This week we will be giving a snapshot view of key issues arising this week with our employer clients.
Lay off /Short Time/ Redundancy:
Many employers out there are facing a reduction in income and a fixed wage bill. Mr Micawber would not be happy at this state of affairs – many employers’ expenditure will be exceeding their income, meaning Mr Micawber will be very miserable indeed.
In the absence of much direct support from government, other than support for loading up on corporate debt, many employers are faced with reducing their wage bill to align with their reduced income. The situation is fast moving and the government may well announce more financial support.
Some employers have had to take prompt action, particularly those in the pub, club and restaurant businesses. So what sorts of actions are employers taking?:
Many employers are looking at a lay off. A lay off should be either done under a contractual right or with the employees’ agreement. In exceptional times employees are agreeing to employers’ proposals to lay off even if there is no contractual right. A lay off is defined as a week without work.
Some employers are putting their staff on short time. Short time is defined as less than 50% work in any one week. Like lay off an employer should only put employees on short time if there is a contractual right to do so. In practice many employees are agreeing to short time working as an alternative to lay off and as an alternative to redundancy.
Some employers are moving to a 3 day week. Whilst technically that won’t amount to short time as it is above 50%, it may give rise to a guarantee payment for the first 5 days where there is no work.
Guarantee pay is a payment for the first 5 days of lay off or short time. It is the unprincely sum of £29 per day. Employees qualify for a further 5 days guarantee pay after 90 days lay off or short time.
Most employment contracts do not have the contractual right to lay off or short time. However we are finding that employers are not facing any objection from employees when a period of lay off or short time is being proposed. Employees can see work drying up before their eyes and are being realistic and co-operative.
To add further complexity if a proposal to vary contracts affects 20 or more staff there is arguably a requirement to consult collectively and with the appropriate representatives. However section 188 of TULRCA does have a special circumstances defence where consultation is deemed not necessary where special circumstances exist. Those employers facing financial crisis will likely fall within the special circumstances defence.
After 4 weeks of continuous lay off or short time employees are entitled to write in to their employer and ask for a statutory redundancy payment. The provisions are very technical and a trap for the unwary. Pick your way through them here and here or seek advice if you get a letter.
SSP doesn’t butter many parsnips.
Some changes have been announced by the government.
For self-isolaters and those with the virus, SSP will be payable from day 1 rather than day 4. Self-isolaters who do not have the virus will be able to get a note from the Doctor if the employer requires evidence.
SMEs who employ fewer than 250 employees will be able to claim 2 weeks worth of SSP back from the government. If you pay full sick pay which incorporates SSP and employ fewer than 250 employees you should be able to re-claim back the SSP part for the first two weeks.
Government Business Support:
Government announcements to date include: A Coronavirus Business Interruption Loan Scheme, Business Rates holiday for 52 weeks if in hospitality, Small Business Rate Relief extended, a £10,000 grant for businesses in receipt of Small Business Rate Relief.
Home Working. If you are moving to working from home, bear in mind your responsibility as an employer to ensure health and safety requirements are adhered to. The HSE have produced a guidance note – the key point is risk assessment. If employees are using the employer’s IT equipment at home then ensure that equipment is safe and been recently PAT tested. Also bear in mind GDPR responsibilities if personal data is being taken home in a file format.
PJH Law is moving to home working from today and have a robust, lexcel compliant business continuity plan that has been tried and tested.
These are some of the key issues we have been helping employers with in the week where the Covid 19 pandemic really hit the UK.
We wish all our readers the best over the coming weeks and months and we will do our best to keep you updated, informed and assisted.