On 11 May the Government published its COVID-19 recovery strategy for the UK.

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On 11 May the Government published its COVID-19 recovery strategy for the UK.

This includes a policy, due to be introduced as soon as possible after 13 May, for most international arrivals to the UK to self-isolate in their accommodation for 14 days on arrival to the UK. This will include arrivals by air, rail and sea.

As elements of the UK’s lockdown are progressively lifted and UK visa processing resumes, the Government believes this measure will help to minimise the risk of COVID-19 cases rising due to people arriving from abroad. 

Travellers will be required to provide their contact and accommodation details. Those who cannot demonstrate where they would self-isolate will need to do this in accommodation arranged by the UK government. 

Those arriving in the UK will also be provided with current information on the UK’s social distancing measures, and will be encouraged to download and use the planned NHS contact tracing app. The app is currently being trialled on the Isle of Wight.

Some people will exempt from the self-isolation measures, including those who arrive from the Common Travel Area (which comprises the UK, the Republic of Ireland, the Isle of Man and the Channel Islands), as well as individuals required to enter the UK more rapidly under international obligations, to provide supplies or to support national security or critical infrastructure work.

It is not yet clear whether the required information will be gathered at the border or before arrival, whether temporary accommodation such as in a hotel or serviced apartment will be considered acceptable and what travel arrangements people will need to make to get to their accommodation. The Government plans to publish further details and guidance in the near future, with the requirements and list of exemptions being reviewed on a regular basis. 

If you have any queries about this announcement, please get in touch with a member of the immigration team. 

Related Item(s): Immigration & Global Mobility, Covid 19 – Coronavirus, Global Movement of People, Immigration

Author(s)/Speaker(s): Andrew Osborne, Kathryn Denyer,

The Coronavirus Job Retention Scheme may have been extended to 30 June 2020, but employers should be thinking now about what their workforce might look like following the end of subsidised furlough and a return to more normal working patterns.

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We set out below our answers to key questions about options for restructuring the workforce. These cover options for ending or extending furlough, notice and redundancy payment rights during furlough, changing terms and conditions, and dealing with redundancies.

Some information on these topics is provided in the government’s guidance for employers on claiming for employee wages through the Coronavirus Job Retention Scheme and separate guidance for employees.

See also our FAQs for employers on the coronavirus job retention scheme for detailed information about furloughing employees.

There is more information about redundancies in our Inbrief guides on Redundancy and Collective redundancies.

1. Furlough – some general issues

2. Changing terms and conditions

3. Redundancy during or after furlough

4. Redundancy consultation during furlough

5. Immigration issues

Furlough – some general issues

How much notice do we need to give employees that they are required back in work?

There is no prescribed notice requirement under the Coronavirus Job Retention Scheme, but employers should be reasonable. We would suggest giving no less than 48 hours’ notice. You should also check what (if anything) was said about notice in any of your communications to employees about furlough.

In practice, most employers are likely to communicate their plans to employees no later than the middle of June (assuming furlough arrangements run to the end of June).

How do we tell employees that they are no longer being furloughed?

There is no prescribed mechanism for bringing employees back to work. Employers should remember that employees will have been instructed to do “no work” which could mean they are not checking their work emails, so you may need to use other means of communication. You should ensure that all employees receive notification of the next steps, be it a return to work or other plans.

Can we keep employees on furlough even when the government scheme has ended?

Yes. The Coronavirus Job Retention Scheme created a form of agreed lay off even where there was no contractual lay-off provision. As a result, provided employees continue to agree to being furloughed, it would be possible to extend the period for which employees are furloughed. However, you will no longer be able to reclaim salary or other wage costs from the scheme after it has ended, which will limit its attractiveness.

Can we keep employees on furlough with reduced terms when the government scheme ends?

Yes, provided employees agree. You would need a new or extended furlough agreement with employees (depending on how the terms of the existing agreement have been framed). This could reduce pay below 80%, or even implement furlough on no pay. Employees may be willing to agree to this as an alternative to redundancy.

If you have a contractual right to lay off without pay, this could be relied on (although such clauses in contracts are quite rare in practice). Lay-off provisions are subject to the implied term of trust and confidence which means, for example, that you should consult with employees first and give reasonable notice of any lay off to avoid being in breach of contract.

There are also specific statutory provisions which provide a right for employees who have been laid off for four or more consecutive weeks, or six weeks in any 13-week period, to claim a statutory redundancy payment in certain circumstances. However, the scheme does require employees to resign in order to receive their redundancy payment.

Note also that the government has indicated that, after 30 June 2020, it may extend the scheme on a slightly different basis – for example, reducing the maximum pay contribution to 60%, or allowing employees to do some work while on furlough. While the details are not yet clear, this should be kept under review.

What if employees do not agree to an extended furlough period?

You will need to look at other options depending on your workforce requirements, as explained below.

Can employees withdraw their consent to being furloughed?

No, not if they have agreed in writing to a specific period of furlough. Employees could refuse to agree to furlough being extended after the initially agreed period has expired.

Changing terms and conditions

Can we reduce hours and pay for employees?

Yes, with employee agreement.

If you recognise a trade union for collective bargaining purposes, you may be able to agree the change with the union – depending on the terms of any collective agreement, this may either be binding on all employees or may at least facilitate individual agreement. If there is no union, individual employee consent should be obtained and evidenced in writing (absent clauses permitting you to impose unilateral reductions, which are extremely rare).

If you are seeking agreement before you have formulated any proposal to dismiss 20 or more employees, collective consultation will not be triggered. This means that you must not have formulated a definite plan that is likely to result in dismissals if employees do not agree to the proposed change. If a proposal has already been formulated to dismiss as redundant anyone who does not agree, or to force the change through by dismissing and re-engaging if necessary, then collective consultation will arguably be triggered.

Alternatively, if there is a contractual right to impose short-time working this could be used (subject to consultation and notice).

Can we reduce pay for employees but require them to work the same hours?

Yes – the process is as set out above. It may be more difficult to persuade employees to agree to this. You will need to ensure you explain the rationale, reasons and business cost in detail to minimise employee discontent.

What if an employee refuses to agree to the proposed change?

You will need to consult individually with the employee and attempt to explain the reasons and necessity for the proposed change. If the employee still refuses after additional time and further discussion, you will need to decide on whether to impose the change by dismissal and re-engagement on the new terms or adopt different measures. 

Dismissals in these circumstances can be fair, so long as there is a clear business necessity for the change and the employer has followed a fair process. Dismissal and re-engagement in this way will trigger collective consultation requirements where 20 or more dismissals are proposed.

Redundancy during or after furlough

Are there other options we could consider first?

Yes. Given the unique nature of the situation caused by the pandemic, employees may be more open to exploring different options.

Many employees may have been personally affected by the pandemic, may not want to return to work until much later, or have childcare issues such as home-schooling or where grandparents or other carers continue to need to shield. Employers can discuss options such as using unpaid statutory parental leave or granting unpaid sabbaticals. This might enable some employees to remain employed without pay until the situation improves and redundancies may no longer be necessary.

Can we make employees who are on furlough redundant?

Yes. The published guidance for employees who have been furloughed states that employees can still be made redundant while on furlough or afterwards. The guidance for employers does not state this expressly but does say that employees’ redundancy rights continue to apply while they are furloughed.

It is important to remember though that the underlying purpose of the Coronavirus Job Retention Scheme is to allow employers to maintain their workforce, so there is some risk that HMRC will question rapid redundancies. The sooner an employer moves to making redundancies after furloughing employees, the greater the likelihood of scrutiny from HMRC later as to whether the employer really intended to make redundancies all along and has just been using the furlough scheme for convenience while carrying out consultation.

What notice pay is an employee entitled to on furlough?

As the guidance for employees says that they can be made redundant while on furlough, we believe that employees can be given notice or paid in lieu while furloughed. (The guidance does not, however, explicitly say this.)

The position in relation to notice pay during furlough is complex.

If you make a payment in lieu of notice under a clause in the employment contract, you should check what the contract says about the amount. If, for example, it says that pay in lieu of notice should be calculated based on basic pay, this is likely to be interpreted as meaning pre-furlough normal pay. (Before making any payment in lieu of notice, see below under “Can we reclaim notice pay?”)

If the employee is given notice which they are to “work out” while on furlough, the amount you need to pay them during the notice period is very complicated.

If the employee’s contractual notice period is at least a week more than the statutory minimum period of notice, they can be paid notice at their furlough rate of pay (for all weeks which fall within the furlough period). Statutory notice is one week per year of service, up to a maximum of 12 weeks. For example, an employee who has three years’ service and a contractual notice period of four weeks would meet this test.

Employees who specifically requested furlough, e.g. because they have caring responsibilities, are also (in our view) entitled to notice pay at the furlough rate only. If there are reasons why it is important not to be in breach of contract (e.g. if you wish to rely on post-termination restrictions in the employment contract), you can avoid any risk by paying notice at the employee’s usual full rate of pay.

The position is more complex for employees who have been put onto furlough at their employer’s request, or who are unable to work because of sickness, family leave or holidays, and whose contractual notice period is less than the statutory minimum plus six days. For these employees, notice may need to be paid based on the employee’s usual pre-furlough pay:

• There are specific legal provisions on calculating notice pay where an employee is “ready and willing to work” but is provided with no work by their employer. These provisions are likely to apply where an employer has asked an employee to agree to be furloughed. They do not apply (in our view) to employees who are only on furlough because they requested it, as they are not ready and willing to work. These specific legal provisions also apply to employees who cannot work their notice period because of sickness, family leave or holidays. This might cover some employees who fall sick during their notice period. The position for shielders is less clear cut because, although they are entitled to SSP, they are not actually sick.
• For reasons which are not entirely clear, these statutory protections do not apply to employees with a contractual notice period which is at least a week more than the statutory minimum.
• Employees who fall within the scope of these protections are entitled to a statutory week’s pay during their notice period. The rules for calculating a week’s pay in these circumstances, explained immediately below, will generally involve looking at pre-furlough pay.
• For employees with normal working hours and fixed pay or salary, a statutory week’s pay is a “normal” week’s pay. There is an argument that a week’s pay should be the furlough rate of pay, because that’s what is currently normal. However, a statutory week’s pay is based on an employee’s normal working hours. As no work at all is done during furlough, it is likely that normal working hours and pay should be based on the position if the employee was not on furlough.
• For employees with normal working hours whose pay varies according to the times they work (e.g. because they work shifts), a statutory week’s pay is calculated by averaging pay for the previous 12 working weeks. Because no work at all is done during furlough, this means pre-furlough weeks.
• For employees who do not have any normal working hours a statutory week’s pay is based on their pay over the previous 12 weeks. This excludes any unpaid weeks but is not limited to working weeks. For these employees, you can (in our view) base the calculation on the previous 12 paid weeks, including weeks on furlough.

For furloughed employees who are entitled to these extra statutory protections, this might mean that you need to “top up” the notice pay to usual pay, even if this is more than can be recovered through the government subsidy.

Can we reclaim notice pay under the government scheme?

This is not covered directly in the guidance.

It seems that you should be able to reclaim notice pay if an employee is given notice during furlough, for those weeks of notice which fall within the furlough period. Employers cannot, however, reclaim any extra “top up” to usual pay which may be legally required (see the answer to the previous question).

We do not consider that a payment in lieu of notice can be reclaimed under the scheme, because this is a discretionary payment. A payment in lieu is also not compatible with the underlying purpose of the scheme to keep employees employed for as long as possible.

How do we calculate statutory redundancy pay for employees on furlough?

Statutory redundancy payments are calculated based on years of service, age, and a week’s pay. A week’s pay for this purpose is capped at £538. Many employees will earn more than this even during furlough, which means there is no need to consider a different calculation.

A statutory week’s pay should be calculated in the same way as explained above in relation to notice payments, which depends on how the employee works in practice. For employees earning less than the capped week’s pay during furlough, in most cases it seems likely that a week’s pay for statutory redundancy pay purposes is based on the rate of a normal week’s pay (i.e. rather than the rate they are receiving during temporary furlough). This is because the normal working hours of a worker who is on furlough leave have not changed.

Redundancy consultation during furlough

Can we carry out individual and collective redundancy consultation during furlough?

Yes. The guidance does not explicitly state whether collective or individual redundancy consultation can be carried out during the furlough period, or whether it would fall under the prohibition on doing work. However, it is not making money for the employer or providing services, so is most likely permissible. The guidance for employers also says that employee representatives may undertake duties and activities for the purpose of individual or collective representation and that this will not be considered work, which strongly suggests that individual and collective consultation must also be allowed.

Why would we want to collectively consult during the furlough period?

Employers may wish to do this if they know they are likely to need to make redundancies post-furlough and want to begin consultation in good time as required under the collective dismissal legislation (or at least 30 or 45 days before any dismissals take effect) – see further below. Providing certainty and clarity for staff as soon as possible is another benefit. You may also wish to use the time employees spend on furlough to absorb part of the cost of the consultation process.

Employers may also wish to use the process to push for other changes (such as reduced pay) as an alternative to redundancy but need to be able to act quickly if no agreement can be reached with employees.

Remember that no part of the grant from HMRC can be used to cover the cost of statutory redundancy payments.

Can employee representatives be furloughed and continue in their role as a representative?

Yes, where the employee representative is only being consulted in respect of possible redundancies or related matters. The guidance for employers says that employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers while they are on furlough – so long as they are not providing services or generating revenue. The representatives are not providing services to the employer, so this should not fall under the prohibition on doing work while on furlough. 

Do we need to collectively consult with our workforce?

It depends on the number of employees involved. Collective consultation is required where an employer proposes to dismiss 20 or more employees “at one establishment” in a 90-day period for a reason unrelated to the individual, which encompasses both “classic” redundancies and “fire and rehire” exercises aimed at imposing less favourable terms. If fewer than 20 redundancies are anticipated, only individual consultation is required. We always recommend taking advice on your particular circumstances before embarking on collective consultation.

What does collective consultation involve?

For full details, see our inbrief on collective redundancies.

In summary, consultation must start “in good time” to allow the relevant discussions to take place, and a minimum period before the first of the dismissals takes effect – 30 days (where between 20 and 99 dismissals are proposed), or 45 days (where 100 or more dismissals are proposed).

Consultation should take place with the “appropriate” representatives of the affected employees. If you recognise a trade union in respect of the affected employees, you must consult with the union representatives. Otherwise, you can choose whether to consult with existing employee representatives who have the appropriate authority (e.g. a staff consultative forum, depending on its mandate) or representatives elected specifically for the purposes of the consultation.

The representatives must be given specific information and consultation should cover, as a minimum: ways of avoiding the need for dismissals; reducing the number of dismissals; and mitigating the consequences of the dismissals (e.g. support for dismissed employees). It is critical that minutes of the meetings with the employee representatives include reference to the fact that consultation has covered these main issues.

Consultation must take place with a view to reaching agreement, but the employer does not have to agree with the representatives’ views.

What issues should we be aware of when collectively consulting with a workforce who are on furlough or remote working?

Coronavirus has created a situation where many employees are on furlough, working from home, self-isolating or practising social distancing. This makes collective consultation a challenge, as it would normally be done in person.

Previous case law has shown that carrying out information and consultation obligations remotely is permissible, and it is unlikely that this would be regarded as a problem in the current, highly unusual circumstances.

Employers can make use of technology to hold online “town halls” to inform employees about proposed measures and prepare to run several of these to ensure the whole workforce is notified properly rather than via the grapevine.

Collective consultation with employee representatives could be done remotely provided appropriate technology is in place. It could also potentially be done in person with appropriate risk assessments and protective measures and subject to consideration of current government guidance.

If done remotely, you should make sure that all the representatives have the technology required to participate. You should also ensure that only relevant parties receive an invitation to the online meeting, and that the line or portal for hosting it is secure and compliant for data protection purposes. Set a clear protocol in advance about how the meeting will be run.

If employee representatives have not already been elected, employers will need to consider what arrangements they need to make to ensure any election is fair. This may include arranging online voting. The voting process is supposed to be secret so far as reasonably practicable, which can present a challenge when it cannot happen in the physical workplace. Some possible options are:

• Use a third-party online voting platform, which ensures anonymity but may come at a cost.
• Design your own internal system. For example, you could nominate one independent person to run the ballot – although strictly this would not then be a secret election.
• Set up a consultation body in advance, which (provided its mandate is sufficiently clear) can then be used for redundancy consultation later on.

Can employers use the “special circumstances” defence to a failure to consult about collective redundancies?

This is a difficult and fact-sensitive area, so you should always seek advice on your specific situation.

Section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) provides a defence to a failure to collectively consult where there are “special circumstances which render it not reasonably practicable” for the employer to comply with the requirements. The collective consultation obligations apply where there are proposals for 20 or more redundancies at an establishment or changes to that many employees’ terms by way of a “fire and rehire” process. This defence applies to failures to consult in good time, failures to consult on the required topics with a view to reaching agreement, or failures to provide the required statutory information on which consultation is based.

There is no definition of “special circumstances”, but an impending insolvency situation on its own is not sufficient. The case law also indicates that it is difficult to rely on this defence to justify a complete failure to consult except in the most extreme circumstances. If a business has cash to keep it going and is making redundancies to remain profitable (or to make a smaller loss), it will be practicable to consult, even though it may be costly – consultation is regarded as a “cost of business”.

The Coronavirus Job Retention Scheme, coupled with other support for business (such as guaranteed loans, no business rates for the retail, hospitality and leisure sector, and deferral of VAT payments) will make it difficult to rely on the special circumstances defence to justify no or short collective consultation. It is therefore important that if employers decide to make collective redundancies, or changes to terms by way of a “fire and rehire” process, they should comply with the collective consultation requirements under TULRCA as best they reasonably practicably can.

As described above, despite Coronavirus creating a situation where many employers may find it difficult to consult, they should still do what they can to inform and consult taking into account their particular circumstances.

The defence may work best if there is a procedural failing, so long as the employer takes what steps it reasonably can. The measures an employer took in the particular circumstances it was facing may also reduce the size of the penalty award for failing to consult, even if it is found to have breached the consultation requirements. The starting point is 90 days’ uncapped pay, with the employer required to show why that amount should be reduced – so taking all practicable steps is very important in reducing what might otherwise be a large penalty.

We’ve finished collective consultation – what comes next?

Once collective consultation with representatives is sufficiently far advanced, individual consultation with affected employees is likely to be required as well. The furlough guidance for employers makes it clear that the ordinary redundancy principles continue to apply during this time, although where collective consultation has been carried out it is generally possible to follow a shorter one-to-one process.

What issues should we be aware of when consulting individually with employees who are on furlough or remote working?

First, you need to think about how you will contact your employees and how will you send them relevant paperwork. Do you have their home email addresses (if they no longer have access to office email or never had it), do you have a home/mobile telephone number, and do you know if the employees have access to a computer?

For people without access to a computer, you could post or courier documents. If individuals will be reading emailed documents on a smartphone, consider formatting issues and what type of document to send. 

If you propose to carry out the individual consultation meetings by video conferencing, check the employee (and, if applicable, their representative) will have access to a computer or smartphone. Alternatively, you can consult by conference call, but bear in mind that it will be harder to see how people are reacting to the news.

It is a common practice to allow the employee to be accompanied at redundancy consultation meetings (and any appeal meeting) by a colleague or trade union representative, although this is not a statutory right. The furlough guidance for employers has confirmed that acting as an employee representative does not amount to “work”, so colleagues who are furloughed could still act as a companion without risking the furlough grant.

Although you are under no legal obligation to allow the employee to be accompanied by a friend or a family member, this may be allowed under your own policies and procedures or as a discretionary measure in these unusual circumstances. Check the wording of any redundancy policy for any such provisions. In practice, it will be difficult for you to ensure nobody else is present in the room while holding the meeting remotely (especially if this is by phone rather than videoconference) – so it might be sensible to allow a friend or family member to accompany the employee.

Think about the following:

• Ensure that only relevant parties receive an invitation to the online meeting, and that the line or online portal for hosting the meeting is secure and compliant for data protection purposes.
• Ask the employee to attend the virtual meeting from a private and quiet room if possible where they will not be disturbed, and discuss their particular circumstances with them.
• Ask parties to speak clearly, let them ask questions when necessary and confirm their understanding. Parties should be asked to mute themselves when they are not speaking to avoid any distractions. Make use of online tools, such as screen sharing, to refer to documents.
• Explain that you will be taking notes of the meeting and will share a copy of the minutes/notes with them. Remind them that they may also take their own notes during the meeting.
• At the start of the meeting, ask the employee to confirm that they (or any companion) are not recording the meeting. If you are concerned about this, remind them that they do not have a legal right to record the meeting and that this may be viewed as a breach of trust and confidence as well as misconduct. You could also explain that covert recording may be in breach of data protection legislation. (Remember, though, that recording may be a reasonable adjustment for someone with a physical or mental impairment.)
• During the meeting, check with the employee whether they need to take a break in the same way as you would during an in-person meeting. Allow employees time to speak privately to their companion during the meeting.

What about the wellbeing of employees going through a redundancy process?

A redundancy process is always stressful but is likely to be particularly so in the current circumstances, due to the combined effect of the pandemic, lockdown and uncertainty about the future and finances. Employees are already likely to be stressed and anxious and may be struggling with their mental health.

Bearing this in mind, it is essential that communications and consultation meetings are conducted fairly in recognition of the impact of present conditions and employees’ personal circumstances. Ensure that parties are supported appropriately after any meetings and there are regular catch-ups to check on the employees’ wellbeing. Have a clear method through which employees can raise questions or discuss concerns.

Think about other things you can do to support people during this very stressful time – for example, by providing counselling, other professional medical help or employee support helplines. Consider offering redundancy outplacement services and point employees to useful websites and resources. If nothing else, keep in touch with them and check how they’re doing.

What if we get it wrong?

Employment Tribunals can make a “protective award” of up to 90 days’ pay per affected employee for a failure to meet the collective consultation requirements.

In addition, employees with two years’ service have the option of bringing an unfair dismissal claim. Although dismissals for business reasons related to Coronavirus are likely to be a genuine redundancy, dismissals can still be unfair if the correct procedure has not been followed – including fair selection and proper individual consultation including consideration of alternatives to redundancy. Where an employee asserts their selection was discriminatory, there is no minimum service requirement.

Immigration issues

What immigration issues should we take into account when considering furlough and redundancies?”

When you are considering redundancies (or changes such as lay-offs or salary reductions), you should assess whether this has any effect on the immigration status of any of the employees affected. Any of them who holds a Tier 2 or 5 visa will have reporting requirements that are likely to be triggered, which may then have knock-on implications for whether they can keep their visa or not. Lewis Silkin’s dedicated immigration team can assist you in navigating this part of the process.

Related Item(s): Redundancy & Restructuring, Redundancy & restructuring, Employer & employee relations, Covid 19 – Coronavirus, Employment

Author(s)/Speaker(s): Colin Leckey, David Hopper,

This Inbrief looks at how employers can minimise the risk of legal claims when dismissing employees by reason of redundancy.

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This Inbrief looks at how employers can minimise the risk of legal claims when dismissing employees by reason of redundancy. The starting point is making sure that there is a genuine redundancy situation. The crucial thing then is to follow a reasonable procedure, including consulting the affected employees, applying a fair selection process and considering alternative employment. Finally, those dismissed should be given their correct redundancy pay. For information on the procedures to be followed in circumstances where the employer is proposing to make 20 or more employees at one establishment redundant within a period of 90 days, please see our Collective redundancies Inbrief.

The content includes:

1. What is a genuine redundacy?
2. The procedure to follow
3. Who is entitled to a redundancy payment?
4. Immigration issues

Main points

In order to avoid a successful claim for unfair dismissal arising out of a redundancy situation there must be:

• a genuine redundancy situation
• adequate warning and consultation of affected employees
• a fair selection process
• consideration of alternative employment
• a fair procedure An employee must have two years’ service in order to claim unfair dismissal.

What is a genuine redundancy?

There is a rather technical legal definition of redundancy. In essence, a redundancy situation exists where:

• the business as a whole is closing down 
• the particular part of the business in which the employee works is closing down
• the business is closing down in a particular location; or
• the business needs fewer employees with the redundant employee’s skills

The procedure to follow

Consultation

Individual consultation is crucial to a fair redundancy. It should be a means by which information is gathered to assist an employer in making its decision and give employees the opportunity to ask questions and have their say. It is essential that the consultation meetings occur before the final dismissal decisions have been taken. It is also important that during consultation the employer does not assert or imply that the employee will definitely be made redundant.

When arranging a consultation meeting, an employer should give the employee adequate time and information to prepare properly for it. Whilst there is no obligation to allow an employee to be accompanied to consultation meetings, the employer may choose to give the employee that option. 

Issues to be discussed at individual consultation meetings include:

• the reason for the redundancy
• an explanation of the pool for selection
• the selection criteria
• why the individual has been provisionally selected for redundancy according to the criteria (including the scores given)
• whether any factual matters relied upon are accurate
• the timescale
• the financial package
• available vacancies, including details of the nature of the job, the location and terms and conditions
• details of any other support available, e.g. outplacement services
• other suggestions to avoid the employee’s redundancy

Consultation involves a two-way discussion between the employer and the employee, potentially over a number of weeks.

All employees who are at risk of being made redundant must be consulted. Employers should therefore ensure that they do not forget to consult employees who are on maternity leave, on long-term sick leave or on secondment, for example.

The selection pool

Before applying any selection criteria, it is important to identify the correct ‘pool’ of employees to whom the criteria are to be applied. Employers have some flexibility in defining the pool and it will be difficult for an employee to challenge an employer’s choice of pool where the employer has genuinely applied its mind to the issue. Once a provisional view of the appropriate pool has been taken, it is useful to check the following:

• Is there a procedure for identifying the pool which has been agreed by the union or employee representatives? If so, this should normally be followed
• Are there other groups of employees doing similar work to the employees within the provisional pool? If so, it is likely that these employees should also be included in the pool unless there are good reasons not to include them
• Are there other employees working at different sites but doing similar work? Just because a particular site is being closed it does not mean that the pool should necessarily be drawn from the employees working at only that site
• Are there employees whose jobs are interchangeable with any of those in the pool? If so, again, it may be appropriate to include them unless there is a good reason not to

Fair selection criteria

The selection criteria should, as far as possible, be objective. Some care needs to be taken so as not to fall foul of discrimination legislation when applying the criteria. For example, although selection on the basis of attendance is fair on the face of it and the facts are objectively verifiable, employers should check the reasons for absence to ensure that this criterion does not put women or disabled employees at a particular disadvantage. Absences for pregnancy related illnesses, maternity or other family friendly leave as well as absences related to an employee’s disability should therefore be discounted.

Similarly, although ‘Last In First Out’ has been used by employers in the past, it runs the risk of falling foul of the age discrimination legislation as younger employees are more likely to be selected for redundancy.

In practice, most employers use a matrix of criteria which takes account of a range of issues such as:

• relevant skills and knowledge
• relevant experience
• relevant qualifications or training
• disciplinary record
• attendance record 
• communication skills (verbal/written)
• time management/productivity

Criteria should always be appropriate in the circumstances. There should be a business justification for the use of each criterion. Employers should be cautious about using subjective criteria such as ‘attitude’ or ‘team player’.

Even if the selection criteria are reasonable in themselves, they must be applied in a reasonable manner. For example, employers should not concentrate on performance which may have been poor for a short period, whilst ignoring previous sustained good performance.

Suitable alternative employment

An employee who is selected for redundancy should be offered any available vacancy that he/ she could fill, even if it is at a lower salary or at a lower status than the post from which the employee is being made redundant. Some employees would rather be working at a lower salary than be unemployed and an Employment Tribunal may criticise an employer who fails to at least offer an employee that possibility.

If an employee has been given notice of termination by reason of redundancy the employer has a duty to search for suitable alternative employment until the end of the affected employee’s notice period.

Any offer of alternative employment must be made before the end of the employment under the previous contract. It must also take effect either immediately on the ending of the employment under the previous contract or after an interval of not more than four weeks.

If the terms and conditions of the new or renewed contract of employment differ in any way from the corresponding provisions of the previous contract, there is a statutory four week trial period for the employee to decide whether the alternative employment is suitable. If the employee terminates the contract during the statutory trial period, he/she is treated as having been dismissed on the date at which his original contract ended. If the termination is unreasonable, the employee will not be entitled to any redundancy payment. 

Where an employee’s role is made redundant during maternity, adoption or shared parental leave and a return to the old job is not possible, the employer must offer a suitable vacancy if there is one. An employee on maternity, adoption or shared parental leave has priority over other employees who may be candidates for the alternative role. If the employee is not given priority, the dismissal will be automatically unfair. 

A fair procedure

A fair procedure must be followed before individual employees are dismissed. What is fair will depend on the circumstances of each case. A fair procedure should involve all the considerations mentioned above as well as clear communication with the potentially affected employee(s), through one-to-one meetings and in writing. In terms of procedural steps, a fair procedure is likely to involve:

• An initial meeting with the potentially affected employee(s) explaining the reasons for the potential redundancy and the selection process that the employer will follow. This should be confirmed in writing.
• Once the selection criteria have been applied, a letter to the provisionally selected employee(s) setting out the reasons for redundancy and their selection and inviting them to a consultation meeting. The employee(s) will need to be given information about their selection assessment.
• A first individual consultation meeting to discuss the employee’s provisional selection for redundancy, alternatives to redundancy, and proposed redundancy pay terms.
• Discussions in relation to alternative vacancies and any application procedure.

A final individual consultation meeting confirming selection for redundancy and discussing redundancy pay terms. This should be confirmed in writing.

• The employer should allow an employee to appeal against the decision to make them redundant.

As there can be no guarantee as to what will be considered to be fair in a particular case, additional or alternative steps may be necessary depending on the circumstances.

Who is entitled to a redundancy payment?

Only employees with two or more years’ continuous service are entitled to receive a redundancy payment. A redundant employee is entitled to a payment no less than the statutory redundancy payment which is calculated according to age and length of service. The payment is calculated as follows:

• One and a half week’s pay for each year of employment which consists wholly of weeks in which the employee was not below the age of 41
• One week’s pay for each such year of employment which consists wholly of weeks in which the employee was not below the age of 22; and
• Half a week’s pay for each such year of employment not falling within either of the preceding sub-paragraphs

The maximum number of service years to be taken into account is 20 and the maximum amount of a week’s pay is £538 as of 6 April 2020. Applying the above calculation, the maximum redundancy payment is £16,140 as of 6 April 2020.

In practice, many employers choose to make ‘enhanced’ redundancy payments. If such payments are calculated using the statutory redundancy payment formula with permitted uplifts they will not be discriminatory on grounds of age. Other schemes that include age or length of service criteria as factors in calculating a redundancy payment may need to be objectively justified.

An employee who is dismissed by reason of redundancy loses the right to a redundancy payment if he or she unreasonably refuses an offer of suitable employment.

Whilst an offer of alternative employment may be suitable on objective rounds, the reasonableness of the employee’s refusal can be determined on subjective grounds. The personal circumstances of the particular employee should therefore be taken into account when considering the question of whether or not an employee has unreasonably refused a suitable offer of alternative employment. 

Immigration issues

When employers are considering redundancies (or changes such as lay-offs or salary reductions), they should assess whether this has any effect on the immigration status of any of the employees affected. Any of them who holds a Tier 2 visa will have reporting requirements that are likely to be triggered, which may then have knock-on implications for whether they can keep their visa or not. Lewis Silkin’s excellent immigration team can assist you in navigating this part of the process. 

Type: Inbrief

Related Item(s): Employment

Author(s)/Speaker(s): Steven Lorber,

Attachment: Redundancy

Most employers are aware of the procedures that have to be followed when making someone redundant (or their job, to be more precise).

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If you’d like a reminder, see our Inbrief entitled Redundancy.

Introduction

Most employers are aware of the procedures that have to be followed when making someone redundant (or their job, to be more precise). If you’d like a reminder, see our Inbrief entitled Redundancy. Additional, more complex requirements arise when an employer is proposing collective redundancies. If 20 or more people are likely to be made redundant within 90 days, there must be consultations with all affected staff before the dismissals can take place. This Inbrief highlights some of the main issues for employers.  

Collective consultation is needed if an employer proposes to dismiss 20 or more employees ‘at one establishment’ in a 90-day period. This involves consulting employee representatives about various matters, including ways of:

• avoiding the dismissals
• reducing the number of dismissals
• mitigating their consequences

Consultation must start ‘in good time’ and, if 100 or more employees are likely to be dismissed, at least 45 days before the dismissals take effect. Otherwise the minimum period is 30 days. Protective awards of up to 90 days’ pay per employee can be imposed on an employer that fails to inform and consult properly.

An employer will still need to inform and consult in the normal way with individuals whose jobs are at risk, even if collective consultation is also needed. 

The content includes:

1. When does the duty to consult arise? 
2. Triggering the obligation 
3. Appropriate representatives 
4. Content and length of consultation 
5. Exceptions
6. The cost of getting it wrong 
7. Notifying the authorities 
8. ACAS guidance 
9. Immigration issues 

When does the duty to consult arise?

An employer must be proposing to dismiss at least 20 employees ‘at one establishment’ before collective consultation is required. An ‘establishment’ is generally the unit or workplace to which employees are assigned – it must be relatively permanent and stable, but does not need to have independent management who can decide to dismiss staff, or be economically or administratively separate.

If an employer is proposing more than 20 redundancies across a number of workplaces, but less than 20 at any single location, it must consider whether the workplaces should be treated as a single “establishment” so as to trigger the duty to consult. This will depend on factors such as whether:

• the unit performs specific tasks; and
• it has facilities, such as a workforce and an organisational structure, to enable it to perform those tasks

A redundancy for the purposes of collective consultation includes a dismissal for any reason not related to the individual employee. So for example, a requirement to inform and consult could arise if an employer is proposing to dismiss and rehire in the context of changes to terms and conditions of employment.

Dismissals due to the expiry of fixed-term contracts which have a clear termination date and are coming to their planned end do not count towards the number of redundancies. However, such dismissals do count if the fixedterm contracts are being ended early. 

Triggering the obligation

The duty to consult is triggered when an employer has ‘proposals’ to dismiss. This means it must have formulated a plan that is likely to result in dismissals. It is extremely important that consultation begins before any final decisions have been taken. For example, if a subsidiary company has a plan to dismiss employees, it will have a ‘proposal’ even if the plan cannot be implemented until it has been approved by the directors of the parent company.

If an employer does not start consultation when its proposals are still fairly tentative, there is a risk that it will be unable to hold meaningful discussions with the employees. For example, if an employer wants to close a particular office to save costs, but only consults employees once it has taken the decision, it will be difficult meaningfully to discuss ways of avoiding the dismissals. In turn, this could mean a significant financial penalty for the employer (see below). 

Appropriate representatives

Collective consultation must take place with ‘appropriate’ representatives of the ‘affected employees’. These include employees who are at risk of dismissal, and any other employees who are affected – for example because their job duties may change as a result of a restructuring.

If a trade union is recognised in respect of the affected employees, the employer must consult with the union representatives. Otherwise, employers can choose whether to consult with:

• existing employee representatives who have the authority to be consulted about such things (e.g. a staff consultative forum)
• representatives elected specifically for the purposes of the consultation

If a union represents only some of the affected employees, representatives will be needed for the remaining staff.

Content and length of consultation

Once representatives are in place, the employer must give them certain information. If there are no representatives, for example because no-one stands as a candidate in an election, the employer must give the information to the affected employees. The information includes:

• reasons for the proposals
• numbers and descriptions of employees the employer is proposing to dismiss and total number of such employees at the workplace
• proposed selection method
• proposed method of carrying out the dismissals
• proposed method of calculating any enhanced redundancy payment
• some information regarding the use of agency workers

The information forms the basis of consultation with the representatives. Consultation must, as a minimum, cover ways of:

• avoiding the need for dismissals
• reducing the number of dismissals
• mitigating the consequences of the dismissals

The duty to consult on ways of avoiding the dismissals means consultation must start at a sufficiently early stage. If the employer only begins consultation when it has already decided on redundancies, it will probably be found to have breached its consultation obligations.

In a business closure situation, where 20 or more people are likely to lose their jobs, the employer should not take a firm decision to close the business or workplace until it has discussed this with appropriate representatives. Discussions should start when closure is a clear intention, albeit a provisional one; the duty is not triggered merely because closure has been raised as a possibility.

In any collective redundancy situation, the employer should explain the business case for the proposed redundancies and listen to the representatives’ views. The representatives may accept the business rationale, in which case consultation can quickly move on to other issues, such as alternative employment and any redundancy package on offer. If not, the employer should allow a reasonable period for discussion before taking a final decision.

Consultation must take place ‘with a view to reaching agreement’. This entails a two-way dialogue with the representatives, who should have an opportunity to relay the views of the affected employees back to management. There is no obligation on the parties to reach agreement. If consultation has been entered into with an open mind, but the parties have been unable to agree, the employer is free to take a decision regardless of the representatives’ views.

Consultation must start ‘in good time’ to allow the relevant discussions to take place and a minimum period before the first of the dismissals takes effect. The minimum periods are:

• 30 days where between 20 and 99 employees are to be dismissed
• 45 days where 100 or more employees are to be dismissed

Consulting for the minimum period does not necessarily mean that an employer has consulted in good time, particularly if it had formulated the proposals some months in advance. It is prudent to start consultation as soon as possible once there are proposals.

Consultation must have finished before employees are given notice of termination. This means that where there are employees with three-month notice periods, and 100 or more employees are to be dismissed, the redundancy process could take four and a half months to complete. In theory, consultation could be completed more quickly if agreement is reached on all matters before the end of the minimum period. But in practice, it would be unlikely for representatives to agree to an early end to consultation unless the employer agrees to compensate employees for the period of consultation that is lost. 

Exceptions

There is a limited exception to the duty to consult if there are ‘special circumstances’ that make consultation not reasonably practicable. This exception has been very narrowly interpreted and applies very rarely. Most of the cases involve insolvency and, even then, not every insolvency situation will make consultation impracticable. Even if special circumstances exist, an employer must still conduct whatever consultation is reasonably practicable. A failure by a decisiontaking parent company to tell its subsidiary about redundancy plans is not a special circumstance. 

The cost of getting it wrong

If an employer fails to comply with any of its obligations, a complaint to an employment tribunal can be made by the appropriate representatives, or in some cases by employees themselves. If the tribunal upholds the complaint, it can order the employer to pay a ‘protective award’ of up to 90 days’ pay per affected employee. In deciding what length of award is appropriate, the tribunal decides what is ‘just and equitable’ in all the circumstances.

The purpose of a protective award is to punish an employer for failing to inform and consult rather than to compensate employees for any loss they sustain because of the failure. In practice this means that the employer cannot argue that consulting would have made no difference, so the employees have lost nothing and are not entitled.

If there has been no consultation at all, the tribunal will start with the maximum 90-day protective award and reduce it only if there are mitigating circumstances. In other cases, the tribunal will focus on the seriousness of the employer’s default, including whether it was deliberate. If an employer only starts consultation once it has decided to make redundancies, it is likely to face a substantial protective award because it will only have consulted about ways of mitigating the consequences of the dismissals. This will be the case even if the consultation that took place lasted for the full 30 or 45-day period. 

Notifying the authorities

Employers have a separate duty to notify the Department for Business, Energy & Industrial Strategy (BEIS) if they are proposing collective redundancies. The duty is triggered if there are proposals to dismiss 20 or more employees within 90 days. Notification must be given before notices of termination are issued and at least 45 days before the first dismissal takes effect (or 30 days if fewer than 100 employees are to be dismissed).

The relevant information may be provided on form HR1 and broadly reflects the information that has to be provided to the representatives for collective consultation purposes (see above). The penalty for failing to provide the information to BIS is a fine of up to £5,000. 

ACAS guidance

ACAS has published a non-statutory guide, Handling large-scale redundancies for employers. The guidance explains the legal framework and best practice requirements behind collective redundancy consultation and includes guidance on when consultation should start; who it should cover; who should be consulted; what should be discussed; how the consultation should be conducted; when consultation can be considered to be complete; and the meaning of “establishment”. 

Immigration issues

When employers are considering redundancies (or changes such as lay-offs or salary reductions), they should assess whether this has any effect on the immigration status of any of the employees affected. Any of them who holds a Tier 2 visa will have reporting requirements that are likely to be triggered, which may then have knock-on implications for whether they can keep their visa or not. Lewis Silkin’s excellent immigration team can assist you in navigating this part of the process. 

Type: Inbrief

Related Item(s): Employment

Author(s)/Speaker(s): Steven Lorber,

Attachment: Collective redundancies

On 9 April 2020 the Home Office released an update for employers on the new points-based immigration system due to take effect from January 2021. Despite the disruption caused by COVID-19, the Home Office still intends to go ahead with the new immigration system within the time-frame outlined in their policy statement released on 19 February 2020.

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This update confirms that the new points-based system will apply across the board to EEA/Swiss (EEA) and non-EEA nationals. EEA nationals will still be able to apply under the EU Settlement Scheme before 30 June 2021 provided that they reside in the UK before the end of December 2020. EEA nationals who arrive in the UK from 1 January 2021 onwards will be subject to the rules of the new immigration system.

The policy statement from February outlined the new points-based system where migrants under the skilled worker route would need a total of 70 points in order to be eligible to make a visa application. Drawing on the existing Tier 2 structure, migrants will need a valid job offer; the job must be at the appropriate skill level; fulfil the English Language requirement; and meet the higher of an occupation-based salary rate, or a minimum salary threshold of £25,600. Due to the introduction of additional ‘tradeable’ points, if the proposed role is on the shortage occupation list or the applicant holds a PhD in a related subject then applicants may still achieve sufficient points despite having a lower salary, as long as this is above a minimum threshold of £20,480. For further details of the proposals, see our earlier article here.

Controversially there is still no route for those in “lower-skilled” occupations such as care workers, retail assistants, cleaners and delivery drivers, many of whom have recently been declared “essential workers” by the UK Government.

While the Home Office has lowered the overall skill level from RQF Level 6 (bachelor degree equivalent) to RQF Level 3 (A-level equivalent) to allow roles such as graphic designers, production managers and lab technicians to apply under the skilled worker route,, questions still remain about what will happen for industries that rely on an influx of migrants from the EEA to fill “lower skilled” roles in sectors such as retail, hospitality, social care and agriculture.

COVID-19 has amplified the need for these “low skilled” roles and currently only the agricultural sector has a concession in the form of the seasonal agricultural pilot scheme. However, this scheme is currently falling short of its target as there are a reported 80,000 vacancies in the UK as a result of coronavirus-imposed travel restrictions across the EU.

The Government has passed responsibility to the Migration Advisory Committee (MAC) to assess which roles make it onto the Shortage Occupation List which applies a lower salary threshold of £20,480. The MAC may choose to include “lower skilled” occupations in this list to help ease severe shortages in specific occupations. However, the high costs of visas may prohibit employers from using such an exception to fill their “lower skilled” roles.

It is not just “essential workers” of a lower skill level who could be excluded from the UK under the new points-based system. Creative industries that rely on “lower-skilled” workers such as models, to come to the UK raises concerns about the knock-on effect for those industries. The UK fashion industry is renowned for spotting and developing talent and relies on the ability to bring in fashion models from abroad, with the majority of models being non-UK citizens. The end of free movement from the EU and a new system that doesn’t cater for this industry could mean that this work will simply move abroad.

The Government is also urging businesses who want to recruit from outside the resident labour market to apply for a sponsor licence before the end of this year. While this may not be an immediate concern for many businesses at this time, it is important to have this on the radar with the new system coming into force from January 2021. Lewis Silkin Managing Associate, Joanna Hunt outlines the process here.

The Home Office’s update for employers has been released shortly after it responded to the Law Commission’s report on simplifying the Immigration Rules. The Home Office intends that the new, simplified Rules will be in force from January 2021 and will be the foundation for a “fair, firm, effective and humane” points-based immigration system. The Government’s latest update has demonstrated that reform of the immigration system is not on the backburner and despite the disruptions from COVID-19 the Home Office is making it a priority to push through the new points-based system and simplified Immigration Rules. In what are difficult times for many businesses, forward-planning regarding recruitment budgets and sponsoring employees will still be essential for business continuity from January 2021.

Related Item(s): Immigration & Global Mobility, Immigration

Author(s)/Speaker(s): Stephen OFlaherty, Ella Skinner,

Andrew Osborne and Naomi Hanrahan-Soar comment for Employee Benefits in an article discussing how the Government provides details on points-based immigration system.

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Click here to read more.

Type: Press

Related Item(s): Employment, Immigration & Global Mobility

Contributor(s): Andrew Osborne, Naomi Hanrahan-Soar

One week into the UK’s nationwide lockdown, the repercussions of the COVID-19 pandemic are beginning to be felt in many major industries, the advertising and marketing sector being no exception. From marketing companies’ ongoing duties as sponsors of foreign migrants to considerations for freelancers, models and influencers, it is vital that immigration issues do not fall to the wayside amidst commercial matters which may feel more pressing.

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All companies with a sponsor licence remain bound by their sponsorship duties. Many organisations may need to implement pay cuts for their employees, and sponsors must be careful to consider the immigration implications of doing so for migrant workers. A salary decrease must be reported on the SMS within 10 days of the change, and if the drop takes the migrant worker’s salary to below a minimum salary threshold, the Home Office’s usual stance is to cut the worker’s leave short. Compliance action may also be taken against the sponsor. Updated Home Office guidance on this topic has yet to be released.

The UK Government has announced the Coronavirus Job Retention Scheme to enable employers to pay staff who would have otherwise been made redundant due to the pandemic. The Government will reimburse up to 80% of the wage costs of employees who would have been laid off, up to a maximum of £2,500 per month. Furloughed employees remain employed but are not able to carry out any work. However, this raises the question of whether sponsorship can continue while they are furloughed as they will not be working for their sponsor. The Home Office has yet to confirm whether a migrant worker can be furloughed without it affecting their immigration status in the UK. Flexibility is likely, but until a statement has been made, we would advise you to report any changes in migrant circumstances on the SMS as normal, and to keep detailed records of any shifts in working patterns in anticipation of future audits.

Employers may alternatively need to place employees on unpaid leave. The Immigration Rules dictate that under normal circumstances, sponsors would need to withdraw sponsorship of any migrant worker who takes more than four weeks of unpaid leave in a calendar year, according to their normal working pattern. However, the Home Office has published confirmation on GOV.UK confirming that where sponsors need to place migrant workers on unpaid leave due to the COVID-19 pandemic, they do not need to withdraw sponsorship and will not face compliance action. Migrant workers can also work from home without a report needing to be made on the SMS notifying a change in primary work location.

The Home Office has said that foreign workers currently in the UK whose leave expires between 24 January 2020 and 31 May 2020 will be able to extend their leave until 31 May 2020 if they cannot leave the UK due to travel restrictions or self-isolation as a result of COVID-19. Individuals in this position will need to inform the Home Office’s Coronavirus Immigration Team before being able to benefit from the extension. The Home Office has stated that extension requests should be processed within five working days of submission.

Responding to market changes: using freelancers and temporary workers

The COVID-19 crisis has triggered an increase in the demand for digital marketing campaigns, requiring many advertising firms to bring in freelancers to cope with the additional workload. When hiring freelancers, it is important to ensure that the government-mandated right to work checks are carried out. While the checks are, strictly speaking, only applicable to employees, it is best to perform compliant right to work checks on all people with whom companies engage to benefit from the full protection of the statutory excuse against illegal working penalties. Companies that employ illegal workers can face criminal liability for employing someone who they knew or had reasonable cause to believe did not have the right to work in the UK, or civil liability of up to £20,000 per illegal worker where the right to work check was not carried out correctly.

The Home Office indicated on 30 March that scanned copies of documents will temporarily suffice for right to work checks in light of the COVID-19 crisis and the resulting change in working patterns for many employees. Individuals will be able to prove their right to work via video link using scanned copies of their identification documents. The scanned documents should be kept on file for the duration of the freelancer’s time at the commissioning company. A fully compliant retrospective right to work check will need to be carried out within eight weeks of the Home Office announcing that the temporary procedure has been discontinued.

Cancelled campaigns and temporary workers

On the other hand, demand for campaigns has decreased in industries that have been hard-hit by the virus, such as sporting associations and live entertainment providers. Bans on large-scale gatherings have obvious implications for advertising initiatives in this sector, particularly as the UK seems set to remain in a state of abnormality until at least the autumn.

This will, in turn, have an adverse impact on individuals who have come to the UK on a short-term, temporary and campaign-targeted basis. Models and influencers, who often travel to the UK for specific, standalone shoots, are therefore in a precarious position. There are typically two visa routes for models and influencers: a Tier 5 (Creative and Sporting) visa or a Permitted Paid Engagements visa (PPE).

Tier 5 (Creative and Sporting) visas are often used by sportspeople and models to undertake work in the UK on a temporary basis. Visa-holders are sponsored by a licensed employer before they come to the UK but are subject to strict requirements: they must have at least one engagement every fourteen days to remain compliant with the terms of the visa. Models and influencers who come to the UK under this route will likely face difficulties meeting this condition in the current market. The Home Office has yet to comment on whether flexibility will be afforded to those in difficult positions due to the pandemic.

PPE visas allow companies to invite models and influencers to the UK to do specific paid work without having to be sponsored under the points-based system. Individuals on this visa can stay in the UK for up to one month at a time. Many individuals will now find themselves unable to travel for the intended purposes, be this due to international travel bans or cancelled campaigns. Refunds are generally unavailable for processed applications, and we are awaiting Home Office guidance regarding whether this will change.

If you require any further guidance on the immigration implications of COVID-19, please refer to our overview or get in touch with a member of our immigration team.

Type: Inbrief

Related Item(s): Covid 19 – Coronavirus, Advertising & Marketing, Immigration

Author(s)/Speaker(s): Stephen OFlaherty, Bronte Cullum,

With the ongoing rapid spread of COVID-19, we’ve seen an ever-greater sense of urgency in the responses of governments from around the world.

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Here in the UK, on 16 March 2020, Boris Johnson advised people to simply avoid gatherings and pubs, clubs and theatres.  Daily briefings followed and, four days later, he announced that all pubs, clubs and theatres should in fact close.

Then, on 23 March (less than a week later), 27 million people tuned in to watch Johnson announce further measures to combat the spread of COVID-19. These included banning public gatherings of more than two people.

Rather than use the existing powers it has to deal with emergency situations under The Civil Contingencies Act 2004, the Government opted to issue new regulations, the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020), under the Public Health (Control of Disease) Act 1984.

These Regulations came into force on 26 March 2020 and give the police the power to disperse gatherings or remove any person in the gathering to a place where they’re living. Anyone found to have contravened the Regulations can be subject to a fine (including companies and their directors, managers and secretaries).     The ban under the Regulations is currently in place until at least 16 April 2020, at which time measures will be reviewed.

The Government has also introduced the Coronavirus Act 2020, which received Royal Assent on 25 March.

The Government’s original guidance was vague and left organisers, sponsors, ticket agents, artists, clubs, athletes and consumers with questions about what happens and what they should do. The subsequent ban was therefore welcomed by many in the media and entertainment industries in these circumstances.

Following the Government’s latest advice, we try to answer some of the big questions on the minds of event organisers, clubs, partners, and suppliers. However, it’s important to recognise that the legal position on event cancellation is incredibly fact-specific, so we recommend seeking legal advice before taking any action. We’ve also set up a COVID-19 hub with lots of helpful information, advice and food for thought on a number of different issues from immigration, to advertising, to employment, which you can find here.

Do I need to cancel my event?

Most likely, yes.

Given the Regulations, it’s safe to say that event organisers will need to cancel any events to avoid falling foul of the new ban (at least those between now and 16 April 2020). The introduction of further legislation in the form of the Coronavirus Act 2020 suggests these restrictions aren’t going away anytime soon, so events beyond 16 April are very likely to be affected too (see below).

However, until there is a ban in place which covers the date of your event there is no legal requirement for you to cancel it. In fact, we’d strongly advise that you don’t cancel your event (when you are not forced to do so) until you have worked through the consequences and agreed the position with your supplier, venue and artists.

We would advise organisations to keep a close eye on further announcements to help them make an informed decision about how to proceed. We’ll keep this piece updated the situation is clearer.

Do I need to refund tickets?

In most cases, where you cancel the event (as a result of a Government ban or otherwise), and the customer is a consumer (rather than business) then yes.
  
We’d also suggest you review the relevant ticketing terms and conditions to see what scenarios will trigger a right to a refund for the customer.  
Often, these T&Cs are between the ticketing agent and the customer. These terms and conditions will generally say when a refund would be payable. However, it’s also important to consider the T&Cs that the event organiser has agreed with the ticketing agent and what these say about cancelling or postponing the event. In many cases, it may be up to the ticketing agent whether a refund is issued.

Of course, you can ask customers to transfer their tickets to a postponed or future event. However, you cannot force them to do so. Interestingly, certain industry bodies outside the UK are lobbying for this right to require a customer to transfer their ticket for a future event.

Whether customers are also entitled to other costs, such as hotels and accommodation, will depend on the T&Cs. Consumer law is unlikely to entitle customers to claim back these extra costs and most T&Cs expressly exclude indirect loss suffered by a customer. It’s important, therefore, to check the ticketing T&Cs carefully to see what is covered.

Consumer law does not generally allow consumers to cancel their tickets when the event is still on.
 
What about my contracts with business customers or suppliers?

Force Majeure

Most agreements (but not all) have clauses relating to “force majeure”. These generally set out what happens when something prevents a party performing its obligations under the agreement. In our last update here, we talked about whether events in connection with COVID-19 can be covered by a force majeure clause (spoiler alert: it depends on the drafting).

The government’s latest measures raise further questions about whether a force majeure clause covers a situation where a party can’t perform an agreement because of a government order. You won’t be surprised to learn that this depends on how the clause has been drafted. Some clauses specifically refer to any law or any action taken by a government or public authority. This would likely cover a situation where parties can’t perform an agreement because the government has made it illegal to hold mass public gatherings, or has issued official advice warning against it, even if the force majeure clause doesn’t specifically refer to epidemic or pandemic. The measures announced this week are clearly beyond the control of the parties, and it’s difficult to think of reasonable steps that either could take to avoid them. A widely drafted force majeure clause, which simply referred to events beyond the reasonable control of the parties, could also potentially capture the current ban. However, again, this is a very fact-sensitive area so it’s important to check the contract carefully before taking any action.

Let’s take an example. The government announces that it will no longer provide emergency services support to events, but that organisers can continue to stage the events and simply engage private companies to carry out these services. This may not be a force majeure event, as the event can still go ahead – it’s just more expensive to do so. 

Let’s contrast this with the current situation. If a 5,000 capacity festival was due to take place on 1 April, the current ban on gatherings of more than two people would likely be a force majeure event. To be clear, it isn’t COVID-19 itself that would be the force majeure event, rather the government restrictions on holding such events. Likewise, if you need the support of the emergency services to receive necessary licences or approvals (for example, from local SAGs), and this support is not forthcoming meaning no approval is granted, this could be force majeure.

A force majeure clause often doesn’t provide a solution for all problems if an event is cancelled or postponed. Relying on force majeure will often only address any liability flowing from the actual cancellation or postponement of the event. It will not resolve any issues that arose before this. For example, if an event organiser engages a company to construct the stage for an events, which is subsequently cancelled, the construction company should still be paid for the work undertaken up to the date of cancellation. The fact that a force majeure event occurs after the stage has been constructed would not exempt the organiser from having to pay for the work done.

It’s always important to think about what other rights you might have under the contract. Is there a general right to cancel by giving a certain amount of notice? Do you have the ability to make changes to the agreement? These may provide an alternative way to resolve issues, rather than trying to rely on force majeure.

Frustration

The measures announced by the government today make it increasingly likely that some may seek to argue that a contract has been “frustrated”. You can find our handy overview of the doctrine of frustration here, plus a very useful flowchart of force majeure and frustration here.

What happens if a contract is frustrated? If a contract is frustrated, the contract is discharged automatically. A key issue will be the precise “time of discharge”. Case law seems to suggest that this will be the time of the announcement that the event will not happen. This is important if the parties have continued to make or receive payments, in order to determine how those payments will be treated.

The government’s proposed ban on mass public gatherings could be a frustrating event. But not if the contract can be performed by some other route. If the sole purpose of entering into the contract was in relation to the cancelled event, then this could excuse performance. However, this is an area of law that isn’t often relied upon. It is also incredibly fact-specific, meaning each case will depend on its own facts. Parties should seek legal advice before attempting to rely on an argument of frustration, as the consequences of wrongly refusing to perform are significant.

Am I covered by my insurance?

This depends on the policy. The first action point is to check whether there is an insurance policy in place already. Some event organisers have rolling cover, which may include cover for communicable diseases. For those without existing insurance, it’s extremely unlikely that they will be able to secure such cover now as many are specifically excluding COVID-19. We understand that the exclusions currently being applied to policies are incredibly broad, covering anything arising even indirectly as a result of COVID-19.

Some policies will include cover for event cancellation resulting from a government order. In light of the recent government announcement, this could (in theory) offer a solution for businesses whose policies do not cover communicable diseases. However, insurers are taking the position that there would be no cover, as the underlying cause of any ban is COVID-19.

We would advise organisers to check any cover that is in place already and speak to their insurer.

Looking ahead

The Coronavirus Act 2020 grants wide-ranging powers, including the power to issue directions in relation to events, gatherings and premises. This is likely to be the basis for any further restrictions imposed in relation to events going forward.

The Act sets out different powers for England, Wales, Scotland and Northern Ireland. Here we’ve examined just the powers relating to events in England. Although, interestingly, there is a power for ministers in Scotland, Wales and Northern Ireland to pay compensation in connection with issuing a direction banning or restricting events. No such power seems to exist for those in England. There is also a power in Scotland and Northern Ireland for the police to use reasonable force in exercising their powers, but no similar power for events in England.

In a nutshell, the Act enables the Secretary of State to prohibit or restrict specific events, or events of a specified description, if they declare that there is a serious and imminent threat to public health in England. The restrictions then remain in place until the Secretary of State decides to revoke this declaration. The Department for Health and Social Care published such a declaration on 10 February 2020 (under the Regulation 3 of the Regulations).

If a direction imposes restrictions on a specific person or company, the Secretary of State has to write to them to inform them. However, given the current approach, it’s more likely that these powers will be used to impose a blanket ban on gatherings of a specified description (e.g. more than two people).

The Act makes it an offence to fail to comply with any such prohibition or restriction issued. If you’re found guilty of an offence you could face a fine. If a director, manager or secretary of a company is found to have committed an offence, then the individual officer and the company can be prosecuted.

Final thoughts

This is obviously a stressful time for those planning and hosting live events. We strongly recommend that all organisations follow official advice from the Government and from Public Health England when considering how to proceed. Many of the legal issues surrounding cancellation of events are complicated, and there isn’t a one-size-fits-all solution. As well as getting legal advice and following government guidance, it’s also important to enter into a dialogue with other parties as soon as possible to try to reach a solution that works for everyone involved. 

Top Tips:

• Don’t act unilaterally, follow official guidance from the UK government and Public Health England.
• Check the force majeure wording in your contracts.
• If you don’t have anything in writing, get something agreed as soon as possible.
• Check your insurance policies for communicable disease cover.
• Check your ticketing T&Cs.
• Engage in discussions early on before deciding to cancel or postpone an event.
• Review your contingency plans and be ready to implement them.

Related Item(s): Media & Entertainment, Covid 19 – Coronavirus

Author(s)/Speaker(s): Jeremy Summers, Lauren Stone,

The new Coronavirus Job Retention Scheme will provide UK employers with support for paying the wages of staff who would otherwise have been laid off as a result of Coronavirus. We’re still awaiting the details, but the scheme involves “furloughing” employees instead of dismissing them. Below we answer the key questions from what we know so far.

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When will the scheme be ready?

The Chancellor has said that his aim is to build the new scheme so that it is operational by the end of April, but claims can be backdated to 1 March (see further below). The government’s intention is to have the scheme up and running so that the April payroll can be reimbursed through the scheme.

Which employers is the scheme open to?

The scheme will be available to all UK businesses, charities and similar organisations of any size and in any sector.

How much will the government pay?

HM Revenue & Customs (HMRC) will reimburse 80% of furloughed workers’ wage costs, up to a cap of £2,500 per worker per month.

We’re currently assuming that the cap is £2,500 rather than 80% of £2,500, but this is not totally clear. We also assume that £2,500 is a gross figure, not net.

The government has published mixed messages about whether the £2,500 grant is to cover just salary or wages or whether it could include other employment costs, such as benefits, pension contributions or even employer’s National Insurance contributions (NICs).

Do we have to top-up the payment?

No. You can top-up the 80% payment if you wish, but you do not have to do so. For employers that are topping up, a key question is how to maintain a fair differential between furloughed employees, and any employees who are still working.

Is it a grant or a loan?

The government is saying that it will be a grant, not a loan, so it will not need to be repaid.

What about benefits such as health insurance, gym membership etc?

These will need to be maintained, unless you agree something different with furloughed employees.

It is possible that the cost of providing benefits will be included in the employment costs that can be claimed as part of the grant, but we await details. In any case, many employers will opt to maintain benefits as the simpler option, particularly if they have already paid for the cost of them.

Employers that offer permanent health insurance or death in service benefits should check with their scheme provider about what salary would be used in the event of a claim – would it be normal annual salary or pay during furlough?

Will the payment be taxable?

Yes, we expect it will be subject to PAYE and NICs.

How do we put someone in the furlough scheme?

You will need to designate them as furloughed. This will involve keeping them employed and on the payroll. You must not make them redundant and they cannot do any work for you.

Can we only put people in the furlough scheme if redundancy was the alternative?

The government has said that the furlough scheme is an alternative to being “laid off”. It is not yet clear what “laid off” means in this context – it probably means redundancy, but we await clarification.

It is possible that employers could be required to show evidence that redundancy was the alternative, for example by showing that they had started or at least discussed a redundancy process. It is also possible, however, that the simple fact that furloughed employees are not doing any work for you will be accepted as evidence that they would otherwise be made redundant. The government has indicated that it will retain the right to retrospectively audit employers, with scope to claw back fraudulent or erroneous claims 

Can we rotate employees on furlough?

This is a key unanswered question. Some employers have work for some employees, but not enough work for all. Can they rotate employees on furlough or must they select some employees for furlough and keep others at work? We don’t know the answer to this question.

Can employees do the odd bit of work for us while furloughed?

Definitely not. Employees cannot do any work for an employer that has furloughed them. If they do any work for you then you may have to repay the grant. We recommend drawing this to the attention of any furloughed employee who could otherwise be doing some work from home. It is important that they don’t do anything that could jeopardise your ability to claim the grant.

Can someone in the furlough scheme do work for other employers?

Possibly. We await details.

You should be able to impose restrictions on employees working elsewhere, even if this is allowed under the scheme, but you should think carefully about whether you want to do so. You will obviously want to stop furloughed employees from working for a competitor, and we presume there will be no need to say this explicitly because the employee’s underlying contract of employment will stay in place throughout the furlough. You might want to allow furloughed employees to take on extra work in, for example, the health and social care sector or essential services.

We don’t yet know if furloughed employees will be able to take advantage of the emergency volunteering leave scheme and, if so, how this would work in practice.

Do employees have to agree to being furloughed?

It depends on the circumstances. Generally, if you are planning to maintain an employee’s full pay during furlough (i.e. topping up the difference between the grant and the employee’s normal pay), you will not need any kind of agreement to designate the employee as furloughed. The same applies if the employee currently has no right to continue being paid (because, for example, they are already laid off on no pay).

In other cases, the employee will need to agree, but this does not necessarily need to entail a protracted procedure. In our view, most employees will be willing to accept furlough on basis that the other options are worse and to ensure they still have a job to return to when the crisis is over.

How long can we keep workers on furlough?

The government has announced that it will be a three-month scheme (1 March to 31 May 2020) but could be extended. Employers are likely to want to reserve the right to call employees back from furlough if trading conditions improve.

How does backdating to 1 March work?

The scheme will be backdated to 1 March 2020, but we don’t yet have any details about how this will work. For example, we don’t know if the scheme can be used for employees who joined after 1 March.

Can we make some people redundant and furlough others?

We believe so. At this stage, we do not think it will be the case that if you have made any workers redundant you will be outside the scheme. We have not yet seen the scheme conditions, however.

How should we select which employees should be furloughed?

Workers who cannot work from home and who currently have no work to do will be obvious candidates for furloughing. Otherwise, employers may need to consider a process of calling for volunteers, pooling and selection – as with a redundancy process. There is a risk of claims (including discrimination claims) if the process is not handled correctly.

Can we do a partial furlough to put somebody on reduced hours? 

No. An individual cannot work for you at all if they are furloughed.

If you have some work for an individual, but not enough, you can still have a discussion with them about going down to a reduced working week. They will need to agree to this, except in the unlikely event you have reserved the right to put them on reduced pay for reduced work, and they will not be on the furlough scheme. 

What is the process for claiming the payment?

You will need to submit information to HMRC about workers who have been furloughed and their earnings, via a new HMRC online portal. HMRC may ask for more information. The portal will hopefully be open in April. If you need short-term cash flow support in the meantime, the government has said you may be eligible for a Coronavirus Business Interruption Loan.

What about casual workers or workers on zero-hours contracts?

The scheme will cover workers on the PAYE system, including any casual or zero-hours worker who are paid in that way. For workers with fluctuating hours, the scheme is likely to be based on average earnings over a reference period.

Can workers be in the furlough scheme if they are off sick?

We think you will be able to put workers in the furlough scheme even if they are off sick, assuming they would otherwise be facing redundancy. If they are on statutory sick pay (SSP), however, this could be at a lower rate than furlough pay.

Employees who become sick while on furlough are also potentially eligible for SSP, but if this is lower than their furlough pay they will have no incentive to declare themselves sick.

Employers will need to decide what to do about company sick pay. It may be best to agree that company sick pay is suspended.

Will workers continue to accrue holiday allowance while they are furloughed?

Yes, because they remain employed. You could agree that no contractual holiday (beyond the statutory minimum of 5.6 weeks per year) will accrue during furlough, but employees will retain their right to accrue annual leave under the Working Time Regulations.

Can people take their holiday allowance while furloughed?

You could refuse requests for holiday during furlough if you want to do so, but you might prefer employees to use up their holiday allowance rather than storing it up. To require employees to take holidays, you need to give twice as much notice as the length of the holiday you want them to take (e.g. one week’s notice for two weeks’ holiday) unless the contract says something else.

What should we pay staff who are take holiday during furlough? 

This is a complicated question on which we suggest you take advice. We expect that you will be able to claim for holiday pay through the grant, in the same way as wages or salary.

Will employees continue to accrue continuous service during furlough?

Yes, the underlying relationship will continue if a worker is furloughed, so their period of continuous employment will continue to accrue throughout and will be recognised in full once the furlough comes to an end.

What happens at the end of the furlough?

The idea is that employees will be able to come back to work. The scheme is designed so that employers don’t need to make redundancies and then recruit a new workforce once the crisis is over – their existing workforce will be ready and waiting in the wings to resume work.

There is a more difficult question over what happens if trading conditions have not improved sufficiently for you to take all the furloughed employees back when the scheme ends. If redundancies are necessary at that point, you are likely to be allowed to make them – but we have not yet seen the scheme conditions. Other European countries that have similar schemes in place are imposing restrictions on employers making redundancies. The government has not indicated that similar conditions will be imposed here, but we do not know for certain.

Are foreign nationals with visas eligible for the furlough scheme?

We have seen nothing to suggest otherwise.  We believe it will cover all workers so long as they are UK workers on UK contracts, working in the UK and paying UK PAYE. There are potential sponsor compliance issues to consider for Tier 2 workers, and while foreign nationals with limited leave are in most cases not entitled to receive public funds, accessing funds through the furlough scheme is not currently prohibited.

Related Item(s): Employment, Covid 19 – Coronavirus, Employer and employee relations

Author(s)/Speaker(s): Lucy Lewis, Richard Moore,

Between 19 – 24 March 2020, we conducted a survey for thought leaders in the retail, hospitality and leisure sector, in order to share the data and help others facing these unprecedented times.

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Click on the image below to view our infographic.

80% of our respondents are headquartered in London. 50% of responses received were from businesses with in excess of 250 employees.

The top themes which derived from the survey are listed below, alongside information produced by us to hopefully provide some clarity and guidance.

The Collective by Lewis Silkin is here for you. We know that the retail, hospitality and leisure community faces many urgent and unique challenges over the weeks and months ahead. We want to play our part in helping you, your business and your industry move past them. With questions and queries wide-ranging, we are here to help provide answers, to act as a sounding board for the decisions you’re planning to make and to help you make the key decisions that will protect your business and your communities in the weeks ahead.

As always, we are available at any time if you need further support. Please contact the.collective@lewissilkin.com, and visit our Covid19 hub.

If you would like to know more about The Collective by Lewis Silkin, please check out our webpage here.

As always, we would be delighted to promote Collective members – please get in touch if you wish to share interesting content on our site.

Supply chain and supplier agreements

The true extent of supply chain issues is unfortunately yet to be seen, and out those surveyed, 56% had already experienced issues, with another 20% expecting to do so within 2 weeks.

The effects of COVID-19 are being felt at all levels of the retail supply chain. China is beginning to reopen factories, but disruption persists as production levels are anticipated to recover gradually. As the world’s biggest exporter of textiles and clothing the disruption in China has a ripple effect across the industry. Estimates place delays in delivery between one to three months, putting seasonal releases at a particular risk.

Brands with a diversified supply chain and a strong online presence are proving more resilient in the face of the outbreak. However, many retailers are in a position that puts obligations in business to consumer contracts at risk of not being met.

The main risks we foresee for UK vendors is the ability to adequately stock stores and fulfil deliveries on time because of disrupted logistics and supply chains. Whilst online sales are moderating the damage caused by falling foot-traffic, they also present a greater cancellation risk if delivery becomes subject to significant delays.

As businesses implement their continuity plans, we have been advising many on their supplier agreements, which may need to be renegotiated to avoid potential litigation for non-performance.

If, you, like 68% of our respondents, are currently seeking to renegotiate supplier agreements and commercial contracts, we have provided a breakdown in this guide of issues which we are seeing daily, alongside our top 10 tips to help you.

Remember it is key to engage not only with your staff, supply chain and logistics providers, but also with your customers. Keep the dialogue open, be fair and keep them onside.

Bricks and mortar closures

It won’t come as much of a surprise that 64% of those surveyed had already closed retail stores, hotels or leisure facilities. Although most were encouraged by Chancellor Rishi Sunak’s relief measures, 56% believed more needed to be done to help.

The reality of what the sector is now faced with and the difficult challenges which lie ahead for landlords and operators is stark. With the March quarter date having now arrived, many operators find themselves with little or no revenue coming in. Whilst the government’s agreement to extend the moratorium on lease forfeiture for 3 months (so as to prevent landlords evicting a tenant for non-payment of rent during this period) provides a short period of grace, operators are desperately trying to find solutions which will help them pay their invoices and retain their staff.

If you own or occupy commercial premises on a leasehold basis, please reference this guide which details measures you should take.

Disputes

Fortunately, 75% of those surveyed did not anticipate potential litigation, as a result of non-performance of their supplier/customer agreements. However, with the government’s mandatory restrictions to stay at home and shut up shop, many contractual obligations are likely to be even more difficult to meet.

Those businesses impacted by the government instructions are much more likely to be able to bring contracts to an end or suspend performance of contractual obligations without incurring liability for alleged breach of contract by relying on contractual force majeure clauses or the common law doctrine of frustration.

But these are complicated issues and is this the right thing to do? Long-term relationships will very much be at the heart of any decision.

68% of our respondents said that they were carefully looking at all of their contractual obligations to fully understand any risks.

Whether relief for force majeure or frustration is available to you does require a careful assessment of the language in the contract and the law. We have created this helpful note which explains the law in a little more detail as well as these flowchart diagrams which will help you make an assessment as to whether you can end your contract or not.

Marketing

With some products in high demand, and the situation changing daily, advertisers are keen to diversify their marketing efforts and explore new ways of reaching consumers. 80% of those surveyed told us they are increasing their social media presence. 65% will be looking at though leadership initiatives to continue to engage with their contact base. Surprisingly, only 25% are relying on price reductions, with preference for increased use of affiliate marketing and online retargeting.

Many advertisers will want to acknowledge COVID-19 in their marketing and external-facing comms in a responsible and authentic way.

Some will need to communicate updates and guidance to consumers on a regular basis, such as those in the travel and hospitality sectors. Others, including makers and retailers of hand sanitisers and facemasks, but also cupboard basics such as tinned goods and loo paper, may be tempted to take advantage of the unique ‘opportunities’ it presents.

But is it legally OK to do so? Please see our guide for advertisers with helpful tips on advertising your products and services during this time.

Employment and Immigration

The government has brought in unprecedented measures to protect the workforce, providing some relief to those most affected. However, 32% of our respondents still predicted that they will need to make redundancies.

We know that people are the heart of any retail, hospitality or leisure business. These are people heavy sectors. We have prepared a comprehensive set of FAQs for employers setting out guidance on all the main questions we are being asked, including everything from “Do we have to pay employees who are off sick with diagnosed Coronavirus?” to “Can we lay off employees or put them on short-time working if demand decreases in the following situations?”.

Like many in the sector, if your business intends to use the government’s ‘furloughing’ measures, our breakdown of the process can be found here. This article summarises what we know so far, what we think are the key unanswered questions and our initial views on the implications for employers.

It is too early to assess the full implications of the spread of COVID-19 for your foreign nationals working in the UK. However, 45% of those surveyed said that they would need to renew non-EEA worker visas in the coming months and 15% were unsure how this will work in practice given the circumstances.

The Home Office has relaxed restrictions, until 31 May, on being able to swap from one immigration category to another without having to return abroad.

People with visas expiring between 24 January 2020 and 30 May 2020 are now able to contact the Home Office to request an extension of their stay until 31 May 2020, provided the reason they can’t leave is due to travel restrictions or self-isolation caused by COVID-19.

From logistical considerations to Tier 2 and prevention of illegal working requirements, our helpful guide on immigration implications for UK employers will steer you in the right direction and hopefully answer any questions you have.

IR35 and Gender Pay Gap Reporting

The majority (53% in fact) of our respondents were pleased with the delay of IR35. Just 2 weeks out from the implementation date, only 52% of respondents felt they were prepared for its implementation.

Delaying its implementation is one of the measures the government has brought forward to help businesses and individuals in the light of the coronavirus pandemic. The proposed IR35 reforms will now be deferred for one year, taking effect on 6 April 2021 instead of 6 April 2020 as previously planned.

The government has previously resisted all pressure to delay or amend the proposals. It is clear, however, that this is a deferral of the reforms rather than an abandonment, and it remains committed to introducing them. The postponement will come as an enormous relief to businesses who were struggling to get ready for this significant change to employment tax at the same time as dealing with the issues thrown up by the fast-changing coronavirus situation.

But what should businesses and contractors do now? Our note explains what you should be doing in light of the delay and how to be well prepared for next April.

In addition to the delay of IR35, the government requirement for employers with 250 or more employees to publish gender pay gap reports has been suspended for this year. Learn more here.

Related Item(s): Business continuity, Retail, Hospitality & Leisure