< Back to insights hub

Article

Coronavirus – Implications for UK Employers1 April 2020

Share this Page
The continually evolving situation in respect of the coronavirus (“Covid-19”) pandemic has naturally had a significant economic and personal impact on UK businesses. Employers should ensure adequate steps are taken to safeguard the health and wellbeing of employees, whilst bearing in mind both current and future financial and commercial implications. Below, we lay out some practical considerations for UK employers in the circumstances.

"Employers should make a concerted effort to check on the mental and physical wellbeing of their staff during this period of uncertainty."

Remote working

The UK Government has now advised that employees work from home (“WFH”) unless the work ‘absolutely cannot’ be done from home – (see here). Employers should look to cancel in-person meetings or events (or, if appropriate, host these using video conference calling technology such as Skype or Loop-up) and consider the practicalities of moving to a system of remote working. It is important that employers, in the first instance, confirm with their employees that it is safe for them to WFH, keeping in regular contact to ensure this remains the case. As an employer’s duty of care extends to the provision of a safe place and system of work for employees, employers should make a concerted effort to check on the mental and physical wellbeing of their staff during this period of uncertainty, sharing ideas and resources for ways to best stay active and connected. Another consideration for employers may be increased vigilance in respect of any IT security breaches, and the protection of the confidentiality of any business information (i.e., ensuring that staff do not share confidential information with household members).

Key Workers

The UK Government has recently issued guidelines in respect of certain critical sectors whose workers fulfil a vital role (“Key Workers”). Where a child has at least one parent or carer who is a Key Worker, they will be prioritised for education provision. Whilst UK schools are now closed indefinitely, children of Key Workers may still attend if they cannot be cared for safely in their homes. There is limited guidance at present as to the best way to evidence Key Worker status for this purpose, but employers could provide pay slips (where employees have not retained copies) or letters of evidence detailing the relevant critical sector and confirming the worker’s position as an employee, where applicable. In some cases, an employee’s role may not fit comfortably within the official definition of a critical sector. Employers should consider whether the employee’s role is necessary to ensure the continuation of an essential public service, in accordance with the UK Government guidelines.

Statutory Sick Pay (“SSP”)

With effect from 13 March 2020, employees now qualify for SSP where they are self-isolating, even where they have not been diagnosed with Covid-19 or displayed symptoms. The regulations bring those in self-isolation within the remit of the definition of ‘incapable of work’ for the purposes of SSP. Small-and medium-sized businesses (those with fewer than 250 employees as of 28 February 2020) will be able to claim a refund of up to two weeks’ SSP per eligible employee.  SSP also now applies from the first day of the employee being ‘incapable of work’.

What other financial support is available to businesses in the UK?

Employees

The Coronavirus Job Retention Scheme (“CJRS”) will allow all UK employers to continue paying a portion of their employees’ salary, where those employees would have otherwise been laid off, or made redundant. Employers wishing to benefit from the CJRS should first identify the relevant employees (“Furloughed Workers”), notify them accordingly, and keep them on the payroll. HMRC will, subject to a cap of £2,500 per month, reimburse 80% of the cost of Furloughed Workers’ wages (the employer may then choose to ‘top up’ the employee’s salary to the full amount, but is not obliged to do so). In contrast to the financial provision for the self-employed detailed below, workers are not able to undertake any work whilst Furloughed. Employers must also bear in mind that changing an employee’s status to Furloughed Worker is likely to require the consent of the employee, unless there is an express right in the employment contract to temporary lay-off (given that any such measure remains subject to existing UK employment law). The scheme will operate through an online portal established by HMRC and is open to all UK employers, including public authorities, recruitment firms, and charities (and, in respect of employee eligibility, is open to all those who have been on the payroll since 28 February 2020, encompassing those on flexible or zero-hour contracts). If an employee who was made redundant since 28 February is rehired, they are also eligible for the purposes of the CJRS. As above, it is imperative that the employee does no work at all for the employer (i.e., the scheme does not extend to those employees whose hours have been reduced).

Employers may choose to ‘top up’ the employee’s salary to the full amount, but they are not obliged to do so.

Self-Employed

For self-employed workers with trading profits of up to £50,000, a new amendment to the Coronavirus relief measures provides for the receipt of a taxable grant worth 80% of their average monthly profits over the last three years (an amount up to a maximum of £2,500 a month). To qualify for the grant, at least 50% of the worker’s income must have come from self-employment, as recorded in their 2018-19 tax return filed in January 2020. Whilst the payment amount will be backdated to March, it will not be paid until June 2020. Anyone very recently self-employed may not qualify for support via this scheme but can still access the government support available through the welfare system (i.e., Universal Credit).

"If the period of lay-off is unreasonably extensive, an employee may resign and claim a statutory redundancy payment."

Notifying employees that a colleague has developed the virus

Information about an employee’s health constitutes a ‘special category of personal data’, under the Data Protection Act 2018. Therefore, in any case where an employee is infected with the virus, employers should take care not to disclose more information than is strictly necessary in respect of the identity of the affected individual. The ICO has issued the following guidance on this point here.

Suspension of work

The economic impact of Covid-19 may result in a downturn in work available, particularly in certain industries. Accordingly, employers may consider asking their employees to take annual leave (as a means of limiting the number of employees on paid leave later in the year once business has resumed), or, as a means of managing cash flow, a period of unpaid leave or a sabbatical. If employers are looking to reduce salaries or hours, they should bear in mind that any such reduction will amount to a variation of the terms and conditions of employment. Where there is no contractual right to do so (see below), this must be done with the employees’ agreement.

Employers may choose (if they are contractually so entitled) to implement measures such as lay-off, or short-time working, sometimes as a means of avoiding redundancies. Laying-off employees involves the employer providing employees with no work, and no pay for a period (subject to the CJRS above). Short-time working means providing employees with less work, and less pay. In both cases, the individuals remain employees. Employers must ensure they have the contractual right to lay-off or short-time working, or obtain consent through consultation, or they risk being in fundamental breach of contract. Any period of lay-off or short-time should also be reasonable in duration. If the period is unreasonably extensive, an employee may resign and claim a statutory redundancy payment. In extending lay-off merely as a means of avoiding making a redundancy payment, the employer may also be in breach of the implied term of trust and confidence. Therefore, employers should ensure that any such suspensory measures are implemented reasonably.

"It is advisable that employers hold proper consultations with employees, providing reassurance wherever possible that any measures are temporary, and will be kept under review."

Consultation

It is advisable that employers hold proper consultations with employees, providing reassurance wherever possible that any measures are temporary, and will be kept under review. Employees should feel able to discuss any issues or concerns openly. If redundancies are necessary, employers must bear in mind the number of affected employees, being careful to comply with any resultant obligations to inform and consult in respect of the measures. Collective consultation will also be necessary where there is a proposal to either (i) make redundant; or (ii) change terms and conditions of employment by way of re-engagement on new terms, for at least 20 employees.

Holiday Carry-Over

If employees with annual leave booked during the next few months all look to cancel this until restrictions on day to day life and travel are lifted, there is a risk for employers that a large proportion of the workforce will request leave at the same time later in the year. However, for employees who have, due to Covid-19, been unable to take all their statutory annual leave by the end of 2020, incoming amendments to the Working Time Regulations 1998 (the “Regulations”) will allow for the carrying over of any remaining holiday days (up to a maximum of four weeks’ worth) into the next two leave years. As employers are under an obligation to ensure that staff take their holiday entitlement each year (and, a failure in this regard could result in a financial penalty), the measure will benefit both employer and employee. The proposals will ensure that: workers in key industries (for example, in the food or healthcare sectors) are able to continue working throughout this essential period, whilst not losing out on their paid annual leave entitlement as a consequence; that those too unwell, or in self-isolation, are still able to take holiday once recovered; and that employees not in work due to a temporary suspension of work, i.e. Furloughed Workers, can still take paid holiday. Further guidance in respect of the Regulations is expected to follow.

Trainee Hannah Myers also contributed to this article.

If you have any specific questions or queries in respect of the above, or would like any further information, please get in touch with a member of Watson Farley & Williams’ Employment Team.

Keep in touch