Employment Law (Including JRS & Self-employment schemes)

The employee/worker is entitled to sick leave, to Statutory Sick Pay and contractually agreed sick pay if any. The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations (Northern Ireland) 2020 provide for categories of people to be treated as incapable of work for the purposes of statutory sick pay (SSP). The Regulations provide that where a person is isolating themselves from others in accordance with advice on Coronavirus, they are deemed to be incapable of work. That guidance is published in digital form only:

• www.publichealth.hscni.net/news/covid-19-coronavirus.

Employees/workers are entitled to self-certify, and during this emergency, employers are not able to insist on a fit-note from a doctor after 7 days. Employers of fewer than 250 across all PAYE payroll schemes created on or before 28 February 2020 are now able to reclaim the statutory sick pay element from day one for at least 14 days. The online service to reclaim SSP is now available here. 

The repayment will cover up to 2 weeks starting from the first qualifying day of sickness, if an employee is unable to work because they either:

• have coronavirus (COVID-19) symptoms; or
• are self-isolating because someone they live with has symptoms; or
• are self-isolating because they’ve been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus; or
• are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks.

You will be able to from the first qualifying day your employee is off work if the period of sickness started on or after:

• 13 March 2020 - if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms
• 16 April 2020 - if your employee was shielding because of coronavirus
• 28 May 2020 - if your employee has been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus

Employers need to be clear whether staff are off sick, and unfit for work, whether the employee/worker is unable to work from home and is self-isolating, or whether the employee/worker is self-isolating but is able to work from home. In the latter case where they are fit to work the employee/worker will normally be entitled to full pay for work done. Employers should also consider deeming employees to be furloughed employees as outlined at 2 below. However, employees cannot be furloughed at the same time as receiving SSP. You must have paid your employees’ sick pay before you claim it back.

The Government is taking powers to enforce quarantine. Clearly if a worker is legally required not to come in, the employer cannot insist on attendance or work, unless work from home is possible. In accordance with the SSP Regulations mentioned above at 1, SSP is payable in these circumstances. However, employees/workers may not be entitled to any contractual sick pay as they may not be sick. Therefore, in this case it may be more appropriate for the employer to consider deeming employees to be furloughed employees as outlined at 2 below.

In this situation then provided the worker qualifies they will be entitled to SSP, and any contractual sick pay. Many sick pay policies will include a requirement for the employee to obtain a fit note from a doctor. Employers must be sensible in relation to the need for medical evidence for a period of absence where an employee is advised to self-isolate due to suspected COVID-19. As such, employers should make exceptions to their usual sick pay policies. Alternatively, employers should also consider deeming employees to be furloughed employees as outlined at 2 below.

There is a general duty to carry out a risk assessment for pregnant employees/workers. Clearly this assessment should be updated in light of Coronavirus and government advice should be followed. Current advice is that pregnant employees should so far as possible practice social distancing, working from home if practicable. In this situation the pregnant employee will be entitled to SSP and any contractual sick pay.

Where there is an additional risk at work due to coronavirus on top of that outside work, and where it is not possible to avoid exposure to risks at work, then pregnant employees/workers have a right to be offered suitable alternative employment (i.e. work that could be done from home). Another option open to employers would be to consider whether the employee could be designated a furloughed employee as outlined at 2 below. The guidance has confirmed that employers can claim through this scheme for enhanced contractual maternity pay and other forms of paid parental leave. 

Some people may be worried about catching Coronavirus and therefore be unwilling to come into work. If this is the case, you should listen carefully to the concerns of your staff member and, if possible, offer homeworking. The Government is advising all employers to encourage employees to work from home where possible. If employees can work from home, then that should be accommodated without question.

If you cannot accommodate homeworking, then your employees/workers can also request time off as holiday or unpaid leave but there is no obligation on employers to agree to this. If an employee/worker refuses to attend work, you are entitled to take disciplinary action. However, dismissal is likely to be outside the range of reasonable responses and therefore unfair, at least in the current circumstances. In addition, much may depend on the particular circumstances-for example if the employee has a pre-existing medical condition that would put them at particular risk which might also amount to a disability requiring reasonable adjustments. If the employee is not self-isolating for a reason as provided in government guidance but just does not want to come in, then they may not be entitled to pay or sick pay. However, the employer should give sympathetic consideration to the situation. It may be possible to use annual leave, or in some circumstances if qualifying, unpaid parental leave. A dismissal for refusal to come into work in current circumstances could well lead to a successful claim for unfair dismissal. Employers must act reasonably.

All schools in Northern Ireland are now closed. In line with Government advice, all businesses and workplaces should encourage employees to work at home where possible. Where employees are able to work from home and have childcare responsibilities they may very well need some flexibility. They may not be able to work a traditional 9 -5 working pattern. Keep lines of communication open with employees in that situation and act reasonably. Guidance has also confirmed that employers may furlough employees (as outlined at 2 below) where they are unable to work because they have caring responsibilities (which includes care for children) as a result of the COVID-19 outbreak and so this should be considered.

The Scheme is available to all UK employers in the private sector. However, where employers already receive public funding for staff costs, and that funding is continuing, employers will not usually be able to avail of the Scheme and have double recovery.The Scheme requires you to designate employees as “furloughed” employees. What this means is that employees will remain on the employer’s payroll as opposed to being laid off or being made redundant.

Furloughed employees must have been on your PAYE payroll on 19 March 2020, and were notified to HMRC on an RTI submissiont on or before 19 March 2020. Employees can be on any type of contrac (including those classified as “workers” or “apprentices” or “agency workers” rather than normal employees). The guidance has confirmed that fixed term contracts can be extended during the furlough period without breaching the terms of the Scheme. 

There are limited exceptions to the 19 March deadline in respect of employees who have TUPE transferred to their employer after 28 February or where there has been a payroll consolidation scheme after 28 February. The Scheme also covers employees who were made redundant (or otherwise stopped working) since 28 February 2020 (and prior to 19 March 2020), if they are rehired by their employer. You can re-hire and furlough these employees as long as they were employed by you and an RTI submission made to HMRC on or before 19 March 2020. You can also re-hire employees who were on fixed term contracts if these have expired. If the fixed term contract ended after 28 February 2020 then the RTI submission must have been notified to HMRC on or before 28 February 2020 to be covered. If the fixed term contract ended after 19 March 2020 then the RTI submission must have been notified to HMRC on or before 19 March 2020 to be covered. Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for the Scheme regardless of whether or not it was a fixed term contract.  However, if an employee has had multiple employers over the past year, and only worked for one at each time, and is being furloughed by their current employer, their former employer should not re-hire and furlough them.

To be eligible for the Scheme, when on furlough, an employee can not undertake work for or on behalf of the organisation (or any ‘linked’ organisation). This includes providing services or generating revenue. However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employer. You can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance. 

However, since 1 July 2020, employers are now able to bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim under the Scheme for their normal hours not worked.

The Scheme closed to new entrants on 30 June. Generally now, employers are only able to furlough employees that they have furloughed for a full 3-week period prior to 30 June.

This means that the final date by which an employer needed to agree with their employee and ensure they placed them furlough was 10 June and in most cases it is no longer possible to furlough an employee that had not previously been furloughed. There is an exception for parents coming back from statutory maternity, paternity, adoption or shared parental leave after 10 June. There is also an exception for employees who are military reservists and are returning to work following a period of mobilisation that started prior to 10 June and ended after 10 June and they are returning after 10 June. In these cases the employees are eligible to be furloughed provided their employer had already used the Scheme and they were on your PAYE payroll and you submitted an RTI submission for them on or before 19 March 2020. Employers will have until 31 July to make any claims in respect of the period to 30 June.

From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.

For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can they can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.

Although flexible furlough agreements can last any amount of time, the period that you claim for must be for a minimum claim period of 7 calendar days. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

For employees that meet the criteria above, the number of you claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June.

For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

The only exceptions to this are in respect of employees that are returning from family friendly leave such as maternity or parental leave or military reservists returning from a period of mobilisation that started before 10 June and are being furloughed for the first time.

Recent guidance has confirmed that whilst on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However, in doing this, they must not provide services to or generate revenue for, or on behalf of the organisation or a linked or associated organisation.

Company directors that are PAYE employees can also be furloughed if eligible but, as with other employees, they cannot work. However, unlike other employees, they can do small amounts of work where this is necessary to comply with their statutory duties. It has recently been confirmed that this includes: fulfilling a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company, making a claim under the Scheme in respect of an employee of the director’s company; and making a payment of salary or wages of an employee of the director’s company. 

An employer must then notify employees of this change in status, which is subject to existing employment law (and will therefore likely require agreement). This notification must be in writing writing (which can include email), specify the main terms and conditions upon which the employee will cease all work and the business must keep records of this for five years until 30 June 2025. Recent guidance has confirmed that, while there needs to be a written record, the employee does not need to provide a written response. New guidance also states that collective agreement reached between the employer and the trade union is also acceptable for the purposes of a claim.  This guidance is helpful from an administrative perspective and will be useful for employers that relied on the wording of the previous guidance and did not obtain express agreement from the employee. However, the change must be consistent with employment law and so, in many cases, employers will still need to ensure that written agreement from the employee is obtained.An employer must then notify employees of this change in status, which is subject to existing employment law (and will therefore require agreement). This notification must be in writing and the business must keep records of this for five years.

If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:

• make sure that the agreement is consistent with employment, equality and discrimination laws
• keep a written record of the agreement for five years
• keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working).

You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record as them being on furlough.

A new online HMRC portal has been set up and employers will submit information about the employees that have been furloughed.

For claims prior to 1 September HMRC will reimburse 80% of furloughed wage costs up to a cap of £2,500 per month. For claims relating to the time period after 1 September the government’s contribution will reduce to 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough. Employers will top up employees’ wages to ensure they receive 80% (up to £2,500). The caps are proportional to the hours not worked.

Discretionary fees, tips, commissions and bonuses are not included but guaranteed contractual commission and fees can be. HMRC has confirmed that employees that work regular overtime can have their wages calculated to include this by either taking the higher of what they earned in the corresponding month last year or by taking an average figure from the previous year. Non-monetary benefits including taxable Benefits in Kind are not covered. If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC. The claim is then made using the amounts in the payroll. If the employer choses to pay the employee anything above the amount covered by the Scheme then the employer will be responsible for meeting this as well as the associated employer NICs and pension contributions. HMRC has set up an online calculator https://www.tax.service.gov.uk/job-retention-scheme-calculator/ to assist employers in making the calculations.

For employees whose pay varies, the employer can claim for the higher of (i) the same month's earning from the previous year (e.g. earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year. Employees that have been employed less than one month can claim at the applicable percentage for a pro rata for their earnings so far.

Employers can choose to top up to 100%, but do not have to. Employers cannot enter into any transaction with the worker which reduces the wages below the 80% furlough wage. This includes any administration charge, fees or other costs in connection with the employment. However, if an employee had previously authorised their employer to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment.

Individuals are only entitled to the minimum wage for the hours they work. So if they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working. However, they are entitled to be paid minimum wage for any time spent training.

If your employee has more than one employer, they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Recent guidance has confirmed that, subject to any contrary contractual provisions, furloughed employees can take on a new job and essentially have two incomes.

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, holiday pay, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Employers can switch employees from sick pay to furlough and vice versa but this should not be abused by using furlough to 'top up' small amounts of SSP for short term absences where the employee would not have been furloughed otherwise. Employers can also furlough staff that are self-isolating, off on long term sick leave, or become sick during furlough. It is up to the business to decide whether to furlough staff or move them to statutory sick pay but both cannot be claimed simultaneously.

Foreign nationals are capable of being furloughed without breaching the normal conditions of their visas in respect of accessing public funds.

The Scheme was set up to run for 3 months initially backdated to 1 March 2020 (so will cover employees that were already on unpaid leave after 28 February as they can be deemed as furloughed from then). On 12 May 2020 the Chancellor announced that the Scheme will be extended for a further four months until the end of October. 

Since 1 July 2020, businesses have been given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them - and will be responsible for paying their wages while in work.

From August 2020, the level of government grant provided through the Scheme will be slowly tapered to reflect that people will be returning to work. 

The Scheme updates mean that the following will apply for the period people are furloughed:

• June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
• September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
• October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim. Payments may be withheld or need to be repaid in full if HMRC identifies non-compliance. HMRC has set up an online portal for employees and the public to report suspected fraud in the Coronavirus Job Retention Scheme.

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.

You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.

You must pay the employee all the grant you receive for their gross pay; no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Grants under the Scheme are not classified as state aid.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

To claim you will need:

• your ePAYE reference number;
• the number of employees being furloughed;
• national insurance numbers for the furloughed employees (if you have one or more without a National Insurance number you should contact HMRC);
• names of the furloughed employees;
• payroll/employee numbers for the furloughed employees (optional);
• your Self-Assessment Unique Taxpayer Reference or Corporation Taxpayer Reference or Company Registration Number;
• the claim period (start and end date);
• amount claimed (per the minimum length of furloughing of 3 weeks);
• your UK bank account number and sort code;
• the billing address on your bank account;
• your contact name; and
• your phone number

You will also need to provide either:

• your name;
• your Corporation Tax unique taxpayer reference;
• your Self-Assessment unique taxpayer reference;
• your company registration number.

From 1 July if your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period. When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period. If you claim in advance and your employee works for more hours than you have told HMRC about, then you will have to pay some of the grant back to HMRC.

If you have fewer than 100 members of staff you will have to enter in the details for each furloughed employee. If you have 100 or more members of staff you will be asked to upload a file with the details. HMRC cannot provide employees with details of claims you make on their behalf and it is your responsibility to keep them updated.

For businesses that need immediate assistance with cash flow then you may be eligible for a Coronavirus Business Interruption Loan. The Loan is being delivered by the British Business Bank and is designed to assist small and medium sized businesses access bank lending and overdrafts. Loans of up to £5 million in value are available.