HPC Law Update – August 2020
Now that businesses have largely re-opened they should have shared their COVID risk assessments with staff before they re-opened.
Despite Government financial aid, businesses have had a difficult time. With trying to come to grips with furlough, risk assessments, reduction in businesses, supply chains closing or reducing it has been a real struggle. Not only that some businesses have reported difficulties actually getting staff back to work. It is important to remember that the return to work needs to be managed safely and taking account of staff members’ individual circumstances. However, we are not quite out of the woods yet.
Employment Tribunal Claims
We have seen an increase in claims being lodged with the employment tribunal. This highlights the importance of making sure that if you are dismissing staff, discipline staff or just asking them to return to work that you make sure you do it correctly.
We thought it would be helpful to put together a summary of some useful pointers.
Furlough changes reminder
From 1st July you wee able to ‘flexibly furlough’ staff. So, what does this mean? The Government guidance says the following:-
“From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.”
As businesses start to re-open, they will be considering whether they need staff to return and for how long. It is likely that businesses may not fully re-open and so the Flexible Furlough Scheme allows businesses to bring staff back part time and furlough them part time. So for example, you could ask staff to come back two days a week and then furlough them for the other three days.
The difficulty arises where a business may not know whether they will need staff for two days a week, three days a week etc., so it may be difficult for businesses to plan this.
Rishi Sunak, the Chancellor of the Exchequer recently announced a new ‘kick start’ scheme with a range of financial incentives for businesses which are designed to help businesses re-build and grow now that restrictions have been lifted.
The incentives are as follows:-
If we take number 1 above, businesses will have to consider whether it is financially viable to continue to employ staff until the end of January to receive the £1,000 bonus. Therefore, businesses will have to evaluate the cost of keeping staff for that period and whether it would be worthwhile continuing to employ the member of staff.
At the start of the furlough scheme, you will have confirmed to your staff in writing that they were placed on furlough leave and if their pay was reduced to 80%, they will have had to agree to this reduction in writing.
In order to ‘flexibly furlough’ your staff members, you will need a new agreement to ‘part furlough’ your staff and that member of staff must have been furloughed previously to allow them to be ‘flexibly furloughed’ as this is a change to their contractual terms. For example, you may be asking them to now work 2 days a week where they would normally work 5 days a week and take a pay reduction for the remaining 3 days. You will need to give them notice that they will be placed on the new hours and we recommend at least 48 hours’ notice is given and they must agree to these changes.
In terms of the pay aspect, staff members will be paid their full rate for the days they work and their furloughed rate for the days they are furloughed which is usually 80% (although some businesses have been topping up salaries) up to the maximum of £2,500 per month.
Changes to the CJRS
Just a reminder that from 1st August, the CJRS will change as follows:-
For 1st August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
For 1st September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
From 1st October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
Businesses will no doubt be considering their future and whether they need the headcount which they currently have. As such, businesses may be considering the following:-
Businesses must follow a fair process when considering their restructure. In particular for redundancies, businesses can no longer adopt the ‘last in first out’ rule.
Businesses must take account of protected characteristics when deciding on any of the above and and must ensure that they are not discriminating against anyone who has a protected characteristic. As a reminder, the 9 protected characteristics are:-
If you have any questions regarding the topics covered in this article, please contact us using our socials below.
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