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The latest statement from Prime Minister Boris Johnson has emphasised the need to reduce “non-essential contact with others” and to “stop all unnecessary travel” to tackle the Covid-19 virus (coronavirus). This is likely to have a devastating knock-on effect on businesses nationwide, leading to a reduction in workforces and many employees sadly losing their jobs.

As an employer, you will be wondering what steps you can take to reduce your workforce in a fair and effective manner, and what options you have going forward.

If you are a business owner who is looking for professional, legal support, please contact us today for an initial consultation

1. Working from home

Although many employees at your workplace may already work from home on the odd day, this can be used to ensure work is complied without the employee undertaking any unnecessary travel.

It is worth considering whether there is the contractual right in the employee’s contract for them to work in a different location. This is often known as a “mobility” clause and will state that the employee can work in a location that is within reasonable proximity to their usual place of work. More than likely, this will include their home address. Even if this clause did not exist in their contract, under the current circumstances it is likely to be a reasonable request. If you are in any doubt, it is best practice in any event to consult with the impacted employee to see whether they are happy to work from home. If your employee is unhappy to work from home despite having the appropriate capacity to do so, you could consider disciplinary proceedings.

The employer has a statutory and an implied contractual responsibility to ensure their employee’s health and safety is protected and that they have a safe workspace. This is something which again you can discuss with your employee to determine whether it is safe, and if not, what steps can be taken to fix any issues.

You will also need to ensure your employee has the appropriate equipment to complete their tasks. Depending on their job role, it may not be practicable for the employee to work from home, for example if they were a factory worker. To assist the employee you can offer to pay for certain equipment e.g. utility costs, stationary, etc. This can be paid per item via expenses, as a weekly/monthly allowance or you could perhaps offset this against any costs the employee has saved by not travelling into work (where appropriate).

It is important to consider how you will monitor the work that your employee is completing. You could use a monitoring tool (with consent) or ask for regular reports. In any event, the employee will be concerned about the future of their role so it is unlikely that they will disregard their performance levels.

You should be aware that if you decide to send an employee home without pay and to close your place of business this could give rise to potential claims for unlawful deduction of wages and/or constructive unfair dismissal.

2. Lay off and short time working

I) Lay off

This is where there is no work for the employee to complete so the employer asks the employee to leave without pay. However, the employee is still retained as an employee and they are not dismissed.

II) Short-time working

This is where there is a diminution in work provided to the employee by the employer where they have less than half of a normal amount of work available and therefore they are only paid for the work they complete.

Both of these options appear very useful for employers, but they are only possible if there is an express clause in the employee’s contract of employment.

What if there is an express clause in the contract?

The employee will be entitled to guarantee pay. This is currently £29 per day and is set to increase to £30 per day from 6th April 2020.

The employee will be entitled to this payment for a maximum of 5 days within a rolling three-month period. Therefore, they would be entitled to a maximum of £145 over the rolling three-month period (or £150 from 6th April 2020). Alt

During this time of lay off/short-time working the employee’s annual leave entitlement will continue to accrue as normal, and if the employee is unable to attend work due to illness they will not be treated as being laid off or short-time working.

Can the employee complain?

If the employee has been laid off or short-time working for a period of 4 consecutive weeks or 6 weeks in a rolling 13 week period, the employee is entitled to resign and treat themselves as dismissed on grounds of redundancy. This would mean that they are entitled to statutory redundancy, provided they have 2 years continuous service and that they provide the correct contractual notice.

The employee would need to write a letter within 7 days of either a period of 4 consecutive weeks or 6 weeks in a rolling 13 week period to you stating that they intend to clam redundancy.

As an employer you can either:

A) Do nothing within 7 days of receipt of the letter and the employee can resign within 3 weeks and claim statutory redundancy; OR

B) Send a letter back to the employee (counter-notice letter) within 7 days of receiving the notice stating that you expect to return to normal for a minimum of 13 weeks. This will stop the employee from receiving the statutory redundancy payment, even if your statement proves not to be true. If it is untrue, your employer can claim statutory redundancy in the employment tribunal. However, this process is likely to take over a year for the employee to complete. Your employee may also claim constructive dismissal if it is untrue due to a breach of the implied term of trust and confidence in their contract. Again, this is unlikely to be heard for a year and in any event the damages may be minimal as they were not working in any event.

3. Redundancy
There are three scenarios where a business can potentially make redundancies:

  • Moving place of business
  • Closure of business
  • Job duties disappear or diminish

As with any other redundancy process, you must ensure a correct process is carried out to reduce the risk of employment tribunal claims.

Part of this process includes the right for the employee to be consulted about the redundancy. If 20 or more people are being made redundant, it is a collective redundancy. Guidance on collective redundancies is provided by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). S. 188(1A)(b) of TULRCA states that if over 20 employees are to be made redundant, the consultation period should last at least 30 days before anyone is made redundant. Furthermore, S. 188(1A)(a) states that if over 100 employees are to be made redundant, the consultation period should last at least 45 days before anyone is made redundant.

In collective redundancy situations, If an employer fails to consult with an employee and dismisses them for redundancy, the employer may be forced to pay a Protective Award. The Protective Award is compensation of up to 90 days pay per employee.

Understandably, an employer may not feel that they have enough time to consult fully with employees given the current circumstances. There is a defence under S. 188(7) of TULCRA which effectively states that if there are “special circumstances” that render it “not reasonably practicable” for the employer to comply with this consulting requirement, they will need to take reasonable steps to comply (and consult with employees). The current coronavirus pandemic could potentially be classified as a special circumstance in light of previous case law. However, this may change when the shock of these unprecedented measures subsides and when we have further knowledge. This would not allow employers to not consult, however it may lighten the consultation requirements.

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We suspect that legislation may be introduced by the government in response to the issues regarding lay offs, short time working and redundancies.

For up to date advice on the coronavirus please refer to the government advice pages: https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response.

If you are looking for further guidance in relation to reducing your workforce or the impact of the coronavirus on your place of work, please contact our team of employment law specialists contact us today on 0330 221 0684 or by e-mailing info@klglaw.co.uk.

*Disclaimer: The above should not be considered as legal advice*

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Tel: 0330 221 0684
Email: info@klglaw.co.uk

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