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The Blackadders Employment Team has received many questions from employers in relation to their obligations to their employees in the current climate. You may have read our previous blogs that have dealt with various specific issues. This blog aims to answer many of the common questions that we are receiving and will hopefully assist employers during this difficult and unprecedented time.
Now that we are in lockdown, do we still have to pay our staff?
Unless you have already laid staff off or made staff redundant, unfortunately, yes. However, under the Government’s new Job Retention Scheme, you could come to an agreement with your employees and ask that they change their status to “furloughed” worker. You could then apply for a grant which would cover 80% of employee wages up to £2,500 rather than you having to pay full wages. The grant can go back to 1 March and will last for a minimum of three months.
How will furlough work and do I need to do anything to put this into place for my staff?
HM Revenue and Customs guidance is very sparse at the moment. Legally, employees will need to agree to change their employment status to “furloughed workers”. If an employer tries to force this status on them without agreement then this could arguably give rise to a breach of contract/constructive dismissal claim. However, where the alternative option to being a furloughed worker would be redundancy, it is hoped that employees will be willing to accept this change in order to remain employed. If possible, you should consult with employees and ask them to agree to be put on furlough (ideally in writing and by signed agreement although email agreement is a good second option).
What happens to holiday entitlement if staff are put into furlough? Does it continue to accrue?
Yes, their holidays will continue to accrue during this time. If an employee is on a zero-hours contract and put on furlough then they will be entitled to accrued holidays at an average based on their previous 12 weeks of work (although this will change to 52 weeks from 6 April 2020 due to the upcoming employment law changes).
What about people on long term sick? Do they continue to get sick pay or can they be put on furlough?
If those on long term sick are in the same class of worker as everybody else who gets furloughed then arguably they will need to be furloughed too (subject to them agreeing to this). In instances where employers are doing a redundancy exercise, sick employees would be included in this and we would, therefore, recommend the same treatment when putting staff on furlough (otherwise if they are off sick with a disability then there is a risk that they will make a discrimination claim). Of course, they might not agree to be furloughed in which case they would continue to receive sick pay.
Can we ask someone to be a “furloughed worker” if they have not yet commenced working for us?
If someone has accepted an offer of employment but their commencement date has not yet passed, legally, they still have a contract of employment and they, arguably, should qualify under the furlough scheme. The employment contract comes into effect from the date an employee accepts this unconditionally meaning that they are effectively employed by the company from the date of acceptance.
Employees will now require to work from home? Is there any documentation I should have in place to support this?
We would recommend that you have a homeworking policy in place in this instance. The Blackadders Employment Team have a template which we would be happy to update and prepare for your particular business.
How do lay-offs work and can I lay-off some of our staff?
As discussed in our earlier blog (Part 3), lay-off is where you send people home without pay due to lack of work and can be done if there is provision in an employee’s contract. However, it is worth noting that the employee is entitled to a guaranteed payment of £29 per day (£30 per day from 1 April 2020 in line with the upcoming employment law changes) for up to five days. One thing which requires attention is that if an employee is laid off for 4 weeks or more, they can put in a resignation and claim statutory redundancy pay. The same applies if they are laid off for 6 weeks out of 13 (where no more than 3 weeks are continuous). Accordingly, lay-offs require to be used carefully due to the possibility that staff can trigger redundancy at these two milestones. Given the recent Government updates, furlough may be a more effective solution at this time if employees agree to this.
As always, if you are in any doubt then please contact the Blackadders Employment Team to discuss your queries or concerns.
Fiona Knox, Trainee Solicitor
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Coronavirus: A Guide for Employers Part 3
Coronavirus: A Guide for Employers Part 2
Coronavirus: A Guide for Employers Part 1
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