Over the last 11 months employers have faced huge challenges, from implementing furlough agreements and carrying out redundancy exercises, to dealing with Covid-related absences, making workplaces Covid-secure, and persuading staff to take their annual leave when they cannot travel internationally due to the restrictions. And, of course, the Brexit transition period concluded at the end of 2020.
With the anniversary of the first national lockdown in the UK fast approaching, and the government due to publish its Budget on 3 March, we take a look at some areas that you may want to consider to help your business stay a step ahead:
1. Furlough grant and notice periods- for furlough claim periods starting on or after 1 December 2020, employers can no longer claim for any days during which the furloughed employee was serving a contractual or statutory notice period, including where the employee has resigned. This marks a change from the earlier scheme rules that did permit notice to be claimed so long as that notice period was worked and was not a payment in lieu. You should therefore keep this updated guidance in mind when calculating potential dismissal costs, including the costs of any redundancy programmes.
2. Home risk assessments and flexible working - by law, employers are responsible for the health and safety of all employees, including those working from home. This means that businesses should conduct a risk assessment of their employees’ work activities at home if they haven’t done so already. Very soon, many people will have found themselves working at home for an entire year. Indeed, arrangements that were originally intended to be temporary may well become permanent at least for some part of the working week.
Do you have a clear flexible working request policy in place, and are managers fully aware of how to deal with flexible working requests from their reportees?
The safest way to carry out risk assessments at the current time is to provide your employees with information on working safely at home and ask them to complete a self-assessment of their workspace and equipment. The risk assessment should be suitable, but guard against inadvertently committing yourself to expensive obligations, such as purchasing new office equipment. That said, in some circumstances you may have obligations to make reasonable adjustments, which can include specialist equipment where an employee may have a disability, for example. Of course, if changes are needed for the employee to work at home in a safe and healthy way, the employer is responsible for this. Employees themselves have a responsibility to take reasonable care of their own health and safety also.
Have risk assessments that were carried out earlier in 2020 been reviewed? Make sure you are up-to-date with the health, safety and well-being of your staff.
3. Planning redundancy programmes - with the furlough scheme due to end at the end of April, many firms will be turning their attention to the question of whether they will be able to continue to employ all their staff. Where the collective consultation duty is triggered, because a business will be making 20 or more redundancies in a 90-day period, you will need to ensure that you consult collectively with the appropriate Trade Union or existing staff representatives, and that you meet the 30-day (or 45-day, for 100 or more redundancies) deadline for commencing consultation. With the practical challenges of appointing representatives and carrying out elections remotely, you may want to plan even further in advance. Consideration should be given to how these issues may impact on the timeframe for any redundancy consultation period (whether that be on an individual or collective basis) that applies to your business.
Work out the potential costs of statutory (and any enhanced) redundancy pay entitlements and how you intend to deal with notice periods. Remember notice pay can’t be claimed from the furlough scheme anymore.
4. Get staff booking their holidays - many businesses now find themselves in the unenviable position of having employees with a large amount of untaken leave. If your company’s holiday year ends at the end of March, it is essential to actively encourage employees to book their holiday entitlement now, and to require workers to take holiday during furlough. Even if you have permitted the carry-over of annual leave under The Working Time (Coronavirus) (Amendment) Regulations 2020 because it was not reasonably practicable for a worker to take some, or all, of the holiday to which they were entitled due to the coronavirus, then it’s still worth reminding them to book and take time off regardless of the travel restrictions. Many employees are going to want to wait until they can travel abroad but given that travel restrictions are set to last for some months, a reluctance to use annual leave will only cause further difficulties for businesses later in the year.
5. IR35 changes - many employers will be all too aware that, from 6 April 2021, all medium or large-sized private sector firms will be responsible for deciding employment status where they engage a contractor via an intermediary. This means that, if the off-payroll working rules apply, your workers’ fees will be subject to deductions at source for tax and National Insurance contributions. It is recommended to carry out a full review of all contractors currently working within your business to try and identify which may be caught by the new rules. If you have many contractors that are likely to fall within the scope of IR35, consider what the true costs are going to be and the additional payroll burden. If you’re considering terminating contracts, it would be sensible to think about doing this before the new rules operate. After they do, if you determine that an individual has employment status for tax purposes, that could make it more difficult to defend redundancy or unfair dismissal claims. Of course, the IR35 changes will not affect those that are genuinely self-employed.
Takeaway for employers
This remains a difficult and uncertain time for employers and employees alike but, with the roll-out of the vaccination programme (read our recent newsletter about this here), the hope is some return to normality in the not-too-distant future. Even so, there are likely to be longer-term challenges such as increased working from home and ongoing issues around sickness (for instance, as a result of long-Covid) as well as the strain on employees’ mental wellbeing. Wide-scale job losses are also expected to continue as we approach the end of the furlough scheme. Planning for any changes to your workforce early is highly recommended. Please get in touch with your usual 3CS contact to find out more about how we can support your business.