Coronavirus: the business impact
For employers, the outbreak of the Covid-19 coronavirus raises points relating to employment law, health and safety and data protection. Below, we address some common questions that employers are likely to have.
The Coronavirus Job Retention Scheme
The government announced on 20 March 2020 that under its Coronavirus Job Retention Scheme, it will meet 80% of the “salary” of furloughed (i.e. laid-off) employees, back dated to 1 March. The scheme has been extended to 31 October, but is to be subject to changes from the end of July. Click here for more details.
The government has published further guidance for apprentices, as well as for employers, training providers, end-point assessment organisations and external quality assurance providers in the context of the virus outbreak. The full guidance is here.
Some of the main points are as follows:-
When can an employer expect an employee to self-isolate?
The current advice of the government is that people should self-isolate for 7 days if they have either:
Further, anybody who lives with somebody who is displaying the above symptoms should stay at home for 14 days from when that person first became symptomatic. After 14 days, anyone in the home who does not have symptoms can return to their normal routine. But, if anyone else in the home gets symptoms, they should stay at home for 7 days from the day their symptoms start.
Any person who suffers symptoms can return to their normal routine after 7 days if they feel better and no longer have a high temperature. If they still have a cough or anosmia after 7 days, but their temperature is normal, they do not need to continue staying at home, as these symptoms can last for several weeks after the infection has gone.
Should any other member of a household develop coronavirus symptoms within the 14 day household-isolation period, the isolation period for the household does not need to be extended, but the person with the new symptoms has to stay at home for 7 days (as per the above). At the end of the 14 day period, any family member who has not become unwell can leave household isolation.
Further still, under the Test and Trace system that launched on 28 May, a person who has been notified that they have had contact with a person with coronavirus is to self-isolate for 14 days. If such a person develops symptoms of coronavirus, they are to apply for a test, and if that is positive they must self-isolate for 7 days from when they developed symptoms.
Individuals who are defined in public health guidance as clinically extremely vulnerable and at very high risk of severe illness from coronavirus because of an underlying health condition are being notified in writing that, in accordance with that guidance, they need to follow rigorously shielding measures for the period specified in the notification. The public health guidance that applies in England is here and the similar guidance that applies in Wales is here.
There is additional guidance from Public Health England that those who are clinically vulnerable, meaning that they are at higher risk of severe illness from coronavirus, should stay at home as much as possible and, if they do go out, to take particular care to minimise contact with others. For further details in this regard, click here.
Can an employer take steps to prevent an employee who has refused to self-isolate from attending work?
It is an employer's duty to protect the health, safety and welfare of their employees and other people who might be affected by their business. Employers must do whatever is reasonably practicable to achieve this. If an employer knowingly allows any individual to attend work during a period when they should be self-isolating for 7 or 14 days as outlined above, it may be in breach of that duty.
Suspension may be an option, but employers should consider whether they have a right to suspend in these circumstances. In the absence of an express contractual right to suspend, legal advice should be sought.
Must employees who self-isolate or who are shielding be paid?
Obviously, employees who are actually unfit to work will be entitled to sick pay in accordance with the terms of their contract or otherwise, if they qualify, to statutory sick pay (“SSP”); and those who are self-isolating but are working from home are entitled to be paid as normal.
Whether employees who self-isolate or are shielding and cannot work from home but who are not actually unfit to work are entitled to contractual sick pay will depend on the wording of their contracts. For example, if a contract stipulates that sick pay (over and above SSP) will be paid if an employee is “incapacitated due to sickness”, the employee will not be entitled to payment; whereas if a contract states that sick pay will be paid if the employee is absent “for health reasons”, it would be arguable that the employee will be so entitled.
Please click here for the position regarding SSP.
Where an employee who is fit to work takes it upon themselves to self-isolate and not work other than in accordance with the government guidance, certainly if there are no considerations regarding unlawful discrimination (see below), they may be subject to a disciplinary action for misconduct in terms of their refusal to follow a reasonable management instruction and their unauthorised absence; and if the absence is unauthorised they will not be entitled to any pay – whether in the form of SSP or otherwise.
Since measures were first introduced to combat the spread of the virus, the public health guidance in England and Wales has always been employees should work from home unless they are unable to do so and their work place is open.
Where home working is being newly introduced, or expanded, the employer should ensure that the health and safety implications have been considered and that the necessary infrastructure is in place.
Employers are responsible for an employee's welfare, health and safety, "so far as is reasonably practicable". They must conduct a suitable and sufficient risk assessment of all the work activities carried out by their employees, including homeworkers, to identify hazards and assess the degree of risk. Employers will need to consider these obligations in the context of any employees who work from home to decide what measures they need to put in place. For HSE guidance in this regard click here. If you would like a referral to a health and safety adviser, please contact us.
What if an employee cannot perform some or all of their work from home, but refuses to attend work because they are in a higher risk group, but not shielding because they are in a highly vulnerable group?
As stated above, Public Health England is advising those who are clinically vulnerable to stay at home as much as possible and, if they do go out, to take particular care to minimise contact with others: click here for further details.
Whether to insist that such an employee attends work, and to subject them to disciplinary action if they do not, is a matter for advice in individual circumstances – but in basic terms, this is more likely to be an option if social distancing measures can be maintained in the work place than if they cannot.
One possible alternative solution is to agree with such employees that they will be furloughed in accordance with the government’s scheme. Alternatively, a contract of employment might be temporarily suspended for the duration of the period of isolation – in which event the employee will not receive any remuneration during the period of suspension and, unlike in respect of a period of furlough or simple unpaid leave, they will not continue to accrue annual leave entitlement (which should be attractive to employers) – but as and when they return to work, their continuity of employment will not have been broken (albeit that the period away from work would not count towards length of service). Legal advice should be sought in respect of individual cases.
What if an employee is otherwise afraid to attend work?
An employee with severe anxiety may find their condition is exacerbated by travelling or being in public places due to the increased risk of contracting Covid-19. If their anxiety prevents them from attending work in these circumstances, it is possible that they may be regarded as on sick leave and therefore entitled to SSP or contractual sick pay.
Where an employee suffers from severe anxiety, this could amount to a disability under the Equality Act, so it would be prudent to obtain legal advice in respect of individual cases, particularly if there are reasonable adjustments that could be made but the employer is considering not making them.
In other cases, employers might prefer not to make special arrangements for fear of generally encouraging others to seek the same concessions, or otherwise causing employees who are attending work when required to become disgruntled. However, if the employee is to be accommodated, they might be permitted to take holiday or unpaid leave – or, alternatively the employee might be furloughed in accordance with the government’s scheme or their employment contract might be suspended for a period (see above).
Can employees be required to use their holiday entitlement?
Employees who are unfit to work can elect to exercise holiday entitlement if they wish, but they cannot be lawfully required to take holiday – at least to the extent this forms part of their statutory minimum holiday entitlement.
Otherwise, employers can require employees – including those who are self-isolating but not unfit to work – to take holiday if their contracts of employment include an express power in this regard. However, whilst we retain this power for employers in contracts that we prepare as a matter of course, we rarely see it in other contracts.
If there is no such contractual power, the Working Time Regulations 1998 allow employers to direct employees who are not unfit to work to take holiday that is part of their statutory 5.6 week entitlement – but subject to a requirement that notice is given of at least twice the duration of the holiday to be taken.
What if a worker does not take annual leave in the relevant leave year because of the impact of the virus outbreak?
The government has passed emergency legislation relaxing the restriction on carrying over the 4 weeks' leave derived from the Working Time Directive to permit it to be carried over for up to 2 years where it was not reasonably practicable to take it in the leave year "as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)".
Whilst only the 4 weeks’ leave under the directive can be carried forward under the new regulations, the 1.6 weeks' additional leave provided under the Working Time Regulations may already be carried forward into the next leave year in accordance with a relevant agreement (usually the contract of employment).
The government has published guidance on workers' entitlement to holiday and holiday pay during the Covid-19 pandemic. This includes guidance on the new regulations. It gives examples of when it might be considered not reasonably practicable to take holiday during the leave year. It suggests that for furloughed workers, carry-over would rarely be justified if they were able to take holiday during the furlough period (although it might be justified if the employer could not afford to top up their pay).
What if a workplace temporarily shuts down or there is otherwise a need to lay-off, or reduce the working hours, of at least some staff?
Of course, population distancing strategies have extended to the closure of schools and premises in the leisure, entertainment and retail sectors; and an increasing number of other businesses have closed their doors due to the impact of staff absences, supply-chain issues and/or fall in customer demand.
In many circumstances, where there is work to be done that can practicably be done from home, home-working will present at least a partial solution in the event of work place closure.
Employers might require employees to take holiday to mitigate the impact of suspended or reduced operations (see above re requiring employees to use holiday entitlement) – but this can only go so far, including due to such considerations as the extent of already exhausted or otherwise pre-booked holiday.
The government announced on 20 March 2020 that under its Coronavirus Job Retention Scheme, it will meet 80% of the salary and auto-enrolment pension contributions of furloughed (i.e. laid-off) employees back dated to 1 March – click here for more details.
However, an employer can only lawfully insist on an employee working no, or reduced, hours and reduce their remuneration accordingly if the contract of employment provides for this. Further, the Coronavirus Job Retention Scheme will provide no support for businesses or employees to whom short-time working arrangements are applied.
Lay-off and short-time working provisions are more common for blue collar workers than white collar. However, we recommend that employers include such provisions in contracts for all employees in order to help protect their business in the event of any material disruption, whether of the type described above or, say, fire, flood, IT failure (consequent upon a viral attack or otherwise), fuel shortage (such as affected many businesses during blockades of refineries some years ago) or, for rural businesses or their customers or supply chains, diseases affecting livestock or crops.
For employers who don’t currently have lay-off or short-time working provisions, it is usually possible to impose them on employees where there is an economic imperative, but advice should be sought before doing so with a view to avoiding liability for breach of contract, unfair dismissal or, where 20 or more employees are affected at one establishment, breaches of collective consultation rules. It should be noted, however, that where the obligation to consult collectively applies, notice of implementation of lay-off or short-time working usually cannot lawfully be imposed within 45 days of the commencement of consultation if 100 or more employees are to be affected at one establishment, or 30 days if fewer are to be affected, and the State must be notified of the proposal on form HR1. Of course, due to the level of pay funded by the Job Retention Scheme, many employees who are not subject to contractual lay-off provisions will consent to being laid off – but any such arrangements should still be implemented with care, and consideration should be given to the approach to be taken in respect of such employees who are asked to agree to being furloughed but refuse.
Employers who withdraw work from an employee for any day are obliged to pay a limited amount of statutory guarantee pay (“SGP”) to employees with more than one month’s service. Although the payments afforded by the Coronavirus Job Retention Scheme will usually very much exceed SGP, bear in mind that it appears that employees who are on short-time working will not be subject that scheme, and so rules relating to SGP will remain relevant.
SGP is £30 per day (having increased from £29 from 6 April 2020) for up to 5 days in any 3 month period. The period of entitlement reduces pro-rata for employees who normally work fewer than 5 days a week. It should further be noted that qualifying employees can issue a notice to take statutory redundancy pay if they are paid less than half pay for 4 consecutive weeks, or for 6 weeks out of any 13 – subject to the employer’s ability to issue a counter-notice in certain circumstances.
What if redundancies need to be made?
Hopefully, the Coronavirus Job Retention Scheme will have its intended impact in minimising job losses. This includes that as the Scheme will be back dated to 1 March 2020, it presents an opportunity for employers who have already issued notices of dismissal, but which have not yet expired, to offer to withdraw them; or perhaps for employers to offer to re-engage employees whose contracts have already been terminated. In that event, we would encourage that advice be sought, including regarding the terms that are to apply to the employment going forward, not least in relation to lay-off and short-time working, the effect of any termination on continuity of service, and the potential for those not to be offered continuing employment to argue unfairness.
To the extent that redundancies are to be made, where it is proposed that 20 or more employees are to be dismissed, or have their contract changed fundamentally, at one establishment within a 90 day period, other than in exceptional circumstances, there will be an obligation to consult collectively on numerous specific issues. Further, the issuing of notices of dismissal will be precluded within 45 days of the commencement of consultation if 100 or more employees are to be affected at the establishment, or 30 days if fewer are to be affected; and the State must be notified of the proposals on form HR1.
In any event, a fair procedure must be followed in respect of employees with ordinary unfair dismissal protection. This includes not only employees with 2 years+ service, but also those who are within a week of reaching 2 years’ service at the point notice of dismissal is given. This includes, where applicable, fair selection and, in any event, the reasonable opportunity to consult, consideration in respect of alternative positions, and the opportunity to appeal once the decision has been confirmed.
Employees with 2 years+ service will be entitled to statutory redundancy pay. Contracts of employment might provide for enhanced redundancy pay.
What if an employee needs to stay at home to care for a dependent – whether because they are sick or because educational establishments are closed?
In normal circumstances, it would not be appropriate for an employee to do work otherwise capable of being performed from home while also providing childcare. However, employers may now need to take a pragmatic, more flexible approach to homeworking.
Employees with younger children who require constant attention may not be able to work at all while responsible for looking after them. However, to the extent that childcare cannot be provided by others within an employee’s support network, they may be able to split it with a co-parent so that both parents are able to continue working – at least part-time. With co-operation between employers and employees, it might be possible for affected employees to fulfil some or all of their normal duties by working different patterns of hours to accommodate childcare commitments. Care should be taken to ensure that any changes to normal arrangements are properly thought out, including any impact on pay and benefits, and recorded in writing (which can include exchanges of emails) in order to minimise the possibility of disputes. This should include clarity regarding each party’s ability to revert to previous arrangements.
Employees who cannot practicably work from home may assert their statutory right to time off to care for a dependant. Time off in these circumstances is unpaid, unless there is a contractual right to pay. Such employees can be furloughed under the Coronavirus Job Retention Scheme, but it might cause employment relations issues to prioritise them over others for such leave.
What can an employer communicate about an employee with coronavirus?
Under data protection law, personal data concerning health is 'special category data', and employers need to ensure that any communication does not include any data about the individual who is absent. For example, while it would be ok to announce that there has been a confirmed coronavirus case at a particular work place, it would not be appropriate to provide any details from which the individual might be identified.
What contingency measures and planning might employers undertake?
The action an employer might take will depend, to some extent, upon the nature of the workplace, the roles carried out and the demographic of the workforce, but some of the issues that employers should consider from an employment law perspective include:
Whilst we hope that the above is of assistance, please note that it does not constitute our formal legal advice. For formal advice on any of the issues referred to above, please contact us on 0800 294 5927 or click here to place an on-line enquiry.