Shared & Halved – IHL series: Employment consequences

As part of our series of webinars to support in-house lawyers during the current pandemic, on 22 April we hosted a webinar looking at employment consequences, specifically the latest guidance on The Coronavirus Job Retention Scheme, amendments to statutory sick pay and right to work checks.

Introduction

The IHL series of our COVID-19 webinar programme covers bite-size topics designed for a half hour coffee break and focuses on practical tips for in-house lawyers.

This was our second session and focused on employment issues. The key takeaway points are set out below:

Overview of Coronavirus Job Retention Scheme (JRS)

• Announced by the Government on 20 March 2020
• HMRC have prepared and updated guidance on the JRS and a Treasury Direction to HMRC about how to apply the JRS was also issued on 15 April 2020
• The JRS is a temporary measure to safeguard jobs across the UK – it applies to workers who have been asked to stop working but kept on the payroll, known as “furloughed workers”
• It is designed to support employers whose operations have been severely affected by COVID-19
• All UK employers are eligible to claim under the JRS provided they had a PAYE scheme on/before 19 March 2020 (previously 28 February but changed under pressure)
• Employers will be able to make a claim via the online portal opened on 20 April 2020 – 1.3m people furloughed and claiming £1.5bn on the first day of the portal being open
• There is no cap on the number of employees who can be claimed for under the JRS
• Under the JRS, HMRC will reimburse employers for 80% of furloughed workers’ wages up to a maximum of £2,500 per month (backdated to 1 March 2020), plus National Insurance Contributions and minimum auto-enrolment pension contributions
• The scheme was initially open for 3 months from 1 March 2020 but has been extended for a further month to the end of June 2020

Eligibility - which employees can be furloughed?

• CJRS applies to any employees or workers provided they were on the employer’s payroll on or before 19 March 2020
• Employees must be furloughed for at least three weeks at a time (21 consecutive days)
• Employees who are on furlough must not “undertake work for, or on behalf, of the organisation or any linked or associated organisation”. This includes “providing services to or generating revenue for” the employer but training and voluntary work is allowed
• Employers can furlough all or part of their workforce - the employer can choose so long as the choice is not discriminatory
• Employers need employees’ agreement to be furloughed – there is discrepancy between the guidance and the Treasury Direction in this regard - certainly there needs to be a written record confirming furlough which is retained for 5 years

Sickness

• An employee who is on sick leave, self-isolating (because of contact with a person/place which may have passed on COVID-19) or shielding (those who received NHS letters saying they’re very high risk) can either receive SSP or be placed on furlough – it is the employer’s decision
• If the employee receives SSP, once they have recovered or passed the period of self-isolation and are able to return to work, they can be furloughed

Holiday

• An employee continues to accrue holiday during a period of furlough leave
• An employee can take holiday while on furlough but the employer must “top-up” pay to 100% of normal pay – presumably this is pre furlough normal pay

Amendments to Statutory Sick Pay (SSP)

• Small and medium sized businesses (those with less than 250 employees as at 28 February 2020) can apply to reclaim up to 2 weeks SSP per eligible employee paid for sickness absence due to COVID-19 from 13 March 2020
• This includes those who are self-isolating or shielding who can claim SSP
• It is not yet known when the payment mechanism will be in place
• SSP is payable from Day 1 where employees are absent due to COVID-19
• Employees do not need to provide a GP fit note but can obtain an isolation note from NHS 111 Online

Right to work

• Temporary changes have been made to make the process for carrying out right to work checks easier during the current pandemic
• Employers should:-

• Ask individuals to submit a scanned copy or photo of original documents by email / mobile app;
• Arrange a video call to check originals against copies received;

• Record the date they conduct the check and note this on the copy documents.Once the measures end, employers will have 8 weeks to carry out retrospective right to work checks in the usual way.