Can you place employees who TUPE transfer to you on Flexible Furlough?

On 4 May 2020, the Government launched the Bounce Back Loan Scheme (BBLS), which is intended to cut red tape to enable smaller businesses to access finance quickly during the coronavirus outbreak.

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there are no any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

The length of the loan is 6 years, but it can be repaid early without penalty. No repayments will be due during the first 12 months.

Under the scheme, lenders are not permitted to take any form of personal guarantee or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).

Businesses can apply for a BBLS loan if it:

• is based in the UK
• was established before 1 March 2020, and
• has been adversely impacted by the coronavirus.

Any business regarded as being a business in difficulty on 31 December 2019 will need to confirm that it is complying with additional state aid restrictions.

Businesses from any sector can apply, except the following:

• banks, insurers and reinsurers (but not insurance brokers)
• public-sector bodies, and
• state-funded primary and secondary schools.

Businesses already claiming under the following schemes cannot apply although it is possible to convert an existing loan under such schemes into BBLS:

• Coronavirus Business Interruption Loan Scheme (CBILS)
• Coronavirus Large Business Interruption Loan Scheme (CLBILS)
• COVID-19 Corporate Financing Facility.

There are 11 lenders participating in the scheme including many of the main retail banks, which are listed on the British Business Bank’s website (www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/). Applicants are directed to approach a suitable lender via the lender’s website. If an applicant is declined by a lender, they can apply to other lenders in the scheme.

The lender will ask applicants to fill in a short online application form and self-declare that they are eligible. All lending decisions remain fully delegated to the accredited lenders.

That will depend on the terms of your facility and the stance taken by your bank.

Banking facilities often place obligations on businesses to stick to certain financial criteria. For example, an obligation to keep turnover or profit above certain levels or a commitment to keep the bank’s exposure within an agreed percentage of the value of the company’s assets (known as loan to value ratio).

The consequences of breaching those covenants will depend on the terms of your facility, but normally this amounts to an event of default. Events of default can result in the loan (or whatever form the facility takes) becoming repayable and could give the bank certain powers to take action to recover the money that they are owed.

Whether the bank will take action during these unprecedented times is another matter, particularly given the extent of support being offered to businesses via mainstream lenders and the political desire to keep viable businesses up and running. Lenders themselves will no doubt wish to remain supportive where possible. The underlying performance of the business (and whether but for the effects of Covid-19 it would have been in a healthy financial position), the relationship you have with the bank and your history with them will no doubt be relevant to the approach taken by the bank. However, early engagement with your bank (as well as other key stakeholders in the business) will be important.

If an employee is self-isolating (as a result of the pandemic) they may be entitled to SSP. 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 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.

The practicalities and processes regarding disrepair claims will undoubtedly be affected. Housing providers will have to adopt a risk-based approach and consider government guidance to handle claims going forward. Key points to consider are:

• Compliance with the Pre-Action Protocol for Housing Conditions Claims (particularly disclosure)
• The practicalities of inspection
• Non-urgent repairs

There is no simple answer.

The NFCC guidance states:

“The person-centred fire risk assessment is intended only as a simple means for non-specialists who have suitable understanding of relevant fire risks to determine whether additional fire precautions might be needed. The person who carries out the person-centred fire risk assessment will depend on the circumstances of the housing and support provision. It can be carried out by those who regularly engage with the resident, with input from specialists where necessary. Assessments will normally be undertaken with residents themselves.

In sheltered housing with scheme managers, the scheme managers normally engage with residents on a routine basis, enabling residents who need a person-centred fire risk assessment to be identified. Many vulnerable residents will be in receipt of care, so enabling the care provider to identify residents in need of a person-centred fire risk assessment. Providers of regulated care are required to take into account risks to people from their wider environment, to take steps to help people ensure that they are dealt with by appropriate agencies, or to raise safeguarding alerts when this is appropriate. Where a ‘stay put’ strategy is adopted, there will be a need to identify residents who need assistance from the fire and rescue service to evacuate the building.

In supported housing, the number of residents in each property is usually quite small. This, and the nature of the care service normally provided, enables person-centred fire risk assessments to be carried out asa matter of course, when a resident first moves into the property.

Where additional fire precautions cannot be provided in the short term, the risk should be reduced as far as reasonably practicable and an adult at risk referral should be made to Adult Social Care.”

Ideally then the RP will need to engage with any care providers in order to conduct the PCRA and identify risk mitigation measures. If they are reluctant to do so, the RP should engage with the individual in any event in undertaking the assessment.