COVID-19 – Key EU and UK Employment Law Considerations Keeping Employees Safe, Dealing With Time Off and Pay

What other measures has the UK Government introduced to support employers?

COVID-19 Job Retention Scheme

Under the UK Government’s COVID-19 Job Retention Scheme (CJRS):

• Employers in the UK can claim back up to 80% of wage costs for employees who are placed on furlough, up to a cap of £2,500 per individual per month.
• Employers may top up employees’ salaries above this level if they wish.
• Employers will be eligible for the CJRS regardless of size or sector.
• The CJRS will apply retrospectively from 1 March 2020, and will run for an initial period of three months. This period may be extended if necessary.
• The CJRS covers all staff on the employer’s Pay As You Earn (PAYE) scheme on or before 19 March 2020 and which were notified to Her Majesty’s Revenue and Customs (HMRC) on a Real Time Information (RTI) submission on or before that date.
• Staff employed and on payroll as of 28 February 2020 that were made redundant or stopped working after that date and before 19 March 2020 are eligible if they are rehired and furloughed by their employer. 
• Staff can be on any type of contract, including:
  • Full-time employees
  • Employees on agency contracts
  • Employees on flexible or zero-hour contracts.
• To be eligible, staff must not perform any work for the employer or any linked or associated organisation while they are furloughed.
• The first grants are expected to be paid by the end of April. The grants work on a reimbursement basis.
• Funding for the CJRS is unlimited, and will be made through the Government’s normal debt management operations.
• For further information, including on how to apply and details of similar schemes introduced by key European jurisdictions, please see our specialist note, “COVID-19 – Job Retention Schemes – UK and European Measures.”

The COVID-19 Self-employment Income Support Scheme

Under the UK government’s new Self-employment Income Support Scheme (SISS):

• The government will pay the self-employed that have lost trading profits due to COVID-19 a taxable grant of 80% of average monthly profits over the past three years, up to a maximum of £2,500 per month.
• The SISS will be open to those who are majority self-employed, have trading profits of up to £50,000 per year and have a self-assessment tax return for 2019.
• Company owners who pay themselves by dividend will not be eligible, but will be covered for their salary under the CJRS if they operate a PAYE scheme.
• Unlike the CJRS, the self-employed will still be eligible for SISS if they continue to work.
• The SISS will run for an initial period of three months, beginning 1 March 2020, and is expected to be available by the end of June.
• HMRC will contact those eligible, and they will need to fill out an online form. HMRC will then pay the taxable grant directly into their bank account.
• For further details, please see our note “COVID-19 – Job Retention Scheme – UK and European Measures.”

Other measures

A summary of the government’s employer support measures is available here. Such measures include:

• Deferring VAT payments for all UK businesses for the quarter from 20 March 2020 until 30 June 2020. These do not have to be paid until March 2021, and will not be subject to interest or late payment charges. This applies automatically and no application is required.
• A refund of up to 2 weeks’ statutory sick pay (SSP) per employee for employers with less than 250 employees (outlined above). This is expected to apply retrospectively from 14 March 2020. Employers will need to apply for reimbursement. Details of the repayment mechanism are expected in the coming months.
• A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England. This will apply automatically.
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. Local authorities will write to employers that are eligible.
• A Coronavirus Business Interruption Loan Scheme, under which the Government will provide lenders with an 80% guarantee on loans to small and medium-sized businesses (subject to a per-lender cap on claims). Businesses can apply by approaching participating lenders.
• A COVID-19 Corporate Financing Facility, under which the Bank of England will buy short term debt from larger companies that had a short or long-term rating of investment grade as at 1 March 2020. Companies can apply by approaching their bank.
• Commercial tenants will be protected from eviction if they miss rent payments because of COVID-19 up until 30 June 2020. This will apply automatically.
• The minimum income floor will be suspended so that the self-employed can access Universal Credit at a rate equivalent to SSP. Self-assessment payments will also be deferred until January 2021.

Is there a difference between company and statutory sick pay?

• Under SSP, qualifying employees are entitled to a weekly payment of £94.25 a week for up to 28 weeks during any period of incapacity.
• Company sick pay is offered by the employer to employees usually through the employment contract. This provides for incapacity payments to employees in excess of SSP.
• SSP cannot be withheld for late receipt of medical evidence, only for late notification of illness. Any decision to withhold should be detailed in writing, and the employee can appeal to the HMRC Statutory Disputes Payment Team.
• If an employer is uncertain that an employee is genuinely unfit to work, a fit note from a GP or NHS 111 will be conclusive. Current guidance states that employers should be flexible with the need for evidence given self-isolation constraints.
• Company sick pay may generally only be withheld in accordance with the contract, or if the employee consents.

Can the employer refuse sick pay if the employee travelled against government/employer advice?

• Depending on the circumstances, an employer may justifiably be able to refuse company sick pay if the employee ignored government and employer travel advice. This should be applied consistently and proportionately to reduce the risk of a discrimination claim.

What about time off caring for dependants?

• Employees are entitled to reasonable time off to care for dependants in an unexpected emergency or event, including COVID-19.
• Time off must be reasonable in the circumstances (e.g., the employee might initially take two days off, then book leave if more time is needed).
• Usually employees do not have a statutory right to pay for this time off, but some employers may offer contractual sick pay.
• However, if a dependant such as partner, child or relative in the same household has COVID-19 symptoms, the employee should receive SSP as a minimum for this time off.
• Staff who having caring responsibilities resulting from COVID-19 can be furloughed under the CJRS, including staff who need to look after children.

What about time off to care for children following school closures?

• This could be taken as time off to care for a dependant (see above), or holiday if the employer agrees.
• If possible, the employee should be allowed to work from home or on different hours to allow for child care.
• If any agreement about flexible working is reached, it is advisable to put this in writing.

If work cannot be done from home, can employers insist that employees attend the workplace?

• If current public health advice is such that the employee could reasonably be asked to continue to attend work, then it is possible to insist that they do so.
  • Current government advice is that employees should work from home where possible, so it may still be reasonable to insist that an employee attends the workplace if this is not possible.
• Consideration should be given to potential discrimination issues, e.g. if the employee is pregnant, breastfeeding, elderly or otherwise vulnerable to COVID-19 infection.
• If there are no discrimination issues and the employee refuses, they could be investigated for misconduct for refusal to follow a reasonable management instruction, and their unauthorised absence.
• If the absence is unauthorised then the employee would likely not be entitled to pay as they are not willing to attend work.

How should employers deal with employees who refuse to come to work due to fear of catching COVID-19?

• If an employee does not want to go to work for fear of catching COVID-19, they should listen to their concerns.
• If the employee is in a vulnerable group, reasonable adjustments should be made and they should be asked to work from home where possible.
• The employer could offer flexible working, or the employee can take this time off as holiday or unpaid leave (if they cannot work from home). The employer does not have to agree to this — if the employee still refuses, it could result in disciplinary action.

Can the employer force employees to take unpaid leave or reduced wages?

• Generally an employee cannot be temporarily suspended without pay or on reduced pay without their consent, unless this is clearly provided for in their contract.
• Agreement should be sought from employees to reduce the risk of claims.
• Alternatively, unpaid leave or reduced wages could be offered as an alternative to layoff. In this case, a consultation process is advisable.
• During layoffs or short-time working, unpaid employees are still entitled to statutory guarantee pay. The maximum is £29 a day for five days in any three-month period, so a maximum of £145.
• There is no limit to how long an employee can be laid off or put on short-time, but they can apply for redundancy and claim redundancy pay after four continuous weeks of layoff/short-time, or six weeks in a 13-week period.

Immigration

How should sponsored workers on Tier 2 or Tier 5 visas be treated?

• Where a sponsored worker’s absence due to COVID-19 is authorised by the employer, a report to the Home Office is not required. The Home Office will not take enforcement action against employers who continue to sponsor workers despite COVID-19 absences.
• If a sponsored worker takes unpaid leave for more than four weeks, ordinarily this would mean the sponsorship must end. However, the Home Office has confirmed that an exception will be applied in the case of COVID-19 and the sponsorship can continue.
• If a sponsored worker’s main work location changes due to COVID-19 — e.g., from one client site to another —this must be reported to the Home Office as usual. If the sponsored worker must work from home, this would not need to be reported.
• Sponsored workers may be furloughed under the CJRS. Any salary reductions must be part of a company-wide policy to avoid redundancies in which all workers are treated the same. Salaries must return to at least their previous levels once furlough has ended.
• UK visa holders whose leave expired or expires between 24 January 2020 and 31 May 2020 will be able to apply to have their leave extended until 31 May 2020. Visa holders will need to provide details to the Home Office’s Coronavirus Immigration Team, including why they are unable to return home due to COVID-19 related travel restrictions or self-isolation.
• Visa holders currently in the UK who wish to apply to a long-term category (e.g. from a Tier 4 Student Visa to a Tier 2 (General Worker), will be able to apply to switch categories without needing to leave the UK, provided they meet the other requirements of the category.
• If an employer has issued a Certificate of Sponsorship, the employee will still be able to apply for a visa. Though the employee’s start date may have changed, the Home Office will not automatically refuse such applications if the employee was unable to travel due to COVID-19.