Covid-19 Employment Law Update: 24 March 2020

Unpaid leave for emergency volunteers “a new form of employment”

Many of the finer details of the proposed Coronavirus Bill were published over the weekend and debated in the House of Commons yesterday.  During debate, Health Secretary Matt Hancock described the proposed measure on emergency volunteers as “a new form of employment”.  The measure allows employees to take unpaid leave from their normal jobs to fill health and social care roles while accessing a fund that will compensate them for loss of earnings.  Employees who take emergency volunteer leave will be entitled to the benefit of all of the terms and conditions of their employment which would have applied if the employee had not been absent, with the exception of pay:  Coronavirus Bill

Employers must designate employees as ‘furloughed workers’ to access Coronavirus Job Retention Scheme

Last week, the government announced the Coronavirus Job Retention Scheme.  Eligible employers will be able to apply to HMRC for a grant to cover up to 80% of workers’ wages (up to £2500 of an employee’s gross salary per month) for employees who are not working but still on payroll.

In order to apply for the grants, employers will need to designate all affected employees as ‘furloughed workers’, and notify these employees of the change in their status: Government Coronavirus Job Retention Scheme

All the information published by the government indicates that furloughed workers are employees in a “workforce who remain on payroll but are temporarily not working during the coronavirus outbreak” as government guidance currently outlines.

After designating employees as furloughed workers, employers will then need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC have indicated that it will set out further details on the information required in the coming days.

It must be stressed that the scheme is still subject to existing employment law.  In other words, there is not necessarily an automatic right for employers to furlough their staff, depending on the content of existing employment contracts.

In the absence of any contractual right giving flexibility to employers, employers should seek an agreement with their staff, and it would be prudent to offer a furlough as an alternative to redundancy.

Statutory Sick Pay recovery for companies widened to include SMEs

The Coronavirus Bill proposes measures earlier announced by the government.  Please see the SMB employment team’s earlier posting on this measure.

Judiciary says principles of open justice “remain paramount”

The Courts and Tribunals Judiciary of England and Wales has pledged that the need to conduct remote hearings will not impede the principles of open justice.  The judiciary have issued a protocol on the conduct of hearings in the High Court and the County Court.  The protocol states that hearings will be taped or digitally recorded.  Further, if judges, clerks or officials cannot relay the audio and video of the hearing to an open court room then accredited journalists will be able to log into the remote hearing and/or live streaming of the hearing will be made available over the internet.

For clients who are bringing or defending claims in the Employment Tribunals, the protocol will not apply to those proceedings.  The Presidents of the Employment Tribunal and the Employment Appeal Tribunal in England and Wales have already directed that all in-person hearings will be converted to a case management or directions hearing by telephone or other electronic means.  However, these types of hearings are not substantive hearings that will determine the outcome of a case.  We have yet to understand from the Employment Tribunals on how it will progress hearings through an already backlogged system.

To this end, our colleagues at Cloisters Chambers have proposed a potential solution:  Cloisters have created a “proof of concept” video of a mock Employment Tribunal hearing which it believes demonstrates that virtual hearings are possible even where witnesses are examined and contentious evidence must be heard: Virtual Hearings for Employment Tribunals

Other updates for SMB clients

Coronavirus Business Interruption Loan Scheme now open for applications

From yesterday, our clients who operate small to medium enterprises can apply for the Coronavirus Business Interruption Loan Scheme.  The Scheme gives companies access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.  To be eligible, your business must be based in the UK with an annual turnover of no more than £45 million per year and your business meets the other British Business Bank eligibility criteria.  Further details are available here.

Commercial tenants protected from eviction

The government has announced that commercial tenants who cannot pay their rent because of the impact of coronavirus will be protected from eviction. In a statement issued yesterday, HM Treasury said landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments due shortly but the Government recognises businesses struggling with their cashflow due to the effects of coronavirus remain worried about eviction.

The measures, which are included in the emergency Coronavirus Bill, will mean no business will be forced out of their premises if they miss a payment in the next three months.  Commercial tenants will still be liable for the rent after this period, but the Government is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them.