What measures are being implemented to protect residential property tenants?
On 18 March 2020, the Government announced that it would pass emergency legislation which would prevent landlords, both social and private, from bringing possession proceedings against tenants who are unable to pay their rent. The Housing Secretary, Robert Jenrick, stated that “no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”
The announcement came after several organisations, including housing charity Shelter, expressed concerns that more than 50,000 households could face possession proceedings due to the economic uncertainty following the Covid-19 outbreak.
Related FAQs
If a business has been provided with a loan from 23 March on commercial terms, providing the borrower meets the CBILS eligibility criteria, lenders have been asked to bring these facilities onto CBILS wherever possible (e.g. where the lender is accredited to offer the same facility through CBILS) and changes retrospectively applied as necessary. Please contact us if this applies to you and we can review facilities and advise upon the potential changes that may be made retrospectively to the benefit of the business.
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.
The FCA’s test case in the Supreme Court ruled overwhelmingly in favour of policyholders. However, business interruption cover generally has the prerequisite of physical damage or loss to the property (or in some circumstances, the presence of a notifiable disease at the property or within a certain radius of it), to recover losses caused by the interruption to your business. The onus is on insurers to re-assess those claims which are impacted by the Supreme Court’s judgment and to make contact with the policyholders regarding next steps. If you have not already made a claim, in the first instance the terms of any policy should be checked carefully to see whether business interruption cover is provided.
- Certain workers will become “furloughed workers”.
- Furloughed workers cannot carry out any work for their employer while designated as furloughed, 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.
- A furloughed worker can be furloughed part time and work the rest of the time.
- 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.
- 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.
- Employers must also keep a record of the agreement for at least 5 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.
Parties are encouraged to review upcoming matters to assess the viability for there to be any agreement which can be reached in relation to the issues in dispute or to consider whether the case needs to proceed to a remote hearing. If directions or issues can be agreed between the parties, reducing the need for remote hearings, then that is the preferred option.