health reasons or essential work”. The Government was already urging those who could work from home to do so, and the vast majority of practitioners and clients alike will have found themselves setting up home offices.
Statutory sick pay (SSP)
The Government has made four changes to SSP:
- SSP will be payable from day one instead of day four, where the absence is related to coronavirus. This will be backdated, once in force, to 13 March 2020.
- Employers with fewer than 250 employees will be able to reclaim the cost of coronavirus-related SSP (up to 14 days per employee).
- Employees are entitled to SSP if they are self-isolating in accordance with public health guidance.
- Isolation notes are available from NHS 111 online, but employers are urged to exercise discretion over evidence of incapacity.
Coronavirus job retention scheme
To help those employers most seriously affected by the pandemic and the Government’s “stay home” instruction, it has launched a job retention scheme (JRS) to avoid redundancies. All UK businesses will be eligible to participate. HMRC will reimburse employers for 80% of wage costs, capped at £2,500 per month. Employer NICs and minimum automatic enrolment employer pension contributions can be claimed on top. Fees, commission and bonuses are excluded.
The JRS will cover workers who have been “furloughed”. Workers must be told about, and in some circumstances consent to, this change of status, which is a change to their terms and conditions. For some, the 80% wage figure will be below the national minimum wage (NMW). As they are not working, this is not a breach of NMW rules. The employer may, but is not obliged to, top up earnings to 100%.
HMRC is administering the JRS and it is not yet live at time of writing. HMRC’s systems are not set up to make payments to employers, so this will take some time. Meantime, the Government is making alternative help available for employers to continue to pay employees. If your clients are experiencing significant financial difficulties, urge them to look at what Government help is available.
The JRS throws up lots of questions. Guidance released on 27 March provides some answers and we hope the draft legislation will be published no later than the start of April.
Support for the self-employed
The Government has announced a version of the JRS to provide a “wage” to those who are self-employed/freelance. At the time of writing, we await the details but in headline terms:
- The scheme will provide payments so that net monthly earnings do not fall below 80% of average monthly profits, determined using a three-year reference period.
- The amount recoverable will be capped at £2,500 per month.
- It is available to those whose trading profits were less than £50,000 last year. More than half the individual’s income must have come from self-employment, and they must have lodged a tax return for 2019.
- Individuals who pay themselves a salary and dividends through their own company are not eligible, but if they operate a PAYE scheme they will be eligible for the JRS.
Emergency volunteering leave
The Coronavirus Act 2020 introduces a new form of statutory unpaid leave: emergency volunteering leave (EVL). Employees will be able to take a maximum of four weeks’ EVL in any 16-week volunteering period. Their terms and conditions otherwise continue as normal; they have the right to return to work on the same terms afterwards. There is protection against detriment and dismissal for taking EVL.
To take EVL, an appropriate authority must certify the employee as an emergency volunteer. A compensation scheme will cover losses employees incur taking EVL. Certain employees are ineligible for EVL, for example if they work in the emergency services or their employer employs 10 or fewer employees.
Changing terms and conditions
Practitioners, and clients, whose businesses are affected may need to consider a variety of costcutting measures, notwithstanding the JRS. As during the financial crisis in 2008, employers may need to negotiate salary reductions with staff for the duration of the restrictions on normal working operations. It is always best to reach agreement on contractual changes, wherever possible. This may be directly with the employees or with trade unions, or both. If employees are not willing to agree to proposals, employers may need to consider dismissing and re-engaging staff on the new terms.
If 20 or more employees are affected by proposed dismissals, the employer must consult collectively, which involves consultation with a recognised union or appropriate representatives. The potential penalty for getting this wrong is a protective award of up to 90 days’ pay per employee. There is a limited exception to this obligation, if the employer can demonstrate special circumstances. This is rarely relied on, and should not be unless on specialist employment advice.
For employees whose work has slowed considerably, one option is to require them to use some of their accrued annual leave. The Working Time Regulations allow employers to do so, by giving notice that is twice as long as the leave to be taken.
Where those employees have pre-booked holidays, they may be tempted to ask their employer to cancel their leave because they have had to cancel their travel plans. Employers are not obliged to agree, and there is a wellbeing perspective to taking holidays, even if you must spend them at home. Allowing cancellations runs the risk of lots of employees taking significant holidays when the restrictions ease, just as employers are hoping to get their business back on its feet.
Many will be used to working from home for the odd day, or once or twice a week. Very few will have been entirely home-based, yet we are all now adjusting to being exactly that.
Employers need to be alive to data protection risks that may arise as a result. The ICO has released guidance; clients, and practitioners, should read it carefully.
It is important to devise new ways of staying in touch as teams adjust. Thankfully, we now have a myriad of options available: video calls, instant messaging, WhatsApp groups, to name but a few. If you are reading this as a manager, make sure you have appropriate arrangements in place with your team.
Alongside these new challenges, many employees are trying to juggle childcare and/or home school alongside work. Employees are entitled to reasonable unpaid time off work to care for a dependant where this is necessary because of an unexpected event. How long is reasonable will depend on the specific circumstances. ACAS has published guidance, which suggests it may be reasonable for employees to take two days of dependant leave but further time should be as holiday. Flexibility is key – consider whether the employee could work outside normal working hours to accommodate childcare. Employers will be rewarded in the longer term if they demonstrate understanding and flexibility wherever possible.
Whether a business finds itself overloaded or temporarily shut down, it is more important than ever to support employees to look after their wellbeing. This is true not only of their physical wellbeing and following official guidance on minimising the risk of contracting or spreading the virus, but also of their mental wellbeing.
If your practice has an employee assistance programme, remind employees it is there. Many workplaces now have mental health first aiders and they have an important role to play, despite the challenges of remote working.
One of the dangers of remote working is that employees feel they are always on call, and cannot switch off. It is crucial that employers respect employees’ right to disconnect (even if not yet enshrined in law, as in France).
New resources to help individuals look after their wellbeing during the expected prolonged period of social distancing are being launched daily. Signpost staff and clients to webinars you have found useful on topics such as resilience, mindfulness and staying fit.
Above all, encourage people to look out for their colleagues.
Taking a long-term view
Now more than ever, clients need a trusted adviser, and client care has never been more important. In the short term, practitioners can assist by staying up to date with the changes in their clients’ sectors and the pandemic’s impacts on them and their staff. Share with them the steps you are taking within your practice to adjust to the “new normal”, and how you are keeping in touch with your colleagues. Longer term, clients will need strategic advice as they pick up the pieces once the world, slowly, starts to return to normal.
Despite the extraordinary changes to our daily lives, we do not have to look far to find a number of positives, and opportunities, arising out of the pandemic. The vast majority of employees have shown exceptional resilience and flexibility, with businesses moving, largely seamlessly, to remote working almost overnight. New ways of working are emerging and may become a permanent feature of our lives. Collaboration is in evidence between neighbours, employees and even competing businesses as we all work towards the common goal of weathering the storm. There are many signs that we will all emerge from it stronger than before.
Laura Morrison, senior practice development lawyer, Dentons UK & Middle East LLP