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Archive

July, 2020

Payments covered by the CJRS when ending employment

Posted on: July 13th, 2020 by Ginny Hallam

Following an amendment to the most recent Treasury Directive, concerns have been raised that employers could be forced to return any payments received under the Job Retention Scheme in respect of termination payments. 

The amendment (paragraph 2.2, for anyone keen to read it) simply confirms that any money claimed under the Scheme is to be used to continue to pay employees. So what does that mean in practice?

You can use the Job Retention Scheme for…

Pay for serving out notice on furlough – an employee can serve out their notice whilst on furlough. Where this is the case, you can use the Scheme towards the pay they receive during notice (for as long as the Scheme is available).

There are complex rules around how much pay should be paid to the employee serving notice on furlough (which depends on the terms of their employment contract), so you may need to top up beyond the furlough pay you can recover under the Scheme.

Holiday pay during notice served on furlough – if you’re requiring an employee to take holiday during notice served on furlough, then in the usual way (and for as long as the Scheme is available) you’ll be able to use the Scheme to cover the holiday (although you’ll have to top up the holiday pay to 100% of usual pay yourselves).

You can’t use the Job Retention Scheme for…

Payments in lieu of notice – if you end the employee’s employment with a lump sum notice payment then you are not entitled to recover that payment from the Scheme.

Statutory redundancy payments – it is clear that the Scheme cannot be used to fund statutory redundancy payments. Paragraph 2.2 of the Treasury Directive clearly states that the purpose of the money claimed is to continue the employment of employees and to pay them accordingly.

Ex gratia payments – clearly payments that you’re choosing to make without any contractual requirement to do so, and that aren’t in return for work done, cannot be claimed through the Scheme.

Lump sum payment in lieu of holiday – if an employee has unused accrued holiday entitlement when their employment comes to an end, this cannot be claimed through the Scheme.

There are complicated rules around amounts which should be paid to employees on termination – always take advice

 

This update is accurate on the date it was sent (13 July 2020), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

A plan for jobs – chancellor’s announcement

Posted on: July 10th, 2020 by Ginny Hallam

Following the chancellor’s ‘plan for jobs’ announcement earlier this week, here’s what we know about the new employment related initiatives so far.

Job retention bonus

You’ll receive a one-off bonus of £1000 for every furloughed employee that you continue to employ from when the furlough scheme ends in October, until the end of January 2021.

  1. Employees must earn over £520 per month (on average) between the end of the furlough scheme in October, and the end of January 2021
  2. Payments will be made to you from February 2021

Based on the wording of the announcement, it looks like this bonus applies to any employee who has been placed on any period of furlough from when the Scheme opened, up until when it closes at the end of October – so long as you keep them employed from the end of October to the end of January 2021. Bear in mind that the government has stated that further detail on how this will work in practice is expected by the end of July.

Kickstart Scheme

This is an incentive to employ young people. The government will cover 100% of the National Minimum Wage for those aged 16-24, on Universal Credit and deemed to be at risk of long-term unemployment.

  1. Funding will be available for six-month work placement periods and up to 25 hours a week
  2. The government will also cover the associated NI contributions and employer minimum auto-enrolment contributions

Hiring new apprentices

A new £2000 payment to employers in England for each new apprentice you hire under the age of 25 and a £1500 payment for those aged 25 and over.

  1. The payments will be made in respect of new apprentices taken on between 1st August 2020 and 31st January 2021
  2. The payments will be in addition to the existing £1000 payment already provided for new 16-18 year-old apprentices

You can access the full ‘plan for jobs 2020’ policy paper here.

This update is accurate on the date it was sent (10 July 2020), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Quarantine quandary – how to deal with holidays outside the travel corridor

Posted on: July 7th, 2020 by Ginny Hallam

From 10 July, anyone arriving to the UK from abroad (including UK citizens) must quarantine themselves for 14 days upon arrival unless the country they’re arriving from is on the list of countries with a travel corridor exemption (guidance here). Some key workers are exempt from these requirements – details here.

For those employees who decide to continue with holiday plans outside of the travel corridor, what are your options?

  1. Although you’re not going to make a friend in doing so, you are able to cancel an employee’s holiday leave by giving them at least as much notice as the holiday you want them to cancel. Take advice first as taking this action could give rise to possible claims;
  2. If they’re able to work from home, you can ask them to do so during the quarantine period. If you don’t have enough work for them to do from home, you could flexible furlough them and offer them the hours of work you do have available and furlough them for the remaining hours (here’s a reminder of who is eligible for the Scheme);
  3. During the quarantine period they could remain on furlough assuming that the government furlough support is still available. Write to them setting out that they should follow government guidance on quarantine and if they fail to do so they will be subject to disciplinary action;
  4. Unfurlough them and place them on unpaid leave or SSP. Our view is that currently you’re not obliged to pay employees SSP in this situation, although this may change following further government guidance. Confirm in writing that they must comply with government guidance on quarantine (explaining failure to do so may be a disciplinary issue); or
  5. Allow or require them to take all or part of the quarantine time as holiday.

Further government guidance on the quarantine scheme can be found here.

 

This update is accurate on the date it was sent (08 July 2020), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Take Action #2 / Is diversity on the leadership agenda?

Posted on: July 2nd, 2020 by Ginny Hallam

“Beliefs and the feelings we have about social groups…can influence our decision making and our actions, even when we’re not aware of it.” – Eberhardt, 2019.

For as long as our predisposition to favour people similar to ourselves is unaddressed, discrimination is likely to exist covertly (and sometimes overtly). We’ve provided our suggestions on speaking up, making a difference, and taking action:

  1. Lead with diversity – if your Board isn’t representative of the culture you’re trying to create, do something about it? Consider positively discriminating in favour of candidates who offer a more diverse outlook (see previous update).
  2. Be aware of your limitations – consider equality and diversity champions (who have clout). However fair and diverse your outlook, you’re likely to unconsciously favour individuals similar to yourself. That means that when investigating a harassment, grievance, or a complaint of discrimination, through no fault of your own, your empathy and understanding of a situation may be lacking and one-sided. A team of diverse leaders who are responsible for calibrating and approving your approach (or investigating the issues themselves) should bring balance and better decision-making.
  3. Ask the audience – an inclusion and diversity team of interested individuals should support you to identify opportunities and challenges to diversity across the business.
  4. Cut out the cover ups – we’ve all seen scenarios where a manager allows the best sales person to push the boundaries of what is acceptable (or even go beyond them). A zero tolerance approach to harassment and discrimination, whilst in the short-term may give rise to a flurry of complaints and grievances, should eventually create a culture of fairness and respect with fewer hours spent managing complaints and recruiting replacements.
  5. Consider confidentiality – if you’re proud of your diverse approach, and have done all of some of the above, is there a need for a provision within your settlement agreements asking the individual to keep confidential the circumstances leading to their exit? A bold approach but one worth a conversation?

These decisions and conversations are certainly challenging. Securing the right support and advice is key to achieving the right outcome, while minimising risk. We can support your with an unlimited advice resource to help with these challenges – click here to find out how. 

 

This update is accurate on the date it was sent (03 July 2020), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.