Hannah Roche

Hannah is a Partner and Head of Employment Law and Holistic HR at MBM Commercial. Hannah has 15 years of experience as an employment lawyer and joined MBM in 2012.

Very few, if any, employers could have predicted the situation we now find ourselves in. There can be virtually no aspects of life that Coronavirus has not affected.  Employers are now having to manage the health and safety of their staff as well as trying to protect jobs and ensure the survival of their businesses.

Thankfully the Government has put in place unprecedented support for businesses and employees. Support for the self-employed will be available from June. (See links below)

Government Support for employers

Government support for self employed

The Government guidance, which has been hastily put together (understandably) can only, at this stage, cover the basics. At MBM Commercial our HR and Employment Law team have had to become quickly well-versed in the guidance which is changing on an almost daily basis.

Over the last couple of weeks, we’ve been assisting employers in making extremely difficult decisions such as whether to furlough staff, whether redundancies can be avoided and how to go about implementing pay cuts.

These are decisions that no employer wants to make but rest assured, the questions that you are faced with are the same as or similar to those faced by our employer clients, large or small, in a variety of different sectors whether it’s high growth tech, professional services, retail or hospitality.

We’ve set out a few tips below which will hopefully help you navigate these unchartered waters.

Business Continuity Plan

Many businesses would have been able to pull out their business continuity plan when the Government restrictions were announced a few weeks ago, and benefit from a clear strategy on how to keep their company going in these challenging times.

Those which don’t have such a plan should draw one up now and all employers should ensure that the plan is regularly reviewed, amended and added to in light of changing Government guidelines and the evolving economic situation.

It’s crucial that the plan covers, amongst other things, how staff can best protect themselves from coronavirus, guidance on shielding, self-isolating etc and how to report this to the employer, the names and contact details of group leaders (and their deputies), what the channels of communication are for staff/management (e.g. daily team Zoom calls, team WhatsApp groups), instructions for working remotely and who to contact with IT issues.

The plan or a summary of it should be shared with staff so everybody knows what they should be doing, how, where and when.

Many businesses will have employees who can work from home. If employees cannot work from home and the workplace remains open, it is essential that the employer carries out a risk assessment to manage the risk posed to employees in travelling to and from, and attending the workplace.

Measures to reduce the risk include limiting the number of employees attending work at any one time,  staggering start and finish times and providing alternatives to public transport.  The risk assessment should be in writing and regularly reviewed.

Any employees who are sick, self-isolating or in a vulnerable group should not attend the workplace.  They may be entitled to statutory sick pay (and possibly contractual sick pay too). If not, employers must pay full pay unless it is agreed with the employee that they are furloughed, take unpaid leave, or a period of paid holiday. See our FAQ for employers for more detail.

Good, clear, regular communication

Most people respond well to being kept in the loop and even if the news is bad, this can often be easier to handle than the unknown, especially if employees are self-isolating/working from home.

So, if there’s a probability that staff will be furloughed or that pay cuts will be proposed, it may be best to let staff know this on a general level before making specific proposals to employees. Such a communication doesn’t have to be unduly negative – indeed it is reassuring if management inform staff that all measures to avoid redundancies are being considered.

Any communication should be empathetic to inevitable employee concern, supportive and clear. Be sure to let employees know when they can expect a management decision on jobs/pay etc and always let staff know who they can direct questions to.

If you are reducing salaries and/or designating employees as furloughed, you must obtain employee consent otherwise you will be in breach of contract, unless the contract provides for this, which is unlikely.

Therefore, you are likely to require a variation to the employees’ contracts of employment. Employers should seek formal consent to change the contract via a letter of variation and keep this letter for 5 years (for HMRC purposes). Please get in touch if you would like to discuss this.

Share the pain

Generally, if employees know that everyone in the business is having to make sacrifices, they are much more likely to accept pay cuts or being designated as furloughed without this impacting on morale more than it has too. The likelihood is that the businesses that will be able to weather this storm the best have an “in it together” mentality.

Most employers will want to be able to show staff that senior management are the first to take a pay cut or that they take the biggest cut, especially if the management have been the ones to profit from the business in the past. This should be made clear to the employees.

Recommended Reading

Fair furloughing

Furloughing staff brings up a number of issues. Some employees (especially those who earn less than or around the monthly earnings cap of £2,500) may be reasonably content to receive 80% of wages for not working (especially if they have young or school-age children to look after at home – though this should not be assumed).

Non-furloughed staff may be aggrieved that they are having to work when colleagues are paid almost as much not to work whilst on furlough leave. While the Government Guidance is not totally clear on this point, it is thought that employers will be able to rotate staff on furlough (which is likely to be fairer), so long as each period of furlough is at least 3 weeks long. Employers should take legal advice on this at the time however.  There is a link to the Government Guidance below.

If you are having to decide who, in particular jobs or teams, to ask to be designated as furloughed and who will keep working, you should use fair and objective criteria to determine this as well as having regard to what skills the business will still require during the period (and keep a paper trail of this).

This exercise can include scoring employees against certain criteria (e.g. required skills, ability to work across teams/disciplines etc) in order to select the appropriate employee for furlough. Employers must be able to back up the scores. The criteria should also be non-discriminatory to reduce the risk of discrimination claims later. For example, disability-related absence must not be a factor in deciding who to ask to be designated as furloughed. However, if the employee is in a vulnerable group, it is likely to be appropriate to discuss the option of furlough with them.

In general, employers should consult with employees about furlough as it may be that their personal circumstances make furlough a sensible option for them (e.g. if they have caring responsibilities).

Remember that furloughed staff are not allowed to work for the employer during the period of furlough though they may undertake training or voluntary work. Even businesses which are having to temporarily shut will need a skeleton staff to carry out activities such as operating payroll and making strategic or operational decisions and therefore most businesses will need at least a couple of staff to keep working.

It’s likely that companies will need at least one director who is not furloughed in order for this to happen (other directors can be furloughed so long as they were on payroll on 28 February 2020 – and this should be documented via a formal resolution of the company).  Employees are permitted to work for other employers during furlough, provided this is permitted by the contract of employment.

Furlough leave is a completely new concept in employment law and there are various interpretations of how it interacts with existing employment law legislation and principles. Complex areas include the interaction between furlough and different types of leave such as maternity, sick or annual leave. See our FAQ for more information.  Holidays continue to accrue during furlough leave and the Government has introduced new legislation to allow employees to carry over holidays into the next two leave years if it is not reasonably practicable for them to take them.

Another complex issue is whether employees who have already been served with notice of redundancy or had their employment terminated because of redundancy can be furloughed. The Government guidance suggests they can if they were on payroll on 28 February 2020. Therefore, even staff who have left can, in theory, be re-engaged and furloughed.  However, this option is not without legal risk or cost to the employer and you are advised to take legal advice on specific situations.

Staff well-being

With many employees working remotely, self-isolating, trying to home-school children, being furloughed and/or getting sick and not being able to see family and friends, this crisis is going to be difficult for almost everyone.

The more employers can do to keep staff connected and morale up the better – and this will stand the business in good stead once the crisis has passed. There are many ways to keep spirits up and everyone feeling supported: daily check in calls from line managers, regular, supportive emails to the whole team from the CEO, virtual book clubs, yoga sessions, Friday evening staff parties via video call, the sharing of positive or funny moments amongst the staff and weekly fun competitions. Ask your staff for their own suggestions.

Last but not least, sincere and regular thanks from senior management to the staff for their flexibility, understanding, hard-work and patience in this, the most challenging of times, will go a long way to creating a loyal, stead-fast team who can come out the other side of this crisis still standing and ready to bounce back.

If you’re an employer who would like to discuss any of the topics discussed in this article please contact Hannah.roche@mbmcommercial.co.uk.