The pandemic has seen the world of work change entirely from what was known at the beginning of this year.
Employing staff in a pandemic: What should we consider for August onwards?
The pandemic has seen the world of work change entirely from what was known at the beginning of this year. Many businesses have had to quickly adapt to staff working from home, the concept of “furlough” was introduced into UK Employment Law at great speed, and as businesses return to the workplace it is clear that redundancies are on the horizon for many. The speed at which these changes have come in have meant that many businesses have struggled to keep up – so where are we at the moment?
Flexible furlough scheme
Many businesses (and individuals) have greatly appreciated the support of the Coronavirus Job Retention Scheme (“CJRS”) or “furlough scheme” which has been in place since 20 March. Many will be aware that the initial scheme required individuals to be placed on furlough (i.e. without work) for a minimum period of 3 consecutive weeks to be eligible for the grant.
From 1 July 2020, businesses have been able to bring back people from furlough on a flexible basis if they wish. They are still able to furlough people in full if they want or need to, but this gives more freedom as businesses re-open. It may be that businesses are not operating at capacity due to the pandemic, or simply that they cannot have all their workforce back in due to social distancing rules. Whatever the reason, the flexible furlough scheme means that individuals can be asked to return on certain days or hours, and be paid as per their contract rate for those hours by the business, but remain on furlough leave for the balance of their normal hours. For the furloughed time, the business will still be able to claim the grant under the CJRS.
For furloughed time, individuals must still not provide any work for the company, although they can complete training. Only individuals who had been furloughed for at least one consecutive 3 week period by the end of June can enjoy the benefits of the flexible furlough scheme.
CJRS grant and winding down of the scheme
The flexible furlough element is the beginning of the end for the CJRS scheme more generally. Over the coming months, businesses are going to be asked to contribute more as the scheme is wound down, and, ultimately, the scheme is currently due to come to an end on 31 October 2020.
The scheme contributions are being amended as follows:
- for all claims relevant to furloughed time until 31 July 2020, the business can reclaim 80% of furloughed wages, up to a cap of £2,500 per individual per month, plus employer’s National Insurance contributions and employer’s pension contributions to the auto-enrolment level;
- for claims relevant to furloughed time in August 2020, the business can reclaim 80% of furloughed wages, up to a cap of £2,500 per individual per month, but they will become responsible for employer’s National Insurance contributions and employer’s pension contributions;
- for claims relevant to furloughed time in September 2020, the business can reclaim 70% of furloughed wages up to a cap of £2,187.50 per individual per month;
- for claims relevant to furloughed time in October 2020, the business can reclaim 60% of furloughed wages up to a cap of £1,875 per individual per month.
In September and October, the business must still ensure that all furloughed time is still paid at 80% up to a maximum of £2,500, despite the possible recovery being less. The business must pay for all time actually worked.
Retention and redundancy
Many will have seen the news that the Chancellor’s “Plan For Jobs” involves a retention bonus of £1,000 for every furloughed individual who remains continuously employed until the end of January 2021 (as long as the earn at least £520 per month on average between 1 November 2020 and 31 January 2021). These payments will be made from February 2021.
However, unfortunately the reality is that many businesses will not be able to retain their staff beyond the end of the furlough scheme, and many are already having to make difficult decisions as the employer’s contributions increase. If an individual is a genuine casual worker (often called “zero hours workers”) then they should be able to be let go relatively easily, which may help with staffing decisions. For employed staff, a careful redundancy process should be followed, ensuring that decisions are made objectively and not on the basis of any discriminatory reason. Businesses would be wise to take specialist advice in terms of running a process, particularly if 20 or more staff are affected by the proposals, as collective consultation is likely to then be required. Businesses also need to consider their liabilities carefully – all employees with over 2 years’ service will be entitled to a statutory redundancy payment, and all employees are entitled to notice and holiday pay. Businesses may want to consider starting the process while the furlough scheme is still in existence to help with notice pay costs.
Working from home
Many staff continue to work from home and many do so very effectively. This may be a different way of working to pre-pandemic and it is important that businesses continue to consider the best ways to support their working from home staff. For example, businesses need to consider how to keep in contact with people and about health, safety and wellbeing. For example, should equipment be provided for physical health and how is mental health being supported?
If staff are returning to the workplace, there is guidance in place around making your workplace “COVID-Secure” and it is essential that care is taken to ensure a safe place of work for staff, in order to avoid any issues around health and safety.
As people return to the “normal” working world, it is anticipated that flexible working requests may be more likely. Many individuals have found that they can work effectively from home and there can be many benefits to both individuals and businesses of them continuing to do so on a full or part time basis. There is a statutory process to follow if an employee with over 26 weeks’ service makes a flexible working request and for all staff any such request must be considered carefully to avoid any risk of discriminatory treatment. It may be that if it has been possible to work from home effectively during the pandemic it will be more difficult for employers to refuse such a request going forwards.
It is therefore clear that the way in which we all work remains very different to the way we worked back in January. This is likely to remain for some time and businesses face difficult decisions in terms of how best to adapt, which staff they can have back in, whether to continue using the furlough scheme, and ultimately, unfortunately, whether job losses are necessary. These are challenging times but with them come opportunities to adapt, modernise and innovate, all of which can be provide very positive outcomes for businesses.