What a month March has been! With the COVID-19 pandemic taking hold across the UK and globally, we’ve seen the UK government responding to the crisis by imposing increasingly restrictive limits on our activities, closing schools and workplaces, introducing emergency legislation within days, and announcing unprecedented levels of financial support. With updates and developments happening daily, it can be hard to keep up. So here’s a roundup of where we are, as at 1 April 2020, in respect of key COVID-19 issues affecting the workplace.
On 20 March 2020, the prime minister announced that certain businesses (pubs, restaurants, cinemas, theatres, gyms, casinos, leisure centres, etc.) should close, and within days this was extended to businesses that were not providing essential services.
The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 came into force on 26 March 2020 detailing, specifically, which businesses must close (schedule 2), which can remain open (any business not listed in schedule 2), and which can remain open with limitations (schedule 1). This legislation will be reviewed every 21 days, with the first review due by 15 April 2020. Businesses failing to comply with this legislation face prosecution and fines.
Attendance at work
On 23 March 2020, the UK government increased its restrictions on the public to reinforce its “stay at home” message by saying that leaving the home was only permitted in one of few limited circumstances. One of the permitted activities is travel to and from work, but only where absolutely necessary and where work cannot be done from home. This led to some confusion about whether it was the work or the travel that had to be necessary, with many non-key workers still being required to attend work by their employer.
It was subsequently clarified that provided workers who cannot work at home can work at least two meters away from colleagues (and travel to work more than two meters away from another person) then non-key workers could continue to work. There will be many industries where working from home is impossible, but a strong instruction was given to employers of non-key workers to find innovative ways to make working from home possible, or at least to ensure the two-meter rule is complied with, or otherwise to close.
Coronavirus Job Retention Scheme
On 20 March 2020, the chancellor announced long-awaited news of support for businesses being forced to close or otherwise facing difficulties as a result of the pandemic. The Coronavirus Job Retention Scheme will operate so that, subject to eligibility criteria being met, HMRC will provide a grant to employers to cover a proportion of wages of those employees who they place on “furlough leave,” allowing these individuals to remain in employment and retain a certain level of income with minimum cost to the employer. Details of the scheme were released on 26 March 2020, and it is currently unclear if more guidance and/or legislation will follow. Our FAQs in relation to the scheme, as far as we know at the moment, can be found here.
Key points to note are:
- The scheme will be open to all UK employers so long as they have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
- The scheme will only cover individuals who have been on the payroll since before 28 February 2020 on any type of contract, including full-time and part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
- Employees who have been made redundant since 28 February 2020 can be furloughed if they are rehired by their former employer and then furloughed. Anyone who started employment since 1 March 2020 is not covered by the scheme.
- HMRC will reimburse employers up to 80 percent of the furloughed worker’s wage, up to a cap of £2,500 per month. In addition, employers will be able to reclaim employer’s National Insurance contributions and the minimum automatic enrolment employer pension contributions.
- Furlough must be for a minimum of three weeks.
- To be covered by the scheme, a furloughed employee should do no work for the employer. As such, the scheme does not cover the wages of employees whose hours are reduced.
- Furloughed employees can volunteer or do online training provided it does not generate revenue for or on behalf of the business.
- There is no obligation to top up wages above what can be reimbursed from HMRC, even if this means employees receive less than the national living/minimum wage. However, where furloughed workers complete online training courses, they must be paid at least the national living/minimum wage for time spent training, even if this is more than the wage that will be subsidised.
- For full-time and part-time salaried employees, the employee’s actual gross salary as at 28 February 2020 should be used to calculate the 80 percent. Fees, commissions, and bonuses should not be included. The burden of working out the calculations rests with the employer making the claim.
- For employees whose pay varies, the guidance details how pay is calculated depending on how long they have been in post.
- HMRC is setting up a portal to administer the scheme, which is expected to be operational from the end of April 2020.
Statutory sick pay (SSP)
One of the early support measures announced by the UK government came during the budget on 11 March 2020, when the chancellor announced changes to SSP to assist during the COVID-19 outbreak. The changes, which are in force as of 28 March 2020 but with retrospective effect from 13 March 2020 as a result of the Coronavirus Act 2020 and the Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020, mean that:
- SSP will be payable from day one of absence rather than day four
- Those self-isolating in line with public health guidance will be entitled to SSP
- 14 days’ worth of SSP will be reclaimable from the government
The regulations are drafted to expire after eight months.
Given the current difficulty in getting a fit note from a GP to evidence an inability to work, the government has introduced an alternative for workers who need to evidence that they have been advised to self-isolate due to COVID-19, either because they have symptoms or someone they live with has symptoms. An isolation note can be obtained from NHS 111 online or from the National Health Service (NHS) website.
On 27 March 2020, the UK government announced changes to the rules around carry-over of holiday, and the Working Time (Coronavirus) (Amendment) Regulations 2020 came into force from 26 March 2020 to amend the Working Time Regulations 1998 (WTR). Key points to note are:
- Where it is “not reasonably practicable” for a worker to take some or all of their statutory leave entitlement as a result of the effects of COVID-19, the worker is entitled to carry forward such untaken leave into the next two leave years. The new rules do not appear to be restricted to certain industries or types of worker (e.g., key workers), simply that the worker has been prevented from taking leave because of COVID-19, which the regulations say “include effects on the worker, the employer, or the wider economy or society.”
- The new rule only applies to the four weeks of statutory annual leave provided for by Regulation 13 WTR. The additional 1.6 weeks of annual leave provided for by Regulation 13A WTR are not covered.
- The carry-over is for the two leave years immediately following the leave year in respect of which it was due to be taken.
- The new rules also amend provisions of the WTR in respect of calculating payments in lieu of accrued but untaken annual leave on termination of employment. The new rules mean a worker can receive a payment in lieu of any of the holiday they have carried over under these new rules but not taken.
- There is now a new restriction on an employer’s right to refuse leave on particular days. Whereas ordinarily an employer can prevent annual leave being taken at certain times if the requisite notice formalities are met, the amended regulations state that an employer will only be able to require a worker not to take carried-over leave on particular days where the employer has “good reason” to do so. “Good reason” for this purpose has not been defined.
- These changes are a temporary emergency measure, although no timeframe has been set for their application to cease.
Our alert on this issue can be found here.
Emergency volunteering leave
In order to boost essential resource to the health service, schedule 7 of the Coronavirus Act 2020 introduces the concept of emergency volunteering leave which allows workers to take unpaid leave from their main job (whilst retaining their contract of employment and all terms, except in respect of remuneration) to temporarily provide help to certain health and social care settings. To be entitled to this, they need an ‘emergency volunteer certificate’ approving them to work in the particular setting. Employees seeking to take volunteer leave have to provide notice and their leave is restricted to a maximum of four weeks in each 16 week period. Employees are protected from detriment and dismissal for taking the leave. There is provision for regulations to be made to provide compensation to volunteers.
Gender pay gap reporting
The enforcement of gender pay gap reporting has been suspended this year.
On 17 March 2020, the government announced that the IR35 reforms in the private sector would not go ahead on 6 April 2020 as initially planned, but would instead be put on hold for a year.
Disclosure and barring service
As a result of organisations experiencing difficulties in following the disclosure and barring service (DBS) identity checking guidelines because of social distancing, the DBS standard and enhanced checking guidelines are changing for an unspecified temporary period, from 19 March 2020, to enable:
- ID documents to be viewed over video link rather than an ID checker having to be in physical possession of the documents
- Scanned images of ID documents to be used in advance of a DBS check being submitted
Applicants will be required to present original versions of their ID documents when they first attend their employment or volunteering role.
Right to work checks
The Home Office and Immigration Enforcement have issued advice for employers carrying out right to work checks during the COVID-19 pandemic. Effective from 30 March 2020:
- Checks can be carried out over video link
- Applicants and existing workers can send scanned documents or photos of documents for checks using email or a mobile app, rather than sending originals
- Employers should use the Employer Checking Service if a prospective or existing employee cannot provide any of the accepted documents
Checks continue to be necessary and employers must continue to check the prescribed documents listed in right to work checks: an employer’s guide. It remains an offence to knowingly employ anyone who does not have the right to work in the UK, and employers must continue to ensure that no-one is discriminated against as a job applicant or employee because they are unable to show their documents.
Financial Support for businesses
The chancellor has announced a number of grants and loan schemes to help support businesses. In addition to the support highlighted above, other initiatives include:
Coronavirus Business Interruption Loan Scheme (open for applications)
- This scheme supports small and medium-sized enterprises (SMEs) with access to working capital (including loans, overdrafts, invoice finance, and asset finance) of up to £5 million in value and for up to six years.
- The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
- The government will provide lenders with a guarantee of 80 percent on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
- This scheme is being delivered through commercial lenders, backed by the British Business Bank.
- Eligibility – Companies are eligible for the scheme if the business:
- Is UK-based, with turnover of no more than £45 million per year
- Meets the other British Business Bank eligibility criteria
- How to access the scheme – The scheme is now open for applications. To apply, businesses should talk to their bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss their business plans. The best ways to contact banks can be found via their websites. All major banks are offering this scheme. Businesses with an existing loan with monthly repayments are advised to ask for a repayment holiday to help with cash flow.
- The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
COVID-19 Corporate Financial Facility (open for applications)
- This is a scheme whereby the Bank of England will buy short-term debt from larger companies.
- This will support companies affected by a short-term funding squeeze and allow them to finance their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all companies.
- Eligibility – All non-financial companies that meet the criteria set out on the Bank of England website are eligible.
More information is available from the Bank of England.
Self-employment income support scheme (not yet open)
- This scheme is available to the self-employed and members of a partnership who have lost income due to the COVID-19 outbreak. It is unclear whether the self-employed who work via an intermediary are covered, or if they have to rely on the Coronavirus Job Retention Scheme as an employee of the intermediary’s company.
- Eligibility – The individual must have submitted a tax return for 2018/19, have traded in 2019/20, be trading when the application is made (or would be but for the pandemic) and continue to trade in 2020/21, and have lost trading profits due to COVID-19.
- The scheme only applies where trading profits are under £50,000 per year and more than half of income is from self-employment.
- HMRC will use data from 2018/19 tax returns to assess eligibility and will contact eligible individuals and invite them to apply.
- A taxable grant of 80 percent of average earnings from tax years 2016/17, 2017/18 and 2018/19 will be made to eligible individuals, capped at £2,500 per month.
- Payment will be made directly into a bank account, in one instalment.