Coronavirus / Covid-19 - Employment Matters

19/Mar/2020

A number of clients have contacted us over the recent days for advice and clarity as employers, with common topics including sick pay, obligations with freelance/self-employed workers and staff retention.

This summary is intended to answer some of those queries and provide some general advice which is hopefully useful if you are an employer in these challenging times.

The Priority: Retention

  1. As is the key message in our previous notes, the overriding factor is communication. Try to be as open as possible with employees as to the situation the business is in, the measures you are taking to enable it to survive and what you are asking of them.
  2. The survival of the business is a mutual interest and the objective is to work together to achieve that, but do also make it clear to employees you fully empathise with what will be a challenging situation.
  3. Remember the government intends to put a full support package in place to enable retention of staff which is the ultimate goal - it is therefore hoped many of the following points are unnecessary.
  4. You need to be aware of your position in terms of insurance - the government has stated it considers the current position to be sufficient to bring business interruption policies into effect, however you will need to confirm that with your insurer.

Legal Considerations

  1. The general rule for employees (not casual or agency workers) is that the employer cannot reduce an individual employee's pay and/or hours without their consent unless their contract states that (which is rare). If sent home without pay they are entitled to a guarantee payment and could have a claim for back pay and/or constructive dismissal should they leave on that basis.
  2. Whilst hopefully a last resort, redundancies are an option. Significant reduction in demand would provide grounds, and in an emergency situation it is generally accepted that the period of consultation might be very short. Any consultation should, however, explore possibilities with the affected employees (such as unpaid leave).
  3. Compromise agreements reached to potentially lower hours/pay would likely need to contain a clause stating that if government or other compensation was awarded that you will do your utmost to recompense any shortfall suffered by employees or at least restore the pre-reduced position when possible.
  4. Many employers are closing offices and asking employees to work from home, for which many won’t have contractual allowances. We don’t know how a tribunal might go on this, but the likelihood is that the current situation is so unusual that the onus would be on the employee to adopt a flexible approach - both parties would be expected to act reasonably and accommodate the needs of the business and of the employee as best they can.

In general, our advice to employers and employees alike would be to wait for as long as possible to see how far the government goes in terms of support packages (and how effective they might be) before taking any drastic action.

If you are considering making redundancies we cannot be clearer – please contact us to discuss this before anything is communicated or implemented.

Statutory Sick Pay

The government have announced a refund scheme to cover the Statutory Sick Pay costs of employees who are absent from work due to Covid-19. The main points are as follows:

  1. The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of Covid-19
  2. Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
  3. Employers to be able to reclaim expenditure for any employee claiming SSP (according to the new eligibility criteria) as a result of Covid-19.
  4. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
  5. The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force. This has yet to be clarified by the government, however the rules for receipt of SSP for self isolation kicked in on 13 March so the expectation would for the refund legislation to mirror that.
  6. We are currently unaware of the mechanism by which the refunds will be processed, however we will confirm as soon as the government announces this.

Keep In Touch!

Clearly no employer is the same as the next and we do appreciate that the bespoke nature of employment will lead to further queries – therefore please do contact us if there is anything you’d like to discuss in greater detail and we’ll do all we can to help.

(Please note the information contained in this summary is designed to be informative but does not constitute legal advice. Should you require advice relevant to your business specifically please contact us or your legal advisor for further guidance).