There has been a lot of discussion in recent months around the effect that coronavirus is having on employment and the UK’s workforce, and the guidance is being updated regularly. Our Employment solicitors have answered some frequently asked questions around employment law and the Coronavirus Job Retention Scheme.
Barcan+Kirby’s Employment Law team take a practical approach to employment issues. They can help you find cost-effective solutions to the difficulties you face during this time of uncertainty.
We will keep this page updated as and when anything changes (last updated 30th September 2021). However, it’s important that you stay up-to-date with daily government advice as this is ever changing.
What is the Coronavirus Job Retention Scheme (CJRS)?
The purpose of this employment retention scheme was to enable employers to ‘furlough’ employees, which means that they were granted a leave of absence. As companies and organisations struggle with business and income during this time, it was an alternative to laying employees off or making them redundant.
The government paid a percentage of wages to those employees placed on furlough. This percentage decreased from July 2021 with a contribution of 70% up to a maximum of £2,187.50, and then reduced again to 60% up to a maximum of £1,875 during August and September.
Employers continued to pay employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work.
Employers were expected to pay 10%, up to a total of £312.50, towards the hours employees did not work in July, increasing to 20% up to a total of £625 in August and September.
Employers were able to ‘top-up’ employee’s wages to 100% if they wished. In order to claim for furlough, the employee must have been entered onto the pay roll on or before 30th October 2020.
What does furlough mean?
The word ‘furlough’ generally means temporary leave of absence from work. It is an American term not previously used in UK employment law. Furlough leave has been temporarily introduced by the Government during the coronavirus pandemic to allow employers to keep employees on the payroll without them working.
This avoids staff being laid off without pay or being made redundant, and is designed to support employers who are affected by coronavirus. People who get furloughed must not work for the employer during the period of furlough, but usually return to their job afterwards unless redundancies follow.
One of the biggest changes, made on 1st July 2020, is that employers were given the flexibility to decide the hours and shift patterns of their employees. To assist the transition back to work, employees were able to return to work on a part-time basis.
Employers could only claim under the scheme for the employee’s wages for the period of time that the employee hasn’t worked. They were responsible for paying the employee’s wages for the time worked.
What happens if an employer made an employee redundant before the Coronavirus Job Retention Scheme was announced?
For claim periods starting on or after 1st December 2020, you cannot claim for any days on or after 1st December 2020 during which the furloughed employee was serving a contractual or statutory notice period (this includes people serving notice of retirement or resignation).
If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment.
Could you furlough someone who’s on maternity leave?
Employees must take at least two weeks’ maternity leave (four weeks if you work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their maternity leave before they give birth and you may want to do this.
If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you will be entitled to claim up to 39 weeks of statutory pay or allowance. If you qualify for SMP, you will still be eligible for 90% of your average weekly earnings in the first six weeks, followed by 33 weeks of pay paid at 90% of your average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.
Some employers ‘top up’ Statutory Maternity Pay and their employees are eligible for an enhanced, earnings related rate of pay. If you are eligible for enhanced (contractual) maternity pay from your employer, this is included within the wage costs that your employer could claim through the furlough scheme. The same principles apply if you qualify for contractual adoption pay, paternity pay or shared parental pay.
If the employee on maternity leave gives their eight weeks’ notice (as per the normal maternity leave rules), they could be furloughed on return if the scheme was still in place. Normal maternity rules will still apply.
Were employers able to furlough employees who were on sick leave?
Employers were able to furlough employees who were on sick leave during the period the furlough scheme was running. However, they could only claim back either furlough payment or statutory sick pay (SSP) at any one time for any employee. Employees did not qualify for SSP if they were on furlough. The solution to this was for employers to continue to make furlough payments.
If an employer told an employee to stop working and they were on SSP, or were entitled to it, the calculation of the minimum period of three weeks didn’t start until the period of SSP had ended.
If an employee became sick again, whether or not they received SSP, this was disregarded for the purposes of calculating the amount of time on furlough.
Did an employee have to take annual leave whilst on furlough?
Employees on furlough were able to take holiday without it disrupting their furlough. The normal notice requirements for an employee requesting leave and it being accepted or refused remained the same. For example, the general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take, e.g. 10 days’ notice for five days’ leave, unless the contract says something different.
An employer could have refused a leave request or cancelled leave but they should have given as much notice as the amount of leave requested (and this must have been before the first day of leave). For example, this could be one week and one day’s notice if the worker asked for one week of leave.
Employers did and still do have the right to tell employees and workers when to take their annual leave.
What statutory sick pay is available for those self-isolating and who is eligible?
You will be eligible to receive £94.25 per week Statutory Sick Pay (SSP) payable by your employer, unless your contract of employment states otherwise, if:
- you have coronavirus or you are displaying symptoms
- if you are in the same household as someone showing symptoms
- you have been advised by a doctors to self-isolate
Employees can self-certify for the first seven days and following this, a note should be sought from NHS 111 online, not from a doctor.
Do employees need a sick note to claim SSP?
No. For the first seven days that an employee is unwell they do not need to provide proof of sickness. After this, if you have coronavirus symptoms or have been advised to stay home, you can get an ‘isolation note’ by visiting NHS 111 online.
What support is available for the self-employed or those on zero-hour contracts who need to take time off?
If you are self-employed or earn below the Lower Earnings Limit (£118 per week), you will not be entitled to SSP. If you have symptoms or are unable to work, you will be able to make a claim for Universal Credit or Employment Support Allowance more easily as the minimum income restrictions will be temporarily relaxed.
Back in March, the House of Commons proposed Statutory Self-Employment Pay. If accepted, self-employed workers can receive 80% of their monthly net earnings, averaged over the last three years or £2,917 per month, whichever is the lower.
If an employee has returned to work from self-isolation and they are still coughing, should they be sent home?
No, if an employee has followed medical and government advice and self-isolated, they can return to work. A cough might seem unsettling for others, however, it may persist for a few weeks and they are not contagious.
Do employees have to work if they are self-isolating?
If they feel well enough to work and they can work from home, they should do so. They should be paid in full for the time they are working from home. If they do not feel well enough to work, they are ‘off sick’. Therefore, unless their employment contract states otherwise, they should be paid SSP.
What is the Job Support Scheme?
The Job Support Scheme was due to start on 1st November 2020. It is designed to support ‘viable jobs’ where employees can still go to work but may have had their hours reduced as a result of coronavirus measures.
It is to be claimed by employers, for employees who are in work for at least a third of their normal contractual hours. Employers will not be able to make employees redundant whilst they are on the Job Support Scheme.
When it does come into effect once the furlough scheme ends, the Job Support Scheme is available to businesses across the UK, even if they have not previously used the furlough scheme.
Who contributes towards the Job Support Scheme?
The employer must pay the employee for the work they have carried out. The employer and the government will top up the remaining wages by paying a third each. Government payments are capped at £697.92, but employees should still receive at least 77% of their normal pay.
For example, if an employee usually earns £1,200 a month for full-time work and is reduced to working half their usual hours, they will be paid £600 by their employer. They will then be paid £200 by their employer and £200 by the government.
When do Government loans need to be repaid?
Many small businesses were given government-backed loans to assist with cash flow and costs during lockdown. These were originally due to be repaid over six years, however, under the new plan this has been extended to 10 years to reduce monthly payments.
Hospitality sector: VAT reduction
The 5% reduced VAT rate for hospitality and tourism has been extended until 30th September 2021, followed by an interim rate of 12.5% lasting until April 2022.
Whether you’re an employer or an employee seeking further information on the Coronavirus Job Retention Scheme, or any other element of employment law, call our specialist employment solicitors on 0117 322 6606 or complete our online enquiry form.