Covid-19 is presenting unique and unprecedented challenges for employers and in the midst of uncertainty many businesses are concerned about their ability to provide ongoing employment. Our Employment team have been advising employers on a range of matters as they start to assess the potential impact on their businesses. We have outlined responses to a number of frequently asked questions below.
What can we do to try to delay or avoid redundancies and/ or having to affect our employees' pay?
Payroll is frequently one of the most significant costs for businesses and many employers are considering what can be done to reduce this burden in the present circumstances, particularly where other business continuity measures such as 'working from home' are not feasible. Redundancy may, unfortunately be the only option for some businesses in the present climate and this is clearly a very direct way for employers to reduce head-count and the associated costs. However, this is not the only option, nor always the best option. It does not allow businesses to retain skilled, experienced and valuable staff nor does it allow businesses to react quickly and proceed at pace when the virus is under control. Businesses may be going through a significant period of pressure at present but a different strategy might be prudent for some, particularly depending on the level of government support that becomes available. Our advice is to use government issued aids where possible (more details are being announced by the government later) and what we are calling the "3Cs":
Contract – check to see what it allows you to do
Consult with employees
Consent – try to get your employees' consent to any changes that you are hoping to implement
Unless there are contractual entitlements to do so, implementing changes to an employees will require consultation with and the consent of your employees. Some of these include:
Temporary reductions in pay
Working from home wherever possible
Reduced working days or working hours
Implementing a shift arrangement to keep production ticking over
Reduce or eliminate overtime
Encouraging employees to use up annual leave
Offer voluntary career breaks
Offer voluntary redundancy
Can we lay-off workers or place them on short-time working?
Lay-off and short-time working relates to situations where an employer does not have enough work for employees to do and are used as an alternative to redundancy.
Lay-off: is where an employer asks an employee to stay at home and not attend work or be paid for a temporary period
Short-time working: is similar, but is where an employer requires an employee to work less than their normal contractual hours for a temporary period
There is a statutory scheme for lay-off and short time working but employers can only unilaterally implement these options if there are express clauses that permit them to do this within the employment contract. Many contracts do not contain these clauses.
Without a contractual right to implement lay-off or short time working, asking employees to stay at home or reducing their hours would be a proposed contractual change and could result in unlawful deduction of wages or constructive unfair dismissal. Employers can, however, implement lay-off or short-time working if they get consent to a period of lay-off or short-time working from the employee(s) at the relevant time. Employees may agree to this given the present extraordinary circumstances and if they feel their only alternative may be redundancy.
Employees with at least one month’s service who fall within the criteria will be entitled to a small fixed statutory guarantee payment to partially compensate them for the reduction in salary. Currently the maximum payment is £29 per day (this is set to increase to £30 per day from 6 April 2020) for up to five 'workless' days in any three-month period, so currently a total maximum of £145. It is open to an employer to decide to pay more.
Employees who are affected for either 4+ weeks or 6 weeks in a rolling 13 week period, may be entitled to statutory redundancy pay (provided they have at least 2 years' service). The employees must resign with written notice of their intention to claim this. Employers may be able to avoid redundancies if they guarantee employees 13 consecutive weeks of work within four weeks of receiving the employee’s notice.
To summarise, there will be a range of options and measures open to Employers, but the process must be to check the Contractual position first, then Consult with affected employees, and to the extent possible, obtain change by Consent. Then document the arrangement reached as fast and as sensitively as possible.
Do I have to pay if an employee self-isolates?
If an employee self-isolates on the basis of the current Government advice, new measures introduced mean they are entitled to Statutory Sick Pay (SSP) from day one of absence. This includes individuals who may be a carrier of COVID-19 but may not have symptoms. Employers should treat it as sick leave and follow their usual sick pay policy (or agree for the time to be taken as holiday). If appropriate, employers could also allow employees who have been told to self-isolate to work from home if possible and to pay as normal. This is encouraged as otherwise concerns about loss of salary could result in those carrying the virus attending the workplace.
If an employee is choosing to self-isolate and has no confirmed sickness (or has not been advised to self-isolate) there is no obligation to pay. Employers, should, however, communicate with the employee, ensure there are no underlying health conditions that make the individual more vulnerable and try to agree a way forward, such as working from home where possible. If working from home isn't an option, an employer may wish to agree that the employee can take unpaid leave or to take time off as holiday.
Should I insist that a vulnerable employee works from home?
Employers have a duty to ensure employees' health and safety. In the present circumstances, and mindful of GDPR obligations, employers should carry out a risk assessment and identify employees who are particularly at risk. This might include older employees and those with pre-existing medical conditions such as asthma, heart conditions or compromised immune systems who are more vulnerable to serious complications if they catch the virus. Those with certain conditions may be reluctant to come into the contract with people who might have been exposed to the virus at work or on public transport. In line with Government advice such employees should be supported in working from home where possible.
Under discrimination legislation if older or disabled employee are at a disadvantage because they are more likely to suffer serious complications from an infection, then the employer has a duty to make a reasonable adjustment which may include home working if possible. Some employees who cannot to do their job from home may be able to show that a reasonable adjustment is to allow them to take time off from work. Payment during this period would depend on how long the period of lock down is expected to last, the level of disruption caused and the size, staff and resources of the employer. It may be prudent to obtain occupational health advice where concerns exist.
What if an employee is self-isolating to care for a relative?
It is likely that this category of employee will be entitled to SSP provided that their relative is isolated following the Government's advice.
Are employers required to pay staff who require time off because of school closures?
The Government has announced schools will close from Friday in GB and from Monday in Northern Ireland. Initially at least employees will be entitled to use their statutory right to time off for family and dependants, however this is generally intended only to be available for a couple of days. Parental leave also allows working parents the right to take unpaid time off work to look after a child or make arrangements for their welfare. Unless the employer's policy or the employment contract provides otherwise, statutory parental leave or the right to time off for family and dependants remains unpaid. Employees may also wish to avail of annual leave.
Where employees can carry out some (or perhaps all) of their duties from home, arrangements can be made to do this and they will be paid accordingly. Employees should of course be encouraged to make alternative childcare arrangements where possible.
Where employees are unable to work from home employers should explore all options with a view to maintain some level of pay at least in the short to medium term. In such cases should make it clear to employees that the situation remains under review and payment cannot be guaranteed indefinitely.
Who are Key Workers?
For many businesses, ensuring that they maintain a stable workforce will be essential to their ability to carry on functioning. This will also be essential to society's effectiveness at fighting this crisis. From Monday 24 March 2020, 'Key Workers' will be able to send their children (up to Year 3 in second level education) in to their school, for the purposes of childcare only. The Minister for Education, Peter Weir, has stated that the definition of Key Workers will need to be flexible. He has issued a list of the likely categories but stated that this is not prescriptive. The categories are very broad and are not, as some had originally thought, limited to healthcare workers They are as follows:
Health and Social Care. This includes doctors, nurses, midwives, paramedics, social workers, home carers and staff required to maintain our health and social care sector
Education and childcare. This includes nursery and teaching staff, social workers and those specialist education professionals who will remain active during the Covid-19 response
Public safety and national security. This includes civilians and officers in the police (including key contractors), Fire and Rescue Service, prison service and other national security roles
Transport. This will include those keeping air, water, road and rail transport modes operating during the Covid-19 response
Utilities and Communication. This includes staff needed for oil, gas, electricity and water (including sewage) and primary industry supplies, to continue during the Covid-19 response, as well as key staff in telecommunications, post and delivery, services and waste disposal
Food and other necessary goods. This includes those involved in food production, processing, distribution and sale, as well as those essential to the provision of other key goods (e.g hygiene, medical etc)
Other workers essential to delivering key public services
Key national and local government including those administrative occupations essential to the effective delivery of the Covid-19 response
How should I treat parents who are working from home where they are also having to look after children because of school closures?
Where employees can work from home then they should be paid as normal. Employees may choose to take some of this time off as holiday, in which case normal annual leave provisions apply.
If an employee is unable to work from home, they could be granted unpaid time off for dependants or unpaid parental leave. Employers should note that time off for dependants is only meant to cover a period of a few days while parents find alternative childcare arrangements. In the present circumstances employers should seek to be flexible where possible.
Some questions have been raised about whether people working from home but with young children could have their pay reduced to reflect the fact that they are unlikely to be able to carry out their work to full capacity at home in light of the home distractions. Without an employee's express agreement to this, this is likely to be regarded as an unlawful deduction from wages.
Depending on the length of time schools are closed, businesses may have to re-evaluate the approach if there is a significant impact on the business by the virus. Employers should consult with employees in such circumstances and consider a range of options such as voluntary unpaid leave, shorter working weeks or other flexible working arrangements
Can we withdraw offers of employment made to new starters?
In principle, offers of employment can be withdrawn. Where an offer has been accepted and a contract has been entered into employers may be liable to pay the new starter notice pay. In the first instance employers should communicate with the candidate and establish whether they have served notice with their current employer or if they can withdraw notice of termination. Employers may otherwise wish to (a) terminate the newly agreed contract by giving any notice required under the contract or statutory notice (one week) if the new employee has already been employed for one month or more or (b) agree a deferred start date or (c) seek to agree a change to terms of employment for example around homeworking, flexible working, temporary reduced salary etc.