Daily Coronavirus Webinar: dealing with employment law

Our Daily Coronavirus Webinar on 2 April included our regular update from Dame Carolyn Fairbairn, as well as a special focus on how to manage employment law issues during the pandemic. We discussed a wide range of topics, and answered questions from the audience. We heard from:

• James Harding, Co-founder and Editor, Tortoise Media
• Dame Carolyn Fairbairn, Director-General, CBI
• Matthew Fell, Chief UK Policy Director, CBI
• Nicola Rabson, Partner and Global Head of the Employment & Incentives Group, Linklaters LLP

Overview:

• On CBILs, we are seeing some important changes being fed through by the government.
• We got a clear message from Alok Sharma stating that viable businesses shouldn’t be unfairly refused funds.
• On CBILs, the CBI’s top three current concerns are:
  • The issue of firms being told they can only get access to commercial loans.
  • The slow and clunky process – we’re also in touch with Stephen Jones and British Business Bank on our ideas to improve this.
  • The question of personal guarantees – we already heard that 9 of the top banks have waived personal guarantees for the all loans in the CBIL scheme under the £250,000 mark.
• On the issue of the ‘Stranded Middle’ the CBI submitted a paper to the Treasury, setting out two options:
  • Expand the existing guarantee schemes to support lending towards larger firms.
  • Or introduce a guarantee model for mid-tier firms or a convertible loan product, where debt converts to an equity stake if not repaid, to provide critical support where needed.
• On the Job Retention Scheme, the CBI are hearing from companies reporting a couple of issues really beginning to bite:
  • Lack of admin support – the need to submit applications for payment, but furloughing staff means they are unable to complete these tasks or pay bills.
  • And, ensuring the ongoing viability of the business – can’t work on tenders to have that work ready to start.
• On the issue of testing, the CBI has a call lined up with the British in Vitro Diagnostics Association, the industry body that represents the organisations that produce these tests. Covering 3 key areas that need addressing:
  • What is the latest on availability - how many testing kits available, and when will they be available?
  • What is the current thinking on the roll-out of testing – rightly, key workers in the NHS and elsewhere will be prioritised – but when realistically can we start to make them available more widely to other workers
  • What are blockers to increasing the availability – and what would accelerate this?

Key questions we answered:

1. What are some of the key employment-related issues businesses are highlighting to the CBI?

• Businesses are looking for insight, advice and shared experiences from other businesses, on how to support employees with issues like flexible working, home working and mental health.
• Businesses are also looking for signs that government measures and support will begin working on the ground as soon as possible.
• On whether businesses should be open or closed, we’ve seen progress with sector-specific guidance for the food industry published by the government. Constructive dialogue between unions and several manufacturing firms, which has allowed them to stay open, and food and energy firms issued with letters to confirm they’re key workers.
• But, as more stringent clampdowns are introduced, and police powers are increased – the ongoing uncertainty and confusion in some areas is straining employer/employee relationships.
• Then, around the JRS, businesses are looking for more practical detail, on what it means for existing employment law, processes and procedures.
• Last week, the government published fresh guidance on how the scheme would work in practice, answering many of the questions we’d fed into government from these webinars and our coronavirus inbox.
• But, when you launch a new scheme like this in such extraordinary circumstances, it’s inevitable that more questions will emerge, as people work with it on the ground. Especially, in terms of its legal implications.

2. On the furloughing scheme, many businesses are asking whether you are allowed to do a little bit of work such as an hour per day? Does the government or treasury acknowledge the need for flexibility on this?

• The guidance is clear: you are either working or not working.
• The system was created to avoid complexity and be interpreted simply. That is why the government is adopting a black and white interpretation of the system.
• There is some flexibility regarding the role of managers and directors. For example, directors can be furloughed and continue to comply with their statutory duties such as filing annual reports.
• However, other duties such as attending board meetings, counts as work on behalf of the organisation. Therefore, a furloughed director would be precluded from performing work of this nature.

3. Can you work for another company while you are being furloughed?

• If you have always worked for another company then yes you can. There is nothing in the government’s guidance that precludes you from that.
• You are still bound by your employment contract during the furlough period.
• However, it would be against the spirit of the scheme for the government to cover 80% of your wages and you still find another job and compensate yourself fully again. We need clarity on this point.

4. On holidays and how they are treated in relation to furloughing, could we have more detail on how companies should approach this?

• The government’s guidance is unclear in relation to holiday procedures. For example, whether taking a holiday would stop the furlough period. The guidance is not clear enough to produce a consensus within the legal community.
• However, when you notify employees for furloughing, you should give a lot of thought on how you will document holidays and state that the government’s guidance on this is not clear.

5. What are the key things businesses should know about the process of entering the Job Retention Scheme?

• The government do not prescribe a process for employers in terms of who they furlough and how they do it.
• However, it does make clear that employers mustn’t furlough employees in a discriminatory manner.
• In addition, one of the implied terms in the guidance is that of trust and confidence. Therefore, how employers conduct this process matters.
• Employers should select staff for furloughing quickly, fairly and without discrimination.
• Once that selection process is concluded, you should inform your staff in writing, known as furlough letters. Do try to explain what you are doing and why.

6. What do you do if an employee does not consent to being furloughed?

• You should always aim to obtain consent from your employees before placing them on furlough.
• If consent is refused, what you should do will depend on the situation. You may have to trigger a consultation to comply with the law if more than 20 employees refuse being furloughed.
• If 20 or more employees refuse furlough, the consultation should last for a minimum of 30 days. If it is 99 or more employees, the consultation should last for a minimum of 45 days.

7. One company told the CBI they have sent emails to staff explaining what they intend to do regarding the furloughing process. This company received no replies to that email. Does that count as employee consent?

• Silence does not count as consent. So, employees not replying to the email should not be interpreted as tacit approval.
• Employees have to agree in written consent. However, the form of this written approval is flexible. It could be by text, WhatsApp or email.