We are in unprecedented times. The Government has advised measures of social distancing including the avoidance of bars, pubs and restaurants. Thousands of businesses will be forced to close due to a downturn in trade or staff being off unwell or in isolation.
We all need to pull together and think flexibly and sustainably. This will have to be a group effort. Employees may need to agree a reduction in pay now to try and retain their roles in the long run. Businesses may have to make redundancies and conduct redundancy processes over a very short space of time to try and stay afloat.
We understand that in this uncertain time you will have lots of questions about your employment and your rights. We have created this factsheet to address some frequently asked questions as well as provide employees and business owners with some ideas to help protect work moving forward.
Can my employer reduce my pay?
In short, yes but you have to agree.
Most employment contracts will contain a clause setting out that the terms can be varied or changed by your employer.
Your employer should give you reasonable notice of its proposed changes. There is no legal definition of reasonableness but we would advise that the bigger the reduction in pay, the more notice should be given.
You may decide to agree to a pay reduction as this could help to secure your role in the longer term. We would advise trying to agree with your employer how long the change to your pay will last so that you can adequately plan and budget. But, be mindful that your employer may be unlikely to know how long this will last and its impact on the business.
You should tell your employer as soon as possible if you do not want to accept the change. If you carry on working without saying anything after the change is made, you are deemed to have accepted the new terms.
Your employer may dismiss you if you refuse to agree. Or, your employer can terminate your existing contract and offer you a new one encompassing the new terms.
There are five potentially “fair” reasons for dismissal and one of these is known as “some other substantial reason (SOSR)”. We anticipate that employers will be able to rely on Coronavirus and the need to reduce costs as a justified SOSR where employees refuse to agree to a pay reduction where the business has opted to keep staff by reducing pay as opposed to making redundancies.
Can I be made redundant?
A business can make redundancies in three circumstances:
- Business closure
- Workplace closure
- Reduction in need for the business to carry out work of a particular kind
All three scenarios above could happen in the face of the Covid-19 pandemic. We hope, for the moment at least, we are mainly dealing with scenario 3. Using the example of shop workers; where there are less shoppers due to social distancing measures, stores do not need as many staff and therefore may need to make redundancies to stay afloat.
If your employer is experiencing a downturn in trade or business, or forced to close, you could be made redundant.
Am I entitled to redundancy pay?
You may be entitled to redundancy pay under the law (statutory redundancy) or under your contract of employment (contractual redundancy).
Statutory redundancy
To qualify for a statutory redundancy payment, you must have worked for your employer for 2 years or more. Statutory redundancy is calculated by your age, length of service and weekly pay. You can calculate your statutory redundancy entitlement here: www.gov.uk/calculate-your-redundancy-pay
If you qualify for a statutory redundancy payment, your employer is under a legal obligation to pay you this.
Contractual redundancy
You may be entitled to an enhanced redundancy payment as part of your employment contract. If this is the case, your employer must pay this to you or you can bring a claim against them for breach of contract.
Commonly, redundancy packages and processes will be set out under a separate company policy. Policies should set out whether they are contractual or discretionary. If you are unsure about whether you are entitled to a contractual redundancy payment please get in touch.
Redundancy (if genuine) is a fair reason for dismissal. You may have a claim for unfair dismissal if your employer does not follow a fair and reasonable process for making you redundant.
Please note that we are in unprecedented times. The concept of “reasonableness” must reflect the extraordinary issues we are facing. Business may be able to justify shorter periods of consultation for example – it is difficult to predict the view that a tribunal will take on this but we anticipate flexibility in response to these circumstances.
If you think you may have a claim for unfair dismissal, please get in touch.
Notice periods
If you are made redundant you may be entitled to the payments set out above and your notice period/pay.
Your contract will set out your entitlement to notice. If your contract is silent on this then statutory notice will apply.
Please get in touch if you need help working out your notice entitlement.
What is being laid-off?
A lay-off is where you are off work and not paid for at least one working day where you would otherwise normally be working.
If there is a lay-off clause in your contract, your employer can exercise this at their discretion. If you do not have a lay-off clause, your employer must gain your consent.
It may be preferable for you to agree to be laid-off or take a sabbatical for a period of time with the security of your job to come back to, rather than being made redundant.
There is no limit on how long you can be laid-off for.
What is short time working?
Short-time working is where your normal or prescribed hours are reduced.
If there is a short time working clause in your contract, your employer can exercise this at their discretion. If you do not have a short time working clause, your employer must gain your consent before reducing your hours.
If you are on a zero hours contract, there is no obligation for your employer to provide you with any work at any time.
It may be preferable for you to agree to reduced hours for a period of time to try and retain your job in the long term.
Guaranteed Payments
If you have at least one month’s service and you are not provided with work for one complete day on which you would normally be required to work, you are entitled to a statutory guarantee payment.
The current rate is £29 a day or your normal daily pay if less.
If your hours are reduced but not your days, will not be entitled to guarantee payments.
Guaranteed payments are limited to 5 days in any 3-month period.
What is Statutory Sick Pay (SSP)?
The Government has confirmed that those who cannot work because they have Coronavirus or are self-isolating in accordance with Government guidelines are entitled to statutory sick pay from day one of being off/ill.
SSP is £94.25 per week and is payable by your employer for up to 28 weeks.
It will be paid in the same way as your normal wages, for example weekly or monthly.
Do I qualify for SSP?
You must be an employee to claim SSP and earn an average of at least £118 a week. If you do not know whether you are an employee, please get in touch. Agency workers can also claim SSP.
The law says you must provide your employer with a fit note if you are unwell for more than 7 days. NHS online offer a digital service to get a sick note.
It is important that you keep your employer fully informed of your health and symptoms throughout this time.
Can I be forced to take annual leave?
Yes. Your employer can direct you to take annual leave on specific dates and can prevent you from taking annual leave on specific dates.
These measure may be taken to try and save costs if you are unable to work from home and your workplace is closed for example.
Your employer must give you notice to take annual leave on dates it specifies. The notice must be twice the length of the period of leave you are being asked to take.
For example, if your employer is directing you to take 1 week off, it must provide you with 2 weeks’ notice.
Can I roll over or sell back my annual leave?
Roll over
If you are unable to take annual leave because you are ill this can be rolled over into the next annual leave year (up to 4 weeks). You cannot roll over annual leave that you were unable to take because you were self-isolating. This only covers scenarios if you are unwell.
Your company may have its own policy on rolling over annual leave. If you would like us to review your policy and advise you on your rights. Please get in touch.
Selling back
Some companies allow you to sell back your annual leave to them. This will be dependent on your employer’s policy. Your employer is likely to reserve the right to refuse a request for you to sell back leave.
You cannot sell back days if this will take you under the statutory minimum leave in any given annual leave year (28 days).
Sabbaticals
To avoid redundancy, you or your employer may request that you take a sabbatical. This is unpaid time off work but your position is secured for when you return. This may be an option that you would like to explore to try and avoid redundancy.
Your employer may invite staff to take sabbaticals in order to relieve financial pressure on the business. Your employer can only enforce a sabbatical if you have a lay-off clause in your contract (see lay-off above).
Negotiating your position
Over the coming weeks, you may be put at risk of redundancy. You should discuss with your employer if any other measures can be taken such as short time working or a period of lay-off as above to avoid this if these options are flexible.
Over the coming weeks, both employees and employers should be open minded on how best to ultimately preserve jobs or secure work going forward. We do not know how long this is going to last or the extent of the impact.
If there is anything we can do to help or you require specific advice on your current circumstances, please do not hesitate to contact us.