Can an employer rotate which employees are furloughed during the coronavirus crisis? 

Guidance published by HM Revenue and Customs on the Coronavirus Job Retention Scheme states that the minimum period an employee can be furloughed for is three weeks. Therefore, it appears that an employer can rotate employees between periods of work and periods of furlough, as long as they are furloughed for at least three weeks at a time. An employer may choose to do this to avoid disputes over which staff are chosen to be furloughed.

Can an employer that is affected by the coronavirus crisis postpone a new recruit’s start date or withdraw a job offer?

Employers facing financial difficulty due to the coronavirus (COVID-19) crisis may wish to postpone a new recruit’s start date as a cost-saving measure, particularly if a temporary reduction in demand means there is no current need for the employee. There may also be practical difficulties in taking on a new employee if, for example, the entire team has switched to working from home.

Where the employee has accepted a job offer and the start date has been agreed, this will be a term of the contract. The employer would be able to change the start date only with the employee’s agreement, otherwise it would be in breach of contract. A new recruit may be prepared to accept such a change if the employer explains the circumstances, particularly if the alternative is that the job offer will be withdrawn.

An employer that withdraws a job offer for reasons related to the coronavirus outbreak is likely to be in breach of contract. An employer can withdraw an offer only if it was conditional on certain requirements being met (such as receipt of a satisfactory reference) and the reason for withdrawal is that the conditions have not been met.

Where an employer does withdraw a job offer due to the coronavirus crisis, the employee could claim for breach of contract. It is likely that the compensation would be limited to payment for the notice period under the contract. To avoid such a claim, instead of withdrawing the job offer, the employer could give the employee notice of termination and pay them for the notice period. The employer should ensure that the reasons for the decision are well documented, to avoid any allegation of discrimination.

Can an employer terminate the contract of an employee in their probationary period if it is facing financial difficulty because of the coronavirus crisis?

An employer that is considering dismissing an employee during their probationary period as a cost-saving measure should first explore alternative options. In particular, it could consider “furloughing” the employee and making use of the Coronavirus Job Retention Scheme to pay 80% of their wages.

It may be in the employer’s interests to retain the employee during the coronavirus (COVID-19) crisis and avoid having to repeat the recruitment process when the economic situation improves, particularly if the employee is performing well.

If an employer decides to terminate the contract of a probationer for economic reasons during the crisis, it must ensure that the reasons for the dismissal are explained to the employee and properly documented.

Assuming that the employee has less than two years’ service, they will not be able to claim unfair dismissal unless the dismissal was for an automatically unfair reason. For example, they could claim that the real reason for the dismissal is that they have asserted a statutory right, such as taking time off for dependants, or made a complaint about health and safety. The employer will also need to be able to show that the dismissal was not discriminatory, as employees do not need two years’ service to bring a discrimination claim.

The employer should give the employee their contractual notice or the statutory minimum notice, whichever is greater, or make a payment in lieu of notice. The employer should note that if it makes a payment in lieu of notice where this is not provided for under the contract, it will be in breach of contract and unable to enforce any post-employment restrictive covenants.

If there is a contractual dismissal procedure, the employer must follow this, to avoid a breach of contract claim.

Can an employer require employees to use their annual leave during the coronavirus outbreak?

Yes, an employer can require employees to take a period of annual leave during the coronavirus (COVID-19) outbreak, provided that they give the employee the required notice. This is unless there is an agreement to the contrary (such as in the contract or a collective agreement).

The employer must give the employee a period of notice at least twice as long as the period of leave it requires them to take. For example, if the employer requires the employee to take one week’s annual leave, it must give them at least two weeks’ advance notice.

An employer may wish to do this if it does not have enough work for its employees during the crisis and the alternative would be asking them to take unpaid leave. Or the employer may wish to avoid employees all taking their accrued annual leave at the same time later in the year.

Can an employee cancel a period of annual leave if they are unable to go on holiday due to the coronavirus outbreak?

Many employees affected by travel restrictions and flight cancellations as a result of the coronavirus (COVID-19) outbreak will have to cancel holidays. They may wish to cancel the annual leave they have booked, so they can take it later in the year. Employers do not have to agree to this (unless the employee has the right to cancel under their contract or another relevant agreement).

The employer should take into account the needs of the business, and the employee’s personal circumstances, and should agree to the cancellation where this would not cause it significant inconvenience.

Whether or not an employer decides to allow employees to cancel their annual leave is likely to be influenced by the impact of the coronavirus crisis on the organisation. Some employers will be happy to agree to the cancellation where they face increased demand, such as NHS employers and supermarkets. Others, such as employers in the hospitality sector, may not have work available for employees and may require the employee to take the leave as booked.

Employers should bear in mind that, if employees are not able to take their leave during the current crisis, there may be a period later in the year when a number of employees request to take their accrued leave at the same time. Employees must be allowed to take their statutory annual leave entitlement during the leave year, so employers should plan to avoid this situation where possible. 

Does annual leave accrue during a period of lay-off or furlough?

Yes, statutory annual leave will continue to accrue as normal during a period of lay-off or furlough during the coronavirus (COVID-19) crisis. This is because the contract of employment will continue to be in existence during this period.  Contractual annual leave in excess of the statutory minimum will also continue to accrue, unless the contract specifically provides otherwise.

Which wage costs are covered under the Coronavirus Job Retention Scheme?

HM Revenue and Customs guidance on the Coronavirus Job Retention Scheme, published on 26 March 2020, states that employers can claim a grant from HMRC to cover 80% of an employee’s regular wage, or £2,500 per month, whichever is lower. In addition to this, they can claim the employer national insurance contributions and the minimum automatic enrolment employer pension contributions that they are liable to pay on the subsidised wage.

Fees, commission and bonuses should not be included in the calculation of the wage costs.

Employers can top up the 80% of employees’ wages that they claim from HMRC, and pay employees in full, but they are not obliged to.

The grant is for 80% of the employee’s gross pay.

What is the Coronavirus Job Retention Scheme?

The CJRS is intended to support employers to continue paying employees who would otherwise be made redundant or put on a period of lay-off. It is open to all employers.

Under the scheme, if a worker is designated as a “furloughed worker”, a grant will be available from HM Customs and Revenue (HMRC) to reimburse the employer for 80% of the wage costs relating to the worker, up to a maximum of £2,500 per month plus employer’s National Insurance Contributions and employer’s minimum auto-enrolment employer pension contributions of 3%.

Payments can be backdated to 1 March 2020. The worker should not perform any work for the employer while on “furlough leave”.

Unless the employer has a contractual right to lay off workers, it will need to obtain the worker’s agreement to be placed on furlough leave. This is unlikely to present an issue in most situations, if the worker is aware that the alternative is redundancy or a period without pay.

In its guidance for employees, the Government states that employers do not have to.

Further details of how the scheme will operate are expected in due course.   The scheme will initially be open for three months, but may be extended.

Does the 80% mean an employee might get paid less than the national minimum wage?

Quite possibly…..So if they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working.  However, they are entitled to be paid national minimum wage for any time spent training.

Click here for government guidance

 

 

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We also can provide you with a Coronavirus (COVID-19): Temporary changes to workplace policies and procedures……