Coronavirus: What employers need to know (as of 18/3/20)

23rd March, 2020

Temporary changes to Statutory Sick Pay (SSP) in relation to self-isolation

• With effect from 13 March 2020, the scope of the SSP Regulations has been extended so that a person who is self-isolating (in accordance with guidance from Public Health England (PHE), NHS National Services Scotland or Public Health Wales) in order to prevent the spread of coronavirus, and who is unable to work because of isolation, is deemed incapable of work and therefore entitled to SSP.
  
  
• In line with the issued guidance, employees and workers would need to self-isolate where:
  • They have coronavirus
  • They have symptoms of coronavirus
  • Someone who lives with them has coronavirus symptoms
  • They have been advised to self-isolate by a doctor or the NHS 111 service.
    
    
• Currently, government guidance provides that individuals should self-isolate for:
  • 14 days where someone in their household has symptoms of coronavirus
  • 7 days if they live alone
    
    
• The emergency legislation that is being introduced to allow for these changes will also allow those self-isolating to claim SSP from the first day of their sickness absence. Though this has not yet been implemented, it is thought it will take take effect retrospectively from 13 March 2020 but this is not clear.
  
  
• A temporary alternative to a fit note will also be introduced for use during the coronavirus outbreak but no further details of this have yet been announced. This will assist those who have been advised to self-isolate as they will obtain a notification form NHS 111 which they can then use to evidence their absence from work. This approach would also help to relieve some of the pressure on GP surgeries especially since those who have been advised to self-isolate could not possibly pay their GP a visit.
  
  
• Business with less than 250 employees (as at 28 February 2020) will be able to seek reimbursement for any SSP that they have had to pay to their employees for the first 14 days of sickness in relation to coronavirus.
  
  
• Remember: only employees who earn over £118 per week will be entitled to SSP. Where this is not the case, contractual / company sick pay policies and procedures should be consulted. Otherwise, employees may be able to claim Universal Credit or Employment and Support Allowance.

Sending employees home and working from home

• Government guidance encourages employers to allow their employees to work from home. However, this can only really work where it is possible to do so and employees can actually do the work they are employed to do from home. (For businesses and industries where working from home may not be an option, see below for information in relation to lay-off and short-time working as well as other alternatives employers can consider).
  
  
• While employees are still able to work and are not unwell, they will not be entitled to SSP and should continue to work from home where they have been told to do so. Employers will obviously need to ensure that employees have what they need in order to work remotely so it is important to consider IT arrangements, ways to keep in touch etc. It may be sensible to have a Home Working policy.
  
  
• Employers are also recommended to send home employees who show symptoms of Coronavirus (such as a new, continuous cough or high temperature) so that they can self-isolate in accordance with the Government guidance. They will then fall within the government guidelines and be entitled to SSP.
  
  
• Employees in vulnerable groups are a particular concern for employers. This includes all employees over the age of 70 (regardless of medical condition) as well as those who may be under 70 years of age but have some underlying medical conditions (such as chronic respiratory or cardiovascular diseases) or weakened immune system. Pregnant women are also considered as ‘high-risk’.
  
  
• Employers should act in the best interests of vulnerable groups by allowing them to stay home and practise social distancing (in accordance with Government guidance) to help minimise the risk of infection generally and in particular to avoid complications to those who are more vulnerable to the disease.
  
  
• Currently, there is no legal requirement or government guidance which says to close businesses, shut workplaces or send employees home (unless they are displaying symptoms).  
  
  

Time off for employees to care for dependants

• Employees have a statutory right to time off to care for dependants in cases of emergencies.
  
  
• The term ‘dependants’ in this case includes a spouse, civil partner, parent or child or even a person who lives with you (but not a lodger, tenant, border or employee). It also includes anyone else who reasonably relies on you to provide assistance or make arrangements where they are ill or injured (e.g. an elderly neighbour).
  
  
• This is usually unpaid time off (unless the employer chooses to pay) and in the absence of any workplace policy on this, both the employer and employee will need to decide what a ‘reasonable’ amount of time off in the circumstances would be. This is usually limited to a few days as the right is not designed to be exercised in long-term situations but exists for use in emergencies. If they need to be off for slightly longer, the employee could look to use some of their holiday entitlement.
  
  
• Employers will need to be aware however, that should an employee choose to exercise this right to look after a dependant who has / potentially has coronavirus, the employee may also be at risk of getting infected and so it would be a risk to allow them back into the workplace. Asking the employee to self-isolate for 14 days and to work from home (where the employee is not unwell) would be appropriate here. Alternatively, the employee will fall within the government guidelines on who should self-isolate and would therefore be entitled to SSP if not working at home.
  
  

Requiring employees to take holiday

• Employers are able to require employees to take holiday if they need to (i.e. where a workplace needs to be shut temporarily).
  
  
• The employer must give adequate notice to employees of their intention to require them to take holiday. Notice should be given to employees of twice as many days as they are requiring them to take as holiday, although employers can seek to agree a period of annual leave with less notice. For example, if an employer is requiring employees to take 5 days of holiday, then they will need to give 10 days’ notice to their employees.
  
  
• Employees may already have holiday booked and requiring them to take additional holiday unexpectedly may cause issues. It is important to have open dialogue with employees about the circumstances in which they are being asked to take holiday.
  
  
• If there are concerns about employees who have holiday booked at a later date, it may be possible to allow them to take paid holiday currently and then in terms of any future holiday they have booked, employers could allow them to take that as unpaid leave instead.
  
  

Invoking lay off and short time working

Lay-off

Laying off employees is where the employer does not provide employees with work and does not pay them for a period while still retaining staff as employees.

• The statutory definition states that an employee is ‘laid off’ for a week where:
  • Their contract terms provide that they are paid depending on whether or not their employer provides them with the work they are employed to do.
  • They are not entitled to any remuneration for that week as their employer did not provide work for them to do.
    
    

Short-time working

This is where employees are provided with less work and therefore less pay for a period while still continuing to retain their employees.

• The statutory definition states that an employee is put on ‘short-time’ working for a week where:
  • There has been a decrease in the work provided by the employer to the employee (which the employee is employed to do under their contract).
  • The employee's remuneration for a week is less than half a week's pay.
    
    

Potential implications

Some points that employers need to be aware of when looking to invoke lay-off or short-time working include:

• You cannot imply a right to lay-off your employees - there must be an express lay-off clause in their contract. This is because an employer would be withholding pay when laying-off employees who are otherwise fit and willing to work, which would be in breach of contract.
• There may be scope to imply a lay-off or short-time working clause where there is a ‘custom’ of laying-off employees in that particular business / industry (e.g. manufacturing). (This was suggested in the employment tribunal in Bond v CAV Ltd). The terms of doing so must have been clear so that the employee could have expected it to be an implied term when beginning work.
  
  

However, proceed with caution on this as the case was from the 1980s since when there has been a growing requirement to document employment terms etc for all employees / workers and increased protection for employees, so it could be that a more factual approach will be taken nowadays meaning that such terms are not as easily deemed to be implied due to the obvious detriment the employee would suffer.

• Notwithstanding the above, it may be that in the current constantly-changing and unpredictable situation employers and employees find themselves in during the coronavirus pandemic, governments and tribunals may be more lenient in allowing employers to invoke or imply lay-off or short-time working provisions in order to save struggling businesses however there is no guarantee of this.
  
  
• It is possible that the government may introduce emergency legislation to introduce a coronavirus specific lay off and short time working regime. As it stands however, the general position is that an express lay-off or short-time working clause is required, and in default of a contractual express clause, any lay off or short time working would have to be implemented by agreement after consultation. If you are considering this is essential than you should seek our advice.
  
  
• When laid-off or on short-time working, employees may still be entitled to statutory guaranteed payments (SGP) (currently £29 max. per day, rising to £30 max. per day from 6 April and calculated pro-rata for those working less than 5 days a week). In any rolling 3 month period, there is a maximum of 5 days where SGP would be payable. Employers will need to be aware that just because they are able to lay-off employees for a while does not mean there is no further cost / payment associated with this as they will need to bear the cost of paying SGP for each employee that has been laid-off / put on short-time working.
  
  
• Employees will also continue to accrue holiday at the normal rate during the period they are laid-off or put on short-time working.
  
  
• Where employees are unwell and therefore not able or available to undertake work in any case, they are not deemed to be laid-off (as the tribunal held in Johnson v Knowsley Caravans [1974]). Again, employment tribunals could adopt a different approach nowadays and given the current situation so employers should take note of this.
  
  

It would also depend if the employee was unwell prior to the lay-off / short-time working being announced and invoked or after as this would help determine the main cause of the employee not having work (i.e. was it because of their illness and incapacity to work or the lay-off itself?).

If an employee is laid off or put on short-term working for 4 consecutive weeks or for 6 weeks in a rolling 13 week period, the employee can resign and deem themselves as having been dismissed due to redundancy.

In such circumstances, a statutory redundancy payment would be payable to the employee subject to a valid counter notice being issued by the Employer. For this, an Employee would still need to have at least 2 years’ service with the employer.

1. Employee needs to send a letter within 7 days of reaching the 4 week / 6 week period as outlined above notifying their employer of their intention to claim a statutory redundancy payment.

2. If the employer does not act within 7 days of receiving the letter, the employee can resign within the next 3 weeks and claim statutory redundancy.

3. Within 7 days of receipt of the employee’s initial letter, the employer can serve a counter notice on the employee if they expect to return to normal working hours for at least 13 weeks within the next 4 weeks.

This stops the employee from getting their redundancy payment even if the employer does not in return to normal working circumstances in the next 4 weeks. If this does happen, the employee can go to tribunal for it to decide whether the employee is entitled to a statutory redundancy payment. However, this isn’t usually preferred given the time and costs this process would involve.

Also, this does not mean employers can just serve counter notices without genuinely believing that they would soon be returning to normal working hours purely to avoid paying out a statutory redundancy payment. Doing so would breach the duty of trust and confidence between the employer and employee allowing the employee to resign, claim constructive dismissal and also claim the statutory redundancy payment the employer tried to deprive them of.

4. If the employee chooses to resign, they must give their contractual notice as if they do not, they will not be able to receive their statutory redundancy payment.

Employers should do their best, in light of the current fast changing and uncertain environment, to keep abreast of any emergency legislation that may be introduced. This could include allowing employers a statutory right to lay-off employees even where there is no express provision in the employment contract to do so. This would be because there may be a steep downturn in work, particularly in some industries more than others (manufacturing, supply chain etc).

Other options employers can consider

• Ideally, employers should look to make agreed arrangements with their employees in light of current circumstance and where possible, avoid the need to lay-off or dismiss employees. There will be a need for employers and employees to be pragmatic and flexible.
  
  

Some possible options to discuss with employees can include:

• Taking holiday
  • As mentioned above, employers have the right to request their employees to take holiday for a short period of time. Employers can offer employees the option of taking paid holiday now in the current circumstances with their future holiday dates still being honoured but being unpaid.
    
    
• Deferred payment of wages
  • Similar to how football clubs deal with payment of wages when they go into administration, it may be possible for employers to request their employees to agree to a wage deferral. This would mean employees would not be paid their wages for a temporary period, then when the business starts to pick back up they would then recover this amount. This would need to be by agreement, and probably in the context that the alternative would be redundancies and possible business failure.
    
    
• Staggered payment of wages
  • This option may serve well as a halfway house for both the employee and employer. An employer could seek to agree some form of staggered payment of wages with the employee where the employee may be paid reduced wages over a prolonged period.
    
    

A similar approach has recently been taken by Virgin Atlantic which has been highlighted in the media where the business has asked employees to take 8 weeks unpaid leave but that the payment of wages will be spread over a 6 month period.

This means that the employer can save some costs and the employee does not lose out on being paid (albeit they will be being paid less than usual for a temporary period) and they are able to retain their jobs.