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Parfitt Cresswell Weekly Employment Law Bulletin 4
Parfitt Cresswell • June 22, 2020
This article is brought to you by our sponsors Parfitt Cresswell.
This is the fourth and final bulletin in our series highlighting some of the key issues that employers are likely to face when returning to work following lockdown. This week we focus on potential changes that it may be necessary for employers to make to the workforce as a consequence of Coronavirus.
It has become clear as this pandemic continues that some businesses are going to find it extremely difficult to return to normal trading conditions, even once lockdown is over. Despite the furlough scheme offering a much-needed lifeline to employers and employees, many businesses particularly those in the hospitality and leisure sectors, are likely to find that business will not return to normal levels for some time to come.
Of course, some businesses will be better equipped to deal with this, but others will have little option but to reluctantly consider imposing changes to their workforce in order to remain viable.
Redundancy
Despite best intentions, ultimately it may be necessary for employers to consider making redundancies either in the coming months or at the end of October when the Coronavirus Job Retention Scheme (CJRS) officially ends. When the scheme ends, employers will be required to take employees back on the same terms that applied before furlough, even if trading conditions have not improved.
The current government guidance confirms that employees are still able to be made redundant whilst on furlough leave. However, whilst this is theoretically possible, there are still some important issues that employers should be taking into consideration before embarking on such a process.
The guidance is also clear that an employee’s employment rights are not affected due to being on furlough leave, such as the rights relating to redundancy, unfair dismissal and discrimination. This being the case, it is still vital that employers look to follow the correct procedures and obtain advice where appropriate when making redundancies.
To understand some of the key points specifically related to Covid19, it is first important to understand what is likely to constitute a fair redundancy process.
Summary of a fair redundancy process
First of all, there needs to be a ‘redundancy situation’. This can be due to the closure of a business, the closure of a specific place of work (moving location) or a reduction in the need for employees to do particular work.
If such a redundancy situation exists, an employer needs to follow a fair process when dismissing for redundancy reasons. Although there is no specific legal procedure set out, ACAS sets out some guidelines that employers are advised to follow and in very broad terms a fair procedure will include the following:
- The employer will have consulted appropriately and meaningfully with employees (and their representatives if collectively consulting)
- If there is a reduction in work, the employer should have followed a fair selection process, both in identifying the ‘pool’ of employees at risk of redundancy, and then fairly selecting from those in the pool to be made redundant
- The employer will have considered any suitable alternative opportunities which are available or become available before the termination date
- The employer will give employees the opportunity to appeal their selection for redundancy.
Notice pay
Ordinarily, upon being made redundant employees are entitled to be paid for their notice period, either as per their contract of employment or statutory notice period if higher. This can be either ‘worked’ prior to the termination date or paid in lieu following termination (or part worked/part paid).
A common question we are being asked by employers is how does notice pay work when someone is currently on furlough?
The CJRS guidance confirms that an employee can be given their notice whilst on furlough leave, but the key question is whether this is payable at their full ‘pre furlough’ salary, or at the 80% reduced furlough rate. Although this should be a clear-cut answer, the answer is surprisingly complex and will depend upon the wording of the employee’s contract of employment, the furlough agreement and possibly the reasons for the furlough. In some cases, it will be possible to argue they are entitled to 80% and for some it will be appropriate to pay 100%.
Of course, in either situation employers may wish to use the availability of the furlough scheme to recover some, if not all of the notice pay costs. As employers are going be required to contribute towards furlough costs from August onwards, the benefits of doing this will gradually reduce as the government contribution reduces.
It is also worth noting that payments in lieu of notice cannot be reclaimed under the CJRS.
Holiday and Redundancy payments
These are usually based upon an employee’s full contractual pay so will need to be factored into the overall cost when making redundancies. Redundancy payments cannot be reclaimed through the furlough scheme.
Selection for redundancy
Employers should be careful not to automatically select those who are furloughed for redundancy as this may give rise to an unfair dismissal claims or even complaints of discrimination. The risks involved in this approach may depend upon the reasons that the employee was originally furloughed.
Another common question is whether employees who are made redundant rather than being left on furlough would have a potential claim against the employer (such as unfair dismissal), even if they may have ultimately been made redundant at the end of the furlough scheme.
The guidance is not particularly helpful in this regard and although it explicitly states that redundancies can be made during the furlough period, it is quite possible that if an employee could show that it was not necessary for such a redundancy to be made at that particular time, then they may be able to make a fairly compelling argument in the Employment Tribunal that the employer has acted unfairly and against the spirit of the scheme.
A complete failure by an employer to consider leaving an employee on furlough leave, rather than making then redundant, is potentially a failure to consider suitable alternatives to the dismissal.
Of course, some situations will involve employers not being able to afford the additional employer contributions or having some other compelling reason for making redundancies at that particular time, but in many cases, it will be far from clear cut.
As has been a pattern throughout this pandemic, further information may possibly be released by the government at a later date that will help to clarify this position for both employers and employees.
Other issues to consider
While employees are furloughed, this presents practical challenges such as in what forum to conduct any consultation meetings and a little more time may be required to be factored in so that these can take place remotely.
Although employees only have the legal right to be accompanied to disciplinary and grievance hearings, it is advisable to also allow this for redundancy situations and the means for this to happen remotely should be organised. It has been confirmed in the latest CJRS guidance that accompanying a colleague to a meeting such as this will not be deemed ‘work’ and therefore does not interfere with a furloughed colleague’s eligibility for the scheme.
Alternatives to Redundancy
Whilst unfortunately redundancies may be the only option available to many as we emerge from lockdown, there are some other alternatives that employers will be keen on exploring first to see if they can remove the ‘redundancy situation’ altogether.
We have summarised some of these other alternatives below:
- Short term working and lay-offs. Generally employers will need a contractual right to be able to follow either of these options, but in the present circumstances there may be scope to agree with the employee that they should either temporarily reduce the hours they work (short term) or temporarily agree to remain off work unpaid (lay off). Although neither of these options are likely to be attractive to an employee, they may be more attractive than the alternatives (compulsory redundancy).
- Pay reduction. As above, although this is unlikely to be attractive, it may be something the employee is willing to agree to when compared with the alternatives.
- Voluntary redundancies. Employers could seek volunteers for redundancy as a means of reducing outgoings and removing the need to make compulsory redundancies.
- A freeze on recruitment, pay raises, overtime and bonuses (subject being permitted by contractual terms)
- Reorganisations and restructuring. It may be possible to adopt more flexible working patterns such as working from home on a more permanent basis and reducing overheads elsewhere in order to retain jobs.
- Reallocation of employees to areas of the business less affected by Coronavirus (if applicable)
- Last but not least, the Flexible Furlough Scheme as outlined in our bulletin released last week. Keeping employees on the furlough scheme is intended to help many businesses avoid redundancies and the introduction of the flexible scheme from 1 July 2020 will permit employers to gradually re-introduce employees back to work at a time when the work itself may also take some time to return to pre-lockdown levels.
If you or someone you know is experiencing legal issues or has a question regarding employment law, take advantage of our complimentary initial consultation via telephone or video call now by contacting us today on 0800 999 4437
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LinkedIn is a key channel for personal branding, so your LinkedIn profile is the launchpad to building a strong professional network. The channel is also the place to be if you wish to continue relationships of key people you meet at zoom networking events allowing you to easily stay in touch after making the effort to attend the meeting. As well as being the touchstone for nurture and lead generation a well optimised LinkedIn profile is on the same level as making a good first impression when you meet in person. How do you optimise your profile? 1. Make sure you have a current and professional head and shoulders photograph of yourself. You are on the platform to do business so ensure you appear to be there for that reason so a picture with your partner, favourite pet or vehicle doesn’t cut it. It should be a current photograph as it could be embarrassing putting a ten-year-old photo on the platform and when you meet a contact in person you look nothing like your photo so it could end up being a little like a bad first date. Be authentic. 2. Also use Canva.com to create a background image as why miss the opportunity to promote your business. If you have staff on LinkedIn create an image for all of them to use as their background as it’s a little like giving them all a company vehicle with no costs attached. 3. Treat your LinkedIn profile as an online resume and ensure you complete every section – a. The about section – I split this into two sections i. My Background ii. What I Do Now iii. Include an email and phone number at the bottom of this section b. Experience – show at least the last two positions c . Education d. Licences and Certifications e. Skills and Endorsements – You can have 50 of these so put in as many as you can for example if you were a bar person you could include customer service. f. Recommendations – request these from people you know 4. Use keywords in your headline – think of the words you would use if you were looking for your goods or services. 5. Join groups which could be a. Within your industry b. Where your target market is c. Services you have an interest in If you require any help or advise we offer training or talk you through the process via zoom. Blog written by Linda Cloke of We Do Social Media Ltd Contact: Linda@wedosocialmedia.co.uk or call 07769943756
According to the Health & Safety Executive, over 11 million workdays are lost each year due to stress at work! The latest Employment Law Bulletin from our sponsors Parfitt Cresswell Solicitors focuses on the topic of stress in the workplace and the actions that employers can take to defend themselves against claims arising from this. In the Employment Law Bulletin expert Philip Luff covers: • What stress is • The duties of an employer • The potential action that an employee can bring against their employer for work related stress, and offers tips on how employers can best protect themselves against workplace stress claims To read the article and find out more about Stress Related Claims in the workplace click here . If you would like legal advice regarding an Employment Law matter take advantage of Parfitt Cresswell Solicitors’ complimentary initial video/telephone consultation with one of their legal experts. Call 0800 999 4437 or email enquiries@parfittcresswell.com today to arrange your free initial consultation.
This article is brought to you by Parfitt Cresswell Solicitors Extension of the Furlough Scheme (CJRS) On Saturday 31st October the Prime Minister announced a further national lockdown in England to address the increasing rate of Covid-19 infections throughout the UK. This lockdown commenced on 5th November and will remain in place until at least 2nd December 2020. Under the previous tiered ‘local’ lockdown arrangements, the Government had announced two Job Support Schemes which were intended to succeed the Coronavirus Job Retention Scheme (furlough scheme). These schemes were known as the ‘JSS Closed’, aimed at businesses that had been forced to close under the tiered restrictions and the ‘JSS Open’, a scheme for businesses who although affected by Covid-19, were still able to open. These schemes were due to replace the existing furlough scheme when it ended on 31 October 2020, with the Government support significantly reduced when compared with the original CJRS. However, along with the announcement of a national lockdown throughout November, it was also announced that the CJRS would be extended for a further month. A few days after this, the Chancellor announced that this extension of the furlough scheme would now run until the end of March 2021. As such, the JSS is not likely to resurface until at least April 2021 (if at all). How had furlough changed By way of a reminder, the CJRS has been through several changes since its introduction in March 2020, from the Government initially funding 80% of an employee’s salary up to £2,500, with government support reducing in recent months as restrictions eased. In October 2020, the month before the scheme was due to end, the government contributed 60% of unworked hours up to a cap of £2,187.50, with the employer paying the additional 20% along with employer national insurance and pension contributions. How will the extension work? In simple terms, the extension of the Furlough Scheme puts employers back to the same level of government contributions that were available in August 2020, with the Government funding 80% of eligible employees’ salary, but the employer having to contribute both employer national insurance/pension contributions themselves. The current understanding is that the furlough extension will operate largely as it did before, however the following now applies: • The extended scheme will run until 31 March 2021. • The employer or employee are not required to have previously used the CJRS • To be eligible, the employee must have been on the employer’s PAYE payroll by 23.59 on 30 October 2020 and the employer must have made a Real Time Information (RTI) submission for that employee by that date. • The employee can be furloughed either full-time or flexibly (for part of their hours). Employers will need to report and claim for a minimum period of seven consecutive calendar days. • The government will pay 80% of eligible wages for any unworked hours, (up to a cap of £2,500) with the employer paying employer NIC and pension contributions on these unworked hours. Employers will need to pay the employees for any hours worked as per usual. • The employer can choose to top up to 100% if they wish but is not obliged to. • The Job Retention bonus for employers (£1,000 for each employee kept on until the end of January 2021) will no longer be able to be claimed in February as planned, but will possibly be introduced at a later date to help avoid the impact of the furlough scheme ending. • The Government will review the scheme in the New Year, so it is still possible that increased employer contributions could be required prior to the end of March. As with all these announcements, further detail and guidance will follow from the government in due course. If you require further legal assistance regarding the CJRS or and other employment law issue, take advantage of our complimentary initial consultation (available via telephone or video call) today by calling 0800 999 4437 or email enquiries@parfittcresswell.com
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