Coronavirus update: business transformation


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These are unprecedented and volatile times.  The new strategy of social distancing, as well as the Foreign and Commonwealth Office's advice against any non-essential travel over the next 30 days has created an atmosphere of extreme uncertainty.

Difficult times lie ahead for everyone, but in particular for businesses, many of which will now struggle to survive.  So what are the options for employers?

Can you ask people to take leave?

Any temporary closure of a business will be treated as the employer's decision and, unless the contract says otherwise, employees will be entitled to full pay.  However, if a business is forced to close yet has to continue paying employees this could quickly lead to permanent closure and redundancies, or it could push the business over the brink and lead to it going bust.

Employees could be asked to take paid holiday - employers have the right to tell employees and workers when to take holiday if they need to.  However, the drawback to this is that strictly the employer should be giving at least twice as many days notice as the amount of days that they want people to take.  In these extremely fast moving times this doesn't give employers much flexibility if they need to shut down over the next couple of days.  It also doesn't help when it comes to saving money to ensure that the business remains viable.

Employers could ask people to take unpaid leave; if it is explained that the alternative is potential redundancy then staff may be willing to do it.  It may also be worth considering lay-off and short-time working. This isn't legal and could give rise to claims, but might be a practical solution for some businesses.  

Are lay-off and short-time working possible options?

This will depend on what the employees' contracts of employment say.  Laying off employees means that the employer provides employees with no work, and very limited pay, for a period but they remain employees.  For short-time working arrangements employees are provided with less work and less pay, for a period of time but are also retained as employees.  There are currently rumours that employers will be allowed to lay off staff even if there is no contractual right to do so, but it remains to be seen if this will be the case.

These are, however, only temporary solutions where you have no or reduced work. Ultimately redundancies may be the only solution.  They are also only options if they are included in the employees' contracts of employment. If there is no contractual right and employees are laid-off or put on short-time working then the employer will be in fundamental breach of contract entitling the employee to resign and claim constructive dismissal.

Another thing potentially on the cards is a shortening of the consultation period for collective redundancies (currently a minimum of 30 days where between 20 and 99 employees are being made redundant, and 45 days where there are 100 redundancies or more).  Again, we will have to watch this space.

Varying hours and redeployment

Something else to think about is varying the hours of work in order to reduce payroll on a temporary basis.  The employer will have to consult with employees and trade unions or other representative bodies.  While employees may normally be reluctant to agree to changes that are not in their favour, they may be more willing to do so if it means they have a job.

What about redeployment?

Employers may find themselves in a position where certain employees have been diagnosed with coronavirus or are self-isolating and other employees are needed to take on their duties.  The first step is to see whether there is a redeployment clause in the employee's contract of employment.

If there is no contractual provision, then the employer will need the employee's consent.  Consent may be easier to obtain if it is made clear that this is only temporary.  Training should still be put in place (though admittedly this might not be entirely straightforward these days) to ensure that the employee is able to carry out the redeployed role confidently.

Self-isolating staff and statutory sick pay

In the meantime, what about your self-isolating staff?  The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 (SSP coronavirus regulations) came into force last Friday.  They provide that a person is deemed incapable of work, and thus entitled to Statutory Sick Pay (SSP) if they are "isolating [themselves] from other people in such a manner as to prevent infection or contamination with coronavirus disease" in accordance with guidance published by Public Health England, NHS National Services Scotland or Public Health Wales, and "by reason of that isolation [are] unable to work".  This entitlement begins from day one of the self-isolation.

The government guidance provides that anyone falling within the self-isolation categories below will be entitled to SSP under the SSP coronavirus regulations:

  • If a person lives alone and has symptoms of coronavirus, however mild, they should stay at home for 7 days from when their symptoms started. 
  • If a person lives with others and either that person, or one of the others, has symptoms then all the household members must stay at home and not leave the house for 14 days.  The 14 day period starts from the day when the first person in the house became ill. 
  • If anyone in the household starts displaying symptoms, they need to stay at home for 7 days from when the symptoms appeared, regardless of what day they are on the in the original 14 day isolation period.

The regulations are in force for eight months, but will be kept under review by the Secretary of State for Work and Pensions.

It's worth noting that the government has published some self-distancing guidelines for everyone including older people and vulnerable adults (advising the latter two categories to be particularly stringent in their self-distancing measures).  Older people are those who are 70 or over, and vulnerable people are those under 70 who suffer from an underlying health condition such as chronic respiratory diseases, chronic heart disease or a weakened immune system due to chemotherapy or AIDs.  Pregnant women also fall within the vulnerable category.

It is thought that older people and vulnerable people will be expected to self-isolate for a period of 12 weeks in the near future, and, when this happens they will fall within the definition in the SSP coronavirus regulations of those isolating themselves and unable to work.  This means that they will be entitled to payment of SSP for this period of isolation.

Recovering SSP under the SSP coronavirus regulations

The SSP coronavirus regulations do not provide for any recovery of SSP by employers.  However, in his Budget speech last week the Chancellor stated that the government will meet the costs of those off work "due to coronavirus" for businesses with fewer than 250 employees for the first 14 days of sickness.  These costs will be met in the form of a refund and the Treasury has said that it is "working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay".

Consider changing your absence management policy

Employers should think about amending their absence management policy. Employers may want to disregard a period of absence caused by infection or self-isolation from coronavirus for the purposes of any absence threshold at which formal action is taken.  Alternatively, if not for all employees, it may be worth putting these measures in place in relation to employees who suffer from certain disabilities, and who are more likely to suffer more severe symptoms, and take more time off work, if they catch the virus.  This will avoid any potential disability discrimination claims arising.

What about school closures?

The government announced yesterday that all schools, nurseries and sixth-form colleges in England will close as of the end of tomorrow (Friday).  Those who work in the NHS and key workers (we do not yet have a precise definition of who this encompasses, but it may be that it will extend to those working in the social care sector) will be able to continue sending their children to school, and schools will also be open to vulnerable children (again there is no precise definition available as yet), those who have a social worker, and pupils entitled to special needs support.

At this stage no-one is sure how long schools will remain closed, but there is a suggestion that they will not reopen until September.  Currently employees are entitled to a "reasonable amount of time off" to look after dependents, but this does not have to be paid (unless the employer's policy says otherwise), and generally the time off will be limited to a few days.

Possible options could include employees taking holiday (though this would not cover a period extending to months) or unpaid leave. Flexible working arrangements will clearly be needed, and employees may well want their hours or days temporarily varied to deal with their increased childcare commitments.

Keep Communicating

In these challenging times it's essential to keep on top of government guidance; keep talking to your staff and be flexible. Businesses that are more nimble are more likely to survive.

 

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We tweet regular updates on @TrowersFuture, #FutureOfWork.

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