Coronavirus (COVID-19) – employment rights

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This post was updated on 23 April 2020 to reflect up-to-date understanding on how the UK Government’s furlough scheme will operate. 

Coronavirus lockdown is hitting businesses and workers hard. This SPICe blog looks at workers’ rights in the current crisis.

The SPICe briefing Employment FAQs discusses general employment rights in more detail – including notice periods, redundancy rights and discrimination.

Is my constituent an employee?

Employees have a contract of employment with their employer. There is a wider category of “worker”. This covers agency and casual workers as well as employees.

Most of the rights discussed here only apply to employees. Statutory sick pay is an exception as it can be claimed by agency workers.

We now know that the Coronavirus Job Retention Scheme is open to all workers paid via PAYE (tax deducted before it is paid). This means that casual workers, agency workers, those with zero-hours contracts and some contractors can qualify, depending on their pay arrangements.

My constituent is being made redundant

Redundancy is when an employer makes a permanent decision that a job is no longer needed.

Where an employee has worked for their employer for two or more years, they will be entitled to a redundancy payment. This is calculated on the basis of their age and the number of years they have had their job.

Where a contract of employment ends, an employee will also be entitled to the following (on top of redundancy pay, where they qualify):

  • to work, or be paid for, their notice period
  • to pay in lieu of any holidays accrued but not taken
  • to any bonus payments they have already earned.

Importantly, if an employer becomes insolvent and cannot make these payments, it is possible to claim from a UK Government fund – the National Insurance Fund.

My constituent is being laid off/furloughed

In a UK context, being laid off refers to a situation where an employee is put on unpaid leave.

The UK Government is using the term “furloughed” to describe workers who cannot be paid because of the coronavirus crisis. Technically, though, their employer must bring them back into payment for the Coronavirus Job Retention Scheme (discussed below) to apply. People on unpaid leave should discuss this option with their employer.

Generally, where someone has an employment relationship, the employer should continue to pay them, even if no work can be provided. Therefore, an employee can only be put on unpaid leave if there is a specific term in their contract providing for this.

However, employees may need to carefully consider the long-term outcome they want in this situation. An employer who has to pay people when no work is available may become insolvent and have to close the business.

Thus, it may be in an employee’s interests to agree to unpaid leave, even if they don’t have to, in order to preserve jobs for the future. However, this will depend on their circumstances. Furlough under the Coronavirus Job Retention Scheme will usually be a better option, if the employer agrees to apply.

Where employees can be put on unpaid leave under their contract of employment, they are entitled to guarantee pay. They may also be able to claim redundancy if they meet the statutory requirements.

My constituent is being asked to come into work when they don’t want to

The Scottish Government has made it clear that people should be allowed to work from home, where this is possible. However, there are many jobs which cannot be done remotely.

The Scottish Government has directed the closure of certain businesses because they pose a threat to public health. These include pubs, restaurants, non-essential retailers and leisure facilities like cinemas, gyms and museums.

Other businesses have not been specifically directed to close. The Scottish Government has issued guidance suggesting that businesses which cannot comply with social distancing requirements, or are not providing essential services, should close. However, this remains open to interpretation.

Employers which are not required to close can ask staff to come into work. It can be hoped that they will be as flexible as possible when dealing with staff concerns. However, staff who refuse to come to work could face disciplinary action.

And the harsh economic reality is that businesses which do close may have to dismiss staff as a result.

Is my constituent entitled to statutory sick pay?

Employees and agency workers can claim statutory sick pay if they are required to self-isolate. They must meet the statutory requirements to qualify, such as earning at least £118 per week.

People can be required to self-isolate because:

  • they have COVID-19 symptoms, or
  • they are at high risk of having been exposed to COVID-19 (for example, they live in the same house as someone with symptoms or have travelled to a high-risk area).

People with underlying health conditions – or who live with someone with an underlying health condition – cannot usually claim statutory sick pay if they do not want to come to work. They should discuss any concerns they have about work with their employer. If it is not possible for those concerns to be fully addressed, unpaid leave could be considered.

NHS Scotland has issued advice on “shielding” for those who are most vulnerable to COVID-19. They are advised to stay at home for the next 12 weeks. Since 16 April 2020, it has been possible for those who have been formally advised to shield to claim statutory sick pay.

It is also possible for those dealing with underlying health conditions – either their own or those of others in their household – to be furloughed. They should discuss this option with their employer.

Some underlying health conditions may constitute disabilities, as defined in the Equality Act 2010. In this situation, failure to make reasonable adjustments to work requirements could constitute disability discrimination.

Support for wages during the coronavirus crisis

The UK Government has announced a scheme – the Coronavirus Job Retention Scheme – to pay 80% of the wages of people who may have faced dismissal as a result of the coronavirus crisis.

The key features of the scheme are:

  • it will apply to staff paid via PAYE (Pay As You Earn – ie. tax deducted before workers are paid), which means casual staff, agency staff and some contractors may qualify
  • it will cover 80% of gross earnings up to £2,500 per month – employers may negotiate with staff to avoid paying the 20% top up
  • it will apply initially for three months, backdated to 1 March 2020
  • staff must be doing no work at all for their employer.

It is up to employers to apply to the Coronavirus Job Retention Scheme. Employees cannot force an employer to apply on their behalf.

The scheme will not make any payments before the end of April. It is unclear what obligations an employer has to pay staff on furlough before this.

As a general rule, staff who are employees are entitled to be paid as normal, unless something else has been negotiated by the employer. It is possible that some staff who were previously on unpaid leave may have agreed not to get paid for some of the period. However, pay should be backdated to cover any period for which the employer has claimed under the scheme.

The UK Government has announced various initiatives which may support some businesses during this period. The Scottish Government is also providing support.

The Chancellor has also announced an income-support scheme for the self-employed. It will be targeted at those earning less than £50,000 and will operate on a similar basis to the Coronavirus Job Retention Scheme. However, self-employed people will still be able to work. Payments are not expected to be made until June.