The Impact of the New UK lockdown restrictions for UK Businesses

News Article

From the 5th of November, new national restrictions have been imposed across the UK. These new lockdown restrictions 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.

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Susan Bernstein
Partner - Employment
Posted in covid-19, Employment, Latest News.