The Mishcon Academy Digital Sessions
Conversations on the legal topics affecting businesses and individuals today
Will Winch
In this episode, how has the furlough scheme changed? How can you manage the safe return to work and what do employers need to watch for in order to avoid problems in the future? Hello and welcome to the Mishcon Academy Digital Sessions podcast. I’m Will Winch, a Legal Director in the Employment Team at Mishcon de Reya and I am joined by my colleague Suresh Patel. And rising to the challenge of social distancing rules, we’re recording this podcast over the internet, each of us speaking from our own homes. So, Suresh, lets start by discussing the most recent developments in relation to the furlough scheme, in particular the new concept of flexible furlough. Can you tell me a bit about what this is?
Suresh Patel
Sure. So, until the end of June, the rules relating to furlough were fairly binary. If you were furloughed, you couldn’t do any work for your employer for a minimum period of three weeks. Now, that three week minimum period has been lifted so in theory you can work one day on, one day off and your employer can still claim under the scheme.
Will Winch
Well, that should at least give employers a bit more flexibility but does it mean though that the old furlough scheme has been replaced?
Suresh Patel
Yeah in some ways it’s definitely easier to think of it as being replaced rather than modified, in particular if you want to make a claim under the original scheme, so that’s covering the period up until the end of June you need to do that by the end of July. However, the rules about furlough remain the same. So, you can still only claim for employees whose employment has been affected by Coronavirus and for the time being you can claim up to 80% of wages which is still capped at the equivalent of £2,500 per month for an employee who was furloughed for the entirety of the month.
Will Winch
You say, “For the time being” that that’s the case. Is it going to change again?
Suresh Patel
Well, the new rules envisage a tapering out of the scheme with the employer expected to contribute more and the Government contributing less essentially in the months leading up to the end of October when the scheme will be wound up. And just so everyone’s aware, the deadline for claims made under the scheme will be 30 November 2020.
Will Winch
So, how will the tapering work then?
Suresh Patel
Nothing changes in July but from August, employers will no longer be able to claim the payroll costs of employer’s national insurance contributions or any employer’s compulsory pension contributions, so, that’s until August. From September, the contributions will then be lowered from the Government from 80% to 70% which means that the maximum contribution will be dropped from £2,500 to £2,187.50, he said, calculating it in his head and from October the contributions go down again, this time to 60% so that contribution from the Government will be capped at £1,875. That said, some things will remain the same throughout. First and foremost normal employment rules will apply to staff so, you still have the duty to maintain trust and confidence. You will need to get the agreement from staff if you want to cut pay and so on and in order to remain eligible under the scheme you still can’t do any work that generates revenue or provides a service for your employer while you are furloughed. You can do a bit of training but employers need to make sure that those who are doing the training are paid at least the national minimum wage for those times.
Will Winch
So, does that mean you can’t work in the morning and be furloughed in the afternoon?
Suresh Patel
Actually, it would appear that you can but you do need to keep a record of the number of hours worked and you obviously can’t claim for a period where employee is working, employers will have to pay for that period in the normal way but you can claim for the time on furlough.
Will Winch
So, are there any barriers to this then?
Suresh Patel
Yes, there are. First you need to make sure that you have a written agreement which sets out the terms of the flexible furlough arrangement. It doesn’t look like that needs to be signed by the employees but they do certainly need to have agreed to it. Added to that, employers also need to keep a copy until June 2025, so, that’s the first. Second, only employees who are furloughed for the full three weeks prior to the 1 July can now be put on furlough. So, in other words if you haven’t been furloughed or you were furloughed after the 10 June, you won’t be able to access the scheme. Now, there are a couple of exceptions to this. First, people who have TUPE’d over into your business and were furloughed by their previous employer and also those returning from family friendly leaves, so, maternity, shared parental leave and so on. They can all be furloughed under the flexible furlough scheme for the first time. And the third barrier is that there is a cap on the number of people you can furlough during any claim period. There is now this concept of a – quote unquote – high water mark which means that you can’t claim for a higher number of employees that were claimed for at any one time prior to the flexible furlough scheme.
Will Winch
Yeah so, in other words if under the old rules you furloughed 50 people in one claim period, let’s say a month, and furloughed a different 50 people in the next claim period, you can’t now claim for more than 50 people during a claim period in the flexible furlough, even though you have more than 100 people who are theoretically eligible.
Suresh Patel
Exactly and if you thought that sounded confusing, wait until you see the rules about how to actually calculate the pay for those who are on the flexible furlough scheme.
Will Winch
Yes, I think that that’s where the flexible furlough scheme really earns its acronym. I think that the easiest way to describe this is to say that you can claim the proportion of time that someone has been furloughed for but you’ll need to check the Government website for how to run those calculations in practice. There’s a number of worked examples that shed some light on what employers are supposed to do but you’re going to need a cold towel around your head and a dark room in which to read them. For a start, you need to put separate claims in for different calendar months. Now, moving swiftly on though to the challenges of the return to work. Suresh, as many businesses emerge blinking from hibernation, what steps need to be taken in order to ensure that the return to work is as safe as possible?
Suresh Patel
Well, the principles haven’t really changed so employers still need to ensure that they’re providing a safe place of work and a safe system of work. Some businesses, like those in the manufacturing sector for instance, they’ll be pretty well used to a lot of the basics as health and safety law is something they probably have to deal with on a daily basis. But those, say, in traditionally safer environments like office workers or those in hospitality, they may find it a bit more of a challenge as there are quite a few bits of health and safety law that they need to get to grips with and added to that, if they get it wrong there are some significant penalties. Even directors and officers can personally be found criminally liable for breaches.
Will Winch
Okay. So, what sort of things are employers going to need to do in that case?
Suresh Patel
Well, first and foremost someone at the organisation needs to conduct a comprehensive risk assessment to work out where the challenges lie. This is going to need someone to sit down and work out what the pattern of work normally looks like and what needs to change to make that pattern safe. Obviously, the people who are going to know best about that sort of thing are going to be people who are actually doing the job. So, it’s really important to consult with them about it in the first instance.
Will Winch
And how should an employer go about consulting its staff?
Suresh Patel
Well, that depends. If there is a union that is recognised, the union can put people forward or alternatively, the employer should really consult with representatives that have been elected by the employees or even directly with the employees themselves. But in practice, it probably makes sense to discuss things with your representatives if you have, say, more than a handful of employees.
Will Winch
And once you’ve done this risk assessment and you’ve gained the views of the various people in your workforce, what do employers need to do with that risk assessment?
Suresh Patel
Quite a few things. Well, first they need to publish it for the benefit of the workforce. The Government is actually encouraging people to put a copy of the risk assessment on their website if they have one. But it’s also really important to remember that the risk assessment isn’t the end of the story it needs to be reviewed regularly to make sure that it’s still relevant both in terms of the current guidance out there but also just to make sure that it’s working in practice. But just as importantly, employers need to make sure that they’re providing the right equipment and facilities to ensure that the risks that have been identified are minimised. So, for instance, there’s no point saying that employees need to use the hand sanitiser if you don’t actually follow through on that advice and provide hand sanitiser at a number of points throughout the working environment.
Will Winch
And then presumably if anyone has any particular concerns you’re going to need to listen to those concerns and address them if you can?
Suresh Patel
Absolutely. Remember health and safety legislation sets out the minimum requirements but you still have to remember that normal employment law rules still apply so, employers have a duty to maintain the trust and confidence of their employees.
Will Winch
Clearly employers are going to have quite a lot to think about when they start the process of getting people back to work then. Perhaps we can talk about the Government’s guidance at this point.
Suresh Patel
Yeah of course. So, first it’s important to note that the Government’s guidance is that if you can work from home you should. But if that’s not practicable it has produced sector specific guidance to help employers put in place a framework for return. So, there are guides for those working in construction, factories, offices, restaurants and bars, retail, other people’s homes and quite a few others. So, each of these guides provides some tailored advice about things such as cleaning, social distancing, organising how people arrive for work and so on. So, employers should definitely read the guides that apply to them but also you have to remember that that’s just the starting point and it’s very likely that employers will need to think about how things will need to work in their own situations as well?
Will Winch
Thank you. Now, since we’re on the topic of health and safety and as people are returning to work, all of those people who have been shielded and other people who are perhaps vulnerable, I think the terms are clinically vulnerable and clinically extremely vulnerable. Are there separate rules for how employers should deal with them on their return?
Suresh Patel
Yeah. Well, the rules are the same but you just need to think carefully about how they will apply to those individuals. So, for instance, if someone is clinically extremely vulnerable, which means they have been shielding, they are likely to also be disabled for the purposes of the Equality Act 2010. That means employers will need to make sure that they don’t discriminate against them in the way they are treated. The Government has actually said that these individuals should continue to shield until at least the end of July. So employers really shouldn’t force or even expect those in this category to return to work until at least August and in reality probably sometime after that. For those who are clinically vulnerable, so for instance, those with asthma, chronic obstructive pulmonary disease, diabetes or someone who is pregnant, they will need to be handled with care. I mean, they may also be disabled but in any even the Government advises that employers should try their best to ensure the two metre rule is preserved in relation to them at all times.
Will Winch
Thanks and finally, what should an employer do in those tricky situations and I can see that it’s going to be fairly foreseeable that this is going to happen, about people who are reluctant to come back to work?
Suresh Patel
Well, that… it really depends on the reasons I think for their reluctance. The golden rule should be to listen to them sympathetically. If they are struggling, say, with childcare issues it may be appropriate to agree to allow them to take holiday or unpaid leave. If they are concerned for the health of people they live with they are entitled to statutory sick pay, if they’re living with someone who is shielding. Otherwise it may be necessary to discuss the possibility of unpaid leave with them and if they are concerned about the risk to their own health and safety and those concerns are reasonable then they will be protected against dismissal and detriment. So, I think that an employer who is thinking of dismissing or disciplining an employee for being worried about returning, they should definitely take specific legal advice before doing that.
Will Winch
Well, on that cheery note, let’s wrap up there. I’d like to say thanks so much to Suresh Patel for joining me for this Mishcon Academy Digital Sessions podcast. I’m Will Winch. Do come back for our next episode, which will be available on the Mishcon website in the coming weeks.
The Digital Sessions are a new series of online events, videos and podcasts, all available at Mishcon.com and if you have any queries you’d like answered or suggestions of what you’d like us to cover, do let us know at coronavirus@mishcon.com. Until next time, take care.