The last few weeks have been somewhat trying as the country deals with Coronavirus. Businesses and staff alike are concerned about the future. However, they can take some comfort in the business support packages announced by the Government in last week’s budget.
Here at Attwells Solicitors, we believe in jargon-free law. Therefore, we have produced this useful blog to highlight the possible help you could receive.
What business support is available for employees with Coronavirus or who are self-isolating?
The Government have announced that Statutory Sick Pay (SSP) will be made available for all workers from day one, rather than day four(as is usually the case). SSP will be paid to employees that on average earn £118 or more a week before tax. SSP is payable at £94.25 per week and can be paid for up to 28 weeks.
SSP will be paid to employees if they need to self-isolate based on the Government’s guidance and cannot work.
Although self-employed people are not eligible for sick pay, they will be able to claim Employment and Support Allowance (ESA) immediately and you may also be able to claim Universal Credits. ESA is payable at up to £57.90 a week if you are under 25 years old or up to £73.10 a week if you are older.
Business Support during the Coronavirus outbreak
The Government has provided a Statutory Sick Pay Relief Package for SMEs, this means that any sickness pay incurred because of the coronavirus outbreak will be covered by the Government for up to 14 days.
To also benefit small businesses, the Government announced a new Business Rate Relief for small businesses and pubs with a rateable value of less than £51k. The 100% discount will apply to the retail, leisure, and hospitality sectors. In addition, the Government has assured £2.2bn of funding for Small Business Grants would be made available. You will be eligible for this grant if your business is in receipt of Small Business Rates Relief (SBRR) or Rural Rates Relief. The Government will provide a one-off grant of £3,000 to help small businesses meet their on-going costs. This has now been increased to £10,000 (17/03/2020).
For medium to larger size businesses that are not eligible for the Small Business Grants, the Government will provide a Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance. Businesses will now be able to borrow up to £5m, with 6 months interest free. In addition, the HMRC Time To Pay Scheme will be relaxed offering you more time to pay. A dedicated helpline has now been set up: Call 0800 0159 559
Finally, the Government has also introduced special support of the retail, hospitality and leisure sector with a Business Rate Holiday and a grant up to £25,000, for businesses with a rateable value between £15,000 and £51,000.
What happens if I need to make redundancies due to the coronavirus outbreak?
We would advise you to first consider other options, short of redundancy, including but not limited to home working, requesting employees to use up any holiday, and considering unpaid leave. If these options are not the answer, they you could consider ‘laying-off’ employees temporarily, albeit you would need a contractual power to use this option and such clauses are usually found in sectors such as manufacturing and alike only. Attempting to impose lay-offs on employees without a contractual right to do so will give rise to potential claims for breach of contract, unlawful deductions, and constructive dismissal. During any period of lay-off, you would still be obliged to pay staff, but the level of payment is low, employees only being entitled to receive a statutory ‘guarantee payment’ for workless days, of up to £29 per day and limited to five days in any three-month period. Furthermore, a lay-off for four or more consecutive weeks also entitles an employee to claim a statutory redundancy payment in certain circumstances.
If redundancies do become a necessity, it is very important that this be considered a final option, taken on the basis that any issues caused by coronavirus within your business are expected to be serious and long term. Redundancy should only arise where the employer:-
- Closes or intends to close the business (business closure);
- Closes or intends to close the business in the place with the employee works (workplace closure); or
- Has a reduced requirement for employees to carry out work of a particular kind (reduced requirement for employees).
Number 3 is by far the most common.
As a minimum, we would advise you to:-
- Draft a redundancy plan to help you manage each stage of the redundancy process and share information with staff;
- Evidence efforts to avoid compulsory redundancies;
- Identify an appropriate ‘pool’ of employees to select from;
- Consult with individuals in the pool;
- Apply objective selection criteria to those in the pool;
- Consider suitable alternative employment where appropriate, subject to a trial period; and
- Make all statutory and contractual payment where dismissal is confirmed (notice pay, redundancy pay etc.) and allow employees to appeal against their dismissal.
What happens if I’ve been made redundant due to the coronavirus outbreak?
You should ensure that your employer has followed each of the above steps when making you redundant. If they have not it is likely that you have been unfairly dismissed. Attwells offer fixed fees for assessing your case and for each step thereafter in bringing a claim against your employer for unfair dismissal. It is likely that you employer may offer you voluntary redundancy, subject to you entering into a Settlement Agreement. Attwells can assist you in negotiating the sums payable to you under the agreement upwards and offer a FREE service to employees where they are happy with the terms provided.
For more information regarding Employment Law or HR please call Lloyd Clarke on 01206 239761. If you would like more information about the topics covered in this blog please click the links within this article.