The Job Retention Scheme is an unprecedented government initiative designed to help employers avoid making large-scale redundancies, or laying staff off without pay, during the coronavirus pandemic.

The purpose of the Scheme is to provide employers with financial assistance during this uncertain economic time, and also to maintain job security and a certain level of income for staff whose jobs may otherwise be affected by the pandemic.

What is the government’s Job Retention Scheme?

The Job Retention Scheme is an unprecedented government initiative designed to help employers avoid making large-scale redundancies, or laying staff off without pay, during the coronavirus pandemic. The purpose of the Scheme is to provide employers with financial assistance during this uncertain economic time, and also to maintain job security and a certain level of income for staff whose jobs may otherwise be affected by the pandemic.

What does ‘furloughing’ staff mean?

The term ‘furlough’ is an American term which has not previously been used in UK employment law.  Essentially, it means temporarily laying off staff for a period of time whilst keeping them on the payroll.

What financial support is provided under the Scheme?

Under the Scheme, the government will provide a grant to cover “the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.  Fees, commission and bonuses should not be included”.

More detailed guidance around how to calculate claims for Employer NI contributions and minimum automatic enrolment pension contributions is expected before the Scheme goes live.

The Scheme will be backdated to 1 March 2020 and will be in place for an initial three month period, although could be extended if necessary.

Which employers can access the Scheme?

All UK employers who had created and started a PAYE payroll scheme on 28 February 2020 can ‘apply’ to use the Scheme, including:

  • businesses
  • charities
  • recruitment agencies (where agency workers are paid through PAYE)
  • public authorities

The government has said it does not expect the Scheme to be used by many public sector organisations as the majority continue to provide essential public services or are contributing to the response to the pandemic.

The government has also confirmed that where a public authority is in receipt of funding for staff costs, the expectation is for that money to be used to pay wages in the usual way.

We anticipate that any public authority seeking to use the Job Retention Scheme will be expected to justify its reasoning as the government will wish to avoid effectively paying twice for staffing costs.

Which categories of staff can benefit from the Scheme?

The guidance confirms the Scheme is open to employees on the PAYE payroll at 28 February 2020 and on “any type of contract” including:

  • full-time employees;
  • part-time employees;
  • employees on agency contract; and
  • employees on flexible or zero hours contracts.

Does the Scheme apply to self-employed contractors or freelancers?

No.  Self-employed individuals may be eligible to claim Universal Credit and/or government self-employed income support, both of which are separate schemes.

How will the government pay staff salaries under the Scheme?

It is important to understand that as the employer, you will still be required to pay staff salaries under the Scheme.  The government will then reimburse costs, subject to the limits set out above.

Are employers obliged to make up the shortfall between the government contribution and staff’s usual salaries?

No, there is no obligation to make up the shortfall in furloughed staff salaries. Under some circumstances employers may wish to do so, but the implications of this should be carefully considered.

Where employers are imposing a furlough period on staff (if a consultation procedure is not followed, or if agreement has not been reached through consultation), employers may choose to make up the salary shortfall in order to mitigate the risk of claims, for example claims for breach of contract. However, thought should be given to the perceived unfairness of a scenario where furloughed staff and those who are required to continue to work, are in the same financial position.

How should employers select staff to furlough?

Staff selection may be straightforward if the entire workforce is affected, or if whole categories of staff are affected. However the more likely scenario might be that a skeleton staff needs to be maintained during the pandemic, so staff will either be selected for furlough or selected to remain at work. In these circumstances, a fair and objective selection process should be designed in order to justify the designation of all staff into one or other of these categories. It might also be appropriate to invite volunteers for remaining at work, and to discuss an employee’s proposed selection with them as part of a consultation procedure with a view to agreeing the change.

Can furloughed staff be called upon to perform any work during the furlough period?

No, any employee who is furloughed should not perform any work for their furloughing employer whilst they are on furlough leave. They are however entitled to perform voluntary work and/or complete training.

We have a number of staff on sick leave or self-isolating and unable to work from home. Can we furlough these staff?

The guidance confirms staff on sick leave can be placed on furlough leave once their sick leave comes to an end. The guidance also confirms staff who are “shielding” can be placed on furlough leave.

What happens if an employee who has been furloughed subsequently falls sick?

Yes, the updated guidance confirms furloughed employees retain their SSP entitlement. However, depending on the financial arrangements in place during the furlough period, staff who fall ill whilst on furlough leave may well not report this to their employer.

How does the furlough period interact with annual leave?

Employees who are furloughed continue to be employed and will therefore continue to accrue annual leave. The guidance issued to date also does not prevent annual leave from being taken during furlough leave.

What happens to employee benefits such as pensions and bonuses during the furlough period?

The government grant will include the minimum automatic enrolment employer pension contributions on the subsidised wage.

The guidance confirms fees, commission and bonuses should not be included in the grant claim. However, this does not mean the employer can automatically stop providing contractual benefits during the furlough period. If there is a proposal to reduce or pause benefits during the furlough period, consultation should take place on this basis with a view to reaching agreement.

To discuss the steps your organisation should take now in relation to coronavirus, please contact Sarah Martin on 07799 136 091, Caitlin Anniss on 07909 683 938 or Michaela Calcutt on  0117 314 5619.

Coronavirus (COVID-19) cases are continuing to spread across the UK, and in response, we have provided guidance around your statutory sick pay rights

Statutory Sick Pay

We recently reported that an employee who self-isolates because they are suffering from the symptoms of coronavirus/COVID-19, may be entitled to receive Statutory Sick Pay (SSP). SSP is currently paid at a rate of £94.25 per week (to increase to £95.85 on 6 April 2020) for up to 28 weeks from the fourth day that the employee is unable to work.

Since that report, new legislation has been introduced which provides that any employee who is self-isolating in accordance with government guidance will be entitled to SSP.

At the date of first publication, the relevant new legislation stated that the change to persons entitled to SSP would be effective from 13 March 2020. However, further changes have since been made to the relevant legislation which mean that an employee who self-isolates is actually entitled to SSP from 17 March 2020, rather than 13 March 2020.

Additionally, in a recent update, the Chancellor announced that new measures including £30 billion of tax reliefs and loans would be implemented to support small-and-medium-sized businesses during the coronavirus pandemic. Among other things, the support plan will allow some employers to reclaim SSP paid for sickness absence.

Within this announcement, the government confirmed that emergency legislation will be brought forward to provide that SSP will be payable from the first day that an employee is off work and that this change will have retrospective effect from 13 March 2020. The draft Coronavirus Bill has been released today and you may read the draft Bill here. In the meantime, the government is encouraging employers to pay employees who are affected by coronavirus from the first day of absence, with immediate effect.

The draft Coronavirus Bill states that all changes made under the Act will be temporary and apply for a period of two years from the date it is passed. However, the legislation that provided for the change to eligibility for SSP is due to remain in force until mid-November 2020, but expressly states that this will be kept under review.

We will continue to closely monitor economic, business and legislative developments in this area.

To discuss the steps your organisation should take now in relation to coronavirus and SSP, please contact Sarah Martin on 07799 136 091 or or Caitlin Anniss on 07909 683 938 at Narrow Quay HR

Up to a fifth of the workforce may be off sick during the peak of a coronavirus (COVID-19) epidemic in the UK, the government has suggested.

As we continue to see day-on-day increases in the number of people infected, there is potential for significant disruption to normal working patterns across all businesses

In this article, we respond to employers’ most common questions around sick pay, travel, as well as caring for dependants, protecting the health and safety of staff, and closing the workplace.

We also recommend all employers consider the ACAS guidance and the government guidance which is updated daily.

Can businesses continue to operate during the government imposed lockdown period?

On Monday 23 March 2020 the government announced a three week mandatory lockdown period, during which time people may only leave their house for one of four defined reasons. One of those reasons is to attend work, if the work absolutely cannot be done from home. Clarity has been sought from the government in respect of what this means in practice, and further guidance may be issued in the coming days as pressure increases on the government to halt non-essential business that cannot be conducted from home.

For now, businesses should facilitate homeworking wherever possible, and should insist on staff travelling to work only where this is essential, for example if your staff are key workers as defined by the government.

When are employees entitled to pay?

Where employees are sick:

  • Where an employee is self-isolating because they are suffering from the symptoms of COVID-19, they will be entitled to receive sick pay in the usual way as they are unwell.
  • The government has advised that employers should use their discretion concerning the need for sick notes to allow GPs to focus on other patients.

Where employees are self-isolating on medical advice or government guidance but have no symptoms:

  • If an employee is able to work from home then they should be paid as normal.
  • Under the new Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 (SI 2020/287), if an employee self-isolates in accordance with government guidance (and are not working) then they are entitled to statutory sick pay (SSP).
  • Employers should check contractual sick pay terms to identify whether contractual sick pay would be payable or consider the extent to which they are prepared to exercise their discretion to pay such employees sick pay in these circumstances.
  • ACAS has recommended that it is good practice for employers to treat any period of self-isolation as sick leave, because otherwise there is a risk staff will attend work in order to get paid and there may be an enhanced risk of them spreading the virus.
  • Note that unions have stated that their expectation is that all employers provide full pay in accordance with ACAS guidance regardless of whether they are required to contractually.

Where employees choose to self-isolate:

  • Where a key worker who would otherwise be required to be at work chooses to self-isolate (but not in accordance with government guidance or medical advice) and is not working or available to work – then they will not be entitled to SSP or contractual sick pay.
  • Schools should explore the employee’s reasons when deciding how to treat them, and whether to exercise their discretion to continue to make any payment.

Where employers ask staff to self-isolate:

  • Where an employer has concerns about a key worker spreading the virus and asks them not to work (but this is outside the government guidance), the key worker should receive their usual pay in the normal way – as such absence is at the request of the employer.

Implications of the government lockdown period

The government has now imposed the requirement on all members of the public not to leave their home, except to shop for essentials, to carry out one form of exercise per day, for a medical need, or to travel to and from work where absolutely necessary.

All workplaces should therefore facilitate working from at home wherever possible. Staff who work at home will usually receive payment as normal.

The government states that employees from vulnerable groups should be strongly advised and supported to stay at home and work from there if possible. This covers staff who are aged 70 or older, under 70 with an underlying health condition and those who are pregnant. The 1.5 million people considered by the government to be most vulnerable, either due to their health or due to an underlying health condition, have now been contacted and have been asked to remain at home in isolation for 12 weeks.

Employers have a duty of care towards staff. They should consider how they can support staff from vulnerable groups to stay at home and follow the government’s social distancing guidance.

Employers should also be mindful of their duties under the Equality Act 2010 to make reasonable adjustments to an employee’s working arrangements where that employee has a disability within the meaning of the Act which results in a higher risk of contracting severe COVID-19.

Where staff are at home on the basis of government guidance and are unable to work from home then it is likely that they will be entitled to statutory and/or occupational sick pay depending on the relevant contract and policy wording in place. It is not currently clear whether staff on sick leave will be able to be furloughed under the Job Retention Scheme. We hope to update this advice once more detailed guidance is published.

What if employees do not want to come to work due to fears of being exposed to the virus (or risk spreading it to others)?

If an employee refuses to attend work (where it is not possible for them to work from home and they are not from a vulnerable group) then employers can usually ask them to do so, and refusal will be unauthorised absence, albeit sensitivity should be displayed particularly in circumstances where, for example, the member of staff shares a household with somebody who is considered extremely vulnerable due an underlying health condition. In these circumstances it is likely to be most pragmatic to agree a period of unpaid leave.

What if employees need to take time off to care for dependants?

Employees are entitled to a reasonable period of time off work to care for dependants in an unexpected event or emergency.

If employees have children they may need to look after them and arrange further childcare because their child’s school is closed. They may also need to help their child or dependant if they are ill, or have to go into hospital. . Individuals are permitted to leave their homes during the lockdown period in order to care for vulnerable relatives. Time off work may be required in order to provide such care.

There is no statutory right to be paid for this time off, but some employers may offer paid time off for a limited period under a contract or policy.

Where staff have a paid holiday entitlement this could be used.

How has SSP changed?

The new Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 (SI 2020/287) state that an employee self-isolating in accordance with government guidance is entitled to SSP – even if they are no showing any symptoms.

The government has stated that SSP will be paid from day one as part of its emergency coronavirus legislation where an employee is self-isolating.

The Chancellor also announced in the Budget delivered on 11 March 2020 that the government will reimburse small employers (those with less than 250 employees) any SSP paid to employees for the first 14 days of sickness absence. We await further details on how this will be implemented.

What if an employee falls ill at work?

If an employee becomes ill with symptoms of coronavirus at work, they should be sent home and advised to follow the stay at home guidance. They should not visit the GP, hospital or pharmacy. If their life is at risk or if they are seriously ill or injured then a member of staff should call 999.

What steps should employers take in relation to employees who are planning to travel?

International travel is becoming more restricted as countries close their borders and airlines cancel flights. The Foreign & Commonwealth Office has asked Britons overseas to return to the UK now if possible. During the current lockdown period, employees are therefore increasingly unlikely to travel overseas, save for if such travel is essential.

Few employment contracts will include terms enabling the employer to restrict personal travel. However, employers are entitled to refuse permission for an employee to take statutory holiday under the Working Time Regulations and may also have policies and procedures in place that allow them to refuse holiday requests.

What if the workplace has to close?

It is a good idea to plan now in case the work place needs to close temporarily, for example if remote working is not possible and the business is not considered essential so that it can continue to operate during the mandatory lockdown period. We recommend that employers ensure staff have a way to communicate with their colleagues and their employer in this situation. For example, do staff have contact details for other members of their team.

Consider whether work can be carried out remotely by staff.

Ask staff to take laptops and mobile phones home with them so if something changes overnight staff are able to keep working.

If possible, arrange paper based tasks for staff that do not work on computers.

If the business has to close down temporarily, unless it is agreed otherwise or contractual provisions are in place that allow for a reduction in pay where employees cannot work, it is likely that staff will be entitled to pay throughout this period. The government has introduced a new Job Retention Scheme to reimburse businesses 80% of wage costs, up to £2,500 per employee per month, for staff who are “furloughed” (temporarily laid off) during the pandemic. We have prepared a separate set of FAQs on the Job Retention Scheme.

How can employers reduce the risk to employees?

Employers should facilitate home working wherever possible in order to adhere to government advice around social distancing, and to comply with restrictions on movement during the mandatory lockdown period.

All employers have a legal duty to carry out risk assessments in relation to the risks to the health and safety posed by their operations. This includes assessing the risks posed by the current coronavirus outbreak. Employers should carry out written risk assessments in respect of the risks posed by coronavirus in order to ensure that they are taking reasonable steps to control risks posed by the virus to its employees, and anyone else affected by its operations – this could include clients, customers or anyone else who may be affected.

As part of the risk assessment, employers should identify and put in place adequate control measures to respond to risks posed by coronavirus. Employers should provide employees with adequate information about the these measures and ensure that they are understood and that training is provided to employees, where necessary.

Given the rapidly changing position, employers should keep the risk assessment under close review and update regularly it to respond to any change in the risk profile.

Practical steps that employers can take now

  • Remain in close contact with staff so it is clear what organisational and operational measures are in place either to facilitate remote working during the outbreak, or if staff are required to continue to travel to work, what measures have been put in place to protect their health and safety such as:

    – whether it is possible to offer flexible start/finish times so busy periods on public transport can be avoided, or whether temporary car parking can be provided
    – how social distancing rules will operate in the workplace, for example staff being required to remain a minimum of two meters apart at all times
    – what hygiene/sanitation measures have been put in place such as the provision of alcohol based hand sanitiser, and wipes for cleaning IT equipment, etc

  • Encourage employees to be extra-vigilant with washing their hands, using and disposing of tissues etc.
  • Provide a link to the government guidance on the situation which is updated every day.
  • Summarise the current guidance about international travel and your own workplace policy on holiday requests; Ask staff to speak to their manager if they have any trips planned and encourage staff to inform you of any trips they have coming up so that you can discuss the risks and any possible consequences of them in advance; As the situation changes, employers may need to update their guidance to staff. This can be done briefly at regular intervals by email;
  • If your staffing requirements have changed, consider workforce planning measures including furloughing staff using the government’s Job Retention Scheme.

To discuss the steps your organisation should take now in relation to coronavirus, please contact Sarah Martin on 07870 681 767 or or Caitlin Anniss on 07909 683 938 at Narrow Quay HR.