United Kingdom

With the UK trapped in varying degrees of lockdown (via the tier system) for much of December, one might be forgiven for thinking that HR professionals up and down the land will be breathing a sigh of relief that they will not have to contend with the usual Christmas party related conduct issues. However, as many employers are turning to online festive celebrations to replace the traditional office Christmas party, employers should be aware that virtual celebrations pose just as many risks as the real life alternative, whether it be from online bullying, harassment or privacy issues.

With so many people working remotely during the pandemic, the boundaries between work and private life have become blurred, and with this comes the risk that the usual office etiquette is abandoned. Home working, and virtual parties, may increase the potential for bullying and harassment as people may let their guard down in more casual environments; there are no restrictions on how much alcohol employees may consume during, or even before, a virtual gathering; and in addition, perpetrators might feel more confident hiding behind their computer because virtual communications provide a degree of anonymity that can lead people to act in ways that they would not in person.

Indeed, it has been widely reported that during the pandemic there has been a significant increase in online harassment, including by work colleagues. Unfortunately, black women and non-binary people have been targeted in particular, with these groups experiencing the highest levels of victimisation.

Most (but, alas, not all) employees these days have a sense that discrimination in the office is unlawful. What is less appreciated is that the Equality Act 2010, which outlaws discrimination and harassment in England and Wales, also applies where individuals are acting in the course of their employment outside their workplace.

The trouble is that the Equality Act does not distinguish between acts done in the office at 9am on a Monday morning and events that take place out of hours at a Christmas party, whether that is in a pub or online. More onerous still is that an act of harassment does not have to be intended to fall foul of the Act if it relates to sex, race, disability, age, sexual orientation, religious belief, gender reassignment, pregnancy, marriage or civil partnership. The classic example is one person makes a joke – which they intend to be humorous rather than offensive – 3 people laugh, but a fourth is humiliated on the grounds of, say, national origin. That will constitute a breach of the Act. Clearly this can happen just as easily virtually as it can in person.

Inappropriate behaviour at an office party could lead to an individual being on the receiving end of a formal grievance and being dismissed for gross misconduct. They could also, along with their employer, potentially be a defendant in a tribunal claim and ordered to pay compensation.

Under the Equality Act employers will have a defence if they can show that they took all reasonable steps to prevent employees from committing discriminatory acts. Therefore, whilst trying not to dampen the festive spirit too much (particularly after the year that everyone has had), employers should therefore consider taking the following steps before they hold a virtual Christmas party:

• warn against inappropriate behaviour, including sporting offensive or risqué fancy dress costumes, and remind employees about the alcohol and drugs policy
• remind staff about the social media policy, and the consequences of posting pictures, or other inappropriate material, online that could infringe an individual’s privacy rights and bring the business into disrepute
• circulate clear written guidelines on equal opportunities and online harassment, and the disciplinary sanctions that could result from breaches of the rules
• ensure any complaints about the party are dealt with seriously and consistently, and in accordance with company procedures.

Employers must also ensure that their online party is secure, so that it is not susceptible to uninvited guests sharing offensive material.

Our anti-discrimination laws were not introduced to stop people having a good time, but to allow everyone to feel at ease at work and when socialising with colleagues, whether that is in person or online. Especially after such a difficult year, this festive season should be a time of goodwill for everyone.

 

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If you have any questions or would like advice on any of the issues raised here, please get in touch with your usual Clyde & Co contact. Clyde & Co attorneys are available to assist you with these and other workplace issues. For more information, visit www.clydeco.com. 

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

National restrictions in England ended on 2 December 2020 with England moving into a new regional, tiered approach. But what does the latest legislation and guidance say about office working and what are the implications for employers?

Working from home is likely to be more viable for office based workers than many workers in other sectors such as leisure, construction, retail and hospitality. The question of whether office workers should work from home or the office from 2 December 2020 needs to be looked at in the light of the regulations introducing the new tiered system (the Regulations) and also the latest government guidance applying from 2 December 2020.

When determining a policy around working in the office, there are two key considerations for employers to take into account:

1. First, the new rules contained in the Regulations around restrictions on gatherings and how those rules apply to being in the office or holding a work related meeting outside the office, such as a restaurant; and
2. Secondly, the government guidance on working from home.

The restrictions in the regulations on gatherings

The new rules contained in the Regulations provide restrictions on the circumstances in which two or more people may gather together in the same place in order to socialise or undertake any other activity.  There is a long list of exceptions to this rule – one being a gathering which is “reasonably necessary for work purposes”.

The Regulations do not prevent people from going into the office and attending on their own (such as in a private room) but they will have an impact on what happens when they meet with others, whether that be in the office in a meeting room, a corridor, the bathroom or the work canteen, or in premises outside the office, such as a business meeting in a restaurant.

The practical effect of the new rules is that if it is reasonably necessary for employees to work together, or to meet with clients or suppliers for business purposes, then on the face of it the “gathering” would be allowed. Such a gathering could take place in the office or in another place such as a restaurant or pub.

A clear cut example of a permitted client meeting at the office might be where a meeting simply cannot take place remotely in circumstances where a client does not have an adequate broadband connection at home and where documents need to be viewed and discussed.

However, where people can successfully conduct a meeting from home and meet the work purpose of the meeting, or the work purpose of a meeting could be just as easily be met by people interacting remotely, then it is clear that it is not “reasonably necessary” for an individual to attend work or for a meeting to be held in person. Ultimately, if the reason for attending the office or meeting in person results from simply a “preference” then the test is unlikely to be met.  However if there is a “reason” for meeting or attending the office, that needs to be identified and if it can be sensibly concluded that that “reason” means it is necessary for that office attendance, or meeting, to take place, that will be in compliance with the guidance.

This does need to be considered carefully though, because any gathering for work purposes which is not “reasonably necessary”, will be a breach of the Regulations which is an offence and could result in a fine.

Government guidance on working from home

The latest government guidance on working from home is slightly inconsistent at the time of writing on 3 December 2020.  Before the November lockdown, working from home was recommended if the work could be done “effectively”, but employers had the discretion to decide, in consultation with their employees, if that was the case.

In the new local tier guidance which applies from 2 December the government guidance for all tiers says “[e]veryone who can work from home should do so.”  The word “effectively” appears to have been dropped. The government’s Winter Plan also uses this wording. However, other guidance on the gov.uk website (such as the guidance Working safely during coronavirus guidance for offices updated on 1 December and the guidance Working during coronavirus if you cannot work from home) still retain the word “effectively” in some places. It is currently unclear if this other guidance is yet to be to aligned with the new local tier guidance.

If the word “effectively” has indeed been dropped (and this will likely become clear in the coming days as  the government continues to update its guidance), this potentially means the government’s message around working from home has become stricter than it was before the November lockdown and people should not be going to the office simply because they work more productively in the office or prefer to work there, where they can do their work from home.

If, on the other hand, the government’s intention is to retain the word “effectively” as opposed to a stricter “can/cannot” test, then in the context of the guidance as it currently stands, employers have a greater discretion to decide, in consultation with their employees, whether the work can indeed be done effectively from home. Adding the word “effectively” arguably confers a more flexible approach to the decision on whether home working is workable  – and suggests that the employer and employee may take into account other reasons based on the longer term nature of the issues we are now dealing with, as to why work cannot be done “effectively” at home, or why it is necessary for someone to be in the office (at least on a reduced basis). We have written more about this approach in our earlier client alert.

In either case, whether the word “effectively” is retained or not, the government’s COVID-19 Winter Plan does recognise that there are specific reasons why attendance in the workplace may be needed, including mental health issues or concerns and/or a need to work on-site physically. This is helpful for employers and employees who wish to go to the workplace in order to work.

Whatever the case may be, employers and employees should make sure there is a specific reason why the employee needs to be in the office. Employers will want to consider the processes that they have in place around any attendance in the office, and ensure they are happy proper consideration has been given to this and records are retained as appropriate. This will also need to be reflected in the COVID-19 workplace risk assessment and actions should be taken to manage the risks of transmission in line with current government guidance.

Travel between tiers to attend work

The latest guidance says that where people cannot work from home, they should continue to travel to their workplace. Across all tiers the advice is to walk or cycle where possible, plan ahead and avoid busy times and routes when travelling.

People in tier 3 are required to avoid travelling outside their area including for overnight stays other than where necessary. Work is cited as one of a list of reasons why it might be necessary to travel outside their area. We do think there is potentially a higher test in relation to work attendance when travelling from a tier 3 area, or into a tier 3 area of whether that travel is “necessary”.  It is hard at this stage to translate this into practical terms – but we would suggest that employers follow their normal processes in relation to considering the attendance of a person in the office, who is travelling from a tier 3 area (or potentially in the future into a tier 3 area) – with an added “rigour” to ensure you can conclude that travel is “necessary”.

Stop Press: We understand the rules in relation to business travel are in the process of changing, and we will provide a further update on this shortly.

Business events

The Regulations also allow certain “permitted organised gatherings” to take place across all three tiers. This would allow business events to take place at certain venues, other than a private dwelling. Numbers of attendees are limited by government guidance rather than the regulations. Different rules apply depending on which tier the business event takes place. In tiers 1 and 2, public attendance at business events can resume inside and outside, subject to social contact rules and limited to whichever is the lower: 50% capacity, or either 4000 people outdoors (or 2000 for tier 2) and 1000 people indoors. In tier 3 there should be no public attendance at large business events.

Health and safety

The government has updated its Working safely during coronavirus (COVID-19) (COVID-19) guidance which applies in a number of workplace settings in England (COVID-19 secure guidelines). It continues to be the case that all businesses and venues that are open are expected to follow COVID-19 secure guidelines to protect customers, visitors and workers.

Most of the sector guidance, including the advice for offices and contact centres now includes a “priority action” for employers to “consider the mental health and wellbeing aspects of COVID-19 for yourself and others.” The requirement to increase ventilation by keeping doors and windows open where possible and running ventilation systems at all times has also been updated for winter for most sectors, including offices and contact centres.

Conclusion

The new guidance is likely to be in place for the entire winter period and so many office workers who have been working from home to date, are likely to be doing so for some time to come. Employers will need to consider requests for employees to work in the office carefully and make sure there are specific reasons why it is necessary for them to do so. For many employers, this will mean revisiting and adapting their working arrangements again.

 

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If you have any questions or would like advice on any of the issues raised here, please get in touch with your usual Clyde & Co contact. Clyde & Co attorneys are available to assist you with these and other workplace issues. For more information, visit www.clydeco.com. 

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

During the coronavirus crisis to date, women in the UK are more likely to have lost work, seen a decrease in their earnings and been working while looking after children. We consider what employers can do to manage this disadvantage and enhance diversity with their organisation.

The disproportionate impact of coronavirus on women in the workplace

Data collated by Universities of Oxford, Cambridge and Zurich shows that women are more likely than men to have lost work and experienced a fall in their earnings since mid-March 2020. The data, taken from almost 15,000 people across the UK, Germany and the US, found that many women without university degrees are more likely to be working in roles where they are unable to work from home, making them more vulnerable to losing their employment.

Similarly, a study by the Institute of Fiscal Studies which surveyed the experiences of 3,500 families with two opposite-gender parents found that in lockdown, mothers have been impacted much more than fathers. They are more likely by 47% to have lost their jobs, and more likely to have had their hours cut and been furloughed. Almost half of mothers’ hours spent doing paid work are split between that and other activities such as childcare, compared with under one-third of fathers’ paid working hours. Women are only doing on average 33% of the uninterrupted paid work of fathers. Before lockdown, this was 60%, already a disadvantage made more acute by this crisis. The impact on the performance of women in their work during this time is significant, with knock on effects on pay, promotion and prospects for the future.

In addition, the UK government has exempted companies from having to file gender pay gap data this year, with only half of companies choosing to do so. The UK Office for National Statistics (ONS) found in 2019 that there was a 17.3% pay gap between men and women in the United Kingdom when considering part and full-time employees together.

On 9 June 2020, the Government announced an exemption to the furlough closing date for some parents returning from parental leave. Over the summer, the House of Commons Petitions Committee issued a report on the impact of COVID-19 on maternity and parental leave, requesting greater support, including an extension of paid leave, which was dismissed by the government in early September.

Why does it matter?

Whilst the current crisis has led many businesses to re-evaluate their chief concerns (such as shifting focus to technology and health and safety matters), employers should of course retain a focus on diversity, and issues which impact on certain groups of their employees more than others. And there is evidence, in relation to sex diversity, that there are rewards for those that continue to attract and keep women in their business. A report Women Count 2020, by the Pipeline, found that FTSE 350 companies with more than 33% female membership on their executive committees have a net profit margin over 10 times greater than those with no women at this level.

Many organisations were already focused on gender diversity issues, and any gender pay gap, before this crisis hit, and in light of the statistics set out above, it is likely that some may well see a gender pay gap increasing. Gender pay gaps are often associated with a lack of women in senior positions; and if the impact of this crisis feeds through to an impact on women moving into senior positions, that will harm any efforts to reduce gender pay gaps through progression.

How can employers mitigate the disadvantage?

In light of the potential impacts identified above, there are steps that employers can consider taking to understand any disproportionate impact coronavirus is having on women in their own workplace, and therefore to assist in tackling any gender inequality which may result.

Gender diversity initiatives

Many employers had a suite of diversity and inclusion initiatives already in play with a view to reducing their gender pay gap. Those initiatives remain as important now as they were before; but we would recommend a review to establish if they remain the right initiatives to deal with any issues employers have identified, and to assist with any issues created by the lockdown. Whilst understandably focus has been on crisis management during the early stages of the pandemic, gender diversity and inclusion remain a key issue for businesses, and continued focus remains important to combat any issues caused or heightened by the pandemic.

Flexible working

In many industries where there is office based work, this period has seen a huge shift in employers’ understanding of how flexible and home working can work in practice for office based workers. Although very few will be considering a fully home working culture on a permanent basis for office based work, anecdotal evidence suggests many will be considering a new mixture of office and home based work, with a culture of full time office work perhaps becoming no longer the “norm”. Many will be devising plans to return to a “new normal” in the short and medium term. Some industry leaders, including the CEO of the Chartered Management Institute, are sounding alarm bells about pushing employees back to work too early, and flagging potential risks around this disproportionately impacting women who are statistically more likely to be suffering from childcare difficulties as the pandemic continues.

Creating or maintaining flexible working policies which reflect the new reality we live in, and what businesses have learnt from their abilities to cater for flexible working practices (on either a short term or longer term basis) will be important in attracting and retaining employees during and after the pandemic is over; and again based on childcare responsibilities this would be particularly important for female employees. This requires flexibility by employers in handling those with caring responsibilities and considering what their business can accommodate. The government has recently announced fines for employers who seek to prevent their employees from self-isolating. With long delays in testing and children likely to pick up cold and flu following their return to school, the prospect of employers dealing with absences from parents waiting for tests for their children is increasing daily. With caring responsibility still falling predominantly on women, this is likely to cause a gender imbalance to continue through the winter.

Employers may want to consider a review of flexible working policies in light of the above issues. Such consideration may include:

• The extent to which employees are “encouraging” employees to return to offices and the point at which return becomes compulsory; and how personal circumstances of employees, as against the needs of the business, are taken into account. This will have to be closely linked to government guidance in the coming months as the pandemic situation develops
• The design of office space, the development of technology and whether the culture supports diverse needs
• How formal flexible working requests are handled during and after this transition phase. Employers can expect a higher volume of requests as well as requests involving more time at home than would have been typical before the pandemic

The benefit of these considerations is the prospect of using the “new normal” to further support and potentially enhance an inclusive culture for all employees, in a way that supports the business’ needs and also supports those with childcare responsibilities, and seeks to support women with issues that they may be facing.

Maintain fair redundancy processes

There are likely to be circumstances in which many organisations need to consider employees for redundancy. Employers will want to consider how it may be appropriate to amend any criteria to take into account any recent issues that employees may have faced in their own particular circumstances. A criterion of “attendance”, for example may disproportionately impact those with childcare responsibilities, which would (based on the statistics) disadvantage women more. A business would want to consider if it should amend such a criterion in the circumstances.

The Government promised in July 2019 that it would expand the period of redundancy protection from the point an employee notifies her employer of her pregnancy until six months after the end of maternity leave. New legislation has been expected in the form of a draft Employment Bill but this has presumably been delayed due to the coronavirus crisis. In the meantime, the Pregnancy and Maternity (Redundancy Protection) Bill, a private member’s bill aims to achieve the same result. The second reading of the bill is scheduled to take place on Friday 16 October 2020 and we shall report on its progress.

Managing physical and mental health, including in relation to domestic abuse

Managing the health and safety of employees, as we considered in our previous articles in relation to those working from home as well as individuals who are returning to work, remains a key factor in supporting individuals in the workplace. The pandemic has encouraged employers to expand their role in monitoring and improving employees’ wellbeing, ranging from adjusting operating hours, offering hardship relief funds to employees in need, and enhancing sick leave. This has been a challenging time for managers and HR who have been under pressure in their own lives while trying to help colleagues in distress. Training for managers and HR on identifying mental health red flags in a remote environment, as well as maintaining their own mental wellbeing, is an area to consider for employers.

Gender pay gap

Businesses are not required to submit gender pay gap data this year, which was widely welcomed by HR staff tasked with keeping their organisations safe during the peak of the coronavirus outbreak. Nevertheless, if an employer is able to publish its data it will have the advantage of monitoring its progress towards its aims.

Looking ahead

Despite the challenges the pandemic has brought about for workplaces and households across the world, there is the potential to bring about positive changes in the UK going forward.

With fathers on average covering nearly double the hours of childcare than before the crisis (according to the Institute of Fiscal Studies), attitudes about the role of fathers in meeting family needs for childcare and domestic work during the working week may change. This may lead to societal and cultural change outside of the workplace, with a more equal sharing of childcare between parents after the pandemic ends as compared to the current statistics. This may impact on employers in terms of their seeing, over time, this impacting on issues within work which may currently impact on women more than men.

Based on issues which have been faced during the pandemic, organisations have the chance to consider how working practices may be amended in the interests of their business, and also to the advantage of employees, going forwards. Many employers have found remote working arrangements to be effective on a short term basis, and continuing with such flexibility to some degree on a permanent basis after the pandemic may be possible and well worthy of consideration. For the reasons set out in this article, that would be likely to support women in a manner that may then assist in promoting increased equality across an organisation.  However, targeted action can also be considered to assist with any imbalances and issues thrown up by this unique period by employees, where possible for an organisation, to try and prevent issues created by the pandemic having a lasting impact on progression for employees, including women who have felt the issues harder based on the statistics outlined above.

Considering such measures, and taking such measures where appropriate, should have a positive impact both in the short term, and the longer term for women, and for all employees.

 

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If you have any questions or would like advice on any of the issues raised here, please get in touch with your usual Clyde & Co contact. Clyde & Co attorneys are available to assist you with these and other workplace issues. For more information, visit www.clydeco.com. 

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

The government has published guidance on the new restrictions that will apply in England during lockdown, which begins on 5 November and is currently due to continue until 2 December 2020. The guidance, which sets out the latest rules on attending the workplace, travel and protecting people who are more at risk, emphasises, once again, staying at home.

Business closures

While the guidance says that a full list of business closures will be published and set out in law, those listed in the guidance that must close are: all non-essential retail, indoor and outdoor leisure facilities, entertainment venues, personal care facilities (such as hair, beauty and nail salons) and hospitality venues (except for takeaway and delivery services).

Working from home

The guidance says that people must work from home if this is possible: “everyone who can work effectively from home must do so. Where people cannot do so (for instance people who work in critical national infrastructure, construction or manufacturing) they should continue to travel to work/attend their workplace. This is essential to keeping the country operating and supporting vital sectors and employers.“

This shows a shift in the government’s message. The examples given for when people cannot work effectively from home are very limited: working in critical national infrastructure, construction or manufacturing, as well as public sector employees who work in essential services such as education settings.

The fact that the position appears to have changed is also conveyed in the context of both the requirement to stay at home, and the new travel restrictions. There are limited circumstances in which we are allowed to leave our home, which includes “for work purposes, where your place of work remains open and where you cannot work from home“. And one of the five permitted reasons for travelling is “travelling to work where this cannot be done from home“. This position is also reinforced by the fact that certain businesses are being ordered to close their doors for a month from 5 November 2020.

The requirement that people must work from home unless their roles cannot be performed at home contrasts with the position from 22 September 2020. Then, working from home was recommended if work could be done “effectively” – and employers had the discretion to decide, in consultation with employees, if that was the case. During lockdown, we appear to be going back to the position we had between May and early July, when offices were effectively closed and office workers were required to work from home.

This indicates that, in respect of any office workers who attend the workplace in England between 5 November and 2 December 2020, businesses will need to show why they need to be in the office and why they cannot work from home. And in showing why it is necessary to attend work during lockdown, in our view the bar is higher than it was from 22 September, when there was in our view more flexibility in determining and considering what was “effective” working.

Attending the workplace

Essential retail (food shops, supermarkets, garden centres etc) and essential public sector workplaces, and those of other essential services, that can remain open must follow COVID-secure guidelines to protect their workers, customers and visitors.

Where employees need to use public transport to travel to work, employers should advise them to follow the safer travel guidance (including the rules on wearing face masks and advice on car sharing).

Protecting people more at risk from COVID-19

The guidance identifies these categories of workers who are considered to be at higher risk of severe illness from COVID-19:

• those aged 60 or over
• those who are “clinically vulnerable” to COVID-19: Anyone aged 70 or over; Anyone who has an underlying health condition who is instructed to get a flu jab every year on medical grounds; and pregnant women
• those who are “clinically extremely vulnerable” to COVID-19 (people with specific, serious health conditions)

Those who are clinically extremely vulnerable to COVID-19 are advised to work from home during lockdown. Those who cannot work from home are advised not to go to work, and may be eligible for Statutory Sick Pay or Employment Support Allowance. New guidance will be published, and the government will write to those who are clinically extremely vulnerable, setting out detailed advice.

The guidance remains silent on what someone who is pregnant, aged 60 or over or who is clinically vulnerable should do if they are unable to work from home, which suggests that provided their workplace is COVID-secure, they should continue to go to work. That said, the guidance emphasises that employers should give extra consideration to individuals who are at higher risk from COVID-19, which may require employers to take additional precautions.

Implications for employers

The emphasis in the guidance on working from home has changed. Previously, the government was recommending that people work from home where this could be done “effectively”, and there was some discretion for employers and employees to decide.

From 5 November 2020, it seems that any attendance in the office would need to be for a reason which will stand up to scrutiny in the context of a national lockdown and businesses being ordered to close. Employers would also need to keep a clear, detailed record of why the individual cannot work effectively from home and why it is absolutely necessary for them to go into the office.

The guidance says that the relevant authorities will have powers to enforce the law on the new restrictions, including through fines. This means that a breach of these restrictions will be a criminal offence.

 

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If you have any questions or would like advice on any of the issues raised here, please get in touch with your usual Clyde & Co contact. Clyde & Co attorneys are available to assist you with these and other workplace issues. For more information, visit www.clydeco.com. 

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

On 22 October, the UK government announced significant changes to the Job Support Scheme which comes into effect on 1st November, replacing the Job Retention Scheme (also known as the furlough scheme). It has also set out more details about the scheme and how businesses qualify for it.

Bowing to pressure from the business community, the government has announced a number of extra ways in which it intends to provide financial support for businesses over the winter months. The announcement covers changes to the Job Support Scheme, self-employed grants and business grants. This update focusses on the Job Support Scheme and the government’s new Job Support Scheme Policy Paper of 22 October 2020 which gives more detail on the scheme.

There are two distinct parts to the Job Support Scheme:

• For businesses that are closed – businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get the support through the Job Support Scheme Closed (JSS Closed).Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.The JSS Closed was originally announced on 9 October 2020. For more information, see our earlier client update on this scheme here. Further details about the eligibility requirements for the JSS Closed have been published in a Policy Paper and are summarised below.
• For businesses that are open – businesses that are operating but facing reduced demand can get support for wages through the Job Support Scheme Open (JSS Open).The JSS Open aims to support employers affected by COVID-19 to bring people in viable jobs back to work following furlough or retain people in work who have not been furloughed, by agreeing with those employees that they will work fewer hours and accept a pay reduction. The JSS Open was originally announced on 24 September 2020. For a summary of the original proposals for the JSS Open see our earlier client update here. Significant changes to this scheme have now been announced. The key changes are set out below.

Both schemes will come into effect on 1 November 2020.

Key changes announced to the JSS Open

The key changes to the JSS Open announced by the government on 22 October 2020 are as follows:

• The requirement for employees to work a minimum of 33% of their contracted hours has been reduced to a minimum of 20%. So a full time employee could be brought back on just one day a week under the scheme.
• The employer contribution for hours “not worked” is reduced to 5%, subject to a cap of £125 per month. This means that:
  • the government’s contribution has increased to 61.67% of pay for hours not worked (up from one third as previously announced) and capped at £1,541.75 per month (up from £697.92 as previously announced). This translates to 49% of total pay (based on 61.67% of 80% of unworked hours)
  • employees earning no more than the reference salary of £3,125 per month will now take home at least 73% of pay for working a new minimum 20% of hours. This being 20% for the minimum working hours, and then in respect of their “non-working” hours they will be paid 5% by the employer and 61.67% from the government.

The differences between the various employer support schemes at a glance

	JRS pre 1 July 2020	JSS Open	JSS Closed
Key condition	Not permitted to work	Must work 20% normal hours	Business is legally forced to close by government
Pay employee receives (per month)	80% of pay (capped at £2,500)	At least 73% of pay	66.6% of pay (capped at £2,083.33)
Government contribution	80% of pay (capped at £2,500) plus pension and Employer NICs	49% of pay (capped at £1,541.75)	66.6% of pay (capped at £2,083.33)
Employer contribution	None unless employer chose to top up pay	Full pay for hours worked (min 20%) 5% of full pay for unworked hours Employer NICs and pension on pay employee receives	Employer NICs and pension on pay employee receives

• The government will not cover the cost of National Insurance Contributions (NICs) or automatic enrolment pension contributions. The employer must still bear these costs on all the pay received by the employee, both for hours worked and not worked. This is not a change as such, but it’s a hidden cost since it applies to the proportion of pay relating to unworked hours which the government will now cover.
• Employers can top up employee wages above the 5% contribution at their own discretion. This was previously unclear and does mean that employees are not required to take a pay cut for the employer to benefit from the scheme.

General eligibility criteria for both schemes

To qualify for either JJS Open or JJS Closed, employees must be:

• On the employer’s PAYE payroll between 6 April 2019 and 11.59pm on 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020
• Employed by their employer on 23 September 2020
• Treated as employed for income tax purposes (this includes agency workers, zero hours or temporary workers provided they meet these criteria).

The JJS Open and JSS Closed are open to:

• All employees that meet these criteria, even if they were not previously furloughed
• Any employee who ceases employment after 23 September 2020 and is subsequently rehired.

The intention is that employees will be able to move on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

Employers cannot claim under both schemes in respect of a single employee for the same day.

Additional eligibility criteria for the JSS Closed

Although the policy paper contains no significant changes to JSS Closed, there are a few additional clarifications on eligibility for the JSS Closed that are worth mentioning here:

• In addition to the general eligibility requirements applicable to both schemes (see above) employers will be eligible for the JSS Closed:
  • if their premises at one or more locations are legally required to close by one or more of the four governments of the UK , rather than by local public health authorities
  • only while the relevant restrictions are in place – once lifted, employers will have to claim under JSS Open
• Employees will be eligible if their primary place of work has been legally required to close by the government and they must have been instructed to cease work for at least seven consecutive calendar days
• The employer must have a written agreement with the employee (or reached a written collective agreement with a union) that the employee has been instructed to and agrees to stop working for a minimum of seven consecutive calendar days. The employer must notify the employee of the agreement in writing. Records must be kept for five years.

This is not a complete list of all the conditions for eligibility for JSS Closed and further requirements and guidance are expected to be published by the end of October.

Additional eligibility criteria for the JSS Open

In addition to the general eligibility requirements applicable to both schemes (see above), there are some key additional criteria which need to be met in order to claim under JSS Open:

• Some, or all, of the organisation’s employees must be working reduced hours – employees must still be working for at least 20% of their usual hours

• Employers must agree a temporary working arrangement for shorter hours in writing with employees (or reach written collective agreement with a trade union as appropriate), and this agreement must cover at least seven consecutive days. It is implicit that the employee also needs to agree to any cut in pay alongside this. The agreement must be available for view by HMRC on request and a record of the agreement must be kept for five years. The government will provide further guidance on what to include in the written agreement by the end of October 2020
• When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way
• Although the scheme is open to all small and medium sized employers who are facing decreasing demand, the availability of the scheme is limited for large employers i.e. those with 250 or more employees on 23 September 2020. Large employers need to complete a Financial Impact test to demonstrate that their income has been impacted due to coronavirus in order to qualify
• If the large employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employer’s first claim for the Job Support Scheme. This policy paper sets out the details of this test, but it involves a comparison of the employer’s VAT returns
• Employers must keep records of how many hours employees work and the number of usual hours they are not working
• Employees are entitled to the National Living Wage, National Minimum Wage (NMW) or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules. At least minimum wage rates must be paid for all hours worked or treated as worked
• Employees can undertake training in their working and/or non-working hours. Time spent training during working hours and should be paid at the employee’s full rate of pay and will count towards 20% of their usual hours. Training done during non-working hours should be voluntary and the employer will have to pay the employee for that time where the time spent training attracts a NMW entitlement in excess of the grant payment

Additional points that apply to both schemes

Conditions on claiming

Use of the JSS grant – grant monies can only be used to reimburse sums already paid to employees.

Redundancy – employees cannot be made redundant or put on notice of redundancy during the period for which their employer is claiming a grant for them under the scheme.

Shareholder distributions – the government expects that large employers (250 or more employees) and their corporate groups using the scheme will not make capital distributions whilst claiming the Job Support Scheme grant. This includes:

• a dividend
• a charge
• a free or other distribution
• any equivalent payment that a partnership may make to its partners.

The Policy Paper says that the government does not plan to make this expectation a contractual or legal condition of the scheme, but encourages business to reflect on their responsibilities. It also states that taxpayers should be able to rely on public money only being claimed where it is clearly needed.

Employee taxes and pensions – as noted above, the JSS grant will not cover NICs or pension contributions. These contributions remain payable by the employer.

Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers must also pay to HMRC any employer NICs due on the full amount that that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers and employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension.

Student loans and Apprenticeship Levy – if applicable, Student Loan deductions and the Apprenticeship Levy must also still be paid.

Salary sacrifice arrangements – employers cannot enter into any commitment or transaction with the employee which would reduce wages below the amount claimed (for example a salary sacrifice scheme). This includes any administration charge, fees or other costs in connection with the employment. Where an employee had authorised their employer to make deductions from their net salary, these deductions can continue while the employee is working reduced hours provided that these deductions are not administration charges, fees or other costs in connection with the employment (for example, pension contributions and charitable giving).

Interaction with other types of support

Job Retention Bonus – employers claiming under the JSS can still claim under the Job Retention Bonus in respect of the same employee if they are eligible.

Job Retention Scheme – the policy paper explains how employers should deal with JSS claims which overlap with Job Retention Scheme claims.

How to claim

Employers will be able to make their first claim from 8 December 2020. Claims are made online through Gov.uk. The grant will be paid on a monthly basis in arrears.

The Policy Paper sets out more details on how to calculate the reference salary and the employee’s usual hours whether fixed or variable (this will follow a similar methodology as for the furlough scheme). Usual pay for employees who have previously been furloughed will be based on their underlying usual pay and/or hours, not the amount they were paid whilst on furlough. Further details of calculations employers need to do to work out their claim will be available in guidance due to be published at the end of October 2020.

When does the scheme end?

The scheme will run for six months until 30 April 2021 but the government will review the terms of the scheme in January 2021.

Fraudulent claims

HMRC will publish the names of employers who use the scheme. Employees will be able to check if their employee has made a claim relating to them via their Personal Tax Account (sign up on GOV.UK).

The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount over-claimed may be applied where appropriate. HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.

What these changes mean for employers

Employers will welcome these changes. Whilst the JSS remains a substantially less generous support scheme than the Job Retention Scheme, the changes announced do increase substantially the government’s contribution per employee claimed for under the scheme. When JSS Open was first announced in September, the maximum the government would pay was £697.92 per month per employee. This has now been increased to £1,541.75 per month per employee. Despite this increase, the cap is still relatively low when compared to the JRS where the cap was £2,500 per month until the end of August 2020.

The reduction in the required number of working hours from 33 % to 20% in JSS Open should also expand the range of employees which employers will be able to select to benefit from the scheme.

Lower paid employees are better off under JSS Open than under JSS Closed (see the table above) but this is to be expected considering they are required to work for at least 20% of their normal hours. It is notable that employees under both schemes can do training during non-working hours but, like the JRS, they must be paid at least National Minimum Wage rates for doing so. Significantly, training can also be done during working hours under JSS Open and can count towards the minimum 20% working hours. This will help employers retrain employees where there is little work for them to do in the short term.

The JSS remains restricted to employees on the payroll between 6 April 2019 and 23 September 2020. The fact that it’s not available to new recruits (except those who left after 23 September and were then rehired by the same employer) means that it won’t help those employers who may be hesitant to take on new staff in this climate.

We now await further guidance which the government has promised at the end of October 2020.  We understand that this will include more guidance on eligibility requirements; what to include in the written agreement; the claim process and employee eligibility for parents entitled to statutory parental leave and pay.

For more details on the Job Support Scheme, please see:

Policy Paper

Press release

Job Support Scheme Open Factsheet

Job Support Scheme Closed Factsheet

 

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If you have any questions or would like advice on any of the issues raised here, please get in touch with your usual Clyde & Co contact. Clyde & Co attorneys are available to assist you with these and other workplace issues. For more information, visit www.clydeco.com. 

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.