News - UK

UK - April 2020

Coronavirus FAQs

Last updated: 9th April 2020 10:15

Here to help

Effective, regular communication is key to the successful management of your workforce in this crisis.  This is particularly so where your workforce is mainly working remotely and where you are looking to obtain their agreement to measures which will help ensure the continued operation of the business- both short and long term – but which may affect employees adversely even if only temporarily.

Our multi-disciplinary COVID Team can

  • Provide the advice you need
  • Draft communications to staff, including FAQs
  • Prepare revised contractual documentation
  • Advise on creative remuneration structures
  • Help you access and implement government assistance programmes - for more information see here
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Can I require staff to work at home?

  • The government has advised (since16 March 2020) that wherever possible people should work at home and has now stated that all should do so except where absolutely necessary.
  • Your contracts of employment may contain a term enabling you to require employees to work at such place as you require – if so, requiring staff to work at home won’t be a problem.
  • If there is no such term then the government’s advice is probably sufficient justification to make this a reasonable requirement.  You should however discuss with each employee in advance to identify any possible problems.
  • Where staff are working at home your obligation to ensure a safe working environment remains so you should take reasonable steps to ensure that an employee has a proper place to work and the right equipment to do so.


What if someone at work becomes ill?

  • If someone becomes unwell in the workplace with a new, continuous cough or a high temperature, s/he should be sent home and advised to follow the government advice to stay at home. Anyone living with someone who has developed those symptoms should also self-isolate for at least 14 days. Anyone unwell or self-isolating is eligible for Statutory Sick Pay from day 1.


Can we enforce workplace working if an employee is refusing to come in?

  • An employer has a responsibility to all its employees to take steps to ensure their health and safety in the workplace.
  • Where employees are not themselves unwell but are genuinely concerned about attending work, or travelling for work, due to potential risks to their health, this should be treated seriously.  The law offers protection to any employee who refuses to attend work where s/he believes there is serious and imminent danger.  In light of current government advice, there must be a risk that this protection will arise and so insisting that they attend for work is problematic. 
  • Where working at home is not practically feasible it would be sensible to explore the employees’ concerns to see what alternative working arrangements can put in place to address the concerns, in particular following government guidance about social distancing and cleaning.  
  • Employers should also be mindful of the specific health and safety obligations towards those who are pregnant or breastfeeding and ensure appropriate risk assessments are carried out in the workplace regularly.


Can we ration annual leave?

  • Under the Working Time Regulations 1998 an employer may reject a request for annual leave by giving as much notice as the length of leave requested.  In the case of holidays already booked a failure to cover the cost of cancellation could result in a claim. 


What about international travel?

  • Travel to many countries is now severely restricted.  Where it is still possible an employer’s duty to take care for the health and safety of employees still applies and careful consideration should be given as to
    • the risks in the country of destination – advice is available from the Foreign and Commonwealth Office
    • any risk that the employee may not be able to return to the UK after the assignment.


I don’t want to lose my employees but I can’t afford to keep paying them. What can I do?

  • Some contracts contain a “lay-off” and “short-term working” provision enabling an employer to require employees not to work without any obligation to pay them or to reduce their hours and pay accordingly.  These terms are not now common outside heavy industry. If there is no such contractual provision laying off or short term working will require employee consent and cannot lawfully be imposed.
  • Recognising this, the government has recently announced a “Job Retention Scheme”.  Under this, all UK employers are eligible to access state support to “furlough” employees – require them to do no work - and continue paying part of their wages to enable employers to retain their staff during the crisis and avoid making redundancies.
  • This includes charities, agencies and public authorities
  • Her Majesty’s Revenue and Customs (HMRC) will reimburse 80% of furloughed workers’ wage costs, up to a cap of £2,500 per month plus Employer’s National Insurance Contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.  It applies  to basic salary, accrued overtime and accrued contractual commission payments – discretionary commission and bonuses are not to be included and seemingly basic salary is not to be increased to take account of any commission payment not earned (as would, for example, be the case when calculating holiday pay).  The payments to the employees will be subject to deductions for income tax and national insurance contributions in the normal way.
  • Contractual enhanced payments for:
    • maternity pay
    • adoption pay
    • paternity pay
    • shared parental pay

may also be claimed

  • The minimum period of furlough will be three weeks. Claims may not be made for shorter periods.
  • The Scheme covers employees who were on the employer’s payroll on 28 February 2020.  Employees who were made redundant after 28 February 2020 will be covered by the Scheme provided they are rehired.  Treasury have also confirmed that it applies to employees who transfer to the employer under the Transfer of Undertakings Regulations 2006 (TUPE) after 28 February but who have continuity of service with their previous employer dating back beyond 28 February 2020.
  • At present this arrangement is intended to last for up to three months, backdated to 1 March 2020 and to be extended if necessary.  HMRC are working urgently on a system for reimbursement, as existing systems are not set up to facilitate payments to employers. The system is expected to be operational by the end of April 2020. You will therefore have to fund the required payments in advance of recoupment through the Scheme.  The Government’s loan scheme [LINK] may assist with cashflow.
  • At present this arrangement is intended to last for up to three months, backdated to 1 March 2020 and to be extended if necessary.  HMRC are working urgently on a system for reimbursement, as existing systems are not set up to facilitate payments to employers. The system is expected to be operational by the end of April 2020. You will therefore have to fund the required payments in advance of recoupment through the Scheme.  The Government’s loan scheme [LINK] may assist with cashflow.


Can I impose this on employees?

  • The Government has said that the scheme is subject to current employment law and has stated that changes to employment contracts – which will be the case for furloughed employees unless the employer “tops up” salaries – should be made by agreement.  It is a requirement that employers must confirm in writing to employees that they have been furloughed and keep a record of that for 5 years.
    This will mean that furlough under the Scheme  cannot simply be imposed on employees.  If it is done without their consent then claims of constructive dismissal may arise or affected employees may make claims for unlawful deductions from wages for the balance between their normal salary and the sums they receive under the scheme.

  • The Government has also stated that current consultation obligations applying to changing employee terms and conditions will continue to apply which will mean in practice that employers looking to furlough 20 or more employees may have to consult for 30 days (or 45 if 100 or more) with trade unioins or, if none are recognised, with employee representatives elected for the purpose.


I still need most of my employees but I have less work for them.  Can I cut hours and pay?

  • Cutting pay will almost certainly amount to a breach of contract. The Job Retention Scheme only applies, however, to employees who do no work for their employer. Employees whose hours are reduced will not qualify for the Scheme.  Apprentices (which would include those on training contracts in professional services firms) may be furloughed but may continue training whilst on furlough provided they do not provide services to or generate revenue for the employer when doing so.


Can I take employees in and out of furlough?

  • The only requirement under the Scheme is that a period of furlough must be at least three weeks long.  Payments will not be made for shorter periods. Guidance states that employees may be take in and out of furlough so long as each period id a minimum of three weeks.


Can I top up employees’ pay where they are furloughed under the Scheme?

  • There is nothing to prevent you doing this; indeed it may be an effective means of securing consent from the employees.  Payments under the Scheme are however based on pay as reported to HMRC in February 2020 (or for employees with variable pay, an average of the twelve months prior to 1 March 2020 so no account will be taken of any salary increases from 1 March 2020 onwards.  Reimbursement for employer’s national insurance contributions and minimum automatic enrolment pension contributions will only be on the payments made under the Scheme, not on any top-up.


Does it apply to employees who are sick?

  • Employees who are sick or self-isolating may be furloughed but claims cannot be made for payment under the Scheme while they are sick or self-isolating,  They will be entitled to Statutory Sick Pay for any such period.


What is the position on holidays?

  • The position is not clear.  ACAS has suggested that furlough is incompatible with holiday and employees on furlough may not be required by their employer to take any part fo it as part of their annual holiday entitlement.

  • It has however suggested that employers may treat bank holidays falling during furlough (for example Good Friday and Easter Monday) as holiday entitlement so that furloughed employees will not retain these days as part of holiday entitlement after furlough ends.  


Does the Job Retention Scheme only apply to employees?

  • The Scheme applies to all employees – full time, part-time, agency. fixed-term, flexible or zero hours contracts
  • As well as employees, claims may be made under the Scheme for
    • Office holders – this would include company directors (including non-executive directors
    • Salaried company directors
    • Salaried members of Limited Liability Partnerships
    • Agency workers
    • “limb (b) workers” – people who contract personally to do work for the employer but who do not operate under a contract of employment 
  • In each case it applies only where eth individual is paid under PAYE.  Those who pay tax under self-assessment may be able to claim under the Self-Employed income Support Scheme

  • Employees with variable hours will be eligible for the Scheme.  Employers will be able to base their claim on earnings for the same month in the previous year or an average over the last twelve months, whichever is the higher. Zero hours workers will  therefore be covered by the Scheme


What about self-employed people?

  • A separate scheme – the Self Employment Income Support Scheme (SEISS) – has been established for the self-employed – those who pay tax through Income Tax Self Assessment..
  • To qualify the person must
    • Have submitted a tax return for 2018-19
    • Traded in 2019-20
    • trading when the claim is made (unless prevented from doing so because of COVID-19
    • have lost trading profits because of COVID-19
    • have trading profits of less than £50,000 and more than 50% of income coming from self-employment.
  • The grant (which will be taxable) is calculated as an average of trading profits for the last three tax years, subject to a monthly maximum of £2,500.
  • SEISS will last for three months and will be paid as one lump sum.
  • Claims cannot be made yet and are likely to follow in May after the establishment of the payment mechanism for employees under the Job Retention Scheme


How do I decide who to “furlough”?

  • Employers are free to decide which employees should be asked to agree to furlough.  In doing so, however, Government guidance makes it clear that employers must observe equality and discrimination laws. 


Can I make my employees redundant regardless of the Job Retention Scheme?

  • Courts and Employment Tribunals would normally regard decisions on redundancies as being for employers to take and generally only concern themselves with the fairness of selection and the requirement for consultation.   Employers are, however, expected to consider alternatives to redundancy and so a failure to at least consider using the Job Retention Scheme could result in findings of unfairness.
  • When the Scheme ends (after 3 months unless extended) employers will have to decide whether employees can return to their normal duties.  If not, redundancy may have to be considered.


How do I claim?

  • Claims are made by way of reimbursement through a portal that will be created by HMRC.  The portal will be open on 20 April 2020 with the first claims being paid by 30 April 2020.
  • The following information will need to be provided
    • details of the amount being claimed,
    • the number of employees furloughed,
    • the claim period
    • ePAYE reference number, bank account and contact details
  • The payment will be made by BACS transfer and employees must receive or have received the full amount claimed apart from tax and NI deductions – no fees may be charged.


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