COVID-19 furlough scheme update and key risks for employers

As the lockdown continues, the Government has extended access to its coronavirus job retention scheme and employers are settling in to a new way of working. Business life may have drastically changed, but employment law still applies.

Gillian Reid, employment law expert with Ware & Kay in York highlights important developments to the furlough scheme and addresses three key risks facing employers.

You should check the Government website for the latest guidance in conjunction with this article, as the guidelines on the coronavirus (COVID-19) are changing daily. The guidance and the Treasury direction are inconsistent in places. You should speak to your solicitor for specific advice for your business.

Coronavirus job retention scheme update

The HMRC online portal opened on 20 April to allow employers to claim the grant covering some employment costs while staff are not working due to coronavirus. HMRC has updated its guidance and published calculation guidance, and the Treasury has issued a direction to HMRC on the scheme. Important developments include:

• scheme extended by one month to apply from 1 March to the end of June 2020;
• employees are eligible for the scheme if they were on the employer’s payroll on or before 19 March 2020 (previously 28 February) and the employer made a real time information (RTI) submission to HMRC for that employee on or before 19 March;
• you need each employee’s written agreement to go on furlough leave and you need to keep a record of this for five years – note that the Treasury direction differs from earlier guidance on this;
• employees who are shielding or who have caring responsibilities because of coronavirus can be furloughed;
• salaried directors on furlough leave are only allowed to carry out limited statutory duties and cannot generate revenue; and
• employees can take holiday during furlough leave. It is uncertain whether employers must top up furlough leave pay to their normal rates of holiday pay.

Redundancy consultation during lockdown

Any release from lockdown will be gradual and a severe global recession is predicted, so making redundancies is becoming a harsh reality for many employers.

Even though it may be clear that there is currently no work or reduced work for your employees, you must still follow a fair process. Otherwise, you risk claims for unfair dismissal from employees with more than two years’ service or those who argue that their selection for redundancy was discriminatory.

A fair process includes individual consultation with employees, including those on furlough leave. This may have to be by telephone or video call to respect social distancing.

Employers making 20 or more staff redundant within 90 days, must also collectively consult. We can advise you on how to comply with this obligation or if you can use the special circumstances exception. You must still hold elections for employee representatives if you do not recognise a trade union.

One final warning; although there is nothing in the guidance preventing employers from making furloughed employees redundant, a redundancy dismissal has to be fair. In deciding fairness, an employment tribunal is likely to consider the suitability of using furlough leave instead of redundancy. We can advise you on ensuring any redundancies are fair.

Is home working not working?

Many businesses moved their staff to working from home, and changes had to be made quickly. For working parents, working from home is complicated by the closure of schools and nurseries for all but children of key workers. Home working may be the new normal for some time, so now is a good time to take stock.

Employers may need to agree flexible arrangements to support staff. Agreeing expectations and specific arrangements in writing with individual employees should help, along with a home working policy.

Some employees may struggle with motivation and feeling isolated. Managers should catch up regularly with their team, possibly through virtual ‘coffee breaks’.

It is worth remembering that employers are still responsible for employees’ health and safety when working from home. Acas has recently published practical guidance on how to fulfill these responsibilities remotely. We can advise you on this and any particular issues such as making adjustments for disabled employees.

We can also advise on what to do if, home working is not working for specific employees, for example:

• difficulty in getting hold of the employee during working hours;
• concerns that the employee’s productivity has dropped; or
• if the employee appears unable to cope with workload and looking after young children.

Data protection risks

One of the risks of home working is relaxation of your data protection measures as employees use their own devices and printed confidential information might find its way into kerb-side recycling.

The Information Commissioner’s Office (ICO) regulatory approach during the coronavirus public health emergency will take into account pressures on organisations due to coronavirus. However, employers still need to ensure data protection is integral to home working arrangements. The ICO guidance on working from home offers a number of tips. We can draft policies to protect personal data for home working.

For support on minimising the risk of claims and ensuring your business can still operate effectively during these challenging times, please contact Gillian Reid on 01904 716000 or email gillian.reid@warekay.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.