Further guidance on the Coronavirus Job Retention Scheme has been released by the Government, and the Treasury have issued a Direction setting out the legal basis for the scheme.

On 9 April, the Government issued further guidance on the Coronavirus Job Retention Scheme (CJRS). On 15 April, the Treasury issued a Direction which sets out the legal basis for the scheme. On the same day, further updates were made to the guidance to reflect much (but not all) of the detail in the Direction.

We have summarised what appear to be the key issues below. However, it is important to note that the Direction, in particular, contains a lot of detail that will take time to digest. It should also be noted that the Direction is not consistent with some elements of the updated guidance – see the comment section below.

9 April Guidance Update

• It is possible to furlough staff on work visas, without undermining the conditions of the visa.
• The furlough scheme should not be used for short periods of sickness absence, but staff who are on long term sick or shielding can otherwise be furloughed.
• Staff who were TUPE transferred can be placed on furlough.

Treasury Direction

To recover a furloughed employee’s wage costs under the CJRS that employee:

• Must have been on your PAYE payroll on or before 19 March (the date had previously been 28 February).
• Must have been registered on HMRC’s real time information system for PAYE as at 19 March.

An employee is a furloughed employee if:

• They have been instructed to cease all work in relation to their employment. This instruction must be agreed in writing (which may be in an electronic form such as email). This is not consistent with the guidance – see our comments below.
• The instruction is given by reason of circumstances arising as a result of coronavirus or coronavirus disease. This is now very broad and there is no longer any requirement for there to be an underlying risk of redundancy.

Where Statutory Sick Pay is payable or liable to be payable in respect of an employee (whether or not a claim for SSP has been made) when an instruction to cease work is given, the furlough period cannot start until the ‘original SSP’ period has ended. Again, this is not consistent with the guidance – see our comments below.

During furlough, company directors are only entitled to carry out legal obligations that relate to the filing of company accounts or the provision of other information relating to the administration of the company.

Comment

The Treasury Direction is important, as it is the legal basis of the CJRS and (from a purely legal perspective) takes precedence over the previously issued guidance.

This makes any variation between the guidance and the Direction very difficult for employers to manage. What happens if an employer has furloughed staff relying on the guidance available at the time, only to find that the Direction calls into question whether those staff will qualify for reimbursement? There is no obvious answer to this, but it would seem highly undesirable for the Government to withhold reimbursement from employers who have made reasonable efforts to act in accordance with the guidance available to them, and who have taken steps to rectify matters where reasonably possible after the goalposts have moved.

Two Key Points

1. Instruction to cease work must be in writing
   
   Where employees continue to be paid 100% of their salary and benefits, the guidance only required employers to notify employees that they were being furloughed. The requirement to gain agreement in writing in these circumstances is new and could call into question the ability to reclaim reimbursement under the CJRS if there has only been notification. It is not clear how this will play out – for example, will deemed acceptance be sufficient?
   
   The good news is that there is no requirement for the written agreement to be obtained before the start of the furlough period.
   
   As a result, if employers did not obtain agreement in writing to stop work from each furloughed employee they should consider whether it is appropriate to act now to obtain such written agreement.
   
   
2. Eployees eligible for SSP
   
   The guidance states that whilst the CJRS cannot be used in cases of short term sickness, those on long term sick and those shielding can be furloughed at the employer’s discretion (as long as the other conditions around furloughing have been met). This is not replicated in the Direction.
   
   The Direction is difficult to understand, but it does suggest that people who are shielding or eligible for SSP at the time they are instructed to cease work will only be eligible for reimbursement under the CJRS when the original period of eligibility to SSP ends. This is even if no SSP has been claimed.

It is difficult to see why the Direction takes a different approach to the guidance on this point. Whilst there are no clear answers, employers will need to take a view on whether to change their approach or submit claims for reimbursement and challenge any attempt by HMRC to withhold payment on the grounds that the guidance has been complied with.

The HR consultants at Narrow Quay HR are available to chat through any queries you may have related to new work arrangements under COVID-19. Please contact our HR specialists Caitlin Anniss on 07909 683 938, Sarah Martin on 07799 136 091 or Micaela Calcutt on 0117 314 5619 at Narrow Quay HR Consultancy.

Employers often need to consult with staff and there may be an increased need to do so given the current pandemic of the coronavirus (COVID-19).

Employers may need to consult about changing work arrangements, including the Government job retention scheme, reduced hours or even redundancies. You may also have ongoing consultations which need to be concluded in an effective way. With no confirmation of when social distancing measures will be withdrawn, delaying consultations is unlikely to be an option for most employers.

Effective consultation is important at any time, but the impact of the coronavirus outbreak has made the process more challenging at an already stressful and uncertain time. As the situation continues to change rapidly, it is vital that employers communicate clear information to staff promptly.

Steps to delay the spread of the coronavirus include social distancing measures, such as a shift to remote working, the cancellation of events, the temporary closure of certain organisations and schools and strict limitations on when people are allowed to leave their homes, currently in place until mid-April. Employers may have a number of employees off sick or self isolating, and steps should be taken to include them in the consultation process in an appropriate way.

Practical Steps

You will need to adapt practices so that you can continue to carry out effective consultations whilst all or some of your employees are not on site. Face-to-face meetings will not be possible and so you should consider the following options:

• Can you hold consultation meetings using video or conference calling technology? You would need to ensure that the staff have all the necessary information via email beforehand, so that they can participate effectively.
• For one to one consultation meetings, can you do these via Skype, use other video conferencing software or on the phone?
• For consultations around less significant issues, could you consult with staff in writing, allowing them the opportunity to come back to you, and perhaps have a phone call, if they have particular issues to discuss?

Remember that there are limitations of these options which you will need to work around, such as:

• It may be more difficult to discuss complex issues without face to face meetings, so you may need to adjourn and have additional calls to consider issues.
• Note taking may be more complex, particularly if meetings are held over the phone rather than via video conferencing.
• Thought should be given as to whether HR or Union Advisors can join consultation telephone calls or video conferences to provide support for employees. If they can’t, then employees should be given the opportunities to consult with the representatives separately and come back to employers with any further points.

Consultations for Lay-Offs or Short-Time Working Arrangements

For employers needing to deal with an unexpected downturn in business as a result of the current uncertain environment who do not have a contractual right to introduce lay-offs or short-time working arrangements, consultations with employees (and trade unions/representatives where appropriate) should be undertaken to try and agree a temporary solution.

There are no specific legal requirements surrounding consulting staff when introducing lay-offs or short term working.

Best Practice

• Communicate changes with employees to keep them engaged during difficult times.
• Give regular updates about the changes being made and the challenges the business is facing. Employees are more likely to accept difficult decisions and changes to the way they work if they understand the reasons behind them.
• For significant changes, carry out consultations by telephone or video conference with employees who are working remotely or self-isolating to unsure that employees understand and are engaging with the proposals being put to them.
• Employees should be given the opportunity to adjourn consultations, if they feel the need to go away and discuss any points with HR or a Union Advisor.

Consultations for the Introduction of the Government’s Job Retention Scheme

The scheme has been introduced to allow employers to temporarily lay-off or ‘furlough’ staff, with the Government stepping in to pay 80% of the wages up to £2,500. The scheme is currently in place for three months from 1 March but may be extended. The scheme is subject to existing employment law , which would indicate that there should be a level of consultation to gain employee agreement to the changes proposed to their status.

Best Practice

• Consider asking for volunteers for furlough. You do not necessarily need to accept those that volunteer if you deem they are needed but it may avoid the need for you to have to select between staff.
• Communicate with staff who you intend to furlough and those you may need to retain, so that they understand what this means for them and the timescales involved.
• Document the process you have undertaken to select those staff who you think can be furloughed and those who you need to retain, and any factors you have taken into consideration.
• Inform staff of the decision on furlough but allow them to provide feedback or to raise any concerns. Ask them for their agreement to the proposed changes to their status.
• Keep the situation under review and keep in communication with staff, both those continuing to work and those who have been furloughed.

Consultations for Redundancies

If employers do not consult employees, any redundancies made will almost certainly be considered unfair by an employment tribunal.

For redundancies of fewer than 20 people, there are no prescribed rules on how consultations should be carried out. However, it is best practice to properly consult with employees and their representatives in order for the process to be fair. Conference or video calls may be an effective way to engage with staff who are working remotely or self-isolating.

For redundancies of more than 20 employees within a 90 day period, there are specific regulations which must be followed and advice should be sought under those circumstances.

How Can We Help You?

Narrow Quay HR is run by experienced employment lawyers who now work as HR consultants. We can fully support you with implementing consultation processes for your business and assist with the process, as follows:

• provide you with compliant and effective communications for your staff
• calculate redundancy entitlements
• timetable the consultation process and provide scripts for consultation meetings
• support consultation meetings remotely, either by being part of a consultation meeting held on the phone or via video conferencing, or by being available on the phone should you want to adjourn to speak to us
• take a note of consultation meetings where these can be arranged remotely
• identify when legal advice may be necessary and quickly put you in touch with the right people

For more information, please contact our Employment and HR specialists Caitlin Anniss on 07909 683938 or Sarah Martin on 07799 136 091 at Narrow Quay HR Consultancy.