Getting Back to Business – Important Planning Considerations

Posted: Monday June 22 2020

By: Charlotte Ashton

As the country adjusts to working through the COVID-19 crisis, many businesses have had to adapt and make huge changes in order to survive.  Some businesses have managed to keep working, with employees set up in new working from home arrangements, other businesses have had to shut down entirely and furlough staff. There are also many businesses where from week to week there has been a mix of the two situations.

Getting Back to Business – Important Planning Considerations

Many employees now are working from home full time whilst waiting to see what businesses are doing in respect of the return to the workplace.  Furthermore, a significant proportion of employees have spent a long time now on furlough and maybe wondering what life will be like with the business in the future.

As employers are planning to move forward, there are some important legal considerations which need to be taken into account when planning for the future.


  1. FUTURE OF THE FURLOUGH SCHEME

 The Government has announced some significant changes to the furlough scheme.  Firstly, from 1 July 2020, furloughed workers can return to work on a part time basis where this is appropriate.  This means that employers can bring their employees back to work on a flexible basis and there is no minimum time for the employees to be on furlough after which the employer can claim under the scheme.  Employers can keep their employees on the furlough scheme and continue to claim under the scheme for the employee’s full hours.

No new workers are now able to be furloughed and have their wages claimed under the Coronavirus Retention Scheme as the final date for this is 30 June and there was a three week minimum period of furlough to allow an employer to make a claim.

The level of support for employers under the scheme will start to change and from 1 August 2020 employers will have to start paying employer National Insurance contributions and pension contributions on furlough pay.

Then from 1 September 2020, the Government will only cover 70% of wages instead of 80% up to a cap of £2,187.50 a month. Employers must pay the additional 10 % so that the employees receive 80% of their wages as minimum.

From 1st October 2020, the Government support will reduce to 60% up to a cap of £1,875 and employers will have to pay an additional 20%.

And finally the scheme will close on the 31st October 2020.

 


  1. PROCEDURAL CONSIDERATIONS

Bearing in mind the changes to the furlough scheme, and the potential for some employees to return to work, employers will need to consider some potential procedural changes.  This could include consulting with employees and agreeing new part time working and part time furlough, agreeing permanent changes to terms and conditions to avoid redundancies, considering getting employees to agree to reduce wages overall as part of cost saving measures to avoid redundancy.

In bringing employees back to the workplace, employers will need to do a full risk assessment in order to assess and mitigate against the risk of any infection spread through the workforce.

Employers may want to operate offices on a rota basis of attendance where there is insufficient space to adhere to current social distancing measures.

Employers might find there are increased flexible working requests as and when employees are asked to return to the office. There is a process to follow with these and they can only be refused for specific grounds. Careful handling of these requests is key to avoid potential claims.


  1. COSTS

Employers will need to bear in mind the changes to the furlough scheme when assessing the future costs of the workforce. This may affect the cash flow of the business and the long-term businesses viability.  Employers also need to consider that employees will have continued to accrue annual leave whilst on furlough and consider whether it is appropriate to require employees to take this before returning to work or before a specific point in the year in order to avoid a big backlog of holidays.

Employers will also need to consider redundancy costs and whether any period of notice during the redundancy consultation would be covered by the furlough scheme and if so when the best time to plan redundancies might be.

  1. RISK IN THE FUTURE

Employers might want to prepare policies to mitigate any risk of further waves of Covid-19, or indeed any future issue which causes such disruption in the workplace.  Employers might want to look into employees working from home more permanently and what, if any, changes they need to make to ensure this is possible.

As always, it’s good practice to get advice early so you can plan the best options for your business. Farleys’ employment team can help in these circumstances. We have extensive experience on advising employers on redundancy situations as well as changing terms and conditions. Contact a member of the team today on 0845 287 0939 or send your enquiry by email.

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