20 Oct 2020

Employment

Advice for employers as furlough scheme is replaced by JSS

With news of a local lockdown in Wales from the 23rd October to 9th November and various local regions in England being placed in Tier 3, it is a challenging time for many employers with significant uncertainty around meeting the costs of employing staff. Our head of employment law, Daniel Wilde, discusses the impact of these lockdowns, as well as the imminent conclusion of the furlough scheme below.

“The furlough scheme obviously provided some very welcome support for both employers and employees during the Covid-19 pandemic. This unprecedented level of Government support enabled many businesses to survive the crisis over the spring and summer and, importantly, significant numbers of employees to keep their heads above water despite suddenly finding themselves with no work.

“It was clear to all that the furlough scheme couldn’t go on indefinitely but the Government has put in place plans to replace it with a new Job Support Scheme (JSS) from 1 November. The new scheme will continue until the end of April 2021 but is, understandably, not as generous as its predecessor, leaving many employers with some tough decisions to make.

“The new JSS will provide ongoing salary support for people in work, provided that the employer meets certain access conditions, the employees is working at least 33% of their usual hours and the employer also provides additional wage support.

“Essentially, the employer will pay the employee when they are in work and the Government and employer will jointly subsidise the time when the employee is not working. The Government‘s contribution will be capped at £697.92.

The Government has also announced an extension to the scheme, to support businesses across the UK that are told to close their premises due to coronavirus restrictions. In these instances, the Government will pay two thirds of employee salaries to protect jobs over the coming months. Potentially this could support the wages of staff in businesses such as pubs, restaurants, non-essential retail and hairdressers that are forced to close, albeit it would not support businesses that are legally allowed to remain open but whose trade may dwindle in consequence of the rules. Nor will the scheme assist for staff employed after the introduction of the original furlough rules during the period between 23rd October and the start of the new scheme on 1st November 2020.  This may mean some businesses falling through the net of support.

For any employers who are considering participating in the JSS, they need to remember that they have no automatic right to reduce pay and any reduction in pay will constitute a variation in an employee’s terms and conditions and so will have to be agreed in writing. Employers will have to be able to produce written agreements confirming an employee’s agreement to these changes, if requested by HMRC.

“Although we think the new scheme will help some employers who are able to continue in business over the winter to retain jobs, we anticipate that many will be reluctant to support 55% of employees’ wages when an employee is only working 33% of their normal hours so significant redundancies are, unfortunately, probably still inevitable.”

“The latest extension to the scheme to help businesses that are forced to close applies in most part to the hospitality industry. While it will help to ease the blow of having to close their doors to customers, the future still looks very uncertain for many of these establishments. Further for staff who are entitled to be paid and where there is no lay off clause in the contract of employment, businesses may have to pay staff without any support from the Government.

“If you are an employer facing these tough decisions, you will undoubtedly have a lot of questions. I’ve tried to cover the most common ones here but as ever, please get in touch for more detailed advice.

Q: If I sign up to the new JSS, will it prevent me from making any redundancies if I need to?

A: It does not appear that there will be any ban on making redundancies for the whole six months of the JSS. If you need to make anyone redundant before the scheme closes, it seems that you would be able to move that employee out of the scheme and stop claiming the grant for them. However, you cannot claim the grant during an employee’s period of notice.

Q: Some of my employees are unable to work from home but, for various reasons, are not willing to return to the workplace. What should I do?

A: If you have taken all reasonably practicable steps to ensure the workplace is Covid-secure and reduce the risk to workers, and the employee is still unwilling to return, you could consider a period of unpaid leave as an alternative to some form of disciplinary action.

Remember that you owe a duty of care towards any vulnerable employees and Government guidance states that this may involve taking ‘extra’ care. Failure to enforce additional precautions could result in a claim for negligence.

If you have employees who are not ill, vulnerable or in any special category, but are still unwilling to come back to work even though they cannot work from home, you could potentially take disciplinary action but we would caution against doing this in most cases as any dismissal could be regarded by an employment tribunal as unfair and disproportionate in the current situation, and so could result in unfair dismissal claims.

Q: What about employees who are parents and are struggling with childcare with ongoing nursery and school closures?

A: With many schools having to ask specific classes and year groups to self-isolate as new cases of Covid are reported, childcare is likely to remain an issue for many working parents for some time.

Those employees who have no childcare available may apply for a period of unpaid parental leave if they are caring for a child under 18 to a maximum of four weeks per child. Employees also have a right to a reasonable amount of unpaid time off where it is necessary to deal with unexpected events involving their dependants, such as schools closing or not having access to grandparent care.

In the current circumstances, we expect Employment Tribunals to be sympathetic to employees who are genuinely struggling to find suitable childcare in the short term as this has been described by the prime minister as “an obvious barrier to their ability to go back to work”.

Q: With some employees, I just cannot see how I can continue their employment. What should I do?

A: For employees who cannot work from home and are not eligible for the new JSS, remaining on unpaid leave may become unsustainable. In these circumstances, it may be appropriate to consider redundancies.

If you require more detailed advice on any area of employment law, please contact Daniel Wilde on 01633 244233 or email wilded@hevans.com.

 

 

 

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