As the government response to coronavirus (Covid-19) is continually being reviewed, the most up to date source of information for all employers and employees is government and ACAS websites. Advice and information are generally well written and can be accessed via the links below:
However, although advice repeatedly directs that employers should “support” their staff, what does that mean for businesses who can’t afford long periods of paid absence? What are practical options? What are the legal obligations?
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In current circumstances, flexible working may simply describe any practical arrangements to allow employees to continue working. It could be via homeworking, changes to time, place, hours or duties etc. It is down to imagination and will of the parties.
However, the implications should be thought through and rules or policies put in place to avoid misunderstanding and proper protection of the business e.g. security of data, use of laptops, access to and recovery of property etc.
We can very quickly assist with providing rules and policies suitable for SME’s. Just get in touch.
Do we have to pay sick pay to absent employees?
Employers may not feel able to pay for the amount of absence that is being caused by the coronavirus or steps taken to avoid contamination spreading.
The government’s urging to employers to “support” employees does not of itself create any legal obligations to pay for all coronavirus related absences.
Employers need carefully to consider if absence is properly regarded as by reason of sickness incapability. Employers are likely to face claims for extended periods of absence where, for quite sensible reasons, an employee is not attending work. However, and contrary to common misconception, in most cases an employer may only be liable for sick pay for periods of 7 or 14 days’ absence. (Why might ‘isolation’ and ‘social distancing’ be important legal as well as practical concepts?)
The amount of pay will then be determined by the contract of employment and frequently this will be limited to SSP.
If you are being asked to pay for absence of more than 7 or 14 days but do not want or cannot afford to do so, you should take expert advice.
Sending an employee home
If an employee is on reasonable view of the employer exhibiting the symptoms of coronavirus, or reports sharing a household with someone exhibiting those symptoms, it is almost certainly going to be appropriate to require them to go home to self-isolate in accordance with government advice. Sick pay will then be payable for the period of isolation and in accordance with contractual entitlement.
If an employee objects, it may be that disciplinary procedure may be invoked. In some circumstances, this might even lead to dismissal for gross misconduct although urgent advice should be sought before taking such action.
Short time working and Lay-off
Short time working refers to the situation where an employee’s hours are reduced and pay reduced accordingly on pro rata basis. Lay-off refers to where normal hours are reduced to nil and pay reduced to nil.
If the employment contract does not expressly allow the employer to impose such reduction of hours and pay, then the employee’s agreement will be needed. Absent agreement, this will be in breach of contract and could lead to potentially significant claims.
However, if an employer is open about the reasons for proposing short time or lay-off, an employee may well agree to it on understanding the alternative may be redundancy with perhaps limited redundancy payment.
Loans to employees
If an employer has no or limited useful work for an employee but wants to help avoid immediate hardship, one option is also to continue payments but to do so as a loan or advance of wages to be paid back or deducted from future wages. A written agreement will need to deal with terms of the loan but with advice this could be put in place quickly and may be very well appreciated.
Apart from not wishing to lose trained or loyal staff, employers may be unable to afford to make the redundancy payments that will then fall due.
However, delay in making redundancies may not always be the best option. Employers will need to factor in other issues such as accrual of holiday pay entitlements, even during lay-off and short-time working, and liability to make pay for sickness absence, whether as a result of coronavirus or other illnesses. A sustained period of delay might gradually cause other liabilities to mount up over time.
There may also be the prospect of litigation if dismissals are not handled well. For example, the current situation will present some employers with good opportunity to remove ‘difficult’ employees. They will have to be alert to prospect of an employee alleging they have been unfairly selected for redundancy, perhaps even discriminated against. Advice should be sought regarding necessary consultation and procedures before any dismissals are implemented.
Employees seeking redundancy in response to lay off or short-time working
If the lay-off or short-time working (or combination of both) lasts for 4 or more consecutive weeks, or 6 weeks in a 13-week period, employees can apply for redundancy.
If an employee does give proper notice seeking redundancy, the employer will have a chance to confirm the lay-off or short-time working will cease within 4 weeks and will not be reinstated for a further 13 weeks. That may be unexpected in the current economic climate.
Assuming employment does terminate by reason of redundancy, statutory redundancy payment is limited in the usual way according to age and length of continuous service.
Also, although the employee might expect to receive notice pay in addition, this entitlement is not automatic and with advice can very often easily be avoided.
The value of expert advice
Standing back and assessing options overall, and the costs and benefits of implementing any redundancies, needs to be weighed against the alternatives. That is very often an exercise in which expert employment advice may prove invaluable. Just give us a call.
Links to main government websites
Disclaimer: The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Jackson Osborne accepts no responsibility for the content of any third party website to which this webpage refers.