Can an employer lay off an employee or put them on short-time working?
It depends on the terms of the contract of employment. Most employees do not have an implied right to be provided with work, but do have an implied right to be provided with pay. So when an employer lays off (or puts on short-time working) an employee without pay, without having reserved the contractual right to do so, it is the non-payment which is likely to give rise to a breach of contract rather than the failure to provide work. As such, it will constitute a breach of contract for an employer to lay off employees or put them on short-time working without pay when they do not have an express or implied contractual right to do so. It is important to check the contract to see if there is the express right to do so. If not then the employer may wish to rely on the implied term but this is not far reaching and in most industries there would not be an implied term.
(a) For a term allowing lay-off to be implied into a contract:
(b) There must be a custom of laying-off within that particular business.
- The custom must be both:
”reasonable, certain and notorious”; and - such that “no workman could be supposed to have entered into service without looking to it as part of the contract”
How long can an employee be laid off for or put on short-time working if there is the contractual right to do so?
There is no set time limit but it should be done in line with the contract and be reasonable. As such, to be on the safe side, it should normally be for as long as is reasonably necessary. For example until work picks up again where there has been a downturn in work. However, note the below caveat.
Redundancy and guarantee payments?
There are circumstances under which employees might be entitled to guarantee payments and statutory redundancy payments as a result of lay-off or short-time working. The provisions are complicated and technical. It would be advisable to take specialist legal advice if an employer is considering enforcing lay off and short-time working to ensure compliance and that the provisions are used to the best advantage of the employer. In short though, to claim a statutory redundancy payment the employee must be eligible for it, which includes (but is not limited to) being laid off or kept on short-time working (or a combination of both) for at least:
(a) four or more consecutive weeks (section 148(2)(a), ERA 1996); or
(b) a total of six weeks (of which no more than three are consecutive) in any period of 13 weeks (section 148(2)(b), ERA 1996).
An employee may be entitled to a statutory guarantee payment (SGP) on up to 5 “workless days” in a three-month period. A “workless day” is a day during any part of which the employee would normally be required to work in accordance with their contract, when the employee is not provided with work by their employer because of either of the following:
(a) There is a reduction in the requirements of the employer’s business for work of the kind which the employee is employed to do.
(b) There is any other occurrence which affects the normal working of the business in relation to this type of work.
The current maximum amount of an SGP is £29 per day.
Emergency legislation?
There is speculation that in these unprecedented times, the Government may introduce new emergency legislation to allow employers to lay off employees or put them on short-time working where there is no express or implied term in their contracts to do this. The Government may go even further and allow longer periods before redundancy claims can be made and it is possible it could increase the number of statutory guarantee days to allow workers who are laid off for relatively long albeit temporary periods to receive some income in these difficult times. The employees would also still keep their continuity of employment. This is all speculative at this time but these are clearly options the Government has open to it.
Can I force staff to take unpaid leave?
Some news stories very recently reported that Virgin Atlantic staff were told to take unpaid leave of 8 weeks. This is not the case. There would have been no valid term in their contracts to allow this. Rather, the staff were asked (not told) to take 8 weeks unpaid leave. This would have been done by way of mutual agreement with the staff, presumably to avoid Virgin having to take other more terminal measures like making redundancies.
Employers can seek to agree by way of mutual agreement various measures to assist with reducing the wage bill to get through these difficult and unprecedented times such as unpaid leave even if there is no term in the contract to allow this and there will not be such a valid term (save for lay off or short-time working dealt with separately herein). Of course it is not always going to be so straight forward and employees can object to any proposals made. Naturally businesses would then be forced to consider alternative measures including but not limited to making redundancies. Whatever measures are taken in relation to staff it is important that they are done in the right way. It is advisable to take specialist legal advice if such measures for the staff are being considered for the short or long term.
Sick Pay – New Legislation
The Government has committed to bringing in a range of extra support and measures to help workers and businesses affected by coronavirus. Please note that this advice only related to Statutory Sick Pay entitlement and not the entitlement to Company Sick Pay.
(i) What is the current position with Statutory Sick Pay (SSP) and absence due to coronavirus?
People who cannot work due to coronavirus and are eligible for SSP will get it from day one, rather than from the fourth day of their illness. SSP will be payable to people who are staying at home on government advice, not just those who are infected.
(ii) What evidence can I ask the employee for to substantiate their sickness absence due to coronavirus?
Employers are urged to use their discretion about what evidence, if any, they ask for. If employees need to provide evidence to their employer that they need to stay at home due to coronavirus, they will be able to get it from the NHS 111 Online instead of having to get a fit note from their doctor. This is currently under development and will be made available soon.
(iii) Can I reclaim the SSP paid due to coronavirus?
Employers with fewer than 250 employees will be able to reclaim SSP for employees unable to work because of coronavirus. This refund will be for up to 14 days per employee.
Good housekeeping in the workplace
There are various official communications to assist employers with their health and safety obligations as follows:
- The government guidance for employers:
- https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-covid-19;
- The World Health Organisation guidance:
- https://www.who.int/docs/default-source/coronaviruse/getting-workplace-ready-for-covid-19.pdf?sfvrsn=359a81e7_6; and
- The government guide on social distancing and for vulnerable people:
- https://www.gov.uk/government/publications/covid-19-guidance-on-social-distancing-and-for-vulnerable-people/guidance-on-social-distancing-for-everyone-in-the-uk-and-protecting-older-people-and-vulnerable-adults.
On 16th March 2020, Prime Minister Boris Johnson outlined that if anyone or anyone in their household has a high temperature or a new continuous cough, then they should stay at home for 14 days. He also advised that people should work from home where they can.
School Closures – What to do if staff need to stay at home to look after their children?
If employees are unable to work due to the closure of schools then there is not a requirement to pay them if they cannot carry out the work they are employed to do. In advance of such circumstances we would advise employers to speak with their employees to have a plan in place for how this situation can be best managed. It may be appropriate for this time to be used as a combination of unpaid leave (this can be parental leave if the employee is eligible) and annual leave that has accrued to date. Obviously each circumstance may differ and we can help you make an informed decision as to what approach is best for your business.
Homeworking – What do I need to know?
The current Government recommendation is for employees to work from home where possible. If this is something not previously utilised within your business then you may not know where to start. Our recommendation is first to identify whether homeworking is feasible, clearly for roles which involve manual labour it will be harder to accommodate homeworking than desk based roles. If it is feasible, then do you have a homeworking policy in place? If not, a short emergency homeworking policy can be provided to protect your business. A policy, even if the situation may be short term, is always advisable to protect your business by ensuring employees know what is expected from them whilst working from home. If you would like us to provide further advice on homeworking or to provide your business with a policy, please contact us.
What if the Government decide to enforce a UK wide lock down?
If the Government introduce this it means an employee may be willing to go to work but is unable to do so and conversely, employers are unable to be open to provide work.
If such strict measures are enforced which prevent employees from attending their place of work, then we expect the Government to do so with clear guidance and/or emergency legislation around how employers should approach such a step. For example we would expect to be advised whether employees should receive their normal salary whilst at home and if not, whether this will be funded by the employer or the Government. Naturally many businesses cannot afford to sustain full pay for employees unable to attend work.
However we consider (and hope) that if such a strict approach is taken, the Government will introduce appropriate guidance/emergency legislation to offer some protection and certainty for employees and employers alike.
Please note that the foregoing is a helpful overview of employment law on these keys areas as it stands at this time. It is not intended to be comprehensive and it is recommended that specialist legal advice is sought as necessary. Further, it is also susceptible to change as emergency legislation and/or guidance can be introduced at any time by the Government. Indeed, Rishi Sunak, Chancellor of the Exchequer, announced yesterday afternoon that an announcement on employment measures would be made over the coming days. We will be keeping right up to speed with developing matters.
18th March 2020