In April, Her Majesty's Government of Gibraltar (HMGoG) passed legislation (under section 8 (1) of the Appropriation Act 2019) in respect of the BEAT COVID measures.
Legislated under the Appropriation (Business Employee Assistance Terms COVID-19) Regulations 2020, HMGoG has now two amendments to the original regulations, which will remain in force until the 30th June 2020, unless an earlier Gazette notice announces that the COVID-19 pandemic is over.
What are the two main amendments?
- Employees can now be designated as partly-active and fully-inactive.
- Employers from an 'Excluded Sector' can now make applications for employees to be deemed inactive for a furlough period.
Under the amended regulations, employees can now be designated as being partly-active and fully-inactive.
- A fully-inactive employee is an employee who has been designated as being inactive by their employer for the whole calendar month, during which an application for a BEAT COVID-19 Contribution is made in respect of their inactivity.
- A partly-inactive employee is an employee that has been designated as being inactive by their employer for an aggregate period of half of the calendar month during which an application for a BEAT COVID-19 Contribution is made in respect of their inactivity.
- Under the amended regulations, an employee can be partly-inactive for a period of time - that period of inactivity is determined by their employer during the calendar month that the partly-inactive employee is designated as being inactive. This period is to be determined by the employer and be on a half-day, daily, weekly or bi-weekly basis, depending on what the employer deems necessary, provided that the aggregate period of inactivity is 50% of the period that the employee is contract to work in accordance with their contract of employment.
- An employer who designates an inactive employee as a partly-inactive employee shall pay that partly inactive employee 50% of their salary in accordance with their contract of employment and the employer shall have no right to receive any contribution from government or it's COVID-19 Response Fund in connection with this payment.
- Any BEAT COVID-19 Contribution or BEAT COVID-19 Payment attributable to a partly-inactive employee shall be reduced by the sum of 50%.
- An employer shall not be liable to PAYE in respect of any partly-inactive employee for such part of the partly-inactive employee's salary that is paid by the employer in accordance with the regulations.
- Any claim for allowances made in accordance with the Provisions of the Income Tax (Allowances, Deductions and Exceptions) Rules 1992 shall be reduced by 1/24 for each month in which a partly-inactive employee receives a BEAT COVID-19 Payment.
Another of the main amendments relates to the Excluded Sectors.
Excluded Sectors are listed in Schedule 2 of the regulations and are listed in our Article on COVID-19 BEAT: "what you need to know" https://bit.ly/367cWMp .
The amended regulations now include a furlough period, which means a period of up to one calendar month during the relevant period or such lesser alternate or other periods as may be agreed with the director of employment where they believe this to be fair and reasonable in the circumstances for the purposes of rotating inactive employees, provided that the aggregate period in days does not exceed 35 days, unless a longer aggregate period is agreed with the financial secretary, where they believe this to be fair and reasonable in the circumstances.
Inactive employees for the purposes of this regulation means an employee who:
- Is registered with the Department of Employment or the Income Tax Office as an employee of an employer from an Excluded Sector
- Does not provide any services to their employer during the relevant period of inactivity
- Is designated as an inactive employee in accordance with the amended regulations with the consent in writing of the director of employment
- If an employer from an 'Excluded Sector' wishes to designate an employee as an inactive employee for a furlough period, then they will need to make an application in writing to the director of employment who will then determine with the approval of the financial secretary whether it is fair and reasonable in the circumstances.
- Any application by made by an employer for an employee will be considered on a case by case basis.
- If an employer wishes to make an application for an employee they must first notify that employee in writing.
- An inactive employee shall not provide any services to their employer during the furlough period.
- An inactive employee shall have a new status in law whereby during the furlough period they will be able to retain all of their employment rights and obligations with the exception of their right to be paid their salary in accordance with their contract of employment and for their employment rights to accrue on their contracted salary as such rights and obligations may need to be suspended.
- An inactive employee shall have a right to receive at least the sum of 50% of their contracted salary, or £1,155 over a calendar month period - whichever is the higher - from their employer throughout the furlough period.
- An employer that designates any of its employees as an inactive employee, and who is desirous of paying their inactive employee a sum that is higher than 50% of their contracted salary as per the above point throughout the furlough period, shall be able to make such additional payment to their inactive employee under the amended regulations provided that the payment exceeds £1,155 over a calendar month period.
- If an employer who wishes to pay an inactive employee a sum higher than 50% of their contacted salary throughout the furlough period shall have no right to make an application to receive any contribution from Government or its COVID-19 Response Fund.
- The maximum number of employees that may be designated as inactive by an employer from an 'Excluded Sector' shall not exceed 25% of such employer's total workforce.
- If an employer wishes to designate more than 25% of their workforce as inactive, they must make an application in writing to the financial secretary who will need to be satisfied that this is fair and reasonable in the circumstances and it is also in the public's interest.
- An inactive employee who is ordinarily required to work less than 37.5 hours a week by their employer or under their contract of employment with their employer shall have the amount of £1,155 pro-rated against the average number of hours that they ordinarily work per week before the 15th March 2020 for the purposes of the amended regulations.
- An employer shall have no right to any BEAT COVID-19 waiver measures paid from the BEAT COVID-19 Response Fund that may be announced by Government as being available to relevant sector businesses by reason of the employer's designation of any inactive employee under the amended regulations.
- Any employee or their representative body, who is proposed to be designated as an inactive employee under the amended regulations shall have the opportunity to make representations in writing to the financial secretary and/or the director of employment within 48 hours of the notice having been given to them by their employer to designate them as an inactive employee. The representations shall be taken in consideration prior to any determination being made by the director of employment or the financial secretary under the amended regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.