COVID-19 - Employment law digest 1 June 2020

Chancellor announces changes to furlough scheme

On Friday 29 May 2020, Rishi Sunak provided further details on the previously-announced changes to the Job Retention Scheme (the Scheme). These will see a gradual tapering of the Scheme until its closure at the end of October 2020.

The key changes are as follows:

  • The Scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees whom they have furloughed for a full three-week period prior to 30 June 2020. In practice, this means that any employee which an employer wishes to furlough for the first time in the forthcoming days should be placed on furlough by 10 June 2020, to ensure that a clear three-week period has elapsed by 30 June 2020.
  • From 1 August 2020, employers will be required to pay employer national insurance and pension contributions. The Government will continue to pay wages up to the cap of £2,500 for the hours an employee does not work.
  • From 1 September 2020, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours an employee does not work. Employers will have to contribute 10% of wages, to make up 80% in total (subject to the cap of £2,500) and employer national insurance and pension contributions.
  • From 1 October 2020, the Government will pay 60% of wages up to a cap of £1,875 for the hours an employee does not work. Employers will have to contribute 20% of wages, to make up 80% in total (subject to the cap of £2,500), as well as employer national insurance and pension contributions.
  • From 1 July 2020, "flexible furloughing" will be permitted.

We are currently awaiting an update to the Scheme guidance which we hope will provide more detail on the mechanics of these changes. This is expected on 12 June 2020. However, in the interim, there is a factsheet published by HM Treasury, which provides some indication of how "flexible furloughing" will work in practice.

From 1 July 2020, employers will be able to bring back previously-furloughed employees for any amount of time or shift pattern. The employer will still be able to claim under the Scheme for an employee's hours which have not been worked, but will need to pay in full for those hours which have been worked (including tax and NI contributions). The new flexible furloughing arrangement will need to be agreed between employer and employee, and be confirmed in writing.

Focus on… Retail

Timeline for retail to reopen in June

Last Monday (25 May 2020), the Prime Minister announced his plan for the reopening of thousands of high street shops, department stores and shopping centres during June 2020. However, this will be dependent on compliance with the "COVID-19 secure" guidelines and demonstration that customers can be kept safe.

From today (Monday 1 June 2020), outdoor markets and car showrooms will be able to reopen. This has been sanctioned on the basis that the risk of transmission of the virus is lower outdoors, and social distancing will be easier with businesses which have access to significant outdoor space.

From 15 June 2020, it is expected that all other non-essential retail, such as clothes, shoe and toy shops, furniture stores, book and electronics stores, will be able to reopen. This will be subject to their ability to comply with the guidelines and the five Government tests having been met. These are: protecting the NHS' ability to cope; seeing a sustained and consistent fall in the daily death rate; obtaining reliable data from SAGE to show that rate of infection is decreasing to manageable levels across the board; confidence in testing capacity and PPE, with supply able to meet future demand; and the "R" rate remaining below one.

In the last few days, the Prime Minister has announced that he considers that all five tests are being met, and this will enable England to move to the next stage of lifting lockdown. As a result, it appears that, unless things change dramatically during the next couple of weeks, all non-essential retail is likely to be able to reopen from 15 June 2020.

Prerequisites for reopening

In order to reopen, business must:

  • Complete a risk assessment, in consultation with their workforce, or trade union representatives, if relevant. (The Health and Safety Executive website provides some useful information on risk assessments.
  • Take the necessary steps to become COVID-19 secure in line with the current Health & Safety legislation. This is important to note – although there is updated guidance available to assist retailers in carrying out their responsibilities, it does not supersede any legal obligations relating to health &safety, employment or equality.

The guidance is just that – a non-statutory roadmap to help retailers identify the main actions which they will need to take when reopening. Some of the sector-specific measures include:

  • Storing returned items for 72 hours before putting them back out on the shop floor.
  • Placing protective coverings on large items touched by the public, such as beds or sofas.
  • Frequently cleaning objects and surfaces which are touched regularly, including self-checkouts and trolleys.
  • Encouraging customers to use hand sanitiser or handwashing facilities as they enter the premises to reduce the risk of transmission by touching products whilst browsing.
  • Encouraging customers to avoid handling products whilst browsing, if at all possible.
  • Closing fitting rooms wherever possible, given the challenges in operating them safely.
  • Setting up "no contact" return procedures where customers take return goods to a designated area.

Aside from the above, the suggested actions in the guidance are those which apply to all businesses and have been frequently discussed in recent weeks. These include the increasing of handwashing; using screens or barriers to separate individuals; and devising fixed, rather than flexible, rotas, to limit widespread interaction. More details and suggestions are contained in our Return to Work Digest.

Remember that employers should be sharing the results of their risk assessment with their workforce. For those businesses with over 50 members of staff, it is expected that the risk assessment be published on their website.

Protecting people who are at higher risk

The following points will apply to all businesses, not just those in the retail sector.

Those who are shielding are clinically extremely vulnerable and, until now, have been advised to remain at home, with groceries and other essential supplies being brought to them.

As indicated below, the Government has indicated that, from today (Monday 1 June 2020), people in this category can leave their homes on very limited occasions. However, this does not extend to attending the workplace. For the time being, shielding individuals should remain away from work (unless they can carry out their role from home).

Those who are clinically vulnerable, rather than extremely vulnerable (for example, those with long-term mild-to-moderate respiratory diseases, such as asthma), have been told to take extra care with social distancing. The Government guidance says that, where possible, they should be helped to work from home, either in their current role or in an alternative role.

However, it goes on to say that, where such individuals cannot work from home, they should be offered the option of the safest available on-site roles, enabling them to stay two metres away from others. If they have to spend time within two metres of others, employers should "carefully assess" whether this involves an acceptable level of risk.

This is one of those areas where the guidance is very much a starting point, rather than the definitive word on the subject. For one, the statement that clinically vulnerable individuals should be "offered" the option of the safest available on-site roles, does not give any indication as to whether they would be obliged to accept this, and what (if anything) an employer could do in response to a refusal.

The only way to understand your obligations and risks as an employer is to revisit the employment legislation which long preceded the current guidance. In our Return to Work Digest, we have discussed previously an employee's right not to be subjected to detriment or dismissal by choosing to remain away from the workplace where (s)he reasonably believes there to be serious and imminent danger. In cases where the individual concerned is more vulnerable, this only serves to strengthen their case of "reasonable belief".

In addition, many employees in the clinically vulnerable category will live with conditions which are likely to meet the legal test of disability. Requiring an individual with a disability to return to work may well invite potential discrimination claims.

PPE?

The guidance states that the steps which retailers need to take to manage Coronavirus (COVID-19) in the workplace do not include wearing additional PPE beyond what an individual would need to wear in pre-virus times.

The justification given for this is because "COVID-19 is a different type of risk to the risks you normally face in a workplace, and needs to be managed through social distancing, hygiene and fixed teams or partnering, not through the use of PPE…workplaces should not encourage the precautionary use of extra PPE to protect against COVID-19 outside clinical settings or when responding to a suspected or confirmed case of COVID-19. Unless you are in a situation where the risk of COVID-19 transmission is very high, your risk assessment should reflect the fact that the role of PPE in providing additional protection is extremely limited…"

It is clear that the Government wants to discourage the habitual use of PPE in workplaces which would not ordinarily do so. Of course, this may well be to conserve supplies for those in the NHS and wider care sector who need it most.

However, employers should be cautious about using the guidance as a rulebook, without consideration of their wider obligations under employment legislation. Regulation 4(1) of The Personal Protective Equipment at Work Regulations 1992 states that: "every employer shall ensure that suitable personal protective equipment is provided to his employees who may be exposed to a risk to their health or safety whilst at work except where and to the extent that such risk has been adequately controlled by other means which are equally or more effective."

It is not clear whether the other measures suggested by the Government would be equally or more effective than the provision of PPE, and it has been suggested that, in poorly-ventilated workplaces, which are sealed units with no ability to open windows and allow natural air circulation, PPE may be the only effective way of reducing the risk.

We are not necessarily suggesting that every workplace with an air conditioning system will need to provide PPE to its employees. However, it is important for employers to consider properly their additional responsibilities under the law, and be prepared to answer questions from employees regarding these. Ultimately, a thorough and frank discussion with employees whilst carrying out the initial risk assessment will be the key to minimising the chance of employee dispute over the measures which are being put in place.

Face coverings are distinct from PPE, in that they are not the same as a face mask, such as the surgical masks or respirators used by health and care workers. In this instance, the guidance states that: "it is important to know that the evidence of the benefit of using a face covering to protect others is weak and the effect is likely to be small, therefore face coverings are not a replacement for the other ways of managing risk…the Government would therefore not expect to see employers relying on face coverings as risk management for the purpose of their health & safety assessments. [However], employers should support their workers in using face coverings safely if they choose to wear one."

Ramifications of non-compliance

There are stringent measures in place to enforce action if businesses do not make their workplaces COVID-19 secure, including fines and prison sentences of up to 2 years.

Case Study… John Lewis details plans for gradual store reopening

Retail giant John Lewis has confirmed its plans for reopening in line with the recent Government announcement.

Only two of the group's 50 stores will reopen on 15 June 2020, followed by 11 others on 18 June 2020. These stores have been selected primarily because of their accessibility by car, thereby reducing the risk to, and presented by, those travelling by public transport. This first phase will be a "pilot" operation and, depending on the success of, as well as the response to, the new ways of operating the stores, more branches will open during the summer.

The initial approach taken by John Lewis, in effecting safe social distancing in its stores, will be devised on the basis of lessons learned from the operation of its Waitrose stores during the height of the pandemic.

Restrictions on those who are shielding have been eased

Yesterday (Sunday 31 May 2020) the Government announced that the 2.2 million people who are currently shielding in England will, from today (Monday 1 June 2020) be able to spend some time outdoors.

Those who live with others are able to go outside once a day with members of their household, whilst continuing to follow social distancing guidelines. Those who live alone can meet outside with one other person from another household.

Important to note for employers is that those being shielded still remain at risk and should continue to remain away from their workplace.

From now on, the guidance on shielding will be reviewed at the same intervals as the social distancing measures.

In the news… employees reporting fraudulent use of Job Retention Scheme

The whistleblowing charity, Protect, has reported that over a third of the calls it has received regarding Coronavirus (COVID-19) have been to report an employer's misuse of the Scheme.

Such disclosures include employers forcing staff to work despite being furloughed; asking staff to continue working as volunteers; and claiming 80% of wages for members of staff who were still working, entirely without their knowledge.

Whilst the rate of claims under the Scheme may mean that there is little that can be done by HMRC at present, it has expressly retained the right retrospectively to audit applications for reimbursement made by employers. This makes it likely that there will be severe consequences in due course for those who have made fraudulent claims.

[CONTENT CORRECT AS AT 1 JUNE 2020]

If you would like to discuss any of the issues raised in this briefing, or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker or Andrew Tobey in Michelmores' Employment team.

 

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This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.