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COVID Managing Human Resources issues during and post lockdown

Best practice and governance when managing furlough and redundancies in post COVID lockdown

When it comes to operating a business, people are key. In a SME it can also be personal, you see your team as an extended family, they work for you and you take care of them.

So what happens in situations like we now find ourselves? Furlough, possible redundancies, cut backs. These are all of the things that business owners and leaders hope they never have to consider.

The COVID-19 Coronavirus pandemic, has changed conventional business practice and thinking possibly for ever. Working from home or furlough has been in place for months, but with the possibility of reduced Government funding, and returning the workforce from furlough there are tough decisions ahead.

For many SMEs this adds to the already stressful times, and if you don’t follow the rules and processes correctly, you could find yourself in employee disputes, ending in costly settlements or employment tribunals.

At Semantic we can help, we provide a FREE initial telephone consultation and will discuss options for ad-hoc or ongoing advice and support. Our HR consultants are experienced in all matters of people management and have held senior positions in other businesses. So lets look at some of the areas where you may need help.

Furlough (Job retention scheme) based upon June 12th update*

The Coronavirus Job Retention Scheme will close on 31 October 2020.

The first time you will be able to make claims for days in July will be 1 July, you cannot claim for periods in July before this point.

31 July is the last day that you can submit claims for periods ending on or before 30 June.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.

From 1 August 2020, the level of grant will be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.

The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:

  • there are no changes to grant levels in June
  • for June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work
  • for August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough
  • for September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
  • for October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed


Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.

The table shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

*source https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme

The process is not as straightforward as you may like, for many you will already have been doing this already, however make sure that you follow the below steps:

Employers should take the following steps prior to making a claim:

  • Design a furlough process and agree a furlough policy. This should involve employees (or union representatives) to aid agreement to any changes.
  • This policy should be reviewed and updated in line with the Government extensions to the scheme.
  • Decide which employees are affected perhaps using criteria similar to redundancy selection – click here for more guidance
  • In the first phase decide whether to pay 80% of salary or to supplement it. You can use the Gov.uk guidance on calculating 80% salary to help make your decision.
  • Decide on the length of the claim period, what to include when calculating wages and employees’ usual hours and furloughed hours.
  • During the further phase of the scheme employers will be obliged to supplement the salary, starting with employer NI contributions in August and increasing to 10% and 20% of salary in September and October respectively.
  • During the further phase of the scheme employers should agree flexible working hours or patterns and keep these agreements and records (see below).
  • Select who will be flexibly furloughed, avoiding all forms of discrimination, especially sex, age and disability.
  • Plan for what will happen when the furlough scheme ends on 31 October.
  • Also consider holiday entitlement and pay during Coronavirus – read more
  • Inform the employees affected using the correct document templates and calculations
  • Make sure that all affected employees are offered the opportunity to discuss their concerns
  • Be certain that all affected employees confirm acceptance in writing at each stage
  •  

Useful templates from ACAS are below;

Furlough agreement letter

Extension of furlough agreement letter

Ending furlough agreement letter

There is a thorough guide on the CIPD website or download it here
 

Redundancies and consultation

1 in 4 UK businesses expects to have to make permanent redundancies as a result of the Coronavirus pandemic.

But the balance of business need, responsibility and duty of care should always be taken when having to take this difficult decision.
 
Redundancy should always be the last resort, it is distressing for the employee, retained workforce and the employer. Redundancy should be handled with sensitivity and always fairly and consistently.
Legislation and case law covering redundancy is highly complex, and it is up to the employer to ensure that they understand their obligations, the employees rights and the correct process to follow.
 

Redundancy can be a very challenging and upsetting situation for affected employees and the wider workforce. Announcing redundancies affects staff morale, motivation and productivity. Employers need to handle the redundancy situation as sensitively as possible to reduce the negative impact.

Every employer should consider having a formal redundancy procedure. In many organisations a formal agreement may exist between management and trade union or employee representatives.

Exact procedures will vary according to the timescale and size of the redundancy programme, but organisations should follow these stages as a minimum:

  • planning
  • identifying the pool for selection
  • seeking volunteers
  • consulting employees
  • selection for redundancy
  • appeals and dismissals
  • suitable alternative employment
  • redundancy payment
  • counselling and support.


For further help and guidance contact us today, we can help guide you through these difficult times, and introduce you to legal professionals as and when the need arises.

Further guidance on redundancy best practice can be found on the CIPD factsheet here

Summary

Best practice and governance with handling employee matters is crucial. It ensures that you can demonstrate being a fair and responsible employer, and ensures that employees are treated consistently and fairly. It will also prevent likely disputes and tribunals. 

It is always best to seek professional advice.

At Semantic we can help by providing independent guidance in a flexible, affordable way, payable by the hour, or flexible contract terms.

*Semantic are not employment solicitors, our guidance is just that, and any legal position must be sought from a legal professional.

If you would like help with HR employment and development, contact us today.

We will be delighted to arrange a FREE initial consultation to discuss your situation, and arrange the next steps to help you on your journey