The COVID-19 pandemic has hit the economy like an express train in the last seven days and it looks as though it will continue to be impacting us for the foreseeable future.
Many employers are now taking emergency measures to protect their businesses and their staff. Some have already moved to remote working for some staff and some employers have even closed their offices allowing all employees to work from home.
However, this is not practicable for all employers and it is concerning to hear talk of a government imposed lockdown. If this were to happen what would it mean for your staff, do you still have to pay them?
It is hoped that, should the government take such a significant step as closing down business premises, further support and announcements will be made. Indeed we are expecting an announcement from the Chancellor this afternoon (Friday 20 March) about support to employers for paying wages which may help to cushion the blow of such a decision. However as things stand there are a few options open to employers;
- If the employee can work from home then they should be allowed to do so to the best of their ability. If this can happen then the employee would get paid in the usual way
- If the employee can’t work from home
- Then you may wish to activate ‘lay off clauses’ if their employment contract allows you to. Lay off is a specific legal right to send your employees home on little or no pay for a period of time which must be specifically included in the employee’s employment contract. There is however a potential sting in the tail in that after 4 consecutive weeks laid off the employee can elect to be made redundant if you cannot return them to work, potentially placing you in an invidious position if you cannot afford redundancy payments at that time but equally cannot have them return
- If there is no lay off clause then the employee is entitled to be paid under their contract but you can insist on the employee taking holiday up to their holiday allowance
- Alternatively you could agree with them a period of unpaid leave as an alternative to being made redundant.
Although imposing a lockdown is likely to be one of the government’s last steps, it is being actively considered (particularly in London), and it is important therefore that employers are aware of what the implications could be for them, for example:
- How many of your staff can work remotely? What do you need to do to enable that?
- If you were to make your staff redundant, how much would it cost (remember also notice pay and holiday pay as well as redundancy pay)?
- When the lockdown ends, how many staff do you need to retain to open your premises safely? How quickly can you recruit them?
- What government/other help is there available to your business to help in payment of wages?
- What help can your employees get, for example mortgage repayment holidays?
This situation remains very fluid with new announcements and initiatives brought forward on a daily basis.
If you are concerned about a potential lockdown please do contact our Employment Team and we will be pleased to talk through the current situation and what steps you may be able to take.