A second lockdown for England – what does this mean for employers?

On Saturday 31 October 2020, the Prime Minister announced a second national lockdown in England and an extension of the Coronavirus Job Retention Scheme (“CJRS”). The lockdown came into force on Thursday 5 November 2020 and will last until at least 2 December 2020, if not longer.

Although not quite as stringent as the first lockdown, it is having a significant impact for businesses – particularly those in the leisure and hospitality sector, who are largely closed down.

Can employees go into work?

The general principle under the national lockdown restrictions is that no person may leave their home without reasonable excuse. Under the relevant Regulations, there are, of course, a number of exceptions which will amount to a reasonable excuse. One such reasonable excuse is for the purposes of work, where it is not reasonably possible for an individual to work from home.

The government’s guidance is that to help contain the virus, everyone who can work effectively from home must do so. Where people cannot do so – including, but not limited to, people who work in critical national infrastructure, construction, or manufacturing – they should continue to travel to their workplace.

This means that office-based workers should, generally speaking, be working from home during lockdown. However, in light of previous pronouncements by the Prime Minister during Parliamentary debates, it seems likely that there will be some leeway where employees are genuinely experiencing adverse mental health issues as a result of having to work from home on a consistent basis. Employers should, however, approach this issue with caution and ensure that they are able to justify a decision to permit an employee to continue to attend at the workplace. It may also be sensible to issue such employees with a letter of permission which they present to the authorities if they are questioned during their commute.

An extension of furlough

The CJRS will be extended until the end of March 2021.

The key details of the changes to the extended CJRS that have so far been announced in respect of the period until 31 January 2020 are as follows:

  • Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500. Employers will only have to bear the cost of National Insurance and employer pension contributions. This reflects the government’s more generous contribution when the scheme originally began to taper off.
  • When the initial extension was announced on 31 October 2020, the government provided that to be eligible to participate in the CJRS, employees must have been on the payroll by 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
  • However, when the further extension was announced on 5 November 2020, the government confirmed that employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
  • Similarly, an employee who was on a fixed term contract, on payroll on 23 September, and whose contract expired after 23 September can be re-employed and claimed for, provided that the other eligibility criteria are met. It appears possible for employers to retrospectively furlough their employees with effect from 1 November 2020, provided such arrangements are put in place in accordance with the appropriate requirements on or before 13 November 2020. Employers wishing to take advantage of this therefore need to act very quickly. This suggests that employers who only put in place the appropriate arrangements after 13 November 2020 will only be able to claim in relation to the period from that date.
  • In what appears to be a significant change of stance by the government, the guidance confirms that the government is reviewing whether employers should be able to claim for employees serving contractual or statutory notice periods for claim periods starting on or after 1 December 2020. Further guidance will be published later in November, but employers should be alive to this issue if they are considering serving notice and furloughing employees.
  •  Employees who participate in the extended CJRS do not need to have been furloughed before.
  •  Employers need to report and claim for a minimum period of seven consecutive calendar days.
  •  The Job Support Scheme, which was scheduled to come into force 1 November 2020, has been postponed until the CJRS ends.
  • The Job Retention Bonus has, understandably, been withdrawn.

However, there will be a government review of the furlough scheme in January 2021 and it is possible (depending on the general state of the economy and prevalence of the virus) that the 80% government grant will, again, be reduced.

For employers, there are number of implications that will need to be considered in relation to the extension of the CJRS. In particular:

  • Under the extended CJRS, the cost for employers of retaining workers will be reduced compared to the scheme during September and October 2020. As mentioned, employers will only be required to fund National Insurance contributions and employer pension contributions.
  • Employers will have flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time. Employers must continue to pay employees for hours worked in the normal way.
  • The government expects that publicly funded organisations will not use the scheme, as was already the case for the CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
  • If employers are not topping up payments over and above the government’s 80% grant, employee consent for a reduction in salary whilst on furlough will need to be obtained (if existing consent is no longer valid).
  • More detail is needed to clarify precisely how the extended scheme will work in practice. The government has confirmed that further guidance will be issued shortly.
  •  Employers who are facing a significant decline in revenue and, perhaps, closure, will need to consider whether it makes economic sense to rely on the extended scheme, rather than making redundancies. This is particularly the case given that even if lockdown is not extended beyond 2 December 2020, the government has already said that it will instead revert back to local tier restrictions, which can still materially affect business activity.

What next for employers?

If employers have learnt anything during the course of this year, it is to expect the unexpected. Whilst the extension of furlough will, undoubtedly, be of significant support for business, employers need to be nimble and remain prepared to make difficult workforce decisions – particularly when we see an inevitable reduction in the government CJRS grant.





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Mark Kaye is an employment lawyer at Bryan Cave Leighton Paisner LLP. He has been a frequent commentator on employment-related COVID-19 issues throughout 2020 and has written articles for numerous HR publications and been interviewed by LBC News a number of times to comment on COVID-19 developments.