We are now all battling the business effects of the Coronavirus so it’s time to consider options in the event of adverse financial and commercial impacts on the business.

Recruitment freeze

Review current vacancies being advertised and pull where possible, reducing numbers through natural wastage.

Any interviews arranged, could be delayed/postponed.

Any pending starters could be reviewed and start dates delayed, ideally on agreement due to risks of breach of contract claims, brand reputation and liability for notice pay.

Explore options of taking unpaid leave immediately

Seek volunteers/interest in taking unpaid leave, addressing reduced weekly hours or blocks of leave.

Some employees may agree to reduce their daily working hours temporarily, for example starting later and/or finishing earlier for reduced pay.

Each will require agreement with each individual.

Holiday entitlement

Explore the feasibility of employees taking some holiday entitlement, perhaps combined with a period of unpaid leave so there is ease on cash flow without the employee being at a detriment.

Emergency and parental leave

With the school closure announcement, some employees may require emergency leave followed by unpaid parental leave, which may help reduce payroll costs.

Employees are entitled to a reasonable amount of unpaid emergency leave to enable them to deal with an emergency involving a child or other dependant.

With most schools closing on Friday 20th March, if staff are unable to find childcare cover for the following Monday, this can be classed as emergency leave.

After 1 years’ service, employees with children are entitled to take unpaid parental leave.

The maximum entitlement is eighteen weeks unpaid leave for each child, which may be taken in blocks of one week at any time up to the child’s eighteenth birthday.

Lay off/Short-time working

Check employee contracts to see if the Company has the right to lay employees off or enforce short-time working.

Before executing layoffs or short time working, careful consideration should be given to determine roles, to ensure that the service level demand at the time can be maintained.

If employees are laid off for a full day, for each workless day in any 3 month period, up to a maximum of 5 days, the employee is entitled to be paid a “guarantee payment” in respect of that day.

The guarantee payment is not made if any work has been done in the day in question, so if you decide to reduce hours by a few a day they are not entitled.

The maximum amount of statutory guarantee payment payable to each employee in respect of any day is currently £29 (soon to rise to £30 per day).

This is a short-term solution as there are time limits that an employer can impose short-time working and lay-offs before employees become entitled to resign and claim a redundancy payment.

If there is no contractual right then lay off/short-time working must be reached in agreement with the workforce.

Steps to take if considering layoffs

  1. Check you have the right to impose this.
  2. Determine which roles are affected and by how much time you are looking to reduce.
  3. Communicate the proposal – prepare a brief statement to explain the rationale and entitlements to statutory guarantee pay.
  4. Agree on a start date.
  5. Confirm it in writing.
  6. Monitor timescales so you are aware at what point you may receive claims for redundancy pay.

Redundancy

If the situation became acute for the business, you can address redundancy.

Determine which roles can be reduced or are surplus and the reason why.

Employees would need to be put at risk of redundancy and consulted with in accordance with all usual consultation requirements.

Be mindful of collective consultation requirements if you’re making 20 or more employees redundant within any 90-day period at a single establishment.

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