24 March 2020
As the COVID-19 pandemic develops, so too does the advice for employers, taking into account government health advice and support which changes and is updated day to day. Matters have now taken a dramatic turn with the Government support measures announced on Friday 20 March and the “lockdown” initiated by the Prime Minister and First Minister last night, Monday 23 March.
The key issues for employers to be aware of as at today are:
Pay during self-isolation
Employers should now all be aware that anyone with symptoms of coronavirus including a high temperature or a new continuous cough must self-isolate for 7 days (and any other members of the household must self-isolate for 14 days). Where employees can work from home they can receive their full pay.
If they cannot work from home, they will be entitled to SSP from day 1 of isolation (no waiting days) as there is new legislation deeming them to be sick and entitled to SSP.
What about company sick pay in this situation? While no employer is required to pay more than SSP, many do offer company/contractual sick pay i.e. full pay for X months and/or half pay for Y months. The terms of the contract of employment will be relevant – how is “sickness” defined – but there must be an argument that it is at least implied that where an employee is self-isolating in the interests of not spreading the virus, and deemed to be sick for SSP purposes, that this should also trigger company sick pay. Our advice currently is that in such cases employees should be paid whatever they are due under their contract in case of sickness absence.
What if the employee wants to attend work? If you (as employer) know they should be self-isolating you should send them home. There must be a good argument that in such a case the employee is not presenting as ready willing and able to work, so would not be due full pay – sick pay provisions would apply, as above.
Vulnerable categories practising social distancing
Employees in the vulnerable category (including individuals over 70, women who are pregnant and individuals under 70 with an underlying health condition) should also be practising social distancing.
The government position is notably “softer” than for those showing symptoms (or a family member of someone with symptoms) who are self-isolating. While the latter group is instructed to stay at home, for vulnerable groups the government refers to their “advice” and “guidance” for everyone, stating that they advise vulnerable groups to be “particularly stringent in following social distancing measures”.
Social distancing measures include “working from home where possible” – there is no blanket ban on such individuals attending work.
These employees should be permitted to work from home where possible and the employer should take all reasonable steps to facilitate that, which could include incurring cost (for example for remote working equipment or licences). Where they are working from home, pay will continue as normal. If the employer fails to take reasonable steps to allow home working, arguably normal pay should be paid until such steps are taken.
Where an employee could work from home but refuses to do so without good reason that may justify withholding pay entirely.
Of course there are some jobs that simply cannot be done remotely, and the question arises as to whether vulnerable staff staying at home per government advice to practice social distancing should receive full pay, sick pay, or no pay.
There is a legal answer and a “moral” answer – that vulnerable staff should not, due to the inability to work from home, be encouraged to come to work and jeopardise their health, suggesting that at least some pay should be due.
Legally, the answer is not clear, and the government has not been clear on what pay, if any, is due for this situation. The amended SSP Regulations state that an individual is deemed to be entitled to SSP if they are “isolating[…] from other people in such a manner as to prevent infection or contamination with coronavirus [...], in accordance with guidance published by Public Health England, NHS National Services Scotland or Public Health Wales” That is open to interpretation. ACAS’s guidance is clear that SSP is due for those self-isolating but does not address the issue of sick pay for those who are in a vulnerable group and social distancing.
Until such time as advice and clarity is provided by the government, the safer approach would probably be to deem such persons to be entitled to SSP and, if applicable, company sick pay (as if they were self-isolating) and to advise such staff that the situation (about pay) will be reviewed when government advice is issued. We will provide more clarity when the government provide answers to these questions. .There is of course nothing to stop an employer paying such staff SSP topped up to full pay and deeming such staff to be sick and reclaiming the SSP element later.
Pay if the business is closed – new Coronavirus Job Retention Scheme introduced on 20 March 2020
If your business is forced to close (see information on the “lockdown” below) then you should consider whether there is any work that some or all of your employees could carry out from home, at least for an initial period. This could mean asking employees to carry out tasks that do not fall within their ordinary job description by agreement.
Where that is not possible and staff would need to be laid off (per the contract) or made redundant, the employer may instead place the employee on “furlough leave” (an entirely new concept) and apply to the new Coronavirus Job Retention Scheme introduced on 20 March 2020.
This scheme allows employers to claim a grant from HMRC to be reimbursed to cover 80% of the wages of employees who are not working but kept on the payroll, up to a cap of £2,500 per month for each employee, in circumstances where the alternative was to lay off the staff (or make them redundant). The government will reimburse the employer for wages paid, not pay the employee direct. Where an employer is facing short term cashflow problems there is state assistance available for that.
We do not yet know how the cap of £2,500 will be calculated / applied – details are awaited from the government and we will update this note when the details are available on the government website: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses Will it be gross or net? Does “wages” include pension contributions and other benefits? How will tax and NIC be dealt with? The government guidance is wholly vague on how the scheme will actually work. The scheme will be backdated to 1 March 2020 and will be open for at least 3 months. It may be permissible to re-hire staff who have already been made redundant, and place them on furlough.
Employers would need to designate the affected employees as “furloughed” and notify them of that change. The guidance states that normal employment law principles still apply, so staff should be asked to agree to the furlough arrangements. They are likely to do so if the alternative is redundancy or lay off without pay. Employees who are “furloughed” would not be able to carry out any work. HMRC has to be notified of employees placed on furlough but there is currently no portal for doing so. The agreement with the employees should ideally set out precisely what the employee will be paid, but given the lack of clarity in the guidance, it may be necessary to obtain employee consent to furlough in principle and follow up with more detail when it is available
As of today, HMRC are still in the process of setting up payments system and we expect that the Government will set out more details about the scheme shortly. It is hoped that the refund system will be operational by the end of April.
“Lockdown” announced on 23 March 2020
On the evening of Monday 23 March, the Prime Minister and First Minister announced a “lockdown” to help reduce the spread of the virus. The three measures introduced are:
1. Requiring people to stay at home, except for the following very limited purposes:
- Shopping for necessities, for example food and medicine, as infrequently as possible
- One form of exercise a day
- Any medical need
- Travelling to and from work but only where this absolutely cannot be done from home
The initial messaging was confusing. Some Government advice on social media suggested that only “key workers” should go to work i.e. it must be an essential role and therefore essential for the employee to work. However, the official guidance suggests that anyone can still go to work (however important or otherwise the job is) but only where it is not at all possible for the work to be done at home. We expect regulations to be laid before Parliament shortly to implement last night’s announcement and hope that these will provide some clarity.
2. Closing non-essential shops and community spaces
A full list of the premises which should now be closed is available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874732/230320_-_Revised_guidance_note_-_finalVF.pdf
3. Stopping all gatherings of more than 2 people in public spaces
Employers can view the Government’s full guidance here: https://www.gov.uk/government/publications/full-guidance-on-staying-at-home-and-away-from-others
Where an employer closes its business in response to the government’s instructions, the question arises as to what payments an employee will be due if they are unable to work from home. They are not unwell, and do not necessarily meet the “deemed sickness” provisions of the SSP Regulations
A useful option in such cases will be the option of “furlough” – the business is not operating, the staff might otherwise be at risk of redundancy or unpaid lay off, and as an alternative they are placed on furlough (with their agreement) and the employer can claim 80% of wage costs (up to the cap) from the government.
This is a daunting time for many employers and our Specialist Employment Team are on hand to deal with any queries and to give tailored advice to your organisation. We will continue to keep you updated as Government guidance is issued and our advice in light of Government guidance develops.
Please note that during the ongoing COVID-19, we will be working remotely and the preferred method of communication is via email (see below). In the event that you are unable to contact us by this method, please call the numbers below.
Caroline Carr, Partner: E: firstname.lastname@example.org / T: 0141 225 5263
Laura Salmond, Partner: E: email@example.com / T: 0141 225 5313
Douglas Strang, Senior Associate: E: firstname.lastname@example.org / T: 0141 225 5271