With the furlough scheme coming to an end on October 31st, many firms will be forced to change their employment strategies to stay solvent. Can employers persuade staff to take a cut in hours or take holidays? Karen Holden, founder of A City Law Firm looks at the legal position and HR Director for Sodexo UK & Ireland, Sarah Perry explains how they are managing their people
Strictly speaking under the Employment Rights Act 1996 and standard UK contract law you cannot unilaterally reduce or take-away an employee’s salary or adjust their working terms, without their informed consent, otherwise it is a breach of contract. If, however, an employee agrees to vary their terms, use annual leave or take unpaid leave to help the employer they can agree whatever the employer and they wish.
However, the question could later be asked were they under duress (redundancy/termination to take this option); and were they selected fairly (not discriminatory)? This means an employer needs to be very cautious and careful how they approach staff and document their consent.
Where consent may not be forthcoming there are provisions to temporarily lay off staff.
As an employer, you can force an employee to take unpaid leave if there’s not enough work available for them—commonly known as laying an employee off – this MUST, however, be permitted and already written into their employment contract. Otherwise, to force them to take unpaid leave without consent, is likely to be a breach of contract and / or could lead to a claim for unfair dismissal.
There is no limit to how long you can lay-off an employee, but if they’ve been away from work for four weeks in a row, or six weeks within a 13-week period where no more than six weeks are consecutive, then they can apply for redundancy pay and resign from their position.
Bear in mind that employees who are laid off or put on short-time working are entitled to pay for days where they do no work at all. This is ‘statutory guarantee pay’ and is the legal minimum you must pay. The maximum employees can get is £30 a day for five days in any three-month period. That’s a maximum of £150. If they earn less than £30 a day, they will receive their normal daily rate. Employers may have their own guarantee pay scheme but it cannot be less than the statutory arrangements. To qualify they must have been employed continuously for one month (including part-time workers) reasonably make sure they are available for work; and cannot refuse any reasonable alternative work (including work not in in their contract).
Those sent on unpaid leave, can apply for Universal Credit as it is intended to help people who are on low income or out of work.
CAN YOU ASK AN EMPLOYEE TO TAKE HOLIDAY?
Employment contracts between an employer and an employee usually give the employer the right to force holiday at certain periods, such as Christmas. Other contracts may give the employer the right to force holiday at any period, so it is important that employment contracts are thoroughly reviewed. It is also important to check any additional COVID-related agreements (i.e. furlough agreements if they’re still in force) or for changes to holiday. Remember that any changes to an employee’s employment contract must be agreed by both parties.
If an employment contract does not cover forced holiday then an employer may look to a statutory option, namely through the ‘Working Time Regulation’. This gives the employer a right to send their employees on holiday by providing at least twice the duration of the proposed holiday as a notice period. It is worth noting that this provision only deals with the 5.6 weeks (including bank holidays) of statutory holiday. Anything outside of this will have to be dealt with by the employment contract.
Communication and engagement with the employees is encouraged to see if an agreement can be reached. An employer should carefully review all the agreements in place before imposing any amendments of leave and if unsure take advice.
COVID-19 lockdown and restrictions have had a significant impact on our industry. Many client sites still remain closed, and those that are open have reduced occupancy, service demand and retail sales.
As a strategic supplier to government, and working with private sector clients who deliver goods or services also categorised as necessary for the national effort, many of our colleagues are ‘key workers’ providing public services in hospitals, prisons, government offices, defence sites, schools and universities.
Throughout the crisis we adopted a ‘redeployment first’ approach for our colleagues. We were able to do this due to our diverse business and the different markets we operate in. We were able to redeploy many colleagues to roles at sites where demand had increased during the pandemic. We have also become one of the leading providers managing the COVID-19 testing centres which offers even more opportunities to redeploy those impacted by site closures.
For those we could not redeploy, the government’s job retention scheme enabled us to protect jobs. We ensured that our furloughed colleagues continued to receive 100 per cent pay by topping up the 20 per cent for the first phase of the scheme up until 30 June, and subsequently as the scheme changed we have continued to support those who have remained on furlough, ensuring that they receive up to 80 per cent of their normal pay until the scheme closes.
We have always sought to do right by our people and our business. To support our colleagues through these extraordinary times our parent company established a €30 million global employee relief programme in early April, the programme was funded by contributions from all members of the global executive committee and our UK and Ireland Regional Leadership Committee.
In May we cancelled our annual management bonus scheme and created an employee fund to reward frontline colleagues who worked through the crisis. The fund has enabled us to support full pay during furlough and provide enhanced sick pay provision for our front-line employees. The reward scheme will also help further recognise those who have gone ‘above and beyond’ in the fight against COVID-19. We do not know if or when we will return to pre-COVID levels of demand for our services. We are continuing to review all aspects of our business. Our business mix of food and FM across both the private and public sector is helping us to adapt to the changing market conditions and our client needs in what is now termed the ‘new normal’.