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Scroll to: Opportunities and offers | Lockdown Exit Strategy | Getting back to work | Alternatives to redundancy | Restructuring the Workforce / Changing Terms and Conditions | Furlough | How does holiday work during furlough? | Pensions | Self-Employed | Places of work | Visa applicants | Tier 2 sponsors | Right to work checks | Health & Safety

Opportunities and offers

OPPORTUNITY: Free strategic workforce planning workshop with employment partnerLast updated on 29th May, 2020

The Chancellor Rishi Sunak is set to announce plans to taper the Government’s Job Retention Scheme (“JRS”) as of 1 August 2020. It is widely expected that the announcement will provide employers with the much needed flexibility to bring workers back to work on a reduced working week while still receiving support from the JRS. However, this is likely to come at a cost to employers as the Government tries to reduce spiralling cost of workers currently on furlough leave by requiring the employer to financially contribute to the scheme.

We will of course update the relevant areas of the FAQ Hub as soon as we have digested the detail. What this does mean though is that a number of businesses will now have a clearer picture of their projected people costs, and will have already started to look at the best way to keep talent, manage costs and drive their own recovery.  We have been considering how we can support businesses with this strategic thinking.

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OPPORTUNITY: Funding towards legal advice for North East SMEsLast updated on 27th May, 2020

We have teamed up with Scaleup North East to help companies impacted by the coronavirus outbreak plan how to get back to business.

Our specialist lawyers will provide a free “diagnostic” call with eligible businesses across the NE, exploring challenges they are facing in the aftermath of the lockdown, and identify specific steps to survive, and then thrive, in these challenging times and beyond.

Through the collaboration with Scaleup North East, eligible North East-based SMEs are then able to apply for up to 40% funding towards up to £4,000 of legal advice.

These might include:

  • Employment issues, such as dealing with a phased return to work
  • Measures to support cash-flow, such as amendment to terms of trading and debt collection procedures
  • Renegotiations and amendments to contracts, and other advice about contracts with suppliers and customers to deal with consequences of Covid-19
  • Managing property costs – review of leases, advice on break clauses and formalisation of any revised arrangements recently put in place with landlords/tenants
  • Health and safety implications of return to work and social distancing

Find out more on our website or contact partner Damien Charlton.  If you are not eligible because of location but are interested in the free “diagnostic”, please contact us.

Lockdown Exit Strategy

Are we exiting lockdown on 13 May 2020?Last updated on 12th May, 2020

No. On that date we are entering Stage 1 of the phased plan to lift restrictions.

Should we stop employees working from home?Last updated on 12th May, 2020

No, government advice remains that if employees can work from home, they should continue to do so in order to minimise social contact across the country in order to keep infection rates down.

Are all employees required to stay at home?Last updated on 12th May, 2020

No, where employees cannot work from home, and it is safe for them to return to work, they should do so. The government specifically refers to sectors of the economy that should be open as: food production, construction, manufacturing, logistics, distribution and scientific research in laboratories.

What is the government guidance on making places of work as safe as possible to return to?Last updated on 12th May, 2020

The government has produced a series of industry specific “Covid-19 Secure” guidelines, which employers should follow. These guidelines are designed to keep the risk of infection as low as possible, while allowing as many people as possible to resume their livelihoods.

What if employees display coronavirus symptoms?Last updated on 12th May, 2020

It remains the case that anyone who has symptoms, however mild, or is in a household where someone has symptoms, should not leave their house to go to work. Those people should self-isolate, as should those in their households.

What is happening with childcare?Last updated on 12th May, 2020

Schools are not re-opening to all at present, but will remain open for children of key workers, or those who are vulnerable. The government has confirmed that paid childcare, for example nannies or childminders, can continue to work, so long as they follow public health guidelines.

What is happening with public transport?Last updated on 12th May, 2020

Government guidance is that public transport should be avoided wherever possible. Transport providers will be expected to follow government guidance to make their services more COVID-19 secure.

Are all employees now required to wear face coverings?Last updated on 12th May, 2020

The guidance states that people should aim to wear a face-covering in enclosed spaces where social distancing is not always possible and they come into contact with others, for example on public transport or in some shops, and potentially in the workplace. Face coverings do not mean face masks such as clinical masks worn by certain key workers as PPE, which should be reserved for those people.

What about employees who have been shielding or who have underlying medical conditions?Last updated on 12th May, 2020

Those in the clinically extremely vulnerable group should continue to shield, in line with the medical letters they will have received. Those who do not fall into the clinically extremely vulnerable group, but who have a specific underlying health condition, or who are over 70 or who are pregnant, are not required to shield but should continue to take particular care to minimise contact with those outside of their household.

What is the next phase of re-opening?Last updated on 12th May, 2020

The government anticipates that Step 2 of the exit from lockdown will commence no earlier than 1 June 2020, and only if it is safe to do so, and will focus on:

  • A phased return for early years settings and schools
  • Opening non-essential retail
  • Permitting cultural and sporting events to take place behind closed-doors
  • Re-opening more local public transport in urban areas, subject to strict measures

What will happen after that?Last updated on 12th May, 2020

It is envisaged that Step 3 will commence no earlier than 4 July, and only if it is safe to do so, and will deal with opening at least some of the remaining businesses and premises that have been required to close, including:

  • Personal care (such as hairdressers and beauty salons)
  • Hospitality (such as food service providers, pubs and accommodation)
  • Public places (such as places of worship)
  • Leisure facilities (like cinemas)

Getting back to work

VIDEO: Tools for Leaders – Supporting the workforce and bringing about an effective return to workLast updated on 22nd May, 2020

During this period of “getting back to business” (or even if business has not actually stopped), it is a critical success factor for business leaders to have the confidence of the workforce when caring for their physical and mental wellbeing and when difficult decisions may have to be made.

Employment law specialist Caroline Shafar and business leadership consultant Jo Grobbelaar discuss what leaders need to do to have the most positive impact on their workforce, exploring effective communication, the importance of empathy, motivation, self and social awareness and provide tips on how to be a visible leader.

This is the first in a series of discussions with a range of experts providing insight into the impact that Covid-19 has had on the mental health and wellbeing of the workforce and looking at tools for business to provide an effective and safe environment in these challenging times.

Caroline is a partner in the employment team at Ward Hadaway, and has a particular interest in the psychological impact of people management approaches. For more information about Caroline or to get in touch, please click here.

Jo is a highly experienced strategic business consultant, coach and facilitator.  She has been supporting numerous businesses manage their workforces through the disruption of this pandemic.  She will be sharing some of these experiences during this video conversation. For more information about Jo, click here to visit her website.

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VIDEO EXPLAINER: Flexible Working Requests – a new trend post lockdown?Last updated on 22nd May, 2020

Employment partner Gillian Chinhengo and associate Hollie Ball talk through the process and risks involved in dealing with flexible working requests.

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Introduction – How am I going to get people back into the workplace?Last updated on 6th May, 2020

As we move to look at re-opening businesses and getting people back into the workplace there is work to be done by employers, firstly in planning how they are going to do this, and secondly, communicating those plans to staff. The only way in which businesses are going to be able to manage the transition back to some form of normality is by speaking to their staff and re-assuring them about the measures that will be put in place to safeguard their health and safety in order to enable them to return. Any successful return to work will need to based on carefully thought out plans and providing re-assurances to employees that necessary action is being taken.

Employers will be focusing on:

  • How do I get my workforce back safely, and
  • How do I give my workforce the confidence to return.

VIDEO EXPLAINER: Workplace after lockdownLast updated on 6th May, 2020

On 1st May, health and safety expert Tristan-Meears White and data security expert Phil Tompkins hosted this webinar on the workplace after lockdown, where they:

  • Shared insights into what might be done in the workplace to manage and mitigate the risk of Covid-19 infection
  • Considered the practicalities of how these can be achieved
  • Reviewed how other countries are addressing these issues and what we might learn
  • Thought about the context of the legal duties owed by a business to its employees, and
  • Considered some of the privacy issues which arise as a result of some of these initiatives.
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VIDEO EXPLAINER: Returning to work – managing people back into the ‘new’ workplaceLast updated on 6th May, 2020

This free Getting back to business webinar was held at 10am on Tuesday 5th May. On this video, employment partner Gillian Chinhengo and health and safety expert Tristan Meears-White:

  • Discussed how you should approach re-opening in terms of employees
  • Reviewed your responsibilities when it comes to a safe workplace environment
  • Explored where you can ask, and where you can insist
  • Considered your options where employees refuse to abide with your advice
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What is the most important thing employers should do from a health and safety perspective?Last updated on 12th May, 2020

Conduct risk assessments! Your RA must cover every foreseeable risk arising from a return to the workplace, including the impact of reduced staff levels and any operational/administrative changes necessary to ensure social distancing.

Appropriate steps should be taken to manage and mitigate identified risks. Where this is not possible, businesses need to decide whether certain activities are necessary for the business to operate or if they can be temporarily put on hold.
Keep a close eye on the comprehensive Government guidance: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

In particular focus on social distancing and workplace health measures. This guidance will evolve over time and you will need to be sure that your organisation is sticking to it AND reviewing and updating its risk assessment.

Who should come back to work and when?Last updated on 12th May, 2020

This is critical. The guidance remains clear – IF YOU CAN WORK FROM HOME YOU SHOULD CONTINUE TO DO SO. Bringing people back into work unnecessarily is a big mistake.

Think about how many employees should physically return to the workplace – the fewer the people on site, the lower the risk AND the less pressure on public transport.

Employers will need to be very careful to recognise workers in vulnerable groups or who develop or live in a household with someone who develops symptoms of Covid-19 – again, look at government guidelines. You should understand that this will mean a higher number of staff absences and consider how this might be managed.

Look to keep smaller teams of workers together, minimise physical meetings and if you MUST have them, keep them short and under 15 minutes. Be imaginative – use online platforms like Teams and Zoom wherever you can.

How can workers get to work safely?Last updated on 12th May, 2020

The Government’s guidance says walk, cycle or drive to work and avoid public transport if you can. Businesses will need to support workers in adopting alternative travel methods to reduce exposure to the virus. You could consider staggering start and finish times for shifts to reduce commuting during peak hours, or support cycling with secure storage facilities and a drying room.

How important is social distancing when planning your workplace?Last updated on 12th May, 2020

It is absolutely critical to creating a safe workplace and to making workers feel secure.

This could include floor markings every 2m (as we’ve seen in grocery stores), stopping or limiting/staggering access to communal or common areas such as toilets and kitchens, rearranging workstations to maintain a 2 metre distance or, where this is not possible (for example in manufacturing facilities or production lines), erecting physical barriers and avoiding face to face working, encouraging the use of stairs and discouraging lift-use, designing a one-way system for entry and exit and looking at aircon/heating systems to see if any modifications are possible to prevent the spread of airborne particles. If you can increase ventilation in your workplace, it will help reduce risk.

The government has published detailed social distancing guidance for workplaces across sectors including manufacturing, retail, offices, construction and transport; it has also promised to continue to add to this.

Is there anything else I should consider from a health and safety perspective?Last updated on 12th May, 2020

Increased hygiene measures should be introduced to limit the spread of infection. Increase the frequency of cleaning, particularly higher risk contact points such as door handles. Avoid the use and sharing of hardcopy in favour of electronic documents; avoid sharing of tools and work equipment; increase the availability of handwashing facilities and hand sanitisers; issue anti-bacterial wipes and tissues to staff, and remind everyone to maintain good personal hygiene practices, including regular hand washing. Prominent and repeat signage will be vital in reminding workers of these steps they can take to protect themselves.

PPE – e.g. disposable gloves and face masks – are not currently legally required in the UK, but especially where social distancing might not be possible, it may be necessary to make appropriate PPE available to staff. If so, you will need to make sure there is enough available train everyone so it used properly and provide for safe disposal of used items.

MOST IMPORTANTLY – communicate with your people; invite their input and suggestions and act on them. Communication and participation in the process of a safe return to work are going to be crucial to its’ success.
Monitor for illness: train managers how to spot the symptoms of COVID-19 and have a clear process if someone is potentially infected. Continue to remind staff to only come into work if they are well and not experiencing any symptoms. A number of businesses are planning on using testing and screening methods, such as temperature checks. Remember, these steps create data privacy considerations which you will need to consider.

Do not forget existing health and safety obligations, such as maintaining sufficient numbers of fire marshals and first aiders on-site. Employers should also be aware that the Health and Safety Executive must be notified under RIDDOR of any workplace incidents that lead to exposure to COVID-19 and any cases where there is “reasonable evidence” that it was caused by exposure in the workplace. Be aware that workers are being encouraged to report to HSE failures of their employers to keep them safe from the threat of the virus.

How much notice do I need to give people to return to work?Last updated on 6th May, 2020

There is no minimum period of notice you are required to give employees of their return, but from a good HR practice point of view you should be speaking to your staff and letting them know what the plan is; giving people a reasonable amount of notice of return will allow them to prepare both practically and psychologically.

Do I need to treat everyone the same and bring them all back at the same time?Last updated on 6th May, 2020

No. You should always treat employees consistently and fairly, but this doesn’t mean treating them all the same, or applying the same requirements. For those employees who have been homeworking and doing so without any problems, then they should be allowed to continue to do so.

We would anticipate that the vast majority, if not all, businesses will be approaching the return on a phased basis, which inevitably means some employees returning to work sooner than others. In reality then, you aren’t treating everyone the same, but try to be fair and consistent; you need to do what works best from a business perspective, but can you rotate people, require them to come in at different times etc. Where people perceive that the planned return is being worked out fairly they are far more likely to buy into this, which will help avoid resentments building up between colleagues.

Is there anything I need to put in place for their return? What are my responsibilities?Last updated on 6th May, 2020

The basics of health and safety law requires that employers take “all reasonably practicable steps” to ensure workers’ safety and that a suitable and sufficient assessment of risk is undertaken. It is the individual assessment of Covid-19 risk in each workplace that will be central. Employers will be required to conduct a robust risk assessment and then, following the hierarchy of controls, put robust processes and safeguards in place to address those risks.

UK government guidance and HSE advice is continually evolving, which in practice means that any risk assessment will need to be reviewed very regularly as that guidance develops. There is flexibility for individual businesses within the overall government framework and there will need to be a process of evaluation to ensure that the measures in place continue to meet the requirements.

The starting point of avoid, eliminate and control means looking at individuals continuing to work from home where possible (the fewer the number of people back in the workplace the lower the risk), and if not look at risk management, which leads to administrative controls – i.e. changing work practices before ending up at PPE. PPE is generally seen as control of last resort but in practice – facemasks, disposable gloves and constant prompts to wash hands for example.

In terms of changing working practices, employers should be thinking about:

  • the workspace and how this is laid layout
  • how do we make sure it is kept clean and hygienic
  • how do we keep people apart
  • how can we use toilets, canteens or other shared spaces/facilities safely
  • how do we promote and enable higher levels of workplace hygiene
  • if we are going to rely on PPE – can we get it, and is it suitable
  • what about limiting customer interactions
  • will there be enough first aiders on site
  • can we manage fire safety, deliveries etc
  • what about higher risk workers
  • should work tools and equipment be allocated on an individual basis to employees.

These decisions need to be recorded and clearly communicated to staff members.

Can I dismiss an employee who refuses to return to work?Last updated on 6th May, 2020

Potentially. The first question is why the person is not able to return, as their individual circumstances will be very relevant in terms of whether they can be safely dismissed.

Employers should ask themselves 2 questions in this situation:

  1. Have I done everything I am required to do in order to make the workplace safe for the individual to return; and
  2. Is what the employee saying reasonable?

If the answer to question 1. is no then a dismissal is unlikely to be fair. However, even if the answer to question 1. is yes, then there is still question 2. to address. If the employee has reasonable grounds as to why they are unable to return to work, e.g. due to health issues, childcare responsibilities etc then the dismissal is unlikely to be fair. It is only if you can answer yes to question 1. and no to question 2. that you can have some confidence in the potential safety of the dismissal.

Dismissals based on objections to returning to work on health and safety grounds will very often be risky and are highly fact specific, therefore please contact one of the employment team for further advice prior to dismissal.

Can we require employees who have been shielding to return to work at the end of the 12 week shielding period?Last updated on 6th May, 2020

Employees who are shielding for health reasons and have received a letter from a medical professional advising them to shield for 12 weeks should not be required to return. These individuals will remain on furlough until the scheme runs out, or anything that may replace this, or on sickness absence where appropriate. Clear guidance is required from the government in relation to this group of people and this is something that will need to be factored in to the return to work plan.

What about employees who say they cannot return to work due to childcare issues?Last updated on 6th May, 2020

Employers will need to be flexible with employees who are unable to return to work at present due to childcare difficulties. As different parts of the economy open at different times the fact that schools and nurseries have not yet re-opened may cause some obstacles for employees with these responsibilities to return to work. Some employees will be able to manage this with their partner and extended family, whereas others will not. Where an employee simply cannot make any other arrangements to care for their children in the short term then they will be unable to return to work until that situation changes. Any dismissals on the basis that someone is unable to return to work as a result of lack of childcare are likely to be unfair, at least in the short term where such employees may well be able to demonstrate that they had no options available to them.

Can we require employees to have their temperatures taken on the way in to work, and is this something we should be doing?Last updated on 6th May, 2020

If such testing is regarded as a “reasonably practicable step” which has been identified as an appropriate control following a risk assessment then it is something you can do.

Although you can’t physically force someone to have something intrusive done, this is very likely to be a reasonable management instruction and therefore if someone refuses to have this done as a condition of entry into the work place then disciplinary action may follow.

Where this is something that is required of employees, employers should be letting their staff know that this is one of a number of measures that are being introduced into the workplace for their own safety. If the employer can explain, in advance of the return, why temperature checks need to be taken, what the consequences of the results will be- i.e. will they be sent home if over a certain temperature, whether this data will be stored (and if the sole purpose is to determine whether or not they are fit to attend work on a particular day then why are they being stored), and the fact that temperature checks are a requirement of entry to company premises for everyone, then there shouldn’t be significant resistance to this measure.

We can see the example from other countries of regular temperature checking and it is likely that large scale temperature checks will become part of the “new normal” working environment.

What can I do if an employee refuses to work due to lack of PPE?Last updated on 6th May, 2020

Put simply, if it is a requirement of a particular role that PPE is worn, then this should be provided to the employee. If an employer dismissed an employee for refusal to carry out their role due to lack of PPE then this is likely to be an automatically unfair health and safety dismissal.

Furthermore, anyone who is subject to a detriment as a result of raising a health and safety concern, e.g. someone in this situation who refuses to work due to lack of PPE and is sent home without pay, will also have a potentially valid claim in the Employment Tribunal for that detriment, even if they are not dismissed.

Can I dismiss someone who refuses to wear PPE?Last updated on 6th May, 2020

Potentially, yes. If someone refuses to follow the health and safety measures that have been put in place to protect them, colleagues and possibly their customers, including (where appropriate) the use of PPE then this is a disciplinary issue and should be dealt with as such. Repeated failure to comply with the requirement to follow these measures, or a one off significant failure, may be sufficient to justify dismissal, depending on the circumstances.

Alternatives to redundancy

Introduction to alternatives to redundancyLast updated on 6th May, 2020

We hope that all organisations will come out of lockdown successfully. However, the current economic crisis means that many organisations will face very difficult trading conditions.

Employment costs are one of, if not the, largest cost to your organisation. These costs will have an effect on your financial well-being – and many organisations are now considering how to reduce employment costs. That said, your workforce is also your most important asset and as we get back to business, you will need your workforce to run the organisation, produce your goods, deliver your services and deal with your customers.

As a result, many organisations are facing a very difficult situation – how to reduce or flex the cost of the workforce whilst also maintaining an ability to service customers. This difficulty is enhanced by the uncertainty of when lockdown will be eased and how long that will take.

VIDEO EXPLAINER: Alternatives to redundancy – how to flex your workforce after furloughLast updated on 6th May, 2020

This free Getting back to business webinar was held on Wednesday 6th May. On this video, employment partner Paul Scope and associate Flora Mewies looked at your options if you need to flex your employee resource or reduce cost without reducing headcount. This may apply across the business or to particular functions. They discussed a range of options when the furlough scheme comes to an end, including: lay off, short time working, reduced hours, reduced pay and other ways to be flexible.

They also discussed the pros and cons of each option, and cover what you will need to undertake with each of these routes.

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How do I reduce employment costs? Are we talking about redundancy?Last updated on 6th May, 2020

The obvious option to reduce the cost of your workforce is redundancy. However, that also reduces the number of employees and therefore your capacity. We will be dealing with redundancy and consultation exercises in some FAQs to be published on the Hub shortly.

What other options are there to reduce employment costs?Last updated on 6th May, 2020

If you don’t want to make redundancies, or if you can’t reduce employee resource, either in a particular department or across the workforce as a whole, then you need to think about alternatives to redundancy.

Equally, you may want to flex the resource you have available to you – without making drastic changes.

These FAQs look at the following options to reduce employee costs and flex your resource:

  • furlough – will it continue?
  • employer furlough schemes
  • unpaid leave and sabbaticals
  • retraining and redeploying
  • forcing annual leave
  • flexible working
  • capability issues
  • lay off
  • short time working
  • reductions in salary
  • reductions in working hours
  • changing to shift working

Can I force these options onto the workforce?Last updated on 6th May, 2020

Some of these can be implemented by you, some need agreement or consultation and some depend on the wording of contracts. We’ll explain more in relation to each option.

Employer furlough schemesLast updated on 6th May, 2020

Furlough means temporary leave of absence. There is nothing to stop an employer seeking to agree a temporary leave of absence – with or without pay – with its workforce.

This could not be forced on an employee without significant risk. Without agreement, this would need fair selection and consultation – more on that later.

Unpaid leave and sabbaticalsLast updated on 6th May, 2020

Employees will be reluctant to take unpaid leave or a sabbatical but when faced with the alternative prospect of redundancy may give it some serious consideration. This would remove the cost of that employee from the employer’s business for an agreed period of time. This is an option which can be offered to employees but again, imposing it without agreement creates significant risk.

Retraining and redeployingLast updated on 6th May, 2020

If the business has areas requiring an increased workforce whilst others require a reduced workforce, staff can be retrained and redeployed across the organisation or even across a wider group of companies. This will not reduce the wage bill but will avoid the need for redundancies. Making fundamental changes to an employee’s role and duties will require their agreement following a fair selection and consultation process.

Forcing annual leaveLast updated on 6th May, 2020

Employers have a statutory right to require employees to take annual leave at their direction, subject to providing staff with notice equal to at least double the length of the leave that you are directing them to take (e.g. 10 days’ notice for five days leave). However, this measure is not likely to achieve any urgent cost savings or alleviate immediate cash-flow pressure as holidays would need to be paid.

Clearly, annual leave can be taken on furlough so you could have staff on furlough and annual leave.

Flexible workingLast updated on 6th May, 2020

Many employees require flexible working now more than ever. That could be reduced hours, working from home, reduced days, etc. Be careful to act fairly when considering these requests as they can be a discrimination claim in the waiting.

A flexible working request is a request for a permanent change to the contract of employment however to encourage a greater take up during this difficult time, you can agree this on a temporary basis.

Capability issuesLast updated on 6th May, 2020

All organisations have underperformers. Capability is a potentially fair reason to dismiss and is separate to any redundancy procedures.

Generally, capability falls into either absences through illness or underperformance in the role. Those who are absent through sickness can be furloughed, but when furlough comes to an end they will need to go back onto sickness. If you are looking to tackle absence then you need to tackle long term and short term absence in a different way.

Long term absence: You need to establish whether the employee is able to return to work (with or without reasonable adjustments) in the medium term. This requires medical opinion and be careful of disability issues. Reasonable adjustments are likely to be important.

Short term absence: You will need to demonstrate that you have fair absence triggers in place and there is normally be a 3 stage procedure: warning and final warning followed by dismissal on notice. Each stage needs a fair procedure, with written information, a fair hearing and the opportunity to appeal. Be careful of disability issues.

As for underperformance: To tackle this, you will need to have clear SMART objectives in place and evidence of the employee failing to meet these. There would then normally be a 3 stage procedure: warning and final warning followed by dismissal on notice. Each stage needs a fair procedure, with written information, a fair hearing and the opportunity to appeal.

Lay off and short time workingLast updated on 6th May, 2020

Lay off is a temporary measure where an employee is required not to do any work by their employer in any given week and does not receive any salary for that period. This is sometimes used interchangeably to refer to redundancies; however, this is not correct and lay-off is different to redundancy.

Lay-off may be very useful to achieve short or medium-term cost savings in response to a temporary reduction in demand for products or services. Whether the employer has the right to implement lay-offs and how swiftly they can expect to be able to do so will depend on whether the relevant contracts of employment have specific provisions which deal with lay-off.

Short time working is where an employer temporarily reduces an employee’s working hours, with a corresponding reduction in their pay to less than 50% of their usual salary. This could be through reducing the number of working days, reducing the length of working days or a combination of both.

Short time working provides the employer with the ability to reduce staffing costs whilst providing flexibility in deciding the form of working pattern. As with lay-off, whether the employer has the right to unilaterally impose short-time working and how swiftly they can expect to practically implement this will depend on whether the relevant contracts of employment contain a short time working clause.

Where there is a contractual right to lay off or impose short time working: There is no strict process which has to be followed. We would advise transparent communication and confirmation in writing.

Where there is no contractual right: Imposing these options without a contractual right to do so will be a fundamental breach of the employee’s contract of employment. In these circumstances the employee’s options are: accept the situation and keep working; claim for lost pay; resign and claim constructive dismissal. The best approach for employers in these circumstances is to instead seek to agree lay-off or short-time working arrangements with employees.

Selecting employees for lay-off or short time working: There is no prescribed method for selecting which employees are to be laid-off or placed on short-time working, provided that the employee cannot argue that the method of selection is discriminatory in some way. We would advise selection based on objective business reasons.

Entitlement to pay during lay-off or short time working: Employees must be paid for the time they work. Additionally, while on lay off or short time working, an employee is entitled to receive statutory guarantee pay for the first 5 workless days in any 3-month period. The maximum statutory guarantee pay in any 3-month period is £150 (i.e. £30 for each workless day up to a maximum of 5).

Entitlement to statutory redundancy pay: Once employees have been on lay-off or on short-time working for 4 consecutive weeks or for a combined total of 6 weeks during any 13-week period, they may seek to claim a statutory redundancy payment (provided that they have two years’ service). There is a prescriptive process for this – please seek advice.

Reductions in salaryLast updated on 6th May, 2020

An obvious cost cutting measure is to reduce salaries, either temporarily or permanently. If you are to seek a reduction in salaries, this should be done fairly – either across the board or by selecting teams/individuals based on objective business reasons.

Note that this cannot be imposed without significant risk. Without agreement, this would need fair selection and consultation.

Reductions in working hoursLast updated on 6th May, 2020

Another obvious cost cutting measure is to reduce working hours, either temporarily or permanently. Again, it should be done fairly, either across the board or by selecting teams/individuals based on objective business reasons. Imposing without agreement would create significant risk, therefore would require fair selection and consultation.

Changing to shift workingLast updated on 6th May, 2020

Changing to shift working may give employers the opportunity to change hours / pay whilst also focusing work when it is needed. Like the other provisions, this should be done fairly, either across the board or by selecting teams/individuals based on objective business reasons. Imposing without agreement would create significant risk, therefore would require fair selection and consultation.

Agreeing or imposing changesLast updated on 6th May, 2020

A reduction in hours or salary or changes to hours or patterns of work is a contractual change – you can’t just impose it without significant risk. The same applies for lay-off or short-time working where there is no existing contractual right to impose these.

In summary, the process that an employer should follow to implement these measures is as follows:

  1. Communicate the Company’s position clearly and the urgent need to achieve temporary cost-saving to ensure the ongoing financial viability of the organisation
  2. Explain the proposed changes in detail and seek the employee’s agreement, and
  3. Record the agreed changes in a letter which is counter-signed by the employee.

If employees will not agree then employers will be at substantial risk of claims for unlawful deduction of wages, breach of contract and/or constructive unfair dismissal if they seek to impose these changes unilaterally. Employers should be mindful that this approach is likely to cause significant employee relations issues and dissatisfaction if only some employees agree to a reduction in pay. Employers should have a clear strategy for what their approach will be if this is the case – for example, they may wish to instead explore a different measure such as redundancies. This may form part of the employer’s communication when explaining the reason for the changes and seeking the employee’s agreement.

Unions: Employers should also be aware that where there is a recognised trade union in respect of any part of the workforce which is being asked to agree to a change to terms and conditions, the recognition agreement or collective agreement will require the employer to consult and/or negotiate with the trade union in the first instance.

Collective consultation: Where 20 or more dismissals are proposed at one establishment in any 90-day period, there are stringent collective consultation rules which apply (regardless of whether the employees have two years’ service or not). All dismissals count towards this total unless the dismissal is “not related to the individual concerned” – therefore dismissals for things such as conduct or capability do not count, but most other dismissals will count. This will include where you are imposing changes to the contract such as reduced hours or pay.

The rules on collective consultation set out a prescriptive and time-consuming process which must be followed, and minimum timescales before any redundancies can take effect. The cost of any claims relating to failure to follow collective consultation requirements are substantial, and specific advice should therefore always be sought before seeking to implement collective redundancies. We will be publishing further guidance on this on the Hub shortly.

Alternatives to redundancy toolkitLast updated on 6th May, 2020

We have developed a Toolkit to help with these issues. The Toolkit contains:

  • LO1 How to Guide: Lay off and short time working
  • LO2 Letter directing employee to take annual leave
  • LO3 Letter confirming lay off (contractual right)
  • LO4 Letter confirming short time working (contractual right)
  • LO5 Letter proposing lay off (no contractual right)
  • LO6 Letter proposing short time working (no contractual right)
  • LO7 Counter notice disputing entitlement to claim redundancy payment
  • LO8 Script for announcing lay off or short time working (contractual right)
  • LO9 Script for announcing lay off or short time working (no contractual right)
  • LO10 Letter proposing reduction in working hours and pay

The cost of this Toolkit is £500 plus vat. If you would like to find out more about the Toolkit, please speak to your usual Ward Hadaway employment contact, or get in touch one of the contacts at the bottom of this page.

Restructuring the Workforce / Changing Terms and Conditions

VIDEO EXPLAINER: Consultation exercises – the why, the who, and the howLast updated on 7th May, 2020

This free Getting back to business webinar was held on Thursday 7th May.

On this video, employment partner Edward Nuttman and Graham Vials went through what a consultation exercise is and when you are required to hold one. They then took you step by step through the process, describing all you will need to do to ensure legal compliance whilst at the same time being sensitive to the emotional and motivational impact on your employees and managers.

Read more about this

What is the difference between individual and collective consultation?Last updated on 7th May, 2020

Where it is envisaged that 20 or more employees will be dismissed at a relevant establishment within a 90 day period or less, then collective consultation is required (in addition to individual consultation) and the company must inform BEIS (using form HR1).

If there are less than 20 dismissals then you are only required to carry out individual consultation.

What amounts to a dismissal?Last updated on 7th May, 2020

For the purposes of collective consultation, making someone redundant and/or changing terms and conditions of employment, by termination and re-engagement, is also classed as a dismissal by reason of redundancy and so has the exact same consultation requirements.

What is defined as a redundancy?Last updated on 7th May, 2020

It is where the need for a role at a specific site, or the number of people performing a role, has ceased or diminished or the site closes down.

How is an establishment defined?Last updated on 7th May, 2020

The definition of a relevant establishment is a question of fact for an Employment Tribunal. Guidance from case law says that ‘establishment’ should be interpreted very broadly (so as to avoid employers escaping the need to collectively consult), and may consist of:

  • A distinct entity
  • With a certain degree of permanence and stability
  • Which is assigned to perform one or more tasks
  • Which has a workforce, technical means and a certain organisational structure to allow it to do so

However, there is no need for it to have the following:

  • Legal, economic, financial, administrative or technological autonomy
  • A management which can independently effect collective redundancies
  • Geographical separation from the other units and facilities of the undertaking

What are the minimum consultation time limits?Last updated on 7th May, 2020

Where an employer is proposing to dismiss:

  • 100 or more employees at one establishment within a 90-day period, consultation must begin at least 45 days before the first dismissal takes effect
  • Between 20 and 99 employees within a 90-day period, consultation must begin at least 30 days before the first dismissal takes effect
  • If you are proposing to dismiss less than 20 employees then there are no minimum time limits but you must adhere to a fair process which will involve individual consultation and providing the employee with a right of an appeal

Do you have to reach agreement during collective consultation?Last updated on 7th May, 2020

Although an employer is obliged to conduct consultation “with a view to reaching an agreement”, it is not required to actually agree to any counter proposals made by the employee representatives. Merely to consider them in good faith.

What is the penalty for failing to comply with the individual consultation obligations?Last updated on 7th May, 2020

Failure to comply with the individual consultation obligations could render the dismissal unfair and expose you to a financial penalty of the lower of up to 1 years gross pay or the maximum statutory limit (currently £88,519).

What is the penalty for failing to comply with the collective consultation obligations?Last updated on 7th May, 2020

Failure to comply with the collective inform and consult obligations could impact on the fairness of any dismissals – see next question. In addition, a Tribunal can award a protective award of up to 90 days gross pay for each affected employee. The purpose is intended punish the employer for not complying with the obligations, not to compensate the employee for their individual financial loss.

What does information and consultation involve?Last updated on 7th May, 2020

There are two stages:

  • Stage 1 – The provision of written information to the representatives.
  • Stage 2 – Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

Stage 1: Provision of information

The first stage in the collective consultation process is to provide the representatives with written information including details of the proposed redundancies (often called a section 188 letter). This information must be given to the appropriate representatives and the time limit before dismissals can take effect does not start to run until they have received it. It is this information which ‘starts the clock’.

It is possible that there will be changes to the proposals during the consultation process: indeed that is part of the reason for the process. The employer’s obligation is not just to provide the appropriate representatives with the relevant information at the start of the process. It is under a continuing obligation to provide them with information in writing about any developments during the consultation process (although later changes do not ‘restart the clock’ before dismissals can take effect).

Stage 2: Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

The consultation process must include consultation “with a view to reaching agreement with the appropriate representatives” on ways of:

  • Avoiding the dismissals
  • Reducing the number of employees to be dismissed
  • Mitigating the consequences of the dismissals

If you have to undertake collective consultation do you also have to carry out individual consultation?Last updated on 7th May, 2020

Once the collective process concludes, an employer can make the decision to proceed with the restructure. They will then have 1-on-1 meetings with employees about the impact of the restructure on them. This will include consideration of alternative employment. There is no need to consult further about the proposal, merely the effect of the restructure on the individual.

Do you have to collectively consult for the minimum period of time before you can issue notice?Last updated on 7th May, 2020

These periods are often mistakenly referred to as minimum lengths of consultation (especially by Trade Unions). That is not correct. Consultation can commence, conclude and notices of dismissal be issued within the 30 and 45 day periods. The expiry of the notice would just have to be outside of those restricted periods.

Who do you have to inform and consult?Last updated on 7th May, 2020

The duty is to inform and consult appropriate representatives of the “affected employees”.

Note that the term “affected employees” means those who may be “affected by the proposed dismissals or who may be affected by measures taken in connection with those dismissals”. The term extends beyond those immediately at risk of dismissal to include those affected by measures associated with the redundancies.

“Appropriate representatives” can be:

  • The Trade Union (if recognised)
  • (For any roles not covered by collective recognition) any existing standing body of elected or appointed employee representatives (if already in place)
  • Employee representatives, who are elected specifically for redundancy consultation

Furlough

Coronavirus Statutory Sick Pay Rebate SchemeLast updated on 21st May, 2020

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the SSP paid to current or former employees and will be available from 26 May 2020. See here.

The scheme covers all types of employment contracts and employers will be eligible to claim if they:

  • Are claiming for an employee who is eligible for sick pay due to coronavirus
  • Had a payroll scheme that was created and started on or before 28 February 2020
  • Had fewer than 250 employees on 28 February 2020

The repayment will cover up to 2 weeks starting from the first qualifying day of sickness, if an employee is unable to work because they either:

  • have coronavirus (COVID-19) symptoms
  • cannot work because they are self-isolating because someone they live with has symptoms
  • are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks

You can claim for periods of sickness starting on or after:

  • 13 March 2020 – if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms; or
  • 16 April 2020 – if your employee was shielding because of coronavirus.

Employees do not have to give you a doctor’s fit note for you to make a claim. But you can ask them to give you either:

  • an isolation note from NHS 111 – if they are self-isolating and cannot work because of coronavirus
  • the NHS or GP letter telling them to stay at home for at least 12 weeks because they’re at high risk of severe illness from coronavirus

You must keep the following records in relation to a claim you make under the scheme for three years:

  • The reason for the employee’s absence
  • Details of each period the employee could not work, including start and end dates
  • Details of the SSP qualifying days when the employee could not work
  • National insurance numbers for each employee you have paid SSP to

 

VIDEO EXPLAINER: The ten most frequently asked questions about furloughLast updated on 27th April, 2020

Consultant Peter Byrne and associate Hollie Ball discuss some of the most frequently asked questions we have received about furlough in this 20 minute video.  This was originally recorded on 16th April, and therefore incorporates the updated guidance issued by the Government on Wednesday 15th April, but does not refer to Rishi Sunak extending the current period of the scheme by a month to the end of June.

On the 22nd April, we have incorporated an updated answer to our response on holidays, since there was important additional guidance issued by the Government the preceding weekend.

Questions answered and their timings are:

  1. Does an employer need to obtain consent to furlough employees? (1.20)
  2. Can an employee demand that they are furloughed? (2.28)
  3. Can you furlough an employee who is on sick leave or shielding? (4.00)
  4. At what date does an employee have to be employed at in order to be considered for furlough? (5.46)
  5. Can you rotate employee’s on and off furlough? (8.07)
  6. What is included in the 80% funded under the scheme? (9.21)
  7. How do you calculate wages for staff with variable pay? (11.28)
  8. What can an employee do while on furlough? (13.25)
  9. How will an employer make a claim under the scheme? (16.49)
  10. What is the position with holidays during furlough? (19.00)

To watch the video, please click the link below.

Read more about this

What is the Government’s Coronavirus Job Retention Scheme?Last updated on 15th May, 2020

All employers in the UK will be eligible to participate in the scheme. The purpose of the scheme is to allow employers to claim back employment costs if they have furloughed employees arising from the coronavirus crisis. Importantly this means the scheme is not limited to cases where the employee would otherwise have been made redundant.

Key points:

  • HMRC will reimburse employers for 80% of wage costs, up to a cap of £2,500 per month, plus the associated employer’s national insurance contributions and minimum automatic enrolment employer pension contributions on that reduced wage. After much speculation, the Chancellor has confirmed that the 80% furloughed rate of pay will continue while the scheme is in place.
  • The employer can agree to pay the employee more than it will be reimbursed but it cannot reclaim the additional amount or any other costs associated with the additional amount.
  • The workers covered by the scheme are those who have been “furloughed” which is a leave of absence.
  • Workers must be told about and consent to this change of status (see below).
  • Employers have to continue to pay the furloughed workers and the Government will reimburse the employer.
  • HMRC is administering the scheme and it has been extended until the end of October 2020.
  • Those who left employment and are re-employed and subsequently furloughed by agreement are eligible, even if you do not re-employ them until after 19th March (the new cut-off date for eligibility). In these circumstances the employee must have been on your payroll on or before 28th February 2020 and HMRC must have received an RTI submission notifying of payment for that employee on or before 28th February 2020.
  • Payments may be withheld if claims are based on inaccurate or dishonest information, or are found to be fraudulent. HMRC has put in place an online hotline for employees and the general public to report suspected fraudulent claims.
  • The Government has made alternative help available for employers to continue to pay employees while the scheme is set up.

How does Coronavirus Job Retention Scheme operate?Last updated on 15th May, 2020

  • Certain workers will become “furloughed workers”.
  • Furloughed workers cannot carry out any work for their employer, or a linked or associated organisation but they can do voluntary work as long as they are not providing services for or generating revenue for the employer or a linked or associated organisation.
  • The furlough period begins when the employee stops work, not when agreement is reached.
  • If furloughed employees are expected to do online training while furloughed they must receive the National Living Wage/National Minimum Wage for the time spent training.
  • Workers must be told of and agree to this change in writing. This written agreement must be kept for five years as part of the scheme. The guidance has confirmed that collective agreement reached between an employer and a trade union on furloughing staff is acceptable for the purposes of making a claim under the scheme.
  • However it should also be noted that this is a change in status and pay (if pay is not being topped up) and therefore subject to the usual employment law rules on changing terms and conditions.
  • Changes to the contract must be made by agreement with the worker and the government guidance is clear that to be eligible for the subsidy employers must document their communication with the employee on being furloughed.
  • Employers must also keep a record of the agreement to furlough for five years.
  • If employers have collective bargaining arrangements in place, they must agree this change with the union in the usual way.
  • Collective consultation obligations may be triggered if there are 20 or more employees that are proposed to be dismissed and re-engaged in order to effect the change to terms to be furloughed. You should take advice if you think this may apply.

Otherwise:

A. Employers may be able to vary contracts without worker consent. Some contracts permit certain changes without worker agreement and in those cases, employers can notify this change in the usual way; or

B. Where employers cannot make this change to contracts without consent, they require the agreement of individual workers.

As the updated guidance has confirmed that you must confirm in writing that an employee has been furloughed, but that the employee does not need to provide a written response. Please note that this is for the purposes of making a claim under the scheme. Any reduction in pay must be agreed in writing under normal employment law principles and failure to do so may result in Employment Tribunal claims. You should not rely on a term in the employment contract to effect this change. We can advise you on how to document this properly.

How long will the scheme be in place?Last updated on 15th May, 2020

The Chancellor has announced the scheme will continue until October 2020. It is expected that changes will be made from August to October 2020 during which time furloughed workers will be able to return to work part-time. We anticipate that employers will be expected to contribute to the cost of furloughed workers’ wages during this transitional period. We will update you when further details on the changes are published at the end of May 2020.

How do I access the Coronavirus Job Retention Scheme?Last updated on 20th April, 2020

The scheme is being administered by HMRC under a new online portal that has been set up. It applies to businesses, charities, recruitment agencies, individuals who employ a nanny, administrators (where there is a reasonable likelihood of re-hiring the workers) and public authorities.

All employers with a UK payroll can apply as long as you have:

  • Created and started a PAYE payroll scheme on or before 28 February 2020
  • Enrolled for PAYE online (which can take up to 10 days)
  • A UK bank account.

To apply employers will need the following information:

  • The number of employees being furloughed
  • The dates the employees have been furloughed to and from
  • The name and National Insurance Numbers for each furloughed employee
  • Your employer PAYE reference number
  • The Self-Assessment Unique Taxpayer Reference, Corporation Tax Unique Taxpayer Reference or Company Registration Number as appropriate for your entity
  • Your UK bank account details and sort code
  • Your organisation’s registered name
  • Your organisation’s address

You will need the above information ready before you access the system to make a claim. You will also need to have calculated the amounts claimed in advance as the application needs to be completed in one session. There is currently no save and return option.

The Government has issued a step-by-step guide for employers who wish to make a claim under the scheme which can be found using the link below. It contains useful information about calculating the payments claimed. You will need to register for a Government Gateway ID and password if you do not yet have one in order to access the portal.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880099/Coronavirus_Job_Retention_Scheme_step_by_step_guide_for_employers.pdf

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. A file only agent can assist you in obtaining the information required to make a claim (listed above). If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into.

For claims for fewer than 100 employees you will need to input the details separately for each employee. If claiming for more than 100 employees you can upload a file with the information instead. The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).

The need to demonstrate the impact of coronavirus on your business is not one of the criteria listed above about who can make a claim, so the government does not appear to intend to set a specific test to determine if a business is “severely impacted by coronavirus”. You are not required to explain the impact of Coronavirus on your business when submitting your claim.

HMRC will retain the right to audit any claim retrospectively. You must follow a process, document it and keep a record of this for five years. You must also document and keep records of your calculations for making claims under the scheme.

Are there any limitations on who can be furloughed?Last updated on 20th April, 2020

Employees on any type of employment contract including full-time, part-time, agency, flexible or zero hours and foreign nationals who are eligible to work in the UK on any visa can be furloughed subject to the following excluded categories:

  • Anyone who has been on unpaid leave except those who have been placed on unpaid leave since 28 February 2020. Employees who were on unpaid leave prior to 28 February 2020 can only be furloughed on the subsidised wage after the date it was agreed that they would return from unpaid leave
  • Anyone who was not hired before 19 March 2020 and not notified to HMRC on an RTI submission on or before 19 March 2020
  • Employees who are working but on reduced hours or for reduced pay
  • Employees currently receiving SSP (see FAQ on SSP and self-isolation below)
  • Public sector employees
  • Employees of businesses or organisations in receipt of public funding for staff costs (except for those who are not primarily funded by the government and whose staff cannot be redeployed to assist with the Covid-19 response)

Can those who have been advised to self-isolate be furloughed?Last updated on 6th April, 2020

Employees currently on sick leave or who are self-isolating due to COVID-19 would be entitled to SSP but they may be furloughed after this. A claim can be made for a grant when an employee has been furloughed for at least three weeks. This appears to have been intended to preclude those who have been advised to self-isolate for two weeks on public-health guidance. The government guidance confirms that  employees in this category can be furloughed after the self-isolation period and they are no longer receiving SSP.

The guidance has specified that those who are ‘shielding’ for 12 weeks in line with public health guidance can also be furloughed. But it is important that you clarify that they do fall in the category of extremely vulnerable (https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19)

Can contractors with public sector engagements and who are in scope (deemed employment) for IR35 purposes be furloughed?Last updated on 14th April, 2020

Contractors working for public sector organisations who are deemed employees for IR35 purposes may be eligible to be furloughed. In this scenario the agreement to furlough would be made between the contractor’s personal service company (PSC) and the fee payer (usually the agency). The parties would agree that the contractor will carry out no work for the public sector organisation while furloughed and the fee payer would apply for the grant.

Can those on sick leave or who have been advised to self-isolate be furloughed?Last updated on 20th April, 2020

The updated guidance has confirmed that employees on sick leave or who are self-isolating can be furloughed. Employers should not furlough employees in this category just because of their absence, but they can furlough if there are genuine business reasons for doing so and other eligibility requirements are met. In these cases the employees should no longer receive sick pay and they would be classified as furloughed.

The scheme is not intended to cover short-term sickness absence as a claim can only be made for a grant when an employee has been furloughed for at least three weeks.

The guidance has specified that those on long term sick leave or who are ‘shielding’ for 12 weeks in line with public health guidance can also be furloughed. But it is important that you clarify that they do fall in the category of extremely vulnerable (https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19). It is up to employers to decide whether to furlough employees who are shielding or on long-term sick leave.

You can claim from the CJRS and also for the two week SSP rebate scheme (see below) for the same employee but not for the same period of time. Therefore if you have a furloughed employee who becomes ill and you subsequently move them to SSP you cannot claim the furlough rate of pay. If you keep the employee on the furloughed rate you can continue to claim this under CJRS.

How do I get consent from employees on furlough if they are already sent home?Last updated on 16th April, 2020

We envisage that most employees will be likely to agree to vary their contractual terms and conditions to place them on furlough if they were already facing redundancy or lay-off. The preference would be to have employees countersign a letter confirming their agreement to being furloughed. However, in the current situation with many employees based at home, it will be acceptable to have employees electronically sign documents or to simply reply to an email/text message confirming their agreement.

What payments will be included for calculating 80% of wage costs?Last updated on 20th April, 2020

This will include employer’s national insurance contributions and employer’s minimum automatic enrolment pension contributions on the 80% wage costs or £2500 as appropriate. The calculation for the grant in this case would be:

80% of gross monthly salary subject to the cap of £2500
+ employer NIC’s
+ employer minimum automatic enrolment pension contributions

The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on “qualifying earnings”.

Grants for pension contributions up to this cap can be claimed provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution.

Please note that you cannot reduce employer pension contributions without written consent from employees, and that reducing employer pension contributions may trigger pensions consultation in certain circumstances. Please see the pensions FAQ’s for more detailed guidance on this.

For salaried staff, wage costs are the salary in their last pay period prior to 19 March 2020. If, based on previous guidance, you have calculated your claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) you can choose to still use this calculation for your first claim.

For more detailed guidance on how to calculate a claim based on 80% of your employee’s wages follow this link:

https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

Can I ask furloughed staff to agree to accept less than 80% of their normal pay?Last updated on 14th April, 2020

The guidance is clear that furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).

Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.

How will normal salary be calculated for those with no normal working hours, such as zero hours workers?Last updated on 16th April, 2020

For those with variable pay, if the employee has been employed for a full 12 months before the period claimed for you, can take the higher of:

  • The same month’s earnings in the previous year; or
  • Average monthly earnings from the 2019/20 tax year.

For those who have been employed for less than one year you can use the average of their monthly earnings since they began their employment until the date they were furloughed.

If they have been employed for less than a month, work out a pro rata for their earnings so far, and claim for 80%.

What payments can be included in the claim for a grant?Last updated on 20th April, 2020

You can claim for regular payments you are obliged to pay staff such as non-discretionary overtime, non-discretionary fees, non-discretionary commission and piece-time payments. Overtime in this context is referred to as ‘past overtime’ in the updated guidance which would suggest that you should use the variable pay calculation (see FAQ above) for those who regularly carry out overtime.

Are benefits to be included in the claim for a grant?Last updated on 14th April, 2020

You cannot include the following payments in a claim:

  • Discretionary bonus or commission payments
  • Tips
  • Non-cash payments
  • Non-monetary benefits including taxable benefits in kind
  • Salary sacrifice benefits that reduce an employee’s pay (however HMRC has agreed that such arrangements can be stopped by agreement if due to COVID-19 and the contract is changed)

The updated guidance has confirmed that all of the grant claimed should be paid to the employee in the form of money and that none of the grant is to the used to pay for the provision of benefits or a salary sacrifice scheme.

Can apprentices be furloughed?Last updated on 20th April, 2020

The government has stated that the scheme will apply to apprentices and that they can continue to train whilst they are furloughed. However you must pay at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for all periods of training during furlough leave, taking into account the rate increases from 1 April 2020. This means that you will be responsible for any shortfall in the amount claimed under the scheme and the appropriate minimum wage.

We recommend that you get in touch to discuss any queries on furloughing apprentices.

Should my apprentice continue their training during the coronavirus outbreak, even if they’re furloughed?Last updated on 7th April, 2020

The Government maintains that apprenticeships will be an important part in the economic recovery post-lockdown and therefore ESFA is encouraging training under apprenticeships to continue, even where an apprentice is furloughed, provided that the training does not provide services to or generate income for their employer. E-learning is being encouraged as a method of delivery.

Should I pay my apprentice to continue training?Last updated on 20th April, 2020

Employers should ensure that apprentices are paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW//NMW) as appropriate (and taking into account the new rates from 1 April 2020) for training carried out where their wage received through the Coronavirus Job Retention Scheme does not cover this.

How do I make arrangements for end point assessments for apprentices?Last updated on 7th April, 2020

Arrangements for end point assessments can be modified or rescheduled. End point assessment organisations should engage with External Quality Assurance Providers to agree arrangements for the end point assessments where face-to-face assessments are being modified. Where rescheduling is required due to Covid-19 issues and there is a specified time limit for the ESA post gateway, a further pause of 12 weeks is allowable. This should be recorded by the training provider in the ILR.

Can the apprentice take a break or pause in learning due to coronavirus?Last updated on 7th April, 2020

A break or pause in learning can be initiated where the interruption to learning due to Covid-19 is greater than four weeks. This must be reported as a formal break in learning. In such circumstance the funding to the training provider will be suspended for the duration of the break. Previously, the rules only allowed an apprentice to initiate this break in learning but this has been expanded to give employers and training providers the right to initiate this. Training providers should continue with their monthly IRL submissions to the ESFA. During breaks in apprenticeships it is not necessary for the apprentice to comply with the minimum of 20% on the job training requirement but this will resume when the break ends.

What happens if an apprentice is made redundant?Last updated on 7th April, 2020

Where an apprentice is made redundant the training provider should support the apprentice in seeking alternative employment within a 12 week period. ESFA will support this process. Where an apprentice is placed on unpaid leave or the nature of their employment no longer supports their apprenticeship, it should be considered whether a break in learning would be appropriate.

An employer who wishes to make an apprentice redundant should seek advice on the process to be followed for this.

Will funding audits continue during the coronavirus pandemic?Last updated on 7th April, 2020

Funding audits are being paused and no new audits will be commenced during the lockdown period.

Will HM Treasury continue to collect my apprenticeship levy payments?Last updated on 7th April, 2020

HM Treasury have no current plans to pause the collection of apprenticeship levy payments from employers, therefore levy-paying employers must continue to make payments. There is also no plan to extend the 24 month period allowed to spend levy funds.

What should I do if my apprentice is due to finish their fixed-term contract during the pandemic?Last updated on 7th April, 2020

Employers who have apprentices on fixed-term contracts due to end during the pandemic should discuss arrangements with the apprentices including whether an extension to the contract can be offered to allow them to complete their apprenticeship.

Are there any other useful resources about apprenticeships during the coronavirus outbreak?Last updated on 7th April, 2020

On 6 April 2020 the Government published further guidance to clarify the position with apprentices during the Covid-19 outbreak. The full guidance is available from here https://www.gov.uk/government/publications/coronavirus-covid-19-apprenticeship-programme-response/coronavirus-covid-19-guidance-for-apprentices-employers-training-providers-end-point-assessment-organisations-and-external-quality-assurance-pro

The guidance includes details of the measures implemented by the Education and Skills Funding Agency (ESFA) in order to provide flexibility in delivering apprenticeships in current circumstances. This includes breaks in learnings, delayed end point assessments and alternative arrangements for end point assessments. These measures apply immediately and until further notice.

There are a number of FAQs within the Government guidance which deal with common queries. The guidance contains some technical provisions and we recommend that you take advice if you are furloughing or making apprentices redundant. If you have any additional queries on the practicalities of implementing the ESFA measures please get in touch.

How do I select which employees should be furloughed? Can I only furlough employees who are at risk of redundancy?Last updated on 14th April, 2020

You do not have to follow a redundancy selection process in order to select employees to be furloughed. However any steps in relation to selection must be carried out in line with equality and discrimination legislation. We recommend that the decision making process is documented where possible.

You do not need to furlough only those at risk of redundancy; you can furlough anyone who is ‘shielding’ by self-isolation as specifically set out in the guidance, or anyone who has finished a period of isolation. The guidance has confirmed that you can also furlough individuals with caring responsibilities which would include staff who are looking after their children, and those who are already on sick leave if there are business reasons for doing so. So far there does not appear to be any restrictions on inviting volunteers to be furloughed.

Can I make someone redundant rather than placing them on furlough leave?Last updated on 12th May, 2020

We do not yet know the extent to which employment tribunals will expect employers to have considered furlough as an alternative to redundancy in the current circumstances. We expect that if the redundancy is strictly as a result of the effect of Covid-19, employers will face difficulty justifying the redundancy instead of furloughing. The dismissal for redundancy may be considered to be unreasonable in the context of an unfair dismissal claim. There are a number of schemes in place to provide financial support for businesses during this time and businesses have been strongly advised to access this support rather than make redundancies.

How do you manage employees who aren’t furloughed and are unhappy that they still have to work?Last updated on 5th May, 2020

Although there is no formal selection process that must be followed in order to furlough staff, the basis for selecting who will be furloughed should be explained to all relevant staff. Basing this on work levels, required skills or whether work can in fact be carried out efficiently from home will help this process. Staff can be invited to volunteer to be furloughed and any requests can be considered on a case by case basis. It may be that a particular skill set is required which may result in an employee’s request being refused.

Can I rotate staff who are furloughed? Can I put someone on furlough, bring them back when I need to, and then put them back on furlough, as demand requires? And practically how can we deal with this for those who want to rotate?Last updated on 12th May, 2020

The updated guidance has confirmed that individuals can be rotated on furlough as long as each period of furlough is at least three consecutive weeks, and employees are formally taken off furlough when they return to work. There is no minimum period for a worker being taken out of furlough before being furloughed again.

Practically how to deal with those who want to rotate

One option is to make it clear in the letter agreeing to being furloughed that there is an open ended right to rotate and to be able to take them off furlough and bring them back and put them back on, subject to them being furloughed for a minimum of a three week block.

So the employer reserves the ability to rotate by building into the agreement, but only exercises it if it is permissible, which we should be able to find out in the coming weeks.

Rotation is quite key for employers who need to make a temporary reduction to their overheads but want to retain the skills base to call back when work picks up.

It also helps in the employer being able to show that they are treating the workforce as fairly as possible and everyone is taking a reduction. Get in touch if you need help preparing the documentation for furlough that will permit rotation.

Can directors, partners or those working under umbrella companies be furloughed?Last updated on 5th May, 2020

Yes. The updated government guidance has confirmed that office holders (including company directors), salaried members of Limited Liability Partnerships (LLPs) individuals working under umbrella companies (including agency workers) and individuals who are classified as ‘workers’ rather than employees can be furloughed but only to the extent that they are paid via PAYE. Therefore director’s fees can be claimed (subject to the cap) but dividends are excluded, as are bonuses and commission payments.

Those who are paid annual are now eligible to make a claim, subject to meeting the remaining requirements. This includes being notified to HMRC on an RTI submission on or before 19 March 2020 which relates to a payment of earnings in the 19/20 tax year.

The decision to furlough a director or office holder should be adopted as a formal decision of the company or LLP which should be minuted and notified in writing.

Company directors can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company while furloughed and they cannot carry out work that would generate revenue or perform services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).

Can agency workers be furloughed?Last updated on 6th April, 2020

Yes, if they are paid via PAYE. This includes agency workers engaged under umbrella companies.

The furlough should be agreed between the agency (the employer) and the worker and documented in accordance with the guidance. It is recommended that the decision to furlough is discussed with end user clients. Just like other employees, agency workers cannot perform work through or on behalf of the agency while furloughed. This includes work for the client.

For agency staff working under umbrella companies, it is for the umbrella company and the agency worker to agree on furloughing the worker.

Can employees on fixed-term contracts be furloughed?Last updated on 24th April, 2020

Yes. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. An employee on a fixed term contract can be re-employed, furloughed and claimed for if either:

  • Their contract expired after 28 February 2020 and an RTI payment submission for the employee was notified to HMRC on or before 28 February 2020
  • Their contract expired after 19 March 2020 and an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020

If the employee’s fixed term contract has not already expired, it can be extended, or renewed. You can claim for them if an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for this scheme. This is not specific to employees on fixed-term contracts, the same would apply to employees on all other contracts.

Do I have to continue to pay furloughed staff while furloughed? Can I wait until I receive the money from the government?Last updated on 5th May, 2020

To qualify for a grant under the scheme you must pay your furloughed staff the wages you are claiming for. Failure to do so may result in a HMRC investigation and/or claims from furloughed staff for unlawful deductions from wages and possibly constructive dismissal claims.

Normal benefits including non-monetary benefits should continue during furlough unless the individual has agreed in writing to reduce or remove a benefit during this time.

Employers are expected to apply for one or more of the financial support schemes available to be able to continue to pay staff.

What if I have already made redundancies because of Coronavirus?Last updated on 20th April, 2020

The scheme applies to those who have already been laid off or dismissed as long as they were employed on or before 28 February 2020 and had been notified to HMRC on an RTI submission on or before 28 February 2020. Employees who have already been made redundant can be re-hired and subsequently furloughed, even if they are not rehired until after 19 March 2020. Note that when the scheme ends employers can chose whether to made furloughed employees redundant or for them to return to work. The letter reinstating employees should make it clear that redundancy is still a possibility when the scheme ends.

Claims can be backdated from 1 March 2020 where employees have already been furloughed from that date. A claim cannot start any earlier than the date the employee was first furloughed.

If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme.

What about someone who resigned?Last updated on 20th April, 2020

You can re-hire and furlough anyone that has left your business for whatever reason, providing they were employed on or before 28 February 2020 and had been notified to HMRC on an RTI submission on or before 28 February 2020.

Can you furlough a suspended employee?Last updated on 28th March, 2020

Yes. You should be able to furlough a suspended employee however we recommend that you take advice on this before doing so.

Can employees volunteer if they have been furloughed?Last updated on 31st March, 2020

Yes. The Government has confirmed that those on furlough will also be permitted to volunteer to help the NHS during the coronavirus outbreak without risking their pay.

Can an employee on family related leave be furloughed?Last updated on 5th May, 2020

Yes, but your claim will be limited to any enhanced contractual payments you make to employees who qualify for the relevant family related pay.

All maternity and parental rights remain in force for anyone in this category who is furloughed. However you may need to calculate average weekly pay differently if the employee was furloughed and then started family related leave on or after 25 April 2020.

Furlough pay cannot be claimed for the period that an employee is receiving Maternity Allowance. An employee can agree to accept furlough pay but they must contact Jobcentre Plus to stop their Maternity Allowance payments for this period.

What rate of pay applies to an employee returning from statutory leave who is furloughed?Last updated on 20th April, 2020

Statutory leave includes family related leave, sick leave or parental bereavement leave. Claims for furloughed individuals returning from statutory leave should be based on their salary, before tax, and not the pay they received while on statutory leave.

Similarly, claims for furloughed employees returning from a period of unpaid leave on sabbatical should be based on their pay they would have had on paid leave.

Can furloughed employees carry out work for another business during furlough?Last updated on 6th April, 2020

Yes, if there is a contractual right to do so. Furloughed employees who start work with another employer during this time must inform HMRC that they have another job.

Can furloughed workers still continue with union or non-union representation duties?Last updated on 5th May, 2020

Yes, they can continue to undertake duties or activities for representative purposes. This includes individual or collective representation of their colleagues. They must not carry out any actual work or generate revenue for their employer or a linked or associated organisation.

Can employees transferring to a new employer be furloughed by the new employer?Last updated on 5th May, 2020

Yes, if they have transferred to the new employer after 28 February either under TUPE or if the ownership of the business changes from one legal entity to another and the new owner takes responsibility for the pay records.

Similarly, where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.

Are there more details on the Coronavirus Job Retention Scheme?Last updated on 12th May, 2020

  • The scheme is being backdated to 1 March and is currently set to run for eight months to the end of October – the original deadline of end of June was extended by Rishi Sunak on 12 May 2020. It will only apply to employees who have been on payroll on or before 19 March 2020 and have been notified to HMRC on an RTI submission on or before 28 February 2020.
  • It will cover workers who have already left employment after 28 February 2020 as long as they have been on payroll and have been notified to HMRC on an RTI submission on or before 28 February 2020 even if they are re-employed and furloughed after 19 March 2020.
  • Workers who are furloughed are not being dismissed or made redundant. This means furloughed employees are not entitled to redundancy payments.
  • There is no requirement for a business to be closed to access the scheme. Which means employers will be able to furlough some workers and not others.
  • Furloughed workers are not entitled to receive a top-up of wages from their employers. Some employers may choose to top up the furloughed wage from 80% to 100%. It will not be possible to claim a grant for any additional pay beyond the 80% under the scheme or the associated employer costs for that additional pay.
  • Workers remain employed/engaged during this period. Which means all normal terms and conditions apply.
  • Workers must pay tax, National Insurance and pension contributions (unless agreed with the employer to stop or reduce pension contributions) in the normal pay while furloughed.
  • Workers who receive a lower income as a result of these changes may be eligible for support through the welfare system, including universal credit.
  • Where employers are still considering implementing redundancies please speak with us. We expect there will be a requirement to show why you are not operating this scheme and retaining employees.

Can I get hold of template documents and guidance to help with the process of furloughing employees?Last updated on 20th April, 2020

One of the key areas we have been helping our clients with, is the production of legally compliant template documents and scripts to cover the various steps that an employer needs to put in place, when it is considering cost reduction options such as placing employees on furlough leave and/or changing terms and conditions such as short-term working, hours and pay etc. To save you valuable time and resource during these difficult and challenging times, we have put together a fixed price Furlough HR Toolkit that will speed up the production of legally compliant documents to ensure that you are following the correct process.

The Furlough HR Toolkit includes the following:

  1. Communication to workforce – Guidance / script for announcing impact of COVID-19 and need to review current business operations
  2. Letter seeking consent to furlough (where there is a contractual right for lay-off)
  3. Letter seeking consent to furlough (where there is no contractual right for lay-off)
  4. Communication to workforce: Guidance / Script for  communicating decision to place staff on furloughed leave
  5. Letter to staff who have agreed to go on furloughed leave / not objected
  6. Letter to staff who objected to being placed on furloughed leave
  7. Letter to staff who are not being placed on furloughed leave and have no change to terms and conditions
  8. Letter proposing reduction in working hours / pay
  9. Communication to workforce: Guidance / Script announcing need to change contractual terms
  10. Letter to staff who are being taken off furloughed leave
  11. Coronavirus Job Retention Scheme – Frequently Asked Questions
  12. Letter to staff being placed back on furloughed leave

The cost of this Toolkit for all of these documents is £1000 plus VAT.  If you would like to purchase please get in touch.

How does holiday work during furlough?

What are the standard holiday rules?Last updated on 15th May, 2020

Under usual rules, workers are entitled to a minimum of 28 days holiday including bank holidays, each year. Except in limited circumstances, it cannot be carried between leave years meaning that workers lose their holiday if they do not take it.

Will holiday entitlement continue to accrue for a period of furlough?Last updated on 15th May, 2020

The guidance has confirmed that all remaining employment rights and terms continue while an employee is furloughed. Holiday will continue to accrue during furlough however you may reach agreement with employees on reducing entitlement provided that it does not fall below the statutory minimum of 5.6 weeks per year.

Can employees take annual leave during a period of furlough?Last updated on 15th May, 2020

Yes, however holiday pay during furlough must remain at the normal rate of pay and not the reduced furloughed rate. You can still claim for this period under the scheme but you will be responsible for any amounts beyond the maximum you can claim. Employers have flexibility to restrict when leave can be taken both during and after period of furlough in the normal way.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then you would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

Can I require employees to take holiday during furlough?Last updated on 15th May, 2020

Yes. Government guidance now confirms that employers can be required to take holiday during a period of furlough, so long as they are given minimum notice to do so. The notice required is double the length of the holiday.

Employers are also able to cancel employees’ holidays (or require them not to take holiday) if they are on furlough, for example if they are not in a position to pay the additional 20% top up to their normal wages (or more where they earn in excess of the £2,500 monthly cap on furlough payments). Again, employers are required to provide a minimum period of notice of cancellation, which in this case, is the length of the planned holiday.

Employers can ask employees to take or cancel holiday with less notice but they would need to get their agreement to do so.

What are the new rules around holiday entitlement?Last updated on 15th May, 2020

Workers who have not taken 20 days holiday entitlement due to Covid-19 can now carry it over into the next 2 leave years. It only applies where it was not reasonably practicable for a worker to take their annual leave due to the coronavirus.

What is the amendment to The Working Time legislation called?Last updated on 15th May, 2020

The government introduced The Working Time (Coronavirus) (Amendment) Regulations 2020 to amend the Working Time Regulations 1998 to allow for the change.

Who decides on carrying-over holiday entitlement?Last updated on 15th May, 2020

The Regulations do not require any prior agreement between an employer and employee that it was not reasonably practicable for holiday to be taken for it to be carried over.

However, if an employee requests holiday then an employer must have ‘good reason’ for refusing it due to coronavirus. The term ‘good reason’ is not defined so the Government will expect employers, employees and (if necessary on any dispute) the Courts to apply common sense.

The Regulations are not confined to key workers so could, in principle, be used by employers for a wider range of employees.

Pensions

How does the Government’s Coronavirus Job Retention Scheme help with pension contributions?Last updated on 21st April, 2020

  • Under the Coronavirus Job Retention Scheme, HMRC will reimburse employers 80% of the pre-furlough wage as at 28 February 2020, up to a cap of £2,500 per month. In relation to pension contributions, HMRC will also reimburse the employer’s minimum automatic enrolment pension contribution on that amount. The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings.
  • However, employers should continue to pay employer pension contributions on the amount actually paid to the furloughed employee, such contribution to be calculated in accordance with the applicable scheme rules. If this is more than the amount that can be reclaimed under the Coronavirus Job Retention Scheme, they will not be able to reclaim the excess from HMRC. Employers cannot simply change contribution to the amount reimbursed without following a proper process (as to which, please see below).
  • Some employers may therefore be obliged to pay more pension contributions than the amount reimbursed by HMRC, in accordance with their scheme’s rules. In some circumstances, some employers will not be able to claim any reimbursement from HMRC regarding pensions at all, despite having to continue making contributions. For example, this will happen if the scheme rules specify contributions to be paid on all of the employee’s remuneration (if the scheme was certified as a qualifying scheme under set one), but the furloughed wage falls beneath the lower level of “qualifying earnings”. Pensions contributions will still be payable, but these will not qualify for funding under the CJRS.
  • This is particularly the case for employers with Defined Benefit (DB) schemes. The Coronavirus Job Retention Scheme makes no mention of refunding DB employer contributions. As a result, all an employer will receive from HMRC is the minimum automatic enrolment employer pension contributions on the capped amount that can be claimed from HMRC, which may well fall short of the employer’s pension contribution in respect of the furloughed employee. There are specific considerations for DB schemes when considering furlough for employees (see the last section, below).

How does salary sacrifice affect the Government’s Coronavirus Job Retention Scheme?Last updated on 14th April, 2020

  • Employee pensions contributions are often paid by way of salary sacrifice arrangements.
  • Use of such arrangements may reduce the amount of wage an employer can claim under the Coronavirus Job Retention Scheme, as the reimbursement is calculated by reference to an employee’s actual pay as at 28 February 2020, hence post sacrifice pay.
  • Using the Coronavirus Job Retention Scheme does not in itself bring a salary sacrifice arrangement to an end, but where an employer wishes to maximise the amount of an employee’s pay that will be covered by the CJRS, the employer and employee(s) concerned may agree to terminate the salary sacrifice arrangement as part of furlough. HMRC has recently announced that the Covid-19 pandemic will be considered a “life event” (i.e. one of the permitted reasons to break a salary sacrifice arrangement mid-term), if the employment contract is updated accordingly.

What should payroll look out for if the Government’s Coronavirus Job Retention Scheme is used?Last updated on 14th April, 2020

  • It is important to have a clear paper trail for any agreed reduction in salary, and hence any reduction in the amount of contributions. However, the contribution rates (as opposed to the amounts) should be the same as normal, and hence all processes and software should function as per normal and, amongst other things, remain compliant with auto-enrolment employer duties.
  • However, if the period of affected contributions does not overlap precisely with the period of reduced salary, for example because of different cut-off dates, there may well be instances of non-compliance with auto-enrolment employer duties at the beginning as well as at the end of the period covered by the Coronavirus Job Retention Scheme.
  • Accordingly, where an employer takes advantage of the Coronavirus Job Retention Scheme, good communication with the persons responsible for pensions administration and detailed record-keeping are essential to prevent non-compliances in the short-term and confusion in the long term.

Can employers reduce their contributions?Last updated on 14th April, 2020

  • Yes, if contributions to a defined contribution (“DC”) scheme exceed statutory minimum for auto-enrolment purposes, it may be possible to reduce employer contributions to the statutory minimum, but not further.
  • However, the processes required for reduction of DC employer contributions will necessitate obtaining legal advice:
    • Reducing employer contributions may require changes to the employment contracts of affected staff (as does the furlough process).
    • Reducing employer contributions may also require negotiation with trade unions or other staff representative forums.
    • Where group personal pensions are used, the contractual format may not permit changes of employer contributions, and hence it may also be necessary to enter into a new contractual arrangement. Choosing a new group personal pension plan is a not insignificant task in itself.
    • Employers with at least 50 employees are required to conduct a 60-day consultation process with affected employees if they propose to reduce employer contributions (but please see below).
    • Finally, it may require a change to the scheme rules and engagement with the scheme trustees if the scheme is operated under trust.
  • For DB schemes, specific considerations apply (see the last section, below).

Can employees reduce their contributions?Last updated on 14th April, 2020

  • Remember that employees will also be making contributions on any reduced wage under the Coronavirus Job Retention Scheme. The amount contributed may be less, but the contribution rate will be the same, unless the following applies.
  • Employees may reduce their DC employee contributions if their scheme rules allow them to do so, but no further than the statutory minimum if the scheme qualifies as the employer’s auto-enrolment vehicle.
  • Employees might choose to opt-out or cease active membership of their scheme, which might cause a spike in administration at a time when administrators are likely to be understaffed. It is important that employers remember they must not do anything to encourage or induce employees from leaving an auto-enrolment vehicle as this may constitute an offence.
  • Employees who leave their scheme in this way will have to be re-enrolled in due course as and when required by law.
  • For DB schemes, specific considerations apply (see the last section, below).

How is the Pensions Regulator reacting to the crisis?Last updated on 14th April, 2020

  • The Pensions Regulator has published regularly-updated guidance for employers.
  • It will take “a proportionate and risk-based approach towards enforcement decisions … with the aim of supporting both employers and savers”. In other words, the law remains the same, but the Regulator will show restraint in enforcement against breaches.
  • In particular, the Regulator has proposed a regulatory easement regarding the 60-day consultation process for the reduction of employer contributions. If the following conditions apply, the Regulator will not take regulatory action in respect of a breach of the requirements, up to 30 June 2020 (but this date may be reviewed):
    • the employer has furloughed staff for whom it is making a claim under the Coronavirus Job Retention Scheme (when the claim process becomes available – it is expected to be online at the end of April 2020);
    • the reduction in employer contributions applies to furloughed staff only, and not non-furloughed staff;
    • the reduced contribution rate for furloughed staff will only apply during the furlough period, after which time it will revert to the current rate (beware the overlap issues discussed above); and
    • the employer has written to the affected staff and their representatives to describe the intended change and the effects on the scheme and on the furloughed staff.

Do employers still have to enrol and reenrol employees?Last updated on 14th April, 2020

  • Yes, and this includes furloughed employees under the Coronavirus Job Retention Scheme.
  • Employers must continue to assess their new employees or newly eligible existing employees and enrol them where required, but can make use of the statutory postponement procedure which allows them to delay for up to three months the assessment of new employees for the purpose of enrolment (see further details here on the Pensions Regulator’s website). Declarations of compliance for new employers must still be completed in the normal way.
  • Postponement cannot be used for re-enrolment. The Regulator recommends employers use the re-enrolment date tool on the Regulator’s website to choose a date up to three months after the third anniversary of enrolment to assess staff for re-enrolment. Further information about employers’ obligations about reenrolment from the Pensions Regulator can be found here. Re-declarations of compliance for new employers must still be completed in the normal way.

What are the special considerations for DB schemes?Last updated on 14th April, 2020

  • Before any agreed reduction in wages, actual changes to earning patterns (loss of overtime, for example) may impact the pensionable salary as defined under the scheme rules, with knock-on effects to a number of benefit calculations, such as death in service benefits.
  • Contractual changes to member salaries may adversely impact accrued benefits as the final salary figure may be reduced to a greater or lesser extent depending on the duration of furlough and the severity of any reductions in wage, and hence reductions may be difficult to agree with staff.
  • Reducing employer contributions will be subject to a number of the same considerations applicable to a DC scheme listed above. There will also be a need to change the rules and interact with the trustees, although it may be possible to override the rules with a direct contractual agreement with members.
  • Reducing employee contributions will also depend on the scheme rules, particularly as to whether there are any discretionary powers to suspend contributions, or pensionable service.
  • The rules will need to be considered for any unexpected consequences of furlough: depending on the wording of the rules, furlough may or may not be considered a leave of absence and may or may not have the effect of terminating pensionable service. This could have far-reaching consequences.
  • In particular, if the workforce’s pensionable service is inadvertently terminated as opposed to suspended in accordance with any relevant rule, this could trigger a statutory employer debt on an employer participating in a multi-employer scheme, if pensionable service continues for employees of other employers. This sort of issue is unlikely to be spotted until after the event, and therefore difficult to untangle. However, an employer should be able to take advantage of the “period of grace” provisions by notifying the trustees of its intention to re-admit employees to pensionable service within the next 12 months.
  • Clearly the impact of the Coronavirus Job Retention Scheme on DB schemes is complex and legal advice should be sought before any changes are considered.

Self-Employed

What is included in the Government’s self-employment income support scheme?Last updated on 31st March, 2020

  • A taxable grant worth 80% of the average monthly profit over the last three years (one or two years will be reviewed for those who do not have three years of tax returns)
  • The grant will be capped at £2,500 per month
  • The scheme will be available for three months and will be extended if necessary
  • Individuals claiming a grant can continue to do business (unlike employees who must not work when furloughed)

What is the eligibility criteria for the Government’s self-employment income support scheme?Last updated on 31st March, 2020

You will be eligible if you are a self-employed individual or a member of a partnership and you:

  • have trading profits of up to £50,000
  • earn the majority of your income from self-employment
  • have submitted a Tax Return for 2019
  • have traded in the tax year 2019/20
  • are trading when you apply for a grant, or would be except for Covid-19
  • intend to continue to trade in the tax year 2020/2021
  • have lost trading/partnership profits due to Covid-19

Those who have just recently become self-employed and do not have a 2019 Tax Return will unfortunately not be eligible for a grant under the scheme.

What if I have missed the January deadline for submitting my 2018/2018 tax return?Last updated on 31st March, 2020

You have until 23 April 2020 to submit your return in order to be considered for eligibility.

How do I access the scheme?Last updated on 31st March, 2020

You can’t apply for a grant at this stage. Those who are eligible will be contacted directly by HMRC based on 2018/2019 tax returns they have received. If you are eligible you will be asked to fill out an online application. HMRC will pay applicants directly.

How much will I get under the scheme?Last updated on 31st March, 2020

If you are eligible you will get a taxable grant of 80% of the average profits from the following tax years (where applicable):

2016-2017

2017-2018

2018-2019

HMRC will add the total profit in each of the three tax years (if applicable). This will then determine the monthly payment, subject to the cap of £2500.

When will I receive a grant under this scheme?Last updated on 31st March, 2020

The Chancellor has confirmed that payments under the scheme will not be available immediately. It is expected that it will take no later than the beginning of June 2020 to access the scheme. This places the self-employed in a much more difficult position than many employees who will be furloughed under the employment retention scheme. Those employees will continue to receive a wage while earnings for self-employed workers have already reduced significantly and in some cases ceased entirely.

What other financial support is available for self-employed individuals?Last updated on 31st March, 2020

Although these measures fall short of the level of assurance given to employees both in terms of eligibility for an immediacy of access to payments, they are a vast improvement on the support for self-employed workers that has been put in place until now. Current support includes:

  • Access to business interruption loans
  • Self-assessment tax payments that were due in July 2020 have been deferred until January 2021
  • VAT is deferred until the next quarter
  • The introduction of Time to Pay arrangements under which deferrals for HMRC payments can be agreed
  • The minimum income floor for universal credit has been suspended which will allow self-employed workers to access the equivalent of Statutory Sick Pay (SSP)
  • Universal credit and tax credit payments to increase by £1000 per year

Will there be further measures for self-employed announced?Last updated on 31st March, 2020

The Government assured parity for the self-employed but it has since accepted that this would be difficult to achieve. The Association of Independent Professionals and the Self-Employed (IPSE) has worked closely with the Government on implementing the current self-employment income support scheme. IPSE has confirmed that it will continue to work on helping to extend measures to all freelancers in need as a result of Covid-19.  We do not yet know if there will be further support announced but we will keep you updated.

Places of work

What can I do to make sure my home-working people are doing so safely?Last updated on 30th March, 2020

Reiterate Government advice. Currently, this can be summarised as:

  • stay at home
  • only go outside for food, health reasons or work (where this absolutely cannot be done from home)
  • stay 2 metres (6ft) away from other people
  • wash your hands frequently and as soon as you get home

More specifically:

  1. Keep in touch. If contact is poor, workers can feel disconnected, isolated or abandoned. This can adversely affect stress levels and mental health – especially in the current crisis when everyone is feeling more anxious.
  2. Think about the use of laptops/devices (DSE) at home. Provide a basic form of risk assessment for self-completion.
  3. Remind workers of simple steps to reduce the risks from display screen work:
    • take regular breaks (at least 5 minutes every hour) or change activity
    • avoid awkward, static postures by regularly changing position
    • get up and move or do stretching exercises
    • avoid eye fatigue by changing focus or blinking from time to time

Visa applicants

What do I do if my visa is due to expire but I can’t travel?Last updated on 26th May, 2020

If your current UK visa expires before 31 July 2020 and you intend to leave the UK as soon as you are able to, you should apply to the Coronavirus Immigration Help Centre for an automatic extension. Your visa will be automatically extended to 31 July 2020.

If you already registered for the extension to 31 May 2020, your visa will be automatically extended to 31 July 2020 without the need to take further action.

If you intend to remain in the UK, you should submit a new visa application before your current visa expires.

My visa is about to expire, can I apply to extend it?Last updated on 15th May, 2020

Yes, you should submit a new visa application before your current visa expires.

The visa application is a two stage process:

  • First you submit the online application and pay the fee
  • Second you attend a visa application centre to enrol your biometrics and verify your passport.

Currently you are able to complete the first stage but not the second as application centres are temporarily closed.

Submitting a valid online application before your current visa expires secures your right to continue living and working in the UK, even after your current visa has expired.

Do I have to leave the UK to switch visas?Last updated on 26th May, 2020

“Switching” is where you can transfer from one visa category to another without leaving the UK. However, in many instances where an individual wants to change from one visa category to another, they have to leave the UK and apply from the country they normally reside in.

Until 31 July 2020, individuals are no longer be required to make their application overseas from their country of residence to switch into a different visa category. Therefore, as long as the other normal conditions are met, individuals will be able to make their visa applications from within the UK.

I have submitted my online visa application but can’t book an appointment, what should I do?Last updated on 15th May, 2020

Normally, once you have submitted the online visa application and paid the fee, you have to attend an appointment to enrol your biometrics and verify your passport within 45 days. This requirement has been relaxed whilst all of the visa application centres are closed. When the application centres reopen you must book and attend an appointment to complete the application process.

When will UK Visa Application Centres reopen?Last updated on 15th May, 2020

The Home Office has not been confirmed when visa application centres in the UK or overseas will reopen. Each country will operate to a different timetable depending on the impact of COVID-19 in the relevant area.

What do I do if I can’t travel to the UK to activate my visa?Last updated on 15th May, 2020

If your 30-day visa to travel to the UK (vignette) has expired or is about to, you can request a replacement free of charge until the end of 2020 by contacting the Coronavirus Immigration Help Centre. This can be granted with new and extended validity dates to allow travel once you are able to.

Do I have to quarantine for 14 days when arriving in the UK?Last updated on 29th May, 2020

From 8 June 2020, people entering the UK from overseas (excluding those entering from Ireland, the Channel Islands or the Isle of Man) must comply with a mandatory 14 day quarantine period. During this 14 days you will not be able to leave the place you are staying in, except in some very limited circumstances.

These rules will apply to both British and foreign nationals, however there are some exemptions to this rule where a person is coming to the UK to undertake a certain role (such as a healthcare professional coming to the UK to provide essential healthcare). A full list of the narrow exemptions can be found on the gov.uk website.

Before travelling, individuals will be asked to provide their contact details and information about their journey and the accommodation that they will be self-isolating in. To do this, individuals will need to fill in an online form on the gov.uk website. Individuals who refuse to fill in this form may be fined £100 and/or denied entry at the UK border should they not be a British citizen or UK resident.

The information provided in the form will ensure that the Government can check that an individual is self-isolating at the address given. Where an individual refuses to self-isolate they can be fined £1,000 if they are staying in England or Wales.

Once visa application centres re-open overseas and UK visa applications are processed, this 14 day period will need to be taken into consideration and may require employment start dates in the UK to be delayed.

What do I do if I have been endorsed for a Global Talent, Start-up or Innovator visa but my endorsement is due to expire?Last updated on 15th May, 2020

Endorsing bodies are still processing applications for these visa types and endorsements are still being issued. You usually have to apply for your visa within 3 months of receipt of your endorsement. In most cases you will still be able to submit your application online within this timeframe however it will not be completed as visa application centres across the world are closed. If you cannot apply because you haven’t been able to travel and your endorsement has expired, you may still be eligible for a visa. You should make your application as planned and UKVI will consider all applications on a case by case basis.

Tier 2 sponsors

Can a Tier 2 visa holder be furloughed?Last updated on 15th May, 2020

Yes, so long as this action is not discriminatory.

Can a sponsor cut the salary or hours of a Tier 2 visa holder?Last updated on 15th May, 2020

Yes but the sponsor must report this on the Sponsor Management System within 10 working days and must follow normal employment law principles.

If this results in the sponsored worker’s falling below the minimum required salary the usual position is that they cannot continued to be sponsored. However the government has implemented a concession for sponsors who have ceased trading or temporarily reduced trading which allows the salary to be reduced to 80% of the figure stated on the Certificate of Sponsorship or £2,500 per month, whichever is lower.

How do I bring an employee with a visa off furlough?Last updated on 15th May, 2020

Employees with visas should be treated consistently with the wider workforce. When their furlough leave ends, they should return to work and their pay should be reinstated. If you agree a pay cut or reduction in working hours, you need to ensure that sponsored workers are still earning above the minimum salary for their role and working in excess of the minimum number of hours (see above).

Can a Tier 2 sponsored worker start working before their visa has been granted?Last updated on 15th May, 2020

Ordinarily, no but during the pandemic, yes.

You can start employing a Tier 2 or 5 worker who is in the UK before their visa application has been decided if the following conditions have been met.

  • You have assigned the worker a Certificate of Sponsorship
  • They have made an in time visa application (i.e. they made their new visa application before their current leave expired) and they have provided you with evidence of this
  • The job you employ them in is the same as the one stated on their Certificate of Sponsorship.

Sponsors should be aware that they should carry out right to work checks before the individual starts undertaking work for them and if their visa application is eventually rejected, they must stop employing them.

Although sponsors will not be able to record migrant activity on the SMS about these workers, the Home Office has confirmed that any necessary reports should still be made on the sponsor’s internal systems.

If the worker is outside the UK, they may be able to start work for you remotely subject to the relevant employment, tax and immigration requirements in that country.

The proposed start date on the Certificate of Sponsorship is about to pass, what do I do?Last updated on 15th May, 2020

Sponsors should update the proposed start date by adding a sponsor note to the CoS via the Sponsor Management System.
Does a sponsor need to report a change in workplace if a Tier 2 visa holder is working from home as a result of Covid-19?

Does a sponsor need to report a change in workplace if a Tier 2 visa holder is working from home as a result of Covid-19?Last updated on 15th May, 2020

No. The Home Office has confirmed that sponsors do not need to report sponsored workers as working from home, where this is directly related to the coronavirus outbreak.

However any UK employers who sponsor overseas workers, should also ensure that they remain compliant with their other sponsor licence duties, which includes reporting any change to an employee’s salary and duties.