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Keeping staff away from the workplace

REQUIRING STAFF TO WORK FROM HOME

Given the third national lockdown and the ongoing government guidance that employees must work from home where possible, it will be reasonable to require employees to do so, and it would likely be unreasonable for an employee to refuse.

However, if an employee resists or avoids working from home, you should try to establish the reason why, as there may be safeguarding issues to consider (e.g. for employees dealing with domestic abuse).

If employees are working from home as normal, they should receive their normal pay.


FURLOUGH LEAVE

Please refer to our Furlough Leave FAQs document for detailed guidance regarding the Coronavirus Job Retention Scheme (CJRS).

While the CJRS remains available, it is likely that employers will continue making use of this, rather than considering other more draconian options such as lay off, enforced annual leave, changing terms and conditions regarding working hours etc.

However, as the CJRS will not last for ever, we set out below some other ways you could keep staff away from the workplace.

 

LAY OFF AND SHORT-TIME WORKING

What does this involve?

Lay off is essentially temporary redundancy and involves giving employees no work and sending them home without pay.

Short-time working involves giving employees less than 50% of their usual work and only paying them for work done.

Employers can only lay off employees or place them on short-time working if the employment contract contains a lay off or short-time working clause. Check any contractual clause carefully to ensure that it covers the current scenario.

Although you could try to argue that you have an implied right to lay off employees, e.g. if there is custom and practice to lay off in your industry, it would be risky to rely on this, especially given the exceptional circumstances.

If you do lay off an employee without having a contractual right, this would likely be a fundamental breach of contract which could result in the employee resigning and claiming constructive dismissal (unless the employee agreed to a period of lay off). It could also lead to an unlawful deduction from wages claim.

There is no prescribed process to follow to lay off employees. You simply need to inform them that you are invoking your contractual right to do so (referring to the relevant clause).

If employees are laid off or on short-time working for 4 consecutive weeks or for 6 weeks over a rolling 13-week period, they can resign, treat themselves as redundant and a statutory redundancy payment will be payable unless the employer issues a counter notice (which essentially indicates that you believe normal work will resume within 4 weeks). The mechanism for this is complex, so please seek advice if you are considering lay off.

While furlough leave is available, it is very unlikely that employers would choose to lay off an employee. The introduction of flexible furlough has also reduced the need for employers to rely on short time working. However, lay off and short time working may become more popular when the furlough scheme ends.

What must I pay?

Employees who are laid off or put on short-time working are not entitled to normal pay. However, holiday will accrue as normal (and could be requested, taken and paid during that period) and employees are also entitled to statutory guarantee payments of £30 per day (or the employee’s daily pay, if lower) for a maximum of 5 days in any 3-month period.

Those on short-time working will be entitled to pay for hours worked but cannot receive a guarantee payment for a day they work.

It is unclear whether, if an employee falls ill during a period of lay off, they should go on to sick pay or whether the lay off will “trump” this and nothing (save for guarantee payments) will be payable.

If an employee is on maternity, paternity or adoption leave, they should remain on their current rates of pay during a lay off. While an employer is entitled to lay off a pregnant employee, they should exercise caution to avoid claims of discrimination and should note that the employee is entitled to go on maternity leave and claim maternity pay during this time.

 

ENFORCED/VOLUNTARY ANNUAL LEAVE

What does this involve?

Employers can require employees and workers to take holiday on specified dates, e.g. during a business shut down, by providing notice at least twice the length of the period that the worker is being ordered to take. For example, if a business decides to shut down for 5 days, they must provide staff with at least 10 days’ notice of such. This is clearly only a short-term fix and may also be very unpopular as it will likely interfere with and possibly prejudice pre-existing holiday plans.

You can, of course, also ask people to agree to take holiday voluntarily or people may want to do so as they will receive their full pay for such period.

Workers are now able to carry forward up to 4 weeks’ unused holiday (which they have been unable to take due to COVID-19) for two holiday years. Although the right to carry forward applies to all employees, it was primarily introduced to ensure that key workers and others who cannot take holiday during the pandemic can still take that holiday in due course. Therefore, businesses might want to ensure that workers who are not in that situation still take the holiday they are accruing, rather than carrying everything forward.

What must I pay?

Employees should receive normal pay if they take holiday during a period of absence. This will, of course, reduce accrued holiday pay costs if redundancies later become necessary.

 

CHANGING TERMS AND CONDITIONS REGARDING WORKING HOURS

What does this involve?

Employers cannot force employees to take unpaid leave or accept reduced hours or pay. However, you can request employees’ agreement, by consulting with them and then asking them to sign to confirm their agreement to the amended terms. In the current circumstances, employers may present this as an alternative to other more draconian options such as lay offs and redundancies.

If employees refuse, you could consider terminating and re-engaging on new terms. However, this could give rise to an unfair dismissal claim and collective consultation may also be required if you might end up terminating and re-engaging 20 or more employees, so tread carefully and seek advice.

What must I pay?

If employees agree to reduce their hours, you should pay them the reduced pay with effect from the agreed date.

 

REDUNDANCY

What does this involve?

If you need to close a place of business or there is a reduction in your requirements for employees to perform work of a particular kind, a redundancy scenario will arise.

Onerous collective consultation obligations will kick in if you propose to make 20+ employees redundant in a 90-day period, so please seek advice in that instance.

As with lay offs, it seems unlikely that many employers will seek to make redundancies given the availability of furlough leave at no cost to employers.

What must I pay?

An employee with two years’ (or more) service is entitled to a tax-free statutory redundancy payment.

All employees (regardless of length of service) will be entitled to notice pay and pay in respect of any accrued but untaken holiday.

In November 2020, the government announced that, as of 1 December 2020, employers would no longer be entitled to claim under the CJRS for any employees serving their contractual or statutory notice period. This includes those serving notice of resignation or retirement.

As such, statutory redundancy payments and notice pay must be paid in full by the employer at the employee’s pre-furlough rate. Payments in lieu of a statutory notice period must also be based on the employee’s full rate of pay. However, where an employee’s contractual notice period exceeds the statutory minimum notice by more than a week, employers may be entitled to pay furloughed employees at a reduced, furlough rate. However, such an approach is risky and could give rise to Tribunal claims. Therefore, the safest option is to pay employees at their full rate during their contractual notice period.

 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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