There have been some important developments for employers over the past week.
Below we summarise the key points and share some thoughts on the Government's new Job Support Scheme and the new Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations.
The Job Support Scheme
With the pandemic raging on and the Government's furlough scheme ending on 31 October, many employers will now be turning their minds to the scheme which will replace it as a potential way to protect their businesses and workforces over the autumn and winter.
Initial government guidance on the new Job Support Scheme (the Scheme) is brief, but in essence:
- Employees need not have been previously furloughed, but they must be on an employer's PAYE payroll on or before 23 September 2020 (presumably to prevent abuse of the Scheme).
- It will open on 1 November 2020 and initially last six months.
- For at least the first three months of the Scheme, employees must work at least 33% of their usual hours and their employer needs to pay them as normal for those hours. Subject to the cap below, the employee will also be paid in respect of 2/3rds of any unworked hours - 1/3rd by the Government and 1/3rd by their employer. Therefore, an employee working 33% of their usual hours receives 78% of their normal pay (33.33% + 22.33% from their employer, and 22.33% from the Government). The minimum working hours threshold will be reviewed after the initial three months of the Scheme.
- The Government contribution is capped at £697.92 a month. The employer contribution (towards 1/3 of unworked hours) is not capped. However importantly, employers cannot top up their employees' wages beyond the one third of unworked hours it is required to pay for.
- Employers remain responsible for any employer NICs and pension contributions on monies they pay to the employee. It's not yet clear whether they are also payable in respect of the Government contribution.
- Small and medium sized businesses will not be subject to any specific eligibility criteria, but large businesses will have to show that their turnover is lower now than before the impact of COVID-19, by way of a 'financial assessment test'. No details of this test have yet been revealed.
- While using the Scheme, the Government expects that large employers will not be making capital distributions, such as dividend payments or share buybacks. This fetter may make large scale redundancies more attractive than the Scheme for such employers.
- Employees cannot be made redundant or put on notice of redundancy while their employer is claiming under the Scheme.
- It's not yet clear whether employers can begin collective consultation while claiming under the scheme. Presumably they can, as long as employees are not given notice of redundancy during that time.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request. The particular form of that agreement, if any, has not yet been specified.
The Job Support Scheme might be a great help for employers who can forecast a healthy spring 2021 and can afford to retain talented staff in the interim. However, employers that need to cut costs now might, understandably, be put off - for example by having to pay out 55% of employees' wages (plus employers' NIC and pension contributions) in return for only 33% of the work. Other cost-cutting options including reduced hours and redundancies might, unfortunately, still be the best route for some.
The Coronavirus Self-Isolation Regulations
As of midnight on Monday (28 September 2020), where an employer is aware that a worker (or agency worker) is required to self-isolate, it will be an offence for that employer to (without reasonable excuse) knowingly allow that worker to attend any place (other than where the worker is self-isolating) for employment-related purposes. If an employer is in breach, they could face a fine of between £1,000 for a first offence and £10,000 for a fourth (and subsequent) offence.
There are legal obligations on workers too. As well as the obligation to self-isolate, they must notify their employer of the dates during which they are required to self-isolate. This notification must be given as soon as reasonably practicable, and in any event, before the worker is due to start work within the isolation period. If a worker fails to provide such notification without reasonable excuse, they will commit an offence and be subject to a potential fine of £50.
In practice, this means that employers whose staff are required to physically attend the workplace (such as in a factory or lab), should be extremely careful to ensure that any workers required to self-isolate do not go in to work. These new Regulations apply to employers in England only.
It seems unlikely that all workers will be aware of the potential to commit an additional offence if they do not inform their employer of the requirement to self-isolate. We think it would be prudent for employers to take steps to promptly bring this to the attention of all staff so that they are fully informed regarding the importance of following the self-isolation rules.
It's also important to bear in mind that, in practice under these new rules, an employer will generally only be liable where they know that a worker should be self-isolating, and then allows them to come to work anyway. Initially, it's the worker's responsibility to tell their employer that they need to self-isolate. If they fail to do that, it might be open to the employer to take disciplinary action, particularly given the serious health and safety concerns and, now, the fact that a failure to do so is an explicit offence under the new 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.