Following the announcement of its third national lockdown on 5 January 2021, the UK government has updated its guidance on the Coronavirus Job Retention Scheme, stating that employers may furlough employees in circumstances where an employee’s health has been adversely affected by COVID-19 or where the employee is prevented from working or required to work reduced hours due to COVID-19 or care responsibilities as a result of lockdown.
This change to the Coronavirus Job Retention Scheme (CJRS) represents an extension to the previous scope, which focused on roles that would otherwise be redundant, and is likely to apply to those employees who are clinically extremely vulnerable or deemed to be at the highest risk of severe illness from COVID-19 following public health guidance. This expansion will also apply to employees who have caring responsibilities as a result of COVID-19, and therefore includes employees who are caring for children at home due to the closure of schools and childcare facilities, or caring for vulnerable individuals within their household.
It is important to note that there is no “right” on the part of any employee to be placed on furlough leave under the CJRS. However, while those individuals who are extremely clinically vulnerable are likely to benefit from sick pay provisions, this will not generally be the case for employees with caring responsibilities, who may find themselves unable to work without any provision for continued pay. Such an employee may well turn to their employer to ask to be placed on full or part-time furlough leave in order to allow them to meet these caring responsibilities. The employer will in turn need to decide whether it is willing to place such employee on furlough leave and claim under the CJRS to cover the employee’s wages (up to the current cap of £2,500 per month).
Larger employers that have not suffered significant financial impact as a result of the pandemic must consider whether it is appropriate to rely on government funds to support staff in these circumstances. This is particularly pertinent in light of HM Revenue & Customs’ (HMRC’s) announcement that from February 2021 it will begin publishing on GOV.UK on a monthly basis details of employers that have made claims under the CJRS. Details will include the name of the employer, the company number (for companies and limited liability partnerships), and an indication of the value claimed under the CJRS within a banded range, starting at £1 to £10,000 and rising to £100,000,001 and above.
In light of the potential publicity and reputational impact, employers will need to consider carefully whether to claim under the CJRS or whether alternative measures to support working parents and carers can be implemented instead. Employers will need to strike a balance between ensuring that business and operational needs are met, whilst also supporting those who are struggling to balance their responsibilities at home with the demands of their role. Combining these competing obligations is likely to be particularly challenging for single parents and other individuals whose roles cannot be carried out flexibly, and it is important that employers do what they can to support employees in these circumstances.
Employers should continue to facilitate working from home for clinically extremely vulnerable employees and for those who have been advised by the UK government to not attend work if they cannot work from home.
For those employees who are unable to work from home within their current role, employers should consider offering an alternative role or changing their working patterns temporarily to enable such employees to work from home. Where this is not a viable option, we anticipate that employers will implement paid sick leave to the extent possible.
As noted above, the UK government has stated that under the CJRS, extended until 30 April 2021, employers can now place employees on furlough where they are unable to work from home or where they are working reduced hours as a result of caring responsibilities resulting from COVID-19, including childcare responsibilities or the need to care for a vulnerable individual in their household. This is permitted provided that the employee in question was on the employer’s payroll on 30 October 2020.
Inevitably, there will be public scrutiny of which companies rely on public funds through the CJRS. For some employers, it may be considered appropriate and necessary to claim under the CJRS. However, employers in a stronger financial position may prefer to consider other ways in which to provide support to employees who are struggling or unable to work due to caring responsibilities. This includes allowing flexibility in the way that employees’ roles are carried out wherever possible, including the times at which they are available to work, and recognizing that plans may need to change on short notice.
Where employees need to physically attend the workplace, employers should consider whether the individual might have “critical (key) worker” status, which would allow their children to attend school or other childcare settings. Employers can also encourage and permit the use of annual leave (possibly also extending paid annual leave provision); introduce another form of paid leave (for example, reduced pay throughout a specific period of absence); or offer the option of unpaid parental leave. Parents have a statutory entitlement of up to 18 weeks’ unpaid parental leave where they have children under the age of 18 (capped at four weeks per year unless otherwise agreed by the employer). The more flexible the employer can be, the more likely it is that employees will show loyalty and gratitude going forward, and the more positive the impact on the employer’s culture and reputation.
Several large employers, including financial and professional services firms, have amended their policies to provide additional support for staff who are balancing work with childcare commitments and caring responsibilities. Policy amendments include offering a short-term enhanced holiday scheme with an additional day of holiday for every four days taken for caring responsibilities, and enhancing “time off for dependents” policies by offering paid emergency leave of up to five days. Other measures some employers have adopted include offering additional paid leave for parenting emergencies arising as a result of the new restrictions, implementing reduced pay at 40% for up to 10 weeks’ leave, and restricting early meetings so that working parents are able to set up their children for daily online classes.
Employers should exercise caution when considering whether to furlough employees under the CJRS, taking into account their specific circumstances and financial situation. They should, however, aim to be as flexible as possible in response to employees’ needs, including by adjusting working patterns and potentially offering forms of paid leave in specific circumstances.
While it is important to ensure that the operational needs of the business are met, in these unprecedented and challenging times, employers will undoubtedly want to demonstrate their full support to their employees by offering flexibility wherever possible.
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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
London
Matthew Howse
Louise Skinner