The COVID-19 outbreak is clearly a matter of major concern for employers given the impact on their staff and business. At the start of the outbreak, the employer's legal duty of care to provide a safe place to work primarily meant communicating with staff on hygiene advice and updating and implementing travel and absence policies. As the situation has worsened, with the government's closure of schools and specified types of business, employers have had to take steps to facilitate remote working where possible and consider issues around temporary lay-offs and redundancies.
A key step for employers has been to identify a core team with responsibility for monitoring the fast-changing government guidance and health advice, and communicating with staff. Links to useful resources from the Government, Acas and World Health Organisation are included at the end of this briefing.
Below we set out some key issues which employers may have to consider over the coming weeks. Please do not hesitate to contact us if you require further advice.
Table of contents
1. Handling sickness absence and self-isolation
2. Travel 3. Health data 4. Homeworking 5. Working parents 6. Reduction in work 7. Relaxations - DSARs/ IR35
/gender pay gap 8. Resources 9. Contacts
1 4 5 5 6 6
8 8 9
Herbert Smith Freehills HSF employment notes
1. Handling sickness absence and self-isolation
Employers need to be prepared to respond to a number of different scenarios.
Employees advised to self-isolate
The current advice (which has already changed over the last few weeks and so could change again) is: 1 Individuals with relevant symptoms (a new persistent cough or high fever): advice is to self-isolate
for 7 days and longer if still unwell. 2 Individuals who do not have symptoms but
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a) have a positive diagnosis of COVID-19 but are asymptomatic: advice is to self-isolate for 7 days
b) live with someone who has a high temperature or a new and continuous cough: advice is now that the whole household should isolate for 14 days
c) who have had close contact with a confirmed case or travelled from the original high risk areas: the position is not entirely clear, as the original Government guidance advised self-isolation for 14 days but this has since been removed. It may be that this advice was thought to have declining relevance given restrictions on international travel (see Travel below) and reduced testing, but if applicable it would seem prudent to continue to follow this advice, particularly given the analogous advice on household members.
3 Extremely vulnerable individuals covered by shielding guidance: people with specified serious underlying health conditions (see here) will be written to by the NHS by 29 March to advise self-isolation for at least 12 weeks.
Employers are under a duty to provide a safe place of work for all their employees and should therefore instruct staff to comply with the above advice. It would be reasonable to require employees to notify their employer if they fall within groups 1 or 2 and to take disciplinary action for a failure to do so. Employers aware that an individual is within group 3 should support them if they decide to comply with the guidance.
If any of these individuals are well enough to work remotely and their role permits this, the employer can allow or instruct the individual to work from home on full pay. Employees are under a general obligation to comply with reasonable instructions or requests from their employer. If these individuals are able to work from home, then it would be a lawful and reasonable instruction to them to do so (even without an express mobility clause in their contract) and therefore one with which employees would be obliged to comply, provided the employer puts in place suitable homeworking arrangements (see Homeworking below). A refusal to comply would be a disciplinary matter.
If the employee is not well enough to work, or the individual's role cannot be performed at home, these individuals (with the possible exception of those in group 2(c) - see Travel below) will be treated as sick for statutory sick pay (SSP) purposes (the Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 deem individuals 'sick' where they are self-isolating in accordance with government guidance and as a result are unable to work). They may also qualify for contractual sick pay depending on the contractual terms, certainly where they are unwell. Employers may choose to augment pay in any event, to support their staff and discourage attendance at work against government guidance.
An emergency bill is currently before Parliament to enable regulations to be made to provide that (i) SSP will apply from day one of COVID-19 related absence rather than day four and (ii) the first 14 days of SSP due to absence because of COVID-19 will be reimbursed to employers with fewer than 250 employees; both changes are expected to be given retrospective effect from 13 March 2020.
Employees can self-certify for the first seven days off work. After that, the Government states that employers should use their discretion not to require evidence for a period of self-isolation in accordance with government advice, but if they do wish to ask for evidence, employees will be able to get an "isolation note" from NHS 111 online or from the NHS website (further details here). It will be possible to have the isolation note sent directly to the employer's email, and to create one on behalf of someone else.
Other employees (not self-isolating) who can work from home
The Prime Minister's statement on 16 March set out social distancing measures, advising everyone to try and follow the measures below "as much as is pragmatic":
avoid non-essential use of public transport, varying travel times to avoid rush hour, when possible;
work from home, where possible.
Employees in certain vulnerable groups (over 70, with an underlying health condition or pregnant) were "strongly advised" to follow the social distancing measures as much as possible (but note that "extremely vulnerable" individuals within this group are now subject to advice to self-isolate for 12 weeks see above).
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Employer guidance stated that employees from the vulnerable groups should be strongly advised and supported to stay at home and work from there if possible.
In a televised announcement on 23 March, the Prime Minister announced stricter lockdown measures effective for at least three weeks, including that travelling to and from work was permitted "only where it is absolutely necessary and cannot be done from home". Subsequently the Guidance on staying at home and away from others was updated to state that individuals are to leave the house only for one of four reasons, including "travelling to and from work, but only where this absolutely cannot be done from home". It therefore seems that the Prime Minister is not (currently) saying that only key workers can travel to and from work; others can do so, but only if the nature of the work really cannot be done remotely. Employers should therefore be doing what they can to facilitate home-working, whether that be by providing equipment or perhaps accepting less than ideal performance. Social distancing measures should also be put in place in the workplace for those who cannot work from home, in accordance with government guidance. A key measure is to stop public gatherings of more than two people. A gathering is permitted "where the gathering is essential for work purposes but workers should be trying to minimise all meetings and other gatherings in the workplace".
Given the duty of care toward employees and the requirement to carry out risk assessments, employers should require employees to follow this advice. Therefore, for individuals whose roles can wholly or mostly be carried out from home, employers should require home-working, all the more so for those in the vulnerable groups.
Of course for those types of businesses and venues ordered to close (see here), home-working will be the only option to the extent feasible. Similarly, employers who have not been ordered to close should instruct employees to work from home if they are required by government advice (or choose) to close a workplace temporarily eg in order to carry out a deep-clean.
Again it would be a lawful and reasonable instruction to employees to work from home (even without an express mobility clause in their contract) and therefore one with which employees would be obliged to comply, provided the employer puts in place suitable homeworking arrangements (see Homeworking below). A refusal to comply would be a disciplinary matter. Employees working from home should be paid as normal.
Vulnerable employees (not self-isolating) who cannot work from home
A risk assessment should be carried out for individuals in the vulnerable groups in relation to their carrying on travelling to and working at the particular workplace. They should in most cases be strongly encouraged and where appropriate directed to remain at home, either working in a different role which can be done from home, or not working. (Note that a sub-group of this category, who are "extremely vulnerable" due to having one of a specified list of serious health conditions, are advised to self-isolate see above.)
In relation to pregnant individuals, the duty to protect their health and safety in the workplace requires employers to assess the workplace risks posed to new or expectant mothers or their babies, alter working conditions or hours to avoid any significant risk and, if this is not reasonable or effective, offer suitable alternative work; if that is not available or the employee reasonably refuses it, the employer must suspend the employee on full pay.
Individuals with underlying health conditions may well qualify as disabled and therefore the employer would be under a duty to make reasonable adjustments. Again, this might involve identifying another role that can be done from home or temporarily suspending them on full pay if this is not feasible.
It is not certain whether vulnerable individuals who are strongly advised to socially distance themselves (but not to self-isolate because they are not "extremely vulnerable") will qualify for SSP pursuant to the recent amending regulations. In any event, employers may choose to augment sick pay in these circumstances.
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Other employees (not self-isolating) who cannot work from home
An employer might wish temporarily to suspend employees on health and safety grounds, because of a possible risk of infection which does not fall within the government's self-isolation advice. The employee remains willing and able to work and is not entitled to SSP. Save where there is a contractual provision to the contrary, the employer should in most cases continue to pay full pay (although see Travel below). Some casual employees may only be entitled to pay if their employer provides work for them to do, so would not be entitled to pay if the employer does not provide them with work due to a fear of possible infection (see Reduction in work below).
Employee refusal to attend workplace
An employee may want to self-isolate purely as a precautionary measure without it being advised by government guidance. They will not be entitled to SSP and there is unlikely to be a contractual right to pay. It will generally be for the employer to agree what if any payment to make. In exercising this discretion, Acas guidance recommends that an employer should listen to any concerns staff may have and carefully consider the individual's personal circumstances, while treating requests consistently. Employers could choose to allow the individual to take periods of annual or unpaid leave, for example if an individual's concerns are because they live with someone at higher risk.
If an employer decides to require the employee to attend work, and they refuse, this could be a disciplinary matter. However, much will depend on the circumstances for example, the employee may want to selfisolate because they genuinely and reasonably believe themselves to be in imminent and serious danger perhaps due to the employer's poor management of an existing infection or contamination, or because colleagues are not following recommended hygiene or social distancing guidelines. Disciplining an employee or withholding pay in those circumstances might be unlawful detriment or, ultimately, unfair dismissal.
Attendance management policies and impact of absence on bonuses
Employers who operate absence management policies may want to consider informing employees that they will disregard COVID-related absence when applying the triggers for formal action, to avoid discouraging sensible self-isolation. Similar considerations apply where bonus schemes are based partly on total hours worked. A failure to disregard such absence could lead to discrimination claims, for example from disabled employees within the vulnerable groups who are likely to suffer more severe symptoms if they catch the virus or require longer periods of self-isolation.
On 17 March the Foreign & Commonwealth Office advised against all but essential international travel, initially for a period of 30 days. An employer's duty to take steps that are reasonably necessary to ensure the health, safety and welfare of all of their employees will mean that in most cases international business trips will need to be cancelled and a request from an employee to return to their country of origin to work remotely should be (sensitively) refused.
Following the new measures put in place on 23 March for at least three weeks, individuals should only be travelling for work if absolutely necessary. Even if there is a case for saying a trip truly is essential, employers should clearly bear in mind employee concerns, particularly if an employee is within one of the vulnerable groups of individuals or if public transport is to be used.
It is unlikely to be a reasonable instruction to prevent (rather than seeking to dissuade) employees undertaking personal travel contrary to Government advice. However, an employer's health and safety duties would justify advising employees that, if they do travel, particularly to higher risk areas, they will be required to remain at home for 14 days on return as a precaution. If they develop symptoms on return, statutory sick pay would be payable (and probably any contractual sick pay, depending on the contractual
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terms). If they do not suffer any symptoms, they will not fall within current government advice to self-isolate (advice to self-isolate in these circumstances was included on the government web pages only until 16 March when it was removed) and therefore, strictly speaking, the statutory sick pay entitlement for selfisolators would not apply. If the individual can work from home, they should be doing this in any event and so should be paid in full. If they are unable to work from home, the employer would need to consider carefully whether to treat the period as sick leave, paid suspension, unpaid leave or further paid holiday, bearing in mind any contractual terms and whether the consequence has been made clear to the employee before they travel. In deciding how to respond, employers should give careful consideration to the reasons for travel, given that requests to travel internationally (to the extent possible) are more likely to come from non-UK citizens and therefore raise the possibility of indirect discrimination claims.
3. Health data
Information regarding an employee's health, such as whether the employee is suffering symptoms of coronavirus, or has been diagnosed as having the virus, is special category data under the General Data Protection Regulations.
The collection and processing of this data is likely to be necessary to protect the health, safety and welfare of the individual and other employees, in accordance with the employer's duty to provide a safe working environment. It should therefore fall within the lawful processing condition of being necessary pursuant to obligations and rights under employment law. However, the processing should be limited to the extent truly necessary and a data protection impact assessment and/or risk assessment undertaken, and an appropriate policy document is also needed. Employers should also give careful consideration to the retention period for any data collected in response to the virus pandemic.
The Information Commissioner's Office (ICO) has published advice here, which notes that employers are entitled to (and should) tell their staff that a colleague may have potentially contracted COVID-19, but notes that there probably isn't any need to name individuals and the employer should not provide more information than necessary. In terms of collecting health data about employees or visitors, the ICO states that it is reasonable to ask people to declare if they have visited a particular country, or are experiencing COVID-19 symptoms, and to ask visitors to consider government advice before they decide to come.
It should also be possible to ask employees to agree to a temperature check on entering the workplace or to have a swab test to check for the virus (carried out by a private medical provider), and to carry these out if the employee consents. (Consent in this context may not be the lawful basis relied upon from a GDPR perspective, which is more likely to be one of the employment or public interest bases set out in Article 9, but would be necessary to mitigate other risks.) Normal temperature and negative test results should not be retained as there is no need to do so. A high temperature or positive test result should be retained but the information should be handled confidentially and actions taken in accordance with Government guidance (ie, send the employee home and advise to self-isolate, disinfect surfaces etc).
It would typically be reasonable for an employer to take disciplinary action against an employee who failed to comply with a request to declare relevant travel or symptoms. In contrast, discipline for refusing to have a temperature check is unlikely to be reasonable in most workplaces, not least as there could in any event be asymptomatic employees carrying the virus at work. Similarly, disciplinary action for refusing to take a swab test might be unreasonable depending on the circumstances.
Employees working from home should be paid as normal. Employers should ideally have a homeworking policy to cover issues such as:
health and safety aspects of working from home employees should be sent a health and safety checklist and asked to confirm they have suitable arrangements (see HSE guidance here)
provision of equipment
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data security, data protection law, and other IT issues
hours of work and working time rest breaks; any requirement to be available to travel to the office/elsewhere
whether permitted by home insurance, mortgage or lease terms
additional expenses (household bills, printing, postage, increased insurance premium etc) although the individual may also save on travel costs
any tax consequences
Thought should also be given to how to manage supervision, performance reviews, communication and measures to minimise isolation and stress.
5. Working parents
All UK employees are entitled to take leave to care for dependents in an emergency, but only for a few days. The government has now announced that all schools are to shut from 20 March, although some provision will still be made for the children of key workers and vulnerable children. Guidance on who may count as a key worker has been published here.
For other parents, at most, emergency leave could cover a day or two while they make arrangements for ongoing childcare now schools are to be closed for a longer period. The right is unpaid, although some employers will provide contractual paid leave for these purposes.
In the longer term, if employees are able to perform their work from home while caring for children, they should continue to be paid in full. Other options will need to be considered for parents unable to work from home and provide 'care' simultaneously. Parents with a year's service may have an unused entitlement to unpaid parental leave; others may be able use up paid holiday or take other unpaid leave. Some employers may be able to offer adjusted hours so parents can work when younger children are asleep, or reduced hours (and pay).
6. Reduction in work
Many employers are likely to face at least a temporary reduction in business and therefore the need for staff as a result of the outbreak, particularly in the travel, hospitality, leisure and retail sectors. Expected high levels of absence through sickness or isolation will deplete the workforce in any case, but further measures may be needed.
Layoffs and short-time work
Employers are only entitled to "lay off" employees (ie, provide no work or pay) or put them on "short-time working" (ie, provide less than half a week's worth of that employee's work and pay, so half of part-time hours/pay for a part-time employee) if the contract provides that there is no obligation for the employer to provide work and no obligation to pay unless work is done. It is more common to find an express provision to this effect in the manufacturing sector and some professional services, but it remains unusual.
For employees who do not have this type of contract (and who do not agree to a change to their employment contract to allow this), it would be a constructive dismissal to lay them off or put them on short time work. It would be very hard to imply a right to do this in most contracts. For a term to be implied through custom and practice, there must be a custom of laying-off or short-time work within that particular business. The custom must be both, reasonable, certain and well known; and such that, no employee could be supposed to have entered into employment without assuming it was part of the contract. This is a very strict test and it is highly unlikely that a right to lay off will be implied.
However, where an employer does have and exercises this right, the employee will become entitled to a statutory redundancy payment (provided they have two years' service) if they are laid off or on short-time for four or more consecutive weeks or for a total of six weeks in any 13 week period. An employer can resist a claim for SRP if the employee will return to normal working hours within four weeks and continue for at least 13 weeks. Employees will also be entitled to a statutory guarantee payment on up to five workless days in a
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three-month period (pro-rated for part-time employees), calculated using normal weekly pay subject to a cap (currently 29 per day). Employers may also need to consult with unions over a decision to implement layoffs or short-time work under the provisions of a collective or national industry agreement.
Alternative cost-saving measures
Employers without the contractual right to lay off or impose short-time work will need to consider other options to deal with a temporary reduction in work. These could be using up paid holiday, unpaid leave, reduced hours, or reduced or deferred pay.
Such changes to contractual terms would need to be by agreement with employees, following appropriate consultation, largely as a way of seeking to avoid redundancies. Imposing changes unilaterally or dismissing on notice and offering re-engagement on new terms gives rise to various risks including unfair dismissal claims. Dismissals in order to re-engage on new terms also count as collective redundancies for consultation purposes (see Redundancies below). In any case there could also be an obligation to consult with unions, works councils or other employee representatives about proposed changes, so advice should be sought.
Salary freezes (ie on pay reviews) are usually possible, unless employees have a contractual right to an increase. Commonly, employees only have a right to a salary review, in which case a decision not to award an increase will be upheld unless it is made capriciously, in bad faith or in breach of trust and confidence. Extra care is also needed when deciding the level of any discretionary bonus, as there may be prescribed factors that have to be taken into consideration and, again, an employer must not act capriciously, in bad faith or in breach of trust and confidence.
Employers could also impose a freeze on new recruits and can withdraw job offers prior to acceptance. If a recruit has already accepted the offer, they would be entitled to notice or pay in lieu. Another option may be to defer start dates, perhaps in return for some compensation.
In any event employers may want to ensure that employees take some of their paid holiday over the coming months, to avoid large numbers saving it up to take off in one go at the end of the year. Under working time regulations, employers can require employees to take statutory holiday entitlement by giving notice to the employee which is at least twice as long as the holiday period being imposed. The contractual terms will determine the position for enhanced contractual holiday.
Coronavirus Job Retention Scheme
On 20 March 2020 the Chancellor announced a Coronavirus Job Retention Scheme available to any employer (of whatever size) to apply to the HMRC for a grant of 80% of the wages of all employees on the PAYE system who are "furloughed" (ie kept on payroll but without work), up to a maximum of 2,500 a month (just above the median income). Where employees do not have a lay-off clause in their contract, they will need to consent to be "furloughed", although this is likely to be forthcoming where the alternative is redundancy (and particularly if the employer offers voluntarily to top up the 80% to full pay).
The scheme will be backdated to 1 March and be open for at least 3 months and longer if necessary, and there is to be no limit to the overall funding of the scheme. HMRC expect to start making grants within weeks and for the scheme to be up and running fully before the end of April. Employers are urged to contact HMRC and review the support available before deciding to make redundancies.
Top line details of this and other business support measures are available in the Support for Businesses guidance and we will publish a further briefing once more information on the scheme becomes available.
If redundancies are ultimately required, there are collective consultation requirements if 20 or more dismissals (for redundancy or some other reason unconnected with the individual) are proposed within a 90 day period at one establishment. The duty is to provide specified information and consult with unions or employee representatives about ways of avoiding or reducing the number of dismissals and mitigating the consequences.
The process must start at least 30 days before the first dismissal, and 45 days before if 100 or more dismissals are proposed. There are significant financial penalties for non-compliance (potentially 90 days' pay per affected employee).
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Where the collective consultation duty applies, the employer must also notify the Department for Business, Energy and Industrial Strategy of the proposed redundancies by letter or on form HR1 (copied to the union/ employee representatives), at least 30 days (or 45 days if 100 or more dismissals) before the first dismissal. Failure to do so can lead to criminal prosecution and a fine (with no upper limit), on summary conviction, for the company and/or officers of the company, although only a few prosecutions have been brought to date. Redundancy is a potentially fair reason for dismissal, but employees with two years' service will be eligible to bring unfair dismissal claims if a fair process is not adopted. Employers also need to avoid unlawful discrimination in how they apply the redundancy process. A more detailed briefing on redundancy will be available on request. Note that employers will have to pay Class 1A employer NICs on ex gratia termination compensation payments above the 30,000 tax-free threshold in respect of terminations on or after 6 April 2020 (bringing NICs into line with income tax). The new liability will not apply to sums paid after 5 April in respect of employment terminated before 6 April, so there will be a financial benefit in ensuring that imminent terminations (with sufficiently large compensation payments to be affected) take place prior to 6 April.
7. Relaxations - DSARs/ IR35 /gender pay gap
With respect to more general data protection compliance, the Information Commissioner's Office (ICO) has published a statement to individuals on its website advising that they should expect delays in companies responding to subject access requests because resources are being diverted elsewhere. This should not be considered by employers to be a waiver of their obligation to respond but should hopefully provide reassurance that they will not be sanctioned should they be unable to respond within the statutory timeframe due to issues arising out of the current situation.
This is particularly welcome given the recent change to the ICO's right of access guidance to apply a stricter timescale for employers (and other data controllers) to comply with a data subject access request. Previously, if a controller asked the data subject for further information/clarification of the request, the start of the one-month time period for compliance was paused until that information was received. The guidance has now been amended to state that the clock will no longer be paused in this situation the one-month timescale will start to run from the date of receipt of the subject access request or, if later, upon receipt of proof of identification. Controllers may be able to extend the time limit by two months if the request is complex or the individual has made a number of requests.
The planned extension of IR35 reforms to private sector large and medium-sized companies has been delayed by a year, to April 2021, in light of the COVID-19 outbreak. On 24 March the Government Equalities Office and the Equality and Human Rights Commission suspended enforcement of the gender pay gap deadlines for this reporting year (2019/20), confirming that there will be no expectation on employers to report their data
Government (BEIS) / Public Health England Guidance for employers and businesses on coronavirus
Acas Guidance Coronavirus: advice for employers and employees
Acas Guidance Coronavirus: working from home and general guide Homeworking
Information Commissioners Office: Data protection and coronavirus
World Health Organisation guidance for employers.
Tim Leaver, Partner
T +44 20 7466 2305 [email protected]
Andrew Taggart, Partner T +44 20 7466 2434 [email protected]
Anna Henderson, Professional Support Consultant T +44 20 7466 2819 [email protected]
Christine Young, Partner T +44 20 7466 2845 [email protected]
If you would like to receive more copies of this briefing, or would like to receive Herbert Smith Freehills briefings from other practice areas, or would like to be taken off the distribution lists for such briefings, please email [email protected] Herbert Smith Freehills LLP 2020
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on the information provided herein.