Welcome to our August newsletter.
It’s been another month when keeping up with all the news about employment and work has been well nigh impossible. I’ll therefore focus on some of the more interesting aspects of this rapidly evolving situation, as well as taking a look at what we might expect in the coming months.
Germany’s Kurzabeit coronavirus furlough scheme is set to be extended to 24 months after the Finance Minister said that “The coronavirus won’t suddenly disappear in the next few weeks…Businesses and employees need a clear signal from the Government: we’ve got your back for the long haul in this crisis, so that no-one is being let go without need”. In the meantime, although it is coming under pressure, the British Government is sticking to its firm line that its furlough scheme will definitely be closed down at the end of October. If there is to be any departure from this stance it is likely that it will be limited to some of the hardest hit sectors, such as might clubs and theatres.
If the furlough scheme does end as scheduled, it is widely anticipated that there will be a huge surge in redundancies as employers not only confront immediate cashflow crises but also adapt to radically revised working arrangements. Among the most recent announcements of significant job cuts are Marks & Spencer (7000 jobs) and Pizza Hut (1100 jobs), while the potential liquidation of Debenhams could add a further 20,000 job losses. It is hard to see how the High Street will fully recover, even in the longer term.
Changes to the furlough scheme from 1 September
From 1 September the Coronavirus Job Retention Scheme will pay 70% of wages (up to a cap of £2187.50) for the hours that furloughed employees do not work. Staff must still be paid 80% of their usual wages for hours not worked, up to a cap of £2500 per month, so employers must top up the difference. The caps are proportional to the hours not worked. For example, if an employee works for half their usual hours in September, the cap is £1093.75 (half of £2187.50). As in August, employers must also pay employees’ NI and pension contributions.
£9 million of no-strings grants still available for Liverpool SMEs
Meanwhile Liverpool City Council has reported that £9 million in grants to qualifying SMEs are still going unclaimed. Deputy Mayor Gary Millar said “Liverpool really wants every single business that is eligible to apply for this funding…This is money for Liverpool firms that does not have to be paid back by those companies, and has no conditions attached as long as they meet the criteria”. Further information is available here.
Latest HMRC and Treasury statistics
As at 16 August a total of 9.6 million jobs had been furloughed with 1.2 million still furloughing at a cumulative cost of £35.4 billion.
There have been 2.7 million claims made under tranche 1 of the self-employed income support scheme at a cost of £2.7 billion. Tranche 2 claims opened on 17 August and 269,850 claims have been made so far with a cumulative cost of £768.9 million.
496,000 VAT payments have been deferred, worth £27.5 billion and £233.7 million has so far been claimed under the Eat Out To Help Out Scheme.
There have been 60,409 CBILS loans with a value of £13.68 billion and 516 Large CBILS loans worth £3.5 billion. 1.17 million bounce back loans have been approved with an aggregate value of £35.47 billion.
Self-isolating (quarantine) after returning to the UK
The removal of France from the “approved list” of countries for travel corridors has added substantially to the number of people who are required to self-isolate for 14 days on their return to the UK.
It seems that many people are unaware of just how strict the restrictions are. You are not allowed to leave your home at all, even for exercise or any shopping, and social distancing must be observed within the household. You should not have any visitors, other than in an emergency or for care or assistance and in respect of limited critical public service.
As I reported last month, employment law is not well-placed to deal with this situation. There is no requirement to pay employees during their quarantine and a failure to return to work on schedule could (at least theoretically) be treated as a disciplinary matter.
”Dismissal should be a last resort and employers should consider alternative arrangements first, such as agreeing with employees to take annual leave or unpaid leave. Where possible, employers should explore the option for the employee to work from home or to agree work that can be completed from home.”
What you must not do as an employer is to require people who are quarantining to return to work before their period of self-isolation is completed.
Extended list of locations where face coverings are required
With effect from 8 August the list of places where a face covering must be worn was extended to include:
- premises providing professional, legal or financial services
- cinemas, theatres, bingo and concert halls
- museums, galleries, aquariums, indoor zoos/visitor farms, or other indoor tourist, heritage or cultural sites
- nail, beauty, hair salons and barbers – other than where necessary to remove for treatments
- massage parlours
- public areas in hotels and hostels
- places of worship and funeral directors
- libraries, public reading rooms and community centres
- social clubs
- tattoo and piercing parlours
- indoor entertainment venues (amusement arcades, funfairs, adventure activities e.g. laser quest, go-karting, escape rooms, heritage sites etc.)
- storage and distribution facilities
- veterinary services
- auction houses
It has since been clarified that although the requirement applies to high street solicitors, those who permit access on an appointment-only basis are excluded.
What to expect in the coming months
Recent research has shown that one in eight workers are still on furlough. Of those, 67% are having their wages topped up by their employer. It’s also clear that many office workers are continuing to work from home and, as reported last month, some major employers have indicated that this will remain the case until at least early 2021. Earlier this month it was estimated that 34% of office workers have returned to their workplaces. This is far lower than in other European countries (83% in France and 76% in Italy).
However, the counterpoint to this is that these countries have seen significant increases in infection rates. On 19 August, Germany recorded 1707 infections, the highest since 26 April. Spain saw 3715 new infections while France saw 3776 new infections and 399 active clusters. New French Prime Minister Jean Castex has said that they now know that a major contributor was the early return of office workers. The result is that, with effect from 1 September all office workers (other than those in individual offices) will have to wear face coverings throughout the working day when they are office-based and numerous locations including major cities have introduced compulsory mask wearing including outdoor spaces. So far, the British Government has said that it does not intend to introduce equivalent measures but we know from the last few months that intentions often don’t match the reality.
Employers have been making enquiries about the compulsory testing of employees. The current position is that, other than in locations where testing is mandatory, e.g. care homes, testing should be voluntary. Guidance is available from the Information Commissioner’s Office.
The guidance for clinically extremely vulnerable people was updated to provide that shielding has been “paused” from 1 August. While this means that affected individuals can resume some sense of near normality, Government advice remains that they should continue working from home wherever possible. It is widely thought that a more refined and targeted form of shielding will be reintroduced this autumn, hence the Government’s use of the word “paused”. It is also worth noting that shielding still applies for those who are in local lockdown areas.
Job Retention Bonus
I briefly mentioned the Government’s announcement about a job retention bonus in last month’s newsletter. Further details are now available and the main requirements to qualify for the bonus are as follows:
- employers will receive a one-off payment of £1000 for every previously furloughed employee if they remain continuously employed until the end of January 2021
- qualifying employees must earn at least £520 a month on average between the beginning of November and the end of January
- qualifying employees include those who were furloughed after the main scheme closed on 10 June (e.g. returning from paternal leave and military reservists)
- TUPE transferred employees are also included.
Understandably, those who are serving notice for redundancy at the end of January will not be included.
Well, that’s it for this month. I could have continued but there will no doubt be much more to report next month. No time for blog posts this time but I will try to add some case reports in the next couple of weeks.
Kind regards and, as I say each month at the moment, best wishes during this difficult time.