The fight against the Covid-19 virus has put much of the economy into deep freeze, affecting thousands of businesses and millions of employees.
If the government’s strategy succeeds, the hope is that people will soon be able to return to work without suffering any significant long-term impact. Until that happens, compliance with government guidelines and widespread disruption to daily life leave business with much to consider.
The government announced its most significant measure, the furlough scheme, and on the first day the HMRC portal went live for employers to claim the payments from the Government, over 140,000 businesses submitted claims. The scheme provides employers who furlough their staff with a grant that covers 80 per cent of wages up to £2,500 a month. It is not means tested which has led to criticism in the press that wealthy employers are misusing the Scheme.
If employers have the right to lay off or short time employees under the employment contract, they can consult and notify them that they are designated as furloughed, although employees cannot designate themselves. If there is no specific provision in the contract, employees will need to give consent, which requires further consultation.
Information as to which employees have been furloughed must be submitted online to HMRC, which will then reimburse employers. Government guidance states that to be eligible work during furlough time is not allowed. Because the system is open to abuse, record keeping is essential. HMRC may audit such claims later and are checking submissions against their records now.
In March, the government passed The Health Protection (Coronavirus) Regulations 2020, which states that those who self-isolate because they have received a written notice from NHS 111 (and not just doctors) are deemed to be incapable and are therefore entitled to Statutory Sick Pay (SSP). Employees can self-certify for the first seven days.
In terms of Covid-19, SSP applies from day one. Businesses with fewer than 250 staff are reimbursed for the first 14 days. Those who live in the same household as someone with symptoms are also eligible for SSP because they should be self-isolating. But if they live with someone who is designated as vulnerable (shielding), who receives a letter telling them to stay at home for 12 weeks, the extended family are not entitled to be off work.
If the vulnerable person is the employee, then they are entitled to SSP and should be off work. The government guidance also suggests that it is possible to furlough a shielding employee instead, but not when they are on sick leave. Anyone who chooses not to come to work because of concern about Covid-19, and who does not have a written notice, is not entitled to claim SSP. The self-employed are not eligible for SSP, although they can claim Universal Credit instead. Those on sick leave, either signed off or self-isolating, are not eligible for furlough until the end of that period.
Millions of people are currently affected by home working, school closures, or both. Unless their parent is a key worker, children must remain at home. If employers consider their staff as key workers, they must communicate that to them. However, this may not apply to everyone in an organisation. For employees who have to look after their children and therefore cannot come in, or who are not really working from home, this is deemed to be time off unpaid unless they are furloughed.
When employees are working from home, managers need to have a detailed discussion with them about what can actually be done from home and whether their pay should be reduced accordingly. This may also depend on the length of their working hours or whether furlough leave can be used instead.
When a decision is taken to close a site or factory because of Covid-19, an employer must still pay employees since they were ready and willing to work unless they furlough them. If their work can be undertaken at home, the employer can reasonably request that every employee does so. If not, employees still get paid. When a site closes because of insufficient work, the employer must consider alternatives: whether workers can be put on short-time working and/or lay off within their contract of employment, or whether furlough should apply.
The next issues facing employers is how to get people back to work at the end of furlough and how to manage the health and safety concerns including social distancing which could be here for some time yet.
About the author
Sarah King is a specialist in employment lawyer at Excello Law.
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