There is lots of information online regarding what support and information there is available for businesses during the Corona Virus outbreak, much of it is hearsay and gossip. Our Employment Law department, answer some frequently asked questions in regards to what employers can/must do in relation to employees during this crisis.
Advice updated 13.01.2021
Can I still claim payments for my employees under the furlough scheme?
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 introduced a Coronavirus Job Retention Scheme (“CJRS”), otherwise known as furlough, a scheme where staff can be sent home and still receive payment.
Initially furloughed employees were paid 80% of their current salary by the Government (capped at £2500). The government contribution was reduced in September and October 2020 and employers were required to top up an employee’s wage to 80% of their wage up to a cap of £2500. The Furlough scheme was extended from 1 November 2020 however and, from that date, the government contribution increased to 80% of an employee’s wage up to the £2500 cap
It is still open to you to top up the payment so that your employees receive their full wage but you are not obliged to do so.
The furlough scheme previously closed to new entrants on 30 June 2020 and employers were unable to furlough employees who had not been furloughed before the cut off date. With the extension however employers are able to furlough employees from 1 November 2020 even if they were not previously furloughed.
Which employees are eligible to be furloughed?
To be eligible to be furloughed an employee must have been by you on 30 October 2020 and you must have made a Real Time Information submission to HRMC notifying them of payment being made to the employee between 20 March and October 2020.
Can a furlough agreement with an employee be backdated?
A furlough agreement was only able to back dated to 1 November 2020 if the employee had genuinely been on furlough from 1 November 2020 and the backdated agreement was put in place by the end of 13 November 2020.
Can I rehire employees who were made redundant before the furlough scheme was extended?
Employees who were on an employee’s payroll on 23 September 2020 and later made redundant or stopped working for an employer can be rehired and furloughed if and their employer made a Real Time Information submission to HRMC notifying them of payment being made to the employee between 20 March and October 2020. Employees who stopped working for the employer before 23 September 2020 are not eligible to be furloughed if rehired. There is no obligation upon an employer to rehire and furlough employees however. If a redundancy payment was made to rehired employees then an agreement will need to be reached regarding whether this needs to be repaid, and how, at the time of rehiring.
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?
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, or require them to take holiday?
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.
If you are going to decline a holiday you need to give at least the same amount of notice as the holiday leave requested – so if someone has asked for a day’s holiday you need to give them a days’ notice that you are not allowing it.
In 2020 the Government announced an amendment to the Working Time Regulations allowing employers to permit rolling over annual leave over the next two holiday years.
If you accept a request for annual leave during furlough then this should be paid at your employee’s usual rate of pay.
If you cannot afford to pay your employee their usual rate of pay then you should try to agree with them that the holiday will be cancelled, they will continue on furlough, and be able to take the holiday later on. They may agree to this if the alternative is redundancy
If a member of staff should be self-isolating can I send them home i.e suspend them?
From 28 September 2020 it is an offence for an employer to allow a worker who should be self isolating to attend any place for any purpose related to their employment unless that place is where they are spending their period of self isolation (for example if an employee is working from home and still fit to carry out work during the period of self isolation).
An employer will be subject to fixed penalty notice of £1,000 for a first offence, £2,000 for a second offence, £4,000 for a third offence and £10,000 for a fourth and any subsequent offences.
It is recommended that you inform employees that they should not attend work or any other place for work related purposes if they are told to self isolate. You should have a clear procedure for staff to inform you if they have been told to self isolate and ensure that it is effectively communicated to all staff members.
What if an employee complains that the workplace is unsafe?
You need to make sure all your risk assessments are up to date to take account of Covid19. If you consider you have taken whatever steps are necessary to implement government guidelines and your workplace is safe, you need to ensure this is carefully documented. Raising a concern about safety could in some circumstances be whistleblowing, and even if it is not employees and workers must not be dismissed or subjected to a detriment because they have raised genuine safety concerns. So you need to listen to the concerns and reassure the employee(s) concerned. If they continue to complain or refuse to work you should take legal advice before taking action against them.
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. 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?
Yes. HMRC’s guidance states that the reference salary (by which the 80% rate of pay is calculated) should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.
Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.
Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.
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 an employee is on “furlough” can I still ask them to carry out work?
Before 1 July 2020 an employer was not able to ask a furloughed employee to carry out work during a period of furlough. An employee had to be furloughed for their full hours.
From 1 July 2020 flexible furlough was introduced. This means that an employer can require an employee to work part time and be furloughed for the remainder of their hours.
If you require an employee to partly return to work from furlough then the furlough agreement should be amended to reflect the new arrangements.
If you require an employee to return to work from furlough or you agree a flexible furlough arrangement with an employee who has not previously been furloughed then you will be able to claim payment from the government based upon the percentage of their hours which the employee is not working. You will be required to pay the employee in full for the hours which they do work and will not be entitled to make a claim to the government in respect of those hours.
Should I keep in contact with employees on furlough?
Employers have a duty of care to employees and it is therefore recommended that you keep in regular contact with employees on furlough to check on their well being, update them as to how long they are likely to remain furloughed and answer any queries they may have. Furloughed staff should also be given the details of a person in HR to contact if they have any queries or matters which they wish to discuss during furlough.
If an employee on furlough has a disciplinary or grievance meeting scheduled during a period when they are on furlough are they still able to attend?
Yes. By attending their own disciplinary or grievance meeting an employee is not providing a service to the employer and they can therefore participate in such meetings whilst furloughed.
If I make an employee redundant can the furlough grant be used towards notice and/or pay?
For periods when an employee was serving their notice before 1 December 2020 the furlough grant could be claimed for those days.
From 1 December 2020 however an employer cannot claim the furlough grant for an employee for any period when they are working their statutory or contractual notice. The employer will be responsible for paying the employee their full notice pay entitlement.
The furlough grant also cannot be used towards redundancy pay and an employer is therefore responsible for paying an employee their full redundancy pay entitlement.
If an employee has another job can they still be furloughed?
An employee with two or more jobs can be furloughed from each of those jobs and the £2500 cap applies to each employer individually.
Is there a deadline for an employer to make a claim to the furlough scheme?
Claims up to and including October 2020 had to be made by 30 November 2020.
From November 2020 onwards an employer must make a claim by the 14th
day of the month following the month to which the claim relates. For example, a claim in relation to November 2020 had to be made by 14 December 2020. Only one claim can be made for each claim period and an employer therefore needs to make a claim in respect of all furloughed employees in each period at the same time.
Will there be any support available to businesses once the furlough scheme ends?
At present the furlough scheme is due to end on 30 April 2021. No confirmation has been given as to what support, if any, will be available after that date.
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