COVID-19 and Employment Law
With high staff absences and business closures, the COVID-19 pandemic has raised unprecedented levels of employment queries. Here we try to answer the most common questions we are being asked but please note, the guidance has been changing constantly and both employers and employees should read the HMRC Guidance in full.
The information below is up-to-date as at 3rd June 2020.
It is a government scheme called the Coronavirus Job Retention Scheme that has been set up to help businesses impacted by COVID-19. It enables staff to be furloughed from work (a temporary leave of absence) rather than being made redundant or laid off. Employers can then claim back 80% of staff wages from HMRC, enabling businesses to remain closed but staff can continue to be paid at 80% of their normal wage.
- Employees on PAYE payroll on or before 19th March 2020; and which were notified to HMRC on an RTI submission on or before 19th March 2020;
- Employees that were employed as of 28th February 2020 and on payroll and were made redundant or stopped working for the employer between 28th February and 19th March, can be re-employed and furloughed;
- Full-time employees
- Part-time employees;
- Agency workers;
- Flexible or zero-hour contracts;
- Foreign nationals in these categories;
Employers should write to employees seeking their agreement to temporarily vary the contract of employment. Employees are agreeing not to work for the period of furlough; and agreeing to be paid 80% of their normal salary (unless their salary is being topped up to 100%). The paperwork should be kept by the employer for 5 years.
Claims by employers under the scheme will not be rejected because they had not obtained written agreement from the employee to cease all work. So, if an employer has written to the employee but the employee has not signed and returned the furlough agreement, they will still be able to claim.
You remain employed whilst you are furloughed and your job will remain open. All being well, you would return to your normal job once the furlough scheme closes and / or businesses are allowed to re-open. If there is a reduction of work at this time, your employer may need to consider making redundancies.
Although you will remain employed, you must not carry out any work for your employer whilst furloughed.
Yes. You can be on annual leave whilst furloughed and it will not affect your furloughed status. There may be a clause in your contract that allows the employer to ask you to take or not take holidays at a certain time so they may rely on this to ask you to take some holidays.
Employers are asking employees to do this so that when things do return to normal, they don’t end up in a situation where everyone wants to take holidays, at a time where the business needs to increase trade and income.
Even if there is no such clause in your contract, at law, an employer can force an employee to use annual leave as long as they give twice as much notice as the amount of annual leave they want the employee to use. For example, if an employer wants you to take 1 week’s holiday, they would have to give you 2 weeks’ notice. If they wanted you to take 2 days’ holiday, they would need to give you 4 days’ notice etc.
Even if you are getting paid 80% of your wage whilst furloughed, any holidays taken should be paid at 100% as normal. This is because of the law around holiday pay. 100% payment would be the case for the first 4 weeks (or 20 days) of annual leave entitlement. It may be the position that the remaining 1.6 weeks (or 8 days) of annual leave can be paid at 80% with the employee’s agreement.
This difference is to do with the 4 weeks of annual leave being covered by EU law, whereas the additional 1.6. weeks is specific to the UK and the laws are slightly different on this point.
Yes, if you are shielding in line with public health guidance.
Only if you need to stay home with someone who is shielding.
Yes, the guidance makes it clear you can be.
Yes but your employer is not under any obligation to re-hire and furlough you.
There is no obligation on the employer to top up the pay to 100% but some employers are choosing to. Most employees are agreeing to be furloughed and receive 80% of their pay because the alternative would most likely be redundancy.
Yes. Unless you agree to have your salary deferred until the employer receives the reimbursement from HMRC.
No. You cannot carry out any work for your employer if you are furloughed. If you carry out work whilst furloughed and your employer makes a claim on the payment scheme, this would be a fraudulent claim.
Yes, those with caring responsibilities including looking after children, can be furloughed.
The repayment scheme currently runs from 1st March to 30th June but the government said at the outset this could be extended if necessary. In order to qualify for the scheme, employees must be furloughed for a minimum of 3 weeks at a time.
Yes. It is common that there is enough work for only some employees, meaning some would be furloughed and some would continue working. The scheme allows employers to rotate staff to make it fairer.
In choosing which staff to furlough, it may be a natural choice due to the areas in which the employees normally work. However, if not employers have a few options:
- Ask for volunteers;
- Prioritise those who are shielding, vulnerable or have health concerns;
Any other method for selection would be ok as long as the reasons for choosing employees are not discriminatory e.g. singling out someone because of their sexuality, race etc.
Yes. The government guidance makes it clear that you can as long as it doesn’t breach your employment contract. For example, you may have a clause that says you cannot work for anyone else whilst you are employed. This would be ok if the employer consents to you working elsewhere.
Yes. Where the board decide that one or more directors should be furloughed, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
A director on furlough is allowed to carry out particular duties to fulfil statutory obligations such as filing annual returns. They should not carry out any work to generate commercial revenue or provide services to or on behalf of the company.
Not unless you were on payroll as at 19th March 2020.
Yes. Your employer could choose (but is not obliged) to take you off of sick leave and SSP, furlough you and pay you 80% of your salary.
Those will short-term illnesses and those isolating because of COVID-19 should be on sick leave and receive SSP. For those isolating due to COVID-19, SSP is payable from day 1 rather than the normal day 4; and employers can reclaim 14 days of SSP from the government.
Employers can only claim through the scheme for enhanced contractual pay for employees in this situation. Statutory payments cannot be claimed.
Women must take the statutory minimum of 2 weeks off after having a baby (or 4 weeks if they work in a factory). However, they could choose to return to work and be furloughed if there was no work for them. Note, employees normally have to give 8 weeks’ notice to return to work early but this could be reduced with the agreement of the employer.
This would bring the maternity leave to an end so this would only be recommended if you are coming to the end of your maternity leave anyway. Alternatively, you could potentially come off maternity leave, be furloughed and return to maternity leave but as shared parental leave because you can take that in blocks, unlike maternity leave.
You would return to work as normal. If the employer does not have enough work for you, they may need to consider changes to your terms and conditions such as reduced pay / hours (as long as pay did not take you below national minimum wage); or redundancies. Your contract may also allow for lay-off or short-time working until the business returns to normal.
We have prepared an article explaining this.
Generally speaking, yes. However, there are exceptions.
As you are still employed, the default position is that you must work when your employer asks you to and/or when you are contracted to. If you are shielding in line with public health guidance (and received the letter from your GP or NHS), off sick or self-isolating, you would not have to return to work of course.
If you are concerned that it is not safe to return, you should speak to your employer in the first instance to voice your concerns. If they have put in place everything they can to ensure social distancing and hygiene measures are in place, there should be no reason for you not to return.
However, if the employer has not put the appropriate measures in place to ensure the safety of its staff and you refuse to return to work; if you are dismissed because of this, it could potentially be automatic unfair dismissal. However, you must believe that there is imminent and serious danger. If the employer has put in place appropriate measures in line with government advice, it would be very unlikely that an employee could argue imminent and serious danger. It will depend on the circumstances of the measures in place, the employee’s own health concerns, and the wider risk of people contracting COVID-19. As the number of cases reduce and we move through the phases of easing out of lockdown, the threat level reduces for employees contracting COVID-19 at work.
If you refuse to attend work without a valid reason, it may be treated as an unauthorised absence and the employer could take disciplinary action. However, disciplinary action could be ‘detrimental’ treatment, which may give rise to a detriment claim for the employee. This is a complicated area of law so I would always advise taking legal advice.
Given the potential risk, employers should carefully consider an employee’s justification for refusing to return to work before taking any action. Again, taking legal advice would be recommended.
Yes. Whilst the Job Retention Scheme is intended to prevent redundancies, unfortunately, redundancies are inevitable. Even more so as employers are required to contribute towards pay for furloughed staff from August.
Redundancy pay should be calculated using full, pre-furlough salary. The calculation for a statutory redundancy payment is based on your age, length of service and full years’ worked. You can calculate the statutory entitlement here.
If you are made redundant when furloughed, you will still be entitled to receive notice and pay. The amount of notice pay will depend on the amount of notice you are entitled to receive on termination of employment.
If you are entitled to the statutory minimum notice, notice pay is based on full salary (100%), not furlough salary (80% if that is what is agreed). If you do not have a written contract, you will be entitled to statutory notice.
If the contract gives at least one week more than statutory notice, notice pay depends on the furlough agreement. If you agreed to reduce pay to 80%, notice pay will be paid at 80% if notice runs whilst you remain furloughed.