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Covid-19: Lockdown and support for the self employed

26th March 2020

Covid-19: Lockdown and support for the self employed

On 23 March 2020, the government released guidance which states that "the single most important action we can all take, in fighting coronavirus, is to stay at home in order to protect the NHS and save lives."

The guidance requires the public to stay at home, subject to limited exceptions. Commuting to work is permitted, but only where the work "absolutely cannot" be done from home.

The government has also ordered the following businesses and public places to close:

  • all non-essential retail stores - this will include clothing and electronics stores; hair, beauty and nail salons; and outdoor and indoor markets, excluding food markets
  • libraries, community centres, and youth centres
  • indoor and outdoor leisure facilities such as bowling alleys, arcades and soft play facilities
  • communal places within parks, such as playgrounds, sports courts and outdoor gyms
  • places of worship, except for funerals attended by immediate families
  • hotels, hostels, bed and breakfasts, campsites, caravan parks, and boarding houses for commercial/leisure use (excluding permanent residents and key workers).

This announcement gives rise to a number of issues for employers and we have addressed some of those frequently asked questions below:

If the workplace has to close as a result of the government’s announcement, do employers have to continue to pay their employees? 

Where employees can continue to work remotely from home, they are entitled to receive full pay.

Where employees are not able to undertake their usual roles from home, employers should consider if there is any work that they can carry out remotely (even if this is not within their usual job description).

Where an employer is not able to continue to operate with employees working from home, the Coronavirus Job Retention Scheme set up by the government will pay 80% of employees’ wages up to £2,500 a month, provided they are kept on the payroll (see our earlier article for more details on the Job Retention Scheme).

What options are available to employers to protect their business if they are forced to closed?

Aside from the Coronavirus Job Retention Scheme referred to above, other options available to an employer in this situation include the following:

  • considering the possibility of lay-off or short-time working where there are appropriate provisions in the employment contract. If the employer does not have the contractual right to lay-off, they can seek employees’ consent to vary the contract, or take the risk of breaching the contract. We recommend that specific legal advice is sought in that regard before acting
  • consulting with employees and trade unions with the aim of agreeing a temporary reduction in pay and benefits until the workplace reopens
  • giving employees the appropriate notice to take annual leave to ensure a full workforce when the workplace reopens
  • considering asking for volunteers to take unpaid leave or redundancy, if appropriate
  • considering making redundancies, if appropriate. 

Must an employer still collectively consult over redundancies if its workplace has been closed?

Where 20 or more redundancies are proposed within a period of 90 days, collective consultation obligations are triggered under s.188 TULRCA. An employer is still obliged to collectively consult in accordance with the legislation if its workplace has been closed.

Employers should consider how best to communicate with employees and representatives for the purposes of consultation i.e. by email, telephone or video conference. It would be sensible for employers to confirm to employees the way in which communication will take place prior to the business closure.

Bear in mind that the employer's duty is actually to consult with representatives of the affected employees, and not the employees themselves.

Proposed Protection for Self-Employed and Freelancers

As a result of increasing pressure on the government to support the self-employed and those who work on a freelance basis, The House of Commons Public Bill Committee has proposed an amendment to the Coronavirus Bill, requiring the government to introduce support equivalent to the Coronavirus Job Retention Scheme for these categories of workers in the form of "statutory self-employment pay".

This would provide those who are self-employed or freelancers with 80% of their monthly net earnings, averaged over the last three years, up to a maximum of £2,917 per month.

It not yet clear whether this amendment will be accepted.

If you would like to discuss any of these issues in more detail, or if you would like advice on how to implement furlough leave, you can contact

Tim Jones on 07815 167206 or tim.jones@higgsandsons.co.uk , Amy Brokenshire on 01384 327214 or amy.brokenshire@higgsandsons.co.uk 

For more information on employment related issues and the support being made available to employers during the Covid-19 Coronavirus crisis, please see the following:

Help for employers - what is available

Job retention scheme

 

Other news

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Brierley Hill
West Midlands, DY5 1LX

Email: law@higgsandsons.co.uk
Call Us: 0345 111 5050

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