The Coronavirus Job Retention Scheme is set to close at the end of October, and many employers will be forced to consider making redundancies

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The following list highlights some important points for employees to be aware of regarding their rights in respect of redundancy.

Redundancy pay

Employees on furlough leave retain the same rights to redundancy payments.

Employees with two years’ service are entitled to a statutory redundancy payment. This amounts to 0.5, 1 or 1.5 week’s pay for each full year the employee has worked for the employer capped at 20 years, the amount dependent on the employee’s age

Employees will receive 0.5 week’s pay for each full year they were under 22, one week’s pay for each full year they were 22 or older, and 1.5 week’s pay for each full year they were 41 or older.

Notice

Employees made redundant are entitled to between one and 12 weeks’ statutory notice, dependent on the employee’s length of service. Employees may have to work out this notice period or spend it on furlough leave, or employers may pay employees in lieu of notice.

Employees may be entitled to more than the statutory notice period depending on the rights afforded to them in their contract. It is important to review any written agreements that have been made with the employer to check the contractual entitlement to notice and redundancy rights in general.

If the contractual and statutory notice periods differ, the longer notice period will apply.

Outstanding payments

Employees are entitled to outstanding payments owed including any unpaid wages, expenses, and accrued but untaken holiday. Employers can require employees to take their holiday entitlement during their notice period providing that the employer gives the requisite amount of notice – twice the amount of days as the number of days required to be taken as holiday.

Insolvency

If the employer is insolvent and has not made the payments owed, employees can apply to the Insolvency Service to claim back any outstanding payments.

Volunteering for redundancy

Employers may ask employees if they wish to volunteer for redundancy. This still classifies as a dismissal, entitling the employee to the same statutory redundancy rights as someone who didn’t volunteer.

If only a limited number of redundancies are being made and an employee was thinking about moving jobs or retiring in the near future anyway, taking voluntary redundancy may be financially beneficial if their length of service means their redundancy pay would be generous.

Suitable alternative employment

If an employer offers suitable alternative employment within the company and this is unreasonably turned down by the employee, the employee may lose their right to statutory redundancy pay.

The question of whether the job offer is suitable can be contentious, so employees should try to have open conversations with their employers to discuss any alternative job offers.

Consultation

Employees who are being made redundant have the right to be consulted either individually, or if at least 20 employees within the company are being made redundant in a 90 day period, collective consultation rules apply which affects how the consultation takes place and the minimum length of the consultation.

Employees are able to put forward comments and suggestions including alternatives to redundancy, which the employer should listen to and consider.

A failure by an employer to properly inform and consult where at least 20 employees are being made redundant may entitle an employee to a Protective Award payment from the employment tribunal.

The amount of compensation awarded is at the tribunal’s discretion and can be up to 90 days’ gross pay to each employee affected. Claims for a Protective Award must be brought within three months of the date of the last dismissal.

Time off

Employees made redundant with two years’ continuous service by the date their notice period ends are entitled to seek a reasonable amount of time off work, to look for new employment or to make arrangements for training to help find another role. Pay is limited to 40% of one week’s pay for the entire time taken off.

Right to appeal

Employees may have the right to appeal the redundancy decision by writing to their employer and setting out the reasons for appeal.

Unfair dismissal and discrimination rights

In order for a redundancy to be fair, a selection criteria must be drawn up along with a pool of employees to select from for redundancy. The employer must then engage with this process fairly and select employees based on transparent and objective criteria. Once a provisional decision has been reached, the employer must follow a fair procedure for consulting with employees over this process.

An employer also needs to show that alternatives to redundancy were properly considered and that reasonable efforts were made to find alternative employment.

Employees with two years’ service are entitled to bring a claim for unfair dismissal. A claim for unfair dismissal could be made if an employee believes they were unfairly selected for redundancy, the employer didn’t follow a fair redundancy process or if the dismissal was not genuinely for the reason of redundancy.

Discrimination claims could also arise if an employee is selected for redundancy on the basis of a protected characteristic under the Equality Act, for example, or the employee’s working pattern.

Typically, unfair dismissal claims must be brought three months less one day from the last day of employment, and discrimination claims must be brought three months less one day from the last act of discrimination complained of

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COVID-19 pandemic leads to record fall in hiring activity in April

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Permanent placements decline at record rates

Renewed falls in both starting salaries and temp pay Demand for staff deteriorates at fastest rate in series history

Permanent staff appointments fall at record pace

The number of people placed into permanent job roles in the South of England fell for the second month running in April. Furthermore, the rate of decline gathered pace since March and was the most severe in the survey’s more than 22-year history. Recruiters in the region frequently cited that the coronavirus disease 2019 (COVID-19) pandemic and associated restrictive measures had led clients to implement hiring freezes. Across the UK as a whole, permanent placements also declined at an unprecedented rate.

Demand for staff across the South of England deteriorated substantially at the start of the second quarter.

Permanent vacancies fell sharply and at the steepest rate since the survey began in October 1997. A record drop in demand for permanent staff was also seen at the UK level. Temporary vacancies in the South of England likewise fell at an unprecedented rate. Notably, the reduction in short-term positions was slightly faster than seen across the UK as a whole.

Availability of permanent candidates rises for first time since June 2013

After having fallen in each of the past 81 months, the supply of permanent staff in the South of England increased during April. Moreover, the rate of growth was the sharpest seen since October 2009. The increase was attributed by panel members to company layoffs and decisions to furlough staff due to the pandemic. A renewed upturn in permanent worker supply was also seen at the UK level, with the rate of expansion similar to that seen for the South of England and marked.

Startinng salaries fall for the first time since June 2012

After rising only slightly in March, latest survey data signalled an outright decline in average starting salaries for permanent workers in April. Not only was it the first time that permanent starters’ salaries had fallen since June 2012, but the rate of reduction was the quickest in 11 years. Anecdotal evidence indicated that the coronavirus pandemic led clients to cut salary offers. Starting salaries also decreased at a historically sharp rate across the UK as a whole.

As significant as April’s results are they are hardly surprising given the current circumstances. Like the rest of the UK, COVID-19 continues to wreak havoc across the South of England jobs market, with the economic uncertainty it is causing weighing heavily on the region’s firms.
“All businesses in the South can do is remain resilient and adapt as necessary to survive this pandemic, as we await the Government’s forthcoming announcement on easing current restrictions so confidence in the jobs market can start to rebuild

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Severe drop in recruitment activity during March

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Quickest drops in permanent placements and temp billings since early-2009

Staff vacancies decline

Slower increases in pay for both permanent and temp staff

The coronavirus pandemic has put the labour market on pause. It does mean massive disruption in the short term, but we need to remember that this has to be done in order to protect businesses and save lives.
What we should be concerned about is how we stop that short-term disruption becoming longer-term economic depression. To do that we need to maintain employment levels as much as possible. Businesses in high-cashflow sectors like recruitment and hospitality need to be able to access government support much more quickly than they currently can, or they will not be able to afford to furlough their workers. This and other measures like government covering statutory sick pay for all firms will help people and firms to stay afloat now, and help the economy bounce back once the crisis is over.

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Furlough – what does it mean?

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From relative obscurity just weeks ago, the term furlough has suddenly dominated the public lexicon. You’ll see it splashed all over newspaper headlines, printed across Government updates and probably mentioned in workplace conversations, but what does this weird term actually mean?

In early March, the Government and specifically Chancellor Rishi Sunak, announced that it would put in place measures to ensure that the vast rate of widespread redundancies across the UK were halted as the country dealt with the initial wave of infections due to coronavirus. The solution that the Government devised essentially replaced the concept of redundancy with a ‘furlough’ – AKA the ability to keep staff on the payroll, yet for them to take extended leave as the company’s business shrinks.

The Government confirmed that for all businesses who forgo redundancies and instead place staff on furlough, it would pay up to 80% of staff wages, to a total of £2,500 per individual per month. This amount would be payable through normal monthly instalments and could be applied for via HMRC.

So essentially, furlough is the process of allowing staff to remain employed at your business yet take an extended leave of absence due to turbulent business. Workers who are on furlough aren’t allowed to actually work yet will currently receive up to 80% of their normal pay – with the option to top up the extra 20% in the hands of the employer.

The scheme will initially run for at least three months, from 1 March 2020, with all UK businesses eligible, and will be extended if necessary.

To access the Coronavirus Job Retention Scheme, employers will need to take the following steps:

Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).

HMRC is working urgently to set up a system for reimbursement, and existing systems are not set up to facilitate payments to employers. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

This applies only to furloughed employees (ie are not performing any work for their employer) and not those whose hours and pay reduces. An employee must be furloughed for a minimum of three weeks, and that compensation can only be claimed for employees who were on payroll on February 28.

The guidance flags the fact that the scheme does not give a ‘right’ to put an employee on furlough. If employers do not have a contractual right to furlough, they will need employee agreement, and the guidance notes that depending on the numbers of employees impacted that might require a collective consultation (typically of 30 days or more). In circumstances where businesses are facing dire cash flow situations the need to address these contractual issues will lessen the value of the scheme.

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Coronavirus: Your Employment-related Questions Answered

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What are our obligations from a health and safety perspective in relation to our staff?

Employers have a duty to ensure the health and safety of their employees and non-employees (contractors, members of the public, etc.) so far as is reasonably practicable. This would include taking reasonable steps to control the spread of the coronavirus at sites under the control of the employer. Employers should carry out a risk assessment and then implement reasonably practicable control measures to either eliminate or mitigate the coronavirus hazard. From a practical perspective, we would recommend that employers:

  1. Ensure staff are aware of the symptoms and the latest advice on how to minimise the risk of infection.
  2. Implement a reporting procedure for anyone with symptoms.
  3. Implement a reporting procedure for individuals who have recently visited “high-risk” areas, such as China, Northern Italy, etc. This may mean that staff have to “self-isolate” if they have returned from a high-risk area (see below for further guidance).
  4. Make individuals aware of the latest government guidance.
  5. Ensure any control measures identified by the risk assessment are aligned with the government’s advice. Employees are under a legal obligation to cooperate with their employer and other duty holders to enable them to comply with health and safety legislation.

Should we place restrictions on our staff in terms of work-related international travel?

Today the 16th March the Foreign and Commonwealth Office (FCO) is advising against all and all but essential travel to some countries, cities and regions. You must check the travel advice to the country you are travelling to …

In what circumstances are our staff required to stay away from work?

Again, the position is changing quite quickly, but the latest advice from the FCO is that anyone who has returned to the UK from the certain areas should “self-quarantine” and stay away from work, even if they are not displaying any symptoms. This information is being updated on an ongoing basis, so employers should ensure they monitor the situation.

Other employees should only stay at home if they have travelled to certain countries (see the latest advice from the FCO as this list is changing) and then develop symptoms of a cough, fever or shortness of breath, however mild. As a general rule, therefore, employers should not require staff to stay away from work simply because they have travelled to these countries. Taking any steps to force them to do so (even if under pressure from other members of staff) may amount to a breach of the implied term of trust and confidence. Employees may be willing to work from home for a period of time (the incubation period for the virus is estimated to be between two and 14 days), but employers should be very careful about how they approach such conversations so as not to put themselves at risk of a claim.

Do we have to pay an employee if they self-isolate?

Clearly, if a member of staff is actually unwell with the coronavirus, you should pay them in accordance with your usual sick pay/leave arrangements. 

The position becomes less clear if they are self-isolating in line with the latest government guidance, but are not (outwardly, at any rate) actually unwell. 

We understand that the Health Secretary, Matt Hancock, told MPs: “self-isolation on medical advice is considered sickness for employment purposes. That is a very important message for employers and those who can go home and self-isolate as if they were sick, because it is for medical reasons”.  However, it is not clear on what basis he has reached this conclusion.  It may be a loose reference to the fact there are provisions buried in the legislation under which individuals can be deemed to be sick for SSP purposes in certain circumstances.  Further clarity from the government would be welcome.

Employers should obviously check their own policies/ contracts concerning pay, but it would be unusual for employees to have a contractual right to pay/sick pay in these circumstances. Some employers may choose to treat such periods of absence as sickness for their own company sick pay purposes.

Acas has recommended in its guidance on the coronavirus that employers treat such leave as sick leave and follow their usual sick pay policy or agree for the time to be taken as holiday. 

It would clearly be best practice to pay employees their normal pay in these circumstances and we note that some large employers have already adopted this approach, not least because otherwise employees may try to come into work, putting others at risk. We would, however, recommend that employers take specific advice on this issue before agreeing to anything, as there may be circumstances where it is not appropriate to adopt/continue with this approach.  It may also lead to ‘copycat’ absences once employees are aware that company policy is that they will be paid as normal when absent due to self-isolation. 

If an employee is able to work from home, this makes things simpler, as the employer should allow this and continue to pay the employee as normal. We recognise that this will not be practicable for all employees.

How should we deal with a member of staff who refuses to come to work because they are concerned about the risk of infection?

In light of the current threat level in the UK, it is unlikely to be reasonable for an employee to refuse to come to work on this basis, especially if there have been no cases in their specific workplace. Clearly, however, an employer should take steps to understand an employee’s concerns before taking any action, especially if they may be at greater risk from developing the coronavirus. In light of the current media coverage of the coronavirus and stories about whole offices being sent home, it is not surprising that some individuals are worried about contracting the virus and are keen to take steps to minimise the risk of infection.

If you are communicating with your staff about the virus and what steps the company is taking to protect the health and safety of its staff, the risk of employees refusing to come to work is likely to be reduced. If there is some basis for their concerns, you may want to think about allowing them to work from home for a period of time, taking some annual/ unpaid leave, etc. It might also be useful to remind them of other support services you have in place, such as employee assistance programmes and wellbeing programmes.

What should we do if a member of staff is confirmed as having the virus and has recently been in the workplace?

The current advice from the government is that, in such circumstances, the employer should contact the Public Health England local health protection team to discuss the situation, identify people who have been in contact with the individual and discuss any actions or precautions that should be taken. A risk assessment will be undertaken by the health protection team and advice to the company will be based on this assessment. The government says that closure of the workplace is not recommended. A knee-jerk response risks demonising the sick employee in circumstances where it may not be down to them at all.

If our staff say they want to wear face masks at work, are we entitled to say no?

In the majority of circumstances, yes. The current advice from the government is that employees are not recommended to wear facemasks to protect against the virus. It recommends that facemasks are only required to be worn by “symptomatic” individuals (as advised by a healthcare worker) to reduce the risk of transmitting the infection to other people. Similarly, the latest advice from the World Health Organization is that people only need to wear facemasks if they are treating someone who is infected with the coronavirus.

If staff are concerned about contracting the virus, they should follow normal best practice about reducing the risk of infection, e.g. washing hands frequently, disposing of tissues, etc.

If the situation worsens and we are considering closing one of our sites, do we have a right to lay off staff in these circumstances? Are we obliged to continue to pay them?

In certain sectors, employees’ contracts of employment or collective agreements may contain “layoff” provisions, which give employers a contractual right not to provide employees with work for a short period of time, usually as a way of avoiding redundancies. Employees can be laid off without pay where there is a contractual term to this effect, but they may be entitled to a statutory guarantee payment from the employer.

Employers may be able to rely on these provisions in certain circumstances, but as employees may bring claims if layoffs are not handled correctly, we would recommend that employers take specific advice on this issue before requiring staff to stay away from work, especially if they wish to be able to do so without paying them. Acas has produced guidance for employers on layoffs and short-time working.

Can we prevent staff from going on holiday to high-risk areas?

It may be possible to turn down a holiday request by issuing a counter-notice in accordance with the provisions of the Working Time Regulations 1998, but a better (and less antagonistic) approach at this stage may be to remind staff about the latest government guidance on high-risk areas and the circumstances in which they would be required to self-isolate on return to the UK, possibly without pay. Employers should ensure they do not do anything that could give employees the right to bring a constructive dismissal/ discrimination claim, etc., but they can certainly encourage staff to insure against holiday cancellation on these grounds.

Practical Tips for Employers

  1. Stay up to date with the latest guidance – The situation is obviously changing quite quickly, so employers should ensure they stay up to date with the latest government guidance and advice from public health agencies. Links to key websites are provided below:
    1. The government’s guidance for employers and businesses. This contains useful advice for employers in providing advice to staff on the virus, what to do if someone with the virus has been in a workplace setting, etc.
    2. Acas has published some guidance for employers on what they should do to protect the health and safety of their staff.
    3. The latest travel advice from the FCO.
    4. The latest advice from the NHS.
    5. Employers should review their approach in light of the latest guidance.
  • Avoid knee-jerk reactions – Employers should ensure they adopt a proportionate response to the coronavirus outbreak, based on the current level of risk in the UK, the nature of their business, available medical opinion, etc. Knee-jerk reactions could result in grievances and, at worst, claims.
  • Communicate with your staff – While the risk to health in the UK is currently still low to moderate, the extensive media coverage of the coronavirus is making many people concerned about the risks, especially if they are more vulnerable to infection, e.g. the elderly and those with certain health conditions. Employers should, therefore, ensure they are communicating with their staff about the virus, letting them know what they can do to protect themselves against the risk of infection, together with the steps the company is taking to deal with the risk, e.g. suspending business travel to China, etc. Employers should clearly be careful about the tone of their communications to avoid any unnecessary panic.
  • Have contingency plans in place – It would be sensible to review your business continuity plan to ensure you know what to do if the threat level increases. In addition, ensure that you have up-to-date contact details for your staff, emergency contact details, etc. Consider what you can do in advance to facilitate home working and to maintain key trading functions.
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