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 10th March 2021). However, it’s important that you stay up-to-date with daily government advice as this is ever changing.
What is the Winter Economy Plan?
The Winter Economy Plan is the Government’s collection of schemes and tax deferrals announced on 24th September 2020. These are the latest plans to safeguard as many jobs as possible over the coming months.
What is the Coronavirus Job Retention Scheme (CJRS)?
The purpose of this employment retention scheme is to enable employers to ‘furlough’ employees, which means that they will be granted a leave of absence. As companies and organisations struggle with business and income during this time, it’s an alternative to laying employees off or making them redundant.
The government will pay 80% of wages up to £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work. Employers will now be expected to pay 10% towards the hours employees do not work in July, increasing to 20% in August and September.
Employers are able to ‘top-up’ employee’s wages to 100% if they wish. In order to claim for furlough, the employee must have been entered onto the pay roll on or before the 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.
Can new applicants be added to the Coronavirus Job Retention Scheme?
Government guidance says that, in order to claim for the CJRS, you must have created and started a PAYE payroll scheme on or before 30th October 2020.
You can only claim for furloughed employees who were employed and on payroll before this date.
For periods from 1st November 2020 onwards, you can claim for employees who were employed on 30th October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
How can I claim through the CJRS?
You first need the Government Gateway user ID and password (which you will receive when you register for PAYE). You cannot submit for a claim more than 14 days before your claim period end date. You can view the claim submission deadlines here.
Claims must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend or a bank holiday, claims should be submitted on the next working day.
One of the biggest changes, made on 1st July 2020, is that employers have been given the flexibility to decide the hours and shift patterns of their employees. To assist the transition back to work, employees will now be able to return to work on a part-time basis.
Employers will only be able to claim under the scheme for the employee’s wages for the period of time that the employee hasn’t worked. They will be responsible for paying the employee’s wages for the time worked.
How can employers claim under the new flexible furlough rules?
Employers will be able to make a claim under the new rules from 1st July 2020.
For claims for periods after 1st July 2020, employers will be required to submit the following information to HMRC:
- The usual contracted hours an employee would be expected to work based on contracted hours for the last pay period ending on or before 19th March 2020
- The actual hours worked or expected to work
Unless the claim is being made for the first or last few days in the month, the employer will need to report a claim for the minimum period of seven calendar days. The number of employees claimed for must not exceed the number claimed for previously through the scheme.
How long will flexible furlough last?
If you are bringing an employee back to work on a flexible basis, new working patterns must be agreed as a temporary variation of the contract if the existing contract does not allow you to do so. Under the terms of the CJRS, agreements regarding work must be confirmed in writing.
From 1st July 2020, flexible agreements can last any amount of time. However, the employer must claim for a minimum period of seven days.
Do employees have to agree to be furloughed?
Yes. Employees must be consulted and agree to being furloughed. The requirements will depend on the employee’s contract of employment, i.e. if there’s a lay-off provision, but the majority require the employer to agree with the employee that they’re being furloughed.
Most will agree without issue, bearing in mind the main alternative would be dismissal by reason of redundancy with the possibility of a delayed redundancy payment or no redundancy payment (for employees who have worked for less than two years).
As normal employment laws apply when furloughing employees, it is important to be mindful of the equality and discrimination laws so, for instance, choosing a disproportionate amount of men or women could lead to discrimination claims later on.
Are individuals still employed during the leave of absence?
Yes, individuals are still employed by the company and the company reserves the right to recall individuals from their period of leave.
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.
Can an employer furlough workers but ask them to work occasionally when there is the need?
This is now possible with flexible furlough. Employers are able to decide the hours and shift patterns worked in accordance with business needs. The new guidance states that a new written agreement is needed to reflect the change in employees’ hours whilst taking advantage of the flexible furlough scheme.
It is not yet clear from the guidance if a new agreement is needed each time the hours change. Claims under the scheme must be brought for a period of seven days at a time, and it appears each seven day period can be different as long it is agreed in advance between the employee and employer.
If I’ve been furloughed, can I still undertake voluntary (i.e. non-paid) work during this time?
Yes. Once you are on furlough, you will not be able to work for your employer, but you can undertake training or volunteer subject to public health guidance, as long as you’re not:
- Making money for your employer
- Providing services to your employer
If workers are required to, for example, complete training courses whilst they are furloughed, then they must be paid at least the National Living Wage/National Minimum Wage for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
Are causal and/or zero-hour contract workers covered under the Coronavirus Job Retention Scheme?
No, unless they work on the PAYE system. For casual and zero-hours contract workers who are on the PAYE system with variable hours, their previous pay can be used as a benchmark for furlough pay.
Am I able to apply for an interview for other jobs whilst on furlough?
Can 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 can 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 this situation is ongoing. Normal maternity rules will still apply.
Can you furlough someone who’s in their probation period?
Yes (although see above about new employees and payroll dates).
Can an employee who is on their notice period be furloughed for the remainder?
Yes, an employer can furlough an employee until their leave date.
Can employers furlough employees who are currently on sick leave?
Employers can furlough employees currently on sick leave. However, they can only claim back either furlough payment or statutory sick pay (SSP) at any one time for any employee. Employees do not qualify for SSP if they are on furlough. The solution to this is for employers to continue to make furlough payments.
If an employer tells an employee to stop working and they are on SSP, or are entitled to it, the calculation of the minimum period of three weeks doesn’t start until this period of SSP has ended.
If an employee becomes sick again, whether or not they receive SSP, this is disregarded for the purposes of calculating the amount of time on furlough.
Can an employee who’s on sabbatical be furloughed?
Employees on sabbatical leave (or those due to go on it) can’t be furloughed until this period of unpaid leave is over.
Can an employee withdraw their resignation and be furloughed?
There is no obligation for employers to accept a resignation retraction. However, there can be an agreement between the parties if appropriate.
Does an employee have to take annual leave whilst on furlough?
Employees on furlough can take holiday without it disrupting their furlough. The normal notice requirements for an employee requesting leave and it being accepted or refused remains 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 can refuse a leave request or cancel leave but they must give as much notice as the amount of leave requested (and this must be 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 do have the right to tell employees and workers when to take their annual leave. If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, i.e. self-isolation, would prevent the worker from relaxing, which is fundamentally the purpose of holiday.
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.
Can you claim SSP retrospectively?
The Government’s Coronavirus Bill states that SSP will be paid from the first day you became unwell. This will apply retrospectively to 13th March 2020.
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 all employees need to work from home?
The current guidance in England is that you may only leave your home for work if you cannot reasonably work from home. Where people cannot do so, i.e. healthcare workers, those in the construction industry, they should continue to travel to work/attend their workplace.
It is very important that if you are attending your place of work, it is ‘Covid-secure’. Employers must follow a strict code of measures, which include but are not limited to:
- Observing social distancing rules
- Wearing a face covering in areas where social distancing may be difficult
- Frequent cleaning of objects and communal areas
Can my employer force me to return to work?
Before coronavirus, it would likely be a breach of an employment contract to refuse to come into the office. Most employment contracts require a person to be available for work at a specific location.
Employees do not have the right to refuse the right to return to their place of work, however, work spaces carry risk, and the right safeguards and policies need to be in place before re-opening. Employees are entitled to ask questions about these safeguards and policies. If an employee is not happy about returning to the office, they should voice their concerns to their employer and/or manager.
Employers have a duty of care towards those they employ to look after both employees’ physical and mental health.
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.
How do you treat an employee in a ‘high risk group’?
If they want to work and can work from home, this is the ideal solution. You do not have to allow working from home if this is not possible. Employers are advised to familiarise themselves with the government’s guidance on who is considered high risk. High risk groups are urged to be particularly stringent when following social distancing.
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.
What help is available for self-employed workers?
The Self Employment Income Support Scheme (SEISS) is in place to support self-employed workers. The fourth grant under SEISS will cover lost earnings for self-employed workers from February 2021 to the end of April 2021.
Eligible self-employed people who have lost income due to coronavirus will be able to claim 80% of their earnings each month up to £2,500.
There will be a fifth and final grant available, covering lost income for June, July and August 2021.
These self-employment grants will be available for 600,000 newly self-employed workers as long as they submitted a tax return by midnight on 2nd March 2021.
For those whose turnover has fallen by 30% or more will continue to receive the full 80% grant. Workers whose turnover has fallen by less than 30% will receive a 30% grant.
Self-assessment tax deferral
Those who pay tax by payment on account were able to defer their July 2020 payment to 31st January 2021. Under the new Winter Economy Plan, those who pay tax by self-assessment can defer the payment due on their 2019-20 tax return for 12 months from January 2021. Under normal circumstances, tax would have to be paid by midnight on 31st January 2021.
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.