What is the government guidance on making places of work as safe as possible to return to?

Contractors working for public sector organisations who are deemed employees for IR35 purposes may be eligible to be furloughed provided they are paid via PAYE. 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.

At the moment the guidance states that in order to be eligible a claim for furlough must have to have been submitted by 31 July 2020 for a period of 3 weeks between 1 March and 30 June 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).

The reaction from NCVO is that this is an important first step.  However, it will not stop well run charities from closing and others will look very different in a few months’ time.

Most rent suspension clauses in commercial property leases are unlikely to come to the assistance of the tenant. These clauses normally apply only where the premises has suffered substantial physical damage and are, as a consequence, incapable of being occupied, used or accessed. The coronavirus pandemic does not involve any physical damage to a property, loss from the crisis will be purely financial. Such losses then will not be covered by the landlord’s buildings insurance policy in a way that will allow a tenant to claim rent suspension.

The government released further clarification on the Coronavirus Job Retention Scheme on 4 April. The wording referred to concerning public sector organisations and organisations receiving public funding remains the same.

The revised guidance does provide a helpful insight into how HMRC will deal with applications made to it for assistance under the scheme. It appears that there won’t be a particularly forensic approach adopted by HMRC. The guidance says you can furlough staff if you cannot maintain your current workforce because your operations have been severely affected by coronavirus.

It goes on to say that all employers are eligible to claim under the scheme and the government recognises different businesses/organisations will face different impacts from coronavirus. The need to demonstrate the impact of coronavirus on your business/organisation is not one of the criteria businesses/organisations are going to need to satisfy, so the government does not appear to intend to set a specific test to determine if a business/organisation is “severely impacted by coronavirus”. It is hoped that this should provide additional comfort to publicly funded organisations facing significant restrictions to their operations during the Covid-19 crisis.