Coronavirus Job Retention Scheme update – Looking towards OctoberJuly 30, 2020
This month has seen the first flexibility being introduced to the Coronavirus Job Retention Scheme. It means that employees can now do a combination of furloughed time and working time, the idea being that this will help businesses resource their recovery plan as lockdown is relaxed, whilst still benefiting from the Scheme.
How does the new furlough flexibility work?
Employers can agree with their employees any combination of working time/furlough time to suit the needs of the business. The Government will continue to fund 80% of the furlough time, subject to the £2,500 monthly cap. The monthly cap will be proportionate to the proportion of time on furlough. For example, if an employee is going to be furloughed for 3 out of their 5 working days (60%), their monthly cap will be 60% of £2,500. The Scheme will also continue to cover employer pension contributions and National Insurance contributions (NICs) for the time that they are furloughed, but only until the end of this month.
The employer will need to fund the time that the employee is working, as well as pension contributions and NICs.
How will the Scheme look from August to October?
The Scheme will end on 31 October and from August, employers will start to resume responsibility for their employees’ pay during furlough time. This will happen gradually, so from 1 August, employers will pay employer pension contributions and NICs for hours on furlough as well as working hours; from 1 September, the Government’s contribution to pay under the furlough scheme will reduce to 70% (subject to £2,187.50 monthly cap) and the employer will have to pay the additional 10% as well as pension contributions and NICs; from 1 October, the Government will pay 60% (subject to a monthly cap of £1,875) and the employer will have to pay the additional 40% as well as pension contributions and NICs.
During all of this time, employers will be focused on decisions regarding the business needs, financial viability and arrangements to bring returning employees back into work.
Practical tips for the next 3 months:
Obtain employee’s agreement
Remember that the new flexibility within the furlough Scheme continues to exist within the context of employment law, so any change to working arrangements must be done with the employee’s agreement. Even if the furlough agreement was expressly subject to being called back to work at any time, you will want to consult with the relevant employees to enable them to make any necessary arrangements to start working from home, or, if you are intending for them to return to the workplace itself, to explain the measures in place to provide a safe working environment and give consideration to any particular risks, practical difficulties or concerns.
Consult the relevant employees
It is more important than ever that employers know their employees as individuals. As a minimum, this is needed to manage the risk of potential Tribunal claims based on a ‘one size fits all’ approach (for example indirect age discrimination, race discrimination or a failure to make reasonable adjustments when dealing with an employee with a disability). More generally, it’s needed to get the best out of your workforce and create the best chance of success for the business moving forward. For example, a female employee with no childcare possible for the summer months may well find it more difficult to return to effective working (particularly to the workplace) than some others. If that’s the case, you may decide to ask a different employee to return before September instead, not only to avoid the risk of indirect sex discrimination but to achieve the best practical solution for the business.
Be aware of protected characteristics
Covid-19 has created numerous new scenarios in which an employer could fall foul of discrimination legislation. You will need to be careful not to make assumptions based on age, race, sex etc. For example, by assuming that someone over 70 would not want to get back to work under the flexible scheme, or making the same assumption of a BAME employee or an employee on the grounds of sex. By talking to the relevant employees about their circumstances, risks and concerns, you are less likely to make those assumptions.
At the same time, you need to avoid indirectly discriminating against employees with protected characteristics. This could occur, for example, if you required an older or BAME employee to return to the workplace without having adequate safeguards and arrangements in place, potentially exposing those categories of employees to a higher risk of serious illness than others. Similarly, the duty to make reasonable adjustments will apply for any employee who qualifies as having a disability under the Equality Act.
Any prospect of justifying indirect discrimination is likely to depend on your ability to demonstrate the requirement for that particular employee to return to the workplace and the arrangements put in place to minimise the additional risk. This could mean ensuring that employee is given the most isolated working area and that their hours of work allow them to travel to and from the workplace at the quietest times. If the employee can work effectively from home, any refusal to allow that in the circumstances is likely to substantially lessen your prospect of defending a claim.
Avoid making easy mistakes in a redundancy process
If you are needing to make redundancies, be aware of your legal obligation to use a fair and objective procedure, and to avoid unlawful discrimination.
Selecting furloughed employees for redundancy in preference to non-furloughed employees, purely on the basis that they have been furloughed, is likely to expose you to unfair dismissal claims and potential discrimination claims. A fair redundancy procedure still requires you to consider and identify reasonable pools for selection, to apply objective selection criteria to those pools, to consult and to consider the ‘at risk’ employees for suitable alternative employment.
Selecting employees for redundancy based on assumptions that they wouldn’t be able to return to work, wouldn’t want to return or wouldn’t be able to work effectively on the grounds of a protected characteristic, is likely to be direct discrimination. Similarly, selecting employees on the basis of criteria which disadvantages certain employees with protected characteristics, such as an ability to start work at 9am, which may expose older employees, BAME employees or employees with a disability to greater risk if they are required to travel on public transport during rush hour, would need to be justified to avoid a successful indirect discrimination claim.
Be alert to issues around health and safety
Our previous article (still available in News) set out the steps employers are expected to take to create a safe place of work, in accordance with Government guidance.
In addition to this, be aware that vulnerable employees or employees who are anxious about the safety of returning to work may, in some circumstances, obtain statutory protection from detriment or dismissal, giving rise to automatic unfair dismissal or detriment claims. This would be the case if they had a reasonable belief in a serious and imminent danger to health, or if they have effectively made a protected disclosure about the safety of the workplace. If employees are resisting a return to the workplace on those grounds, you need to avoid imposing disciplinary sanctions or dismissal, without first assessing those risks.
Ask for help if needed
At the forefront of most employer’s minds will be the need to try and recover from the effects of the lockdown and weather the storm to come. Balancing the practicalities of that with Government guidance and all the usual employment law risks is a huge challenge, and the ability to manage risk is going to be paramount.
If you need more information on the level of employment law risks in your particular workplace or in particular situations, so you can make informed commercial decisions, please get in touch.
This article must not be construed as legal advice. All cases are different on their facts and you should consult with us directly on your case.