April 28

How to exit from furlough….what is your strategy?

1. Return to business as usual

Bringing employees back to work on their previous terms and conditions will be the easiest but most expensive option and will most likely be used by employers who anticipate that they can revert to ‘business as usual’ in the short term.

How do you do this?

Give your employees a minimum of 48 hours’ notice to return to work, although notice in mid-June, assuming the government does not extend the furlough scheme further, will be sensible.

2. Reduce payroll costs without making redundancies

Extending the furlough leave scheme without the benefit of the government grant, on the same or revised terms, is possible provided employees continue to agree. It is also possible, with consent, to furlough new employees or rotate employees to ensure that elements of the workforce do not become deskilled.

How do you do this?

Provided employees agree to an extended furlough period, a new or extended furlough agreement will be required. If an extended furlough scheme is presented as a formal alternative to redundancy, a formal redundancy consultation will be required.

Where an employee has a contractual lay off without pay provision in their contract, this could also be used. The employer should consult with employees first and give reasonable notice of any lay off. Be mindful of the fact that employees who have been laid off for four or more consecutive weeks, or six weeks in any 13-week period, are able to claim a statutory redundancy payment in certain circumstances.

3. End furlough and bring employees back to work on reduced hours and pay

Employers wish to retain trained employees and avoid the costs involved of making redundancies where:

• business has resumed but a full-time commitment is not required
• a return to business as usual is likely in the medium to long term
• furlough resulted in a reduced number of employees being kept in work but now the available work needs to be spread more evenly across all staff.

How do you do this?

Where furloughed employees are returning to a workplace where employees have already agreed a pay-cut in exchange for reduced hours, they may anticipate that this is what will be expected of them and be willing to agree to a change.

If not, a reduction in hours and pay is a change to terms and conditions and requires employees’ agreement. It is important to gain individual consent in writing from each employee using a variation of contract letter.

Where an employer has a contractual right to impose short-time working, this could be used. The employer should consult with employees first and give reasonable notice to avoid being in breach of contract. The statutory lay-off provisions mentioned above also entitle employees who have been kept on short time for four or more consecutive weeks or six weeks in any 13-week period to resign and claim a statutory redundancy payment in certain circumstances.

4. Offer unpaid (or part-paid) leave or sabbaticals

Where an organisation wants to retain all their employees but needs to buy some time to allow the business to return to normal trading conditions, this may provide a solution.

How do you do this?

The employer will inform all staff that it will consider applications for sabbaticals and reserve the right to decline requests if, for example, an employee is in a business critical role.

Where a sabbatical is agreed, its terms and the employee’s consent to them should be recorded in writing.

5. Make redundancies

In the absence of any extension to the furlough scheme there are likely to be many organisations who will have no option but to make redundancies.

Starting redundancy consultation during the furlough period

The guidance from HMRC on furlough provides that ‘your employer can still make you redundant while you’re on furlough or afterwards”. There is no specific guidance to state that collective or individual redundancy consultation can be carried out during furlough, but it is widely considered that either form of consultation can be commenced during furlough leave.

Assuming collective consultation can be undertaken during the furlough period, this is likely to be used by employers who:

• know they need to make redundancies, but could reduce that number by using the furlough scheme to absorb part of the cost of consultation
• want to push for other changes as an alternative to redundancies (see above) but need to be able to act quickly if employees do not agree.

How do you do this?

Collective consultation is required where an employer proposes to dismiss 20 or more employees “at one establishment” in a 90-day period. If fewer than 20 redundancies are anticipated, only individual consultation is required.

Consultation must start “in good time” to allow the relevant discussions to take place and a minimum period before the first of the dismissals takes effect. The minimum periods are:

• 30 days, where between 20 and 99 employees are to be dismissed
• 45 days, where 100 or more employees are to be dismissed.

There is no confirmation that the current situation will mean that these minimum consultation periods can be dispensed with, but it may be possible in some cases. It is important the employer can demonstrate it has engaged in collective consultation so far as it can do in the circumstances.

Given the current circumstances, where there may be large numbers of employees furloughed and so not attending work, the consultation process will be more challenging and so the impact on timelines will need to be borne in mind and zoom (or equivalent) consultation meetings will need to be held.

It is important to dot all the ‘i’s as getting the collective consultation requirements wrong can expose the employer to significant financial liabilities, including a “protective award” of up to 90 days’ pay per affected employee.

Individual consultation is required at the end of collective consultation. The ordinary redundancy principles apply during this time. In order to avoid a successful claim for unfair dismissal arising out of a redundancy situation, there must be:

• a genuine redundancy situation (most likely to be satisfied in these circumstances)
• adequate warning and consultation of affected employees
• a fair “pooling” and selection process
• consideration of alternative employment
• a fair procedure.

An employee must have two years’ service in order to claim unfair dismissal, although no period of service is needed if they assert, for example, that their selection was discriminatory.

Employees who leave at the end of such a process will be entitled to notice, statutory redundancy pay and whatever enhanced redundancy pay the employer may provide.

Starting redundancy consultation at the end of furlough

This is likely to be used because:

1. it transpires that either sort of consultation during the furlough period is not allowed, or
2. where the employer does not formulate its proposals until after the end of the furlough period.

How do you do this?

The details of the consultation process and periods are as set out above. If this approach is followed and assuming consultation starts on 1 July 2020, dismissals could not take effect until 1 August or 16 August at the earliest (depending on the number of employees involved). For redundancies of less than 20 employees, the dismissal could take effect as early as mid-July.

Please contact nicola.goodridge@goodhr.co.uk or on +44(0)7917878384 if you need any assistance at all or simply just require more detail than is set out here…

April 20

Update on furlough….and the detail on how to claim….

As you are probably aware, the government has confirmed that it is extending the period that employees can be furloughed to 30 June 2020. The chancellor has also stated that this period could be extended further.

A further amendment to the scheme has been to extend the eligibility date from 28 February 2020 to 19 March 2020. This means that employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020 – this means the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.

Please also remember that the HMRC portal goes live today, 20 April 2020.

To claim you will need:

• your employer PAYE reference number
• the number of employees being furloughed
• National Insurance Numbers for the furloughed employees
• Names of the furloughed employees
• Payroll/employee number for the furloughed employees (optional)
• your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
• the claim period (start and end date)
• amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
• your bank account number and sort code
• your contact name
• your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).

If you have 100 or more furloughed staff, you will be asked to upload a file with the information rather than input it directly into the system. The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).

Email: nicola.goodridge@goodhr.co.uk
Telephone: +44(0)7917 878384

April 17

Furlough, annual leave….and how it all fits together!

One of the ongoing concerns for employers during the COVID-19 crisis is that if and when we return to ‘normal’ in the latter half of the year there is the potential for employees to perhaps have a whole year’s holiday to take in the final six months of 2020 when employers are, quite rightly, keen to try and rebuild their businesses.

To assist, I will hopefully answer some of the FAQs that I am regularly asked:

Does holiday accrue during furlough leave?

Yes – during furlough leave “employees still have the same rights at work” which includes the accrual of holidays. There is an argument for saying that only the statutory minimum holidays will accrue, rather than any enhanced contractual holiday, but I believe goodwill may be lost and there are bigger battles to fight!

Can employees take holiday whilst on furlough leave?

Yes – if an employee is furloughed they can still request and take their holiday in the usual way. Taking holiday does not break the continuity of furlough leave.

Can employers request that employees take holiday during furlough leave?

Yes – provided the employer gives twice the notice for the holiday it wants the employee to take – for example, if an employer wants an employee to take a week’s holiday during furlough they would need to give that employee two weeks’ notice.

It is worth remembering that, whilst it is reasonable for employers to request staff take some annual leave during furlough, the purpose of holiday is for the employee to enjoy rest and leisure – at this time, for many, this is simply not possible. If employers try to ask that all an employee’s holiday is used during furlough leave, this could be an abuse of the employer’s powers.

Can employers refuse holiday requests for employees on furlough?

It depends on the employer and the business sector in which they are operating. Some may want their employees to take holiday to avoid it being “stored-up” to a time when they want their employees to be working. Others will not. It is important to be consistent and fair in how you apply your policies and rules.

What happens with bank holidays (there are four during the furlough scheme)?

If your contract of employment stipulates that bank holidays are part of the annual holiday entitlement, then employees should be paid at their ‘normal rate of pay,’ rather than the reduced furlough pay, for that bank holiday.

If staff, currently furloughed, usually work bank holidays, then employers need to decide whether either the employee takes that day as holiday and is paid their normal pay or they take the time off at a later date.

Can employees cancel pre-booked holiday?

That is for the employer to decide. If an employee can no longer enjoy their holiday because they are at home, looking after/schooling children then perhaps allowing holiday to be taken at a later date or carried over would be recommended. However, an employer may want to ensure that pre-booked holiday is taken at this time to avoid the issues outlined already of a significant amount of holiday accumulating for many staff who may struggle to take it all during 2020 – albeit see below for revised carryover provision – and so insist that the holiday is still taken.

Can the employer cancel an employee’s pre-booked holiday?

Yes – an employer must give staff at least the same number of days’ notice as the original holiday request. As any sort of travel is banned at the moment, the employee may appreciate being able to take the holiday at another point in time.

What are employees paid if they take holiday during furlough?

Employees who take holiday during furlough leave are paid their ‘normal’ pre-furlough leave pay for the annual leave taken. This is a neat way of ensuring that holiday is not stored up and staff get a boost to their furloughed income (if their employer is only paying 80% of salaries). However, it does of course presume that the employer has the cashflow to manage this.

New rules on carryover?

If the employee is prevented from taking holiday because of coronavirus, they are now allowed to carry over 20 days for 2 holiday years after the end of their current holiday year. It is still reasonable, and advisable, to request some holiday is taken during furlough leave because a carryover of 20 days is going to be potentially difficult for the employer to manage as they try to rebuild their business. However, it is reassuring to know that the law has been relaxed for 2 years post COVID-19.

What about other holiday in excess of 20 days that has not been taken?

Some contracts of employment will allow for carryover. However, if not, it is down to the employer to decide whether to allow additional holiday to be carried over or not. Either way it is important that the employer is consistent in its approach and fair to all staff.

For further advice please email: nicola.goodridge@goodhr.co.uk or telephone: +44(0)7917 878384

April 16

How to boost employee morale whilst remote working due to COVID-19….

COVID-19 has imposed a new culture of remote working and with this comes the risk of declining productivity, morale and overall team performance. Here are some top tips to boost employee morale and wellbeing during this difficult time:

1. Keep employees informed

Regular contact with staff is essential throughout this period of uncertainty. Email communications should be clear and concise focusing on important pieces of information that will keep employees up to date. Regular team check-in meetings via zoom, or similar, should be implemented. Encourage team WhatsApp groups to be set-up to allow employees quickly keep in touch.

2. Promote work-life balance

It is important to acknowledge that employees may find it difficult to adjust to remote working and that they may find themselves more distracted than normal with additional home responsibilities.

Encourage employees to establish a new working routine, which should incorporate regular small breaks during the working day. If employees are used to a daily commute suggest that they use this time to get some exercise before starting their working day. Ensure that employees know that they are not expected to work additional hours and that they should switch-off once their working day is over.

3. Ask for feedback

While employees may not be physically present in the office, they may still have opinions over how the business is operating and how it could be improved. Asking for feedback also helps employees know that their thoughts are valued and when any issues are addressed as a result of feedback.

4. Introduce employee recognition and rewards

Employers should ensure that they recognise and reward individuals or teams who are making significant contributions, show extra effort or deliver beyond expectations. This can boost employee morale and reassure employees that their work is valued. Employers may consider introducing a weekly email, which can be circulated to employees highlighting these achievements.

5. Be flexible and empathetic

Where possible, employers should consider allowing employees to vary their working hours to suit their new arrangements. For some employees being able to work before their children are awake or after they have been put to bed will be enormously beneficial. Employees’ productivity levels when they are free from distraction will also benefit employers. Employers could also consider introducing set core hours that all employees must be available at but allow employees to work their additional hours at other times convenient for them.

6. Team wellness check-ins

Set a weekly virtual team meeting to discuss not only work-related topics but also do a check-in to see how team members are doing. This is an excellent way for team leaders and team members to show their support for one another and to offer up tips that they find helpful in staying healthy. This is a good time to share fact-based videos and news from authority sites for discussion. Sorting through myths and keeping heads calm is important when dealing with low morale during this time.

7. Virtual coffee or perks

Schedule a virtual coffee get-together on a regular basis. Set up a zoom meeting, ask your team to grab their favourite drink and come prepared to share something funny or exciting – non-work related.

These aren’t the only ways to boost your virtual team’s morale during COVID-19 and beyond. The key is first recognising that your teams are likely to suffer decreased morale and then making the decision to do something about it. Trying to ensure they remain connected and productive is key for all parties.

email: nicola.goodridge@goodhr.co.uk
Telephone: +44(0)7917 878384