New Regulations: redundancy and notice pay during furlough
The Government has introduced new Regulations, coming into force on 31 July 2020, to provide that employees with more than two years of service who are made redundant during a period of furlough leave are entitled to receive statutory redundancy pay based on their usual rate of pay, rather than their reduced furlough pay (subject to the statutory cap of £538 per week).
Prior to these new Regulations, employees whose hours and/or rates of pay varied were entitled to statutory redundancy pay calculated on a 12 week average, meaning that their redundancy pay could potentially be reduced to reflect their rate of furlough pay. From 31 July it will instead have to be calculated using their full rate of pay, which for those with variable hours must be based on the reference salary used to calculate the amount claimed under the Coronavirus Job Retention Scheme.
The new Regulations also provide that payment for a statutory notice period must also be based on the employee’s usual rate of pay, rather than their reduced furlough pay.
For more information about making redundancies during furlough, see our recent article.
Further amendments to statutory sick pay
A further set of amendment regulations came into force on 6 July 2020, providing for statutory sick pay (SSP) entitlement for those who are self-isolating and those shielding.
The Statutory Sick Pay (Coronavirus) (Suspension of Waiting Days and General Amendment (No.2) Regulations 2020 (SI 2020/681) provide that SSP is payable to an individual who is self-isolating because they are in a ‘linked’ or ‘extended’ household (a ‘bubble’) with someone who has COVID-19 symptoms. Previously this only applied to those living in the same household. SSP will cease to be payable if the symptomatic person tests negative for COVID-19.
In addition, the amendment regulations provide further clarity on the SSP entitlement of those ‘extremely vulnerable’ people who are shielding. The individual’s original shielding notification, specifying an end date at which entitlement to SSP would cease, can now by overridden by a further notification, meaning that an individual can start shielding again if necessary and be entitled to receive SSP.
Public sector exit payments – consultation response and draft regulations published
The Government has published its response to the consultation on capping public sector exit payments it issued back in April 2019 (see our previous article). The proposals were first consulted on in 2015, with the power for the necessary regulations included within the Enterprise Act 2016. However, implementation of these measures has been repeatedly delayed.
In its response, the Government confirmed that revised draft regulations and guidance would be published. Draft regulations were subsequently published on 27 July but the revised guidance is still awaited. It has not yet announced a timescale for the new measures to take effect. The Government has also confirmed that it plans to reintroduce proposals “in due course” to recover exit payments from public sector employees who are subsequently re-employed.
In summary, the response confirms as follows:
- the cap will be set at £95,000 initially, to be kept under review. It will apply in respect of employees or office holders leaving a ‘relevant authority’
- implementation will apply across the public sector (apart from those excluded organisations, such as the armed forces) at the same time, rather than adopting a staged approach as was previously intended. The full list of public bodies in scope is set out in the schedules to the draft regulations, but the new rules will broadly apply to the civil service, NHS and local government employees and the police
- the Government has confirmed that pension top-up payments will be within the scope of the cap, but payments made in respect of injury to feelings (where a discrimination complaint has been raised) will be exempt. The order in which payments are counted towards the cap will not be prescribed, giving employers and employees discretion and flexibility based on individual circumstances. Individuals will be entitled to receive their full statutory redundancy payment, which means that in practice the Government expects employers to cap the contractual redundancy payment in the majority of cases
- only the amount of any payments in lieu of notice in excess of a quarter of an individual’s salary will be included in the cap. Payments in lieu of accrued but untaken holiday are exempt
- payments in respect of death in service or incapacity due to accident, injury or illness are not deemed ‘exit payments’ under the draft regulations
- there will be a waiver process to allow the cap to be relaxed in exceptional circumstances, with ministerial clearance. There will be a mandatory waiver in respect of workers transferred to the public sector under TUPE, and in respect of discrimination, whistleblowing and health and safety-related claims.
The revised guidance, once published, will provide more details of how the new rules will apply in practice, and when they are due to take effect.
Working safely during Coronavirus
At the time of going to press the Government guidance on working safely during coronavirus has been updated five times during July. It is likely to be updated regularly over forthcoming months.
The guidance varies between different sectors but key points that have been updated include:
- taking steps to facilitate verbal communication without individuals needing to unduly raise voices, to reduce the risk of aerosol transmission
- making sure records of staff contact details are up to date, as well as keeping temporary records of customers and visitors, to assist in supporting NHS Test and Trace if necessary. Employers must also maintain temporary records of staff shift patterns for 21 days
- employers should ensure they have an up to date COVID-19 outbreak plan, with a nominated single point of contact with the local health protection team. The local team should be contacted if there is more than one case of COVID-19 associated with the workplace
- additional guidance has now been included for sectors such as sports and gym/leisure facilities, the performing arts and close contact services (hairdressers, beauticians etc)
- new guidance on meetings (up to 30 people) and gatherings of more than 30 people hosted in the workplace, provided COVID-19 secure guidelines are followed and a risk assessment is completed
- guidance on the use and disposal of face coverings in the workplace, where applicable.
The Chancellor Rishi Sunak set out his ‘Plan for Jobs’ in the Summer Economic Update, delivered to Parliament on 8 July 2020. For employers, the following measures will be of interest.
- Coronavirus Job Retention Scheme (CJRS) and retention bonus: the CJRS is due to end on 31 October 2020, with grants tapering off from August onwards. The Chancellor announced a new job retention bonus of £1,000 payable to employers in respect of each furloughed worker retained in work until at least 31 January 2021.
- Kickstart scheme: a new job creation scheme for those between the ages of 16 and 24 on Universal Credit and who are at risk of long term unemployment. The Government will pay the wages of new workers who meet the eligibility criteria if they undertake a ‘work placement’ for a period of six months. This will cover up to 25 hours’ work a week paid at the rate of the national minimum wage. The scheme is due to open for applications in August, with the first placements starting this autumn.
- Training and apprenticeships: the Government plans to double the number of Jobcentre work coaches and to invest in traineeships and work academy placements with the aim of tripling the number of placements available during 2020 and 2021. Employers will be paid £2,000 for each new apprentice under the age of 25 and £1,500 for those aged 25 or over.
Further details of these and other measures aimed at boosting jobs and the economy are set out in the Government’s press release.
These articles are from the July 2020 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact Liz Stevens or another member of Birketts' Employment Law Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at July 2020.