Focus has been on the sales of toilet paper, hand sanitiser and self-isolation, but consideration had to be given to the overall affect that the virus was having on businesses themselves and the potential risks to businesses facing a downturn in work.

Clients had contracts cancelled/postponed during their usual busy period, which meant that they had to question what they do with all of their employees who were still expecting to come into work and be paid, when they had no work.  So whilst advice on issues such as self-isolation and dependant leave was vital, no-one had addressed the question as to what happens to employees if businesses have a downturn in work.  

Businesses will need to review their employment contracts to see whether they have clauses allowing them to either lay off employees or place their employees on short-time working during any downturn in business.

Laying off employees means that the employer provides employees with no work (and no pay) for a period while retaining them as employees and short-time working means providing employees with less work (and less pay) for a period while retaining them as employees. This is a temporary solution to the problem of no work or less work saving the employer money during an unexpected downturn in its business or unforeseen circumstances such coronavirus.  

If the employment contract contains an express clause permitting lay-off or short-time working, then the employer will be entitled to exercise this right.  However, if there is no such term in the employees’ contract and the employer does this, then this will constitute a breach of contract entitling the employee to resign and claim constructive unfair dismissal or remain in employment and claim unlawful deduction from wages in the Employment Tribunal.

However to avoid this, the Government has put in place a Coronavirus Job Retention Scheme under which, all UK employers will be able to access support to continue paying part of their employees’ salary for those affected by lay off or even redundancy during this crisis.

To access the scheme, employers will need to designate those affected employees as “furloughed workers”, keep the employee on the payroll, but the employee will not be able to undertake any work for the employer whilst they are furloughed. This will enable the employer to claim a grant of up to 80% of the employees wage for all employment costs, up to a cap of £2,500 per month.  This scheme will be in place for at least 3 months from 1 March 2020, but it will be extended if necessary.

It is advisable that businesses should use this as an opportunity to review their policies, procedures and employment contracts to ensure that they are covered for the future.

Link here also to Government information pages

For help on this or other related Employment Law matter, please contact Emma-Louise Hewitt on 0808 166 8827 or email Emma at e.hewitt@sydneymitchell.co.uk

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