How is the Pensions Regulator reacting to the crisis?

Small suppliers (defined by reference to certain financial indicators) are temporarily exempt from these new restrictions until 30th March 2021 in order to account for the difficulties to small suppliers during the Covid-19 pandemic.

There are also certain industries that are exempt from these restrictions (for example financial services).  The Secretary of State may also create further exemptions framed by reference to kinds of company, supplier, contract, goods or services or in any other way.

IR35 is an anti-tax avoidance regime which is intended to tackle (in HMRC’s view) the long standing issue of individual contractors providing their services or labour via an intermediary – which is usually a personal service company (referred to as a PSC). We’ll talk about PSCs here, but there are other types of intermediaries that are caught.

HMRC’s view is that this arrangement is often considered to be disguised employment and therefore a tax-avoidance arrangement.

So IR35 is essentially a test of employment status – and if, once you apply the test, the contractor should be an employee, they should then be taxed as an employee.

An employee on Flexible Furlough can take part in volunteer work during hours which you record your employee as being on Flexible Furlough as long as it is for another employer or organisation.

To be clear, if on Flexible Furlough and you’re claiming the grant for them, then they cannot work for you.

As people work part-time and ease back into the business, this is likely going to be a key risk area. You need very clear lines as to working time and non-working time. No replying to emails on days off.

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.

In most circumstances the answer will be no. It would be an infringement of their human rights. It could also be a criminal assault.

However where there is a high risk to employees of exposure to COVID-19, such as care homes and healthcare environments, you might be able to make it a requirement of their role to have the vaccine.

First, consider whether you need to have a blanket requirement covering all employees or whether only certain groups who work in the most high risk areas require the vaccine.

You will need to do a thorough risk assessment balancing the amount that the risk of exposure would be reduced against the interference with the employee’s human rights. Consideration will need to be given as to whether insisting on the vaccine is proportionate to the risk and whether other less invasive steps could be taken instead, such as maintaining social distancing, wearing a mask, washing hands.

Any requirement for employees to be vaccinated should be communicated clearly to employees and trade unions together with a clear explanation for why it is necessary.