Coronavirus: Legal Update for Employers (18 March 2020)
COVID-19/Coronavirus Briefing Note
As the Coronavirus (COVID-19) pandemic continues, and the UK moves from the containment to the delay stage, employers are presented with several challenges affecting individuals and business operations. We look at some of the key areas affecting businesses over the coming weeks.
a) Reducing staff hours.
Rarely will an employer have the express contractual right to reduce working hours, unless in the case of so-called ‘zero-hours’ workers or casual workers, whose hours of work are not guaranteed. In the case of permanent employees with fixed hours of employment, then the starting point is to look at the contract of employment to see whether it does provide for the right to reduce hours of work. If it doesn’t, then it will be a case of reaching agreement with staff, staff representatives or trade unions. Those who do not agree may find themselves redundant, given that the employer has a reduced requirement for employees to carry out their work.
Imposing reduced hours or pay on an employee will almost certainly amount to a breach of an express term of the employment (unless there is the right to do so), or a breach of the implied term of trust and confidence giving rise to constructive unfair dismissal, but query, would the employer be acting without reasonable and proper cause in the circumstances?
Arguably not, and furthermore it is a brave employee who in the current circumstances, opts to resign, rather than remain employed and agree to work reduced hours or take a pay cut. Otherwise, they could potentially find themselves out of work and unemployed, unable to find an alternative position in a difficult climate.
Temporary closure is an alternative option, but this 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.
For most employers, this will present significant economic hardship: if the business is forced to close and cut off revenue, but also required to continue paying employees then it is easy to see how this could potentially lead to permanent closures, insolvency and redundancies. The government has announced a number of measures to help businesses survive the economic hardship caused by the pandemic; however, it is likely that many will need to take action to reduce the payroll on a temporary basis.
Some of the options include:
• Consulting with employees and trade unions or other representative bodies to try to agree a temporary reduction in working hours, pay and benefits for the duration of the crisis. Under normal circumstances, employees and their representatives would be unlikely to agree to such measures; however, where the alternative is closure and job losses, there may be more of an appetite to reach an agreement;
• Considering lay-off (see below), if the employer has the contractual right to take that approach. If the employer does not have the contractual right to lay-off then it may either take the risk in doing so in breach of contract), or try to obtain consent to do so;
• Give notice to workers to take holiday. Employers are entitled to give notice to workers to take statutory annual leave, provided there is no contrary contractual right. Although this would not save the employer money in the short term, it would ensure a full workforce once the business reopens and allow full focus on rebuilding the business;
• Seek volunteers to take unpaid leave;
• Seek volunteers for voluntary redundancy;
• Consider whether there are workers and contractors whose contracts can be terminated without the risk of an unfair dismissal or redundancy payment claim;
• If the longer-term impact of the pandemic is likely to mean that a reduced headcount will be required even when the business reopens then the employer may need to consider redundancies.
b) Working from home.
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 by way of agreement, or simply imposing changes (subject to constructive dismissal in cases where the employer does not have reasonable and proper cause) 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.
The starting point when considering home working, is to consider whether there is a mobility clause in the contract of employment. If there is, and this allows the business to require individuals to work a reasonable distance from the employer’s site, then this is likely to cover the contractual right to work from home subject to it being a reasonable and lawful order to invoke. Even where there is no mobility clause, then it’s probably a lawful and reasonable order to ask an employee to work from home in light of the pandemic.
If sending someone home without pay, where there is no lay-off or short-time working provision in the contract (see below), then there’s a good chance of it being a constructive unfair dismissal, but there is also an argument that an employer has reasonable and proper cause for sending someone home in the current climate.
It is also important to consider the following:
Health and safety. Statutory regulation and the implied term of an employment contract provide that an employer must take reasonable care to ensure it is providing a safe place and system of work.
An employer is responsible for an employee’s welfare, health and safety, so far as is reasonably practicable (section 2(1), Health and Safety at Work etc Act 1974). Employers must conduct a suitable and sufficient risk assessment of all the work activities carried out by their employees, including homeworkers, to identify hazards and assess the degree of risk (regulation 3, Management of Health and Safety at Work Regulations 1999 (SI 1999/3242)). The government has also strongly advised certain vulnerable categories to work from home and avoid travelling on public transport.
Equipment. If it’s an assembly job in a factory, then it’s just not going to be possible to work from home. If it’s a sales job or administration job, then a computer and phone is all that someone is going to need. If someone refuses to use their own equipment then this could be a refusal to adhere to a reasonable management instruction in the current climate giving rise to a warning and in serious cases, dismissal on the grounds that it is a substantial reason warranting dismissal.
Paying for use of home services. An employer may want to consider paying for extra paper for a printer, ink, electricity and gas etc.
Monitoring. Monitoring email to check productivity introduces complications and for the vast majority of employees permitted to work from home, they are likely to be grateful and work to the best of their ability, compared to those on zero hours contracts, or those self-isolating without pay. Monitoring can be introduced, however, subject to have the means to do so.
Remember that if the employer has sent the employee home contrary to self-isolation guidance, then they will usually have to pay the employee full pay, (if it is not on the basis of government advice), or SSP if it is on the basis of government advice – i.e. for self-isolation reasons in the event of displaying symptoms.
On 16th March 2020, the government stated that anyone in the following categories were strongly advised to work from home:
• Individuals aged over 70;
• Women who are pregnant;
• Individuals aged under 70 with an underlying health condition (being any adult instructed to get a flu jab each year on medical grounds) would be strongly advised to work from home for the time-being.
These are listed as:
o Chronic (long-term) respiratory diseases, such as asthma, chronic obstructive pulmonary disease (COPD), emphysema or bronchitis;
o Chronic heart disease, such as heart failure;
o Chronic kidney disease;
o Chronic liver disease, such as hepatitis;
o Chronic neurological conditions, such as Parkinson’s disease, motor neurone disease, multiple sclerosis (MS), a learning disability or cerebral palsy;
o Spleen issues, for example, sickle cell disease or where an individual has had their spleen removed.
o A weakened immune system as the result of conditions such as HIV and AIDS, or medicines such as steroid tablets or chemotherapy;
o Being seriously overweight (a BMI of 40 or above).
The guidance also states that all other workers are advised to work from home or vary their daily commute and use less public transport, where possible.
Can an employer refuse to allow an employee to work from home if they will also be looking after children who have been sent home from school or nursery?
In normal circumstances, it would not be appropriate for an employee to work from home while also providing childcare; however, as the COVID-19 outbreak escalates, employers may need to take a pragmatic approach. As of Friday 20th March 2020, schools and nurseries will close, meaning that the majority of parents in the workplace will face this issue and putting a blanket ban on working from home while also looking after children may preclude a large proportion of the workforce from performing any duties. In these unprecedented circumstances, employers may be prepared to take a more relaxed and flexible approach to homeworking and allow employees to work around their childcare responsibilities.
Employees with younger children who require constant attention may not be able to work at all while responsible for looking after those children; however, they may be able to split the childcare with the other parent, so that both parents are able to, at least, continue working part-time.
Employees in these circumstances may assert their right to time off to care for a dependant. Time off in these circumstances is unpaid, unless there is a contractual right to pay. Given that school closures could last a relatively long time, it is likely that many employees who consider that they can undertake some work while providing childcare would prefer to do so (rather than assert their statutory right to time off) if the employer is willing to allow them to work flexibly.
Those jobs where the employer cannot accommodate home working
For those keys workers for whom it is not possible to permit home working, for example emergency services, health providers and non-emergency workers in manufacturing and industrial settings, there may be alternative options including:
• Varying rotas to avoid contact;
• Reconfiguring workplaces to increase social distancing;
• Avoiding peak travel times if relying on public transport to travel to work;
• Reminding employees about personal hygiene and hand washing;
• Directing employees to government stay at home guidance.
If an employee unreasonably refuses to attend work 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 (for example someone who has an impairment amounting to a disability), take disciplinary action, or withhold pay in light of the employee’s refusal.
If there is no discrimination angle, and the public health advice is such that the employee could reasonably be asked to continue to attend work, then it is possible that the employee could be investigated for misconduct in terms of their refusal to follow a reasonable management instruction, and their unauthorised absence.
If the absence is unauthorised then the employee would likely not be entitled to pay as they are not willing to attend work.
Broadly speaking this occurs when a place of work closes; or, where there’s a reduction in an employer’s need for employees to do work of a particular kind.
When more than 20 redundancies are being contemplated at one establishment within a period of 90 days, the legislation provides that the employer must consult for a minimum of 30 days before the dismissals with either a trade union or elected employee representatives. Where 100 employees are being made redundant, the employer must consult for a minimum of 45 days.
There is a defence if there are special circumstances which render it not reasonably practicable for the employer to consult for 30 or 45 days. If so, the employer must take reasonable steps to comply.
Is Coronavirus a special circumstance? Probably yes, for now at least. If a sudden disaster strikes a company making it necessary to close, then that sudden disaster is capable of being a special circumstance. A special circumstance does not necessarily have to entail the closure of a business. Coronavirus may be classified now as a sudden disaster. In a month’s time, it won’t necessarily be, but now it is reasonably likely that an employment tribunal will find this to be a sudden disaster. This is not to say that employers don’t have to consult at all. Employers still must make reasonable efforts to consult, if they are unable to do so for the statutory minimum of 30 or 45 days, in order to avoid paying a protective award of up to 90 days’ pay.
Lay-off and short time (LOST)
Lay off is a form of temporary redundancy. A business says to an employee, we’ve got no work for you – go home, we’re not going to pay you.
Short time has a statutory definition which is: we’ve got less work for you – we’re going to supply you with less than half of the normal work and only pay you for the work that you do.
This is an anachronistic residue from the 1970s when manufacturing dominated British industry and it fell it out of practice until the financial crisis in 2008. It is still used in manufacturing and professional services at times.
It does need an express clause in the employment contract. You cannot generally imply the right to lay-off because employees are entitled to be paid if they are ready, willing and able to work. With LOST, you are reserving the right not to pay them even if they are ready and willing and able to work.
Absent an express provision, there will only be a custom of LOST in a business, if the terms of doing so are clear, so that it can be said that the employee knew it to be an implied term when starting employment.
LOST entitles the employee to the princely sum of £145 over five days within three months/£150 from 6 April 2020.
Holiday accrues during the period of layoff or short time. If an employee is not available for work anyway, for example because they are unwell, they are not treated as being laid off.
If someone is LOST for four consecutive weeks or six weeks in a rolling 13-week period, the employee is entitled to resign and treat themselves as redundant entitling them to statutory redundancy, provided they have two years’ qualifying employment.
d) Unpaid leave.
In the absence of agreement, sending someone home without pay and there being no lay-off or short-time working provision in the contract, then there’s a good chance of it being a constructive unfair dismissal. The situation is different if someone effectively refuses to come to work. If the employee can work from home, then 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. If there is no discrimination angle, and the public health advice is such that the employee could reasonably be asked to continue to attend work then it is possible that the employee could be investigated for misconduct in terms of their refusal to follow a reasonable management instruction, and their unauthorised absence.
e) Pay in the event of self-isolation.
In a nutshell:
• Employees self-isolating out of personal choice contrary to prevailing stay at home guidance are not entitled to be paid.
• If employers send home employees contrary to prevailing stay at home guidelines, and are ready and willing to work, then then they are likely to be entitled to their normal pay.
• Those self-isolating in accordance with prevailing stay at home guidance, i.e. they are displaying symptoms, are from 13th March 2020 entitled to statutory sick pay (SSP) under so-called ‘deemed incapacity’ provisions. This may be set to change following the chancellor’s recent budget announcement that SSP will be extended to those who are asked to self-isolate even if they have no symptoms (see forthcoming changes below).
• The government also proposes to pay from day one, rather than applying ‘waiting days’ before SSP is payable (see below).
In order to qualify for SSP, an employee must be absent from work due to incapacity. Where an employee has not, at the point they are suspended, either been diagnosed with COVID-19 or exhibited symptoms, then it is unlikely that their absence will meet the definition of day of incapacity which is: A day on which the employee concerned is, or is deemed in accordance with regulations to be, incapable by reason of some specific disease or bodily or mental disablement of doing work which he can reasonably be expected to do under that contract.
With effect from 13th March 2020, amendment regulations provide that a person is ‘deemed incapable’ of work where he is: isolating himself from other people in such a manner as to prevent infection or contamination with coronavirus disease, in accordance with guidance published by Public Health England, NHS National Services Scotland or Public Health Wales, and effective on 12th March 2020.
For sources of information on the circumstances in which self-isolation is advised, see https://www.acas.org.uk/coronavirus. Employers should regularly check the public health guidance on self-isolation, as it has changed as the pandemic has developed, and it directly affects who is entitled to SSP during self-isolation.
The government’s position on self-isolation for those returning from high-risk countries appears to have changed, although the available information is contradictory. See: Public Health England and BEIS: COVID-19: guidance for employees, employers and businesses and Public Health England: COVID-19: stay at home guidance.
The former advises self-isolation for those returning from countries with a high incidence of COVID-19 but links to withdrawn guidance (see section 9 of the guidance for employers). The latter advises self-isolation only if the individual suffers from certain symptoms. Given that the withdrawn guidance referred to in the guidance for employers states that it has been superseded by Public Health England: COVID-19: stay at home guidance, it is likely that the latter reflects the government’s current position on self-isolation in England. If this is correct, it means that, arguably, an employer requiring an employee to self-isolate because they have returned from a high-risk country, will need to pay the employee full pay, as it is not necessarily the case that those people have to stay away from work, unless they are displaying symptoms.
The SSP provisions may still be relevant however, in the case of mandatory quarantine ordered under mandatory isolation, for example if employees are quarantined at the border. The regulations provide that a person is ‘deemed incapable’ of work where they are by reason of it being known or reasonably suspected that he is infected or contaminated by, or has been in contact with a case of, a relevant infection or contamination.
This means that, in most cases, an employee who is in quarantine or self-isolation will be regarded as being incapable of working for SSP purposes. The government has indicated that there may be further changes to SSP in light of the COVID-19 outbreak, which are yet to be announced.
Furthermore, as of 17th March, the government has now introduced mandatory isolation for anyone who lives with others and they or someone in their household has symptoms of COVID-19, then all household members must stay at home and not leave the house for 14 days. This will attract SSP even though the individual employee may not themselves display symptoms, unless they are not ill and are able to work from home, in which case they should receive normal pay.
Employers should still consider the health and safety issues that could arise if it allows employees who have returned from countries with a high incidence of COVID-19 to return to the workplace, irrespective of the government guidance and the SSP position.
What changes to the normal rules on SSP and fit notes have been made in light of COVID-19?
The SSP ‘deemed incapacity’ rules have been extended to cover those who self isolate in accordance with government guidelines.
The government indicated an intention to also extend SSP to those caring for those within the same household who were exhibiting symptoms of COVID-19, but this is not explicitly covered in the new regulations. The carer would only be covered by the new rule on deemed incapacity if the public health guidance also required them to self-isolate.
Forthcoming changes and changes in effect since 17th March 2010
As a result of the COVID-19 outbreak, the government has announced that it will bring forward emergency legislation temporarily making statutory sick pay payable from the first day of sickness absence. The government has also announced that small employers (with fewer than 250 employees) will be reimbursed for any SSP paid to employees in respect of the first 14 days of sickness related to COVID-19.
The Chancellor, Rishi Sunak, announced future measures in his Budget on 11th March as follows:
• Employees can now obtain a sick note through NHS 111 rather than seeing their GP.
• SSP is extended to those who are asked to self-isolate even if they have no symptoms from the first day of quarantine in certain circumstances.
As of the 16th, current stay at home guidance extends to those individuals with a family member displaying symptoms. As we understand it, this was not previously the case.
Stay at home: guidance for households with possible coronavirus (COVID-19) infection: This guidance, updated on 16th March 2020, states that if an individual lives with others, and they or someone in their household has symptoms of COVID-19, all household members must stay at home and not leave the house for 14 days. The 14-day period starts from the day when the first person in the house becomes ill.
Coronavirus amendment regulations extend SSP entitlement to those individuals who are unable to go to work or carry out their role from home during the 14-day isolation period, because a family member has symptoms. This is to cover those who, whilst they may not have symptoms themselves, nonetheless need to self-isolate and are unable to work from home.
COVID-19: guidance on social distancing for everyone in the UK and protecting older people and vulnerable people. This guidance first published on 16th March 2020 strongly advises employees to work from home if they are aged over 70, pregnant, or have a specified underlying health condition, including chronic respiratory diseases, chronic heart, kidney or liver disease, diabetes and those with a weakened immune system. It also strongly advises them to avoid social mixing in the community and limit use of public transport.
Thomas Mansfield Solicitors Limited
18th March 2020
Please note that this briefing note does not constitute legal advice and you should not place reliance upon it. Please seek legal advice if you require advice about your specific circumstances. You are also urged to check government updates.