Furlough leave extended
When the Job Retention Scheme (furlough leave) came in, it was nothing short of a saviour for firms and employees up and down the country. Approximately 7.5 million workers and 1 million businesses have benefited from the scheme’s protection.
The HMRC portal for recovery has been open since 20 April to make claims for recovery of wages. HMRC reserves the right to audit any applications. In cases where dishonest or inaccurate information has been given, they will seek repayment. It is important for Employers to maintain good records and keep them for at least 5 years.
The present scheme has been extended until the end of July 2020 but Rishi Sunak has announced that the scheme will be extended to October although in a different form with employers expected to make a contribution. The blanket prohibition on employees doing any work continues until 31 July but under the modified scheme partial furloughing is expected to be a possibility.
While we do not know the details of the arrangements from August 2020 onwards, the subsidy of 80% of pay to a maximum of £2500 per month will be reduced. It is reported that Rishi Sunak will announce a tapering of the scheme: employers will have to pay 20% of wages of furloughed staff as the scheme is wound down after 31 July. This means that employers will be having to make hard decisions in relation to their workforce that may have been put on hold.
In many cases, employers will need to identify employees for redundancy. However, if redundancies are not handled correctly, employees with over two years’ service could make a claim for unfair dismissal unless employers follow a reasonable procedure including:
- Consulting with employees individually before any final decision is made;
- Having in place a fair method of selection;
- Considering alternative employment where possible.
Statutory consultation obligations apply when an employer proposes to dismiss as redundant, 20 or more employees at one establishment within a period of 90 days. This includes employees with less than 2 years’ service. ‘Dismiss’ in this context covers not only those employees whose employment is terminated, but also those whose contracts may be terminated but whom the employer nevertheless retains in some revised capacity. Therefore, it is important to consult in respect of all employees ‘affected’ by the proposals.
Consultation must begin ‘in good time’ and must take place before notice is given. As such, it cannot run concurrently with the period of notice. Where the employer proposes to dismiss fewer than 100 employees, not less than 30 days must elapse before the first of the dismissals takes effect. If 100 or more employees are affected, then the employer must consult for not less than 45 days. It is therefore important to take early legal advice if considering this step.
The duty is to inform appropriate representatives, meaning representatives of the appropriate recognised trade union, or duly elected employee representatives.
As a minimum, employers must undertake consultation with a view to reaching agreement on ways of avoiding dismissals, reducing the number of dismissals and mitigating their consequences. It is not sufficient for an employer simply to explain its proposals and listen to any counter-proposals.
The sting in the tail is that unless there are ‘special circumstances’ precluding the ability to consult for the requisite time periods (for example, a company is placed into immediate administration), then the employer could be liable to pay a ‘protective award’ of up to 90 days’ pay per employee.
If furlough leave is still available into the near future once restrictions are lifted, then the question arises as to whether an employer must collectively consult when initiating a further furlough scheme. The obligation might be triggered if sufficient numbers do not consent to furlough leave, such that the prospect of redundancy becomes a reality for 20 or more employees. The obligation may also be triggered if an employer is considering a furlough scheme alongside a well-advanced plan to make redundancies.
In many cases employers will be looking to protect themselves against claims arising out of redundancies by negotiating settlement agreements. This will lead to having separate “protected” conversations with employees with a view to speeding the process up and achieving an amicable solution. These agreements need to be professionally drafted and employees are required to obtain their own legal advice.
Changes to terms of employment
Some employers might seek to retain as many employees as possible by making savings with the existing workforce either through reductions in pay or hours or other aspects of terms and conditions. The aim in most cases should be to agree changes with the employees. Where there is resistance it may be possible to impose changes in contracts and defend unfair dismissal claims on the grounds of other substantial reason. There will need to be a good business reason for this. There will also be a premium on following a fair procedure.
In both the case of changes to the terms and conditions of the contract and redundancy, special requirements will kick in if 20 or more employees are involved.
Return after Lockdown: Health and Safety – Whistleblowing – Detriment
While the advice remains for those who can to work from home, the Government is encouraging a return for those who cannot while “remaining alert”.
When staff do begin to return, firms will need to reconsider almost every aspect of their usual procedures and expectations. The UK government is continually updating its guidance to employers (Government guidance – working safely) but it remains broad, and firms will need to think through carefully their specific needs and options, particularly to prioritise health and safety, as a fresh outbreak could require closures once more.
Sector specific guidance has been issued. To ensure social distancing requirements, are followed. General guidance includes:-
- Making regular announcements for staff and/or customers to observe social distancing advice and wash hands
- Providing additional pop-up handwashing stations or facilities if possible, providing soap, water, hand sanitiser and tissues and encouraging staff and customers to use them.
- Regular cleaning of key contact points -door handles, lift buttons, keypads stair/escalator handrails
Amazon, which has continued to work during lockdown, illustrates the kind of measures which might be considered. Examples are, the appointment of designated social distancing ambassadors, staggered shift times, elimination of stand up meetings during shifts, spreading out of tables in break rooms and providing PPE.
Employers have a duty under the Health and Safety at Work Act 1974 to provide a safe working environment and ensure health, safety and welfare at work.
Employers need to have a system in place to keep abreast of government advice. This could be internal or external such as a law firm. In addition, a risk assessment of the workplace should be carried out. Adaptations such as seating plans and partitions may be considered as well as other social distancing plans like staggered hours and increased use of videoconferences.
The law also requires specific risk consideration for young people and pregnant women, and it will be important to consider other staff who may have a heightened risk. Failing to take into account a specific employee’s attributes (e.g., age or a disability) could constitute indirect discrimination.
Particularly risky for employers are protections, contained in ss 44 and 100 of the Employment Rights Act 1996, for employees who have a reasonable belief that they may be in “serious and imminent danger” if they return to work. This will also cover risks from, for example, a dangerously overcrowded commute. Firms will need to ensure that they do not breach the law in this area, but also remain prepared for the likelihood that there may be some complaints and claims. Employers should take great care to avoid subjecting employees who raise health and safety concerns to any detriment because they have “blown the whistle”
If you would like a review of any of your existing policies and procedures please contact us at [email protected].