Employment law implications following the outbreak of COVID-19 (Coronavirus)

Posted By: on 20th March 2020 | Category: Employment Law Solicitors

Absence and pay

The introduction of regulations means that, in most cases, an employee who is in quarantine, or strongly advised in government guidance to self-isolate, will be regarded as being incapable of working for SSP purposes.

As a result of the COVID-19 outbreak, the government has announced emergency legislation temporarily making statutory sick pay payable from the first day of sickness absence. This will apply retrospectively from 13 March 2020.

The government has also announced that small employers (with fewer than 250 employees) will be reimbursed for any SSP paid to employees in respect of the first 14 days of sickness related to COVID-19.

In the Spring 2020 Budget, the government also announced that a temporary alternative to the fit note will be introduced in the coming weeks which can be used for the duration of the COVID-19 outbreak. This system will enable people who are advised to self-isolate to obtain a notification via NHS 111 which they can use as evidence for absence from work, where necessary. This notification would meet employers’ need for evidence, whilst taking pressure away from General Practices.

Social distancing

On 16 March 2020, the government issued the Social distancing guidance which “strongly advises” certain categories of vulnerable employees to practice socially distancing measures including working from home and avoiding public transport. Those categories are:

  • Individuals aged over 70.
  • Women who are pregnant.
  • Individuals aged under 70 with an underlying health condition (being any adult instructed to get a flu jab each year on medical grounds) would be strongly advised to work from home for the time-being. These include those with chronic respiratory diseases, chronic heart, kidney or liver disease, diabetes and those with a weakened immune system.

An employer should consider their position very carefully before requiring an employee to come into work if they fall into one of the vulnerable categories identified. To do so could amount to a breach of the employer’s duty of care to the employee and a breach of the implied term of mutual trust and confidence.

This could amount to a repudiatory breach of contract resulting in a claim for constructive dismissal and/or discrimination. Further, where an employee from one of the vulnerable groups subsequently contracts COVID-19 due to their employer’s actions, they will potentially have a claim for personal injury against the employer.

Employers should also note that within the underlying health condition category, the guidance identifies a further sub-group who are at an even higher risk of severe illness from COVID-19. People falling into this group are those who may be at particular risk due to complex health problems such as:

  • Individuals who have received an organ transplant and remain on ongoing immunosuppression medication.
  • Individuals with cancer who are undergoing active chemotherapy or radiotherapy.
  • Individuals with cancers of the blood or bone marrow such as leukaemia who are at any stage of treatment.
  • Individuals with severe chest conditions such as cystic fibrosis or severe asthma (requiring hospital admissions or courses of steroid tablets).
  • Individuals with severe diseases of body systems, such as severe kidney disease (dialysis).

Affected employees are potentially entitled to SSP or contractual sick pay if applicable. However, unlike self-isolation for 7 or 14 days, social distancing for vulnerable employees may be required for many months. Very few employees will be able to afford to receive only SSP long-term and some may put pressure on their employer to allow them back to work. The alternative for employers is to continue to pay the employees full pay. However, this is a difficult situation for employers, many of whom have been adversely financially impacted by COVID-19 already.

However, where the nature of a pregnant employee’s role means that they cannot work from home and there is no suitable alternative work available that they could do from home, the employer should consider suspending the employee on full pay.

Many individuals advised to work from home in the Social distancing guidance will fall into a vulnerable category because of a protected characteristic: age, pregnancy or maternity, or disability. Employers should be aware that, where those employees cannot carry out their role from home, requiring them to remain at home on SSP could be discriminatory. The government’s guidance is only a strong recommendation not a legal requirement. It is therefore ultimately the employer and employee’s decision whether the employee continues to come into the workplace. This places employers in an extremely difficult position because it could be a breach of the employer’s duty of care to allow the employees to come into work but, to pay them anything other than full pay to remain at home where they are unable to work will be a detriment because of a protected characteristic.

Using annual leave

The normal rules on taking annual leave under the Working Time Regulations 1998 will continue to apply. Workers may wish to take annual leave as an alternative to scenarios where they would otherwise be on SSP or nil pay. Workers are entitled to take statutory annual leave during sickness absence but may not be compelled by the employer to do so.
Workers who are not on sick leave can be instructed to take statutory annual leave by their employer, provided that they are given the required level of notice.

Employers are entitled to require workers not to take statutory annual leave on certain dates. However, where consent has already been given to take the leave, the employer faces risks.

Any contractual provisions on annual leave, and any holidays policy would also need to be considered.

Employer’s duty of care

Employers have additional duties to protect the health and safety of new and expectant mothers in the workplace. In summary, the law requires employers:

  • To assess the workplace risks posed to new or expectant mothers or their babies.
  • To alter the employee’s working conditions or hours of work to avoid any significant risk.
  • Where it is not reasonable to alter working conditions or hours, or would not avoid the risk, to offer suitable alternative work on terms that are not “substantially less favourable”.
  • Where suitable alternative work is not available, or the employee reasonably refuses it, to suspend the employee on full pay.

As pregnant women have been “strongly advised” to socially isolate, avoid travelling on public transport and work from home where possible, where the nature of the employee’s role means that they cannot work from home and there is no suitable alternative work available that they could do from home, the employer should consider suspending the employee on full pay.

The government guidance from Public Health England, BEIS and the Acas guidance, advise that if anyone becomes unwell with a new, continuous cough or a high temperature in the business or workplace they should be sent home and advised to follow the Stay at home guidance.

The guidance advises that, if they need clinical advice, the affected employee should go online to NHS 111 or call NHS 111 from their mobile, or 999 should be called if it is an emergency (if the employee is seriously ill or injured or their life is at risk).

The Acas guidance advises that if someone with COVID-19 comes into a workplace, the workplace does not necessarily have to close.
In England, the local Public Health England health protection team (HPT) will get in contact with the employer to:

  • Discuss the case.
  • Identify people who have been in contact with the affected person.
  • Carry out a risk assessment.
  • Advise on any actions or precautions to take.

A risk assessment of each setting will be undertaken by the HPT with the lead responsible person. Advice on the management of staff and members of the public will be based on this assessment.

The HPT will also be in contact with the case directly to advise on isolation and identifying other contacts and will be in touch with any contacts of the case to provide them with appropriate advice.

Advice on cleaning of communal areas such as offices or toilets will also be given by the HPT.

An employer cannot require an employee, worker or visitor to their premises to undergo a medical examination without their consent. This would include taking temperatures. To proceed without consent could potentially be a repudiatory breach of contract in respect of employees, entitling them to claim constructive dismissal, and assault in relation to any individual.

However, on a practical level, if the nature of the employer’s business is such that it considers it would need to temporarily close or send employees and workers home during a pandemic unless it undertook such health checks, consent may not be an issue in the majority of cases. On a personal level, employees and workers may be reassured that the employer is taking steps to protect their health in the workplace, as long as testing is carried out on all staff and visitors without exceptions, and appropriate hygiene safeguards are in place.

Obtaining health information about an individual is special category personal data and an employer (or data controller) can only process such data on certain grounds under the GDPR.

One of the permitted grounds for processing special category data is for health purposes. As it says in these sections, the health exemption enables occupational health professionals to process data relating to health where processing is necessary for the purposes of preventative or occupational medicine, for the assessment of the working capacity of the employee, medical diagnosis or management and treatment. This exception will only apply to occupational health professionals who are subject to confidentiality obligations, such as those issued by the General Medical Council regulating the conduct of medical practitioners.

This may mean that provided an employer uses an occupational health professional to conduct the temperature checks and obtains explicit consent, it may be possible to conduct these temperature checks lawfully. A generic form of consent in employment contracts relating to health checks is unlikely to be sufficient for data protection purposes.

An employer has health and safety obligations towards its employees. It may be arguable that carrying out temperature checks may be part of a series of measures which assists employers to protect the health and safety of their employees in a pandemic. However, in relation to the COVID-19 pandemic, taking temperatures is not a measure currently recommended by the government or the World Health Organisation. An employer should first focus on ensuring that the advice recommended by those sources is followed. The guidance is however being continually updated so it is necessary to regularly check for the latest developments.

If an employer decides to carry out any form of medical testing on employees, workers or visitors during a pandemic, it should ensure that it is applied consistently to all. Only testing certain groups who are perceived to be at a higher risk of having contracted a virus could potentially lead to discrimination claims.

Policies and procedures

Employers should be flexible in the evidence of sickness absence they require from employees or workers. For example, an employee in self-isolation is unlikely to be able to obtain a fit note from their GP. In the Spring 2020 Budget, the government announced that a temporary alternative to the fit note will be introduced in the coming weeks which can be used for the duration of the COVID-19 outbreak. This system will enable people who are advised to self-isolate to obtain a notification via NHS 111, instead of a fit note, which they can use as evidence for absence from work.

A further issue that potentially arises is where an employee’s absence (whether because of sickness or because of isolation) triggers action under their employer’s absence management policy. Employers with such policies should consider informing all employees that a period of absence caused by COVID-19, whether because of infection or due to self-isolation in accordance with government guidance, will be disregarded for the purposes of the absence threshold at which formal action is taken under the policy.

Where an employer does not wish to take this action in respect of all employees, it should bear in mind that employees with some disabilities, such as auto-immune conditions, respiratory conditions or diabetes, are likely to suffer more severe symptoms (and therefore take greater time off work) if they catch the virus, or may be more likely to self-isolate due to the potential risks of catching the virus. To avoid any potential disability discrimination issues arising, employers would be advised to consider disregarding COVID-19 absence for such employees.

In many cases, an employee’s sick pay entitlement will be set out in their contract of employment, although the details of the scheme are often set out in a separate policy. It is common for the contracts of more senior employees to specify that they will be entitled to full pay for a specified period of sickness absence.

The employer should therefore first check whether the relevant employees’ contracts set out a contractual entitlement to sick pay, or whether they refer to a separate sickness absence policy for details.

High risk employees and discrimination issues

People who suffer from certain health conditions are at higher risk of serious illness or death if they contract COVID-19. A requirement imposed by an employer to continue travelling to and attending work, or to not pay or to dismiss them due to their absence in this scenario, could amount to discrimination. In addition, if the reason the employee self-isolates is because of a disability that puts them into a high risk category such as an auto-immune disease or a respiratory condition, disability discrimination issues may arise.

There may be a case that the employer’s provision, criterion or practice (PCP) of requiring all employees to continue to attend work in a pandemic could be indirectly discriminatory against the employee and those who share the employee’s disability. In such a case, the employer should consider whether the PCP can be justified as a proportionate means of achieving a legitimate aim.

Discrimination arising from disability occurs where both:

  • A treats B unfavourably because of something arising in consequence of B’s disability.
  • A cannot show that the treatment is a proportionate means of achieving a legitimate aim.

Where an employee self-isolates because of their disability and their employer treats them unfavourably because of this by not paying them or dismissing them for unauthorised absence, the employee could have a potential claim under section 15 Equality Act 2010. The employer’s actions would be because of “something arising in consequence” of the employee’s disability (the employee’s decision to self-isolate). As no comparator is required in respect of a section 15 claim, it will not necessarily be a defence for the employer to argue that it would treat all employees who decide to self-isolate without medical instruction in the same way.

The employer may, however, escape liability if it can show that:

  • It did not know, and it was not reasonable for it to know, that the employee was disabled; or
  • Its treatment of the employee was a proportionate means of achieving a legitimate aim of, for example, maintaining staffing levels in its workplace to meet customer demand.

An employer may be liable for a failure to make reasonable adjustments if it does not facilitate a disabled employee’s request to work from home in a pandemic. However, where the employee’s role is not suitable for remote working, it will not necessarily be a failure to make a reasonable adjustment for the employer to not continue to pay a disabled employee who self-isolates before seeking medical advice. The Employment Appeal Tribunal has held that the purpose of reasonable adjustments is to facilitate a disabled employee to remain in work, or to return to work. The emphasis is therefore on assisting the employee to work, not to not work. Where an employer decides not to pay a disabled employee who self-isolates, it could potentially be argued that this is hindering the employee from “remaining in work” as few employees can afford to remain employed without pay for the duration of a pandemic. The EAT has, however, commented that the purpose of the legislation is not to treat disabled persons as objects of charity.

Where a disabled employee refuses to attend work because of the perceived increased risk because of their disability, medical advice should be sought as soon as possible, from the employee’s GP or occupational health, to confirm or clarify the potential risks and to see what adjustments, if any, should be made to assist the employee in continuing to work. Where the matter is urgent and there is insufficient time to obtain medical advice, employers may wish to err on the side of caution.

Employers should also take note of the Social distancing guidance, issued on 16 March 2020 which strongly advises that employees with specified underlying health conditions should work from home.

An employer should be sympathetic to any concerns staff may have and try to resolve them to protect the health and safety of the employee. For example, if possible, the employer could offer flexible working, or allow the employee to take holiday or unpaid leave.

An employee with severe anxiety may find their condition is exacerbated by travelling or being in public places due to the increased risk of contracting COVID-19. If their anxiety prevents them from attending work in these circumstances, it is possible that they may be regarded as on sick leave and therefore entitled to SSP or contractual sick pay.

Where an employee suffers from severe anxiety, this could amount to a disability under the Equality Act 2010. Medical advice should be sought as soon as possible from a specialist treating the employee, or occupational health, to determine whether the employee is disabled (if there is no recent diagnosis) and, if so, to see what adjustments, if any, should be made to assist the employee in continuing to work, such as home working or flexible hours.
Some employees may fall into a high risk category in relation to COVID-19 but are not disabled. The World Health Organisation (WHO) has identified that those aged over 60, or who suffer from cardiovascular disease, a respiratory condition, diabetes, an auto immune condition or who are pregnant, are at a higher risk of developing more severe symptoms.

Such employees may wish to self-isolate, even before seeking medical advice. The Acas guidance states that an employer should listen to any concerns staff may have and if they are genuine, the employer must try to resolve them to protect the health and safety of their staff. For example, if possible, the employer could offer flexible working, or allow the employee to take holiday or unpaid leave. Employers should consider whether there are any potential indirect age discrimination issues if they require all employees to be in receipt of either a fit note or written request under regulation 2(1)(b)(i) The Statutory Sick Pay (General) Regulations 1982 [as amended] to be eligible for contractual sick pay.

Employers should also take note of the Social distancing guidance, issued on 16 March 2020, which strongly advises that employees who are over 70, pregnant, or with specified underlying health conditions should work from home. The list of specified health conditions is much larger than that issued by WHO and some will not necessarily amount to a disability under the Equality Act 2010, such as obesity.

There have been reported incidents of racial harassment of Asians in relation to COVID-19. Unfortunately, there is the potential that employees may be harassed by colleagues or customers in the workplace because they are perceived to be at a greater risk of having the virus.

For the purposes of the Equality Act 2010, anything done by an employee in the course of their employment is treated as having also been done by the employer. The employer can be liable for harassment in these circumstances, whether or not the harassment is done with the employer’s knowledge or approval.

There is a defence available to an employer if it can show that it took “all reasonable steps” to prevent the employee from doing the discriminatory act or from doing anything of that description. Employers would be advised to establish a zero-tolerance approach to harassment in the workplace, which is communicated both internally and externally, ensure all workers are aware of their anti-harassment policy and provide training to all staff on how to recognise harassment and what is inappropriate behaviour.

The position is more complicated when an employee is harassed in the workplace by a third party, such as a customer or visitor. The third-party harassment provisions in the Equality Act 2010 were repealed in 2013 and the scope of the protection offered by the general harassment provisions of the Equality Act 2010 have been considerably narrowed by case law since then. To establish liability, the employee would need to show that it was their employer who “created” the intimidating, hostile, degrading, humiliating or offensive environment which is likely to be difficult to prove.

An employer cannot force a pregnant employee to start their maternity leave early. However, maternity leave will start automatically before the employee’s chosen start date if the employee is absent from work “wholly or partly because of pregnancy” after the beginning of the fourth week before the expected week of childbirth (EWC), but before the date she has notified. The employee’s maternity leave will begin automatically on the day after the first day of her absence.

In all other circumstances, including where the employee is off sick for a non-pregnancy-related illness, her maternity leave will start on the chosen start date, as notified to the employer. An employer cannot force an employee to start her maternity leave earlier. To attempt to do so would be discrimination on grounds of pregnancy and maternity.

As pregnant women have been “strongly advised” to socially isolate, avoid travelling on public transport and work from home where possible, where the nature of the employee’s role means that they cannot work from home and there is no suitable alternative work available that they could do from home, the employer should consider suspending the employee on full pay.

Homeworking

If there is already an established requirement to work from home where appropriate or where instructed to do so (or in the case of a business continuity issue such as a pandemic), then there is unlikely to be an issue in applying that obligation in an effort to contain the spread of COVID-19.

If not, imposing home working would arguably constitute a variation of the contract requiring employee consent. However, where an employee is faced with either being on SSP or nil pay as an alternative, they may well be willing to consent to working from home as a way of preserving pay. There are alternative methods of changing terms and conditions of employment, but in the circumstances and given the time sensitive nature of the COVID-19 outbreak, employee consent is likely to be the most realistic means of validly imposing a home working requirement where none previously existed.

Where home working is being newly introduced, or expanded, the employer should ensure that the health and safety implications have been considered and that the necessary infrastructure is in place.

On 16 March 2020, the government stated that anyone in the following categories were “strongly advised” to work from home:

  • Individuals aged over 70.
  • Women who are pregnant.
  • Individuals aged under 70 with an underlying health condition (being any adult instructed to get a flu jab each year on medical grounds) would be strongly advised to work from home for the time-being. These are listed as:
  • chronic (long-term) respiratory diseases, such as asthma, chronic obstructive pulmonary disease (COPD), emphysema or bronchitis.
  • chronic heart disease, such as heart failure.
  • chronic kidney disease.
  • chronic liver disease, such as hepatitis.
  • chronic neurological conditions, such as Parkinson’s disease, motor neurone disease, multiple sclerosis (MS), a learning disability or cerebral palsy.
  • diabetes.
  • spleen issues, for example, sickle cell disease or where an individual has had their spleen removed.
  • a weakened immune system as the result of conditions such as HIV and AIDS, or medicines such as steroid tablets or chemotherapy.
  • being seriously overweight (a BMI of 40 or above).

The Social distancing guidance also states that all other workers are “advised” to work from home, or vary their daily commute and use less public transport, where possible.

In normal circumstances, it would not be appropriate for an employee to work from home while also providing childcare. However, as the COVID-19 outbreak escalates, employers may need to take a pragmatic approach. If all schools and nurseries close, the majority of parents in the workplace will face this issue and putting a blanket ban on working from home while also looking after children may preclude a large proportion of the workforce from performing any duties. In these unprecedented circumstances, employers may be prepared to take a more relaxed and flexible approach to homeworking and allow employees to work around their childcare responsibilities.

Employees with younger children who require constant attention may not be able to work at all while responsible for looking after those children. However, they may be able to split the childcare with the other parent, so that both parents are able to, at least, continue working part-time.

Employees in these circumstances may assert their right to time off to care for a dependant. Time off in these circumstances is unpaid, unless there is a contractual right to pay. Given that school closures could last a relatively long time, it is likely that many employees who consider that they can undertake some work while providing childcare would prefer to do so (rather than assert their statutory right to time off) if the employer is willing to allow them to work flexibly.

An employer is responsible for an employee’s welfare, health and safety, “so far as is reasonably practicable” (section 2(1), Health and Safety at Work etc Act 1974). Employers must conduct a suitable and sufficient risk assessment of all the work activities carried out by their employees, including homeworkers, to identify hazards and assess the degree of risk (regulation 3, Management of Health and Safety at Work Regulations 1999). The government has also “strongly advised” certain vulnerable categories to work from home and avoid travelling on public transport.

Self-isolation following government guidance is deemed incapacity from a statutory sick pay perspective. However, this only applies where, by reason of that self-isolation, the employee is unable to work. It does not prevent an employee from being permitted to work from home and continue to receive full pay if they are well enough, and the appropriate facilities are in place for them to do so.

Where an employer has the contractual right to compel an employee to work from home in normal circumstances, it is likely that they could assert that right in the context of self-isolation (assuming that the employee is fit to work and has not asserted another right such as the time off to care for a dependant). Where the employer does not have the contractual right to impose home working then it is unlikely that the employer could force the point. However, given that the employee would only be entitled to SSP (or, arguably, nil pay if it could be argued that they are not “unable” to work if the facility to work from home is provided) it seems likely that most employees will agree to do so.

Lockdown

Some employers will be able to continue to run their business with employees working remotely, but many employers will not be able to do so, such as those in the service industry. All employers should consider whether there is work that some or all of their employees could carry out in this situation, at least for an initial period. This may mean asking employees to temporarily carry out work that is not within their usual job description. However, in the circumstances, employees are likely to be flexible in order to both help their employer’s business keep running and to keep getting paid.

What employees are entitled to be paid where an employer is not able to continue its business with employees working remotely is currently unclear. On the one hand, the employees are willing and able to work and would therefore be entitled to be paid in full if it were the employer’s decision to close. However, this is an unprecedented situation where employers will be forced to close to comply with government requirements.

It is possible that further amending Regulations will be issued to update the relevant date in regulation 2(1)(c) of the SSP Regulations to the date the government issues new guidance requiring employers to close. This will allow for SSP to be paid to employees in this situation, in a similar way to how the Coronavirus Amendment No 2 Regulations moved the date forward to allow for SSP to be paid to employees self-isolating in accordance with the Stay at home guidance or the Social distancing guidance.

We will have to wait and see how the government intends to deal with this situation as and when it arises.

The doctrine of frustration is rarely applied, particularly in an employment context. Ordinarily, it is unlikely that employment contracts are considered to be frustrated because this would require the position to be so fundamentally different to that envisaged that performance becomes impossible.

However, it is possible that where a government instruction (or, indeed, other circumstances) prevent an employer from providing work to its employees, and prevents the employees from performing the work, employment contracts may be frustrated. Unfortunately, it is too soon to tell whether this will apply during the Covid-19 pandemic and it will remain a fact-specific question in any event.

One point for an employer to consider is that the frustration of a contract will bring the contract to an end, causing the rights and obligations of the parties to fall away by operation of law. If the employer envisages continuing its business, it will likely want to consider less permanent options such as lay-off or short-time working.

If 20 or more redundancies are proposed at one establishment within 90 days, this will trigger collective consultation obligations under section 188 of TULRCA.

The fact that an employer has closed its business does not mean it is no longer possible for it to collectively consult with its employees under section 188. Practically speaking, the employer must have a way of communicating with employees after business closure – whether by email, telephone or even by post (although it would be wise to confirm to employees the way in which communication will take place prior to the business closure).

Further, the employer’s duty is actually to consult with representatives of the affected employees, and not the employees themselves. Therefore, once representatives have been elected, the employer’s consultation obligations become easier to manage.

If things are particularly difficult, it may be possible for the employer to rely on the “special circumstances” defence to justify a failure to comply in all respects with collective consultation obligations. However, this will not totally absolve the employer from obligations under section 188; it will still be necessary to take reasonable steps to comply.

Changing terms and lay-off

The action an employer should be taking will depend, to some extent, upon the nature of the workplace, the roles carried out and the demographic of the workforce, but some of the issues that employers should consider from an employment law perspective include:

The employer’s approach to sick pay. The employer should consider its contractual sick pay policy, and the practical implications on withholding pay or reducing pay to SSP. The employer will wish to balance the costs of paying full pay where they are not legal obliged to do so with the indirect costs (in terms of spreading the virus and increasing sickness absence) where employees attend work following potential exposure to the virus, or even when exhibiting symptoms of it, in order to continue receiving pay. Some employers are introducing a new right to full pay for a finite period, in circumstances where the employees would otherwise be in receipt of nil pay or SSP.

  • Similarly, consideration should be given to how absence management processes and trigger points may be adjusted to reflect self-isolation and high numbers of diagnosed cases.
  • Whether the infrastructure is in place to allow large numbers of employees to work from home. Is the IT system prepared for a high number of employees to work remotely? Do employees have the hardware necessary to work from home? Will additional guidance need to be issued to reduce demand on the IT systems if many people will be working remotely simultaneously?
  • Compliance with government, PHE and WHO guidance on hygiene in the workplace, and other preventative measures.
  • Some employers are physically separating the workforce into separate units in an attempt to minimise the risk of COVID-19 spreading throughout the whole workforce.
  • Consider appointing a coronavirus taskforce who are responsible for keeping track of developments, updating internal guidance and communicating with workers. Consider whether a dedicated intranet page is required.
  • Clear communication with workers on the employer’s policy on homeworking, work travel and precautionary isolation. Provide regular updates. Ensure that employees are asked to speak to their manager upon return from any overseas travel prior to attending the workplace, and that they are notified of the government’s position on self-isolation as it develops, as well as the employer’s position if more stringent.
  • Ensure that employees have provided up to date personal details.
  • Plan for mass closures of schools and nurseries. Identify business critical roles and how they can be maintained. Consider what pay employees will receive if they work part-time to fit around childcare, and the benefits of acting flexibly to allow as many employees as possible to continue working. Consider whether the business would be best served by encouraging employees to work flexibly and making that facility available, or by encouraging the use of statutory rights to time off to care for dependants, annual leave or parental leave.
  • Provide clear information to managers on how to deal with an employee who attends work displaying symptoms, or who has potentially been exposed to the virus.
  • Identify any high-risk employees and consider whether there are any potential discrimination implications which mean a more cautious approach is required. Ask employees who have been identified as vulnerable in government guidance to contact their manager to discuss working arrangements.
  • Critically consider whether any domestic and international work travel and events are necessary. Consider whether internal meetings can be carried out through virtual meetings.
  • Where travel is necessary to high risk areas, consider what protective measures should be put in place and ensure that protective equipment is sourced and ordered.
  • Identify the minimum safe level of workers required to continue operating, and how that can be maintained in the worst-case scenario. Identify the point at which the business may need to cease operating temporarily and consider the employment law consequences.

Any temporary closure of the business will be treated as the employer’s decision and so, in principle, the employees will remain entitled to full pay, unless there is no contractual requirement to offer work (which may be the case for casual employees). This is on the basis that those who are not on sick leave are willing and able to work, and it is their employer’s decision to temporarily close the workplace which is preventing them from performing duties.

For most employers, this will present significant economic hardship if the business is forced to close and cut off revenue, but also required to continue paying employees. It is easy to see how this could potentially lead to permanent closures, insolvency and redundancies. The government has announced a number of measures to help businesses survive the economic hardship caused by the pandemic. However, it is likely that many will need to take action to reduce the payroll on a temporary basis. Some of the options include:

  • Consulting with employees and trade unions or other representative bodies to try and agree a temporary reduction in pay and benefits for the duration of the crisis. Under normal circumstances, employees and their representatives would be unlikely to agree to such measures. However, where the alternative is closure and job losses, there may be more of an appetite to reach an agreement.
  • Considering lay-off, if the employer has the contractual right to take that approach. If the employer does not have the contractual right to lay-off then it may either take the risk in doing so in breach of contract, or try to obtain consent to do so.
  • Give notice to workers to take holiday. Employers are entitled to give notice to workers to take statutory annual leave, provided there is no contrary contractual right. Although this would not save the employer money in the short term, it would ensure a full workforce once the business reopens and allow full focus on rebuilding the business.
  • Seek volunteers to take unpaid leave.
  • Seek volunteers for voluntary redundancy.
  • Consider whether there are workers and contractors whose contracts can be terminated without the risk of an unfair dismissal or redundancy payment claim.
  • If the longer-term impact of the pandemic is likely to mean that a reduced headcount will be required even when the business reopens then the employer may need to consider redundancies.

Laying off employees means that the employer provides employees with no work (and no pay) for a period while retaining them as employees; short-time working means providing employees with less work (and less pay) for a period while retaining them as employees. These are temporary solution to the problem of no or less work. However, if employees are laid-off or put on short-time working in circumstances where the employer does not have the contractual right to do so then the employer will be in fundamental breach of contract entitling the employee to resign and claim constructive dismissal.

Lay-off may need to be considered in the following scenarios:

  • A downturn in work due to the effect of COVID-19 on suppliers and customers means that fewer employees are required on a temporary basis.
  • Temporary closure of the workplace due to insufficient employees being able to work.

Short-time working may need to be considered where there is:

  • A downturn in work due to the effect of COVID-19 on suppliers and customers meaning that the business does not need all employees to work their contracted hours.

Employees who are already unable to work, for example due to sickness or (arguably) medically advised self-isolation, cannot be laid-off.

In the context of the COVID-19 outbreak, the definition of deemed incapacity for SSP purposes has been widened. This means that those who are required to self-isolate as a result of COVID-19 (whether due to actual or possible infection) are entitled to SSP. The position on entitlement to SSP during lay-off is not entirely clear. However, entitlement to SSP has been widened as a result of the COVID-19 outbreak and the trend is towards making SSP available in a wide variety of circumstances, so statutory interpretation may well support a claim for SSP during lay-off where the individual is incapable of working either under the normal or deemed incapacity provisions.

In the Spring 2020 Budget, the government announced several measures to help employers who are struggling with the economic consequences of COVID-19. These include business rates reliefs, a Coronavirus Business Interruption Loan Scheme, a grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities.

Whether a bonus payment can be deferred will depend on the precise terms of the bonus scheme and whether it is discretionary or contractual. Consideration would need to be given to the contracts of employment, any relevant bonus schemes or policies and any implied terms.
If the bonus is contractual, then the terms will dictate whether it can be deferred or not regardless of the reasons for the proposed deferral.

If, however, the bonus is discretionary, then the employer may have more latitude in terms of deferring the bonus. The exercise of discretion is subject to limit and the implied term of trust and confidence, but the unprecedented context would be relevant in this context.

The employer could also consider seeking employee consent to waive or defer bonuses. In normal circumstances employees are unlikely to agree to this, but in the context of the COVID-19 outbreak and expected widespread lay-offs and redundancies, employees may be more open to this approach.

Data Protection issues

The Data Protection Act 2018 defines information about an employee’s health as a “special category of personal data”. This means that it can only be processed by the employer in defined and restricted circumstances.
If a colleague or customer develops the virus employees must be notified of the infection risk as soon as possible. However, the identity of the individual should not be disclosed. An employer should simply advise that an employee who has been in the workplace has been infected and that appropriate precautions should be taken.

The ICO has confirmed that it will take a pragmatic approach to enforcement in light of the pandemic. It has issued ICO: Data protection and coronavirus: what you need to know which confirms that employers can disclose to colleagues that an employee has contracted COVID-19 provided that they do not provide more information than is necessary and, in most cases, it will not be necessary to name the individual.

For advice contact Nigel Targett, Solicitor and Partner at Coole Bevis LLP on 01273 722532 or by email at nigel.targett@coolebevisllp.com.

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