Employment Law Newsletter Spring 2020

Spring 2020

COVID-19 Pandemic

Coronavirus Job Retention Scheme

As a result of the economic impact of the COVID-19 pandemic, the government has introduced the Coronavirus Job Retention Scheme. The scheme is intended to avoid redundancies by alleviating the pressure on employers to continue paying wages in full during the crisis period.

Employers who have been severely affected by COVID-19 are able to ‘furlough’ employees and claim 80% of their usual monthly wage costs up to £2500 per month for each employee.

The scheme applies in respect of employees who have been furloughed, meaning that they have been put on a period of leave during which they are not required to work. Under the  scheme, the employment relationship between employer and employee continues but the employee will be put on temporary leave of absence (furlough leave).

Given that the reimbursement that employers can seek per employee is limited (to the lower of 80% of wage costs or £2,500 per calendar month, plus employer national insurance contributions and employer auto-enrolment pension contributions) it is anticipated that many employers will seek to amend the contracts of those put on furlough leave to match the level of reimbursement that can be obtained.

The scheme is backdated to 1 March 2020, open for at least three months, and will be extended if necessary.

Government guidance on the Furlough Scheme can be found at:

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme

ACAS guidance can be found at:

https://www.acas.org.uk/coronavirus/if-the-employer-needs-to-close-the-workplace

HMRC guidance can be found at:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Normal employment law rules apply when furloughing employees and it is advisable to handle the matter carefully to avoid claims whether for contructive dismissal, unfair dismissal, discrimination, breach of contract, unlawful deduction of wages or otherwise. Where furlough is agreed between employer and employee, it is also advisable to have a written agreement in place, which will constitute a variation to the employment contract.

Knight-Webb Solicitors are specialists in employment law. We pride ourselves in providing a first-rate, cost-effective and personal service to clients. We can help you to avoid the employment law pitfalls and ensure that your procedures are up-to-date, taking into account all the recent changes in the law, including those outlined in this Newsletter.

Contact Sunita Knight-Webb on 020 7207 6195 or at sunita@knightwebb.com