Can I require employees to take holiday during furlough?
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.
Government guidance has been updated to state that “Employees should not be placed on furlough for a period simply because they are on holiday for that period.” If a period of furlough happens to coincide with an employee’s holiday then you should ensure that there are business grounds to support furlough being used in that instance so that it isn’t just being used as a means to fund holiday utilisation.
Related FAQs
If it is not possible to find work for the employee to do at home, you do have the option of putting the employee on furlough.
Given the impact the Coronavirus is going to have upon the commercial property market, landlords will undoubtedly, as a matter of good commercial sense, will have to seriously entertain approaches from tenants seeking a rent suspension – notwithstanding there is no entitlement to the same under their lease.
Some landlords may decide it is better to waive or suspend rental payments over the short term rather than face their tenants going out of business and leaving them with an empty building in a flat or dead market.
A measure falling short of a rent suspension would be for the tenants to negotiate with their landlord’s monthly payments of rent rather than quarterly and for those monthly payments to be in payments arrears, rather than in advance.
The Government has produced and published three new Procurement Policy Notes as a direct result of the ever changing Covid-19 environment.
PPN 01/20: Responding to COVID-19
The purpose of PPN 01/20 is to ensure that contracting authorities are able to procure goods, services and works with extreme urgency, to allow them to respond to the pandemic efficiently.
This PPN provides guidance for the following circumstances:
- Direct award due to extreme urgency (regulations 32(2)(c)) (click here to read our article regarding regulation 32)
- Direct award due to an absence of competition or protection of exclusive rights
- Call off from an existing framework agreement or dynamic purchasing system
- Call for competition using a standard procedure with accelerated timescales
- Extending or modifying a contract during its term
PPN 02/20: Supplier relief due to COVID-19
PPN 02/20 focuses predominantly on the supplier to assist in keeping supply chains open and ensuring that suppliers are kept financially sound during these unpredictable times.
This PPN provides guidance for the following circumstances:
- Urgent reviews of contract portfolios and to update suppliers if they believe they are at risk
- Put in place appropriate payment measure to support supplier cash flow
- Where contract payments are based on ‘payment by results’ make payments based on previous invoices
- Ask suppliers to act on a ‘open book’ basis and make cost data available to the contracting authority during this period
- Ensure invoices submitted by suppliers are paid immediately on receipt
PPN 03/20: Use of Procurement Cards
The third guidance note PPN 03/20 relates to the use of procurement cards to increase efficiency and accelerate payment to suppliers.
This PPN provides the following advice and urges organisations to arrange with their procurement card provider to:
- Increase a single transaction limit to £20,000 for key card holders
- Raise monthly limits on spending with procurement cards to £100,000 for key card holders
- Spend on procurement cards each month in excess of £100,000 should be permissible to meet business needs
Although the above advice has been provided, should these limits not be necessary, organisations should seek an appropriate transaction limit or monthly limit.
The PPN also advises that by 30 April 2020, in scope organisations should:
- Ensure that a number of appropriate staff have the authority to use these cards
- Open all relevant categories of spend to enable these cards to be used more widely
The obvious option to reduce the cost of your workforce is redundancy. However, that also reduces the number of employees and therefore your capacity.
If a contract contains a force majeure clause this may become operative due to the coronavirus pandemic and related emergency legislation. Such clauses exist to ensure that if some unforeseen event prevents a party from being able to perform their obligations under a contract, either on time or at all, they will be excused from their obligations and not be held liable for non-performance.
The clause must actually be written into the contract to have effect – a force majeure clause cannot be implied into a contract. Whether it can be relied on by a party will depend on the wording of the clause itself as it may only be applicable in certain limited circumstances.
You should seek legal advice at an early stage if you think that force majeure is relevant, because a number of potentially complex issues must be addressed, many of which will turn upon the exact wording of the force majeure clause in the contract in question:
- Has a force majeure event actually arisen?
- What notification process do you have to follow to rely on the provision?
- What mitigation steps do you have to take?
- What is the effect of the force majeure event – is the contract suspended, or can it be terminated (which might not be what you want)?