By Jonathan Maude, Partner and Head of Employment Law, VedderPrice
In these most extraordinary times we have been advising a range of employers on many employment law issues stemming from the pandemic. The number one objective is to protect employees and keep them in jobs. As such a number of employers have used the Coronavirus Job Retention Scheme (CJRS) if they can afford to not have an employee working for a period of time. Other employers have had to agree salary and general compensation reductions and impose short working week arrangements.
As these changes necessarily involve changes to terms of employment the employer needs to try to reach agreement with employees to bring about the change, and this may mean a degree of consultation needs to be undertaken. If agreement is reached the changes need to be confirmed in writing and, if possible, with the employee’s consent recorded. From an employer standpoint it is also useful to include a provision which allows any arrangement to be reviewed so that subsequent variations may take place if needed. In any event, the general hope is these arrangements will be in place for a temporary period and as such a review stage should be specified.
Aa noted above a major initiative in the UK has been the CJRS. This went into operation on 20 April and received 67,000 claims within 30 minutes of its opening. By the close of business, 140,000 companies had applied for the scheme. “Our research indicates that two-thirds of firms have furloughed some portion of their workforce,” Adam Marshall, the British Chambers of Commerce’s director general, said in an HMRC press release. We have assisted a number of clients access this scheme, and similar schemes around Europe.
A furloughed worker is still employed however they are not to undertake any work for their employer. Employers can claim for 80% of furloughed employees usual monthly gross wage costs up to £2,500 plus the automatic enrolment employer pension contributions on that subsidised wage. Employers can choose to top up an employee's salary beyond this however they are not obliged to do so. Employers can claim for a minimum of 3 weeks and to, up to 3 months - but this may be extended. Please note the minimum 3 week furlough period is a condition of the scheme. Employees must do no work for their employer while on furlough.
A topic which has caused much debate has been around the need to agree the furlough arrangement. Our advice has been to agree the fact of taking the furlough leave and that no work will be done during this period of time. Effectively, the employer is changing the terms of the employee’s employment and as such employers should discuss such changes with their employees and make any changes to the employment contract by agreement.
The CJRS has now been extended to the end of June and pressure is mounting from certain business sectors for a further extension so this remains a useful tool in the employer’s “anti-Coronavirus armoury”. We should he pleased to assist if this might be helpful with regards to the CJRS or other measures if applicable.
While we are all agreed on the objective is to protect employees and keep them in jobs, it is likely that despite these best efforts to maintain employment there will be companies which may have to cut staff numbers as the picture for many employers across the UK and Europe will radically change. The job, working environment, business and market that an employee leaves to work from home or be furloughed, will be completely different in many cases to the one they return to when we are allowed to do so. Employers need to now start thinking about what the return to work will physically look like. They owe duties of care to employees and health and safety issues are of paramount importance. Businesses need to undertake risk assessments now and start working out working patterns so social distancing measures can be maintained following “the return”. Again, we are assisting a number of employers in this regard and advising as to, in particular, how forceful an employer can be to require employees to return. There are also “hidden duties” employers may owe to employees around even getting to and from the work place.
Finally, companies will need to plan for the new reality, and even the best-intentioned employer may need to break its promise to keep jobs open. As such it is likely redundancies will unfortunately become necessary and this raises a number of tricky issues to consider.
If there is a “reduced requirement for employees to carry out work of a particular kind” or some form of business closure or reorganisation then the redundancy definition is likely to be satisfied. It is then for the employer to consider the numbers of employees affected and consider any pool and selection criteria which may be needed, if selecting employees. Equally, alternative vacancies should be considered. If 20 or more redundancies are being proposed at “one establishment” in a 90-day period then the collective consultation obligations will arise. This will involve collective consultation and notification to the Secretary of State of the proposed redundancies. If the numbers are less than 20 then it will be necessary to follow a fair procedure in relation to each employee at risk of redundancy.
Specific considerations will need to be given to employees absent from work due to maternity or sick leave issues. Undertaking the consultation process is likely to be more tricky than normal due to employees being physically distant from the workplace, or due to the to maintain social distancing measures. So thought needs to be given to this now and we should be pleased to assist if needed.
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