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Covid-19: Top questions 09.04.2020

In these challenging times, our teams have been receiving a high volume of queries from clients and businesses about the impact of Covid-19 on their operations on key issues such as furloughing, contracts and supply chain management.

To help you and your business, the team has collated the most frequently asked questions from this week, with their responses, in the hope that this information is useful to you. Each week these questions are updated, but if you have any queries, at any time, please talk to the team for more detailed advice that is specific to you and your business.

 

Do I have to consult about putting employees on furlough leave?

If there is a contractual right to lay staff off then there is no formal obligation to consult subject to the wording of the clause. If there is no contractual right to lay-off, the employer will need to seek the employees’ agreement to furlough by consulting with them. If there is no agreement and the employer either imposes the change or terminates the contract and offers new terms, then, depending on the number of employees involved, there may a legal obligation to consult collectively with either the Trade Union or employee representatives.

An employer takes on a number of employees under a TUPE transfer on 3 March 2020. Can it furlough those employees?

Yes it can. The Coronavirus Job Retention Scheme (CJRS) states that a new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

Is Furlough available to employees who are on short time working (STW) ?

The Government’s guidance states that if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.  This could be read as meaning that employees currently on STW or working on reduced pay are not eligible to enter the scheme. However, in the absence of further guidance our view is that it surely cannot be intended that such employees should be outside the scheme if they cease working altogether and are then placed on furlough. There is no logical reason for treating such employees differently from those who were furloughed without having their hours of work reduced beforehand.

Is SSP payable to employees who are self-isolating because they fall within a vulnerable group or are shielding and therefore strongly advised not to leave their home for 12 weeks.

Based on the law as it currently stands, it appears that neither class of employee would be entitled to SSP for that reason. They would only be entitled to SSP if they were self-isolating under Stay at Home guidance i.e. that they have the virus (or symptoms) or live with someone who has the virus or symptoms. We understand that this is the Government’s position also but it may leave a significant number of people without any income. We will keep this under review as the situation may change.

Can I discipline an employee who has been furloughed?

The contract of employment continues to operate during a period of furlough leave.  On that basis, there appears to no be credible reason why an employer cannot discipline an employee subject to the normal rules on procedure and fairness. In particular, employers should consider how any hearings are held – virtually or in person and ensuring that the employee is able to exercise their right to be accompanied to the disciplinary hearing. Clearly it is not going to be as straightforward as it would usually be and employers are advised to proceed with caution, particularly if dismissal is a possibility.

Is it a good idea to issue update statements as to a business’s  action plan in respect of coronavirus?

It is of course more important than ever to keep the supply chain updated and it is certainly a good idea to pass on information.  The only caveat to this however is that such statements should be carefully worded, so it is clear that they are indicative guidance only and are always subject to change.  If businesses are considering entering into variations to contracts then these need to be properly documented and formalised.  It is important that statements of this nature are not so ambiguous that they could inadvertently be argued or considered to be proper formal contractual variations.  Statements therefore should be considered carefully to ensure their effectiveness.

How should we deal with commercial changes within commercial agreements for example changes to schedules to agreements?

When considering temporary changes it is always important to understand whether variations need to be noted as formal variations to the contract or whether a Schedule will allow for variation by simple agreement between the parties.  Obviously often commercial detail in schedules is drafted in such a way that it can simply be updated by written agreement with the parties and no formal Deed of Variation will be required.  However, it is always imperative to check the exact wording of the Schedule to ensure that this is in fact correct.  Even if schedules can be varied in this more informal manner then we would always recommend that as best practice each party keeps a proper written record of the interim changes that have been agreed including how long such changes will last for to avoid any dispute or ambiguity in the future.

 

Our team is on hand to help you, your business and your family however we can, so please get in touch with us on 01482 325242 or email enquiries@andrewjackson.co.uk

Correct as of 5pm on 09.04.2020

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