Reasons to choose Wilson Browne
As the Coronavirus / COVID-19 continues its hold on UK business, we have seen regular interventions and support from the government.
Keeping on top of them can be challenging, so we have assembled this hub (repository) to help you keep up to date.
Advice issued today may well be out of date tomorrow, but we try hard to keep this information fresh and current.
24 September 2020 - Update from HM Treasury on how the Job Support Scheme will work
Following the Chancellor’s announcement about the new Job Support Scheme (“JSS”) and which we informed you about at the time it was announced, HM Treasury has since published a factsheet to explain how it will work and can be accessed here
The JSS, which commences on 1 November 2020, is designed to dovetail with the end of the furlough leave scheme on 31 October 2020. This is in the hope the JSS will help stave off the much anticipated surge in redundancies.
The following is a summary of 5 key JSS facts.
1. To qualify, employees must be in a “viable job” and work at least a third of their normal hours. The viable job requirement is expected to disqualify a number of roles as the JSS will not apply if the business is currently closed due to the pandemic.
2. After 3 months of the start of the JSS, the Government may increase the minimum hours requirement to above 1/3.
3. The Government will make a payment equating to 1/3 of each employee’s salary for those hours not worked providing the employer does likewise. Subject to the cap, this will mean employees receive a minimum of 77% of their normal salary.
4. The Government’s contribution is capped at £697.92 per employee per month.
5. Crucially, and unlike the furlough leave scheme, employers will not be able to give employees notice of redundancy while claiming under the JSS.
More detailed guidance on the calculation of eligible wages is promised.
24 September 2020 - Chancellor announces ‘Winter Economy Plan’
As the furlough and the Self Employed Income Support Schemes draw to a close, Rishi Sunak has today announced the following measures to support businesses and individuals in the wake of the Covid-19 crisis. Precise details are awaited and links to Government information and advice will be added to this hub in due course.
Referred to as the ‘next stage’, and the ‘next phase’ to support people’s jobs, the Chancellor stated that the economy is more likely to undergo more permanent adjustment. There is a need, he said, to support people to be in viable jobs, through this crisis. He noted that not every job could be saved, but wants to protect as many viable jobs as we can
Jobs Support Scheme
Direct support of the wages of people in work who have their need for their role depressed
1. Support Viable Jobs – employees must work at least one third of normal hours and be paid at least that by employers.
-Of the balance of the wages, the employer will pay one third, the Government will pay one third and the Employee will not receive the remaining third. Do not get confused by the reference to “must work at least a third of normal hours” the scheme is designed to “share the pain” between employer, Government and employee, subject to a minimum number of hours being worked.
2. All small and medium sizes are eligible, larger only when turnover falls
3. Open to businesses whether or not furlough has been used
4. Runs for 6 months from November
5. Businesses can claim BOTH jobs support scheme and Jobs retention bonus
Self Employed Grant
Will be extend on similar terms to the self employed as above
Bounceback loans – “pay as you grow” –
1. Loans can be extended from 6 to 10 years
2. Interest only payments can be made
3. Business can apply to suspend repayments for up to 10 months
CBILS – extend the government guarantee for up to 10 years, making it easier to give more time to repay
All deadlines for loan schemes extended to end of 2020
New successor loan guarantee program to come in 2021
1. VAT that was due in March, can be spread over 11 smaller payments with no interest
2. Self Assessment self employed can also be extended over similar term
VAT in Hospitality
Will not be increased from the reduced rate of 5% until March 31st 2021
More details will follow.
24 September 2020 - Fines to be paid by employees not wearing a mask
Regulations regarding the use of face masks by employees working within certain sectors has been updated following the PM’s announcement on Tuesday, 22 September 2020.
It is now clear that workers in the listed sectors must wear masks and their failure to do so will result in a fine of £200.
The fine is payable by the employee Not the employer.
Listed sectors include:
- shopping centres
- restaurants and bars
- banks, and
The exception to wearing masks (for example, because of disability or where wearing a mask would cause severe distress) still applies.
For more information Click here
23 September 2020 - Furlough Part 2
With the anticipated surge in redundancies and settlement agreements , it’s maybe not that surprising to read the Chancellor is considering a new style job subsidy scheme to dovetail with when the Coronavirus Job Retention Scheme ends on 31 October . A number of possibilities are understood to have been mooted including a form of subsidy for those employers offering workers a percentage of their normal hours.
For the time being the official position remains that the furlough scheme will end on 31 October 2020 and that it will look at targeted assistance only after that date. We’ll keep you updated in the event this position changes.
6 August 2020 - Updated Guidance on Holiday and Leave during Coronavirus
Despite the traditional summer holiday season being in full swing, given the frequent policy changes to quarantining when returning from certain countries as well as local lockdowns, many employers are starting to grapple with their employees requesting the carry-over of their holiday from the current holiday year to future holiday years. This is against the backdrop of the government having passed emergency legislation relaxing the restriction on carrying over the 4 week’s leave derived from the Working Time Directive (2003/88/EC) (WTD leave).
The government has issued guidance on the factors that should be considered in terms of whether it is reasonably practicable to take the leave in the relevant leave year. This guidance can be accessed here
The guidance also confirms that employers are not prevented from exercising their normal right to require workers to take leave on certain dates where it is reasonably practicable for the worker to take their leave. It also clarifies that holidays can be taken whilst an employee is on furlough leave.
ACAS has also issued advice designed to assist with making the carry-over call. Less helpfully, that advice identifies different factors for making the call! The ACAS advice can be accessed here
Despite the guidance and advice, there still remains the question of how to deal with holiday entitlement which is above the 4 weeks allowed under the WTD – so the additional 1.6 weeks provided for by the Working Time Regulations and any additional contractual entitlement employees may have. Ultimately, it will be up to employers to decide how to deal with these entitlements in line with employment law rights and holiday policies. Those decisions should then be effectively communicated to employees in a timely manner.
5 August 2020 - Updated Guidance for Redundancies
With recent and forthcoming changes to the government’s furlough leave scheme, many companies are now turning their attentions to restructuring and headcount reductions. It is therefore unsurprising that ACAS has updated its guidance for redundancies – this can be accessed here
30 July 2020 - New law will ensure furloughed employees are not short changed if made redundant
From the 31st July 2020 all furloughed employees are to receive redundancy payments at 100% of their normal pay rather than a reduced furlough rate. The Government had been urging companies to pay an employee who benefits from statutory redundancy at the rate of the employee’s normal wage prior to furlough, however some companies had not and had calculated the pay based on the furlough rate which was less.
Business Secretary Alok Sharma said
“The government is doing everything it can to protect people’s incomes through our Coronavirus Job Retention Scheme, which is now supporting over 9 million jobs across the UK. We urge employers to do everything they can to avoid making redundancies, but where this is unavoidable it is important that employees receive the payments they are rightly entitled to. New laws coming into force today will ensure furloughed workers are not short-changed if they are ever made redundant – providing some reassurance for workers and their families during this challenging time.”
20 July 2020 - Employment: Back to work and Covid 19
With changes coming on 1st August, we have produced an FAQ to answer questions about getting employees back to work, based on government updates
15 July 2020 - Government announces Job Retention Bonus
The government has announced a Job Retention Bonus (JRB) which is designed to encourage employers to continue the employment of employees beyond the end of the CJRS.
The JRB, which is to be paid from February 2021, is available if an employee:
- remains continuously employed, and
- earns above the Lower Earnings Limit (£520 per month) on average between the end of the CJRS and the end of January 2021.
Additional information about the JRB will be released later this month.
6 July - Confusion over furloughing and redundancy
You may have read an article over the weekend in a broadsheet about the Treasury Direction issued on 25 June 2020 in respect of the Furlough Scheme and its relationship with redundancy situations. That article could be understood as meaning that the employer must intend for the employee to continue to be employed after the Furlough Scheme has ended – i.e, reimbursement under the scheme is not possible for those employees made redundant before or at the end of October. This is not so.
The Treasury Direction simply confirms that the Furlough Scheme cannot be used to pay:
- in lieu of notice, or
- statutory redundancy payments.
However, employers can make redundant those employees in respect of whom it has made reimbursement claims for under the scheme. Additionally, employers can use the Furlough Scheme for salaries paid to an employee who continue in employment (albeit not working) during for their notice period.
6 July 2020 - 30-day moratorium introduced for the Coronavirus Job Retention Scheme (CJRS) or the Self Employed Income Support Scheme (SSEISS)
Under the Finance Bill 2020, a 30-day moratorium is to be included in respect of the Coronavirus Job Retention Scheme (CJRS) or the Self Employed Income Support Scheme (SEISS). This that persons notifying HMRC of erroneous (or even ‘deliberately incorrect’) grant claims under the CJRS or the SEISS will avoid being charged a penalty by HMRC provided the notification is given:
- within 30 days of the incorrect claim, or
- within 30 days of the Finance Bill 2020 receiving Royal Assent if the claim arose before that date.
Royal assent is expected some time this month.
The Bill will also confirm that grants under the CJRS and SEISS are taxable income and will provide HMRC with the means of recovery of incorrect payments together with the power to impose penalties for deliberately false claims.
29 June 2020 - Treasury has issued a further Treasury Direction on the Coronavirus Job Retention Scheme (CJRS)
On the back of recent HMRC guidance (see 16th June update below) the Treasury has issued a further Treasury Direction on the Coronavirus Job Retention Scheme (CJRS) which allows for flexible furlough arrangements until 31 October 2020 – the flexible furlough scheme commences on 1 July. This new Direction modifies the effect of the previous Directions made on 15 April and 20 May.
Key aspects of this Direction are:
- Confirmation that employers will only be able to participate in the flexible furlough if:
- a claim under the original scheme has been made by 31 July; and
- that claim was in respect of an employee who has been furloughed for a minimum of three weeks beginning on or before 10 June (this is unless the employee is either family leave returner or an armed forces reservist in which case the 10 June restriction is dis-applied).
- Employers and employees must reach agreement on flexible furlough arrangements. As with the original furlough scheme, the agreement must either be made in writing or confirmed in writing, and retained by the employer until at least 30 June 2025.
- Details for calculating the amounts the employer can recover for those employees who work part-time on flexible furlough.
Link to Treasury Direction here
18 June 2020 - New Data Protections for Employers dealing with COVID-19
The ICO’s website has been updated with Q&As as well as guidance on data protection issues for organisations as lockdown restrictions start to ease and businesses begin to reopen.
Whilst organisations can ask employees whether they are experiencing any COVID-19 symptoms and introduce appropriate testing the personal information obtained must be handled in compliance with data protection legislation.
More information here
16 June 2020 - The introduction of flexible furloughing
Last week, HM Revenue and Customs published further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS) which are designed to deal with flexible furloughing. The key points are:
- From 1 July, the minimum 3 consecutive weeks’ period will no longer apply and leave can last for any period
- From 1 July employers can introduce part-time arrangements – employers must ‘keep a new written agreement’ and will be liable for all payments due to employees for those hours they work. Reimbursement will be available only for those hours the employee is furloughed. The guidance includes an example for calculating pay for an employee who is flexibly furloughed. It’s anticipated that getting the calculation right is going to be extremely tricky.
- Tapering arrangements have been confirmed as:
- from 1 August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500;
- from 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and
- from 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).
Link to updated guidance
16 June 2020 - Forces update- Reservists returning to civilian work eligible for government support schemes, and help for self employed reservists.
On the 15th June HM Treasury announced that the furlough scheme will be extended for reservists.
If you have a reservist employee who has been called out for permanent service (mobilised) and is likely to be demobilised in the coming months, you will be able to furlough him/her under the government’s Coronavirus Job Retention Scheme, even though the deadline for registration under the scheme has passed.
It was also announced that self-employed army, navy and airforce reservists who are currently ineligible for the Self Employment Income Support Scheme as a result of their service will be able to access a grant.
More details here, which will be updated in the coming weeks.
1 June 2020 - New changes to CJRS
The Chancellor of the Exchequer has set out the following changes to the Coronavirus Job Retention Scheme (CJRS):
- From August employers will have to pay national insurance and pension contributions,
- From September employers will also have to pay 10% of wages,
- From October the wage contribution by employers is to increase to 20%.
- Part-time working will be allowed under the scheme from 1 July (this has been brought forward from August as originally intended).
The HM Treasury has published a factsheet which provides guidance on how ‘flexible furloughing’ will be implemented. The factsheet states that, from 1 July, subject to having an employees written agreement employers will be able to bring back to work any employees who have previously been furloughed for any amount of time and any shift pattern. The employer will still be able to claim under the CJRS for such employees’ normal hours not worked but will have to pay in full for any hours worked, and will be responsible for tax and NI contributions on those payments. Further guidance from HM Treasury on flexible furloughing is expected on 12 June.
The Chancellor has also indicated that the CJRS will close to new entrants from 1 July.
29 May 2020 - SSP and Track & Trace
Following the introduction of new Test and Trace system, The Statutory Sick Pay (General) (Coronavirus Amendment) (No. 4) Regulations 2020 have been extended.
The extension means that statutory sick pay is payable to a person who is self-isolating for 14 days as a result of being notified that they have had contact with a person with coronavirus.
The government has also updated its guidance for employers whose employees are told to self-isolate under the new system.
26 May 2020 - A new Treasury Direction has been issued by the Chancellor for the CJRS
A new Treasury Direction has been issued by the Chancellor; this Direction modifies the effect of the Coronavirus Job Retention Scheme (CJRS) as set out in the previous CRJS Direction. Key elements include:
- The removal of the explicit requirement in the original Direction that an agreement required to place an employee on furlough must be in writing. The new Direction allows for consent to be express consent. The Direction also states that either the agreement (where in writing) or a record of the agreement (if express) must be retained until at least 30 June 2025.
- Detailed guidance on the kinds of study and training that an employee can do while on furlough without breaching the requirement that a furloughed employee do no work for the employer.
- Confirmation that pension scheme trustees can continue to do work for the sole purpose of fulfilling their duties.
- Confirmation that, if SSP is being paid/due to be paid, furlough cannot begin until immediately after the end of the ‘period of incapacity for work’ for which the SSP is being paid or due to be paid. The end of the period of incapacity should be agreed by the employer and employee.
- Confirmation of how the CJRS applies to employees on unpaid leave.
18 May 2020 - HMRC deadline for May furlough reimbursement is 20 May
Businesses have been reminded by HMRC that, to receive reimbursement by the end of the month for those salaries paid to furloughed workers for May, claims need to be in by Wednesday 20 May.
As with claims made previously, all records and calculations should be retained in order that HMRC seeks to query any elements of each claim.
By way of a quick reminder, the Corona Virus Job Retention Scheme will continue in its current form until the end of July. As of 1 August and until the scheme ends (this is currently scheduled to be the of October) there will be greater flexibility for those employers furloughing some/all staff – a key change will be the ability to bring back employees on a part-time basis. Further details on the changes are expected by the end of May.
Other HMRC guidance and support
HMRC’s online guidance includes:
- information for furloughed employees
- that work furloughed company directors can undertake
- what time periods you can claim for, and
- detail on non-discretionary payments, holiday pay and record keeping.
HMRC webinars are also available and which provide an overview of the scheme and a detailed session about how to make a claim. Webinar places can be booked by going to GOV.UK and searching ‘help and support if your business is affected by coronavirus’.
14 May 2020 - Government guidance on holiday rights during the coronavirus pandemic
The Department for Business, Energy and Industrial Strategy has now published guidance on workers’ entitlement to holiday and holiday pay. This guidance, comes with a health warning – in that it has no legal effect and so does not have to be followed by courts or tribunals when determining holiday pay claims. Despite this, it will still be helpful for many employers as it covers a number of areas and confirms that which we have previously believed to be the case including:
- the accrual of annual leave entitlement – furloughed workers continue to accrue entitlement to annual leave under the Working Time Regulations 1998,
- taking holiday during furlough – the mere fact holiday is taken during this time will not bring furlough leave to an end,
- the rate of holiday pay – the guidance states that this rate of pay must be ‘the correct holiday pay in accordance with current legislation’ which means that employers will likely have to top up pay,
- the new right to carry forward leave that could not be taken because of the COVID-19 pandemic – this right was provided for in the Working Time (Coronavirus) (Amendment) Regulations 2020. These Regulations allow for some or all of the basic four weeks’ untaken leave to be carried forward into the following two leave years. The guidance includes the factors to be taken into consideration when deciding whether it was not reasonably practicable for a worker to take leave. As for furloughed workers, the guidance notes that the need to carry forward statutory annual leave will likely only come into operation in limited circumstances such as when the employer is unable to fund the difference between furlough pay and holiday pay.
The guidance can be accessed here
13 May 2020 - Information Commissioners Office Publishes New Coronavirus Hub
The ICO has produced a Coronavirus hub on its website which provides useful guidance on data protection obligations including those that apply to home working.
The hub also includes a Q & A section on covid workplace testing which is likely to become a topic of debate in forthcoming times given the imminent return to work within a number of business sectors. The links for both the hub and the Q & A pages are:
Access the Coronavirus Hub here
Access the Workplace Testing Guidance For Employers here
12 May 2020 - Coronavirus Job Retention Scheme Extended
The Chancellor has today announced that the Coronavirus Job Retention Scheme will be extended for four months, until the end of October 2020. He has also announced that there are to be no changes to the scheme until the end of July.
It has also been announced that, between August to October 2020, the scheme will allow furloughed employees to be brought back part-time. It is understood that full details of the changes to the scheme will be published by the end of May.
12 May 2020 - Key Employment Law Principles For Employers Returning to Work
As we have already reported today, the government has published guidance for businesses returning to work after lockdown. The guides are designed for businesses operating in 8 sectors – namely construction and other outdoor work; factories, plants and warehouses; labs and research facilities; offices and contact centres; other peoples’ homes; restaurants offering takeaway or delivery; shops and branches; and vehicles). Whilst each guide contains guidance specific to each of those sectors, there are a number of overarching principles; key include:
- Health & safety laws apply to all businesses and accordingly there is a responsibility protect both workers and others (including visitors) from risks to their health and safety.
- Risk assessments are a legal requirement for all businesses – those risk assessments must now address the risks of COVID-19 and should take account of the guidance and decisions should be informed by it. The HSE website contains a number of interactive tools for assessing risk as well as risk assessment templates.
- If your business has less than 5 workers “you don’t have to write anything down as part of your risk assessment”. Conversely, it is expected that those businesses with over 50 workers should publish its risk assessment on its website.
- The guidance is non-statutory and all employment law and equality obligations prevail. Therefore, any changes to hours or ways of working which amount to a change in terms require compliance with the requisite consultation obligations. Additional considerations should be given in relation to those with protected characteristics.
The principles above apply not just to employees but agency workers, contractors and other visitors to the business.
It is expected that the guides will be revised over the forthcoming days and weeks. We’ll continue to keep you updated on this as well as any other key developments.
12 May 2020 - Making Workplaces Covid Secure - Government publishes guidance
‘A list of guidelines to make the workplace ‘Covid Secure’ have been published with specific guidance for:
- Construction and other outdoor work
- Factories, plants and warehouses
- Labs and Research Facilities
- Offices and contact centres
- Restaurants offering takeaway or delivery
- Shops and Branches
A Covid 19 Risk Assessment is expected from the HSE imminently.
More information here
11 May 2020 - The UK Government’s COVID-19 recovery strategy and advice for employers
The government’s OUR PLAN TO REBUILD:The UK Government’s COVID-19 recovery strategy which was published today, includes a section on those key aspects employers need to be aware of. This includes:
Working from home “rather than their normal physical workplace, wherever possible.” This is for the foreseeable future.
- Those who cannot work from home should go to their physical workplace if it is open. The government has listed those sectors of the economy that can be open – this includes food production, construction, manufacturing, logistics, distribution and scientific research in laboratories. There are some workplaces which must remain closed at this time – these include hospitality and non-essential retail.
- Guidelines for workplaces t ensure they are operating safely will be published later this week.
The position remains the same for someone has Covid-19 symptoms, or is in a household where another has those symptoms – they must self-isolate and not go to work.
6 May 2020 - Can a business continue with a grievance or disciplinary procedure during lockdown?
The short answer to this question is “yes” even if employees involved in the process are on furlough leave. However, careful thought will need to be given to ensure the process is both fairly conducted and carried out in compliance with current lockdown rules and social distancing requirements.
To assist all employers, ACAS has issued a guidance for handling grievance and disciplinary processes during the coronavirus pandemic. Do please be aware that it is considered that the guidance goes further than the law actually requires.
The guidance can be accessed here
4 May 2020 - Treasury Direction: Self-Employed Scheme
The Treasury’s Direction for the government’s self-employed income support scheme has been issued. Key points include:
- It is not available to any self-employed person (provided they fulfilled certain financial criteria) – only those, whose business has been adversely affected by coronavirus or coronavirus disease, may claim.
- Although they must have traded in 2018/19, 2019/20 and intend to trade in 2020/21, the claimant only needs to have completed a tax return in one of three relevant years.
- The claimant’s income (profit before tax) must be under £50,000pa.
- As with the Coronavirus Job Retention Scheme, the grant (which is called a SEISS payment) is 80% of 3 months’ earnings averaged over the last three years.
- No credit is given for any earnings received by the individual during the period covered by SEISS. This means those who have lost amounts as a direct result of coronavirus can still receive up to £7,500 which is the maximum SEISS payment.
Further details here
2 May 2020 - Government announces Top-up to local business grant funds scheme
On Saturday a discretionary fund was announced to address the losses being felt by certain small businesses that were previously outside the scope of the business grant funds scheme.
- £617 million more will be made available.
- This is a 5% uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF).
- Local authorities will make the decisions and will be told next week how much they have to allocate.
- The Government will confirm the exact amount for each local authority next week.
- Aimed at small businesses with ongoing fixed property-related costs.
- Local authorities will be asked to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates.
- Local authorities will have discretion to allocate funding how they see fit, the above is a guide. They can make payments to other businesses.
- be small,
- under 50 employees,
- must demonstrate that they have seen a significant drop of income due to the Coronavirus restriction measures.
LA’s can award £25,000, £10,000 or any amount they wish below £10,000.
As with other schemes in this current climate more details will follow the announcement in the coming days.
24 April 2020 - Is An Employee's Written Agreement Needed For Furloughing?
There has been recent uncertainty as to whether an employee’s written agreement to being furloughed is required by an employer before that employer can make a reimbursement claim to the HMRC under the CJRS. It appears from a communication from the HMRC to a member of the legal profession that this uncertainty has now been resolved and that the HMRC, will follow the Guidance as opposed the Treasury Direction in this regard.
This means that, whilst employers must reach an agreement with an employee before furloughing that employee, it is not a reimbursement requisite to have that employee’s written agreement. However, there does remain the need to have an audit trail of the employee’s agreement to being furloughed.
20 April 2020 - Claiming Coronavirus Job Retention Scheme - Jennie Jahina advises
With the HMRC online CJRS portal now up and running organisations will need to make sure they have the correct paperwork in place when claiming. The Treasury Direction to HMRC states there must have been a written agreement in place between the employee and the employer (see our update dated 16 April) prior to furlough leave commencing. It is currently unclear whether employers can claim under the CJRS for employees who have not specifically agreed in writing to being furloughed.
HMRC has also published two new guidance documents. The first is a guide for how employers can claim under the CJRS. The second is a guide for calculating 80% of an employee’s wages. Links for the guidance documents appear below.
The HMRC’s guidance for employees has also been updated. This guidance clarifies the position in respect of those employees taking holiday whilst on furlough leave. However, employers can still rely on their right to refuse holiday leave requests in accordance with legislation.
20 April 2020 - New Guide For Calculating 80% of Furloughed Employees Wages
The new guide enables you to calculate 80% of your employee’s wages, National Insurance Contributions and pension contributions if you’ve furloughed staff due to coronavirus (COVID-19). Access the calculator here
20 April 2020 - New Step By Step Coronavirus Job Retention Scheme (CJRS) Claims Guide
The government has now released a step by step guide to Coronavirus Job Retention Scheme. This guide explains the information that employers need to provide to claim for their employees’ wages.
View the guide here
17 April 2020 - Furlough Scheme extended Until June 30th
More to follow but details likely to remain the same with this being a simple extension of the scheme, in addition to yesterday’s announcement regarding a change of date to the original eligibility criteria.
Chancellor of the Exchequer, Rishi Sunak, said:
We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.
It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.
16 April 2020 - Coronavirus Job Retention Scheme Updated
The Treasury’s Direction to HMRC has now been issued. This contains authority and instructions for making payments under the Coronavirus Job Retention Scheme and is expected to be the definitive guidance on how the Job Retention Scheme works.
Key aspects of the Direction include:
- employees who were employed on 19 March 2020 are eligible for furlough – previously the cut-off date was 28 February 2020. However, the employer will have to prove the employee was on the payroll by that date.
- An employee can be furloughed if their dismissal was “by reason of circumstances as a result of coronavirus or coronavirus disease” – this means it’s not limited to only those employees who were/would otherwise be made redundant.
- Furloughed directors can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company.
- Employees will only be deemed “furloughed” if there is a written agreement that the employee will cease all work. Where there is no written agreement, it’s possible that the CJRS will not apply and accordingly employers will not be eligible for reimbursement.
- Performance related bonuses, discretionary payments, commission and any non-financial benefits must be disregarded for the furlough claim. However, it may be possible to claim for some deferred payments.
Any furlough agreement which makes the payment conditional on the CJRS paying out may disqualify the employer from claiming those salary payments under the scheme.
9 April 2020 - CJRS online portal news
On 8 April 2020 HMRC gave a Parliamentary Select Committee an update on the online portal for employers to access under the CJRS. Key elements of the update included the following:
- The online portal is currently undergoing testing by a number of selected employers.
- Further guidance on the scheme and portal use is to be issued next week (week commencing 13 April 2020).
- The online portal, will be available to all employers on 20 April 2020.
- The online portal is a self-service system but there will be a helpline for employers to call for help with the portal.
- Payments will be made to those employers who have claimed using the portal by 30 April 2020.
The House of Commons Library has now issued helpful FAQs on the CJRS which can be accessed at FAQs on the Coronavirus Job Retention Scheme.
9 April 2020 - Can I place apprentices on Furlough Leave?
The short answer to this question is that apprentices can be placed on furlough leave and still continue their training provided that they do not carry out any services which generates revenue for their employer during this time. However, the government has recently published further guidance in respect of furloughed apprentices. There are some key points for employers to be aware of which include:
- Implementing arrangements for the necessary training and assessment to take place – the government’s guidance is that, ideally, this is done remotely
- Extending the assessments timetable where necessary
- Ensuring national minimum wage compliance
The updated guidance also clarifies that the apprenticeship levy payments for employers will not be suspended during furlough leave periods.
07 April 2020 - Construction Sites and Covid-19
The recent social distancing guidelines put in place by the Government have undoubtedly affected the way all industries are now working. One industry in particular has raised numerous questions and uncertainties about how future work and contracts will be affected.
As offices around the country close their doors and their employees move to remote working, many construction sites remain open for business as usual. This means that pressure is being placed on companies who find themselves torn between adhering to the government instructions and fulfilling their contracts with larger contractors.
The question that many UK businesses now face is ‘will I be subject to a claim for breach of contract and damages if we choose to stop work in light of the pandemic?’. Unfortunately the answer is not a straightforward one.
While many companies are taking a commercial view on contracts already entered in to in light of the climate we now find ourselves in, many businesses now face the threat of legal action, damages for breach of contract and the legal costs that are involved with it.
Every contract is different, the specific terms of the contract entered in to will be vital to ascertain your business’s position. It is therefore critical that you obtain the right commercially effective advice for your business, especially in the uncertain times we find ourselves in.
6 April 2020 - Update on Furlough Leave Guidance
HMRC has published an updated guidance on it’s CJRS. There are many unanswered questions, however the updated guidance does answer a few.
- An express allowance that employees can start a new job when on furlough leave – this means that they could, theoretically, receive a Furlough Leave payment for their old salary plus 100% salary for their new job.
- A clarification that employers can reclaim 80% of compulsory commission payments in relation to commission but cannot reclaim for non-monetary benefits (e.g. the value of health insurance or a car).
- Company directors can be furloughed provided they perform only their statutory duties – although the guidance fails to specify what “statutory duties” includes.
- Employees can be furloughed multiple times which allows for the rotation of furloughed employees.
27 March 2020 - Rules on Carrying over Annual Leave to be Relaxed
The right to carry-over untaken holiday leave has been extended in the event leave was not been taken because of the COVID-19 pandemic.
The extension allows untaken leave to be carried over into the next two leave years. Equally, the right to a payment in lieu of untaken holiday on termination of employment is extended. But the extended rights apply only to 4 weeks of statutory leave.
Conversely, the employers right to refuse leave has been restricted. This new restriction has given a good deal of uncertainty as to when leave can be refused.
26 March 2020 - Claim for Wage Costs through the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. We expect the scheme to be up and running by the end of April. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
The HMRC has just published guidance on the Coronavirus Job Retention Scheme, aka Furlough Leave. This guidance provides some detail on:
• which businesses and employees will be covered;
• what counts as ‘furloughing’; and
• how employees’ wages will be calculated.
The guidance has confirmed the scheme, which it expects to be up and running by the end of April, will be in place for at least three months from 1 March 2020. The scheme’s online portal will enable employers to reclaim:
• wage costs – which is actual salary before tax and does not include fees, commission and bonuses
• the employer’s NI contributions, and
• the minimum automatic enrolment employer pension contributions on that wage.
The guidance also covers how to calculate the wage for those whose pay varies and reiterates that the employee must undertake no work for the employer whilst “furloughed”. However, training which does not bring in any money for the employer can be undertaken by employees whilst on Furlough leave.
Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.
26 March 2020 - Emergency Measures in relation to SSP
The Coronavirus Act 2020, which received royal assent on 25 March 2020, introduces a number of emergency measures in response the coronavirus pandemic. A number of these are the following employment-related changes:
- SSP is payable from the first day of sickness or self-isolation and can be funded by HM Revenue and Customs;
- ‘emergency volunteering leave’ is a new form of leave to enable emergency volunteers in health or social care to take unpaid time off work and receive compensation for loss of earnings.
There is still some uncertainty about these changes as both require secondary legislation, and so will only take effect on a date still to be decided.
What do we know now?
- coronavirus-related SSP, which is paid by the employer, will be funded by the state. Although, again, the requisite regulations for this state funding are still to be drafted and there is uncertainty as to how this will apply. But it’s anticipated that the regulations will be along the lines of the Chancellor of the Exchequer’s 17 March 2020 announcement that funding would be available to employers with fewer than 250 employees and limited to two weeks’ SSP per eligible employee.
- Emergency volunteering leave is aimed at allowing workers to take unpaid leave from their employment and, instead, volunteer temporarily in the NHS or social care sector. Individuals seeking this leave must have received the necessary authorisation, given the applicable notice and certificate to their employer and take the leave in blocks of either two, three or four weeks in any 16 weeks’ voluntary period. Employees taking or proposing to take this leave will have additional and new employment law protections.
24 March 2020 - The Importance of the Termination Processes
Given the economic impact the Coronavirus has had on businesses up and down the country, accounts of job losses and redundancies are sadly already being reported. Regrettably there are likely to be more, despite the Government’s measures to support people and businesses without doubt, this is a worrying time for both employees and employers.
With the inevitable slowing of recruitment, an extended time on the hands of those without jobs, and the abolition of tribunal fees, this may result in a sharp increase to employment tribunal claims.
Employers must take stock and ensure appropriate processes are followed ahead of making any headcount changes.
The importance of this has been made all the greater following the government’s introduction of the Furlough scheme. Final details are yet to be provided by the Government for this scheme, which will pay salaries of those businesses who’s otherwise lay-off/make redundant their staff as a result of Covid 19. More details below.
During the current economic environment company processes can be adapted to meet business needs whilst, at the same time, ensuring they can defend any changes that are pushed through thus leaving the business to focus on surviving and evolving once this pandemic is but a memory.
The significance of fairness and following the correct procedures cannot be underestimated in these challenging times.
24 March 2020 - Financial Help for Freelancers and the Self-Employed
There has been much criticism that the government has put in place financial assistance for the employed but has “forgotten” about the self-employed and those in the gig economy. In response to this, the House of Commons Public Bill Committee has proposed the Statutory Self-Employment Pay amendment to the Coronavirus Bill.
This amendment, if passed in its current form, will mean the introduction of Regulations whereby “freelancers” and “self-employed people” will receive guaranteed earnings of:
(a) 80% of their monthly net earnings, averaged over the last three years; or,
(b) £2,917 per month
whichever is the lower.
Although the term “Freelancers” is yet to be defined, the proposed amendment offers some hope to many who had fallen between the gaps of the financial assistance schemes currently in place.
We will report more on this as and when the provisions become clearer.
What is Furlough Leave?
In short, this is a Covid-19 job retention scheme that was introduced by the government on Friday. Details are a little sketchy right now and this article will be updated as we get more information about it.
Who can access this scheme?
All employers can access it.
What is it’s function?
To pay the salaries of those who would otherwise lay-off/make redundant their staff as a result of Covid-19
What do I need to do as an employer to take advantage of this scheme?
There are a number of steps that you need to take. They are as follows:
1. Designate your “furloughed” worker(s).
This is not a currently recognised concept. It references anyone who the company is asking to stay at home due to Covid-19
2. Identify if your contract allows the right to lay-off or provide short-time working to your furloughed worker(s).
Very few contracts include these clauses. If it doesn’t, you’ll need to agree the change in status with the employee. This can be achieved through a very short consultation exercise. It’s anticipated that agreement will be readily given by most.
3. Once a worker is designated a furlough worker (and they must be notified of this), provide HMRC with the requisite information.
This is to be done through a new, online portal which is still to be set up.
How much will HMRC reimburse an employer?
HMRC will reimburse 80% of a furloughed worker’s salary up to a maximum of £2,500 per month. It’s not currently clear whether the £2,500 cap is in relation to the amount HMRC will pay or whether it is the cap to be applied to all salaries so the reimbursement for a furloughed worker will be 80% of £2,500. It’s expected this guidance will be given shortly.
Can an employee work whilst designated a “furloughed worker”?
To qualify for the scheme the individual cannot undertake work for the employer at this time otherwise the employer is not able to access the scheme.
What about the remaining 20%?
The employer can top up the missing 20% not reimbursed by the government. If the employer chooses not to do so, it will need an agreement from the employee in this regard otherwise the employer faces the risk of unlawful deduction/breach of contract claims. Again, this is something that is expected and can be readily achieved through the consultation exercise.
Working from Home
One of the biggest considerations right now is remote working / home working, regardless of whether it’s part of minimising potential exposure for your employees, or part of a wider policy of self-isolating.
The Government is asking that employees work from home whenever they can (and it’s important to note that this is where reasonable and practical as opposed to a directive).
What should employers be doing?
Some may elect to put in place a temporary working from home agreement which covers all the salient points. Where these agreements are not in place it is worth checking that the following is sufficiently robust:
Do place of work clauses include home addresses?
Are confidential information clauses sufficiently robust?
Are your home working policies and procedures GDPR compliant? (how is data secured, stored, encrypted etc whether online or offline, “hard copy” or “soft copy”)
Does your Electronic Communications Policy cover home working?
Do you have a “Use your own devices” policy?
Does your expenses policy need reviewing? (is it reasonable to offset additional lighting/heating costs for working from home, against a reduction in personal travel expenses?)
Health and Safety
Have the requisite audits been undertaken?
Review insurance cover for home working arrangements
Make sure Communication plans are up to date
Implement appropriate supervision arrangements
Consider how you will deal with those employees who cannot work from home
Helpful Guidance for Employers and Employees
• ACAS: Guidance for employers and employees from ACAS, the Advisory, Conciliation and Arbitration Service, an independent body funded by the Government, is available here
• NHS: Health-related guidance from the National Health Service is available here
Public Health Guidance:
Public Health England including, eg, specific guidance for employers, educational and health-related organisations, and an option to receive updates directly is available here
What are Working Parents Entitled to in Light of School Closures?
Statute allows time off for emergencies – this includes taking time to put in place longer-term arrangements.
Strictly speaking, this form of leave is designed to be short-term so typically 1 or 2 days at most. However, given the unprecedented position we all find ourselves in, employers are urged to be flexible in their approach in this regard and allow this form of time off to continue for longer than would ordinarily be the case.
This form of statutory leave is unpaid although some employers emergency time-off polices provide for this form of leave to be paid.
Alternatively, employees may be able to:
- Work from home where their job allows this. This may require some flexibility in terms of the hours they work to enable them to juggle both childcare and work. And employers are advised to have in place homeworking policies which cover the key aspects of homeworking – not least data protection compliances; or
- Utilise holiday entitlements – pay and procedures should apply as they would in ordinary circumstances.
Should school closures continue for an indefinite period of time employers will need to contingency plan for voluntary leave options (this may be either/a mixture of paid and unpaid leave), short time working and lay-offs.
In the absence of an employer having a contractual right to implement any of these options careful consideration must be given to the appropriate processes that the business should follow. Even where your terms and conditions of employment already allow for these options, their implementation will still need careful handling to avoid costly claims.