We set out below the recent amendments to legislation in relation to employment law which are designed to help employer and employee alike weather the coming weeks and months.
What does the government’s announcement on 23 March 2020 mean for employers?
On 23 March 2020 the government issued new guidance which requires the public to stay at home, subject to limited exceptions (Cabinet office: Full guidance on staying at home and away from others). Commuting to work is permitted, but only where the work “absolutely cannot” be done from home.
The effect of the new guidance is also to close down all non-essential businesses including:
Hotels, hostels, bed and breakfasts, campsites, caravan parks, and boarding houses for commercial/leisure use (excluding permanent residents and key workers).
If the workplace has to close temporarily following the government’s announcement on 23 March 2020, do we still have to keep paying our employees?
Some employers will be able to continue to run their business with employees working remotely, but many employers will not be able to do so, such as those in the service industry. All employers should consider whether there is work that some or all of their employees could carry out in this situation, at least for an initial period. This may mean asking employees to temporarily carry out work that is not within their usual job description. However, in the circumstances, employees are likely to be flexible in order to both help their employer’s business keep running and to keep getting paid.
Where an employer is not able to continue its business with employees working remotely, the Coronavirus Job retention Scheme will pay employees’ salaries of up to £2,500 a calendar month as long as they are kept on the payroll.
If we need to ask all our employees to work from home in light of the government’s announcement on 23 March 2020, what issues do we need to consider?
The Acas, Working from home guidance summarises the issues to consider, including:
Dealing with the economic impact: changing terms and lay-off
The action an employer should be taking will depend, to some extent, upon the nature of the workplace, the roles carried out and the demographic of the workforce, but some of the issues that employers should consider from an employment law perspective include:
If the workplace temporarily closes due to insufficient numbers of employees being able to attend work, what pay are employees entitled to?
We have assumed for the purposes of this answer that the employer envisages that the closure will be temporary and that it intends to reopen once sufficient employees are able to attend, and any government restrictions allow it to do so. We have also assumed that alternatives to closure (such as finding temporary cover to fill the gaps in the workforce or introducing homeworking) have not prevented the closure.
Those who are already being treated as unable to work due to either self-isolation or diagnosis with COVID-19 will remain on sick leave until they are fit to return to work. At that point, they will be treated the same as the employees who were sent home at the point of closure (discussed below). Appropriate communication should take place to ensure that they are aware of their position, and any transition from sick leave to another form of leave or lay-off.
Any temporary closure of the business will be treated as the employer’s decision and so, in principle, the employees will remain entitled to full pay, unless there is no contractual requirement to offer work (which may be the case for casual employees). This is on the basis that those who are not on sick leave are willing and able to work, and it is their employer’s decision to temporarily close the workplace which is preventing them from performing duties. However, the employer will be able to apply to the Coronavirus Job retention Scheme which will pay employees’ salaries of up to £2,500 a calendar month as long as they are kept on the payroll.
What steps can we take to protect our business if we are forced to temporarily close?
Many employers will be in this situation following the government’s announcement on 23 March 2020. Where an employer is not able to continue its business with employees working remotely, the Coronavirus Job retention Scheme will pay 80% of employees’ salaries of up to £2,500 a calendar month as long as they are kept on the payroll (see Coronavirus Job Retention Scheme.
Other options include:
In what circumstances should the employer consider lay-off and short-time working?
Lay-off may need to be considered in the following scenarios:
Short-time working may need to be considered where there is:
In the Spring 2020 Budget, the government announced several measures including:
On 20 March 2020, the government announced:
Coronavirus Job Retention Scheme (furlough leave)
The introduction of a new Coronavirus Job Retention Scheme (furlough leave) was announced by the government on 20 March 2020. Under the scheme, all UK employers, regardless of size or sector, can claim a grant from HMRC to cover 80% of the wages costs of employees who are not working but kept on the payroll (“furloughed”), of up to £2,500 a calendar month for each employee. Employers can choose to top up the remaining 20% if they wish.
On 20 March 2020, the Chancellor announced that the scheme will be backdated to 1 March 2020, be open for at least three months and will be extended if necessary. HMRC are urgently working to set up the new system of reimbursement, but the government hopes that the first grants should be paid within weeks.
The scheme will apply in respect of all employees on PAYE, including those on zero-hours contracts. This means that it will cover many workers as well as employees. An ammendment has been proposed which would give the self-employed similar rights.
What does the £2,500 cover?
The COVID-19: support for businesses guidance states employers will be reimbursed “80% of furloughed workers wage costs, up to a cap of £2,500 per month”. The COVID-19: guidance for employees states that the scheme will allow an “employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month”.
Rights of other types of workers
Agency workers are entitled to “the same basic working and employment conditions” as employees recruited to do the same job (regulation 5(1), Agency Workers Regulations 2010).
Pay is included as a “relevant terms and condition” and is defined as “any sums payable to a worker of the hirer in connection with the worker’s employment, including any fee, bonus, commission, holiday pay or other emolument referable to the employment, whether payable under contract or otherwise but excluding any payments or rewards [listed in regulation 6(3)].”
The Agency Workers Regulations guidance provides the following non-exhaustive list of pay for these purposes:
Are self-employed freelancers entitled to be paid when they are self-isolating?
If the freelancer is a genuinely self-employed contractor, the position is (for the time being) more straightforward than in respect of employees.
Self-employed contractors are not currently entitled to SSP, even if their absence is sickness-related. Whether the freelancer is entitled to any contractual payments for shifts missed due to self-isolation will therefore depend upon the terms of the consultancy agreement relating to payment for non-attendance (if any).
If the freelancer is asymptomatic and therefore in theory able to work, but just cannot attend the workplace, it may be possible for the employer to consider other options such as remote working. This would ensure that the work is completed and the freelancer does not lose income.
The position in relation to payments due to freelancers who are self-isolating may rapidly (and potentially retrospectively) change, since the government is under increasing pressure to ensure that there is no disincentive for anyone to follow the guidance on self-isolation during the pandemic. In the current unpredictable environment, employers would be sensible to monitor all developments closely.
On 17 March 2020, the government published details of the Coronavirus Bill 2019-2021 and set out proposed emergency legislative measures to address the outbreak (see Department of Health and Social Care: Guidance: What the coronavirus bill will do (17 March 2020)). The legislation will be time-limited for two years. Not all measures will come into force immediately, but they may be brought in when needed. From an employment law perspective, the following measures are of interest:
Proposed amendment to introduce statutory self-employment pay
The House of Commons Public Bill Committee has proposed an amendment to the Coronavirus Bill 2019-2021 which would require the government to introduce “statutory self-employment pay” for the “self-employed” and “freelancers” equivalent to furlough leave for employees and workers (see Coronavirus Job Retention Scheme (furlough leave)). The amendment proposes that individuals who are self-employed or freelancers would receive a “top-up” to ensure that their net monthly earnings do not fall below the lower of:
Statutory sick pay (SSP) and COVID-19
In order to qualify for Statutory sick pay (SSP) an employee must be absent from work due to incapacity (see Practice note, Sick pay: Eligibility). Where an employee has not, at the point they are suspended, either been diagnosed with COVID-19 or exhibited symptoms, it is unlikely that their absence will meet the definition of day of incapacity. The changes provide that a person is deemed incapable of work where he is:
“(i) isolating himself from other people in such a manner as to prevent infection or contamination with coronavirus, in accordance with guidance published by Public Health England, NHS National Services Scotland(d) or Public Health Wales(e) and effective on 16th March 2020; and
(ii) by reason of that isolation is unable to work.”
In addition, an employee who is in quarantine after travelling abroad, or strongly advised in government guidance to self-isolate, will be regarded as being incapable of working for SSP purposes.
Absence and pay: no symptoms or diagnosis
If the workplace and the nature of the role allow for remote working then this may provide the employer with an alternative to suspension for the purposes of self-isolation (see Homeworking).
There are a range of reasons that an employer may wish to send an employee home to self-isolate. The employer may be acting out of an abundance of caution (in circumstances where government guidance does not suggest that self-isolation is required), the employee may have had contact with someone who has been infected (which may fall within the circumstances in which the government recommends self-isolation), or they may be exhibiting symptoms.
If there is an identified risk that an employee may have been exposed to COVID-19, then it is understandable, in light of an employer’s duty to protect the health and safety of other employees, that the employer would wish to keep that employee away from the workplace until the risk has passed. Ultimately, the employer may regard the risk of allowing the employee to remain at work as outweighing any employment law risk which could exist in suspending them.
Where an employer sends an employee home from work to self-isolate, what pay are they entitled to?
Scenario 1: Employer suspends for reason not falling within government self-isolation advice
Where an employee is suspended by their employer on health and safety grounds, because of a possible risk of infection which does not fall within the government’s self-isolation advice, it is likely that they have the right to continue to receive full pay on the basis of the employer’s implied duty to pay wages.
Scenario 2: Employer suspends for reason falling within government self-isolation advice
Where an employer is considering suspension because an employee falls within the circumstances in which public health advice is to self-isolate then the position in terms of pay may be different. If the employee falls within the category of people who have been advised in government guidance to self-isolate then they will fall within the new deemed incapacity rules for SSP.
What should an employer do if an employee is living with someone who is suspected to have, or has been diagnosed with, COVID-19?
If a member of an employee’s household is suspected of having, or has been diagnosed with COVID-19, they will need to self-isolate for 14 days. The employee will be deemed incapable for work under the new deemed incapacity rules for SSP. They will therefore be entitled to SSP, or any contractual sick pay which may apply in this scenario.
Where an employee refuses to attend work due to fears about coronavirus, what action can the employer take and what pay are they entitled to?
If the employee can work from home, this may well resolve the issue. If not, the employer would need to consider the current public health advice, the specific reason that the employee is concerned about attending work and whether it would be discriminatory to refuse home working, take disciplinary action, or withhold pay in light of the employee’s refusal.
Where an employee self-isolates following either a direction by a medical professional or government guidance, what pay are they entitled to?
It is assumed for the purposes of this answer that the employee is not exhibiting symptoms and has not been diagnosed with the disease in question, and that they cannot work from home during their self-isolation.
Where an individual self-isolates in response to either direction by a medical professional or government guidance they will be deemed incapable under the new deemed incapacity rules for SSP (see In what circumstances is SSP payable?). They will therefore be entitled to SSP, or any contractual sick pay which may apply in this scenario.
What pay is an employee entitled to where they have mild respiratory symptoms but no diagnosis of Covid-19?
An employee in these circumstances may be treated as being on sick leave and be paid SSP or contractual sick pay. Although their mild respiratory symptoms may not have ordinarily resulted in them taking sickness absence, the fact that they have symptoms likely brings them within either the normal definition of incapacity, or the deemed incapacity provisions.
Where an employee falls into one of the categories the government has “strongly advised” to work from home, can the employer require them to come into work if their role cannot be carried out remotely?
On 16 March 2020, the government issued the Social distancing guidance which “strongly advises” certain categories of vulnerable employees to practice socially distancing measures including working from home and avoiding public transport. Those categories are:
The government’s announcement on 23 March 2020 that all members of the public must stay at home, except in very limited circumstances, means that all employees must be permitted to work from home where possible. If the employer is one which is permitted to continue operating (meaning that employees who cannot carry out their work from home are permitted to commute to work) then an employer should consider their position very carefully before requiring an employee to come into work if they fall into one of the vulnerable categories identified. To do so could amount to a breach of the employer’s duty of care to the employee.
Where an employee falls into one of the categories the government has “strongly advised” to work from home, what are they entitled to be paid if they remain at home and it is not possible for them to work remotely?
Affected employees are potentially entitled to SSP or contractual sick pay if applicable. However, unlike self-isolation for seven or 14 days, social distancing for vulnerable employees may be required for many months. Very few employees will be able to afford to receive only SSP long-term and some may put pressure on their employer to allow them back to work. The alternative for employers is to continue to pay the employees full pay. However, this is a difficult situation for employers, many of whom have been adversely financially impacted by COVID-19 already. A potential option for an employer will be to put the employee onto furlough leave. However, the government’s intended purpose for the scheme is to keep employees who would otherwise be made redundant on the payroll (see Coronavirus Job Retention Scheme (furlough leave).
Using annual leave
The normal rules on taking annual leave will continue to apply. Workers may wish to take annual leave as an alternative to scenarios where they would otherwise be on SSP or nil pay. Workers are entitled to take statutory annual leave during sickness absence but may not be compelled by the employer to do so.
Workers who are not on sick leave can be instructed to take statutory annual leave by their employer, provided that they are given the required level of notice (see Practice note, Holidays: Notice by employer that leave must be taken).
Can an employer cancel a worker’s annual leave?
Employers are entitled to require workers not to take statutory annual leave on certain
What special considerations apply where the employee is pregnant?
Employers have additional duties to protect the health and safety of new and expectant mothers in the workplace. In summary, the law requires employers:
As pregnant women have been “strongly advised” to socially isolate, avoid travelling on public transport and work from home where possible, where the nature of the employee’s role means that they cannot work from home and there is no suitable alternative work available that they could do from home, the employer should consider suspending the employee on full pay
What should an employer do where an employee who is at work starts displaying symptoms?
If anyone becomes unwell with a new, continuous cough or a high temperature in the business or workplace they should be sent home and advised to follow the Stay at home guidance.
At what point should an employer close the workplace?
The Acas guidance advises that if someone with COVID-19 comes into a workplace, the workplace does not necessarily have to close.
What adjustments to absence management procedures will be required in light of Covid-19 sickness absence?
Employers should be flexible in the evidence of sickness absence they require from employees or workers. For example, an employee in self-isolation is unlikely to be able to obtain a fit note from their GP. On 20 March 2020, the government introduced a new system of isolation notes which employees can use to provide evidence to their employers that they have had to self-isolate due to COVID-19, either because they have symptoms, or because they live with someone who has symptoms.
A further issue that potentially arises is where an employee’s absence (whether because of sickness or because of isolation) triggers action under their employer’s absence management policy. Employers with such policies should consider informing all employees that a period of absence caused by COVID-19, whether because of infection or due to self-isolation in accordance with government guidance, will be disregarded for the purposes of the absence threshold at which formal action is taken under the policy.
Can we change our enhanced sick pay scheme to provide that only SSP is payable in the event of absence due to Covid-19?
On 23 March 2020, the government advised that all employees should work from home wherever possible.
If there is already an established requirement to work from home where appropriate or where instructed to do so (or in the case of a business continuity issue such as a pandemic), then there is unlikely to be an issue in applying that obligation in an effort to contain the spread of COVID-19.
If not, imposing home working would arguably constitute a variation of the contract requiring employee consent. However, where an employee is faced with either being on SSP or nil pay as an alternative, they may well be willing to consent to working from home as a way of preserving pay. There are alternative methods of changing terms and conditions of employment, but in the circumstances and given the time sensitive nature of the COVID-19 outbreak, employee consent is likely to be the most realistic means of validly imposing a home working requirement where none previously existed.
Where home working is being newly introduced, or expanded, the employer should ensure that the health and safety implications have been considered and that the necessary infrastructure is in place.
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