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Index
1. Statutory Sick Pay; eligibility, notification, etc.

Eligibility
Notification
Contractual sick pay
2. Coronavirus Job Retention Scheme (CJRS) – “Furlough”

Furlough and holidays
Consent and furlough
Shielding and furlough
Public funding and furlough
Selection for furlough
SSP and furlough
Employees “with caring responsibilities” and furlough
Other leave and furlough
Calculation of pay and furlough
NMW and furlough
Furlough and other statutory payments
3. Provision for self-employed
4. Social distancing and health and safety at work
5. Emergency volunteering leave
6. Holiday rollover

Statutory Sick Pay; eligibility, notification, etc.
Eligibility

Statutory Sick Pay (SSP) is payable when an employee is incapable of work. One of the first issues the Government addressed as the pandemic took hold in the UK was whether SSP is payable when employees are not ill, so not incapable for work, but are self-isolating and so advised not to work in accordance with Public Health England guidelines. Ideally, such employees should work from home and be paid their normal wage or salary. This, however, is not always possible, especially with service delivery roles.

Starting with changes made on 13 March 2020, a person is now deemed incapable of work because they are self-isolating to prevent infection from Covid-19 if they are;

Suffering from symptoms of the virus (however mild) and are staying at home for seven days from the day the symptoms started;
Living with someone who is self-isolating because of symptoms of the virus and are staying at home for fourteen days (from the day the symptoms started); or
Already self-isolating in accordance with the second bullet, then develop the symptoms of the virus and have to stay at home for a further seven days starting with the day the symptoms started.
Shielding because they are vulnerable and have received notification from the Government to that effect (this is only applicable from 16 April 2020).
In any of these situations, the individual would, subject to other eligibility criteria, be entitled to SSP. In addition, following changes made on 28 March and backdated to 13 March 2020, SSP is payable from day one of the absence and not day four, where the absence is due to coronavirus.

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Notification

Evidence of sickness is required after seven days of absence, and this is, of course, problematic where GP surgeries/hospitals cannot cope with the extra workload of signing Fit Notes, and self-isolation precludes leaving the house in any event. To address this, the Government has introduced Self-Isolation Notes. This is an online service whereby employees can complete the relevant details, and print a note confirming their name, date-of-birth, reason for isolation and date from which the note is effective. For those employees who may not have access to a computer, a friend or someone else can carry it out on their behalf.

Clearly, these notes are reliant on a high level of trust from employees to complete the information accurately and truthfully.

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Contractual sick pay

Contractual sick pay is, of course, dependent on the contents of the contract or policy. Where the wording in the contract or policy closely follows the SSP Regulations, then an employee might be entitled to contractual sick pay even if they are asymptomatic and have self-isolated. Where the wording doesn’t follow the regulations, then it seems less likely that the employee would be entitled to contractual sick pay. Should they wish to do so, employers can use their discretion and pay contractual sick pay, even when the employee is not entitled. We suggest that, where this happens, it is made clear this exercise of discretion is not a change to the policy or contract.

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Coronavirus Job Retention Scheme (CJRS) – “Furlough”
This scheme, first announced by the Government on 20 March 2020, introduced the word “furlough” to our vernacular; a word that is now used as if we have known about it forever! At its core, the CJRS seeks to assist employers in avoiding mass redundancies, because of the economic effect of the pandemic, by providing a grant so that these employees can continue to be paid 80% of their wages while not working. The essential aspects of the scheme remain as follows;

Employers can place employees on furlough leave (a period of paid absence) and reclaim 80% (up to a maximum of £2,500) of the employees’ wage back from the HMRC in addition to any national insurance contributions and minimum automatic enrolment pension contributions.
Any organisation can claim provided they had a PAYE scheme in place at 19 March 2020, but public bodies and those in receipt of public funding for staff costs have some restriction on when the scheme can be used, as detailed below.
All employees are eligible provided they are on PAYE (this includes zero-hour workers) and were employed on or before 19 March 2020.
The scheme started on 1 March 2020 and will continue until 30 June 2020.
Whilst on furlough leave, an employee will accrue holiday but cannot undertake any work, volunteering or training that would provide services for or profit their employer in any way.
The minimum period of furlough leave is three weeks; an employee can be furloughed multiple times and can be taken off and put back on furlough provided each period is for three weeks.
Employees who were made redundant or stopped working for whatever reason post 28 February 2020, can be re-employed and put on furlough even if they are not re-employed until after 19 March 2020 provided they were on PAYE on 28 February 2020 and an RTI submission was made to the HMRC in respect of that employee on or to 28 February 2020.
The online reclaiming programme for employers was launched 20 April 2020.
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Furlough and holidays

Furloughed employees accrue holiday whilst on furlough. The issue of whether they can take holiday during furlough and holiday pay is addressed in the Government’s Employee Guidance. It states that holiday can be taken whilst on furlough and this does not break the period of furlough. In accordance with the Working Time Regulations 1998, holiday pay should be paid at an employee’s normal rate of pay. Therefore, where employees are furloughed at 80% of pay, employers will need to pay the additional 20%. This additional amount cannot be claimed back under the CJRS.

The Employee Guidance further notes that if employees work Bank Holidays, then this will be included in furlough pay. However, if Bank Holidays are usually taken as leave, then these days will need to be topped up to 100% or holiday given in lieu.

Rather ominously, however, the Employee Guidance does note that this policy on holiday is being kept under review! Employers will, therefore, need to make clear to employees that the right to take holiday during furlough is also going to be kept under review.

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Consent and furlough

The employer will determine which employees are furloughed and contact those employees to that effect. The issue of whether the employee needs to consent to be furloughed is not yet clear. The Treasury Direction of 15 April 2020 stated that employers must have employees’ consent in writing for any period of furlough. The Government’s Guidance to employees does not confirm that written consent is required by furloughing employees. It states that “to be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purpose of claiming the CJRS”.

From a legal perspective, if an employer is not topping up the 80% paid by the Government, then failure to get consent exposes the employer to an unlawful deduction of wages claim.

Clearly, the best course of action is to have an employee’s signed furlough agreement on file. The Direction does not prohibit retrospective permission, and so employers could request consent after employees have been furloughed. However, in the absence agreement between the Treasury Direction and the Government Guidance, written notification of a period of furlough to an employee (retained for five years) and the employee not attending work after that letter or notification has been received, is likely to be sufficient for claiming reimbursement of wages under CJRS.

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Shielding and furlough

The Government guidance for Employers, 20 April 2020 states that employees who are shielding in line with public health guidance can be furloughed. This, however, conflicts with the SSP Regulations published on 17 April together with the Treasury Direction of 15 April that cast doubt again on this issue. The SSP Regulations state that shielding employees are deemed sick for the purposes of SSP and so should be paid under that scheme (see note above under sickness). The Treasury Direction states that employees who are on SSP could not be furloughed but must continue with the SSP scheme until that was exhausted. Putting these two together (which we don’t think the Government has done) would mean the following; shielding employees cannot be furloughed until they have exhausted their SSP entitlement. However, this conclusion is at odds with the Guidance both in force at the time the Treasury Direction and SSP Regulations were published and the latest guidance published on 20 April. Again, we assume that given the speed with which these schemes are being put together there has been an error in the Direction and we await clarification. In the meantime, given the clarity of the guidance on shielding, we would not advise any changes to current furlough arrangements for shielding employees.

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Public funding and furlough

The Government has made it clear that it does not expect public sector organisations to use the Furlough scheme as their employees will continue to work in key worker roles. However, the question arises for non-public-sector employers where funding is received for staff costs. The underlying message from the Government is clear; there should be no double recovery, so an employer cannot receive monies from the public purse for the role and then for 80% of the role when it is furloughed. Where the funding is ring-fenced for specific staff costs and these roles are necessary to provide services to respond to the crisis, then these roles cannot be furloughed. In other cases, we consider it may still be possible to utilise the scheme.

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Selection for furlough

The Government guidance on selection states that “Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

In view of this we would advise the following;

Ensure any criteria used to select furlough workers are clear, transparent and non-discriminatory.
Be especially careful with selection where you cannot top up the 80% of salary as any selection on potentially discriminatory grounds could result in a finding of less favourable treatment due to the deduction in pay.
Before applying criteria, offer voluntary furlough leave to employees (although be aware that employees who you want to remain working might volunteer).
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SSP and furlough

The guidance provides that where SSP is payable to an employee at the time they are placed on furlough, the furlough period will not start until the SSP period has ended. The Direction states that furlough cannot start until eligibility for SSP has ended. There is again a contradiction between the guidance and the Direction on this point. We consider the guidance is likely to be the correct position.

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Employees “with caring responsibilities” and furlough

Employees with “caring responsibilities” who cannot work because of these responsibilities can be furloughed. The responsibilities must arise out of the coronavirus crisis, and the Government uses the example of looking after children. This is extremely broad in its drafting. Key workers can still send children to school, so the need should only arise where the employee is not a key worker, and there is no way that they can do their work at home.

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Other leave and furlough

Similarly, if an employee is on any form of statutory leave, unpaid sabbatical or other unpaid leave on or before 28 February 2020 and then placed on furlough, the furlough period would not begin until the expiry of the period of leave previously agreed.

The Direction provides that no claims can be made under the CJRS for unpaid sabbatical or other unpaid leave beginning before or after 19 March 2020. This is a surprising requirement as it would mean anyone placed on unpaid leave because of coronavirus can’t now be paid under the scheme until that unpaid leave ends and the notification and consent requirements have been met, and we consider the Direction may be wrong on this point.

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Calculation of pay and furlough

The Government has released separate guidance for employers to calculate the rate of pay during furlough and the Treasury Direction goes into further detail about how pay is calculated under the Scheme.

The Direction introduces the concept of a fixed-rate employee. This is essentially very similar to someone who is a salaried-hours worker for National Minimum Wage (NMW) purposes. In summary, they are people who are entitled to an annual salary in respect of basic hours and are not entitled to any other payment in respect of those hours. The full list of conditions at paragraph 7.6 of the Direction should be checked in full. When calculating what can be reclaimed for fixed-rate employees, the CJRS will not pay out in respect of anything that goes beyond their basic salary at 19 March 2020.

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