On 23 March 2020, in response to the global Coronavirus pandemic, the UK Government issued rules requiring the public to stay at home subject to limited exceptions, in order to slow the transmission of the virus. The Government has ordered the closure of all non-essential businesses including:
- All non-essential retail stores – this includes clothing and electronics stores; hair, beauty and nail salons; and outdoor and indoor markets, excluding food markets
- Libraries, community centres and youth centres;
- Indoor and outdoor leisure facilities, for example bowling alleys, arcades and soft play facilities;
- Communal places within parks, for example playgrounds, sports courts and outdoor gyms;
- Places of worship, except for funerals attended by immediate families;
- Hotels, hostels, bed and breakfasts, campsites, caravan parks, and boarding houses for commercial/leisure use (excluding permanent residents and key workers).
Do I still have to pay my employees?
We have already had several enquires about what the lockdown and the enforced closure of these businesses will mean for our clients who are employers. The first question is usually, if our business has been closed by the Government’s announcement do we still have to keep paying our employees and if so how do we do this?
Some employers will be able to continue to run their business with employees working remotely from home, just as we at Progression are doing. However, many employers will not be able to support home working, for example those of you who are in the hospitality and service industries.
How are the Government helping?
The Government has announced measures designed to support employers and employees where an employer is not able to continue its business or where it is not practical or possible for employees to work remotely. Intended to avoid the mass redundancy of many thousands of workers, it is understood that the Coronavirus Job Retention Scheme will:-
- pay 80% of an employee’s usual monthly salary up to a cap of £2,500, where the employee is furloughed.
- But what does ‘Furlough’ mean? – Furlough is like lay off in that workers are sent home because they have no work to do but their employment is not ended and the intention is that the employee will come back to work as soon as there is work to do.
HMRC will deal with the payments and have been asked to have arrangements in place by the end of April. This means that most employers will still have to run their March payroll and possibly the April payroll too and be reimbursed later by the Government. What happens where the employer has already run out of money is not clear.
How do I choose between employees?
Not all employers have provisions in their contracts of employment enabling them to lay off employees. However, in the circumstances, it is unlikely that employees will object to being furloughed if the alternative is the loss of their employment altogether.
Employers should identify all of the employees who cannot work from home or for whom there is no work for them to do. They should then write to all of those employees telling them that they are being furloughed, from when, and the reasons why. The employees should be asked to confirm in writing that they understand and accept the decision.
Can my employees work even if they are furloughed?
No; the employer must be clear that a furloughed employee does no work at all.
It seems that the Government scheme will only apply where employees are fully laid off. This could be problematic where an employer still needs some employees but perhaps does not have full time to work for all of them. In that situation, the employer must decide if it is better to keep some employees working full time, perhaps with a change of duties and furlough others, rather than reduce every employee’s hours. In the latter situation it would seem that no one would be eligible for the Government scheme. It is also possible that some employees will be furloughed now, and then others at a later stage.
Can the employee work elsewhere while they are furloughed?
If a furloughed employee undertakes other paid work during a period of furlough, that is likely to be a breach of the employment contract and the terms of the Government compensation scheme.
What support is available for home-workers?
Acas have issued Working from home guidance which includes specific advice on how employers can best support their employees as they adjust to homeworking, any new health and safety responsibilities which now need to be considered and also how best to set clear expectations of the employees working from home. For more detail please follow this link:- www.acas.org.uk/working-from-home
Whoever runs your payroll for you should be able to advise you on the Government Compensation scheme and how you can register for the Government scheme on the HMRC Portal.
The situation is constantly changing and the Government may bring in further protection in due course. However, this post represents our best interpretation of HM Government’s guidance, where applicable, at the time of our writing. Both the content of the post and any guidance it is based upon will be subject to change.