As always, HR is in the front line. Your teams are already dealing with the realities of plans for dealing with workplace closures and staff being absent for a variety of reasons. The advice we’ve been giving clients over the last few days covers common themes and we’re providing this round-up to keep you abreast of current thinking. The rapidly changing environment means that some of this advice may quickly go out of date, but we’ll keep in touch.
Our team is fully-equipped to work from home for as long as we need to – please excuse the sound of children and barking dogs which will sometimes be heard in the background!
Short term considerations
Self-isolation and sick pay
Following early changes to the usual statutory sick pay (SSP) provisions, employees and workers must receive any statutory sick pay due to them if they need to self-isolate because:
- they have coronavirus
- they have coronavirus symptoms, for example a high temperature or new continuous cough
- someone in their household has coronavirus symptoms
- they’ve been told to self-isolate by a doctor or NHS 111
In practical terms, most employees are now unlikely to be able to obtain fit notes after 7 days of self-certification, but you are entitled to take reasonable steps to verify the reasons for the absence. Requiring the employee to make regular contact and asking them to explain what medical advice they are following from NHS 111 are among a range of reasonable steps.
To the extent that employees are entitled to contractual sick pay over and above SSP, it is likely that they will be entitled to that contractual sick pay in the above circumstances.
Social distancing, flexible working and working from home
Current government advice is for everyone to try and stop unnecessary contact with other people – ‘social distancing’. This includes:
- working from home where possible
- avoiding busy commuting times on public transport
- avoiding gatherings of people, whether in public, at work or at home
Employers are encouraged support their workforce to take these steps. This might include:
- agreeing to more flexible ways of working, for example changing start and finish times to avoid busier commuting times
- allowing staff to work from home wherever possible
- cancelling face-to-face events and meetings, and rearranging to remote calling where possible, for example using video or conference calling technology
This could well have the commercial advantage of ensuring that less of your workforce become sick at the same time.
Employers need to be especially careful and take extra steps for anyone in their workforce who is at increased risk from coronavirus.
They include, but are not limited to, those who:
- have a long-term health condition, for example asthma, diabetes or heart disease, or a weakened immune system as the result of medicines such as steroid tablets or chemotherapy
- are pregnant
- are aged 70 or over
- care for someone with a health condition that might put them at a greater risk
Government guidance published on 16 March 2020 “strongly advises” employees to work from home if they are aged over 70, pregnant, or have a specified underlying health condition, including chronic respiratory diseases, chronic heart, kidney or liver disease, diabetes and those with a weakened immune system. The guidance for vulnerable groups is advisory only, and there is therefore an argument that they are not entitled to SSP for periods of self-isolation. However, we consider, given employers’ obligations towards the vulnerable groups in question, that the SSP rules will be interpreted to include vulnerable groups who effectively have to self-isolate in order to follow the advice on social distancing. As such, the practical advice is that these groups should receive SSP, unless there is a very good reason not to pay.
The obligatory risk assessment for all pregnant staff should also be revised to take into account any additional risks posed to them by the current situation. If nature of their role means that they will be particularly exposed to risk, it may be necessary to medically suspend them, in which case, they will be entitled to receive full pay.
As of 20 March 2020 all schools will shut (many have already closed their doors). Alternative childcare arrangements are unlikely to be available, meaning some staff may need time off to look after children. Where these staff are not able to work from home (or only able to partially work from home), you may be able to grant them unpaid leave/reduced pay, subject to the terms of any “time off for dependants” policy.
Staff who are unable to attend because they unexpectedly need to case for dependents are entitled to unpaid dependent leave to make emergency arrangements. The current situations means that there may currently be many who have no alternatives to put in place. Insistence on staff attending work in such circumstances may be problematic and please do contact us to discuss specific cases.
What about employees who refuse to self-isolate?
The basic legal position (established pre-Coronavirus) is that if an employer insists on an employee remaining at home where the employee is willing, ready and able to work, the employer is obliged to pay full pay (as it is technically a suspension). Failing to pay would be a potential breach of contract. In normal circumstances though, you would not insist on employees staying at home where they consider themselves fit to work. However, if there is medical evidence to suggest that the employee is not ready and able to work, there may be arguments that they are not entitled to full pay but only contractual sick pay or SSP as applicable.
The quandary employers are finding themselves in now is that there is a conflicting duty, with the obligation to look after other employees’ health and safety, and the need for employees who pose a possible risk to stay away from the workplace (even if they look and feel perfectly well). If an employer knows that an employee is showing signs of coronavirus, or has been exposed to coronavirus from somebody in their family, does mean that it should be considered reasonable for the employer to send the employee home.
Unless the government decides to help employers out in these types of scenarios by way of new legislation, it is likely that the employee who refuses to self-isolate and is sent home by the employer should be paid full pay unless the employer can demonstrate that they are not ready and able to work (i.e. are actually too ill to work).
This leads to a unpalatable situation whereby a conscientious employee who chooses to self-isolate is only entitled to sick pay, but one who does not self-isolate and is prepared to put other employees at risk (or simply cannot afford not to be paid), could be entitled to full pay. For these reasons, some employers may take the view that the government guidance is enough to be able to argue that these employees are not ready and able to work and so will only receive sick pay. There is an inherent risk in this approach, however, if the employee chooses to challenge the situation and we recommend contacting us to discuss specific cases and other approaches which may be considered.
If you have new staff due to join in coming weeks there may be circumstances in which you need to delay or abandon those plans. If you are able to agree a delayed start with the new recruit, that may be the most pragmatic approach but please contact us if you encounter resistance or need to abandon offers entirely. There may be exposure to risks in some cases and we advise taking individual advice.
In some sectors the arrival of new staff may be critical and the same considerations in terms of any vulnerable groups will apply.
Employees asking to cancel holiday
Some employers are experiencing requests from staff to cancel leave, because their holiday plans have changed or fallen through. Our advice is that there is no obligation to agree a cancellation of leave where already approved, although of course there may be some instances where it suits your business to have the person available after all, in which case it would be your choice to agree.
If an employee whose request to cancel leave subsequently goes off sick, you are entitled to ask the usual questions to satisfy yourself that it is genuine. If current circumstances prevent a fit note being obtained from a GP, it is reasonable for you to consider what questions to pose to an employee about the matter. If you are not satisfied with the answer further investigation, where possible, may be justified.
Depending on the nature of their contracts with you, you may be able to lay off casual staff with little or no notice, if you need to – check their contracts to see what’s in place. Some casual staff will have been working sufficient hours to be eligible for SSP so that is also worth investigating and may be an alttractive alternative.
It’s worth considering any other measures to mitigate the effect of this, if you know you will rely on them in future and want to preserve good will, perhaps by reducing their hours or agreeing a different pattern of work for a limited time.
Contractors & Suppliers
If you have ‘off-payroll’ workers in your business and need to consider reducing your commitment to them, it’s important to go back to the contract with them. There may be notice provisions to be taken into account before you can legally bring the arrangement to an end. Talk to your suppliers if you need to agree a delay to normal service and payment arrangements – if a small business on which you rely for services goes bust because of the current situation and other customers not paying, it may well set back your own organisation’s recovery when it’s all back to business as normal.
Thinking ahead for the longer term
Plans for a temporary closure could include alternatives such as homeworking, working from different premises, or enforced holiday (see below). In the event that you ask staff to work from home there should be clear arrangements in place to enable them to do so. Similarly, you should ensure effective communication with the workforce to keep them updated while the workplace is closed. An early review with the IT department would be advisable to ensure that there is adequate coverage and equipment if all staff are asked to work from home.
Unless there is provision in the employment contract to the contrary, the current legal position is that staff should be paid as normal during this absence even if they are not able to work from home. However, it is clear that for many businesses, paying staff full pay throughout any prolonged period of closure, whilst potentially not receiving any income into the business, is not viable and could well lead to business failure and even insolvency.
Unless the government chooses to legislate to provide that only SSP is payable during any business closures due to coronavirus, employers may need to get creative (and bold), in order to protect their livelihoods.
Options for avoiding the costs of full pay during closure/reduced business
Employers have the right to tell employees and workers when to take holiday if they need to. For example, you can decide to shut your workplace for a week and everyone has to use their holiday entitlement.
If you decide to do this, you must tell staff at least twice as many days before as the amount of days you need people to take.
For example, if you want to close for 5 working days, you should tell everyone at least 10 working days before.
This could affect holiday staff have already booked or planned. So:
- explain clearly why the workplace needs to close
- try and resolve anyone’s worries about how it will affect their holiday entitlement or plans;
- be prepared to be flexible where possible.
Lay-offs and short-time working
If your contracts permit unpaid lay-offs or short-time working, this could be a useful option. However, whilst these types of clauses used to be common in contracts, they have all but disappeared in recent years, with the exception of some in the manufacturing and construction sectors and so it is unlikely that many modern contracts will contain these provisions. It is always worth checking though.
Employees who are can be contractually laid off and are not entitled to their usual pay might be entitled to a ‘statutory guarantee payment’ of up to £29 a day from their employer.
This is limited to a maximum of 5 days in any period of 3 months. On days when a guarantee payment is not payable, employees may be able to claim Jobseekers Allowance.
Government assistance to help struggling employers
In the Spring 2020 Budget, the government announced several measures to help employers who are struggling with the economic consequences of COVID-19. These include business rates reliefs, a Coronavirus Business Interruption Loan Scheme, a grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities.
Business interruption insurance
Many businesses carry business interruption insurance. It is worth checking that insurance to see whether this situation is covered and could provide financial assistance with the wage bill.
Other options for containing staff costs
It is likely that many employers will need to take action to reduce their payroll on a temporary basis, particularly if staff cannot work from home and/or there is no work for them to do. Some of the options include:
- Unpaid leave: Seeking volunteers to take unpaid leave/reduced hours (now that the schools are closing, people may be willing to do this in order to look after children). However, in the event of a full business closure, with no work for anybody, you are unlikely to get volunteers if their colleagues will be paid for doing the same thing.
- New recruits: Seek to agree later start dates for any new recruits or withdraw job offers.
- Overtime: Review the need for overtime and stop any non-guaranteed overtime
- Voluntary redundancy: Seeking volunteers for voluntary redundancy (although the costs of redundancy payments could be prohibitive).
- Workers, contractors and agency staff: Considering whether there are workers and contractors whose contracts can be terminated without the risk of an unfair dismissal or redundancy payment claim, such as agency staff and independent contractors. Beware anybody who may be able to claim that they are really an employee and seek advice if necessary.
- Dismissal of certain employees: Considering whether there are any employee whose contracts can be terminated without the risk of an unfair dismissal or redundancy payment claim, such as those with less than two years’ service. Clearly, dismissing staff simply because they do not have a right to bring a claim will not be popular, so this is only likely to be a viable option in extreme situations. If you do decide to do this, make sure you treat all employees in the same way of justify treating them differently (to avoid direct discrimination claims), and ensure you can demonstrate good business reasons for doing so, as there could be indirect age discrimination claims arising from dismissals due to length of service.
- Changing terms and conditions: Consulting with employees, trade unions or other representative bodies and try to agree a temporary reduction in pay and benefits for the duration of the crisis. Under normal circumstances, employees and their representatives would be unlikely to agree to such measures. However, where the alternative is closure and job losses, there may be more of an appetite to reach an agreement and early constructive dialogue could be helpful. Where you cannot get agreement but need to enforce changes to terms and conditions in order to reduce pay/hours, there would normally be a requirement for collective consultation where 20 or more employees are involved. However, as waiting 30 or even 90 days to make the changes is clearly pointless, employers may be able to utilise the “special circumstances” defence, by showing that it would not be reasonably practicable to fully comply with the collective consultation requirements. We would be surprised if these were not “special circumstances” for the purposes of the legislation, but employers will still need to show that there is a real business need for the proposals, and do as much as possible to comply with the legislation (such as holding short form elections and consulting with groups over a short period of time). Simply using the “special circumstances” defence to completely ignore consultation obligations is unlikely to work, even in these unprecedented times.
- Redundancies? If the longer-term impact of the pandemic is likely to mean that a reduced headcount will be required even when the business reopens then employers may need to consider redundancies.
What should we be doing now?
With so many uncertainties, and the picture changing almost daily, it may not be possible to make any final decisions about the long term at this stage. However, some steps you can be taking are as follows:
- Prepare contingency plans for different scenarios, and cost the different options
- Seek legal advice (if necessary) on the most likely scenarios
- Think about how you will carry out risk assessments for disabled or pregnant employees who are to work from home (discuss this with them)
- Check your business continuity insurance
- Reassure your employees that you are working to come up with solutions and options and that you will be taking steps to avoid significant financial detriment to them in the event of closure. While you cannot necessarily commit to anything at this stage, an announcement or email that you are thinking about what to do could well help to put employees’ minds at rest (at least a little).