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Employment Law Roundup – November 20

November 4th, 2020

Welcome article – Covid-19

Last month saw a huge amount of activity with the planned end to the furlough scheme and the introduction of the new Job Support Scheme to follow from November. Originally aimed at businesses with reduced demand over the winter due to Covid, plans were made to extend the JSS to cover businesses who were required to close due to the 3 tier restrictions.

All this planning was for nothing in the end. It was overridden on Halloween when the Prime Minister announced a new month-long national lockdown where non-essential shops, restaurants and pubs must close. The furlough scheme is now being extended into November whilst the lockdown is in place. Michael Gove indicated on the Andrew Marr show that the lockdown could extend beyond November. Everyone will be watching this space to see what effect the lockdown has on the spread of the virus.

Before the announcement, and following leaks about the government’s plans, business leaders said another national lockdown would be devastating. Mike Cherry, Chair of the Federation of Small Businesses, said another lockdown would be ‘incredibly frustrating’ after small businesses had spent thousands in making their sites Covid-secure. It is an incredibly tough time for all employers and the situation is fast moving. Keep up to date with both the rules and support here or contact us for immediate and targeted help. Read the rest of this entry »

Employment Law Roundup – Oct 20

October 8th, 2020

Welcome article

Whether you call it a second wave or one continuous storm, Covid-19 is at the forefront of every employer’s mind as we enter Autumn.  Once again, the government has said employees should work from home if they can, in stark relief to the summer push to get them back in the office. More staff in sectors such as retail and hospitality must now wear masks to stem the rise in infections. Hospitality businesses, such as pubs and restaurants, must shut by 10pm. But the big news for employers came via Rishi Sunak’s Job Support Scheme (JSS) as part of his Winter Economy Plan. It is aimed at safeguarding viable jobs in those sectors of the economy which will struggle over the winter months because of the pandemic.

The JSS will run for 6 months from 1 November 2020. An employee will need to work at least a third (33 per cent) of their normal hours and the employer must pay them for those hours. The remaining two thirds (or 66 per cent) of an employee’s hours are then split again into 3: the government will pay for one third of the remaining hours (22% of their overall contractual hours) and the employer must pay for another third (22%). This means an employee will receive 77% of pay. The government grant is based on the employee’s usual salary, but their contribution will be capped at £697.92 per month. The employer will be reimbursed in arrears for the government contribution.

Only small and medium businesses can take part in this scheme (bigger businesses can take advantage only if their turnover has fallen during the pandemic and the government does not expect them to pay out dividends or similar capital distributions whilst using the JSS). Any small or medium business can use the JSS even if they haven’t previously used the furlough scheme.

No doubt there will be more guidance on the scheme in due course so keep an eye out for the finer detail. Whether the current situation is a tiny ripple or a raging storm, this could be the lifeline that some SMEs need to help them ride out this wave over the winter. Read the rest of this entry »

Employment Law Roundup – Sept 20

September 7th, 2020

Update September 2020

September and October this year see the scaling back of the Coronavirus Job Retention Scheme under which millions of employees have been placed on furlough while the Government issued grants to employers to cover the cost of their wages.

The scheme ends altogether on 31 October and in September and October the amount of the grant being offered by the Government is to be reduced. Under the original scheme the Government paid 80 per cent of a furloughed employee’s wages up to a maximum of £2,500 per month. In August employers became liable to pay National Insurance Contributions and mandatory pension costs for furloughed employees and from 1 September, the scheme will only pay 70% of employees’ wages to a maximum of £2,187.50 per month. From 1 October the scheme will be reduced further so that the government contributes only 60% of wages to a maximum of £1,875.

It is important to note that these grants are made on the basis that the employer continues to pay a furloughed employee at least 80 per cent of wages or £2,500 per month. In other words the employer cannot simply pass on the reduced amount of grant being provided under the scheme but must top it up so that the actual entitlement of a furloughed employee stays the same.

There seems little doubt that the increased costs to employers – and the prospect of the scheme ending altogether – will result in large scale redundancies across the economy. It is worth remembering that a fair dismissal for redundancy requires an employer to engage in meaningful consultation with employees. That means consulting before a final decision is taken and so even if the end of the scheme is still two months away, it is not too early to start that process if employers can already foresee what will need to be done come November. Read the rest of this entry »

Employment Law Roundup – July 2020

July 6th, 2020

From this month the new Flexible Furlough Scheme is in operation. Under the old scheme an employee had to be furloughed for at least 21 days and could perform no work in that time. The new scheme allows for a furlough of any period and for employees to work part-time. Employees must be paid in full for the time that they are working, with the scheme covering 80 per cent of an employee’s wages for the remainder of the week (capped at £2,500). The Government regards this as part of the process of phasing out furlough altogether by the end of October. For that reason, the Flexible Furlough Scheme is only open to employees who were fully furloughed for at least 21 days under the old scheme. What is more, the number of employees who can be flexibly furloughed is capped at the ‘high water mark’ of employees furloughed under the old scheme. So if the employer had furloughed no more than 50 employees at any one time under the old scheme it cannot place more than 50 employees on flexible furlough.

From August, the employer will have to start bearing some of the costs of paying employees on furlough. At first, they will simply have to pay employer’s national insurance and pension contributions. Then in September, the support provided for employees on furlough will be reduced to 70 per cent of wages (capped at £2,187.50) and in October the Government will contribute only 60% of wages (capped at £1,875). Even in September and October, however, the employer must make up the sum so that the employee receives at least 80% of wages to a maximum of £2,500 per month.

Pressure is now growing on the Government to extend the furlough scheme beyond October for those sectors of the economy that will continue to be hard-hit by the pandemic. That is a big ask of the Treasury given the scale of the intervention that it has already made. Without further measures however, it seems inevitable that large scale redundancies that were avoided in the Spring will dominate the autumn.  The real employment law impact of coronavirus has yet to be felt. Read the rest of this entry »

Employment Law Roundup – June 20

June 3rd, 2020

The lockdown imposed in response to the coronavirus outbreak is now in the process of being lifted – albeit gradually. As part of this the Government are encouraging employees to come back to work.  Some businesses that were legally required to close are now reopening and more will follow in the coming weeks. The Coronavirus Job Retention Scheme (CJRS) that has supported more than 8 million jobs since March will change in July so that employees who return to work part-time will still qualify for support. From August employers will have to start contributing to the cost of furloughed employees with the scheme being ended altogether at the end of October.

So this month we are looking at the things that employers need to think about from an employment law perspective when starting on the journey to normal working. Much of this is common sense, but there are potential legal difficulties that employers can avoid by listening carefully to the concerns of employees and adopting a flexible approach.    Read the rest of this entry »