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Coronavirus/COVID-19: Advice to Employers

This blog may be out of date by the time you read it. However, in view of the number of calls we have been receiving from concerned business clients, we thought it necessary to add to the plethora of articles on social media regarding the implications of this unprecedented situation….I say unprecedented not because the UK hasn’t faced similar emergencies in the past…it has faced much worse….but because this is the first pandemic to hit the Nation since the advent of modern employment law.

Whilst the complex web of rights and obligations which make up modern employment law functions well under normal circumstances, throw a pandemic at it and it quickly becomes a chaotic tangle. In times such as these, common sense must prevail with employers and employees working together to share the burden.

The extent of the burden and the timescale for it depends on the industry sector. The first casualties are obviously front line staff in the leisure sector who are often poorly paid and on casual or zero-hours contracts. Businesses in these sectors often have little in the way of reserves and depend heavily on daily turnover of cash from customers to pay staff and suppliers. The customers have already abandoned them in their droves leaving no money in the kitty. In the medium term other sectors will experience knock on effects and all sectors will face staff issues arising from self-isolation and possibly compulsory lockdown.

So what must employers do in these situations? There isn’t space to cover all permutations, so I set out below the answers to some of the more frequently asked questions:

Do I have to pay staff who are self-isolating?

Yes, staff who self-isolate or are actually sick should receive SSP. You should disapply the normal three-day waiting rule and the requirement to produce a fit note (sick note).

Must all staff who make it back to the UK from abroad self-isolate?

No. Not unless they have symptoms. Only those returning from high risk countries such as Italy, Spain or China must self-isolate for 7 days if symptom free (or 14 days if they or a family member has any symptoms).

Check the FCO website for a list of countries currently at high risk as this may change over the coming weeks.

Faced with plummeting customer numbers, can I lay off staff or cut hours?

Normally, there are complex rules governing lay-off and short time. However, if you meet with staff (or in small groups, all spaced at least 5 metres apart) and rally support, asking them to work with you for the long-term benefit of the business and their own jobs, most people will come on board and agree to a temporary change to working hours/shift patterns. Remember, for many employees, even a small reduction in working hours will result in financial hardship and so it is important to demonstrate the sacrifices you are making too. Don’t assume that they will understand the self-imposed share dividend cut or debt refinancing that may be going on in the background.

There may be one or two who appear inflexible but if you get the majority on your side, herd mentality will ensure the others are dragged on board too.

What happens if there is a compulsory lockdown?

This isn’t really the moment for interesting legal arguments, I know, but arguably, this scenario would invoke the little known legal doctrine of “frustration” whereby contractual obligations end by operation of law in response to an Act of God or “force majeure”. If so, then the obligation to pay staff would simply dissolve, leaving the employer free to choose whether to enter into new contracts once the crisis event has passed. However, I would not recommend being the test case for this.

A more sensible approach would be to rely upon employees’ contractual obligation to  be ready and able to work as a condition of entitlement to pay. If lockdown occurs, preventing employees from working, they forfeit their right to pay. Hence, those who can work from home may continue to be paid as normal whereas those who cannot work at home will lose pay for the duration of the lockdown.

It remains to be seen how the Government’s £330bn “War Chest” will divvy up among small businesses to ease the inevitable pain.

This blog was written by:  Mark Higgins

DISCLAIMER: Please note that this post sets out the general position under the general law. It should not be acted upon in any specific circumstances without taking specific legal advice as to those circumstances. Also, it should not be relied upon, acted upon or treated as a substitute for specific advice relevant to particular circumstances. If you do require specific advice please contact us for assistance.