United Kingdom

The UK government’s Coronavirus Job Retention Scheme is designed to support employers to pay the salaries of those employees who take a temporary leave of absence because of the difficulties their employer is facing due to Covid-19. The Scheme is due to come to an end on 31 October 2020, and will continue in a more flexible form from 1 July, with employers being asked to contribute towards its cost from 1 August.

On 29 May 2020, the Chancellor announced that the Scheme will continue in its present form only until 30 June 2020 (one month earlier than anticipated). After that date, the Scheme will continue in a more flexible form until 31 October 2020, with employers gradually being asked to contribute to its cost from 1 August. The new flexible scheme from 1 July can only be used to furlough employees who have been previously furloughed for a full three weeks under the current Scheme which ends on 30 June.

There is guidance for employers on the revised Scheme which was published on 12 June 2020.
The legal parameters of the Scheme are set down in the First Treasury Direction and Second Treasury Direction. We anticipate that a further Treasury Direction will be published for the revised scheme.

Read our Clyde Guide to the Second Phase of the Coronavirus Job Retention Scheme (https://www.clydeco.com/blog/the-hive/article/the-uk-guide-to-the-second-phase-of-the-coronavirus-job-retention-scheme) for a more detailed overview of the revised Scheme and answers to some key questions UK employers are asking.

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 Clyde Guide to the UK Coronavirus Job Retention Scheme (furloughing) has been prepared to help employers navigate the UK job retention scheme established during the COVID-19 coronavirus pandemic.

This guidance note takes you through some of the issues employers need to consider in relation to the government’s Coronavirus Job Retention Scheme which was announced by the Chancellor on 20 March 2020 to help support employers pay a large proportion of the salaries of furloughed employees.

On 29 May 2020, the Chancellor announced that the Scheme will continue in its present form only until 30 June 2020 (one month earlier than anticipated). After that date, the Scheme will continue in a more flexible form until 31 October 2020, with employers gradually being asked to contribute to its cost from 1 August. From July onwards the Scheme will be restricted to employers currently using the Scheme and previously furloughed employees. This means that the last date that employers can furlough employees for the first time will be 10 June 2020. In the last section of this note, we summarise what we know so far about the revised Scheme and answer some of your key questions. Further guidance on the revised Scheme will be published on 12 June 2020.

Download the guide here.

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 29 May 2020, the Chancellor announced that the Coronavirus Job Retention Scheme will continue in its present form only until 30 June 2020 (one month earlier than anticipated). After that date, the Scheme will continue in a more flexible form until 31 October 2020, with employers gradually being asked to contribute to its cost from 1 August. Some employers may be surprised to learn that claims from July onwards will be restricted to employers currently using the Scheme and previously furloughed employees. This means that the last date that employers can furlough employees for the first time will be 10 June 2020. In this update, we summarise what we know so far about the revised Scheme and answer some of your key questions.

The key details of the revised Scheme, as outlined by the Chancellor on 29 May 2020, are set out below. It is expected that further guidance on flexible furloughing and how employers should calculate claims will be published by the government on 12 June.

Employee pay

• Employees who are furloughed on a full time basis will remain entitled to 80% of pay, to a maximum of £2500 per month for the remainder of the Scheme until it ends on 31 October 2020.

Flexibility

• The Chancellor said that the revised Scheme will involve “maximum possible flexibility”. From 1 July (one month earlier than anticipated), employers will be able to allow furloughed employees to return to work on a part-time basis.  The Chancellor gave the example of an employee working two days a week (during which time the employer would pay their wages as normal) and then being furloughed for three days a week.

Scheme closure

• Claims from 1 July onwards will be restricted to employers currently using the Scheme and previously furloughed employees
• To allow for the more flexible scheme from 1 July, the current scheme (which does not allow furloughed employees to work for their employer) will close to new employers on 30 June. This means the last date employers will be able to furlough employees under the current Scheme will be 10 June (allowing for a minimum 3 week furlough period) and the revised Scheme operative from 1 July will not be open to new applicants
• No other details have been provided as yet.

Employers to contribute more from 1 August

• From 1 August, the government’s contribution to employer costs will change
• From 1 August, the revised Scheme will no longer cover employer National Insurance Contributions and minimum employer auto-enrolment pension contributions. This will obviously mean a further expense for employers bearing in mind employer NICs cost 13.8% of gross pay up to the upper earnings limit, and the current auto-enrolment pension rules require employers to contribute 3% of employee pay into a pension scheme. These are currently funded by the Scheme (although you cannot currently claim for any NICs or pension contributions you make because you chose to top up your employee’s wages)
• From 1 September, the government’s contribution will be reduced to 70% of pay up to a maximum of £2190, leaving employers to contribute 10% (in order to top up to 80%)
• From 1 October the government’s contribution will be reduced to 60% of pay up to a maximum of £1875, leaving employers to contribute the remaining 20% (in order to top up to 80%)
• Under the revised Scheme which allows part time working from 1 July, employers will be able to claim for furloughed hours but claims will be for a minimum period of a week so that grants can be calculated accurately across working patterns
• The Scheme will close in its entirety on 31 October 2020.

In light of this announcement, is there anything we should be telling employees?

Employers will no doubt be reviewing their furlough arrangements to decide what the next steps will be for their business.  Ideally, employees will be allowed to return to work after furlough and this more flexible scheme gives employers the opportunity to get staff back to the workplace in a financially manageable way.  However, many businesses will also be considering how else to cut costs so will be considering redundancies.  Staff will be anxious to know what their employers are planning and so keeping them informed on a regular basis will be important.  Employers should communicate with furloughed staff to let them know their plans when practicable.

Do we need to obtain the employees’ consent to vary our existing furlough agreement?

Yes, you should make sure that employees consent to any variation of their furlough agreement  obtained in advance of the changes taking effect. This will make sure that there is a valid variation of their contract.

Will employers need to enter into fresh furlough agreements with employees if their furlough period continues after the end of June 2020?

Employees under the current Scheme are prohibited from working for their employer so many furlough letters/agreements will state this explicitly.  The revised Scheme permits employees to work for their employer on a part time basis from 1 July so it may therefore be necessary for the furlough agreement to be amended. This could be done by side letter or a fresh agreement which outlines the circumstances in which the employer can require the employee to work.

We are currently topping up salary to 100% but won’t want to do this for much longer. What should we do?

This will depend on what you have agreed in your furlough agreement/letter.   This would be a variation of their contract of employment so you would need their consent to reduce their pay.

Where are the rules for the revised Scheme?

The rules of the current Scheme are set out in two Treasury Directions which were issued on 15 April and 22 May 2020  to cover the period up to the end of June 2020. These are supplemented by the HMRC guidance available on the gov.uk website.  The Chancellor has announced that guidance on the revised Scheme will be published on 12 June.  We also expect that a further Treasury Direction will be issued setting out the details of the scheme from 1 July 2020.

Can we continue to place employees on furlough now?

Yes, provided they meet the Scheme’s eligibility requirements.  However, after 1 July, employers will only be able to claim for those employees who have been furloughed before 10 June. It is not yet clear whether employees who have been previously furloughed and have already returned to work before 1 July will be able to be re-furloughed at a later date.  It seems likely though that an employee who continues on furlough through to 1 July may subsequently be taken on and off furlough under the revised Scheme in the same way as is possible under the current Scheme.

What should we pay employees who are furloughed but work part time?

In order to incentivise employees to return to work, the revised Scheme allows furloughed employees to work part time for you after 1 July. You should pay employees at their normal rate of pay for the hours they actually work.  For example, If they work for half their normal hours, they should be paid half their normal pay.  Effectively this means they are furloughed for the remaining half of their working week. Therefore, the employer will still be able to claim under the Scheme for such employees’ normal hours not worked but will have to pay in full for any hours worked, and will be responsible for tax and NIC contributions on those payments.  More details on precisely how this calculation will work will be provided on 12 June when the government has promised its new guidance.

How do we recall employees from furlough?

It is advisable to provide for this under your furlough agreement/ furlough letter to your employees so that employees are ready to return when they are recalled. Employees must obey a reasonable instruction of their employer so recalling them by giving a few working days notice is probably reasonable in most circumstances.  You should bear in mind though that the employee may be working elsewhere, whether paid or volunteering work unless you have specifically forbidden this.  Helpfully, the government’s employee guidance points out that the employee needs to be able to return to work for you if you decide to recall them and must be able to undertake any training you require of them.

See our guide to the current Job Retention Scheme.  This will be updated again when we receive more detail on the proposals for the revised Scheme on 12 June 2020.

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.

A new ACAS-commissioned YouGov survey recently found that nearly two out of five employees working from home during the COVID-19 pandemic have felt stressed, anxious or experienced mental health difficulties, due to their working situation at some point. The poll also found that one in two people working from home felt isolated and seven out of ten missed social interactions with colleagues. This article considers practical steps employers may want to consider taking to assist employees in working from home from a mental health perspective.

In these unprecedented times, we are having to alter the way we live and work for the good of our collective health and safety. One of these key changes is the move to working from home for those that can. For many of us, this is a new way of working, and where there is change to “the norm” we can find that this places a stress on our mental health.

Without the luxury of time to put effective measures in place, many employers initially adopted a “make do” mentality whilst waiting for normal office life to resume. Now it is clear that it will be some time before we see a resumption of the normal office life we were all used to (if it ever does resume), employers have been taking further steps to assist employees in what are more permanent arrangements.

We have set out some practical considerations for employers below.

1. What steps should employers consider in relation to helping the mental health and wellbeing of staff?

Talk to your employees

Working from home can be incredibly isolating, therefore speaking to your employees regularly is important. Think about your structure and how communications can be made and cascaded.  Think about your units of employees, and speak to managers or team leaders about how they can interact.  Review your online tools and meeting applications to see if they are the best fit for you and your teams, and make sure that your teams and managers are using them to stay in touch.  Do you want to bring in mentoring or mentoring groups so that there are additional points of contact outside the normal manager to employee interaction?

Promote work-life balance

Now that our homes have essentially become our offices, it is very easy for employees to slip into working extended hours.  Employees no longer have the commute in the morning to get to work, or the natural break point at the end of the day where they log off and leave the office.  Even though we are all well used to the smartphone and picking up emails / phone calls – the loss of the natural breakpoint to leave the office at the end of the day has had an impact on many employees and led to them working extended hours.  Think about talking to your employees about this, or investing in training or otherwise cascading advice as to how employees can make sure that they take breaks and switch off at the end of the day and at weekends to the extent that they can.  Also make sure that employees are taking breaks through the day.  This is important for assisting wellbeing, but of course the working time regulations (and the requirements on breaks) continue to apply to homeworking in the same way as they do for office based work.

Consider individual employees’ needs

Look to make sure that employees communicate with you in relation to what their demands are – for example in relation to childcare responsibilities.  Make sure that any arrangements are written down so it is clear what has been agreed.  For the good of employees and also the company, informal arrangements cannot be continued for anything more than a temporary and short period.  You do not want to find that an employee has been juggling childcare and their work for an extended period – it is impossible to work effectively.  Equally, it is not good for your employees.

Review your technology

Employers should make sure their employees have the technology and equipment they need to get the work done. Clearly there is a balance to be made in relation to temporary working arrangements and investment, but the longer the period of homeworking goes on, the greater the need for employers to ensure there is proper equipment to get the job done.

Promote access to support  

Employers may provide access to support services – if you do, make sure these are advertised well and find out whether there are specific resources relating to the outbreak. Dust off the information regarding EAP and private health provision and cascade out to employees.

2. Firm up your working from home policy

If an employer does not have a working from home policy, now is the perfect time to put one place. A working from home policy could include guidance on:

• hours of work/working patterns
• communication
• instruction and guidance on setting up a safe home office environment, particularly in relation to workstation set up
• sickness policy
• links to support on health and wellbeing
• overtime policy
• security issues such reporting personal injury and damage to company equipment and reminder to check home insurance and mortgage or rental agreements

Remote working becomes more efficient when employers set clear expectations and guidelines for their employees.

3. Carry out health and safety risk assessments 

Employers have a duty to protect their employees’ health, safety and welfare even when their employees are working from home. During the COVID-19 pandemic, it’s very unlikely that employers can carry out “usual” health and safety risk assessments at an employee’s home. However, employers should still check that:

• each employee feels the work they’re being asked to do at home can be done safely
• employees have the right equipment to work safely
• managers keep in regular contact with their employees, including making sure they do not feel isolated and
• reasonable adjustments are made for employees with disabilities.

Risk assessments should also be updated for home working generally, and any recommendations from those or action points should be put into place (for instance online risk assessments for individuals to complete at home, or online training for homeworking).  Employers should also remind employees that they have obligations to report any risks whilst working from home and they should keep in regular communication with their manager. This is particularly important when the employees are working remotely.

Whilst there are many demands on all employers at this time, we also depend on our employees working well and productively from home.  In this regard, looking at assisting with, and safeguarding, employee mental wellbeing has benefits for both your employees and the business.  There is no formula or automatic solution to it – but hopefully some of the ideas and pointers in this article help in considering these issues.

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.

Written by Chris Holme and Laura Taylor

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.

COVID-19 Healthcare: the Potential Impact of the Pandemic on Damages and Quantification of Losses

The far-reaching impact of the COVID-19 pandemic is already evident in the day-to-day handling of personal injury claims. However, the effects are expected not only to be extensive in terms of the types of claims affected, and how they are brought and defended, but also in relation to the complications that will influence causation. In turn, this will impact the level and quantification of damages, in what is likely to be a significant period of economic uncertainty.

Recovering damages

The very basic rule in the law of damages is that a claimant can only recover damages for actual loss sustained as a result of the wrongful act of a defendant. Even if a defendant admits breach of duty, if a claimant cannot prove (on the balance of probabilities) that the breach was an effective cause of loss to the claimant, then it will not be possible to recover damages.

Aside from causation, a claimant must also prove that an alleged loss is not too remote (i.e. that a loss is of a foreseeable nature) and also prove the extent of the loss by demonstrating that it is quantifiable. Each of these aspects are likely to be heavily affected by the severe impact the pandemic is expected to have on the UK and global economies.

There may be difficulties in a claimant proving on the balance of probabilities that certain economic past or future losses were caused by any breach on the part of the defendant, rather than the pandemic. There is, and will continue to be for some time, a sharply increased risk of redundancy across numerous sectors, with large swathes of the national workforce currently furloughed or accepting reduced wages in the short-term.

Impact of COVID-19 on causation

This begs the question: is the pandemic, and the impact on the economy, sufficient to allow a defendant to argue that certain financial losses were unforeseeable, or that the pandemic broke the chain of causation in respect of certain heads of damage?

For example, an employer defending an employer’s liability claim, which includes future loss of earnings brought by an injured employee who has subsequently been made redundant due to the pandemic and who cannot currently find similar employment within a chosen industry, cannot possibly have foreseen the extent to which replacement employment would be limited to such a severe extent in 2020, and that certain sectors would be placed in to such emergency measures.

It will be strongly arguable that this global pandemic is of such a magnitude that it will nullify any continuing financial effects arising out of the employer’s original breach, in which case the employer’s liability for ongoing remuneration and pension damages should cease at the moment the economic impact of the pandemic supervened any legitimate original curtailment of the claimant’s ability to work.

In this regard, it is important to remember that the Court will often deal with the issue of foreseeability of damage and the chain of causation on a public policy level. The Court will look to apply the rules to allow damages to be awarded where it is considered just and equitable to do so. It is therefore likely that litigation arising out of or affected by the COVID-19 pandemic will be involved in part in an assessment of the role and impact of public policy.

The economic measures currently in place will certainly make it more difficult to quantify certain heads of loss, including past and future loss of earnings, disability awards, pension losses, and loss of chance claims. It is arguable that such economic uncertainty could justify incremental and perhaps significant reduction of awards in respect of these types of losses.

Conclusion

Most if not all industry has been affected, but different roles and industries will be affected to different extents. In considering the issues set out above, the travel, transport and tourism industries will have been the most severely impacted, alongside sectors such as retail and manufacturing. As with all looming recessions, there will also be certain industries that will benefit from economic downturn, such as auditors and insolvency practitioners, but for the majority of health and care workers impacted by injury the scope of available jobs within alternative industries will be greatly restricted. Individual claims will have to be considered on a fact sensitive basis to try and determine what losses flowed from the employer’s breach of duty as opposed to those unforeseeable losses which have been caused by the economic downturn. The situation will be even more complex for former employees bringing claims who are now self-employed. It is very likely that evidence from employment experts and forensic accountants will become necessary in a wider range of cases in the future.

It will also be important to consider the potential for increase in fraudulent and exaggerated claims, which would appear to be a feature of threatened societal economic downturn. During previous downturns there have been increases in the frequency of such claims which will result in part from an inclination towards seeking more extensive levels and heads of damage. This is often based upon a potential over emphasis of the general impact of any crisis upon any individual claimant without proper regard for those features of the losses which are either unsupported and unmerited or which could have resulted in any event in the absence of that crisis.

Authors: Jason Bleasdale & Alexandra Dearn

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.