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COVID-19 - Stay Alert to deliver final mile - April 2020

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Friday 17th April

 

Medical for HGV licence temporarily relaxed for COVID-19

Keeps 30,000 HGV drivers a month on the road

 

 

COVID-19 MOT exemption, driver hours extended, this week compliance shift to keep drivers on the road was announced on Friday April 17th,  the government has temporarily relaxed the requirement for bus and lorry drivers to provide a doctor’s medical report in order to renew their licence.

 

Transport Secretary Grant Shapps this Friday (17 April 2020) announced the latest action taken by the government and DVLA will ensure that bus and lorry drivers can continue their vital work and keep the country moving. Under the scheme, drivers will be able to receive a temporary 1-year licence, providing they do not have any medical conditions that affect their driving and their current licence expires in 2020.

 

·         temporary removal of the routine D4 medical will make it easier for bus and lorry drivers to renew their driving licence and keep 30,000 drivers on the road each month

·         as long as they are fit to drive, applicants will be able to apply for a 1-year licence without the need to provide further medical evidence

 

 

This temporary change will not only keep 30,000 drivers on the road each month, but will also relieve pressure on NHS staff who are working hard on the frontline to tackle coronavirus and help parts of the emergency services to deliver their critical role.

 

Drivers with health issues will still need to declare these, and those with health issues that prevent them from driving safely will not have their licence renewed.

 

Transport Secretary Grant Shapps ‘By temporarily relaxing the requirement to provide a doctor’s medical report as part of the bus and lorry driving licence renewal process we will ensure that those who are fit to drive can continue delivering critical goods around the country and getting workers to the front line. This will also help to ensure doctors and nurses can continue their crucial efforts to fight coronavirus.’

This temporary change will only apply to those drivers whose licences are due to expire or have expired since 1 January 2020. The licence will only be valid for 1 year and then the driver will need to submit a completed D4 when the licence is next due for renewal.

 

Thursday 16th April Job retention scheme – 4th revision

Yesterday afternoon (Thursday April 16th) the Government issued its 4th version of the Coronavirus Job Retention Scheme.  At the same time HM Treasury issued a direction to HMRC about how to implement the scheme.

 

Expert employment lawyer for the logistics sector, Alan Lewis has reviewed both items and updated the Inst of Couriers, hot off the press with the FAQs accordingly.   Carl Lomas IOC chair, ‘Big thank-you to Alan. His update appears one of the simplest guides available, hot off the press and no-one is coming close to his express delivery.’

 

You can contact Alan direct -  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

He summarises the main practical considerations below.

 

·         WHAT IS THE SCHEME? The stated purpose of the Coronavirus Job Retention Scheme is to allow employers to claim for costs of employment “in respect of furloughed employees arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus”. The scheme allows employers to place employees on ‘furlough leave’ by agreement and provides access to a grant towards employment costs. The scheme was announced on 20 March 2020. Guidance is being provided incrementally by the Government and we will continue to update this summary document. 

 

WHO IS ELIGIBLE?

·         The scheme is applicable to all UK businesses and all PAYE employees (including part-time, agency, flexible and zero hours contracts) who were on payroll on or before 19 March 2020.  An RTI submission notifying HMRC of a payment to those employees must have been made on or before 19 March 2020 (see 3, below).  

·         Those transferred from another business after 19 March 2020 under the Transfer of Undertakings (Protection of Employment) Regulations 2006 are eligible. 

·         The scheme also applies to PAYE office holders (including company directors), salaried LLP members, agency workers, apprentices and “workers” who fall under s.230(3)(b) of the Employment Rights Act.

·         An employee must be furloughed for a minimum period of 21 calendar days and have entered into a written agreement in respect of furlough leave, for a claim for wages to be valid.

 

·         WHAT ABOUT NEW STARTERS? The scheme does not apply to anyone starting work after 19 March 2020.  Also, anyone who had not been paid by 19 March 2020 will be excluded because of the requirement for an RTI payroll submission by this date.  This means monthly paid staff who commenced work at the beginning of March will not be caught by the scheme, although weekly paid staff will be caught. 

 

WHAT HAPPENS DURING FURLOUGH LEAVE?

·         The employee remains employed by the employer, but they cannot work for the employer.  They should not attend the workplace or work remotely. If employees continue to answer emails and telephone calls (for example) then HMRC may see this as abuse of the scheme and could well seek repayment from the employer of part or all of the funding. 

·         The employee can, however, volunteer or train provided that “the employee does not provide services to, or generate revenue for, or on behalf of their organisation”. The employer can require employees to undertake training from home.  Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time.

 

CAN FURLOUGHED EMPLOYEES WORK FOR ANOTHER EMPLOYER?

·         Employees who already have more than one job can be furloughed by one employer and continue to work for the other.

·         The scheme does not prevent furloughed workers from taking on new employment while furloughed provided that this is by agreement. If the contract prohibits additional employment, employers may be asked to vary this provision.  Employers may wish to take steps to warn employees about working for competitors and remind employees of their contractual duties.

 

·         HOW LONG WILL THE SCHEME LAST?  The scheme is open for initial period until 31 May 2020 after which date it may be extended. It is good practice to inform employees the scheme will be kept under review.

 

·         HOW IS IT IMPLEMENTED?  Furlough leave must be seen as a change of status and will therefore require consent or a contractual right.  The guidance requires that employers agree the leave with the employee and confirm their new status in writing (and keep a record for 5 years).  Once the new portal is open (see 11, below), the employer will report this status to HMRC.  When deciding who should be furloughed, wider employment rights and obligations continue to apply, including equality considerations.

 

·         IS THERE A REQUIREMENT TO CONSULT WITH EMPLOYEES? If the employee is proposing to furlough 20 or more employees in circumstances where they would have otherwise made redundancies, then the requirement to collectively consult seems likely to have been triggered.  The special circumstances defence may be available to employers if there is insufficient scope to consult properly with employees, given these extraordinary times.   

 

·         WHAT ABOUT THOSE WHO ALREADY LEFT EMPLOYMENT OR ON NOTICE? The scheme is backdated in order to provide for those who had been put on notice of redundancy or who stopped working in the period 28 February to 19 March 2020 (inclusive). It allows employers to rehire and furlough employees who were made redundant or stopped working during that specific period.  Employers can also claim for those employees who agreed to take unpaid leave on or after 28 February 2020.  It is also possible to extend or renew fixed term contracts during the furlough period and keep those employees on furlough leave.

 

·         CAN EMPLOYEES REQUEST FURLOUGH LEAVE AS AN ALTERNATIVE TO REDUNDANCY? An employee can ask to be placed on furlough leave but the employer does not have to agree.  However, we expect that many employers will see the scheme as preferable because, in the short term, it will avoid payments of notice, accrued holiday and any statutory redundancy entitlement payable and allow access to a grant. 

 

WHAT CAN THE EMPLOYER CLAIM BACK AND HOW?

·         The employer will be able to claim a grant of up to 80%, of an employee’s regular wage (before tax) up to a cap of £2,500 per month.  The guidance states that this can include wages, past overtime, fees and compulsory commission payments. However, the Treasury has issued a Directive which clearly states that it does not include payments which are conditional on any matter or vary in accordance with business or employee performance.  This means most commission payments will be excluded.

·         Discretionary bonus (including tips) and commission payments and non-cash payments should be excluded. The cost of monetary and non-monetary benefits, including taxable Benefits in Kind and benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also be excluded.

·         In addition, the employer will be able to claim the associated Employer NICs and minimum (3%) automatic enrolment employer pension contributions on that subsidised wage.  Employees will be required to pay tax and NIC on payments received. 

·         Claims will be made via a HMRC portal which is being implemented and it is expected to be up and running on 20 April 2020.

·         Claims should only be made in relation to the period after the employee finishes work, not when the decision to furlough is made, or the date of any correspondence.

·         No claim can be made if it is “abusive or is otherwise contrary to the exceptional purpose of the scheme” (see 1, above)

 

·         CAN THE EMPLOYER “TOP-UP?” The employer may seek to pay only at the rate recoverable from HMRC.  The employer may opt to top up the employee’s salary if the grant does not cover it in full, but this is not a requirement.

 

·         HOW IS THE 80% OF EMPLOYMENT COSTS CALCULATED FOR THOSE WITH IRREGULAR EARNINGS? The 80% grant will be applied to the higher of: (1) earnings in the same month in the previous year; or (2) average monthly earnings in the 2019/2020 tax year. If the employee has worked for less than a year, the employer can claim for an average of their monthly earnings for the time that they have worked.

 

·         WHAT IF 80% OF SALARY IS AN AMOUNT WHICH FALLS BELOW NATIONAL LIVING WAGE/NATIONAL MINIMUM WAGE? Furloughed employees are not working therefore NLW and NMW do not apply. If the employer agrees with the employee that they will undertake training during furlough leave, the employee is entitled to a minimum of their NMW for the training period.

 

·         CAN EMPLOYEES BE MOVED ON AND OFF FURLOUGH LEAVE (OR ROTATED)?  Yes, but an employee must be furloughed for a minimum of 21 calendar days on each rotation.

 

·         WHAT HAPPENS WITH ANNUAL LEAVE AND CONTINUITY OF SERVICE? Continuity of service will be unbroken. We believe that annual leave will continue to accrue.  ACAS has stated that holidays can be taken during furlough leave and must be paid at 100% of normal salary. However, this has not been stated anywhere in the Government guidance.  It has not been confirmed whether an employer can make a claim for wages paid for holiday taken during furlough leave. 

 

·         WHAT HAPPENS WITH FAMILY LEAVE? Employees already on or due to go on any form of family leave (e.g. maternity leave) will remain on such leave and cannot be furloughed.  Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed.

 

·         WHAT HAPPENS WITH SICK LEAVE? Those already on sick leave or self-isolating remain on sick leave until they are fit to work, out of isolation or designated as furlough by the employer.  During sick leave or self-isolation, they are paid at the relevant rate (SSP or contractual sick pay).  Aside from those on short term sick leave/self-isolation, employers can, for business reasons, furlough employees who are currently off sick. They can also furlough employees who are shielding in line with public health guidance. 

 

·         WHAT ABOUT SPONSORED WORKERS UNDER TIERS 2 OR 5 OF THE POINTS BASED SYSTEM? Home Office guidance indicates that it is possible to furlough such workers and provides for temporary reductions in pay.  However, it also requires that the reductions in pay are “part of a company-wide policy to avoid redundancies and in which all workers are treated the same”.  Further guidance is available here.  

 

 

 

 

April 11th - Two key briefings below, first the 15 point summary on the Job retention scheme update, then a ten point summary, ‘KEY DEVELOPMENTS FOR THE EXPRESS COURIER SECTOR TO BE AWARE OF WITH FURLOUGHING’

 

15-point summary review for the April 9th Job retention scheme update for the express courier sector

(Note: On 4 April 2020 and again on 9 April the Government issued updated guidance about the Coronavirus Job Retention Scheme).

Here we summarise 15 points of clarifying or new information from the second and latest versions of the Scheme. This is not a summary of the full Scheme.

  1. WHAT IS IT DESIGNED TO DO? The Guidance used to say that the scheme was designed to help employers keep in employment those who would otherwise be laid off or made redundant.  That has now changed. The latest Guidance says the Scheme is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.  There is no definition of what “severely affected” means.
  2. WHAT ABOUT INDIVIDUALS? Individuals can furlough employees such as nannies, provided they pay them through PAYE and they were on their payroll on, or before, 28 February 2020.
  3. CAN AN EMPLOYEE WHO HAS LEFT BE RE-EMPLOYED AND PUT ON FURLOUGH? It has now been made clear that if an employer made an employee redundant, or they stopped working for an employer on or after 28 February 2020, the employer can (but is not obliged to) employ them again and put them on furlough and claim for their wages through the scheme. This applies even if the employee left of their own accord.
  4. WHAT ABOUT EMPLOYEES WITH CARING RESPONSIBILIIES? Employees unable to work due to having to care for people as a result of Covid-19 can be furloughed. An example would be employees that need to look after children - they can be furloughed.
  5. WHAT ABOUT FIXED TERM CONTRACTS? Employees on fixed term contracts can be furloughed. Their contacts can be renewed or extended during furlough. Where a fixed term contract ends because it is not extended or renewed, the employer can no longer claim under the Scheme for that employee.
  6. WHAT ABOUT INDIVIDUALS WHO ARE NOT EMPLOYEES? The Scheme covers office holders, salaried members of LLPs, agency workers and workers (where they are contracted to provide the services personally).  This means that directors can be furloughed and the furlough arrangements should be adopted by board resolution of the company, noted in the company records and communicated in writing to the director. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.  This also applies to salaried individuals who are directors of their own personal service company.
  7. WHAT IF AN EMPLOYEE DOES VOLUNTEER WORK? This is permitted so long as it does not provide services to generate revenue for the employer’s business.
  8. WHAT ABOUT OVERTIME, COMMISSION AND BONUSES? The employer can claim for these if they are obliged to pay them regularly to employees.
  9. WHAT ABOUT WORKING FOR A DIFFERENT EMPLOYER? Provided their employment contract does not prohibit it, employees on furlough can work for another employer.  This means, for example, that an employee could be receiving 80% of their salary whilst furloughed and at the same time a salary from the new employer. This will lead to situations where some employees are better off on furlough than they would otherwise have been, a surprising result.
  10. WHAT ABOUT EMPLOYEES WHO ARE SHIELDING OR ON LONG-TERM SICK? They can be furloughed. There had been a requirement that this could only be done for shielding employees if they would otherwise have been made redundant or they can’t work from home.  That requirement has now been removed.
  11. CAN SSP BE CLAIMED IN ADDITION TO THE JOB RETENTION SCHEME GRANT?
  12. CAN A FURLOUGHED EMPLOYEE CARRY OUT WORK FOR A COMPANY OR ORGANISATION WHICH IS LINKED OR ASSOCIATED WITH THE EMPLOYER?
  13. CAN AN EMPLOYER SWITCH EMPLOYEES FROM SICK PAY TO FURLOUGH AND VICE-VERSA? Yes, though this should not be abused by using furlough to in effect top up SSP for short terms absence.  
  14. ARE FOREIGN NATIONALS ELIGIBLE FOR FURLOUGH?
  15. CAN THE EMPLOYER IN A “TUPE” SITUATION PUT ON FURLOUGH EMPLOYEES OF A PREVIOUS BUSINESS? Under the Transfer of Undertakings (Protection of Employment) Regulation 2006 (commonly referred to as “TUPE”) employers can inherit staff and the contracts of employment of those staff automatically transfer over to the new employer.  Provided the transfer happened after 28 February 2020, the new employer is eligible to designate those staff as furloughed (still having to obtain their prior agreement to avoid a breach of contract).

 

 

10 KEY DEVELOPMENTS FOR THE EXPRESS COURIER SECTOR TO BE AWARE OF WITH FURLOUGHING

Brought to you by Alan Lewis, expert express courier sector employment lawyer of Constantine Law

INCLUDING COMMISSION IN THE FURLOUGH PAY CALCULATION

Government has amended the eligibility criteria for commission payments to be included in claims for furloughed pay under the Coronavirus Job Retention Scheme.

The clarification means that express couriers with employees who earn commission will be able to claim for any regular payments that they are obliged to pay employees including

  • wages
  • past overtime
  • fees
  • compulsory commission payments

Discretionary bonuses and commission payments however, and non-cash payments cannot be included.

EMPLOYEES WHOSE PAY VARIES

Where the employee has been employed for 12 months or more, you can claim the highest of either:

  • the same month’s earning from the previous year
  • average monthly earnings for the 2019-2020 tax year

Where the employee has been employed for less than 12 months, employers can claim for 80% of their average monthly earnings since they started work.

The scheme is in place from 1 March 2020 for 3 months and may be extended if necessary. To be eligible for the grant, a furloughed employee (including “workers” if they were on the PAYE payroll as at 28 February 2020) must have been enrolled on the company's PAYE payroll and cannot undertake work for, or on behalf of, the organisation.

Staff who are working reduced hours are not eligible for pay to be reimbursed.

REDUNDANCY

Where an employee on the payroll as at 28 February 2020 has been made redundant on or after 28 February 2020, express couriers can re-employ them, put them on furlough and claim for their wages through the scheme.

TRAINING

Furloughed employees are free to participate in training and this is encouraged as long as it is not part of work to generate income for the organisation within the furlough period.

 

VOLUNTEERING

A furloughed employee is free to take part in voluntary work if this is in line with public health guidance, as long as they are not providing services for their employer.

EMPLOYEES WHO LEFT FOR ANOTHER JOB THAT FELL THROUGH

Where an employee left your company’s employment to take up a new job elsewhere which was withdrawn or postponed as a result of the Covid-19 situation, you can, if you wish, re-hire them and put on furlough, claiming payment via the Scheme. 

MOVING EMPLOYEES ON AND OFF FURLOUGH

Provided an employee is furloughed for at least 3 weeks, you can rotate employees on furlough. You cannot claim subsidy under the scheme for any employee wo is furloughed for fewer than 3 weeks.

FURLOUGHED EMPLOYEES WHO WORK A NEW JOB DURING FURLOUGH

Government has clarified that you can furlough an employee and, if contractually allowed, that employee can take up new paid employment and you can still claim the subsidy under the scheme to pay them on furlough. Whilst this will allow some employees to have windfall earnings (the furlough pay plus the earnings in the new job), the intention is to ease the burden that the UK has right now with recruiting fruit pickers, cleaners and care workers.

EMPLOYEES ON SICK LEAVE

Employers can now move employees from sick pay to furlough and vice-versa, provided they do not abuse the Scheme to top up sick pay for short term absences. SSP cannot be claimed in addition to a subsidy under the Scheme.

CASH FLOW IN FUNDING UNTIL THE SUBSIDY ARRIVES

The HMRC portal to claim the subsidy is expected to be ready from 20 April 2020. Funding the furlough pay In the meantime may prove challenging for some express couriers.  With the agreement of the employee, payment of furlough pay can be delayed until the subsidy is received.

 

 

April 9th - The new Coronavirus business hub on GOV.UK is now available at: https://www.gov.uk/coronavirus/business-support

Jenny Driscoll, Deputy Head of External Affairs, Department for Work and Pensions talks to the IOC,

The new business hub on GOV.UK is the first point of call for people seeking government information on support for business. Please can you share this update with your fellows and members. Your support in keeping people informed of important updates is greatly appreciated.

April 7th - Alan Lewis expert employment lawyer for express courier sector updates the IOC

 

FURLOUGHING:   Summary from Govt update April 7th

WHAT IT MEANS AND HOW TO IMPLEMENT IT

 

The Government has updated guidance for employers (on 4 April 2020) which can be found here. Alan Lewis employment law expert for express courier sector and partner at Constantine Law summarises the main practical considerations below.

 

1. WHAT IS THE SCHEME? The Coronavirus Job Retention Scheme is intended to help employers to maintain their current workforces where operations are severely affected by coronavirus. The scheme allows employers to place employees on ‘furlough leave’ and provides access to a grant towards employment costs. The scheme was announced on 20 March 2020 and has been backdated to 1 March 2020. Guidance is being provided incrementally by the government and we will continue to update this summary document.

2. WHO IS ELIGIBLE? The scheme is applicable to all PAYE employees who were on payroll on 28 February 2020 (including part-time, agency, flexible and zero hours contracts) and all UK businesses are eligible. The scheme also applies to PAYE office holders (including company directors), salaried LLP members, agency workers, apprentices and “workers” who fall under s.230(3)(b) of the Employment Rights Act. An employee must be furloughed for a minimum period of 3 weeks for a claim for wages to be valid.

3. WHAT ABOUT NEW STARTERS AFTER 28 FEBRUARY 2020? The scheme does not apply to them.

4. WHAT HAPPENS DURING FURLOUGH LEAVE? The employee remains employed by the employer, but they cannot work for the employer. They should not attend the workplace or work remotely. If employees continue to answer emails and telephone calls (for example) then HMRC may see this as abuse of the scheme and could well seek repayment from the employer of part or all of the funding. The employee can, however, volunteer or train provided that “the employee does not provide services to, or generate revenue for, or on behalf of their organisation”. The employer can require employees to undertake training from home. Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time.

5. CAN FURLOUGHED EMPLOYEES WORK FOR ANOTHER EMPLOYER? Employees already have more than one job can be furloughed by one employer and continue to work for the other. The scheme does not prevent furloughed workers from taking on new employment while furloughed provided that this is by agreement. If the contract prohibits additional employment, employers may be asked to vary this provision. Employers may wish to take steps to warn employees about working for competitors and remind employees of their contractual duties.

6. HOW LONG WILL THE SCHEME LAST? The scheme is open for initial period of 3 months (from 1 March 2020) after which it may be extended. It is good practice to inform employees the scheme will be kept under review.

7. HOW IS IT IMPLEMENTED? Furlough leave must be seen as a change of status and will therefore require consent or a contractual right. The guidance requires that employers agree the leave with the employee and confirm their new status in writing (and keep a record for 5 years). Once the new portal is open (see 10, below), the employer will report this status to HMRC. When deciding who should be furloughed, wider employment rights and obligations continue to apply, including equality considerations.

8. IS THERE A REQUIREMENT TO CONSULT WITH EMPLOYEES? If the employee is proposing to furlough 20 or more employees in circumstances where they would have otherwise made redundancies, then the requirement to collectively consult seems likely to have been triggered. The special circumstances defence may be available to employers if there is insufficient scope to consult properly with employees, given these extraordinary times. 

9. WHAT ABOUT THOSE WHO ALREADY LEFT EMPLOYMENT OR ON NOTICE? The scheme was backdated in order to provide for those who had been put on notice of redundancy or who stopped working on or after 28 February 2020. It also allows employers to rehire and furlough employees and  extend or renew expired fixed term contracts. Employers can also claim for those employees  who agreed to take unpaid leave on or after  28 February 2020.

10. CAN EMPLOYEES REQUEST FURLOUGH LEAVE AS AN ALTERNATIVE TO REDUNDANCY? An employee can ask to be placed on furlough leave but the employer does not have to agree. However, we expect that many employers will see the scheme as preferable because, in the short term, it will avoid payments of notice, accrued holiday and any statutory redundancy entitlement payable and allow access to a grant.

11. WHAT CAN THE EMPLOYER CLAIM BACK AND HOW? a. The employer will be able to claim a grant of up to 80%, of an employee’s regular wage (before tax) up to a cap of £2,500 per month. This includes wages, past overtime, fees and compulsory commission payments. b. Discretionary bonus (including tips) and commission payments and non-cash payments should be excluded. The cost of non-monetary benefits, including taxable Benefits in Kind and benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also be excluded. c. In addition, the employer will be able to claim the associated Employer NICs and minimum (3%) automatic enrolment employer pension contributions on that subsidised wage. Employees will be required to pay tax and NIC on payments received. d. Claims will be made via a HMRC portal which is being implemented and it is expected to be some weeks before this is up and running. Claims should only be made in relation to the period after the employee finishes work, not when the decision to furlough is made, or the date of any correspondence.

12. CAN THE EMPLOYER “TOP-UP?” The employer may seek to pay only at the rate recoverable from HMRC. The employer may opt to top up the employee’s salary if the grant does not cover it in full, but this is not a requirement.

13. HOW IS THE 80% OF EMPLOYMENT COSTS CALCULATED FOR THOSE WITH IRREGULAR EARNINGS? The 80% grant will be applied to the higher of: (1) earnings in the same month in the previous year; or (2) average monthly earnings in the 2019/2020 tax year. If the employee has worked

for less than a year, the employer can claim for an average of their monthly earnings for the time that they have worked. If the employee only started work in February 2020, a pro rata of their earnings so far should be taken to support the claim.

14. WHAT IF 80% OF SALARY IS AN AMOUNT WHICH FALLS BELOW NATIONAL LIVING WAGE/NATIONAL MINIMUM WAGE? Furloughed employees are not working therefore NLW and NMW do not apply.

15. CAN EMPLOYEES BE MOVED ON AND OFF FURLOUGH LEAVE (OR ROTATED)? Yes, but an employee must be furloughed for a minimum of 3 weeks on each rotation.

16. WHAT HAPPENS WITH ANNUAL LEAVE AND CONTINUITY OF SERVICE? We have no confirmation, but we anticipate that this will continue to accrue. We are advising clients to hold the status quo on any leave which is already booked until we have clarity as to how this should be paid. Equally, employees coming up to two years’ service are likely now to accrue this length of service.

17. WHAT HAPPENS WITH FAMILY LEAVE? Employees already on or due to go on any form of family leave (e.g. maternity leave) will remain on such leave and cannot be furloughed. Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed.

18. WHAT HAPPENS WITH SICK LEAVE? Those already on sick leave or self-isolating remain on sick leave until they are fit to work or out of isolation and paid at the relevant rate (SSP or contractual sick pay). Once they return to work, they may then be furloughed. Employees who are shielding in line with public health guidance can be placed on furlough if they would otherwise be at risk of redundancy. If employees do report as sick during furlough leave employers are required to pay them at the relevant SSP rate. However, we would expect some employees are unlikely to report as sick so as to avoid payment at a lower rate.

19. WHAT ABOUT SPONSORED WORKERS UNDER TIERS 2 OR 5 OF THE POINTS BASED SYSTEM? On this point guidance will also be needed from both the Home Office. The Home Office have strict rules as to minimum pay requirements for sponsored employees. If an employer elects to furlough sponsored employees, it should not reduce salaries below the minimum requirements unless the Home Office expressly permits this.

 

You can contact Alan Lewis  at Constantine Law on (0)203 696 8230.

www.constantinelaw.co.uk E: This email address is being protected from spambots. You need JavaScript enabled to view it. T: 44 (0)203 696 8230

 

 

April 4th - Alan Lewis expert employment lawyer for express courier sector updates the IOC on variations

 

(Note: On 4 April 2020 the Government issued updated guidance about the Coronavirus Job Retention Scheme).

Coronavirus Job Retention Scheme update April 4th

Here Alan Lewis, partner at Constantine Law brings the IOC a next-day update on the April 4th job retention scheme. Last week Alan briefed IOC fellows in detail on the COVID19 employment law - you can find that material in the story here.

Alan’s summary; 9 points of clarification or new information.  This is not a summary of the full Scheme.

  • WHAT IS IT DESIGNED TO DO? The Guidance used to say that the scheme was designed to help employers keep in employment those who would otherwise be laid off or made redundant.  That has now changed. The latest Guidance says the Scheme is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.
  • WHAT ABOUT INDIVIDUALS? Individuals can furlough employees such as nannies, provided they pay them through PAYE and they were on their payroll on, or before, 28 February 2020.
  • CAN AN EMPLOYEE WHO HAS LEFT BE RE-EMPLOYED AND PUT ON FURLOUGH?I It  has now been made clear that if an employer made an employee redundant, or they stopped working for an employer on or after 28 February 2020, the employer can (but is not obliged to) employ them again and put them on furlough and claim for their wages through the scheme. This applies even if the employee left of their own accord.
  • WHAT ABOUT EMPLOYEES WITH CARING RESPONSIBILITIES? Employees unable to work due to having to care for people as a result of Covid-19 can be furloughed. An example would be employees that need to look after children -they can be furloughed.
  • WHAT ABOUT FIXED TERM CONTRACTS? Employees on fixed term contracts can be furloughed. Their contacts can be renewed or extended during furlough. Where a fixed term contract ends because it is not extended or renewed, the employer can no longer claim under the Scheme for that employee.
  • WHAT ABOUT INDIVIDUALS WHO ARE NOT EMPLOYEES? The Scheme covers office holders, salaried members of LLPs, agency workers and workers (where they are contracted to provide the services personally).  This means that directors can be furloughed and the furlough arrangements should be adopted by board resolution of the company, noted in the company records and communicated in writing to the director. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.  This also applies to salaried individuals who are directors of their own personal service company.
  • WHAT IF AN EMPLOYEE DOES VOLUNTEER WORK? This is permitted so long as it does not provide services to generate revenue for the employer’s business.
  • WHAT ABOUT OVERTIME, COMMISSION AND BONUSES? The employer can claim for these if they are obliged to pay them regularly to employees.
  • WHAT ABOUT WORKING FOR A DIFFERENT EMPLOYER? Provided their employment contract does not prohibit it, employees on furlough can work for another employer.  This means, for example, that an employee could be receiving 80% of their salary whilst furloughed and at the same time a salary from the new employer. This will lead to situations where some employees are better off on furlough than they would otherwise have been, a surprising result.