A Fine Balance – Coronavirus Lockdown Number Three

Although it was an inevitable consequence of a virulent new strain and the coming of winter, Coronavirus lockdown number three is taking its toll on an exhausted population. Despite the vaccine being rolled out at a galloping pace, being stuck at home during the dank, dreary days of mid-winter is filling few people with joy if the comments on internet forums and newspaper op-eds are to be believed.

However, much of the government’s mixed messaging that is causing frustration and confusion is the result of a much stronger and more positive strategy than was present during the March lockdown. Back in those scary days of early 2020, everyone, including scientists, healthcare workers, and politicians had little idea of what they were dealing with. So when a national lockdown was announced, the country (and indeed most of the world) simply shut up shop. Although initial estimates of a 14% drop in national output proved overly pessimistic, the actual figure of around £190 billion (a drop in GDP of 9.5%) was catastrophic for many industries and businesses.

Ten months on we have a better understanding of not only the virus, but how to keep as much of the economy running as possible whilst facilitating the extreme social distancing required. Schools have more children of key workers attending because not only has the definition of key worker been expanded, but fewer businesses are furloughing staff. The property market, construction, manufacturing – industries that ground to a halt in March, April, and May 2020 are continuing to operate. Furthermore, as always happens in a crisis, people quickly adapt and hunt out opportunities. Many small businesses have taken advantage of their agility and moved online and/or sought new markets abroad, resulting in some being busier now than they were pre-pandemic.

In light of the current dynamic situation, below are some factors which employers need to be aware of regarding the Job Retention Scheme and health and safety compliance, including pitfalls to watch out for.

Coronavirus Job Retention Scheme (the Furlough Scheme) and government-backed loans

In December 2020, the Chancellor, Rishi Sunak announced that the Furlough Scheme, in which the government pays 80% of a furloughed employee’s wages, will continue to the end of April 2021. Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.

Watch out for – furlough fraud

Alongside the extension of the Furlough Scheme a parallel project is being run by HMRC to claw back funds that should not have been claimed during the first lockdown. Make sure you follow the rules of the scheme diligently, the most important being that furloughed employees must not work. To mitigate your risk of an HMRC investigation, ensure that you keep up to date records of who is receiving furlough payments and the funds distributed. The other area of concern is the rampant furlough fraud being committed by organised criminal gangs. Protect your business from being unwittingly caught up in such fraud by having documented new customer and supplier due diligence policies and procedures in place and communicated to all staff. In addition, rigorously monitor your business accounts/investments for any unusual activity.

Manging Coronavirus risks in the workplace

If your employees cannot work from home you must conduct a Coronavirus health and safety risk assessment at your premises/s and implement policies and procedures to ensure your staff and the public are protected. Not doing so could result in your organisation and its directors facing a regulatory investigation, personal injury or employment law claims, and even prosecution.

Acas advice regarding keeping your workplace safe is regularly updated. At a minimum, all employers should have regard to eight priority actions designed to protect employees and customers:

 

  • Complete a Coronavirus risk assessment and share it with all staff.
  • Encourage staff to wash their hands regularly, provide hand sanitisers, and clean surfaces frequently.
  • Help with social distancing by putting a one-way walk system in place for staff and customers.
  • Ensure that face coverings are worn by anyone visiting your workplace (unless they are medically exempt).
  • Keep your workplace well ventilated. The HSE has provided excellent guidance on this.
  • If applicable to your business, follow the legal requirement to keep a record of staff and customers attending your workplace and ensure that your method of data collection is compliant with the NHS track and trace system.
  • Consider the mental health of you and your employees. Public Health England has produced useful guides on steps to improve mental health during this turbulent time.
  • If an employee is required to self-isolate they must do so. Under the Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, employers have a legal obligation to ensure staff they know have tested positive for Covid-19 or have been in close contact with somebody who has, do not come to work. Failure to comply with this law can result in a £1,000 fine for the first offence, rising to £10,000 for repeated offences. Workers must also inform employers if they are required to self-isolate.

Watch out for – breaching your duty of care to homeworkers

All employers have a duty of care to protect the health, safety, and wellbeing of their employees and visitors to their workplace. This includes homeworkers. Ensure that you have homeworking staff conduct a risk assessment relating to their workstation setup. HSE has provided a useful checklist for this. Also, keep in regular contact with homeworkers to make sure they are not feeling isolated and stressed. Out of sight, out of mind could result in a future Employment Tribunal claim so check in regularly and give all employees a point of contact who they can call if they need support.

The government’s aggressive rollout of the vaccination programme provides hope that this will be the last big lockdown we have to battle through. For employers, navigating the ever-changing laws and guidance is a challenge in itself. Our team is here to support you and provide bespoke advice for your business. The cliché “it is always darkest before dawn” has been regularly bandied about over the past few weeks, but in this case, it is likely to be true.

To make an appointment to discuss any aspect of employment law please email or phone our helpdesk on (0)20 8349 0321.

The Impact of the New UK lockdown restrictions for UK Businesses

From the 5th of November, new national restrictions have been imposed across the UK. These measures will undoubtedly have an impact on UK businesses and the economy at large. In this post, our north london employment solicitors outline some of the potential implications of these changes to the markets while looking at potential employment issues this could cause for businesses in the UK. 

UK Business Closures

Following the latest lockdown announcement from the Government regarding the closure of businesses in the UK, there will be an obvious impact on the business economy. The Government has requested that all employees who can work from work continue to do so. However, there are many businesses and venues that have been ordered to close completely.

The top-level summary of these business includes those mentioned below; and while there are certain caveats to some of these organizations keeping their doors open for vital community services, the business owners and their local economies will be impacted for at least a month, with much speculation that this period of closure could indeed last for longer than the initial 4-week plan.

  • Non-essential retailers
  • Hospitality venues
  • Accommodations
  • Sports and Leisure facilities
  • Entertainment venues
  • Community halls and centres
  • Personal care facilities
  • Places of worship

Coronavirus Job Retention Scheme Update

The current CJRS was due to end on the 31st of October but has since been extended into December.

UK Furlough Scheme Latest Information – the 5th of November

The Government has now announced a five-month extension to the furlough scheme, meaning this will now last until Spring 2021. This is designed to give workers a certain amount of certainty over the winter and is designed to help protect millions of jobs in the UK. While this news is positive, employers in the UK still have many questions about what this means for them and for their businesses.

This next section is a summary from our of some of the most asked questions from UK employers about the furlough scheme extension from our finchley based employment solicitors:

Does my business need to have used the CJRS before in order to use it again?

No. In order to be eligible for the scheme, an employee will need to be on the PAYE payroll as of 23:59 on the 30th of October. You must have made an RTI submission to HMRC by this date.

What costs will employers need to pay under the extended CRJS?

The Government will pay 80% of any eligible wages for hours unworked, up to a maximum of £2,500. Employers are still responsible for paying any pension and national insurance contributions for the unworked hours.

Can staff now be furloughed if they weren’t previously?

Yes, as long as they were on the PAYE payroll by the deadline of 23:59 on the 30th of October, and provided the employer meets the eligibility requirements, this is fine. This means that any new starters or staff members who were not previously furloughed can indeed be included in this scheme.

If staff were due to return to work are unable to do so, what action should employers take?

If you have members of your team who were due to make a return to work but are now unable to do so, the key element for employers to consider is communication. As we are facing somewhat unprecedented times, it is good practice to speak to your employees over the phone or via video conference as soon as possible. Avoid sending emails as a primary form of communication, and be prepared to answer their questions or listen to their concerns. Always follow up key conversations with emails or letters, but in the first instance, take the time to reach out and answer their questions via phone or VC. Supporting the well-being of your staff at this time is going to be key, and regular catch-ups or team meetings over video conference is a good way to do this.

If I made someone redundant, can I bring them back and furlough them?

There is no clear guidance on this subject from the Government at this point. Although the original furlough scheme did allow employers to rehire staff who had been made redundant, the current guidance does not make it clear whether this will or will not be included just yet.

Is flexible furloughing still possible under the new CJRS scheme?

As with the current scheme, both full-time and flexible furloughing will be possible. So, for those employers looking to bring back staff on a part-time basis, it is possible to do this and use the furlough scheme for the unworked hours.

We would expect there to be further updates to the furlough scheme. These are the most prominent questions we’re hearing from people at the moment. Although the last-minute announcement didn’t give businesses much time to plan for these changes, they have confirmed that they will not extend the furlough scheme again. Rishi Sunak also confirmed that the furlough scheme would be reviewed in January once a review of the economic situation had been undertaken. 

Self-Employment Income Support Scheme Latest Information

Support for the millions of self-employed workers across the country has already been reviewed, and there will be a third grant offered at an increased rate to the previous grant. It will cover the period from November through to January and is to be calculated at 80% of the average trading profits, up to a maximum amount of £7,500.

Further information on the announcements made by the Government on the 5th of November can be found on this economic support factsheet.

Redundancy fears as the Furlough Scheme comes to an end

In March 2020, Chancellor Rishi Sunak announced an unprecedented government-sponsored furlough scheme designed to protect jobs during the pandemic. The scheme meant that the UK government would pay the 80% salaries of furloughed workers up to a maximum of £2,500 a month, in a bid to prevent job losses while lockdown restrictions meant that companies across the country couldn’t operate as usual.

As restrictions are lifted, the scheme is set to come to an end on October 31st. Without the government’s furlough pay, many people in the UK worry that businesses will start cutting jobs in the weeks leading up to this date. If companies either aren’t operating at full capacity or aren’t making the same income they were before the pandemic, it’s easy to see why job losses might be the likely outcome.

How has the UK fared so far?

2020 has already taken a toll on the UK’s employment levels. Since March, the number of employers in the UK planning 20 or more redundancies has consistently been at least twice as many as in the same month in 2019. 695,000 UK workers have been cut from the payrolls of UK companies since lockdown hit, and many more could be set to join them once the furlough scheme ends.

Sunak has repeatedly ruled out an extension of the furlough scheme beyond October, but what does this mean for the coming months? The Trades Union Congress general secretary Frances O’Grady thinks government intervention is the only way out, saying: “If the government doesn’t act, we face a tsunami of job losses”, which was backed by governor of the Bank of England Andrew Bailey who suggested some sectors would benefit from further help, having previously backed the decision end the scheme in August.

Does employment law offer any protection from redundancy?

It’s possible to challenge a redundancy with proper legal advice, although if your employer is making you redundant alongside many other employees as part of Covid-19 cuts, it’s unlikely your appeal will be upheld. However, some protections are in place: you are still entitled to the full 45 days redundancy notice, and the government has recently brought in a new law to ensure that furloughed employees receive redundancy payments based on their full salaries, rather than their furloughed salaries.

For help and advice on matters relating to employment law, please get in touch with our employment team today

Employees returning from parental leave continue to be eligible for furlough scheme

Employees returning from statutory maternity and paternity leave in the next few months will remain eligible for furlough through the Coronavirus Job Retention Scheme (CJRS).

Since 10 June, it has no longer been possible to furlough an employee for the first time, with the Government set to introduce part-time furlough from 1 July onwards. To facilitate this, the scheme will only be available to employers that are using the CJRS and employees that have previously been furloughed.

Because workers must complete 21 days of furlough to be eligible for part-time furlough, this means that the cut-off date for employees to be placed on furlough leave was Wednesday 10 June.

However, employees returning from parental leave will be eligible for the CJRS as they return to work, with further details set to be announced by the Government imminently.

The CJRS has helped more than one million employers so far, with more than one quarter of the UK workforce being furloughed.

Rishi Sunak, Chancellor of the Exchequer, said: “When I announced these changes to the furlough scheme last month, I was clear that we wanted to do this in a fair way, that supports people back to work as the country begins to re-open following coronavirus.

“But for parents returning from leave, their circumstances has meant that they are still in need of support, and I’m pleased that they will be able to receive the financial assistance they and their family will need.”

Are employers responsible for commuter safety as people return to work?

Current guidance recommends that anyone who is not able to work from home should return to work within the ‘COVID secure’ guidelines.

As part of this return to work, people are being encouraged to avoid public transport where possible, but for many this may not be possible.

To assist those who commute via public transport the Department for Transport has published guidance. These guidelines include:

  • Take a less busy route
  • People should travel at off-peak times
  • Wait for other passengers to get off before boarding
  • Keep two metres away from other passengers where possible
  • Wash hands for at least 20 seconds after completing a journey

It is mandatory for passengers on all forms of public transport to wear a face covering from 15 June. Fines will be issued to those who refuse to follow this rule and they may be refused travel.

Employers are not legally responsible for any risks associated with an employee’s commute to work, but they do need to be aware of travel arrangements as it may increase the risk of transmission at work.

It is in an employer’s best interest to have a discussion with workers about their return to work and be receptive to concerns they may have about their commute.

Employers are being encouraged to discuss what is possible, and what might not be when taking their circumstances into account.

When bringing people back to the workplace employers should be careful not to discriminate against an employee based on their circumstance or create a situation that could lead to a potential legal dispute.  

Employers face imminent decisions on redundancies

Employers concerned at the prospect of contributing to the cost of furloughed employees’ wages from August now face imminent decisions about whether to begin the redundancy process.

An employer wishing to make 100 or more redundancies from 1 August, when the Coronavirus Job Retention Scheme (CJRS) will cease to cover the cost of National Insurance and pension contributions, has until 15 June to initiate a 45-day consultation.

Meanwhile, employers looking to make between 20 and 99 redundancies must initiate a 30-day consultation, giving them until the start of July.

Additionally, employers may also need to allow for time for employee representatives to be elected, where there is no recognised trade union.

Collective consultation must follow a set structure, which begins with notifying the Redundancy Payments Service (RPS) ahead of the consultation, consulting with trade union or employee representatives, providing information to staff, responding to requests for further information, issuing termination notices and issuing redundancy notices.

For employers looking to make fewer than 20 employees redundant in a 90-day period, there is no statutory consultation period, but some form of consultation is generally recommended in order to mitigate the possibility of disputes arising.

Whistleblowers make almost 2,000 allegations of furlough fraud

Figures show that almost 2,000 allegations of furlough fraud have been made by whistleblowers against employers, with HM Revenue & Customs (HMRC) expected to impose steep penalties on businesses and directors found to have abused the scheme.

Such claims come in several forms, including requiring furloughed employees to work, failing to pass the full value of the grant to the employee and backdating claims to include periods when the employee was, in fact, working.

Draft legislation published by the tax authority indicates that retrospective auditing of the Coronavirus Job Retention Scheme will be rigorous with severe penalties for employers found to be in breach of the rules.

The proposed legislation provides for HMRC to raise Income Tax assessments to recover amounts wrongly claimed from the scheme and to charge penalties in instances of deliberate wrongdoing.

Significantly, the legislation also contains provisions for holding company directors jointly and severally liable for any breaches.

Chancellor unveils changes to furlough scheme

The Chancellor, Rishi Sunak, has announced a series of changes to the Coronavirus Job Retention Scheme (CJRS) from July that will see furloughed employees able to return to work part-time, but with the value of Government support reducing gradually from August.

Meanwhile, the scheme will, in effect, close to employees who have not previously been furloughed from 10 June, before closing completely at the end of October.

A system of ‘flexible furloughing’ will come into effect from 1 July, allowing employers to bring back furloughed employees for any amount of time on any shift pattern, while still able to claim a grant in respect of the time not worked when they otherwise would.

Employers will have to pay employees at their usual rate of pay for any hours they work, while also covering the cost of Employer National Insurance Contributions (NICs) and minimum employer automatic enrolment pension contributions that this pay attracts.

They will need to reach new flexible furlough agreements with any furloughed employees brought back on a part-time basis.

From 1 August, CJRS grants will cease to cover Employer NICs and pension contributions, with this cost passing to employers. The grant will continue to cover 80 per cent of furloughed employee’s usual wages, up to a cap of £2,500 a month.

However, from 1 September, the value of the grant will fall to 70 per cent of a furloughed employee’s usual wages, capped at £2,187.50 a month. Employers will be expected to contribute the remaining 10 per cent plus NICs and pension contributions to reach a combined total payment to the employee of 80 per cent of their usual wages, up to a cap of £2,500 a month.

October will see the value of the Government contribution fall again to 60 per cent, capped at £1,875 a month, with employers expected to contribute 20 per cent of a furloughed employee’s usual wages plus NICs and pension contributions to reach the total of 80 per cent, capped at £2,500 a month.

At the same time, the Chancellor confirmed the closure of the scheme to new entrants from 30 June. After this point, employers will only be able to furlough employees who have been furloughed for three full weeks at any point before 30 June.

This means the last day an employer can furlough an employee for the first time will be Wednesday 10 June.

Furthermore, after 30 June, employers will not be able to claim for more employees in a claim period than the maximum number they have claimed for in any period under the scheme in its current format.

Full details of how the scheme will operate from this point are expected to be announced on 12 June 2020.

The announcement comes against the background of an easing of the lockdown restrictions that have closed down large sections of the economy since late March, with the Government now encouraging certain sectors back to work.

The CJRS was announced by the Chancellor in March and currently allows employers to furlough any employees who were on a PAYE payroll and reported to HM Revenue & Customs (HMRC) through the Real-Time Information (RTI) system by 19 March 2020.

Since then, more than a million employers have collectively claimed £15 billion from the scheme in respect of 8.4 million employees, via the Government’s online portal.

The announcement comes days after the Chancellor issued a new Direction to HMRC, updating the record-keeping requirements of the scheme.

Under these requirements, the written agreement that the furloughed employee will, under the current terms of the scheme, cease all work must be retained until 30 June 2025 and:

  • State the main terms and conditions;
  • Be incorporated either expressly or implicitly in the contract of employment; and
  • Be either made or confirmed in writing.

It is widely expected that HMRC will audit use of the scheme retrospectively over the coming months and years, with potentially hefty penalties for those found to have acted improperly.

What happens if my employees have to self-isolate following contact tracing?

Following the launch of the Government’s contact tracing system, employers should be prepared for the possibility of multiple employees being required to self-isolate if one employee from the workplace tests positive for Coronavirus.

This means it is vital that employers are aware of the arrangements concerning Statutory Sick Pay (SSP) and self-isolation.

Changes to the regulations that were implemented after the outbreak hit the UK mean that self-isolating employees are entitled to SSP from the first day of absence, if they cannot work from home.

Employers can claim a grant to cover the cost of SSP resulting from Coronavirus for up to two weeks per employee.

Where a self-isolating employee does not have symptoms, is otherwise fit to work and can work from home, they should continue to do so on full pay.