CORONAVIRUS: WHAT IS THE UK GOVERNMENT DOING AND WHAT CAN EMPLOYERS DO?
It is less than two weeks since we wrote our blog on Coronavirus and pay, and it already seems outdated. With people preparing for months of home working, streets and supermarket shelves empty; in industries such as travel, entertainment and hospitality the question is no longer about sick pay but about what, if anything, can be done to avoid redundancies.
On a national level, what is the government doing to avoid mass unemployment? At the time of writing, Monday 16th March, the UK government’s responses seem to fall well short of their European counterparts. The extent of the current measures taken by the government to support businesses can be found here.
(For those industries not yet affected by the economic downturn, the safety precautions can be found here.)
Sick Pay: An Update
As explained at the end of our previous blog, the government announced changes to statutory sick pay (SSP), announcing that the first three days of an absence must be paid and broadening the definition of, and therefore the entitlement to, sick pay to people who are staying at home because of Coronavirus.
SSP is paid by the employer. The government has also announced that the refund of SSP to small employers (less than 250 employees) will be improved with the reimbursement of up to two weeks’ SSP per employee.
The main issue faced by employers and employees is that this measure only applies to SSP. The current weekly SSP rate (£94.25) is less than a third of the adult minimum wage for someone working full time (£328.40).
The government response is therefore inadequate for employers who provide a contractual sick pay which is often far more generous than SSP, with employees guaranteed full salary for sometimes extended periods.
The government’s response is also inadequate if employers only pay SSP, there is little doubt that many employees will face financial difficulties if they don’t go to work, and the health of their co-workers if they can’t afford to stay home when they should.
Short time working and temporary lay off
European governments have announced ground breaking measures to enable employers to send their employees home whilst the economy is at a standstill.
In France, employers whose activity is at a standstill are able to lay off their employees or impose reduced hours. An employee who is laid off is entitled to 70% of their gross salary.
Whilst reimbursement had been capped at around the minimum wage level, President Macron has announced that these payments will be reimbursed in full to the employer.
There has been no announcement so far on the government helping employers with temporary lay off. The advice from the government remains the same as it was before the crisis:
- Temporary lay off or reduced hours must either be provided for in the contract of employment or agreed with each employee. If an employer intends to lay off employees without their agreement, these employees will be able to refuse, resign and claim constructive dismissal.
- When an employee is laid off the employer must pay them the Guarantee Pay. This payment is £29 per day with a maximum of 5 days (£145) per employee over a period of three months. To be entirely clear about this – if you are laid off for a period of three months, your whole entitlement under the Guarantee Pay provisions is £145. If you are laid off for 6 months, you will receive twice that amount – £290. The payment is £145 per three months. This payment is borne entirely by the employer and there is no reimbursement from the government. The Guarantee Pay as it currently operates is therefore not the solution for industries at a standstill.
Other measures announced by the government take the form of very limited grants and facilities for borrowing.
We will discuss in our next blog what can be done with enforced holiday period or negotiated reduction in hours and pay.
This week we expect to see emergency legislation introduced to parliament which will lay out more details of how this government intends to address these and other issues.
Today (17th of March 2020) we expect to hear from the Chancellor about the financial provisions that will be put in place as a result of the pandemic. Should these provisions affect employment, we will of course write further on them.
For more specific information or to discuss your requirements please call either Amanda Galashan or Julie Calleux at Employease on 0333 939 8741, or email us at email@example.com. This note does not constitute legal advice on any particular situation you may have.