Coronavirus & Employment Law – For Business Owners | Howells Solicitors

Coronavirus & Employment Law – For Business Owners

There is lots of information online regarding what support and information there is available for businesses during the Corona Virus outbreak, many of it is hearsay and gossip. Clare Fowler and Danny Smith, from our Employment Law department, answer some frequently asked questions in regards to your rights at work.

Advice updated 30.3.2020

What is furlough and will it apply to my business?

A term taken from the United States, furlough is a process whereby your employees do not carry out any work but are paid. Prior to the current crisis, there was no such thing as “furlough” in the UK, but the Government is currently working on a scheme where staff can be sent home and be paid by the Government up to 80% of their current salary (capped at £2500).

It is unlikely that you will have a contractual right to place your staff on furlough so you must obtain their consent. Failure to do so may constitute a breach of contract. It is important to work with employees during this crisis, many of them will be concerned about their jobs. Placing staff on furlough could stop you having to go through a redundancy process and if the alternative is dismissal, most employees in practice are likely to agree.

Further information about the practical steps to furlough staff is contained within the latest Government guidance here – https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

Despite government proposed support, I still need to make some staff redundant, can I still do this?

Yes. The law has not changed in regards to redundancy and the usual rules and processes continue to apply. You may wish to seek specialist advice before undergoing a redundancy process to limit exposure of the business and to ensure that the process is carried out lawfully.  You will need to have a credible explanation as to why government funded furlough was not a suitable alternative to redundancy.

Do I have to pay my staff if I choose to close down my business to prevent the spread of the virus

You should consider asking your staff if they agree to be on furlough (see answer above).  If you cannot afford to pay them the alternative would be dismissal for redundancy.  You would need to pay notice and accrued holiday pay, and statutory redundancy payments.  You will also need to re-recruit when the pandemic subsides if you intend to re-open your business.

Can I make staff work reduced hours/accept a reduction of pay

You will need to consult and work together with your employees. Unilaterally reducing employee’s hours or pay could amount to a breach of contract and  may result in your employees resigning and claiming constructive unfair dismissal.

Can I stop my employees using their holiday allowance during the Coronavirus outbreak?

Employers have a legal obligation to allow their employees to take their holidays during the year. However, they also have the legal right to refuse requests for holiday due to business reasons (as long as they are not preventing the employee to take their holiday completely). Therefore, it is possible to decline holidays and to refuse them for a period of time. For example, it is common in the hospitality industry to have a “holiday ban” during key trading times of the year i.e Christmas. This is likely to be found in the staff handbook or the annual leave policy.

The Government has recently announced an amendment to the Working Time Regulations allowing employers to permit rolling over annual leave over the next two holiday years. I suspect this is due to the reasons as above i.e due to furlough etc it is unlikely that employees will be taking many holidays whilst the pandemic is ongoing.

If a member of staff should be self-isolating can I send them home i.e suspend them?

All employers have a legal obligation to ensure their workplaces are safe. If an employee is at work who should be self-isolating then you may wish to consider asking them to work from home. If they do not wish to work at all then they can claim statutory sick pay or the furlough provisions may apply.

What if an employee wants to work from home but I don’t want or need them to?

You may have legitimate concerns about safety, insurance cover, data security and the amount of work available, as well as about your employee’s wellbeing.  You should set out clearly why you don’t want them to work and what the alternatives are.  These may be furlough or redundancy.  You may be able to agree that your employee carries out a different role that they could do from home on a temporary basis.  You will have to make decisions based on individual circumstances and business need.  You must avoid making decisions based on an employee’s “protected characteristics” (gender, race, disability, age, pregnancy, sexual orientation, religion/belief, gender reassignment, marital status) or, for example, the fact that have previously raised grievances.  Keep a record of the rationale behind decisions you make during this difficult period to avoid claims of unfairness or discrimination later on.

What if an employee refused to work from home when I have asked them to?

Try to understand the employee’s concerns – if they don’t usually work from home they may feel they don’t have the right equipment or sufficient privacy at home, or lack confidence or training.  If there don’t appear to be any legitimate concerns and the employee would simply prefer to be furloughed, they could be failing to obey a reasonable management instruction and you could treat this as a disciplinary issue.  Again, clear record keeping is important – why do you need them to work from home, what assistance, guidance and reassurance have to provided to them, and what are the alternatives?

What if I need some staff but not others to continue working – how do I deal with complaints of unfairness?

This comes back to having a clear rationale for which roles are needed and why.  Some staff may be vital for business continuity and to ensure there is a workplace for everyone to return to eventually.  You could (but do not have to) consider incentives for people you identify as required to continue working.  These do not have to be directly financial, but could include additional holidays once restrictions have been lifted.  If you are considering offering this you should take financial advice on any tax implications for you and the staff concerned.

What if someone who is working falls ill and is only entitled to SSP whilst those who are not working still get 80% of their pay?

This does seem particularly unfair – but the legal position is just that.  It would be up to you as an employer to decide whether to exercise discretion to enhance their pay in those circumstances.

Do I have to pay pension contributions while someone is on furlough?

It seems likely that you do, yes.  The government guidance refers to the 80% of salary being there to cover all employment costs.  How much you will pay depends on the terms of your contracts with staff and the requirements of your pension provider.

What if I have asked someone to work from home but the amount of work available starts to dwindle?

At present it seems as if you could discuss furlough with an employee at any point during which the scheme is in place, which is initially for 3 months, so you can keep this under review.

What are the possible issues I should be aware of if people are homeworking?

You need to carefully consider whether people can safely work from home or not, including an assessment of:

  • Insurance – will they be covered by your insurance whilst working at home?
  • Safety – do they have a safe environment to work in?
  • Equipment – do they have the right tools for the job?
  • Data security – can this be guaranteed?  It’s far from ideal to allow employees to download work data onto their personal devices.
  • Assistance – what do they do if something goes wrong?
  • Performance – how can you monitor performance?  Do you need them to notify you of start and end times, keep a diary, submit work to you for approval?
  • Wellbeing – can you make sure someone is checking in with employees regularly so they feel supported?

If I put an employee on “furlough” can I still ask them to pick up bits of work when necessary?

The government guidance available to date specifically says that if you are on furlough you should not work for your employer.  It is not clear what the penalty is but you may risk losing the funding for that person’s furlough.

Both Danny and Clare offer free consultations for businesses to discuss your specific needs, and If you would like to discuss your business with them you can email Howells to make an appointment at [email protected], visit our website or call us:

Sheffield0114 249 66 66

Barnsley0122 680 51 90

Rotherham0170 936 40 00

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