Employment law is constantly evolving, now more so than ever. In this update we’re giving you some brief guidance on action you may want to consider during these uncertain times.
Giving staff notice to take annual leave
Many employers are asking us if they can request that their employees take annual leave in order to reduce the impact that this could have once businesses are operating normally again. The answer is yes. You may have the right within your contracts of employment, if not, the Working Time Regulations 1998 give you the right subject to you providing notice. The notice required under the Working Time Regulations is twice as long as the holiday you would like the employee to take, therefore if you want them to take one week, you should give them two weeks’ notice.
How should you give notice? As always, we recommend it’s in writing, either a letter or an email will suffice.
Based on the current guidance, there is nothing to prevent you from giving employees notice to take annual leave during any period of furlough leave, however this will need to be paid at 100% of salary and not 80% (see note below on the new rules for how to calculate holiday pay). There remain risks however that HMRC deems that the period of annual leave breaks the furlough leave period (we consider this unlikely) or that the sums for holiday pay are not recoverable because the employee is prevented from enjoying rest and relaxation due to the lock down period. We’ll keep you updated and let you know if the guidance suggests this at any time.
Agreeing reduced working hours
Some contracts permit short time working in which case, consent will not be required. However, in the majority of contracts this clause does not appear and therefore agreeing to reduce hours, even temporarily will require consent. As to how to approach this, you need to be honest with your staff about the options available. If redundancy or lay off is an alternative to short time working, you would hope that (subject to their individual circumstances) most employees will agree to a shorter working week. However, the issue that you have is furlough leave. This is seen by many as a more attractive alternative. You are not obliged to accept requests from employees who want to be furloughed and as you’re aware, furloughed workers cannot undertake any work. If there is still a need for work to be carried out, then short time working is the answer.
Once you’ve agreed a new working pattern you need to follow it up in writing, you should confirm:
• Their new days and hours of work; and
• The effect this change has on their salary.
You should then ask employees to send a signed copy back confirming their agreement to the new terms.
Reviewing staff numbers
We appreciate that the intention behind the Coronavirus Job Retention Scheme is to avoid redundancies but if your cash flow projections are such that you are going to struggle to keep paying staff while you wait for the grants to come in you have the following options;
1. Ask employees to agree that their salary is deferred until the HMRC payments are received (unlikely unless you have a lay off clause within your contracts);
2. Look at employee numbers and consider whether you can remove any roles to preserve the roles of others. For those with under two years’ service, the procedure carries less risk but for those with over two years’ service we consider that when deciding whether you have acted fairly and reasonably, a tribunal will want you to be able to demonstrate why placing staff on furlough leave was not appropriate.
Don’t forget the Good Work Plan
The provisions of the Good Work Plan came into force yesterday, something that’s easy to forget during these times. Two of the main headlines for you to remember, appear below.
• All employees and workers now have to be issued with contracts of employment (or as the legislation refers, a written statement of terms) from the first day of their employment. Although recruitment may seem some time away, we urge you to make a note of this new requirement.
• Holiday pay is now based on earnings in the previous 52 and not 12 weeks.
If you have any questions relating to furlough leave or how to protect your business, please contact us.