I have been practising employment law for 18 years, but nothing has been more testing then the last four weeks. As a board member of Stephens Scown LLP and head of our employment team in Cornwall, I have seen first hand the impact coronavirus is having on business, all whilst adjusting to working from home and home schooling my two young children! I want to share some of what I have learned, particularly around furlough and the coronavirus job retention scheme.
Do’s
- Consider all your options – furlough is not always the best option. Redundancies are a difficult decision to make but sometimes are necessary. If you need some work to continue, consider asking employees to agree to a reduction in hours/pay instead.
- Stay up to date on all the changes to the scheme. What you may have read or heard at the end of March may not be the case now, as Government and Treasury guidance is coming out regularly (and helpfully often late on a Friday night or start of the bank holiday). To stay up to date bookmark the Covid-19 Insights Hub on Stephens Scown’s website and the Gov.uk website.
- If you are not asking all your staff to furlough, ensure you can justify who you have asked to do so. Equality and discrimination laws continue to apply so be careful of discrimination. A scoring matrix akin to a redundancy selection matrix is advisable and fair to your staff.
- Keep records of everything that has been communicated to your staff and any agreements made in relation to the furlough scheme for five years. HMRC will be undertaking audits in this time.
- Pay 100% salary to your employees for any days of annual leave they take while furloughed. We have now got confirmation that you can include those days within your claim period from HMRC, which means you can get a grant to cover 80%/£2,500 per month. Be aware that HMRC is however keeping this under review.
Do nots
- Do not furlough your employees without getting their express consent – even if that is as simple as an email from them confirming their agreement. The latest Treasury Guidance says that there should be an ‘agreement in writing’ for the employee to cease work. Without it you risk HMRC saying the grant won’t be paid or a recoup.
- If you did not get the consent at the time you furloughed staff, get it now. Once this has been agreed by the employee, you should send a separate email or letter confirming the date that the employee ceased worked and have been furloughed and confirming this contractual change to their employment. Check carefully any documents you have used to furlough staff before 16 April, as they may not comply with this recent guidance. Don’t just hope the paperwork you cobbled together at the time is ok. It is better to be safe than sorry.
- Do not allow your employees to do any work for you whilst they are on furlough. Make this clear in your communications with them. Yes, they can do training but that is it. They cannot provide services or generate revenue for the business. They cannot volunteer for you.
- Do not bring someone back from furlough before they have been off for a minimum of three weeks. After this minimum time, you can bring someone back to work and then re-furlough them if you need to.
Frustrating don’t knows
It is hard to tell my clients the answer “I don’t know”, but over the last month we have often been waiting for more guidance and helping clients make the best decisions in a vacuum. At the time of writing (20 April at 13.30) the key gaps are:
- Whether HMRC will want businesses to evidence further down the line that they were impacted by coronavirus to get the benefit of the scheme. The information that you need to collate for the claim via the HMRC portal does not say this, but HMRC reserves the right to audit so I would advise you to keep records just in case.
- Whether the reclaim sum should be calculated based on working days or calendar days if your employee’s furlough period is not the exact length of their pay period.
- Whether, if you or the furloughed employee gives notice to end their employment, you should pay them at 80%/£2500 or their usual salary.
- Whether you can consult with employees in relation to possible redundancies whilst on furlough. It looks possible that staff on furlough can be made redundant, but there is a concern over whether consultation could be seen as ‘work’.
We will continue to work closely with our clients and the business community to circulate updates and share knowledge. All our toolkit and HRExpress clients get automatic updates of templates and information as it is published.
If you have any questions at all in relation to coronavirus job retention scheme or just generally in relation to your business during this testing time then please do not hesitate to get in touch with me at employment@stephens-scown.co.uk or by calling 01872 265100. We are here to help.
Stephens Scown is recognised as one of the UK’s best employers and has ranked in the Sunday Times 100 Best Companies list for six consecutive years. The firm’s employment team is recognised for its expertise in independent legal guides Chambers and Legal 500. Stephens Scown’s covid-19 insights hub is available here.
