Changes to Furlough (Coronavirus Job Retention Scheme) announced on 29 May 2020
On 12 May 2020 the Chancellor announced an extension to the CJRS until October 2020, with a requirement that employers would start to contribute to the cost of this from 1 August onwards. It was also anticipated that at some point employers would also begin to be able to bring employees back to work on a part-time basis whilst still on furlough.
Important Deadline - Closure of the scheme for new entrants on 10 June 2020
The announcement from the government on Friday confirmed that the CJRS scheme will no longer be available to new entrants from 30 June 2020.
Considering that employees are required to be furloughed for a minimum of 3 weeks, in practical terms this means that any employers still considering furloughing employees for the first time will need to do so by 10 June, as after this date it will not be possible.
Changes to employer contributions
During June and July 2020, the scheme will continue to operate as it has previously, with the government continuing to reimburse employers up to 80% of pay (up to £2,500), plus employer National Insurance and auto-enrolment pension contributions.
From 1 August, the government will still reimburse 80% of pay (up to £2,500), but the employer will then become responsible for payment of both employer National Insurance and pension auto-enrolment contributions.
From 1 September, the government’s contribution will be reduced to 70% of pay (up to a cap of £2,187.50), with employer then required to pay 10% of the employees’ wages to make up the 80% (up to £2,500) as well as employer National Insurance and pension auto-enrolment contributions.
In October 2020, prior to the scheme closing on 31 October 2020, the government contribution will be reduced to 60% of wages (up to a cap of £1,875), with employers required to pay 20% of wages to make up the 80% (up to £2,500) as well as employer National Insurance and pension auto-enrolment contributions.
From 1 July 2020 (earlier than anticipated), employers will have the flexibility to bring employees back to work and for them to perform some work part time.
This will be on an ‘as needed’ basis, with employers able to choose when and how many hours they wish the employee to work, whilst furloughing them for their remaining contractual hours. These hours can be varied on a week by week basis.
For the hours that employees are required to work, this will be at full pay with the remaining hours not worked on furlough pay as detailed above.
Further details on how this ‘flexible furlough’ will work are being published on 12 June 2020, which we note is following the deadline for new entrants to the scheme. It is expected that employers and employees will be required to put any new arrangements in writing when utilising this flexible furlough option.
No doubt this will place an additional administrative burden on employers (as well as financial), to formally record and monitor the hours that are being worked under flexible furlough.
The government hopes that the above changes will help employers manage the transition back to work with a gradual increase in employer contributions being introduced over time, rather than the ‘cliff edge’ scenario of suddenly ending the furlough scheme.
However, being asked to contribute even a modest contribution over the coming months will be unaffordable for many employers in the current climate and they will need to assess their options carefully, with possible changes in the workforce required.
If you need assistance with any of the issues arising from the above, please do not hesitate to get in touch using the contact details at the end of this bulletin.
Changes in working arrangements
In our last bulletin we looked at the various health and safety requirements for employers to consider when looking to return to the workplace.
Whilst many employees have been required by the government to work from home during lockdown (where possible), many employers may now be considering increased homeworking for their employees on a more permanent basis, despite a return to pre-coronavirus conditions.
Homeworking has some clear benefits to employers such as reduced overheads, increased productivity (due to reduced travel time) and increased workforce motivation. However, such arrangements also present several challenges that will need to be considered carefully by employers before they agree.
Is the employee’s current contract sufficiently well drafted to cater for a more permanent home working scenario?
Employers will need to ensure that their contracts are appropriately tailored to cater for homeworking including:
In addition to this, a well drafted homeworking policy to set out the requirements and expectations whilst working from home is also recommended.
Health and Safety duties
Homeworkers will be covered by the Health and Safety Act and as such employers will need to ensure that they:
In ensuring that appropriate risk assessments are carried out for homeworkers, employers may look to consider the following:
Expenses and Insurance
Employers may wish to consider the additional household expenses that employees may incur when working from home and whether any re-imbursements can be made to employees, potentially with tax advantages.
Employees may also need to check their leases or mortgage arrangements to ensure that they are not prohibited from working from home and to obtain permission if this is required.
Employees should also have in place adequate home insurance that will cover damage and third-party claims caused by work equipment, with the employer looking to cover any additional premiums that are required to provide this. The cover for the equipment itself should be covered by the employer’s insurance.
Employers have a duty under the Equality Act 2010 to provide reasonable adjustments to enable a disabled person to work. What is a reasonable adjustment will vary for each individual/workplace and such adjustments could include the provision of homeworking itself as well as the various forms of assistance that an employer provides to make homeworking possible. Assistance may take the form of equipment, software or other forms of support that an employer would be expected to provide to their disabled employees.
There may also be employees with undeclared disabilities who may also struggle with working from home, particularly those with mental health conditions. It is therefore vital that when working remotely, employers communicate with all employees in such a way to ensure that all employees concerns/issues are identified at an early stage, and that adequate support mechanisms are put in place where appropriate. Taking these steps will help employers reduce the risks of discrimination claims arising.
Employers who wish to introduce changes
As we emerge from lockdown, it is likely that some employers will be looking at permanent homeworking arrangements to reduce overheads. To make such a change to an employee’s contract of employment (where there is no contractual provision permitting such a change), an employer could:
Unilaterally imposing changes and terminating contracts are measures that should be taken with the benefit of legal advice to minimise the risks of any claims that the employee could potentially make.
Flexible working requests
As a result of the increase in homeworking during the lockdown period, it is likely that employers will also see an increase in flexible working requests being made by employees.
Whilst there is no automatic right to work from home, employers with 26 weeks’ continuous service have the statutory right to apply for flexible working. The application must:
Employers should deal with requests reasonably and are only permitted to reject a request on specified business grounds, namely:
Considering this requirement for employers to reject on specified business grounds only, we anticipate that employers may find it more difficult in the future to justify such a refusal. If homeworking has been successfully operating for several months during lockdown, with the necessary infrastructure put in place to enable this to happen, it is likely to become more difficult to justify one of these specified grounds when rejecting the request.
The above applies to formal ‘statutory’ requests, but employers will also need to carefully consider the implications of rejecting any informal request for flexible working. Failure to deal with such requests reasonably, especially for those with disabilities, susceptibility to Covid19 or childcare commitments, may expose the employer to risks of discrimination and constructive dismissal claims.
To find out more or take advantage of our complimentary initial consultation via telephone or video call contact us today on 0800 999 4437 or email firstname.lastname@example.org.