March 28, 2020
Employment Law

COVID-19 has put unprecedented pressure on businesses and their staff and has raised various employment law issues. An awareness of government updates and employment law will help you weather the storm. Here are some key points although please bear in mind the situation is fluid:

Coronavirus Bill 2019-2021

On 17 March 2020, the government published details of the Coronavirus Bill 2019-2021 and set out proposed emergency legislative measure to address the outbreak.

Important employment law issues raised include:

  • Employees and workers will be able to take emergency statutory volunteer leave in blocks of two, three, or four weeks’ unpaid leave. A UK-wide compensation fund will be established to compensate for loss of earnings and expenses incurred at a flat rate for those who volunteer through an appropriate authority.
  • Changes to statutory sick pay (SSP) include: allow for it be claimed from the first day of incapacity, which will have retrospective effect from 13 March 2020; enable employers with fewer than 250 employees to reclaim SSP paid in respect of the first 14 days of COVID-19-related sickness absence, which will have retrospective effect from 14 March 2020.

Statutory sick pay (SSP) and COVID-19 Employment Law

SSP is the right of all employees to receive payment from employers when they are unable to work due to illness. Many businesses offer sick pay policies in employment contracts.

In order to qualify for SSP an employee must be absent from work due to incapacity. Where an employee has not, at the point they are suspended, either been diagnosed with COVID-19 or exhibited symptoms, then it is unlikely that their absence will meet the definition of day of incapacity in the Social Security Contributions and Benefits Act 1992.

The deemed incapacity rules in the SSP regulations have been extended to explicitly include employees who are self-isolating or socially distancing following government guidance.

Is an employer entitled to send an employee home from work to self-isolate?

If the workplace and the nature of the role allow for remote working then this may provide the employer with an alternative to suspension for the purposes of self-isolation.

There may be a range of reasons that an employer may wish to send an employee home to self-isolate. The employer may be acting out of an abundance of caution, the employee may have had contact with someone who has been infected, or they may be exhibiting symptoms.

If there is an identified risk that an employee may have been exposed to COVID-19, then it is understandable, in light of an employer’s duty to protect the health and safety of other employees.

From an employment law perspective, the employer should consider whether it has an express right to require the employee to stay at home. If not, the question is then whether there is an express or implied right for the employee to attend work in these circumstances. It is unlikely to be a breach of implied duties to require an employee to stay at home in these circumstances, assuming there are reasonable and non-discriminatory grounds for concern, and the matter is dealt with appropriately, proportionately and sensitively.

What pay are employees entitled to when sent home?

Where the employer is able to continue work from home then, subject to any contractual provision to the contrary, they will continue to be entitled to their normal rate of pay.

If they are not able to do so then consideration would need to be given to the terms of the contract of employment, although most employment contracts will not provide for this type of scenario.

If an employee has been advised by government guidance to self-isolate or be socially distant then they will fall within the new deemed incapacity rules for SSP discussed above. In those circumstances is it likely that the employer could treat them as being on sick leave and pay them SSP (subject to any contractual sick pay policy).

Where an employee refuses to attend work due to fears about coronavirus, what action can the employer take and what pay are they entitled to?

If the employee can work from home, this may well resolve the issue. If not, the employer would need to consider the current public health advice, the specific reason that the employee is concerned about attending work and whether it would be discriminatory to refuse home working, take disciplinary action, or withhold pay.

If there is no discrimination angle, and the public health advice is such that the employee could reasonably be asked to attend work then it is possible that the employee could be investigated for misconduct in terms of refusal to follow a reasonable management instruction, and their unauthorised absence.

If the absence is unauthorised then the employee would likely not be entitled to pay as they are not willing to attend work.

Returning from ‘high-risk’ countries

As matters currently stand, government guidance does not advise self-isolation for those returning from countries with a high incidence of COVID-19. This means, arguably, an employer requiring an employee to self-isolate because they have returned from a high-risk country, will need to pay the employee full pay.

This does not seem to reflect the government’s intention. However, given the link between public health guidance on self-isolation and SSP it seems to represent the legal position.

Can we change our enhanced sick pay scheme to provide that only SSP is payable in the event of absence due to COVID-19?

Where the relevant employee’s sick pay entitlement is out in their contracts, to amend this will amount to a variation of contract. There are a number of ways an employer could achieve this:

Consent – employers could seek written consent of the relevant employees to the contractual change. While employees are unlikely to agree to a change in terms that is not in their favour, they may be willing to do so where their agreement may help the employer to stay in business.

Dismissal and re-engagement – where employees are unwilling to consent to a change in their contractual sick pay entitlement, an employer can consider dismissing them and offering them re-engagement on the revised terms. Even if the affected employees accept the new terms, they will be entitled to claim unfair dismissal in respect of termination and wrongful dismissal, if the employer does not give them the required notice to terminate.

Unilaterally imposing the change – employees may respond to a change that is imposed on them unilaterally in a number of ways. They may “work under protest” and bring claims for breach of contract or unlawful deductions from wages. Alternatively, they may resign and claim constructive dismissal.

Where the relevant employees’ contracts specify that their sick pay entitlement is set out in the employer’s separate sickness absence policy, which may be amended from time to time, it will be much easier for an employer to make the change. The employer should confirm the change in writing to employees and ideally ask them to provide written acknowledgment.

Lay-off and short-time working

Laying off employees means that the employer provides employees with no work (and no pay) for a period while retaining them as employees; short-time working means providing employees with less work (and less pay) for a period while retaining them as employees. These are temporary solution to the problem of no or less work. However, if employees are laid-off or put on short-time working in circumstances where the employer does not have the contractual right to do so then the employer will be in fundamental breach of contract entitling the employee to resign and claim constructive dismissal.

A better option is likely to be the Coronavirus Job retention Scheme which will pay employees’ salaries of up to £2,500 a calendar month as long as they are kept on the payroll.

COVID-19 Employment Law: Coronavirus Job Retention Scheme

The introduction of a new Coronavirus Job Retention Scheme (furlough leave) was announced by the government on 20 March 2020. Under the scheme, all UK employers, regardless of size or sector, can claim a grant from HMRC to cover 80% of the wages costs of employees who are not working but kept on the payroll (“furloughed”), of up to £2,500 a calendar month for each employee. Employers can choose to top up the remaining 20% if they wish.

The Government will provide access to the scheme through an online portal which is currently under development. Once the scheme goes live it will be backdated to 1 March 2020. The scheme will be in place for at least 3 months. 

It is understood that the scheme will apply in respect of all employees on PAYE, including those on zero-hours contracts.

Employers cannot require employees to be furloughed unless the employment contracts allow for this which is highly unlikely. It is therefore advisable for employers to obtain the agreement of the employees to be furloughed within a properly drafted furlough agreement. For those employees who do not agree then you are left with either imposing furlough on them (which would amount to a breach of contract) or making them redundant.

We have published a separate blog dedicated to the COVID-19 Job Retention Scheme here.

If you have any questions or need help with any COVID-19 employment law issues please contact Marc Jones or Imogen Finnegan or call us on 0203 637 6374.