Hello, my name’s Paul Griffin and I’m head of the employment and labour team at Norton Rose Fulbright in London.
Following on from my series of videos at the beginning of the summer, when we looked at the Coronavirus Job Retention Scheme, I’m now going to look at some of the new restrictions that the Government has put in place and the effects that this has on the employment relationship.
The UK Government s has announced a new three-tier system of restriction in England to stop the spread of Coronavirus. Every local area will be classified as being on medium, high or very high alert, known as Tiers One, Two or Three. Those employers in Tier Three may find that they are required to close their workplace.
Employers in very high-risk category – Tier Three
Where the area is placed in the very high-risk category, the government has announced that it will work with local councils on the additional measures which will need to be taken. Currently for the area which falls within the Tier Three restrictions, most pubs and bars, gyms, leisure centres, betting shops and casinos will be required to close. Similar steps have been taken in Scotland where pubs and bars have been closed.
So what does this mean for employees working in those workplaces required to close temporarily? The government has announced additional support for businesses affected, under the extension of the Job Support Scheme. I will be looking at the Job Support Scheme, which applies where the workplace remains open, in a forthcoming video. This extension scheme is different and applies to those businesses which are required by law to close as a direct result of coronavirus restrictions imposed by one of the four governments in the UK. This includes a business forced to close but who can still provide delivery and collection services from their premises. Importantly the scheme doesn’t apply if the workplace has to close as a result of an outbreak of the virus among the employees and the local public health authority recommends that the workplace is temporarily shut down. It also won’t apply if a business chooses to shut because of a downturn in business as a result of the coronavirus – it is only where there is a legal requirement to close.
What can be claimed?
The employer can claim a grant of up to two-thirds of the normal pay for each eligible employee up to a limit of £2,100 per month. The whole of the grant must be used to meet the employees’ wages and pay costs. The employer can agree to top up the amount paid to the employee to the normal level of pay of the employee. The employee will have some additional costs, as it will still be required to cover employer National Insurance contributions and automatic enrolment pension contributions. As this is a change to the person’s terms and conditions regarding the level of pay, then the employer must agree the new scheme with the relevant staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
Eligible employees will be those who have ceased work for a minimum period of seven consecutive days. It appears from the fact sheet produced by the Government that the employee must also have been on the PAYE payroll of the employer and had a Real Time Information submission notifying payment in respect of them made to HMRC on or before 23 September.
The claim can be made for the period during which the premises are closed. If, when the premises re-open, the employer has reduced demand for working hours, then the employer can claim under the Job Support Scheme if it meets the criteria for that scheme. One point that the fact sheet clearly states is that employees can’t be made redundant or even put on notice of redundancy during the period for which the employer is claiming the grant.
Making a claim
The employer will be able to make a claim after the scheme comes into effect on 1 November and the claim should be made monthly in arrears. The first payments to the employers won’t be made until December 2020, so there will be some period of delay for employers in receiving the grant under the Scheme.
The Government proposal is that the scheme will last for six months and so will run until the end of April 2021. The issue for some employers is that the scheme doesn’t start until 1 November – but as you will know the first local lockdowns started on 14 October. Employers in that situation will have to rely on the use of the furlough scheme which is due to end on the 31 October, but there are criteria to be satisfied for them to be able to make a claim under that scheme.
As I mentioned, the Government has published a fact sheet on the scheme, which you can find on the government website, and we are awaiting for further guidance.
The most important point to bear in mind is that the situation with regard to restrictions being imposed on the workplace is constantly changing, so, you need to make sure that you are up to date on the government guidance and can react accordingly.
Please stay safe and I look forward to seeing you in my next video.