Our team: Michael McCartney
The rights of UK employees are contained in an employment contract (incorporating express rights and implied rights which are derived from the common law) and in statutory rules and regulations laid down by parliament which are mandatory in nature. The entitlement to pay during a period of leave depends to some extent upon the rights set out in the employment contract (since an employer may have agreed certain enhanced rights, for instance, to receive contractual sick pay during periods of sickness absence), as well as on the reason for the employee being unable to attend work. We have considered the applicable position in a range of circumstances below:
(a) The employer is a non-essential business following Government guidance to shut down operations and its employees are unable to work from home.
The employee would be entitled to continue to receive their contractual pay and benefits during such periods, provided they remain fit and able to return to work. An employer may have the option to impose a period of lay-off or short-time working provided this is contained in the employment contract. Failing that, employers would need to agree a variation of the employment contract with the employee’s consent to allow for one of the following:
(i) Furlough – the UK Government has introduced a Job Retention Scheme (JRS) which will reimburse employers for 80% of their employees’ normal pay up to £2,500 (plus employer’s national insurance and pension contributions on this amount) up until 31st May 2020;
(ii) Salary reductions;
(iii) Reduced working hours; or
(iv) Mandatory holiday.
(b) The employee is unable to attend work because they have symptoms and/or are required to self-isolate.
Where an employee is exhibiting symptoms, is self-isolating because a member of their household has symptoms, or is in one of the vulnerable groups strongly advised to stay at home and who are not able to work from home, then they will be eligible for statutory sick pay “SSP” under new rules introduced on 13 March 2020. They may also be entitled to receive contractual sick pay if their contract of employment provides for this additional entitlement. SSP is £ £95.85 per week from 6 April 2020 for qualifying employees. Employers with fewer than 250 employees will be entitled to reclaim SSP from HMRC/the UK Government.
Such employees can be placed on furlough when their sick leave or self-isolation ends. However, those employees who are in the ‘extremely vulnerable’ group (those over 70 years of age and who have an underlying condition), who are shielding themselves in line with public health guidance, can be placed on furlough straight away.
(c) The employee does not have coronavirus symptoms/ is not required to self-isolate but is nevertheless unwilling to work to avoid exposure to COVID-19.
An employee whose place of work remains operational and who has not been requested to self-isolate, whether under WHO guidance or a written request by Public Health England or following a call to their GP or a recognised health expert, and is not demonstrating any of the symptoms of COVID-19, will not be entitled to SSP and will not generally be able to claim salary during their period of leave.
It is important to examine carefully the reason for an employee’s refusal to attend. Employers have legal obligations to provide a safe working environment and must adhere to their responsibilities under the Equality Act 2010. If, for example, the employee has a disability which increases their vulnerability to COVID-19, the employer should consider if it can make reasonable adjustments to the employee’s working arrangements. This may include, for example, agreeing to working from home on full pay, or adjusting their workload to accommodate any increased feelings of stress.
It is also important that employers are consistent in payment for self-isolation. Any difference in treatment between employees may give rise to a discrimination claim if it can be linked to a protected characteristic.
(d) The employee is unable to work as a result of caring responsibilities (e.g. due to school/nursery closure or because a dependent has fallen ill)?
If the employee is able to work from home then they should continue to be paid in full. If not, then the following options would be open to an employer:
(i) Provided the employee does not undertake any work for at least three weeks then they can be furloughed under the JRS. Note that this would not be open to public funded companies and certain scheme conditions must be met (see our note on the JRS here).
(ii) If the employee’s requirement to take leave is a short term emergency until alternative cover can be arranged (i.e. one or two days) then they would be entitled to take unpaid leave to care for a dependent.
(iii) As mentioned earlier it is important to treat employees consistently and not to discriminate on prohibited grounds.
(e) Can employees use their paid holiday during periods of business closure caused by COVID-19?
Throughout the shut down period, and regardless of whether an employee is furloughed under the JRS, they retain their existing employment rights. This includes the right to maternity pay, parental leave, unfair dismissal protection and paid holiday (which in the UK is a minimum of 28 days paid leave per year for those working full time). For employees who have normal working hours, holiday will be based on their usual contractual pay.
The Government guidance is not clear whether holiday pay will be reimbursed by the Government under the JRS and to what extent. However, the updated guidance from ACAS does seem to suggest that holiday can be taken during furlough . We expect the position on pay to be clarified in the near future.
(f) Can employers instruct employees to utilise paid holiday during a business closure caused by COVID-19?
Employer’s can institute a period of mandatory paid holiday provided they give appropriate notice which is twice the length of the required period of annual leave. In other words, a two week notice period would be needed for a one week period of annual leave. We do not recommend that this is used in respect of staff who are furloughed on the JRS given the uncertainty regarding reimbursement of holiday pay at present.
Please note that this note is based on UK guidance issued as at 9 April 2020 and this position may change.